Filed by Automated Filing Services Inc. (604) 609-0244 - Alexco Resource Corp.

ALEXCO RESOURCE CORP.
Suite 1920, 200 Granville Street
Vancouver, British Columbia, V6C 1S4
Telephone: (604) 633-4888
Facsimile: (604) 688-1157
E-Mail: info@alexcoresource.com
Website: www.alexcoresource.com

In this Annual Information Form, Alexco Resource Corp. is referred to as the "Company". All information contained herein is as at September 26, 2006, unless otherwise specified.

All sums of money which are referred to in this Annual Information Form are expressed in lawful money of the Canada, unless otherwise specified.

This Annual Information Form contains forward-looking statements concerning the Company's plans for its properties, operations and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning estimates of mineral resources and reserves may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if the property is developed, and in the case of mineral reserves, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects" or "does not expect", "is expected", "anticipates" or "does not anticipate", "plans", "estimates" or "intends", or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be "forward-looking statements". Forward-looking statements are subject to a variety of risks and uncertainties, which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

Some of the important risks and uncertainties that could affect forward looking statements are described in this Annual Information Form under "Description of the Business – Risk Factors". Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward looking statements. Forward looking statements are made based on management's beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change. Investors are cautioned against attributing undue certainty to forward-looking statements.

In this Annual Information Form, the following technical terms have the following meanings:

Alteration - any change in the mineralogical composition of a rock that is brought about by physical or chemical means.

Anomaly - having a geochemical or geophysical character which deviates from regularity; in the case of gold, it refers to abnormally high gold content (i.e., 70.5 g per tonne).

Assay - in economic geology, to analyze the proportions of metal in a rock or overburden sample; to test an ore or mineral for composition, purity, weight or other properties of commercial interest.

Calcite - calcium carbonate, CaCO₃, with hexagonal crystallization; a mineral found in limestone, chalk and marble.

Chalcopyrite - copper iron sulphide mineral (CuFeS₂). A common copper ore.

Deposit - a mineralized body which has been physically delineated by sufficient drilling, trenching, and/or underground work, and found to contain a sufficient average grade of metal or metals to warrant further exploration and/or development expenditures; such a deposit does not qualify as a commercially mineable ore body or as containing ore reserves, until final legal, technical, and economic factors have been resolved.

Fault - a fracture in a rock along which there has been relative movement between the two sides either vertically or horizontally.

Feldspar - a group of common sodium-potassium-calcium aluminosilicate minerals.

Geophysical survey - the exploration of an area by exploiting differences in physical properties of different rock types. Geophysical methods include seismic, magnetic, gravity, induced polarization and other techniques, and geophysical surveys can be undertaken from the ground or from the air.

Grade - the amount of valuable metal in each tonne of ore, expressed as grams per tonne (g/t) for precious metals, as percent (%) for copper, lead, zinc and nickel.

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

Igneous - a classification of rocks formed from the solidification from a molten state.

Intrusion - the process of emplacement of magma in a pre-existing rock. Also, the igneous rock mass so formed.

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

Mineral resource – a concentration or occurrence of material or intrinsic economic interest in or on the Earth's crust in such form and quantity that there are reasonable prospects for eventual economic extraction. The location, quantity, grade, geological characteristics and continuity of a mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.

Ore - a metal or mineral or a combination of these of sufficient value as to quality and quantity to enable it to be mined at a profit.

Ounce or oz - a troy ounce or twenty penny weights or 480 grains or 31.103 grams.

Reconnaissance – a general examination or survey of a region with reference to its main features, usually preliminary to a more detailed survey.

Sediment - solid material that has settled down from a state of suspension in a liquid. More generally, solid fragmental material transported and deposited by wind, water or ice, chemically precipitated from solution, or secreted by organisms, and that forms in layers in loose unconsolidated form.

Silicified - the introduction of, or replacement by, silica, generally resulting in the formation of fine- grained quartz, chalcedony or opal, which may fill pores and replace existing minerals.

Sulphide - a group of minerals in which one or more metals are found in combination with sulphur.

Tonne - metric unit of weight equivalent to volume multiplied by specific gravity; equivalent to 1.102 tons or 1,000 kilograms (2,204.6 pounds).

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

Cautionary Note to U.S. Investors – Information Concerning Preparation of Resource Estimates

This Annual Information Form has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. Unless otherwise indicated, all resource estimates included in this Annual Information Form have been prepared in accordance with Canadian NI 43-101and the CIM Classification System. NI 43-101 is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. NI 43-101 permits a historical estimate made prior to the adoption of NI 43-101 that does not comply with NI 43-101 to be disclosed using the historical terminology if the disclosure: (a) identifies the source and date of the historical estimate; (b) comments on the relevance and reliability of the historical estimate; (c) states whether the historical estimate uses categories other than those prescribed by NI 43-101; and (d) includes any more recent estimates or data available. Such historical estimates are presented concerning certain of the Company’s properties described herein.

Canadian standards differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”), and resource information contained herein may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term "resource" does not equate to the term "reserves". Under U.S. standards, mineralization may not be classified as a "reserve" unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC's disclosure standards normally do not permit the inclusion of information concerning "measured mineral resources", "indicated mineral resources" or "inferred mineral resources" or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC, unless such information is required to be disclosed by the law of the Company's jurisdiction of incorporation or of a jurisdiction in which its securities are traded. U.S. Investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any party of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures.

The Company was incorporated under the Business Corporations Act (Yukon) on December 3, 2004 under the name "Alexco Resource Corp.".

The Company's head office is located at Suite 1920, 200 Granville Street, Vancouver, British Columbia, V6C 1S4 and its registered and records office is located at Suite 200, 204 Lambert Street, Whitehorse, Yukon, Y1A 3T2.

At the end of its most recently completed financial year, the Company had the following wholly-owned subsidiaries:

Unless the context otherwise indicates, reference to the term the "Company" in this Annual Information Form includes Alexco Resource Corp. and its subsidiaries.

On March 15, 2005, the Company completed a series of transactions pursuant to which it acquired a number of property interests and rights to certain operating contracts in Yukon and British Columbia.

Pursuant to a sale and assignment agreement with Quest Mortgage Corp. (formerly Viceroy Minerals Corporation) ("Viceroy") dated February 1, 2005 (the "Viceroy Agreement"), the Company acquired certain assets of Viceroy comprising its Brewery Creek mine near Dawson City, Yukon Territory and a $2,500,000 payment from Viceroy to post replacement security under a related water license. The assets included mining assets and infrastructure/equipment located on the Brewery Creek property, all rights, title and interest of Viceroy in and to the 708 quartz mining claims and 93 mining leases on the Brewery Creek property and all rights, title and interest of Viceroy in and to the agreements, accords, memoranda and licenses relating to the Brewery Creek property, described under " Description of the Business – Mineral Projects – Brewery Creek Property" below. In exchange, the Company issued to Viceroy 2,686,567 common shares of the Company at a deemed price of $0.67 per share and assumed all liabilities and obligations of Viceroy with respect to its Brewery Creek property interests.

Pursuant to a sale and assignment agreement with NovaGold Canada Inc. ("NovaGold Canada") dated February 1, 2005 (the "NovaGold Agreement"), the Company acquired all of the issued and outstanding shares of 650399 B.C. Ltd. (“AlexSub”) in exchange for the issuance to NovaGold Canada of 4,104,478 common shares of the Company at a deemed price of $0.67 per share and a $599,812 cash payment to NovaGold Canada. The Company also agreed to cause the payment by AlexSub to NovaGold Canada of approximately $137,000 to be paid to AlexSub by the Canada Revenue Agency as a refundable mineral tax

credit for the period from December 1, 2003 to November 30, 2004. AlexSub holds interests in the McQuesten, Sprogge, Harlan and Klondike properties in Yukon and royalty interests in the Kiniskan Lake and Manson Creek claims and the Telegraph Creek/Iskut River claims in British Columbia, described under "Description of the Business" below.

Pursuant to a sale and assignment agreement with Asset Liability Management Group ULC ("ALM") dated February 1, 2005 (the "ALM Agreement"), the Company acquired certain rights, title and interest of ALM in and to certain contracts and arrangements of ALM including current technical support and service contracts with various mine operating and exploration companies and any intellectual property used in connection therewith (including rights to secure certain patents). The assets acquired are more fully described under "Description of the Business – Remediation Business" below. In exchange, the Company issued to ALM 1,940,299 common shares of the Company at a deemed price of $0.67 per share. Alexco also agreed to assume all liabilities and obligations of ALM under the contracts and arrangements to a maximum of the value of the remaining work to be performed under such contracts.

The net assets acquired by the Company under the Viceroy Agreement, NovaGold Agreement and ALM Agreement were valued at their estimated fair value. With respect to the assets acquired by the Company for the Viceroy Agreement and the NovaGold Agreement, the fair value approximated the book values for the assets. With respect to the assets acquired by the Company from ALM, the fair value was determined by the directors with the benefit of independent financial advice.

The above-described sale and assignment agreements were completed concurrently with an organization agreement (the "Organization Agreement") dated February 1, 2005 with Viceroy, NovaGold Canada, AlexSub and ALM. The Company completed a seed capital private placement financing for the issuance of 5,264,000 common shares of the Company for gross proceeds of $3.6 million effective March 15, 2005.

In June 2005, the Company was selected as the preferred purchaser of the assets of United Keno Hill Mines Limited and UKH Minerals Limited (together, "UKHM") in Yukon by PricewaterhouseCoopers Inc., court appointed interim receiver and receiver-manager of UKHM. The agreements entered into by the Company and the initial closing under the agreements is described under "Remediation Business – Specific Mine Reclamation and Remediation Projects – Keno Hill Project, Yukon" below.

Effective September 16, 2005, the Company entered into a letter agreement with NovaGold Canada granting NovaGold Canada a back-in right to acquire a 70% interest in the sulphide project and a 30% interest in the oxide project with respect to the Brewery Creek property. The sulphide project relates to exploration and if successful, future development of deeper sulphide resources related to one or more of the various oxide mineralized zones which are present along the Brewery Creek mineralized trend. The sulphide zone is generally interpreted to be the non-oxidized and deeper expression of surface mineralization or, in some cases, the "feeder" zones to the shallower, more disseminated gold mineralization. The oxide project, on the other hand, relates to exploration and if successful, development of shallower oxidized and direct cyanide leachable disseminated gold mineralization similar in character and geometry to the ore previously mined at Brewery Creek.

Under the terms of the letter agreement, within 60 days of the Company incurring a minimum of $750,000 in expenditures on the Brewery Creek property, the Company will deliver to NovaGold Canada a report as to the results of such expenditures. NovaGold Canada will have 60 days following receipt of the report to give notice that it wishes to exercise the back-in right. The back-in right will be exercisable by NovaGold Canada by paying $500,000 to the Company over a four year period and incurring $1,750,000 in expenditures on the Brewery Creek property over a five year period. The letter agreement contemplates the parties entering into joint venture agreements upon the completion of the payments and expenditures by NovaGold Canada.

The Company completed its initial public offering of 2,000,000 common shares at a price of $1.50 per share on January 26, 2006 to raise gross proceeds of $3,000,000. The Company completed a listing of its common shares on the Toronto Stock Exchange under the trading symbol "AXR" on January 26, 2006.

The Company completed a partially brokered and partially non-brokered financing of in the aggregate 1,702,128 "flow-through" common shares at a price of $2.35 per share on April 13, 2006 to raise gross proceeds of $4,000,000.

The Company completed a public offering by way of short form prospectus of 4,700,000 common shares at a price of $2.50 per share on April 28, 2006 to raise gross proceeds of $11,750,000.

On June 30, 2006, the Company completed the acquisition of Access Mining Consultants Ltd ("AMC"), a privately owned mid-tier environmental consulting firm headquartered in Whitehorse, Yukon Territory. AMC was originally formed in March 1995. Since then, AMC has provided locally experienced professional project management and environmental services for industrial land and resource development projects in northern Canada. The Company acquired 100% of the shares of AMC for $2,000,000; 50% of the AMC shares were acquired for $1,000,000 in cash and the remaining 50% of the AMC shares were exchanged for 383,978 common shares of the Company, being $1,000,000 in common shares of the Company valued at the volume weighted average price for the 10 trading days of the common shares of the Company on the Toronto Stock Exchange prior to June 27, 2006. The vendors, Rob McIntyre and Dan Cornett, being the founders and current principals of AMC, are continuing in the AMC management team with a focus on client service and the profitable growth of the AMC business as a wholly owned subsidiary of the Company. The Company also intends to appoint Mr. McIntyre and Mr. Cornett to the senior management team of the Company. The business acquisition report dated September 13, 2006 relating to the acquisition of AMC is incorporated into this Annual Information Form by reference. The business acquisition report is available for review under the Company's profile on the SEDAR database at www.sedar.com.

The Company's principal businesses are the exploration and development of the Brewery Creek and McQuesten properties in Yukon, and following initial close of the UKHM acquisition in April 2006 exploration of the UKHM properties; the Company also operates an environmental services business as well as a mine reclamation and remediation business. In addition, the Company holds interests in the Keno Hill, Sprogge, Harlan and Klondike properties in Yukon and the Telegraph Creek, Iskut River, Kiniskan Lake and Manson Creek properties in British Columbia.

The Company's principal exploration projects are the Brewery Creek and McQuesten projects in Yukon. In addition, the Company is currently undertaking an extensive review of the historical mining records at the Keno Hill property, as well as initiating a 15,000 meter drill program. The Company initiated an exploration drill program at Brewery Creek in April 2006 with focus on sulphide facies gold mineralization in the Bohemian area of the Brewery Creek mineralized trend, as well as exploration testing of the Classic prospect to the south of the mineralized trend.

An investment in the securities of the Company involves significant risk, which should be carefully considered by prospective investors before purchasing the common shares. In addition to the information set out elsewhere or incorporated by reference in this Annual Information Form, investors should carefully consider the risk factors set out below. Such risk factors could materially affect the Company's future

financial results and could cause events to differ materially from those described in forward-looking statements relating to the Company, each of which could cause investors to lose part or all of their investments in the common shares of the Company. These risk factors are not a definitive list of all risk factors associated with an investment in the Company or in connection with the Company's operations.

Mineral exploration and development involves a high degree of risk and few properties which are explored are ultimately developed into producing mines.

With respect to the Company’s properties, should any ore reserves exist, substantial expenditures will be required to confirm ore reserves which are sufficient to commercially mine its current properties, and to obtain the required environmental approvals and permitting required to commence commercial operations. Should any mineral resource be defined on such properties there can be no assurance that the mineral resource on such properties can be commercially mined or that the metallurgical processing will produce economically viable saleable products. The decision as to whether a property contains a commercial mineral deposit and should be brought into production will depend upon the results of exploration programs and/or feasibility studies, and the recommendations of duly qualified engineers and/or geologists, all of which involves significant expense. This decision will involve consideration and evaluation of several significant factors including, but not limited to: (1) costs of bringing a property into production, including exploration and development work, preparation of production feasibility studies and construction of production facilities; (2) availability and costs of financing; (3) ongoing costs of production; (4) market prices for the minerals to be produced; (5) environmental compliance regulations and restraints (including potential environmental liabilities associated with historical exploration activities); and (6) political climate and/or governmental regulation and control.

The ability of the Company to sell, and profit from the sale of any eventual production from any of the Company’s properties will be subject to the prevailing conditions in the marketplace at the time of sale. Many of these factors are beyond the control of the Company therefore represent a market risk which could impact the long term viability of the Company and its operations.

A material decline in the level of activity or reduction in industry willingness to spend capital on mine reclamation, remediation or environmental services could adversely affect demand for the Company's services. Likewise, a material change in mining product commodity prices, the ability of mining companies to raise capital or changes in domestic or international political, regulatory and economic conditions could adversely affect demand for the Company's services.

The patents to which the Company has access or other proprietary technology may not prevent the Company's competitors from developing substantially similar technology, which may reduce the Company's competitive advantage. Similarly, the loss of access of any of such patents or other proprietary technology or claims from third parties that such patents or other proprietary technology infringe upon proprietary rights which they may claim or hold would be detrimental to the Company's reclamation and remediation business. There can be no certainty or assurance that licence agreements with ARCADIS (as defined herein) or the ARCADIS Companies will be concluded on favourable terms or concluded at all. If licence agreements are not concluded with ARCADIS or the ARCADIS Companies or if the terms are onerous, or if the relationship with ARCADIS deteriorates, this may have a significant adverse effect on the Company's reclamation and remediation business.

The Company may not be able to keep pace with continual and rapid technological developments that characterize the market for the Company's mine reclamation and remediation services and the Company's failure to do so may result in a loss of its market share. Similarly, changes in existing regulations relating to mine reclamation and remediation activities could require the Company to change the way it conducts its business.

The purchase by the Company of the assets of UKHM is subject, among other things, to the Company applying for a water license prior to October 18, 2006 and obtaining a water licence for the purpose of care and maintenance pursuant to the Waters Act (Yukon) by October 18, 2009, subject to a 12 month extension at the discretion of the vendor. There can be no assurance that the Company will be able to satisfy these conditions.

The Company is in the process of reviewing historical records and has begun an initial exploration program. Further geological testing will be required. There is no assurance that such exploration and testing will find favourable results. The history of the UKHM property has been one of fluctuating fortunes, with new technologies and concepts numerous times reviving the district from probable closure until 1989, when it did ultimately close down for a variety of economic and technical reasons. Many or all of these economic and technical issues will need to be addressed prior to the commencement of any future production on the UKHM property.

To further the activities of the Company to acquire additional properties, the Company will require additional funds and it is likely that, to obtain the necessary funds, the Company will have to sell additional securities including, but not limited to, its common stock or some form of convertible securities, the effect of which would result in a substantial dilution of the present equity interests of the Company's shareholders.

The Company will require additional funds to further explore, develop and mine its properties. The Company has limited financial resources, and there is no assurance that additional funding will be available to the Company to carry out the completion of all proposed activities, for additional exploration or for the substantial capital that is typically required in order to place a property into commercial production. Although the Company has been successful in the past in obtaining financing through the sale of equity securities, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of its properties.

While the Company has performed its own due diligence with respect to title of its properties, this should not be construed as a guarantee of title. The properties may be subject to prior unregistered agreements of transfer or land claims, and title may be affected by undetected defects.

Significant and increasing competition exists for mining opportunities internationally. There are a number of large established mining companies with substantial capabilities and far greater financial and technical resources than the Company. The Company may be unable to acquire additional attractive mining properties on terms it considers acceptable and there can be no assurance that the Company's exploration and acquisition programs will yield any new reserves or result in any commercial mining operation.

Certain directors and officers of the Company are, and may continue to be, involved in the mining and mineral exploration industry through their direct and indirect participation in corporations, partnerships or joint ventures which are potential competitors of the Company. Situations may arise in connection with potential acquisitions in investments where the other interests of these directors and officers may conflict with the interests of the Company. Directors and officers of the Company with conflicts of interest will be subject to and will follow the procedures set out in applicable corporate and securities legislation, regulation, rules and policies.

The Company has no history of earnings with respect to its mineral exploration and development activities, and there is no assurance that any of its mineral properties will generate earnings, operate profitably or provide a return on investment in the future. The Company has not paid dividends in the past and has no plans to pay dividends for the foreseeable future. The future dividend policy of the Company will be determined by its directors.

Potential Profitability Depends Upon Factors Beyond the Control of the Company

The potential profitability of mineral properties is dependent upon many factors beyond the Company’s control. For instance, world prices of and markets for gold and silver are unpredictable, highly volatile, potentially subject to governmental fixing, pegging and/or controls and respond to changes in domestic, international, political, social and economic environments. Another factor is that rates of recovery of mined ore may vary from the rate experienced in tests and a reduction in the recovery rate will adversely affect profitability and, possibly, the economic viability of a property. Profitability also depends on the costs of operations, including costs of labour, equipment, electricity, environmental compliance or other production inputs. Such costs will fluctuate in ways the Company cannot predict and are beyond the Company’s control, and such fluctuations will impact on profitability and may eliminate profitability altogether. Additionally, due to worldwide economic uncertainty, the availability and cost of funds for development and other costs have become increasingly difficult, if not impossible, to project. These changes and events may materially affect the financial performance of the Company.

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to insure against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.

Adverse weather conditions could also disrupt the Company's mine reclamation and remediation business and/or reduce demand for the Company's services.

The current or future operations of the Company, including development activities, commencement of production on its properties and activities associated with the Company's mine reclamation and remediation business, require permits or licenses from various federal and local governmental authorities, and such operations are and will be governed by laws and regulations governing prospecting, development, mining, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. Companies engaged in the development and operation of mines and related facilities and in mine reclamation and remediation activities generally experience increased costs and delays as a result of the need to comply with the applicable laws, regulations and permits. There can be no assurance that all permits which the Company may require for the conduct of its operations will be obtainable on reasonable terms or that such laws and regulations would not have an adverse effect on any project which the Company might undertake.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in mining operations or in mine reclamation and remediation activities may be required to compensate those suffering loss or damage by reason of such activities and may have civil or criminal fines or penalties imposed upon them for violation of applicable laws or regulations.

Amendments to current laws, regulations and permits governing operations and activities of mining companies and mine reclamation and remediation activities, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or production costs or reduction in levels of production at producing properties or require abandonment or delays in the development of new mining properties.

In the course of exploration, development and production of mineral properties and in connection with the Company's mine reclamation and remediation business, several risks and, in particular, unexpected or unusual geological or operating conditions, may occur. It is not always possible to fully insure against such risks, and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise they could reduce or eliminate any future profitability and result in an increase in costs and a decline in value of the securities of the Company.

The Company is not insured against most environmental risks. Insurance against environmental risks (including potential liability for pollution or other hazards as a result of the disposal of waste products occurring from exploration and production) has not been generally available to companies within the industry. The Company periodically evaluates the cost and coverage of the insurance against certain environmental risks that is available to determine if it would be appropriate to obtain such insurance. Without such insurance, and if the Company becomes subject to environmental liabilities, the payment of such liabilities would reduce or eliminate its available funds or could exceed the funds the Company has to pay such liabilities and result in bankruptcy. Should the Company be unable to fund fully the remedial cost of an environmental problem it might be required to enter into interim compliance measures pending completion of the required remedy.

The demand for the Company's mine reclamation and remediation services may be adversely affected by shortages of critical supplies or equipment, or personnel trained to manage and operate the Company's programs and equipment.

The operations of the Company in countries other than Canada are subject to currency fluctuations and such fluctuations may materially affect the financial position and results of the Company. The Company is subject to the risks associated with the fluctuation of the rate of exchange of the Canadian dollar and foreign currencies. The Company does not currently take any steps to hedge against currency fluctuations although it may elect to hedge against the risk of currency fluctuations in the future. There can be no assurance that steps taken by the Company to address foreign currency fluctuations will eliminate all adverse effects and, accordingly, the Company may suffer losses due to adverse foreign currency fluctuations.

The Company may be subject from time to time to foreign exchange controls in countries outside of Canada although no such claims are currently known to the Company.

The Company's international operations with respect to its mine reclamation and remediation business are subject to uncertainties, which could limit the revenues and profitability of these operations, including difficulties and costs associated with complying with a wide variety of complex foreign laws, treaties, regulations, unexpected change in regulatory environment, inadequate protection of intellectual property, legal uncertainties, timing delays, expenses associated with tariffs, licenses, and other trade barriers, among other risks.

The Company's principal mineral projects are the Brewery Creek and McQuesten projects in Yukon.

Effective, September 16, 2005, the Company granted a back-in right to NovaGold Canada to acquire a 70% interest in the sulphide project and a 30% interest in the oxide project with respect to the Brewery Creek property. See "General Development of the Business – Three Year History and Significant Acquisitions".

The Brewery Creek property is subject to two underlying royalty agreements, as follows:

The Company had an asset retirement obligation of $1.2 million at June 30, 2006 at the Brewery Creek property, based on the estimated cash flows required to settle any abandonment and site restoration obligations relating to the Company's mining properties at the end of their useful lives. The asset retirement obligation was arrived at by the Company with the benefit of independent engineering and financial advice. The Company on an annual basis retains an independent engineering firm to review and opine on the remaining outstanding reclamation liability at Brewery Creek. The cost obligation to offset the liability is estimated using government published rates and schedules. Most of the payments to settle the obligations will occur on an ongoing basis over the lives of the related assets estimated to be for a period of up to 13 years. Undiscounted cash flows are estimated at $1,319,000. Cash flows have been discounted at 4% for the purposes of determining the asset retirement obligation and were recorded as a part of the Brewery Creek acquisition. As at September 26 2006 the Company and the Yukon Government were discussing the reduction of the amount of security as a result of work completed by the Company in 2005 and 2006.

All of the reclamation work on the Brewery Creek property has been completed as per the conditions outlined in the Company's approved reclamation and closure plan. Final reclamation of the process solution ponds and the single remaining mine building will be completed once these facilities are no longer required and appropriate regulatory authorizations have been secured for their removal. Monitoring and terrestrial maintenance activities at the mine continue as per the schedule outlined in the Company's Water Use and Quartz Mining Licenses.

An independent qualifying report (the "Brewery Creek Report") on the Brewery Creek property entitled "Brewery Creek Gold Project, Yukon Territory, Canada" has been authored by Ronald G. Simpson, P. Geo. (the "Brewery Creek Report Author") of GeoSim Services Inc. dated November 4, 2005. The Brewery Creek Report is available for review under the Company's profile on the SEDAR database at www.sedar.com.

The following disclosure relating to the Brewery Creek property has been derived from the Brewery Creek Report.

The Brewery Creek property and mine site are located 55 kilometres due east of Dawson City, Yukon on NTS map sheet 116B-1 at latitude 64°02' N and longitude 138°15' W. The property covers an area of approximately 9 x 17 kilometres or 12,772 hectares, consisting of 801 mineral quartz claims and fractions held under the provisions of the Yukon Quartz Mining Act. 93 claims are legally surveyed and have been converted to "Quartz Mining Leases", covering mine facilities, pits, waste dumps and adjacent drill indicated deposits including the Bohemian, West Big Rock, East Big Rock and South Fosters zones. 76 of the mining leases expire on May 21, 2016, seven expire on May 24, 2018 and ten expire on August 24, 2019.

The Brewery Creek mine is authorized under a Type A Water License (Water License) to obtain and use up to 2,724 cubic meters of water per day from Laura Creek (a tributary of the South Klondike River), and to deposit waste, as defined in Viceroy's water license application, into the catchment basins of Laura, Lucky

and Pacific Creeks. The expiry date of the Water License, which is subject to the restrictions and conditions contained in the Yukon Waters Act and the Regulations made thereunder, is December 31, 2021. The Brewery Creek mine has a production license for the production of minerals pursuant to the Yukon Quartz Mining Act. The expiry date of the production license is December 31, 2021.

Road access from Dawson City is 40 kilometres east on the paved Klondike Highway; seven kilometres north on the all-weather gravel Dempster Highway; then eastward for 20 kilometres on the upgraded North Fork Road to the southwestern edge of the property; and finally another six kilometres to the mine site on a company road. There are two river crossings on the 20 kilometre stretch of the upgraded North Fork Road. The first, across the North Klondike River, and the second, across Lee Creek, have bridges with weight limits of > 50,000 kg.

Dawson City, the principal settlement in the region, has a population of almost 2,000. From Dawson City there is regular air service and a paved highway to Whitehorse and points south.

The property is located in the foothills of the Olgivie Mountains, with elevations ranging between 540 and 1225 metres above sea level. Despite low elevations, relief on the property is moderately steep, characterised by V-shaped valleys cutting a gently rolling upland rising from the Tintina Valley.

The climate is semi arid, typical of northern interior regions, with most precipitation occurring in the summer. Temperatures are variable and extreme, with warm summers averaging 15-20° C and maximum temperatures reaching greater than 30° C. Winters are prolonged (November through March) and sometimes severe, reaching extreme minimum temperatures between -40 and -50° C. Average annual precipitation is 325 millimetres. The annual frost free period at Brewery creek is 111 days.

Infrastructure at the mine site has been scaled back with reclamation activities and consists of a permanent heap leach pad, process and overflow ponds, an exploration office complex with core and RC chip tray storage and a warehouse/office structure.

The initial claims were staked by Noranda Exploration Company Limited ("Norex") in 1987 to cover a reconnaissance geochemical anomaly. Further claims were staked in subsequent years to cover possible extensions of gold mineralization. In June 1990, Loki Gold Corporation ("Loki") entered into an option agreement with Norex and earned a 49% interest in the property by August 1991. In June, 1993, the remaining 51% interest was purchased, giving Loki sole ownership of the property. In 1994, the core claims covering the deposit areas, mine facilities and heap leach pad area were surveyed and taken to lease. In May 1996, Loki amalgamated with Baja Gold Inc. to form a new company under the name VLB Resource Corporation and became a wholly-owned subsidiary of Viceroy Resource Corporation. VLB Resource Corporation changed its name to Viceroy Minerals Corporation and later to Quest Mortgage Corp. (Viceroy).

Mineable oxide reserves were defined in eight near surface deposits along a strike length of 7 km. From west to east, the deposits were named Pacific, Blue, Moosehead, Canadian, Fosters, Kokanee, Golden and Lucky Zones. Construction of the mine started in 1995 and was completed in 1996.

A total of 279,541 ounces of gold were produced at Brewery Creek from 1996 through 2002. During 1997, a total of 72,387 ounces of gold were produced at a cash cost of US$184 per ounce. In 1998, production totalled 79,396 ounces at a cash cost of US$177 per ounce. Production in 1999 fell to 48,164 ounces while operating costs rose to a cash cost of US$288 per ounce. Viceroy suspended seasonal mining operations earlier than planned and hired an independent consulting company to study recovery processes in an effort to improve recoveries. The company also conducted extensive exploration on the mine site to identify additional reserves. In 2000, Viceroy concentrated on selectively mining those ore bodies which were most oxidized and contained the highest grade. Production in 2000 fell to 48,048 ounces of gold at a cash operating cost of US$243 per ounce. Mining ceased at Brewery Creek in 2001, but heap leaching continued with production of 18,542 ounces of gold at a cash operating cost of US$222 per ounce.

During 2002, Viceroy undertook and completed approximately 50% of the mine area reclamation related to re-contouring and re-vegetation of pits and dumps. A heap detoxification program was initiated bringing cyanide and metal levels of heap effluent to water licence discharge levels, excluding selenium, by September 2002. An amendment to the water licence was approved by government regulatory agencies, allowing land application of heap effluent of no more than 200,000 cubic metres per year. Re-circulation of effluent to the heap ceased in October 2002, excluding 450 litres/min that was applied to the heap over the winter (2002/2003) for snow making purposes. A final closure and decommissioning plan was prepared and submitted as required, to the regulatory agencies, and the primary elements of the plan adopted as water license amendments granted in April 2005.

Five near surface, drill indicated and inferred deposits remain outside of the mined areas. These deposits include the South Fosters Zone (immediately adjacent to the Canadian Pit), Bohemian Zone (500 metres east of the Lucky Pit), West and East Big Rock Zones (0.5 to 2 kilometres west of the Pacific Pit) and North Slope Zone (1 kilometre NW of the Kokanee Zone).

Recent structural mapping in 2002 by R. Diment and in 2003 by R. Diment and P. Lindberg has developed a more regionally consistent and comprehensive structural model that offers potential to define a higher grade, multi-million ounce, sulphide feeder source to the near surface oxide mineralization. This concept was partially tested by diamond drilling in 2004 at the Blue Pit. No significant new gold mineralization was encountered.

Preliminary exploration work and metallurgical testing was also carried out by R. Diment on assessing the potential resource of bedded barite on the property and whether it meets approved petroleum industry standards for drilling additives.

The Brewery Creek property is located within the foothills of the Ogilvie Mountains along the northeastern boundary of the Tintina Trench. The Tintina Trench forms a 15 kilometre wide erosional valley that delineates the Mesozoic to Tertiary Tintina Fault, which is now obscured by extensive unconsolidated deposits that fill the Klondike River Valley. The fault juxtaposes Selwyn Basin stratigraphy on the northeast and the accreted terranes of the Canadian Cordillera on the southwest.

Selwyn Basin rocks northeast of the Tintina Trench have been polydeformed and imbricated by the Jura-Cretaceous Dawson, Tombstone and Robert Service Thrusts (Murphy, Heon 1994). The Robert Service Thrust, extending from the Dempster Highway east-southeast through the Mayo map area, carries the bulk of

Selwyn Basin rocks, including those of the Brewery Creek property, in its hanging wall. The hanging wall stratigraphy includes thick sequences of Lower Proterozoic Hyland Group, Cambrian-Ordovician Road River Group and Devonian-Mississippian Earn Group sediments.

Supracrustal rocks within the property boundary are composed of Rabbitkettle Formation (Cambrian-Ordovician) calcareous phyllite overlain by Road River Group (Ordovician-Silurian) volcanics and off-shelf sediments and Earn Group (Lower Devonian) siliclastics. Throughout most of the property, Cretaceous monzonite and quartz monzonite intrudes Earn Group and Road River Group stratigraphy as a series of semi-conformable sills along a 15 km strike length. Cretaceous (91 Ma), Tombstone Suite biotite monzonite and syenite stock-like bodies occur locally in the south-central part of the property. Sill emplacement is primarily controlled by a tectonized, graphitic argillite at the contact between the Earn and Road River Groups. This contact is also the locus of NNE-directed thrust faulting that has placed thin sequences (<150 metres) of Silurian siltstone against Devonian siliclastics. The age of thrusting is probably related to the earliest Cretaceous movement on the Tombstone Thrust.

The deformation history is complex consisting of four distinct folding events, three of which are recognized regionally in similar rocks to the ESE. Brittle faults, related the fourth and youngest deformation event, control the bulk of known gold mineralization within the Cretaceous sills and lesser Earn and Road River Group sediments.

The Brewery Creek deposit exhibits characteristics of both intrusion-related and epithermal/Carlin type deposits. It is generally considered to be an alkalic intrusion-associated, gold deposit as most of the mineralization is concentrated within or proximal to the monzonites. Geological, geochemical, petrographic and fluid inclusion data indicates that original sill emplacement, first stage alteration and associated mineralization occurred at a relatively low temperature and high level within the crust. However, the presence of wispy-textured quartz veinlets, related to later shear zone deformation, indicates deposition at moderate to deep levels (Dunne, 1995), a common characteristic of Carlin-type deposits (Poulsen, 1996).

The reserves delineated to date consist of fracture-controlled quartz stockwork in siliclastic and intrusive rocks; however, the presence of local decalcification and silica replacement in the calcareous Steel Formation suggests that a Carlin Type model may be appropriate at Brewery Creek.

Gold mineralization at Brewery Creek is fracture controlled, primarily confined to hanging wall siliclastic strata, intrusive rocks and calcareous sediments along listric normal faults. Eighty-five percent of the reserves were hosted by Cretaceous quartz monzonite sills while the remainder was contained within brittle-deformed coarse clastic sediments of the Devonian Earn Group. Furthermore, newly discovered mineralization within Silurian calcareous siltstone and sheeted quartz veinlet systems within larger Cretaceous monzonite and syenite stocks increases the potential for defining economic "Carlin" and "Fort Knox" type deposits.

Typically, the reserve deposits delineated to date average 1 to 2 gpt Au with individual assays varying from trace to greater than 30 gpt Au.

Intrusive hosted mineralization is intimately associated with pervasive phyllic and locally intense argillic alteration and the introduction of secondary quartz with fine pyrite and arsenopyrite. These silicified areas

host some of the highest-grade gold mineralization on the property with values up to 16 gpt Au / 6 metres, and 11.24 gpt Au over 10 metres in drilling and 2.07 gpt Au over 50 metres in trenching. However, high gold values are also associated with intense fracturing and weak silicification, suggesting that the more subtle and passive hairline stockworking is the main mineralizing event.

Stibnite veins (<1 metre) are common within the mineralized zones but rarely contain any significant gold values. Silicified intrusive clasts within these veins imply that the stibnite may represent a later hydrothermal event that occupied the same structures as the gold mineralizing event.

Extensive oxidation persists to a depth of 50 metres from surface. The most common oxidation minerals are goethite after pyrite, scorodite after arsenopyrite, and antimony ochre and kermesite after stibnite.

At Brewery Creek, the monzonite is grossly divided into the following variants; altered quartz monzonite (AQM) and limonitic altered quartz monzonite (LAQM). The AQM represents the sulfide or hypogene zone, where sulphides typically remain unoxidized. LAQM represents rock in which oxidation is complete.

Sediment hosted mineralization in Earn Group siliclastic rocks is confined to the Pacific, Blue and Moosehead Zones. Oxidation is less extensive than in the intrusive rocks, limited to a depth of 25 metres from surface. Gold appears more closely associated with arsenopyrite than is apparent elsewhere; however, this may be more a result of better preservation of the sulphides in the typically less oxidized sediments. All lithologies host gold mineralization; however, shale, siltstone and sandstone host higher gold values than greywacke and chert pebble conglomerate. This is likely due to the increased primary porosity in the thinly bedded, fine-grained sediments. Where structural controls are strongest, the host rock lithology becomes less significant.

In the North Slope zone, fracture-controlled gold mineralization occurs in narrow zones within Silurian Road River Group sediments. The Steel Formation, a calcareous and pyritic siltstone, exhibits local decalcification and replacement: these are typical characteristics of Carlin-type mineralization.

Mineralized Steel Formation siltstone also occurs in the North Schooner Zone, 0.5 to 2 kilometres east of the Bohemian Zone, where drilling has returned intersections of 3.04 gpt Au over 10 metres and trenching has returned gold values of 1.32 gpt Au over 17.7 metres.

In the South Schooner Zone (23400E/17600N) fracture-controlled mineralization is associated with chalcedonic quartz stockwork zones in sericitized Steel Formation siltstone. Drilling has returned significant but erratic intercepts up to 12.8 gpt Au over 2 metres and 2.44 gpt Au over 8 metres.

Exploration surveys conducted at Brewery Creek between 1988 and 1999 included geological mapping, extensive grid soil sampling, ground and airborne geophysical studies and extensive, mechanized surface trenching. Due to the lack of recent glaciation and nominal overburden cover, soil sampling followed by systematic trenching proved to be the most useful tools in defining the geological and structural controls to gold mineralization.

Exploration work in 2004 by SpectrumGold Inc. included camp building, line cutting, road construction, Induced Polarization geophysical surveys and diamond drilling. The program was terminated prematurely due to safety issues related to an on site forest fire.

Due to less than 1% outcrop on the property geological mapping was restricted primarily to trench and road cut exposures. Soil pit mapping was also utilized outboard from main exploration zones to develop a coherent and regionally consistent geology map.

Detailed structural mapping was carried out in 2002 and 2003. The purpose of the study was "to develop a temporal ore genesis model for the Brewery Creek Deposit to help focus future exploration drilling in assessing the potential for higher grade sulphide resources". Several conclusions were reached including:

Soil geochemistry has been an important exploration tool at Brewery Creek. Gold-in-soil anomalies strongly define all the ore zones and exploration targets discovered. To date, greater than 24,000 soil samples have been collected.

The hydrothermal system at Brewery Creek is anomalous in gold, arsenic, antimony and mercury. Enriched zinc and lead values are characteristic of Earn Group sediments. Silver is weakly anomalous and erratic; it is associated with zinc in the sediments and gold in the epithermal system.

Between 1994 and 1996, more than 10,500 soil samples were collected across previously sampled portions of the exploration grid. Anomalies were extended south of the Classic zone and west of the Big Rock zones.

In 1997, approximately 6,000 soil samples were collected to better define anomalous trends in the South Canadian zone.

Geophysical surveys consisted of ground magnetometer and IP surveys conducted between 1989 and 1992 by Norex. In 1998, an airborne magnetometer and radiometric survey was also conducted covering the entire property.

Although the airborne and ground magnetometer surveys were useful in delineating Tombstone Suite intrusive centres and their adjacent hornfelsed areoles, mineralized zones typically lie outboard or flanked these magnetic anomalies. The oxidized, auriferous sills that make up most of the Reserve Trend deposits exhibited a relatively flat magnetic response.

Results of a twenty-eight kilometre IP geophysical survey in 2004 clearly defined two chargeability domains (west-high and east-low) that are separated by a major northwest trending fault. The trace of this structure passes from the Classic Zone to just west of the Pacific production pit. A strong magnetic-high is coincident with the high chargeability anomaly.

Due to the lack of outcrop and weathered, unglaciated terrain, mechanized systematic trenching of soil anomalies proved to be a very useful tool in defining geological and structural controls to gold mineralization and defining drill targets. A total of 318 trenches with at cumulative length of 42,298.8 metres were excavated on the property between 1989 and 1999.

A total of 2,310 reverse circulation holes have been drilled since 1989, amounting to 126,112.2 metres. Average and maximum depth of drilling was 24 m and 45 m, respectively.

An additional 110 rotary drill holes were completed using the mine blast hole drill in 1999 and 2000.

A total of 127 core holes (9,664.5 metres) have been drilled since 1989. RC drilling became the chief type of definition drilling from 1990 onward. Core drilling post 1989 was restricted to geotechnical drilling for pit wall stability, deeper sulphide drilling, and twinning significant RC hole intercepts for grade and thickness comparisons.

Core drilling was resumed in 2004 by SpectrumGold Inc (now, NovaGold Canada). Unfortunately, the proposed program could not be completed due to forest fires in the vicinity.

Diamond drilling in 2004 tested targets at Blue, Blue East and South Pacific. At Blue, holes BC04-118 and BC04-119 were collared on the pit high wall and targeted steep north dipping, high grade gold bearing structures at depth. Significant historic drill hole values in the Blue Pit area include 16.0 metres of 9.0 g/t Au (RC94-873) and 12.0 metres of 14.0 g/t Au (RC94-856). Both holes intersected long intercepts of altered quartz monzonite. No significant gold mineralization (all values <0.5 g/t Au) was intersected in either of these two test holes.

Despite the lack of significant gold intercepts, results from the 2004 drilling are regarded as positive for the following reasons:

Sampling at Brewery Creek involved RC drilling, diamond drilling, mechanized surface trenching and soil sampling.

RC drilling was conducted using down hole hammer bits and drilling was conducted dry when ever possible to limit down hole contamination. The mine blast-hole drill was also used in 1999 and 2000 for infill definition purposes.

Samples were collected over two metre intervals. Sample material was fed into a cyclone and then dropped into a splitter. A 12.5 % split was collected in 12" x 20" plastic sample bags and used for assay purposes. All sample bags were sealed with tamper resistant ties immediately after the sample was collected.

The MRDI audit inspected sample weights from 1997 and 1998 drilling and found that they represented an acceptable range in recovery (minimum recoveries were calculated at 59%). Entire weights from 1991 drilling were found to be low relative to industry standards, averaging between 20-75%. However, the Company believes this recovery to be underestimated by approximately 20%.

Core was washed and marked out into two meter sampling intervals or smaller (sample intervals are broken at lithologic contacts and around alteration and structural zones). Core recovery and rock quality data (RQD) were recorded. The core was logged and photographed. The core is then split longitudinally in half using a diamond rock saw or knife. MRDI audit concluded that although recoveries were low in early drilling campaigns in 1989 and 1990 recoveries in all later drilling campaigns were within industry standards. The results from the twinned hole comparison with RC holes showed no significant correlation between recovery in the core hole and grade difference between twinned holes (Huska, 1992).

In 2004 a competent mud program was implemented to improve on core recoveries. Holes were all started with HQ core and when ground conditions deteriorated were reduced to NQ. Overall recoveries ranged from a low of 62% to a high of 88%.

Systematic two metre continuous chip samples were taken along the bottom of a trench wall or outcrop face. Sample intervals were broken at lithologic contacts and around major alteration and structural zones to determine controls and relative distribution of gold mineralization. The two metre sample interval is considered acceptable since significant gold mineralization is typically controlled by fracture stockwork zones and local breccias in both intrusives and sediments ranging from 2-50 metres thick. Trenches were excavated at least 1.5 metres into bedrock to prevent any surface contamination. Panel or random chip samples are discouraged, as sampling bias is more likely to be introduced. If geology or structure is gently dipping or flat lying vertical, continuous chip samples are also taken in order to provide true mineralized widths as much as possible. Sample intervals were marked off with a tight chain and labelled in the field with metal tags affixed to wooden stakes. A strip log documenting the geology, alteration, and structural measurements were recorded.

Soil sampling consists of "B-Horizon" samples taken below the A-2 organic layer, and below the layer of White River Ash (a recent volcanic event which laid down a thin veneer of volcanic ash over south central Yukon). If a "B-Horizon" sample is unavailable, "A-Horizon", and possibly "C-Horizon" samples are taken, and the respective horizon is recorded. It is felt that sampling these horizons is preferable to not sampling the

station. Other soil characteristics which are noted include depth of sample, horizon development, slope angle and direction, organic content, vegetation and surficial and rock chip geology.

Sample preparation and analytical techniques for trench, RC, RD and core drill samples were conducted by a variety of laboratories from 1989 through 2000 and are tabulated below.

MRDI conducted a comprehensive resource and reserve audit in 1998, including verification and accuracy of the geological and analytical database. Approximately 3.3% of the total number of assays (n=62,167) had corresponding outside check assays which showed good agreement with the original assays. Results from a single batch of check assays from Chemex Laboratories in Vancouver assays (n=42) in 1998 averaged 42%

higher than the original Mine assay laboratory. Subsequent re-assaying, including an additional outside laboratory verified that the check assays were contaminated during preparation and analysis at Chemex. Later 1998 drill hole samples produced an acceptable correlation between Chemex and Brewery Creek laboratory assays. Gold values used in resource estimations were the lower and more accurate assays produced by the Brewery Creek laboratory, thus resource estimations were not materially affected.

Subsequent to the MRDI audit more rigorous check assay procedures, involving up to 12 outside laboratories, were put in place.

Cyclicity tests were also performed on 2,260 RC holes to test for down hole contamination. Only 0.9% of holes (20 holes) failed the test which is within industry standards.

The Brewery Creek mine process facility consisted of a large permanent heap leach pad, and adsorption, desorption and gold recovery ("ADR") plant, process and overflow ponds and ancillary facilities. The ADR plant was removed in 2004.

The leach pad is divided into 7 cells, each nominally 83 metres wide and 462 metres long. Each cell can accommodate approximately 1,500,000 tonnes of ore. The cells are separated by earthfill dividers, approximately one metre high.

Solution ponds are required to store both operating solutions and the rainfall/snowmelt from the pad area. In the unlikely event that the solution volumes exceed the maximum design criteria, a permitted effluent treatment plant and land application system has been constructed. The systems allows for the treatment and release of excess process solution of up to 200,000 cubic metres per year. Given sound solution management and the normal operational controls, the probability of an overflow is considered to be remote.

Prior to mine production, metallurgical testing was conducted by Lakefield Research of Lakefield Ontario and by Kappes Cassiday & Associates (KCA) of Sparks, Nevada. KCA conducted 13 column leach tests and 207 bottle rolls on samples of drill core and material obtained from surface bulk trenches. This material was crushed to-50mm, screened, or leached as run-of-mine material. Tests by Lakefield Research, including specific gravity determinations, SAG mill grinding and Bond Work Index calculations, all of which were conducted on samples of drill core and surface trench samples.

Results from the testwork indicated that run of mine material was amenable to heap leaching with an overall weighted average recovery of 88%. Crushing tests indicated a potential increase of only 2-4 % that would also require additional costs of agglomeration. Overall heap recovery was projected at 78% after allowances for preg robbing graphitic argillite (2%), coarse ore (2%) and transition/sulphide ore (6%) were subtracted. Rate of recovery was predicted at 80% over a 100 day leach period.

A total of 9,458,000 tonnes of ore at an average grade of 1.534 gpt Au (466,550 ounces.) have been placed on the heap from 1996 through to 2000. Total gold recovered as of December 2002, is 279,541 ounces, indicating a current heap recovery of 60%. The 18% reduction in recovery and longer recovery rates can be explained by comparing sample type and test results from 18 column tests and over 2000 bottle rolls collected

during mining operations and comparing them to the sample type and test results used for the feasibility study.

In retrospect, when comparing the current global recovery estimate of approximately 64% (using the feasibility methodology) for all of the ore currently on the leach pad to the original estimate of 78%, the largest variance is in the initial LAQM recovery starting point. The average recovery shown of 72% is for all of the columns conducted since commencement of operations (total of 18) on core and trench samples at various depths (ranging from surface to 60 metres) and deposits. Column tests used in the feasibility study were from surface trenches (0-8 metres). The LAQM recovery indicates a much lower oxide global recovery than samples at the surface.

In general, the methodology used for determining a global heap leach recovery in the feasibility report was acceptable but the selection of the samples used in the column leach tests created an overestimation of the LAQM ore type by projecting the surface recoveries through depth for all of the deposits.

The current recovery model is based on the results of over 2,000 additional bottle roll tests, additional column leach tests, actual heap performance and a comprehensive metallurgical review conducted by MRDI in 1999 and 2000. The model depends less on column leach tests and more on bottle roll tests and preg robbing shake tests.

By incorporating the new recovery model against the remaining resources, the ultimate recovery of all future ore reserves is estimated at 65%.

A review of bulk density measurements was undertaken by MRDI (Resource and Reserve Audit, 1999). MRDI located bulk density data relating to 217 samples collected in most mineral zones and comprising the major rock types as follows.

Most of the gold deposits at Brewery Creek were modelled using SURPAC software. Block models were created for each zone with a block size of 5 x 5 x 6 metres. Data used for the model were mainly 6-metre bench composites of assay intervals from diamond and reverse circulation drill holes. Trench data was not used for block model estimation since the grades were not considered to be as representative and unbiased as the drill data. Data from one trench was used in a sectional resource estimated for the North Slope zone which has now been classified as ‘inferred’.

Eight of the mineral zones at Brewery Creek have been mined out and four zones have block model resource estimates but were not mined. Two zones, North Slope and Classic, had preliminary, "hand-calculated" sectional resource estimations but only the former contained significant mineralization above a cutoff grade of 0.5 gpt Au. Several other zones did not have sufficient drilling to estimate a resource.

Blocks were interpolated using Inverse Distance to the fourth power (ID4) in which the weight of each composite is inversely proportional to its distance to the centre of the block. This method was chosen after experimental block models using inverse distance powers of 2-5 and Kriging were compared to blast hole results and actual mined blocks.

Only composites located inside the mineralized zone were used to estimate block grades. Anisotropic search ellipses were developed and oriented parallel to the strike and dip of the sills. No significant geostatistical analysis was carried out and search parameters were based primarily on zone geometry.

Grade capping was done on assays at selected zones according to recommendations made by MDA (Feb. 1998). In the most recent estimates of unmined zones, capping was only carried out for the Bohemian deposit (capped at 8 gpt Au).

Following initial grade interpolation, an estimated recoverable gold grade was calculated based on bottle roll tests from each zone and recoveries from actual mining operations. This recovery factor was calculated based on a combination of depth from surface (oxidation level) and rock type.

In 1999 MRDI carried out an extensive audit on the Brewery Creek reserves and resources. They recommended several changes to the procedures, most of which were adopted, at least partially. The main exception was in resource classification where a measured category was never estimated but simply combined with the indicated material. Changes made to the estimation procedure were as follows:

Recommendations that were not followed include restricting the number of composites from a single drill hole but until very recently this option was not available in SURPAC.

In 1997, a hand-calculated, sectional resource was estimated for the North Slope zone. A total of eight cross-sections with geology and gold assay values were cut through the North Slope zone. These sections were

interpreted as to geological framework, and mineralized zones above the cutoff were drawn. Subsequently, the mineralized zones were broken down into polygons based on distance from data and the areas of the polygons were measured.

The cross-sectional polygons were assumed to project half way to the adjacent sections. Because of the relatively early stage of exploration at the North Slope zone, the distance between sections is as much as 120 metres.

The cutoff grade used for composite creation was 0.5 grams/tonne Au, over a minimum length of 4 metres. Two consecutive meters of internal waste were permitted if the overall grade of added material exceeded the basic 0.5 gpt Au cutoff. On occasion, where a very high grade (>10 gpt Au) sample was present, additional material below cutoff may have been added to make a mineable thickness.

Because of the geological resource nature of this calculation, there was no attempt to correlate ore zones between sections. Mineralization was projected 25 metre outward beyond the first and last sections.

Grades for the polygons were taken directly from the nearest drill hole composite. If a polygon were positioned midway between two drill holes, it received a grade which was the mean of the two drill hole intercepts.

If the drill hole or trench intercept ended in material above the cutoff grade, this information was used to draw the polygon, but no grade was extrapolated to an area. Exceptions occurred if the indicated interval was of 4 metres or more and continuity looked geologically reasonable.

In light of industry standards currently established for mineral resource estimation, this resource has all been included into the 'inferred' category mainly due to the wide drill spacing and lack of correlation between sections.

The majority of the geological resource of the North Slope Zone is hosted within very weakly oxidized material. Bottle roll tests conducted on samples from the 1997 RC drilling program showed no apparent relationship between gold recovery and depth from surface, although the best recoveries were always within the top 30 metres. Recoveries ranged from 2% to 75% with an average recovery of 23%.

The Brewery Creek mine classified its resources on the basis on nominal drill-hole spacing. Resources were considered to be ‘measured and indicated’ if drilled on a 25-metre by 25 metre spacing. In the MRDI 1999 audit, it was stated that "this is acceptable industry practice, but should be supported by search parameters (minimum distance to composites and minimum number of composites) that are determined by variography".

The most recent resource estimations used a minimum of 3 composites to estimate a block and the number of composites used and distance to the nearest composite were recorded for each block. Due to the fairly tight drill spacing, most blocks within the zone constraints were within 25 metres of at least one composite. The one exception was the Bohemian zone where about 12.8% of the resource tonnes were contained in blocks that were greater than 25 metres from the closest composite but less than 1% in blocks that were more than 40 metres distant.

Since parameters for a ‘measured’ category were never defined for the block models, the current resources are all assigned to the ‘indicated’ or ‘inferred’ category. The following tables show the current mineral resources at a cutoff grade of 0.5 gpt Au:

Recovery factors were not estimated for the North Slope zone due to lack of data at the time of the study. More recent bottle roll tests on 9 samples from the 1997 RC drill program yielded recoveries ranging from 2% to 75% with an average recovery of 23%.

As part of their 1999 audit, MRDI conducted a bias check on each of the deposits to verify if the resource model grades were statistically unbiased with respect to the composite grades. It was concluded that there was no apparent bias between declustered composite grades and the estimated block grades on a bench by bench basis. Composite and block grades within the mineralized zone located inside the pit shells reconciled particularly well.

According to the Brewery Creek Report Author, the current data and information are adequate for the assumptions, conclusions and recommendations included in the Brewery Creek Report. Although the mine is currently in a reclamation and closure phase, geological and structural mapping in 2002 and 2003 has developed a more regionally consistent structural model that offers potential for the discovery of additional oxide and higher grade sulphide deposits. Drilling to date has been inadequate in assessing this potential. Comprehensive structural and stratigraphic mapping needs to continue outboard from the known deposits to define the potential of other polydeformed, regional fold closures that may have acted as deep seated, extensional sinks for later gold deposition. In a current environment of improving gold prices and approximately 2 million tonnes of useable space left on the heap leach pad, indicated resources of 145,000 ounces and inferred resources of 143,000 ounces may prove economically feasible in the future. The 5 kilometre Classic structure, of which only one kilometre has been drill tested, needs further work to define possible higher grade areas and its relationship with the regional deformation history.

Continued exploration work at Brewery Creek is recommended. Work should continue on detailed structural mapping of existing trenches and road exposures and re-logging of the deeper drill holes on the property in order to refine local controls to gold mineralization and how they relate to the regional deformation model. This mapping and re-synthesis of available data is critical to defining blind, higher grade sulphide targets at depth. In particular, priority should be given to defining extensions of the structurally complex areas in the Moosehead, Bohemian-Sleemans Trend and the Classic Zone.

Based on the work recommendations stated above an exploration program and budget are proposed below:

If results from this first phase core drilling program are favourable, the phase 2 drilling campaign would follow. Other targets generated from structural mapping and data synthesis in Phase 1 would also be incorporated into this phase 2 program. Estimated expenditures would be in excess of $2.5 million.

The following disclosure under this heading "Update on the Brewery Creek Property" has been prepared by or under the supervision of Mike Stammers, P.Geo., a Qualified Person for the purposes of NI 43-101. Mr. Stammers is the exploration manager of the Company and supervises the Company's exploration work on the Brewery Creek project.

On June 1, 2006, the Company announced assay results from its April 2006 diamond drilling campaign at the Brewery Creek project. The nine-hole, 1184-metre core program was managed by the NovaGold Resources Inc. exploration team on behalf of the Company.

Epithermal style gold mineralization at the Bohemian zone and elsewhere in the "Reserve Trend" shares remarkable similarities with the 28 million ounce Donlin Creek gold deposit in Alaska owned by NovaGold Resources Inc. and Barrick Gold Corporation. At Brewery Creek, as well as at Donlin Creek, mineralization is hosted in a series of stacked intrusive sills set in carbonaceous sediments intercalated between coarser clastic units. Mineralization at both properties is hosted in the porphyritic intrusions and is characterized by gold-rich arsenopyrite. Mineralization is related to widespread ammonia illite alteration surrounded by regionally extensive ankerite and kaolinite alteration. Both the Brewery Creek and Donlin Creek systems are of similar orders of magnitude with known alteration and mineralization at Brewery Creek extending over 12 kilometres of strike length.

Drilling at the Bohemian deposit was located near or adjacent to three 1998 RC drill holes which had encountered significant high grade. Drilling in 2006 sought to confirm these gold values as well as to provide better information on lithology, alteration, and structure controlling mineralization. Results from 2006 include:

Also at Brewery Creek is an area of widespread low grade gold oxide mineralization hosted in an extensive monzonitic intrusion called the Classic Zone. Several kilometres south from the historically exploited "Reserve Trend", the Classic zone was previously explored in limited RC drilling where numerous intercepts suggest potential for a significant low grade resource. At the Classic Zone, two holes tested and confirmed low grade gold mineralization encountered in earlier RC drilling work. Mineralized intervals include:

Three untested geophysical IP chargeability anomalies were also targeted during the program but encountered only weak to non-auriferous sulphide mineralization (gold values less than 300 ppb). Finally, DDH BC06-123 targeted sulphide mineralization at depth beneath the mined-out Blue pit along the "Reserve Trend'. A stibnite - silica bearing breccia zone was intersected and drill sample results include 1.19 grams per tonne gold over 12.35 metres from 60.10 to 70.45 metres.

New and historic mine data is being compiled into a three-dimensional structural and fluid chemistry working model in an effort to guide the upcoming field work. Efforts are on-going and will focus on the higher grade gold zones in the Bohemian-Sleeman trend and as well in the Classic lower grade gold oxide zone. A geological mapping and sampling program this summer may be followed up with a Phase 2 diamond drill program. The scope and timing of the next drill program will depend on the interpretation of the current drill results and planned summer field work.

Note: True widths have not been determined for all the above reported drill intercepts but are believed to be representative of actual drill thicknesses.

A rigorous quality control and quality assurance protocol under the supervision of Qualified Person, Mike Stammers, P.Geo. was utilized on the project including blank, duplicate and standard reference samples in each batch of 20 samples that were delivered to the lab. All drill samples were analysed by fire assay and ICP by ALS Chemex Labs of North Vancouver, British Columbia.

The Company holds a 70% interest in the McQuesten property through its wholly-owned subsidiary AlexSub. Eagle Plains Resources Ltd. ("Eagle Plains") holds the other 30% interest. The interests are held subject to a joint venture agreement dated December 1, 2003 between AlexSub and Eagle Plains. The McQuesten property is also subject to a 2% net smelter return royalty reserved to the original owner, Bernard Kreft pursuant to an agreement dated April 10, 1997 between Bernard Kreft and Eagle Plains.

An independent qualifying report (the "McQuesten Report") on the McQuesten property entitled "Technical Report on the McQuesten Property" has been authored by Janice Fingler, M.Sc., P.Geo. (the "McQuesten

Report Author") dated November 7, 2005. The McQuesten Report is available for review under the Company's profile on the SEDAR database at www.sedar.com.

The following disclosure relating to the McQuesten property has been derived from the McQuesten Report.

The McQuesten property, formerly the "Wayne Property", is located in the Mayo-Keno Hill District of the central Yukon Territory, approximately 56 kilometres northeast of the town of Mayo and 350 kilometres due north of the town of Whitehorse. The property is centred at latitude 63 53’ North and longitude 135 40’ West, within the area covered by topographic sheet NTS 105 M/13.

The property covers an approximate area of 744 hectares (1,838 acres) and consists of 55 quartz mining claims and fractions in three blocks, referred to as the McQuesten, Chiko and Hoito blocks. A single outlying claim, Twins 7 (3.7 ha), lies to the west of the McQuesten block. All claims are currently in good standing.

The McQuesten and Hoito claim blocks are accessible from the all weather Silver Trail Highway. Direct vehicle access to the known mineralized zones on the eastern portion of the property is possible via an unserviced airstrip and old logging roads. The Chico block is accessible from the Duncan Creek Road which branches off the Silver Creek Trail near Mayo.

Mayo is a full service community with an available workforce, and some contracting facilities. A power transmission line originating at the Wareham Dam 10 kilometres north of Mayo extends across the property. Generating capacity of this facility is roughly 5 Megawatts (Yukon Energy Corporation).

Topography of the McQuesten Project consists of the gently north sloping, subtly terraced south flank of the broad glaciated McQuesten River valley. Outcrop exposure is poor, although slightly more abundant along terraced areas. Permafrost underlies much of the property, except where previous work has stripped the surface cover.

Records indicate the Mayo-McQuesten area was prospected as early as 1887, primarily for placer occurrences. In addition to early placer mining, silver (Silver King vein) was discovered in 1906 on Galena Creek, located 1.6 kilometres north of the McQuesten claim boundary. With the activity at the Silver King mine, interest spread to the east towards Keno Hill where a discovery of galena carrying high-grade silver was made in 1919. Between 1919 and 1989, the Keno Hill-Galena Hill lodes were explored and developed, becoming the richest silver deposits in Canada. The deposits up to 1989 produced more than 213 million ounces of silver, with millions of pounds of lead, zinc and cadmium. In addition, about two million dollars of recorded gold has been won from the placers of the area.

The discovery of auriferous skarn and replacement gold mineralization within the McQuesten property in 1981, and gold to the south at the Aurex property in 1993, suggested that the area had potential for bulk tonnage gold mineralization. Within the confines of the property, the principal gold-tungsten-bismuth-arsenic mineralization occurs just north of and straddles the Silver Trail Highway.

Gold-arsenic-antimony-bismuth mineralization occurs on the adjacent property on Aurex Hill and silver-lead-

zinc lodes occur to the east on Keno and Galena Hills. The Silver King mine lies one kilometre to the north and the Husky Southwest silver-lead-zinc mine lies 3.2 kilometres east-northeast from the McQuesten claim boundary. Smaller silver-lead-zinc deposits occur on Mount Haldane located 10 kilometres west of the McQuesten claim block.

The McQuesten Property is located within the western part of the Selwyn Basin, in northern Yukon Territory. The stratigraphy of the area consists of deformed and metamorphosed strata of basinal sediments which accumulated at the edge of the Neoproterozoic to Paleozoic continental margin.

During the Jurassic to Cretaceous (160 and 130 Ma), the area was subjected to compressional orogenesis related to large scale plate convergence. This shortening episode also caused ductile north-south directed thrusting which generated three main ductile thrust panels containing highly strained to transposed basin strata. In the area of the McQuesten Property, the trace of the Robert Service Thrust is evident and the underlying Tombstone Thrust is expressed as an EW corridor of intense strain developed in hangingwall sediments.

Between 90-95 Ma, a tectonic change from convergence-oblique to subduction-dextral strike slip movement resulted in an episode of magmatism and the emplacement of the Tombstone series of intermediate to felsic plutons. Later renewed compressional tectonism forming the McKenzie Mountains induced another magmatic event at 65 Ma, and the emplacement of the McQuesten series of plutons. Several gold deposits in the region, such as Dublin Gulch, Scheelite Dome, Clear Creek and Brewery Creek, are related to the Tombstone plutons.

The Tombstone intrusions are economically important in the McQuesten region as they commonly host quartz and potassium feldspar bearing scheelite-sulphide veins that commonly are anomalous in gold, silver, bismuth, arsenic, tungsten, molybdenum and antimony (Murphy 1997). This veining locally is intense enough to be potential hosts for bulk tonnage gold deposits (e.g., Dublin Gulch, 98.6Mt at 1.19g Au/t, Smit et al.). Additionally, these intrusions are potential sources for mineralizing fluids for distal disseminated/replacement style gold mineralization.

The McQuesten property is located within the Tintina Gold Belt, a 35 million ounce gold producing trend which comprises several mineral-rich district extending through Alaska and Yukon. The gold deposits are typical of those found worldwide in well preserved, moderate to high temperature Phanerozoic collisional orogens.

The mid Cretaceous plutons of the McQuesten are part of the Tombstone-Tungsten Suite and form a 700 kilometre long sub-belt of with similar magma associations. The distribution of these intrusions ranges from the southeastern Yukon to east-central Alaska, with the Tungsten Suite in the SE Yukon area and the Tombstone Suite extending from east-central Yukon to east-central Alaska. The Tombstone plutons are typically small (<5 sq km) and may be composite to homogeneous or zoned. They have been emplaced over a wide depth range. They are also dominantly metaluminous, calc-alkaline to subalkaline, and plot as arc and I-type. Styles of mineralization related the Tombstone Suite intrusives include intrusive hosted sheeted stockwork gold-quartz veins (Fort Knox), skarns (Scheelite Dome), proximal replacement zones (Brewery Creek), distal skarnoids and fissure veins (Keno Hill).

Historically, the most regionally important type of mineral deposit is the clastic metasediment hosted vein silver lead zinc of the Keno Hill district (Beaudoin & Sangster, 1995).

The following mineralization types and relative temporal relationships occur at the McQuesten Property:

Occur in sedimentary rocks and not intrusives. Structurally controlled by fractures, small faults, shear zones and disrupted bedding planes.

Hosted mostly by quartzites and calc-silicate schists. Appear to be concentrated near intrusives.

Shear and contact metamorphic-induced calc-silicate altered sediments (calcareous siltstones) contain abundant pyrrhotite (locally in massive bands) along low angle shear planes and later veins and fractures. Pyrrhotite forms 99+% of the sulphide mineralization associated with the calc-silicate alteration, with minor/trace amounts of chalcopyrite, pyrite and sphalerite.

In hornblende-plagioclase porphyry and granodiorite intrusions; where pyrrhotite (5-7%) and/or pyrite (3-4%) has pseudomorphed the reactive, carbonatized hornblende phenocrysts.

Tend to occur in clusters of dilatent zones. The veins range from 2 -10 millimetres in thickness. The veins at McQuesten are seen crosscutting schistose quartzites, phyllites, graphitic schist, calc-silicate sediments, hornblende porphyry, and granitic intrusions.

These veins and vein breccia zones may be similar to those described at Keno Hill, Galena Hill and Mount Haldane and are siderite healed brittle fault zones with coarsely crystalline galena and marmatite sphalerite. All vein/faults and joints are coated with manganese and minor to moderate iron oxide. The host rocks all show extensive sericitization.

Limonite occurs along shear foliation planes and fracture surfaces as goethite after pyrite and hematite after pyrrhotite. Other oxide minerals include manganese wad, calcite, anglesite and scorodite. Limonitic sections typically have elevated geochemical results for mobile elements such as molybdenum, arsenic, antimony, bismuth and gold. Free gold has been panned from the West Zone, from the strongly oxidized material which was mined by B. Kreft (Schulze, 1998).

Several airborne magnetic surveys have been completed over the McQuesten property and adjacent areas. Contoured results of magnetic data have identified a broad high magnetic response over the northwestern part of the McQuesten claim block, with a series of strong negative responses along the southern part of the block, in the area of West and East Zones. Geophysicist J. Wright of Newmont suggested that the high magnetic signature in the north may be related to a large intrusive pluton at depth.

Thin to moderate glacial till with limited outcrop exposure overlies the west-central area of the McQuesten block, while thicker till to greater than 20 metres overlies the rest of the block. Thick terraces of glacio-fluvial and alluvial gravels cover the area of the Hoito block and colluvium and minor glaciof-fluvial gravels cover the area of the Chiko block. Due to these local conditions, little surface rock sampling has been recorded for the McQuesten property. Soil sampling similarly has not been a very effective exploration tool in the area of the McQuesten block, due to thick overburden.

To overcome this difficulty, a total of sixty sites were power augered on the McQuesten block, with thirty holes reaching bedrock. Significant auger results are as follows:

During the 1981 and 1982 drill testing of the Ag-Pb-Zn Wayne occurrence, gold values were first discovered to be associated with intervals of pyrrhotite skarn mineralization. In 1992, B. Kreft mined 17 tons of this limonite-pyrrhotite skarn material from the surface area of the original Wayne occurrence, at a grade of 1.29 oz/ton and an average recovery of 83%. This demonstrated clear potential of the property to host a gold deposit.

In 1997, nine trenches totalling 440 metres were excavated, with five testing the West Zone and four testing the East Zone. A total of 242 samples were collected and analysed for gold. In 1998, twenty-six trenches totalling 3279 metres were excavated and samples were were analysed for gold and 32 other elements. Four of the trenches tested the West Zone, eight tested the stratigraphy north of both zones, five tested the Central area between the West and East Zones and three tested for eastern extensions to the East Zone.

In 2000, Newmont excavated a single 51 metre long trench to the east of Thompson Creek. The purpose of this trench was to better expose bedrock in the vicinity of a rock sample which returned 9.8 g/t gold.

A summary of significant trenching results is as follows (from Caira and Stammers, 2000):

Trench	Area	Significant Results	Comments
TR97-01	West	24m@2.1 g/t Au 20m@3.4 g/t Au 25m@1.6 g/t Au	Two NNE faults (023/73NW); po-lim-drusy qtz veins with galena; in HW schist; minor calc-silicate sediments
TR97-02	West	4m@0.50 g/t Au 8m@0.72 g/t Au	Faults 070/77S; high grade in faults,fractures cut intrusions (5 and 12 m thick); clay-ser-qtz carb alteration.
TR98-02	West	14m@0.38 g/t Au	Calc schist cut by ENE faults/43S and 2 NNW cross faults (205/52SW) at intersection w/ NNE fault (015/75NW)
TR98-11	West	6m@0.66 g/t Au 4m@7.97 g/t Au 16m@3.04 g/t Au	NNW faults dip 21-87SW and ENE sheeted veins; calc- silicate seds and graphitic quartzites (ENE/dip S); granitic dyke 15 metres to S
TR98-16	West	14m@0.50 g/t Au 4m@2.4 g/t Au	Grades in HW schist; calc-silicate seds; no nearby granites? Easterly low angle faults/37S
TR98-15	Central	8m@0.71 g/t Au 12m@0.62 g/t Au	Grades in HW schists; NE faults (030/36NE); 2m dyke
TR98-17	Central	4m@0.55 g/t Au 4m@0.64 g/t Au	Grades in HW schists along low angle faults (068/20S), NNE faults (026/36SE); granitic dyke lacking grade
TR98-18	Central	6m@0.42 g/t Au 3m@0.52 g/t Au	Grades in HW schists near NW fault (330/75SW) and NNE fault (038/50SE); EW faults w/ low grade; dyke.
TR98-19	East	4m@2.3 g/t Au	Grades in HW schists; EW faults dipping 16-43N, NNE faults (030/NW?); calc-silicate; bound by two NW faults
TR97-05	North East	4m@0.99 g/t Au 8m@0.79 g/t Au	HW schist with calc-silicate horizons; narrow intrusive dyke; two NNW faults at AZ335.
TR98-07	North East	4m@1.52 g/t Au 8m@0.88 g/t Au	Grade in HW schists, granite, calc-silicate; cut by NNW fault (332/SW); beds dip 42-71S; cut by ENE/22SE faults; NE 058/22S
TR98-08	North East	8m@0.42 g/t Au 6m@0.63 g/t Au	Grade in HW schists, granite dyke at sheared contact of HW schists/quartzites; faults 333/75SW and 020/88NW
TR98-09	North East	8m@0.91 g/t Au	Grades in HW schists cut by EW low angle faults/34-40S; and NE fault 040/9SE; imbricate slices; NNW fault AZ336
TR98-10	North East	20m@3.42 g/t Au 8m@0.38 g/t Au	Grades near NW fault (320/59NE) and easterly faults/33- 78S; two granite sills (5 and 10m), related calc-silicate seds bound by 2 NNW faults, qtz-ca-py vein, po
TR98-25	North East	2m@1.85 g/t Au	NNW fault 340/20NE and 042/53NW; NNE folds; calcareous sediments in FW quartzites
TR97-07	East-South	6m@0.45 g/t Au 6m@0.40 g/t Au 10m@1.45 g/t Au 8m@0.59 g/t Au	Calc schist cut by ENE/43S faults and NNW fault (320/88S) white mica/iron carbonate veins; narrow granitic dyke
TR98-13	East-South	12m@0.58 g/t Au 6m@1.19 g/t Au 4m@0.64 g/t Au	Grades in HW schists (to 16.7 and 51.9 g/t Au) related to easterly low angle faults, two NW faults 325/59 NE and 335/76SW
TR98-14	East-South	26m@0.78 g/t Au 12m@0.61 g/t Au 6m@0.37 g/t Au	NW faults (325/59NE) in HW schists; reactive schists here?

* All reported widths refer to horizontal intervals (unless otherwise indicated). It is not currently possible to determine true widths due to density of data and diversity of mineralization styles.

The Company conducted a brief exploration program on the McQuesten property in 2005. The program consisted of grid-based auger drilling in overburden covered areas of the Chiko and Hoito claim blocks. A total of 42 drill sites were tested, with 31 sites on the Chiko block and 11 sites on the Hoito block. Bedrock was encountered in all holes drilled on the Chiko block, but in only two of the holes drilled on the Hoito block.

The program was designed to attempt reconnaissance bedrock mapping in overburden covered areas within the Chiko and Hoito claim blocks. The procedure had mixed results. In the Chiko area, auger drilling encountered a diverse range of bedrock lithologies similar to those of the Yusezyu Formation in the McQuesten block. The noted lithological diversity and high levels of strain in the bedrock underlying the Chiko block suggests the area may be similarly prospective to host both skarn and vein type mineralization. Evidence for migration of the hydrothermal fluids through the Chiko succession is noted as common centimeter to subcentimetre scale quartz lenses and veinlets +/- pyrite emplaced along cleavage planes. As well, one drill site in the northwest (NDR0942) encountered quartz veining with marginal arsenopyrite, pyrite, galena and minor sphalerite, stibnite, and is similar to vein-style mineralization encountered in trenches and drillholes on the McQuesten claim block to the west. The geochemical results for bedrock samples in the Chiko area clearly identify the mineralized sample NDR0942 and the overlying sample of glaciofluvial gravels as highly anomalous in several elements as folows:

The overall lack of and/or inconsistent anomalism of other samples suggests that mineralization in the Chiko area may occur as discrete veins.

In the Hoito area, there was very little success in reaching bedrock through a thick succession of glaciofluvial gravels. The holes were drilled to depths ranging from 14-36 feet (4.3 -11 metres). Bedrock was encountered in only two sites at depths of 23 feet (7 metres). The bedrock at these sites (NDR0958-59) is moderately hard, medium grey, phyllite to pearly chlorite-sericite schist, similar to phyllitic schists mapped on the McQuesten claim block to the south. Little to weak geochemical anomalism was obtained from samples of the overburden; however, a single site (NDS2285) on the western area of the claim block returned an elevated gold result of 0.11 ppm. Given the lack of knowledge of the underlying bedrock lithology and the depth to bedrock, no inferences can be made from this result.

A follow-up program of detailed hand auger soil sampling (100 or 50 metre spaced lines with 25 metre stations) is recommended in the western area of the Chiko Block to further test the potential of this area. An insitu geochemical signal of underlying mineralization may be preserved in the overlying colluvium and broken bedrock. Detailed ground geophysical surveys (ground magnetics and induced polarization) would be contingent on these results and/or conducted concurrently, to further discriminate bedrock lithologies and to identify potential sulphide bearing zones of mineralization.

All historical diamond drilling conducted on the property, to date, has been completed on the McQuesten block and was mostly focused on the West and East Zones.

In 1981, Island Mining and Exploration conducted diamond drilling to test the Ag-Pb-Zn Wayne occurrence in the area now referred to as the West Zone. A total of 1212 metres in 14 holes were drilled to test the NS trending vein structure over a strike length of 130 metres and to vertical depths of less than 80 metres. Although the 1981 program targeted the Ag-Pb-Zn Wayne occurrence, several of the drill holes encountered gold values associated with intervals of pyrrhotite skarn mineralization.

In 1997, Eagle Plains conducted reverse circulation drilling and a total of 287.2 metres were drilled in seven holes which tested the West and East zones. In 1998, Viceroy re-logged the chip intervals from this program.

In 2000, Newmont conducted NQ2 diamond drilling and a total of 883.2 metres were drilled in five holes which tested four targets along the 1500 x 600 metre pyrrhotite skarn zone of the West and East Zones. The fifth hole was drilled in the Far East area, approximately 600 metres to the east, to test geophysical responses in the vicinity of anomalous auger sampling results

In 2003, SpectrumGold conducted NQ diamond drilling suing Britton Bros. of Smithers, British Columbia. A total of 3,071.8 metres were drilled in eighteen holes which mostly provided widely spaced drill hole coverage to test the continuity of mineralization from the West to East Zones.

Significant drill results from these various drilling campaigns are summarized in two tables below:

Table B: 2000, 2003 programs (from Brownlee and Stammers, 2003)

* All reported intervals are downhole intervals, not true widths. It is not possible to determine true widths due to density of data and diversity of mineralization types.

No details are available regarding sampling methods and approach for the early 1981, 1983 and 1997 drill programs. Extensive resampling and sampling of the 1981 holes was completed during the later programs by Viceroy. Samples were collected by a single individual and sample ID tags were placed inside, outside of the bags and random duplicate samples were collected. Samples were daily placed in bulk shipping containers and sealed on the property, transported to base camp and then sent to Chemex Labs in Vancouver.

The sampling method for the 2000 auger drilling program was documented as an appendix by O. Lavin, 2000, in the report by Caira and Stammers, 2000. The 2005 auger drilling program was conducted using the same methods of sample collection, sample preparation, analysis, and similar standards of security as the 2000 auger drilling program.

There are no details available for sample security for the 1981, 1983 and 1997 sampling programs. There are few to no details available regarding sample preparation, for samples collected and analyzed during the 1981, 1983 and 1997 programs. Photocopies of original logs from the 1981 suggests selected samples were analyzed for gold, silver, lead, zinc and tungsten. Photocopies of assay certificates from the 1983 programs indicate that samples that the drill core samples were analyzed by Bondar-Clegg of Whitehorse. Samples were assayed for gold, silver and tungsten. Photocopies of assay certificates of samples from the 1997 RC drilling program indicates that they were analyzed for gold by Northern Analytical Labs of Whitehorse.

Security for the 1997 and 1998 trenching and core sampling programs of Viceroy are documented above, by Brownlee, 1998. Samples were forward to Chemex Labs of North Vancouver, British Columbia, and were ring crushed to 150 mesh. A 30g pulp sample was then analyzed for gold by fire assay with an atomic adsorption finish. Silver was analyzed by fire assay with a gravimetric finish and a 32 element scan was completed by ICP-AES.

The methods of sample preparation, analysis and security for the 2000 program by Newmont were

documented by Caira and Stammers, 2000. The 2005 auger drilling program was conducted using the same methods of sample collection, sample preparation, analysis, and similar standards of security as the 2000 auger drilling program. In each case, all samples were shipped to ALS Chemex of North Vancouver, British Columbia. Rock sample, bedrock auger and drill core samples from the 2000 and 2005 programs were passed through a primary crushed to yield a product in which greater than 60% was less than 2mm. A 200-300 gram split was then taken using a stainless steel riffle splitter and was subjected to a ring grind to 95% at 150 mesh size, to generate a pulp. Soil and overburden samples from both programs were dried, hammered and sieved, to generate a pulp. For each sample, a 30g split of this pulp was analyzed for gold by fire assay with an atomic adsorption finish. Also for each sample, a 0.5 gram split was subjected to an aqua regia digestion and analyzed for 32 elements by a combination of ICP-AES and ICP-MS methods. The latter method was used on samples which returned values higher than the geochemical detection limits.

The methods of sample preparation, analysis and security for the 2003 program were documented by Brownlee and Stammers, 2003. A comprehensive QA-QC program was implemented for drill core sampling, involving the sampling of duplicates and the insertion of standards and blanks. The sampling procedure was based on a 20 sample batch system, with the 10^th being a standard, the 20^th being a blank, and one other sample in the series being a duplicate. A reddish shale decorative stone purchased from Home Hardware, of Whitehorse, was used a the blank and three different pre-made standards from WCM Minerals Ltd., of Vancouver, were used. A total of 113 samples of each type were collected.

Rock and drill core samples were fine crushed to greater than 70% passing a -2mm sieve size, with up to 250 grams then split and pulverized to greater than 85% passing a 75 micron sieve size, to generate a pulp. For each sample, a 30g split of this pulp was analyzed for gold by fire assay with an atomic adsorption finish. Also for each sample, a 0.5 gram split was subjected to an aqua regia digestion and analyzed for 34 elements by the ALS method ME-ICP41, of atomic adsorption spectroscopy. Samples were ICP-AES and ICP-MS methods. The latter method was used on samples which returned values higher than the geochemical detection limits.

Original and/or copies of much of the data used for the McQuesten Report were obtained from D. Brownlee and M. Stammers. The McQuesten Report Author noted the original data, but did not complete a comprehensive review of this material, nor has reviewed all the assay and composite data from exploration programs conducted on the property.

Since 1997, the exploration programs on the McQuesten property have been conducted by professional geoscientists D.Brownlee and M.Stammers. The McQuesten Report Author relies on information from their reporting. It is the McQuesten Report Author’s opinion that, based on the reviews of the available information, these programs were conducted in accordance with industry standards. During the Viceroy programs, historic drillcore and RC sample chips were relogged and sampled (or resampled). This provided greater confidence in the integrity and consistency of the earlier recorded data.

The data from exploration programs has been largely compiled into AUTOCAD drawing files, ACCESS databases and EXCEL spreadsheet. Data has been variably presented between UTM NAD 27 and NAD 83 datums.

The McQuesten Report Author visited the property on May 18^th and 19^th, 2005 and reviewed selected outcrop exposures, drill core intervals, boundary claim posts and reclamation work, on the McQuesten Block. During the period from August 15 to August 26,^,2005, the McQuesten Report Author conducted on-site supervision

of the auger drilling program on the behalf of the Company, on the areas of the Chiko and Hoito claim blocks.

The McQuesten Project is located along the western margin of the Keno Hill Mining District, formerly a world class silver producing district. Considerable silver production occurred from the 1920s to 1940s. UKHM was formed in 1946, and soon began major silver mining operations resulting in the construction of the towns of Elsa and Calumet, both now abandoned. UKHM, still retains mineral rights to crown grants and several quartz mining properties near the McQuesten Property, including the Snowdrift Claims just to the west.

Placer gold mining operations were established primarily along Duncan Creek, southeast of the property, and Haggart and Lynx Creeks north of the McQuesten River Valley. The discovery of auriferous skarn and replacement gold mineralization within the Wayne Property in 1981, the Aurex Property in 1993, and the Len Property by 1996, led to the delineation of a new target model in the camp for bulk tonnage gold mineralization.

In 1974 and 1975 UKHM staked the adjoining SNOWDRIFT Claims to the west of the McQuesten block. Exploration consisted of 80 holes of percussion drilling in 1976, 46 holes in 1982, and 3658 metres of percussion drilling and 4 diamond drill holes in 1984. Reports remain confidential; however, assays of up to 1.5%^WO3^{and 34.3} g/t Au were returned from pyrrhotite skarn. The property is still held by UKHM.

The AUREX claims adjoining the McQuesten block to the south were staked by Yukon Revenue Mines in 1992-93 and are currently held by Stratagold Corp.

Exploration on the McQuesten property has been historically focussed on exploration for silver lodes of Keno style mineralization and most recently, for skarn and vein hosted gold mineralization. On the McQuesten block, there is widespread retrograde pyrrhotitic skarn mineralization of variable intensity, as replacements of calcareous horizons within east-west trending, shallowly dipping strata of the the Yusezyu Formation. In the western area of the block, a subvertical granitic dyke cuts the succession along an east-north east trend, and submetre dykes have been reported in other areas.

Age dating of the dyke on the McQuesten property indicates a mid Cretaceous age, and is probably of the same age and affinity as plutons of the Tombstone suite. The association of Tombstone intrusives to gold mineralization has been demonstrated in the McQuesten area, at the Clear Creek, Scheelite Dome and Dublin Creek deposits. Tombstone aged intrusives are also known in the Keno Hill area (Mayo Lake Batholith) and as narrow dykes on the McQuesten Property. A large airborne magnetic high overlying the western area of the McQuesten Block may be the signature of a larger pluton at depth, of similar age at depth, with the dykes representing related apophyses.

The McQuesten-Keno Hill District is an area of remarkable and diverse mineral endowment, which includes the Elsa-Keno Hill mining camp, a 23 km long x 6 km wide corridor of Ag-Pb-Zn+/- Au mineralization. There is evidence that the camp lies within a corridor of brittle deformation which extends on to the McQuesten property. This strain event may have been closely coeval with the emplacement of larger Tombstone intrusions in the area, as well as the McQuesten dyke and the interpreted deeper pluton. Most of the early brittle "vein faults" strike east-northeast, dip steeply southeast, and contain lead-zinc-silver lodes at Keno and Galena Hill, high grade silver at the Silver King Mine, and gold-arsenic-antimony-bismuth

Similar relationships between gold mineralization and these regional structural elements exist on the McQuesten property and exhibit a strong control on gold values. Trench exposures and geophysical responses both indicate that the stratigraphy has been cut by early and late brittle fault zones which developed within the broad ENE corridor of brittle deformation which traverses the property. Mineralization on the McQuesten property appears to be temporally related to this brittle event, and has occurred in three main stages: an early pyrrhotitic calc-silicate (skarn) mineralization followed by quartz-pyrite+/- arsenopyrite+/- galena, sphalerite veins along NE to ENE trending structures and later galena-sphalerite-siderite+/-quartz veins, breccia zones along NW trending structures. These styles of mineralization represent local different physical conditions and are often superimposed on each other and they reportedly all crosscut the West Zone dyke. The associated geochemical signatures include variants of Au-Bi-+/-W+/-As+/Te+/Sb and Ag-Pb-Zn-Au+/-As, similar to several other gold deposits associated with the reduced plutons of the Tombstone suite.

Gold mineralization within the skarn is generally of low tenor, with local higher grade intervals mostly related to the quartz-pyrite+/- arsenopyrite veining and intersections of NE vein faults with NW transverse faults. There is no apparent correlation of elevated gold values with the intensity of the calc-silicate alteration. Local unexplained high gold values (to 85 g/t Au) within the earlier skarn mineralization may be related to a vein intersection in the vicinity of the drillhole. As different mineralizing styles are superimposed on each other, some remobilization and reconcentration of gold is possible, as well.

In summary, the McQuesten property is endowed with several of the geological, geophysical, and geochemical associations of granitic-related gold deposits of the mid Cretaceous Tombstone Suite. Local the temporal and structural associations of gold mineralization are also similar to those within the Elsa-Keno Hill camp.

Overall, the gold mineralization on the McQuesten property exhibits strong structural control and secondary chemical control. Recent exploration has focussed on the gold potential of the skarn mineralization; however, mineralization may be more focussed on discrete structures of the brittle event and possible intersections. Therefore, there exists potential to build multiple, small zones of a higher grade gold resource from skarn zones in areas of cross-structures as well as the untested expression of the dilational structures as sheeted veins and stockworks within the brittle, more competent skarn horizon to the north.

The results of exploration programs conducted to date give evidence that a large of a large, multi-staged hydrothermal system related to gold deposition was operational in the area of the McQuesten property. The disposition of the geological, structural and mineralization features are complex; however three main gold events have been recognized: retrograde pyrrhotite skarn, quartz-pyrite-arsenopyrite veining, and siderite-galena-sphalerite+/-arsenopyrite vein/breccias.

Low grade gold mineralization is widespread throughout the McQuesten Block and the flanking Snowdrift and Aurex properties. Local zones of higher grade zones appear related to dilation zones developed at or near transverse NW and/or ENE structures. A potential gold deposit therefore would require higher grade mineralization associated with such traps, as well as a greater density of the traps within the succession. With this essential structural complexity , there is potential on the property and flanking holdings, to delineate series of smaller deposits along the trend which may be collectively developed as has been done at the Brewery Creek Mine.

An integrated program of soil geochemistry, ground geophysics, trenching and diamond drilling is recommended for 2006, to verify the interpreted controls on mineralization and to delineate additional higher grade traps on the property. A budget of $260,000 is recommended.

WAGES	NO. #	DAYS	RATE
Project Manager	1	20	400	8000
Project Geologist	1	40	400	16000
Senior Field Assistant	1	32	250	8000
Senior Field Assistant	1	22	225	4950	$ 36,950
CONTRACT GEOPHYSICS	NO. #	DAYS	RATE
Ground Magnetics	1	4	600	2400
Ground Induced Polarization	1	4	2500	10000
Gridding	2	4	600	2400
Mob/Demob/Room and Board				3500	$ 18,300
CONTRACT EQUIPMENT	HOURS		RATE
Caterpillar D6	75	1	125	9375
Excavator 225 Cat	60	1	165	9900
Trucking	1	1	3500	3500
Operator Support	1	15	525	525
Fuel	1	1	2000	2000	$ 25,300
DIAMOND DRILLING	FEET		RATE
Contract Core Drilling	4000	1	20	80000
Core Boxes				4000
Fuel				6000
Mob/DeMob				7500	$ 97,500
ANALYTICAL
Core samples	500	1	25	12500
Soil samples	100	1	25	2500
Trench samples	50	1	25	1250
QA-QC	60	1	25	1500
Saw Blades	3	1	800	2400
Freight				2500	$ 22,650
PROJECT SUPPORT		MANDays	RATE
Hotel or Lodge		180	100	18000
Core shack-generator		30	50	1500
Core shack-diesel				500
Field durables				600
Field expendibles				1500	$ 22,300
SUPPORT	NO. #	DAYS	RATE
Travel Airfare	8	1	750	6000
Travel Hotels and Meals	10	2	150	3000
Truck 4x4	2	25	80	4000
Travel Auto Exp.				1200
Freight				2000
Communications				800	$ 17,000
COMPILATION and REPORTING	NO. #	DAYS	RATE
Geologist-Compilation and	1	40	400		$ 16,000

The following disclosure under this heading "Update on the McQuesten Property" has been prepared by or under the supervision of Mike Stammers, P.Geo., a Qualified Person for the purposes of NI 43-101. Mr. Stammers is the exploration manager of the Company and supervises the Company's exploration work on the McQuesten project.

As at September 26, 2006, no further work has been completed directly on the McQuesten claims, primarily because the Company has access to and is studying historical data from the surrounding contiguous claims owned by UKHM. Geology and mineralized trends continue from McQuesten to the adjacent UKHM claims and compilation of historical UKHM data will better focus future work at McQuesten.

Subsequent to the date of the McQuesten Report, the Company has staked an approximate area of 1,243 hectares (3070 acres) comprising 85 quartz mining claims and fractions in eight blocks, north and east of the McQuesten property.

The Keno Hill project in Yukon is described under "Remediation Business – Specific Mine Reclamation and Remediation Projects – Keno Hill Project, Yukon" below.

The Sprogge property is located 175 kilometres (108 miles) north of the Town of Watson Lake within the Tintina Gold Belt of Yukon. The property consists of 278 Yukon quartz mining claims covering 14,359 acres (5,810 hectares) accessible by Yukon Highway 10. The Sprogge property is held jointly by 650399 BC Ltd. (“AlexSub”) and Newmont Mining Corporation ("Newmont"). AlexSub’s interest in the property is 73.6% with Newmont having a 26.4% interest. The claims are in good standing with no required assessment work in 2005. Four principal target areas have been identified on the property through surface sampling of rocks, soils and stream silts. An initial reconnaissance drill program was completed in 2000. The Company returned to the Sprogge property in late summer 2006 for purpose of reclamation and environmental review as well as additional sampling work.

The Harlan property is located 150 kilometres north of the town of Ross River, within the Tintina Gold Belt, and consists of 75 Yukon quartz mining claims covering 3,862 acres (1,568 hectares) which are 100% owned by AlexSub. The property is located 35 kilometres southeast of the Plata Airstrip and has winter road access from Yukon Highway 6, 60 kilometres to the southeast. The claims are in good standing with no required assessment work in 2005. Two major target areas have been identified on the property through surface sampling of rocks, soils and stream silts. The Company intends to complete additional target definition and

possibly initial drill testing in 2005 - 2006. The Company returned to the Harlan property in August 2006 and carried out a program of geological mapping, sampling and geophysical surveys.

The Klondike property is located 90 kilometres (56 miles) east of Dawson City within the Tintina Gold Belt of Yukon. The property is 30 kilometres (18 miles) east of the Brewery Creek Gold Mine and consists of 46 Yukon quartz mining claims covering 2,375 acres (960 hectares). The property is 16 kilometres (9 miles) from the Yukon Consolidated Dam Road and has winter road access along the Klondike River. AlexSub owns a 100% interest in the Klondike group claims and the claims are in good standing with no required assessment work in 2005. Two major target areas have been identified on the property through surface sampling of rocks, soils and stream silts. The Company returned to the Klondike property in late August 2006 to map and sample the property.

AlexSub is entitled to a 1% net smelter return royalty in respect of mineral claims on the Telegraph Creek and Iskut River property located in the Liard Mining District of British Columbia held by Newcastle Minerals Ltd.

AlexSub is entitled to a 1% net smelter return royalty in respect of mineral claims on the Kiniskan Lake and Manson Creek properties in the Liard and Omineca Mining Divisions of British Columbia held by Canadian Gold Hunter Corp.

In March 2005, the Company acquired the following from ALM pursuant to the ALM Agreement:

The principals of ALM, Clynton Nauman and Bradley Thrall, are involved as President and Chief Executive Officer, and Chief Operating Officer, respectively, of the Company. Both of these individuals are party to management contracts with the Company and ALM pursuant to which ALM and the individual have agreed not to be involved (other than as a shareholder holding less than 10% of the shares of an entity), without the prior written consent of the Company, with any business or undertaking in British Columbia, Yukon or the Northwest Territories which competes with the business of the Company. See "Interest of Management and Others in Material Transactions".

On June 30, 2006, the Company completed the acquisition of Access Mining Consultants Ltd. ("AMC"), a privately owned mid-tier environmental consulting firm headquartered in Whitehorse, Yukon Territory. The Company acquired 100% of the shares of AMC for $2,000,000; 50% of the AMC shares were acquired for

$1,000,000 in cash and the remaining 50% of the AMC shares were exchanged for 383,978 common shares of the Company, being $1,000,000 in common shares of the Company valued at the volume weighted average price for the 10 trading days of the common shares of the Company on the Toronto Stock Exchange prior to June 27, 2006. The vendors, Rob McIntyre and Dan Cornett, being the founders and current principals of AMC, are continuing in the AMC management team with a focus on client service and the profitable growth of the AMC business as a wholly owned subsidiary of the Company. The Company also intends to appoint Mr. McIntyre and Mr. Cornett to the senior management team of the Company. AMC was originally formed in March 1995. Since then, AMC has provided locally experienced professional project management and environmental services for industrial land and resource development projects in northern Canada.

The Company's business plan relating to its mine reclamation and remediation business is to enhance asset value through effective liability risk management and efficient site operations, using and applying the technical expertise acquired from ALM, the non-contractual relationship with ARCADIS (described below) and the proprietary technologies of ARCADIS. This is accomplished through unlocking potential exploration and development opportunities at contaminated or abandoned sites through cost effective and responsible environmental remediation and liability transfer. The Company offers the mining industry a unique combination of strong operations management, environmental remediation success in the area of mine reclamation and closure, and an ability to manage complex permitting and regulatory programs on a turnkey basis.

ALM was formed in early 2003 and has been involved in a number of projects related to permitting, mine closure and environmental remediation. Clynton Nauman and Bradley Thrall, principals of ALM, have operated on a number of projects in the north of Canada and have a track record in site management, mine closure and environmental remediation. The principals of ALM have been actively involved with the Brewery Creek heap leach operation in the Yukon from the early mine development stage through final reclamation and closure.

In addition to its environmental remediation services at Brewery Creek, the Company is conducting business and generating revenue through a variety of industry services consistent with its skills including pre-feasibility studies, permitting, regulatory support, metallurgical testing and consultation, project and construction management, plant start-up and commissioning and process optimization.

The Company engages outside consultants and experts as necessary for support of its mine reclamation and remediation business. The business is generally fee-based with performance incentives.

As part of its mine reclamation and remediation business, the Company works with ARCADIS in utilizing ARCADIS' proprietary technologies in Canada including in-situ metals immobilization within mine workings and treatment of groundwater recharge zones. ARCADIS, through the Company, can provide to mine owners a fixed price performance contract to achieve guaranteed closure (to required regulatory standards), which is further secured through a variety of risk management facilities such as environmental cost cap insurance and pollution legal liability insurance (which includes insurance against regulatory reopeners and third party claims). The Company has a non-contractual understanding and arrangement in place with ARCADIS to exclusively deploy appropriate and mutually acceptable technologies (proprietary and otherwise) and risk management facilities with ARCADIS at mine sites throughout Canada.

Separately, under the ALM Agreement, ALM agreed to use its best efforts to conclude a patent licence agreement with Joseph G. Harrington ("Harrington"). The Company, under the ALM Agreement, has the right to sublicense certain patents from ALM. Harrington is the owner of certain processes, patented in the U.S. and Canada, pertaining to the in situ immobilization of metals within density variant bodies of water and for treatment of rock heaps to prevent acid rock drainage (the "Patents"). The Patents provide solutions to certain environmental problems commonly associated with mining projects. ARCADIS and companies related to it (the "ARCADIS Companies") are associated with Harrington in the deployment and use of the Patents in engineered remediation solutions.

ALM is currently concluding discussions with Harrington and the ARCADIS Companies (collectively, the "Licensor") and expects that Canadian patents CA 2348510 and CA 2424563 will be exclusively licensed to ALM (the "License") and under which ALM will have:

The Licensor will charge a technology application fee for the use of the Patents. The fees payable by ALM to the Licensor under the Licence will have two components: an initial fee based on the estimated Remediation Price; and a performance fee based on the relationship of the Remediation Price to the actual project performance costs.

The Company expects to enter into a Patent Sublicence Agreement (the "Sublicence") with ALM under which the rights and obligations of ALM under the Licence will be exclusively sublicenced to the Company. The Sublicence will be terminable by ALM in the event that for an extended period the Company does not deploy the Patents on projects producing material income. No fees will be payable by the Company to ALM pursuant to the Sublicence.

The Patents will provide the Company the ability to offer and execute long-term cost savings treatment options. The Company will have the exclusive right to use the Patents in Canada, but will not be restricted to working in Canada or with ARCADIS. In addition, the Patents are only two in a basket of many which the ARCADIS Companies control, any number of which may be deployed with conventional technologies under the Company's arrangements with ARCADIS depending on the particular problem to be solved.

The Company has also worked with other consulting companies and mining companies and bids for other care and maintenance and remediation projects with other experts in the field, using and applying the technical expertise acquired from ALM, the relationship with ARCADIS (described below) and the proprietary technologies of ARCADIS.

The Company's arrangements with ARCADIS and other business alliances enable the Company to bring environmental remediation technologies to mine waste management, and the ability to accept a transfer of environmental closure liability at various stages of project development and operation.

Examples of mine reclamation and remediation projects with which the Company is involved are set out below.

In June 2005, the Company was selected as the preferred purchaser of the assets of United Keno Hill Mines Limited and UKH Minerals Limited (together, "UKHM") by PricewaterhouseCoopers Inc., court appointed interim receiver and receiver-manager of UKHM. PricewaterhouseCoopers Inc. and the Company subsequently entered into an agreement (the "Purchase Agreement") dated August 4, 2005, as amended November 2, 2005 and January 31, 2006. The Company assigned the Purchase Agreement to its wholly-owned subsidiary Elsa Reclamation & Development Company Ltd. (“ERDC”) on February 6, 2006. The Company has accounted for the purchase price of $410,000 as a cost of acquisition for the Keno Hill property.

The Company, through ERDC completed the "Initial Closing" on April 18, 2006 under the Purchase Agreement to acquire the UKHM assets. On the Initial Closing, among other things, the Company (i) deposited $10 million in trust to be used exclusively to fund ERDC’s contribution to the cost of the reclamation of the preexisting environmental liabilities of the UKHM site and (ii) obtained possession of the mineral claims and leases, title property and crown grants of UKHM and the equipment on the properties for the purposes of exploration by ERDC of the properties. A "Final Closing" is scheduled to occur under the Purchase Agreement ten business days following receipt by ERDC of a water licence for the purpose of care and maintenance pursuant to the Waters Act (Yukon). ERDC will have until October 18, 2006 to apply for a water licence and until April 18, 2009 to obtain it, subject to a 12 month extension at the discretion of the vendor. Ownership of the UKHM assets will be conveyed to ERDC on Final Closing.

The Company, through ERDC, is also party to an agreement (the "Subsidiary Agreement") with the Federal and Yukon governments (the "Governments") in respect of the pre-existing environmental condition and the environmental care and maintenance and reclamation of the UKHM site.

On the Initial Closing, ERDC granted to the Governments a general security agreement against the assets of ERDC (the "Security") securing ERDC's obligations to the Governments under the Subsidiary Agreement. The Security provides for subordination to project financing and partial discharge where the value of the collateral exceeds the amount reasonably expected to secure the obligations.

The Company has agreed to provide the Governments with an alternate remediation proposal involving a guaranteed remediation program conducted for a fixed price, the terms and conditions of which are to be developed between Initial Closing and October 13, 2006 and which proposal will be open for acceptance by Governments until March 31, 2007. If accepted, the Subsidiary Agreement will be replaced by a similar agreement incorporating such alternate program.

In a separate agreement with the Government of Yukon, entered into on the Initial Closing, ERDC as a paid contractor will assume responsibility for the environmental care and maintenance of the UKHM site for a one year term, which is renewable until Final Closing. During such period, the Company will have access to the UKHM site primarily to undertake an extensive review of historical mining data and plan and execute an exploration program to test any mineralized targets which emerge from the review.

The Company intends to team with ARCADIS in addressing the environmental issues at the UKHM mine sites.

The UKHM assets comprise non-producing silver mines, production facilities, mineral claims, leases, surface lands and other properties in the Keno, Galena and Sourdough Hills area of central Yukon Territory, 450 kilometres due north of Whitehorse by road in the vicinity of the villages of Elsa and Keno City. The UKHM property comprises approximately 14,980 hectares.Following Initial Close, the Company initiated a field oriented geology and exploration program, based on the compilation of historical data, and focused toward outlining a 15,000 meter exploration drill program which begun in July 2006. The Company also established semi-permanent living and field office quarters on the UKHM site for the purpose of supporting ongoing and future exploration, environmental care and maintenance and reclamation programs.

The Company has recently entered into a consultant services agreement dated August 19, 2005 with BHP Billiton Diamonds Inc. ("BHPB") to provide support services and project management to BHPB in completing the interim reclamation and closure plan for the EKATI diamond mine, located approximately three hundred kilometres northeast of Yellowknife, Northwest Territories. The Company will be compensated $19,030 per month over the period of the agreement, expiring February 28, 2007. In addition, the Company may earn additional incentive payments through achieving established project milestones. As of September 26, 2006 the Company continued to provide technical support services to BHPB as anticipated in the scope of work related to the August 19, 2005 agreement.

The Company has not paid any dividends on its common shares since its incorporation. Any decision to pay dividends on common shares in the future will be made by the board of directors on the basis of the earnings, financial requirements and other conditions existing at such time.

The authorized capital of the Company consists of 100,000,000 common shares without par or nominal value. As at September 26, 2006, 28,305,909 common shares of the Company were issued and outstanding as fully paid and non-assessable shares.

There are no special rights or restrictions of any nature attached to any of the common shares, which all rank equally as to all benefits which might accrue to the holders of the common shares.

All registered shareholders are entitled to receive a notice of any general meeting to be convened by the Issuer. At any general meeting, subject to the restrictions on joint registered owners of common shares, on a show of hands every shareholder who is present in person and entitled to vote has one vote and on a poll, every shareholder has one vote for each common share of which he is the registered owner and may exercise such vote either in person or by proxy.

As at September 26, 2006, the Company had outstanding share purchase warrants exercisable to purchase up to 399,561 common shares, representing approximately 1.4% of the Company's issued and outstanding share capital, at prices ranging from $1.50 to $2.50 per share expiring between January 26, 2007 and April 28, 2007.

The Company has adopted a stock option plan (the "Stock Option Plan") which provides that, subject to the requirements of the Toronto Stock Exchange, the aggregate number of securities reserved for issuance, set aside and made available for issuance under the Stock Option Plan will be 10% of the number of common shares of the Company issued and outstanding, from time to time.

The purpose of the Stock Option Plan is to attract and motivate directors, officers, employees of and service providers to the Company and its subsidiaries (collectively, the "Optionees") and thereby advance the Company's interests by affording such persons with an opportunity to acquire an equity interest in the Company through the stock options. The Stock Option Plan authorizes the Board of Directors (or Compensation Committee) to grant stock options to the Optionees on the following terms:

common shares of the Company exceeding, within a one year period, 5% of the outstanding issued shares.

All other amendments will require approval of shareholders and the Toronto Stock Exchange.

As at September 26, 2006, options were outstanding under the Stock Option Plan exercisable to purchase up to 2,270,000 common shares, representing approximately 8.0% of the Company's issued and outstanding share capital, at prices ranging from $0.80 to $3.08 per share expiring between June 15, 2012 and May 18, 2013.

The Company’s common shares are listed and traded in Canada on the TSX under the symbol "AXR".

The Company's common shares were originally listed on the TSX on January 26, 2006. During the period from January 26, 2006 to June 30, 2006, the Company's common shares traded on the TSX as follows:

The number of securities of each class of the Company held, to the Company's knowledge, in escrow at September 26, 2006, and the percentage that number represents of the outstanding securities of that class are described below:

The name, province or state, country of residence, position or office held with the Company and principal occupation during the past five years of each director and executive officer of the Company are described below.

Name and Address⁽¹⁾	Office or Position Held	Principal Occupation During the Past Five Years	Previous Service as a Director
Clynton R. Nauman Washington	President, Chief Executive Officer and Director⁽⁴⁾	President and Chief Executive Officer of the Company; Chief Executive Officer of Asset Liability Management Group ULC since February 2003; President of Viceroy Gold Corporation and Viceroy Minerals Corporation, February 1998 to February 2003; President and Chief Executive Officer of Viceroy Resource Corporation, February 1998 to December 2001.	Since December 3, 2004
Michael Winn California	Chairman and Director^(2)(3)(4)(5)	President of Terrasearch Inc., a consulting company that provides analysis on mining and energy companies since 1997.	Since January 11, 2005
Rick Van Nieuwenhuyse British Columbia	Director^(2)(3)(5)	President and Chief Executive Officer of NovaGold Resources Inc. since May 1999.	Since January 11, 2005
David Searle	Director⁽²⁾	Lawyer with Fasken Martineau	Since May 12,

Name and Address⁽¹⁾	Office or Position Held	Principal Occupation During the Past Five Years	Previous Service as a Director
British Columbia		DuMoulin LLP,October 2001 to August 2006.	2006
Bradley Thrall Washington	Chief Operating Officer	Chief Operating Officer of the Company; President of Asset Liability Management Group ULC since September 2002; Manager Technical Services of Viceroy Resource Corporation, July 1996 to September 2002.	N/A
Elaine Sanders British Columbia	Chief Financial Officer and Corporate Secretary	Vice President, Finance of NovaGold Resources Inc. since September 2006; Controller of NovaGold Resources Inc., March 2003 to August 2006; Controller of Telos Technology Inc., February 1997 to February 2003.	N/A

Each of the Company’s directors is elected by the Company’s shareholders at an annual meeting to serve until the next annual meeting of shareholders or until a successor is elected or appointed. The board of directors appoints the Company’s executive officers annually after each annual meeting, to serve at the discretion of the board of directors.

Based on information provided by such persons, as at September 26, 2006, the directors and executive officers of the Company as a group beneficially owned, directly or indirectly, or exercised control or direction over, an aggregate of 2,472,133 common shares of the Company, representing approximately 8.7% of the issued and outstanding common shares of the Company. In addition, the director and executive officers of the Company as a group held stock options for the purchase of an aggregate of 1,550,000 common shares in the capital of the Company, which options are exercisable at between $0.80 and $3.08 per share and expire between June 15, 2012 and May 18, 2013. Clynton Nauman and Bradley Thrall also hold 55% and 40%, respectively, of the outstanding shares of ALM, which owns 1,940,299 common shares of the Company.

Except as otherwise disclosed, none of the Company's directors or executive officers or any shareholder holding a sufficient number of securities of the Company to affect materially the control of the Company:

The directors of the Company are required by law to act honestly and in good faith with a view to the best interest of the Issuer and to disclose any interests which they may have in any project or opportunity of the Issuer. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his interest and abstain from voting on such matter. In determining whether or not the Company will participate in any project or opportunity, that director will primarily consider the degree of risk to which the Issuer may be exposed and its financial position at that time.

To the best of the Company's knowledge, there are no known existing or potential conflicts of interest among the Issuer, its promoters, directors, officers or other members of management of the Issuer as a result of their outside business interests except that certain of the directors, officers, promoters and other members of management serve as directors, officers, promoters and members of management of other public companies, and therefore it is possible that a conflict may arise between their duties as a director, officer, promoter or member of management of such other companies.

The directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest

and the Issuer will rely upon such laws in respect of any directors’ and officers’ conflicts of interest or in respect of any breaches of duty by any of its directors or officers. Such directors or officers in accordance with the Business Corporations Act (Yukon) will disclose all such conflicts and they will govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law.

NovaGold Canada and ALM took the initiative in founding the Company and arranging for its organization and financing and, accordingly, may be considered promoters of the Issuer within the meaning of securities legislation of British Columbia.

As at September 26, 2006, NovaGold Canada held 5,304,478 common shares of the Company, representing approximately 18.7% of the issued and outstanding common shares of the Company.

As at September 26, 2006, ALM held 1,940,299 common shares of the Company, representing approximately 6.9% of the issued and outstanding common shares of the Company.

See "General Development of the Business – Three Year History and Significant Acquisitions" and "Interest of Management and Others in Material Transactions" with respect to transactions entered into by the Company involving NovaGold Canada and ALM.

The Audit Committee (the “Committee”) of the Board of Directors (the “Board”) of Alexco Resource Corp. (the “Company”) shall assist the Board in fulfilling its financial oversight responsibilities. The Committee’s primary duties and responsibilities under this mandate are to serve as an independent and objective party to monitor:

A majority of the members of the Committee shall not be officers or employees of the Company or of an affiliate of the Company.

Each member of the Committee must be able to read and understand fundamental financial statements, including the Company’s balance sheet, income statement, and cash flow statement.

In accordance with the By-Laws of the Company, the members of the Committee shall be appointed by the Board and shall serve until such member’s successor is duly elected and qualified or until such member’s earlier resignation or removal. Any member of the Committee may be removed, with or without cause, by a majority vote of the Board.

Unless the Board selects a Chair, the members of the Committee shall designate a Chair by the majority vote of all of the members of the Committee. The Chair shall call, set the agendas for and chair all meetings of the Committee.

The Committee may form and delegate authority to subcommittees consisting of one or more members when appropriate, including the authority to grant pre-approvals of audit and permitted non-audit services, provided that a decision of such subcommittee to grant a pre-approval shall be presented to the full Committee at its next scheduled meeting.

The Committee shall meet at least four times in each fiscal year, or more frequently as circumstances dictate. The Auditor shall be given reasonable notice of, and be entitled to attend and speak at, each meeting of the Committee concerning the Company’s annual financial statements and, if the Committee feels it is necessary or appropriate, at any other meeting. On request by the Auditor, the Chair shall call a meeting of the Committee to consider any matter that the Auditor believes should be brought to the attention of the Committee, the Board or the shareholders of the Company.

At each meeting, a quorum shall consist of a majority of members that are not officers or employees of the Company or of an affiliate of the Company.

As part of its goal to foster open communication, the Committee may periodically meet separately with each of management and the Auditor to discuss any matters that the Committee believes would be appropriate to discuss privately. In addition, the Committee should meet with the Auditor and management annually to review the Company’s financial statements in a manner consistent with Section III of this Charter.

The Committee may invite to its meetings any director, or manager of the Company and any other person whom it deems appropriate to consult with in order to carry out its responsibilities. The Committee may also exclude from its meetings any person it deems appropriate to exclude in order to carry out its responsibilities.

The following functions shall be the common recurring duties of the Committee in carrying out its purposes outlined in Section I of this Charter. These duties should serve as a guide with the understanding that the Committee may fulfill additional duties and adopt additional policies and procedures as may be appropriate in light of changing business, legislative, regulatory or other conditions. The Committee shall also carry out any other responsibilities and duties delegated to it by the Board from time to time related to the purposes of the Committee outlined in Section I of this Charter.

The Committee, in discharging its oversight role, is empowered to study or investigate any matter of interest or concern which the Committee in its sole discretion deems appropriate for study or investigation by the Committee.

The Committee shall be given full access to the Company’s internal accounting staff, managers, other staff and Auditor as necessary to carry out these duties. While acting within the scope of its stated purpose, the Committee shall have all the authority of, but shall remain subject to, the Board.

The Committee will have the following responsibilities and, in order to perform and discharge these responsibilities, will be vested with the powers and authorities set forth below, namely, the Committee shall:

(including the fees and terms thereof) to be performed for the Company by the Auditor unless such non-audit services:

While the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management and the Auditor.

The members of the Audit Committee are Michael Winn, Rick Van Nieuwenhuyse and David Searle. All of the members are financially literate and independent for the purposes of Multilateral Instrument 52-110 ("MI 52-110").

Mr. Winn is a financial expert, in that he has an understanding of generally accepted accounting principles and financial statements; is able to assess the general application of accounting principles in connection with the accounting for estimates, accruals and reserves; has experience analyzing or evaluating financial statements that entail accounting issues of equal complexity to the Company's financial statements (or actively supervising another person who did so); and has a general understanding of internal controls and procedures for financial reporting and an understanding of audit committee functions.

Mr. Winn does not have an accounting designation; instead his expertise is derived from his high level involvement in the financial matters of public corporations. Mr. Winn is currently President of Terrasearch Inc., a consulting company that provides analysis on mining and energy companies. Mr. Win has worked in the oil and gas industry since 1983 and the mining industry since 1992. He completed graduate course work in accounting and finance and received a BSc in geology from the University of Southern California. Mr. Winn has the business expertise to understand and evaluate financial statements and the accounting principles applied to natural resource companies’ financial statements.

The other members of the Company's audit committee, Messrs. Van Nieuwenhuyse and Searle, are financially literate in that they have the ability to read and understand a set of financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.

At no time since the commencement of the Company's most recently completed financial year has the Company relied on the exemption in Section 2.4 of MI 52-110 (De Minimis Non-audit Services), Section 3.2 of MI 52-110 (Initial Public Offerings), Section 3.3(2) of MI 52-110 (Controlled Companies), Section 3.4 of MI 52-110 (Events Outside Control of Member), Section 3.5 of MI 52-110 (Death, Disability or Resignation of Audit Committee Member) or Section 3.6 of MI 52-110 (Temporary Exempion for Limited and Exceptional Circumstances) or Section 3.8 of MI 52-110 (Acquisition of Financial Literacy), or an exemption from MI 52-110, in whole or in part, granted under Part 8 of MI 52-110 (Exemptions).

At no time since the commencement of the Company's most recently completed financial year was a recommendation of the Committee to nominate or compensate an external auditor not adopted by the board of directors.

The Audit Committee nominates and engages the independent auditors to audit the financial statements, and approves all audit, audit-related services, tax services and other services provided by PricewaterhouseCoopers LLP. Any services provided by PricewaterhouseCoopers LLP that are not specifically included within the scope of the audit must be pre-approved by the audit committee prior to any engagement. The audit committee is permitted to approve certain fees for audit-related services, tax services and other services pursuant to a de minimus exception before the completion of the engagement. In the fiscal year ended June 30, 2006, fees paid to PricewaterhouseCoopers LLP were approved pursuant to the de minimus exception for tax services.

PricewaterhouseCoopers LLP, Chartered Accountants, serve as the independent auditors for the Company and have acted as the Company's independent auditor for the fiscal year ended June 30, 2006 and for the period from incorporation to June 30, 2005. The chart below sets forth the total amount billed the Company by PricewaterhouseCoopers LLP for services performed in these periods and breaks down these amounts by category of service (for audit fees, audit-related fees, tax fees and all other fees):

"Audit Fees" are the aggregate fees billed by PricewaterhouseCoopers LLP for the audit of the Company’s consolidated annual financial statements, reviews of interim financial statements and attestation services that are provided in connection with statutory and regulatory filings or engagements.

"Audit-Related Fees" are fees charged by PricewaterhouseCoopers LLP for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under "Audit Fees." This category comprises fees billed for independent accountant review of the interim financial statement s and Management Discussion and Analysis, as well as advisory services associated with the Company’s financial reporting.

"Tax Fees" are fees for professional services rendered by PricewaterhouseCoopers LLP for tax compliance, tax advice on actual or contemplated transactions.

Fees disclosed under the category "All Other Fees" for the 2006 fiscal year are related to quarterly reviews.

The Company is not a party to any legal proceedings and is not aware of any such proceedings known to be contemplated.

The directors, executive officers and principal shareholders of the Company or any associate or affiliate of the foregoing have had no material interest, direct or indirect, in any transactions in which the Company has participated within the two most recently completed financial periods prior to the date of this Annual Information Form or in the current financial year, and do not have any material interest in any proposed transaction, which has materially affected or will materially affect the Company, except as set out elsewhere in this Annual Information Form or as follows:

Clynton Nauman, the President and Chief Executive Officer of the Company, and Bradley Thrall, the Chief Operating Officer of the Company, each entered into management contracts dated March 15, 2005 with the Company and ALM pursuant to which the Company pays ALM $12,917 plus GST and $11,167 plus GST, respectively, per month in consulting fees with respect to the services of Clynton Nauman and Bradley Thrall (each a "Consultant"), for a two year term ending March 15, 2007. The Company or the Consultant may terminate the contract upon three months' written notice. Upon notice of termination being given, the Company may elect to require the Consultant to cease providing services, provided the Consultant is paid for his services to the end of the notice period.

The Company has entered into the agreements described under "General Development of the Business – Three Year History and Significant Acquisitions" with NovaGold Canada, Viceroy and ALM. NovaGold Canada is a principal shareholder of the Company and certain of the directors and/or officers of NovaGold Canada, Viceroy and ALM are directors and/or officers of the Company. In addition, Clynton Nauman and Bradley Thrall hold 55% and 40%, respectively, of the outstanding shares of ALM.

Certain directors and/or officers of the Company subscribed for common shares of the Company pursuant to the public and private placement financings of the Company. In addition, certain directors and/or officers of the Company were granted stock options under the Issuer's Stock Option Plan. See " General Development of the Business – Three Year History and Significant Acquisitions" and "Description of Capital Structure".

The Company recorded $337,679 in consulting fees to ALM during the fiscal period ended June 30, 2006 ($90,053 during the fiscal period ended June 30, 2005), which was related by having one director and one officer in common. At June 30, 2006, there was $43,101 owing to ALM included in accounts payable and accrued liabilities ($32,307 at June 30, 2005).

The Company paid $7,250 in rent expense during the fiscal period ended June 30, 2006 ($3,000during the fiscal period ended June 30, 2005) as the result of a month to month rental agreement with Quest Management Corp., a company related by having one director in common.

The Company recorded $470,064 in technical services fees to NovaGold Canada during the fiscal period ended June 30, 2006, which was related by having twodirectors in common. At June 30, 2006, there was $160,777 due to NovaGold Canada included in accounts payable and accrued liabilities.

The registrar and transfer agent for the common shares of the Company in British Columbia and Ontario is Computershare Trust Company of Canada, Vancouver, British Columbia.

Other than contracts entered into in the ordinary course of business, the Company entered into an escrow agreement dated December 16, 2005 with Computershare Investor Services Inc. and certain directors and officers of the Company. The escrow agreement was entered into under National Policy 46-201 Escrow for Initial Public Offerings in connection with the Company’s initial public offering completed in January 2006.

Ronald G. Simpson of GeoSim Services Inc., an independent consulting geologist and "qualified person" as defined in NI 43-101, is the author responsible for the preparation of the Brewery Creek Report.

Janice Fingler, an independent consulting geologist and "qualified person" as defined in NI 43-101, is the author responsible for the preparation of the McQuesten Report.

Michael Stammers, a "qualified person" as defined in NI 43-101, is responsible for directing the Company's exploration programs on the Brewery Creek property in Yukon.

The audited financial statements of the Company have been subject to audit by PricewaterhouseCoopers LLP, Chartered Accountants.

Based on information provided by the experts, other than as described below, none of the experts named under "Names of Experts", when or after they prepared the statement, report or valuation, has received any registered or beneficial interests, direct or indirect, in any securities or other property of the Company or of one of the Company's associates or affiliates (based on information provided to the Company by the experts) or is or is expected to be elected, appointed or employed as a director, officer or employee of the Company or of any associate or affiliate of the Company.

The auditors of the Company are PricewaterhouseCoopers LLP, Chartered Accountants, of Vancouver, British Columbia. PricewaterhouseCoopers LLP, Chartered Accountants, report that they are independent of the Company in accordance with the Rules of Professional Conduct in British Columbia, Canada. PricewaterhouseCoopers LLP is registered with the Public Company Accounting Oversight Board.

Additional information relating to the Company may be found on SEDAR at www.sedar.com.

Additional information, including directors' and officers' remuneration and indebtedness, principal holders of the Company's securities, and securities authorized for issuance under equity compensation plans, where applicable, is contained in the Company's information circular for its most recent annual general meeting of securityholders that involved the election of directors.

Additional financial information is provided in the Company's consolidated financial statements and management's discussion and analysis for its most recently completed financial year.

To Convert From	To	Multiply By
Feet	Metres	0.305
Metres	Feet	3.281
Miles	Kilometres ("km")	1.609
Kilometres	Miles	0.6214
Acres	Hectares ("ha")	0.405
Hectares	Acres	2.471
Grams	Ounces (Troy)	0.03215
Grams/Tonnes	Ounces (Troy)/Short Ton	0.02917
Tonnes (metric)	Pounds	2,205
Tonnes (metric)	Short Tons	1.1023

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

	The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" used in this Annual Information Form are Canadian mining terms as defined in accordance with National Instrument 43-101 ("NI 43-101") under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum ("CIM") Standards.

"Measured mineral resource"	Refers to that part of a mineral resource for which quantity grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.

"Indicated mineral resource"	Refers to that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic

	parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

"Inferred mineral resource"	Refers to that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

"Mineral reserve"	Refers to the economically mineable part of a measured or indicated mineral resource demonstrated by at least a preliminary feasibility study. The study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A mineral reserve includes diluting materials and allowances for losses that might occur when the material is mined.

	Mineral reserves are categorized as follows on the basis of the degree of confidence in the estimate of the quantity and grade of the deposit.

"Proven mineral reserve"	Means, in accordance with CIM Standards, for the part of a deposit which is being mined, or which is being developed and for which there is a detailed mining plan, the estimated quantity and grade or quality of that part of a measured mineral resource for which the size, configuration and grade or quality and distribution of values are so well established, and for which economic viability has been demonstrated by adequate information on engineering, operating, economic and other relevant factors, so that there is the highest degree of confidence in the estimate. This definition for differs from the standards in the United States, where proven or measured reserves are defined as reserves which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; (b) grade and/or quality are computed from the results of detailed sampling and (c) the sites for inspection, sampling and measurement are spaced so closely and the geographic character is so well defined that size, shape, depth and mineral content of reserves are well established.

Year	Laboratory	Sample Preparation	Au Analytical Technique
1989	Norex Lab, Vancouver lab	12.5 % split from drill crushed, unspecified split pulverized to minus 200 mesh	Atomic Absorption in hot aqua regia digestion of 10 grams
1990	ACME Laboratories, Vancouver	12.5% drill split crushed and split, 250- 300 grams pulverized	Atomic Absorption in hot aqua regia digestion
1991, 92	ACME Laboratories, Vancouver (analysis) Northern Analytical Laboratories, Whitehorse (sample prep)	12.5% drill split crushed and split to - 1/4 inch, 250-300 grams pulverized	Atomic Absorption in hot aqua regia digestion
1993-1995	Terramin Research Laboratories, Calgary (analysis and pulverization) Onsite Loki Gold prep lab (crushing and splitting)	12.5% drill split crushed to -1/4 inch with jaw crusher by Loki personnel on site. 500 gram sample shipped to Terramin for Pulv and analysis.	30 gram fire assay with atomic absorption finish
1996-2000	Brewery Creek Mine Lab (crush, pulverize, analysis) Chemex Laboratories, (pulverize, analysis)	drill splits crushed to - 1/4 inch (mine lab), 500 gram split pulverized to -150 mesh	30 gram fire assay with atomic absorption finish
2004	ALS Chemex Labs (crush, pulverize, analysis	See above	30 gram fire assay with atomic absorption finish

	Feasibility Data	Current Data
Weighted average of LAQM column leach tests:	88%	72%
Less allowance for coarse ore and heap scale-up:	-2%	-2%
Less allowance for preg robbing material:	-2%	-0%
Projected recovery for oxide ore:	84%	70%
Less provision for transitional ore:	-6%	-6%
Projected weighted recovery from the heap:	78%	64%

		Page

PRELIMINARY NOTES		1
GLOSSARY OF TECHNICAL TERMS		3
CORPORATE STRUCTURE		8
	Name, Address, Incorporation and Intercorporate Relationships	8
GENERAL DEVELOPMENT OF THE BUSINESS		8
	Three Year History and Significant Acquisitions	8
DESCRIPTION OF THE BUSINESS		10
	Risk Factors	10
	Mineral Projects	15
	Remediation Business	48
DIVIDENDS		53
DESCRIPTION OF CAPITAL STRUCTURE		53
MARKET FOR SECURITIES		55
	Trading Price and Volume	55
ESCROWED SECURITIES		56
DIRECTORS AND OFFICERS		56
	Name, Occupation and Security Holding	56
	Cease Trade Orders, Bankruptcies, Penalties or Sanctions	57
	Conflicts of Interest	58
PROMOTERS		59
AUDIT COMMITTEE INFORMATION		59
	Audit Committee Charter	59
	Composition of the Audit Committee	64
	Reliance on Certain Exemptions	64
	Audit Committee Oversight	65
	Pre-Approval Policies and Procedures	65
	External Auditor Service Fees (By Category)	65
LEGAL PROCEEDINGS		66
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS		66
TRANSFER AGENTS AND REGISTRARS		67
MATERIAL CONTRACTS		67
INTERESTS OF EXPERTS		67
	Names of Experts	67
	Interests of Experts	67
ADDITIONAL INFORMATION		68

	of gold production at Brewery Creek, royalties under this agreement had already been paid on 278,484 ounces of gold production.

(b)	A royalty agreement with Total Erickson Resources, Ltd. and Energold Minerals, Inc. requiring the owner of the Brewery Creek mine to pay a 5% net profits royalty (after recapture of pre-production expenditures) on profits from gold production at Brewery Creek.

-	The northern half of the entire Reserve ore trend appears to have been shifted left-laterally relative to the southern half; and

-	Mineralization is intimately associated with these left-lateral wrench faults that strike both NW and NE.

-	Lithology and alteration were favourable;

-	Anomalous arsenic, antimony and mercury values were encountered in all holes; and

-	Spectral analysis of clay minerals in drill core indicates favourable environments for gold deposition.

Rock Type	Number of measurements	MRDI Average	Assigned to Model
LAQM/LQM	91	2.43	2.40
QM / AQM	20	2.62	2.50
Argillite	15	2.61	2.40
Other sediments	23	2.53	2.40

-	Minimum composites required to estimate a block increased from 2 to 3 (4 were recommended)

-	Search ellipse orientations were revised

-	Trench assays composites were not used (formerly used in Bohemian zone)

Zone	Tonnes > Cutoff	Grade gpt/ Au	Recov. Grade gpt Au	Total In-situ oz	Estimated Recov. oz
W.Big Rock	815,800	1.133	0.764	29,700	20,000
E.Big Rock	1,017,400	0.907	0.577	29,700	19,000
Bohemian	1,180,900	1.126	0.702	42,800	27,000
Lower Fosters	961,900	1.387	0.576	42,900	18,000
Total*	3,975,900	1.135	0.652	145,000	83,000

Zone	Tonnes >= Cutoff	Grade gpt Au	Total oz
North Slope	2,214,000	2.01	143,000

HQ Core Drilling	2700 meters @ 150/m	$	405,000
Mob/Demob of drill equipment		$	10,000
Down hole survey		$	10,000
Geologist	4 months @ 10000/month	$	40,000
Geological technicians (2)	3 months @ 10000/month	$	30,000
Assays	1350 samples $25/sample	$	33,750
Vehicle	3 months @ $2500/month	$	7,500
Camp	720 mandays @ 75/day	$	54,000
Site Prep & Reclamation		$	37,000
Travel & accom		$	15,000
Report Prep		$	10,000
Freight		$	10,000
Supplies		$	20,000
Contingency @ 10%		$	68,000
	Total	$	750,250

HQ Core Drilling	4500 meters @ 150/m	$	675,000
RC Drilling	2500 metres @ $95/m	$	237,500
Mob/Demob of drill equipment		$	35,000
Down hole survey		$	15,000
Sr. Geologist	6 months @ $10000/month	$	60,000
Jr. Geologist	3 months @ $7,500/month	$	22,500
Geological technicians (4)	3 months @ $20,000/month	$	60,000
Assays	3500 samples $25/sample	$	87,500
Vehicles (2)	3 months @ $2500/month	$	15,000
Camp	1500 mandays @ 75/day	$	112,500
Site Prep & Reclamation		$	120,000
Travel & accom		$	35,000
Report Prep		$	16,000
Freight		$	40,000
Supplies		$	60,000
Contingency @ 10%		$	159,000
	Total	$	1,750,000

Sample	Area	Results	Associations
Number
NDR 1547	Far East	250 ppb Au	Along the southern contact of magnetic high
		1250 ppm As
		5.6 ppm Bi
NDR 1557	Far East	115 ppb Au	Along southern contact of magnetic high, near
		752 ppm As	EW fault; quartz-siderite veining in graphitic
		1.7 ppm Bi	quartzite
		5 ppm Sb
NDR 1551	Northeast	45 ppb Au	Along southeast contact of inferred buried
	of Far East		intrusive (magnetic high); quartz-siderite veining
			in muscovite-limonite schist
NDR 1550	Northeast	416 ppm As	Quartz-muscovite-limonite schist
	of Far East	3.7 ppm Bi
NDR 1587	Northeast	594 ppm As	Along NNW fault, near intersection with NE
	of	6 ppm Sb	fault.
	Thompson
	Creek
	(1km)

Hole
No.	Area	Length	Interval	Intercept	Gold
		*metres*	*metres*	*metres**	*g/t*
D81-02	West	108.0	79.0-83.0	4.0	0.59
D81-03	West	89.0	53.0-55.0	2.0	1.75
D81-04	West	80.0	8.0-10.0	2.0	0.85
D81-07	West	125.0	16.0-18.0	2.0	0.47
	West		109.0-111.0	2.0	0.76
D81-8	West	77.0	37.5-41.5	4.0	0.83
	West		43.0-58.0	15.0	1.81
D81-9	West	73.0	35.4-45.0	9.6	1.60
	West		50.0-51.5	1.5	6.90
	West		51.5-54.5	3.0	1.70
D81-10	West	117.0	103.0-106.0	3.0	0.45

D81-11	West	59.0	41.0-58.8	17.8	?
D81-12	West	102.0	50.0-90.0	40.0	?
D81-13	West	60.0	64.0-75.0	11.0	1.32
D81-14	West	27.0	22.4-25.0	2.6	2.33
D83-01	East	136.0	15.0-27.0	12.0	0.91
			79.0-88.0	9.0	0.81
			100.0-109.6	9.6	4.10
D83-02	East	136.0	80.0-94.0	14.0	0.54
D83-03	East	74.0	29.0-32.0	3.0	0.38
D83-04	East	99.6	73.0-76.0	3.0	4.10
D83-06	East	160.6	63.0-66.0	3.0	5.60
			103.0-114.0	11.0	1.51
D83-07	East	113.6	29.0-34.0	5.0	3.34
			103.4-114.5	11.1	1.51
RC97-01	East	21.0	9.0-12.0	3.0	0.53
RC97-
01a		21.0	12.0-15.0	3.0	0.46
RC97-02	West		8.0-35.0	27.0	2.11
RC97-03	West	30.5	7.1-27.4	18.3	3.74
RC97-06	East	104.0	7.0-10.0	3.0	0.41
			34.0-52.0	18.0	0.48
			62.0-95.0	33.0	1.11

Hole No.	Area	Length	Interval	Intercept	Gold
		*metres*	*metres*	*metres**	*g/t*
MQ00-1	East	165.5	54.2-64.0	9.8	0.44
			70.0-72.5	2.5	3.21
			115.0-122.5	7.5	0.89
			145.1-151.2	6.1	2.55
MQ00-2	West	100.5	26.0-30.5	4.5	1.29
MQ00-3	Far East	150.9	142.0-145.0	3.0	2.98
MQ00-4	West	119.0	25.0-36.5	11.5	1.54
			82.7-119.3	36.6	1.37
		incl.	82.7-95.5	12.8	1.48
		incl.	97.3-105.0	7.7	1.94
			115.0-119.3	4.3	3.31
MQ00-5	East Extn	253.0	4.6-18.5	13.9	1.31
			50.9-58.0	7.1	KH type
MQ03-14	West	200.3	122.0-128.0	6.0	0.94
			144.0-148.0	4.0	1.87
MQ03-08	West	228.3	106.5-111.5	5.0	1.98
			129.5-140.9	11.4	0.87
			164.5-171.7	7.2	1.11
MQ03-09	West	123.8	3.7-123.8	120.1	1.36

•	Core drilling at the Bohemian zone returned some exceptional high grade intervals including:

	(a)	DDH BC06-126 which cut 9.01 grams per tonne gold over 13.74 metres including 14.47 grams per tonne gold over 7.90 metres;

	(b)	DDH BC06-127 which cut 5.14 grams per tonne gold over 34.88 metres including 8.50 grams per tonne gold over 15.90 metres; and

	(c)	DDH BC06-128 which cut 6.79 grams per tonne gold over 15.32 metres.

•	Core drilling in the Classic zone returned broad intervals of low grade gold and suggests potential for bulk mineable intrusive-related oxide mineralization.

TR98-22	East-South	12m@1.81 g/t Au	Grades related to NNW fault and NNE fault (Mn oxide) where gold >10 g/t, in HW schists near FW qtzite contact
TR98-26	Far East	8m@0.77 g/t Au	Grade related to silicified-pyrrhotite gabbro near contact
TR MQ00-1	Thompson Creek	Au from 0.10-0.83 gpt. Highest Au of 10cm of 9.8 g/t Au	Mineralized veins strike ENE, dip 64 SE; quartz- arsenopyrite veins along contacs between schist and quartzite or calc-silicate and schist/phyllite. Widespread As from 400 to >10,000 ppm, Bi (1.5-18 ppm), W (0.10- >10 ppm), Te (0.10->10 ppm)

		incl.	3.7-24.7	21.0	0.53
			51.2-58.9	7.7	13.64
			94.7-102.5	7.8	3.68
			57.8-58.9	1.1	84.80
MQ03-15	West	227.7	97.0-106.2	9.2	0.39
MQ03-10	Central	135.6	53.0-64.0	11.5	0.57
MQ03-11	Central	151.5	69.0-75.2	6.2	1.60
			78.2-86.7	8.5	1.08
MQ03-16	Central	193.6	91.2-96.5	5.3	1.50
			153.7-159.5	5.8	1.12
MQ03-17	Central	197.2	82.7-93.5	10.8	1.94
MQ03-12	North	126.9	91.9-92.2	0.3	12.00
MQ03-13	East S.	186.5	17.37-23.8	6.4	2.69
MQ03-20	Southeast	187.8	49.5-59.7	10.0	0.60

(1)	rights and interests of ALM in and to current technical support and service contracts with various mine operating and exploration companies. Two of the projects under the contracts are ongoing;

(2)	ALM's non-contractual working relationship with ARCADIS NV ("ARCADIS"), a publicly traded company involved in environmental clean-up and risk management, including an arrangement to utilize ARCADIS' proprietary technologies in Canada; and

(3)	rights of ALM to secure certain patents pertaining to the in situ immobilization of metals within density variant bodies of water and for treatment of rock heaps to prevent acid rock drainage.

	(a)	the exclusive licence to use the Patents in Canada for remediation projects in which the portion of the project price which is attributable to activities under which the Patents are applied (the "Remediation Price") is less than US$3,000,000; and

	(b)	the first option to perform work in executing any project where the Remediation Price exceeds US$3,000,000.

1.	The number of shares subject to each stock option is determined by the Board of Directors (or Compensation Committee) provided that the Stock Option Plan, together with all other previously established or proposed share compensation arrangements, may not result in:

	(a)	the number of common shares of the Company reserved for issuance pursuant to stock options granted to insiders exceeding 10% of the outstanding issued shares; or

	(b)	the issuance, to insiders of the Company of a number of common shares of the Company exceeding, within a one year period, 10% of the outstanding issued shares; or

	(c)	the issuance, to any one insider of the Company and such insider’s associates, of a number of

	The outstanding issued shares is determined on the basis of the number of common shares of the Company outstanding immediately prior to any share issuance, excluding shares issued pursuant to share compensation arrangements over the preceding one-year period.

2.	The maximum number of common shares of the Company which may be issued pursuant to stock options granted under the Stock Option Plan, unless otherwise approved by shareholders, is 10% of the issued and outstanding common shares at the time of the grant. Any increase in the issued and outstanding common shares will result in an increase in the available number of common shares issuable under the Stock Option Plan, and any exercises of stock options will make new grants available under the plan.

3.	The Stock Option Plan must be approved and ratified by shareholders every three years.

4.	The exercise price of an option may not be set at less than the closing price of the common shares of the Company on the Toronto Stock Exchange on the trading day immediately preceding the date of grant of the option.

5.	The options may be exercisable for a period of up to seven years, such period and any vesting schedule to be determined by the Board of Directors (or Compensation Committee) of the Company, and are non-assignable, except in certain circumstances.

6.	The options can be exercised by the Optionee as long as the Optionee is a director, officer, employee or service provider to the Company or its subsidiaries or within a period of not more than 30 days after ceasing to be a director, officer, employee or service provider or, if the Optionee dies, within one year from the date of the Optionee's death.

7.	On the receipt of a takeover bid, issuer bid, going private transaction or change of control, any unvested options shall be immediately exercisable.

8.	The directors of the Company may from time to time in the absolute discretion of the directors amend, modify and change the provisions of an option or the Stock Option Plan without obtaining approval of shareholders to:

	(a)	make amendments of a "housekeeping" nature;

	(b)	change vesting provisions;

	(c)	change termination provisions for an insider provided that the expiry date does not extend beyond the original expiry date;

	(d)	change termination provisions which does extend beyond the original expiry date for an optionee who is not an insider;

	(e)	reduce the exercise price of an option for an optionee who is not an insider;

	(f)	implement a cashless exercise feature, payable in cash or securities, provided that such feature provides for a full deduction of the number of shares from the number of common shares reserved under the Stock Option Plan; and

Period	Volume	High	Low
January 26, 2006 to January 31, 2006	111,600	$2.10	$1.65
February 2006	1,650,098	$2.50	$1.45
March 2006	1,636,080	$2.50	$1.98
April 2006	5,516,796	$4.10	$2.29
May 2006	2,751,805	$3.95	$2.60
June 2006	734,010	$3.10	$2.51

Designation of Class	Number of Securities held in Escrow	Percentage of Class
Common Shares	4,197,388 ⁽¹⁾⁽²⁾	14.8%

	(1)	Held in escrow pursuant to an agreement (the "Escrow Agreement") dated as of December 16, 2005 among the Company, Computershare Trust Company of Canada and the principals of the Company which included, Clynton Nauman, Bradley Thrall, Rick Van Nieuwenhuyse, Michael Winn, Sam Wallingham, ALM and NovaGold Canada. The Escrow Agreement provides that the escrowed shares will be released from escrow in the following manner: ¼ of the escrow securities on the date of the TSX listing, January 26, 2006; 1/3 of the remaining escrow securities six months after the listing; ½ of the remaining escrow securities 12 months after the listing; and the remainder of the escrow securities 18 months after the listing.

	(2)	Also held in escrow pursuant to the Escrow Agreement are 900,000 stock options issued to the officers and directors.

(1)	The information as to the jurisdiction of residence and principal occupation, not being within the knowledge of the Company, has been furnished by the respective individuals individually.
(2)	Member of the Audit Committee.
(3)	Member of the Corporate Governance Committee.
(4)	Member of the Environmental and Safety Committee.
(5)	Member of the Compensation Committee.

	(i)	was the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days;

	(ii)	was subject to an event that resulted, after the director or executive officer ceased to be a director or executive officer, in the company being the subject of a cease trade or similar order or an order that denied the relevant company access to any exemption under securities legislation, for a period of more than 30 consecutive days; or

	(iii)	within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets;

(b)	has, within the ten years before the date of this Annual Information Form, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, officer or shareholder; or

(c)	has been subject to:

	(i)	any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or

	(ii)	any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

1.	The quality and integrity of the Company’s financial statements and other financial information;

2.	The compliance of such statements and information with legal and regulatory requirements;

3.	The qualifications and independence of the Company’s independent external auditor (the “Auditor”); and

4.	The performance of the Company’s internal accounting procedures and Auditor.

1.	Review and discuss with the Auditor any disclosed relationships or services that may impact the objectivity and independence of the Auditor and, if necessary, obtain a formal written statement from the Auditor setting forth all relationships between the Auditor and the Company, consistent with Independence Standards Board Standard 1.

2.	Take, or recommend that the Board take, appropriate action to oversee the independence of the Auditor.

3.	Require the Auditor to report directly to the Committee.

4.	Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the Auditor and former independent external auditor of the Company.

5.	Be directly responsible for the oversight of the work by the Auditor (including resolution of disagreements between management and the Auditor regarding financial reporting) for the purpose of preparing or issuing an audit report or related work.

6.	Review annually the performance of the Auditor and recommend the appointment by the Board of a new, or re-election by the Company’s shareholders of the existing, Auditor.

7.	Review and pre-approve all audit and audit-related services and permitted non-audit services

	(a)	which are not pre-approved, are reasonably expected not to constitute, in the aggregate, more than 5% of the total amount of revenues paid by the Company to the Auditor during the fiscal year in which the non-audit services are provided;

	(b)	were not recognized by the Company at the time of the engagement to be non-audit services; and

	(c)	are promptly brought to the attention of the Committee by Management and approved prior to the completion of the audit by the Committee or by one or more members of the Committee who are members of the Board to whom authority to grant such approvals has been delegated by the Committee.

8.	Establish procedures for:

	(a)	the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters; and

	(b)	the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters.

9.	Discuss with management and the Auditor significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements, including any significant changes in the Company’s selection or application of accounting principles, any major issues as to the adequacy of the Company’s internal controls and any special steps adopted in light of material control deficiencies.

10.	Discuss with management and the Auditor any correspondence with regulators or governmental agencies and any employee complaints or published reports which raise material issues regarding the Company’s financial statements or accounting policies.

11.	Discuss with management and the Auditor the effect of regulatory and accounting initiatives as well as off-balance sheet structures on the Company’s financial statements.

12.	Discuss with management the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures, including the Company’s risk assessment and risk management policies.

13.	Discuss with the Auditor the matters required to be discussed relating to the conduct of any audit, in particular:

	a.	The adoption of, or changes to, the Company’s significant auditing and accounting principles and practices as suggested by the Auditor or management.

14.	Review the Company’s annual and quarterly financial statements, management discussion and analysis (MD&A) and interim earnings press releases before the Board approves and the Company publicly discloses this information.

15.	Review the Company’s financial reporting procedures and internal controls to be satisfied that adequate procedures are in place for the review of the Company’s public disclosure of financial information extracted or derived from its financial statements, other than disclosure described in the previous paragraph, and periodically assessing the adequacy of those procedures.

16.	Review any disclosures made to the Committee by the Company’s Chief Executive Officer and Chief Financial Officer during their certification process of the Company’s financial statements about any significant deficiencies in the design or operation of internal controls or material weaknesses therein and any fraud involving management or other employees who have a significant role in the Company’s internal controls.