UNITED STATES SECURITIES AND EXCHANGE COMMISSION-FORM 10-K/A-IRELAND INC. ~ unitedstatessecurities

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10-K/A 1 form10ka.htm FORM 10-K/A

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K/A
(Amendment No. 2)

(Mark One)

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

For the fiscal year ended December 31, 2011

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

For the transition period from _____to _____

COMMISSION FILE NUMBER 000-50033

IRELAND INC.(Exact name of registrant as specified in its charter)

NEVADA	91-2147049
State or other jurisdiction of incorporation or organization	(I.R.S. Employer Identification No.)

2441 West Horizon Ridge Parkway, Suite 100
Henderson, Nevada	89052
(Address of principal executive offices)	(Zip Code)

(702) 932-0353Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act: NONE.

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.001 Par Value Per Share.

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined by Rule 405 of the Securities Act.
[__] Yes [X] No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
[__] Yes [X] No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
[X] Yes [__] No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (s. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[X] Yes [__] No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (s229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [__]	Accelerated filer [__]
Non-accelerated filer [__] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
[__] Yes [X] No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter:
$39,741,507.49 as of June 30, 2011, based on an average of the closing bid of $0.21 and the closing ask of $0.765 as quoted by the OTC Bulletin Boardon that date.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.
As of March 26, 2012, the Registrant had 137,012,641 shares of common stock outstanding.

EXPLANATORY NOTE

This Amendment No. 2 on Form 10-K/A to Ireland Inc.’s (the “Company”) Annual Report on Form 10-K for the year ended December 31, 2011 is being filed to amend certain information with respect to the Company’s mineral properties in response to comment letters received by the Company from the Securities and Exchange Commission (the “SEC”).

Among other changes, in accordance with SEC comments, the Company has removed all disclosure containing estimates of tonnages with average grades and other estimates that do not meet the definition of proven or probable reserves. Under the provisions of the SEC’s Industry Guide 7, only proven or probable reserves may be disclosed in filings with the SEC. The Company does not currently have any proven or probable reserves. In accordance with Industry Guide 7, the Company is not permitted to disclose inferred, indicated or measured resources in its filings with the SEC.

Other than as set forth in this Amendment No. 2, the information contained in the original Form 10-K remains unchanged.

IRELAND INC.

AMENDMENT NO. 2 TO ANNUAL REPORT ON FORM 10-K/A
FOR THE YEAR ENDED DECEMBER 31, 2011

TABLE OF CONTENTS

			PAGE
PART I			3
	ITEM 1.	BUSINESS.	3
	ITEM 1A.	RISK FACTORS.	6
	ITEM 2.	PROPERTIES.	10
PART II			24
	ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.	24
PART III			32
	ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES.	32
SIGNATURES			34

PART I

The information in this discussion contains forward-looking statements. These forward-looking statements involve risks and uncertainties, including statements regarding the Company's capital needs, business strategy and expectations. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as "may," "will," "should," "expect," "plan," "intend," "anticipate," "believe," "estimate,” "predict," "potential" or "continue," the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks described below, and, from time to time, in other reports the Company files with the United States Securities and Exchange Commission (the “SEC”). These factors may cause the Company's actual results to differ materially from any forward-looking statement. The Company disclaims any obligation to publicly update these statements, or disclose any difference between its actual results and those reflected in these statements.

As used in this Annual Report, the terms “we,” “us,” “our,” “Ireland,” and the “Company” mean Ireland Inc. and its subsidiaries, unless otherwise indicated. All dollar amounts in this Annual Report are expressed in U.S. dollars, unless otherwise indicated.

ITEM 1.

BUSINESS.

General

We were incorporated on February 20, 2001 under the laws of the State of Nevada. We are an exploration stage minerals exploration company focused on the discovery and extraction of precious metals from mineral deposits in the Southwestern United States.

In February 2008, we acquired our lead project, a prospective gold, silver and calcium carbonate property located in Esmeralda County, Nevada, that we call the “Columbus Project.” The Columbus Project consists of 25,498 acres of placer mineral claims, including a 378 acre Permitted Mine Area (58-acre mill site and mill facility and 320-acre mine site). Our current permits allow us to mine up to 792,000 tons per year to 40 feet in depth for the purpose of extracting precious metals and calcium carbonate from the Permitted Mine Area. We also have a mineral lease covering, and the option to acquire, an additional 23,440 acres of placer mineral claims adjoining the current project area (the “DDB Claims”). Our current exploration efforts are focused on the North and South Sand Zones of the Columbus Project.

In addition to the Columbus Project, we own the right to acquire a prospective gold, silver and tungsten property located in San Bernardino County, California, that we call the “Red Mountain Project.”

Recent Corporate Developments

The following significant corporate developments occurred after the completion of our fiscal quarter ended September 30, 2011:

Extension of Options Granted to Executive Officers under 2007 Stock Incentive Plan

On December 13, 2011, our Board of Directors approved an extension of certain options granted to the following executive officers on March 30, 2007 as follows:

		No. of	Exercise	Previous	Extended
Optionee	Position	Options	Price	Expiry Date	Expiry Date

Douglas D.G. Birnie	Director / Chief Executive Officer	2,200,000	$0.05	30-Mar-2012 (orig. 30-Mar-09)	30-Mar-2017
Robert D. McDougal	Director / Chief Financial Officer	500,000	$0.05	30-Mar-2012 (orig. 30-Mar-09)	30-Mar-2017

The extended options had previously been extended from their original expiration date of March 30, 2009 to March 30, 2012.

In addition to extending the options granted to the our Chief Executive Officer and Chief Financial Officer, our Board of Directors approved an extension of an additional 500,000 options granted to a consultant of the Company. The extended options were also granted on March 30, 2007, are exercisable at a price of $0.05 per share, and have an extended expiry date of March 30, 2017.

Testing on Gravity Concentration Circuit

In January and February 2012, we released the results for three tests completed by our independent metallurgical consultants, AuRIC Metallurgical Laboratories, LLC of Salt Lake City, UT using a new gravity concentration process on bulk samples taken from the North Sand Zone. All tests were conducted at AuRIC’s laboratory facilities in Salt Lake City, utilizing modified operating parameters on the same gravity concentration process. These test results all exceeded our 75% gold extraction rate goals for the Columbus Project. We are continuing to work on optimizing the extraction circuit. Once we have settled the operating parameters for the gravity concentration circuit to our satisfaction, we will seek to upgrade our onsite pilot plant at the Columbus Project. A more detailed description of these tests is contained under Item 2 of this Annual Report in our description of our planned Mining and Recovery Methodology for the Columbus Project.

In addition to demonstrating potential extraction rates for the Columbus Project, these tests indicated that more gold was extracted by leaching concentrates derived from large samples than was predicted by caustic fusion assay on small head samples (approx. 5g). We believe that these results are consistent with the nugget effect common in alluvial deposits such as those found at the Columbus Project, and point to the need to process large samples and the extraction of gold in hand to best determine the head grade of the project.

Issuance of Securities under Private Placement Offerings

In February and March 2012, we sold an aggregate of 9,560,000 units (each a "Unit") at a price of $0.50 per Unit in separate concurrent private placement offerings for total aggregate proceeds of $4,780,000 as described below. Each Unit was comprised of one share of our common stock and one share purchase warrant (each a “Warrant”), with each Warrant entitling the holder to purchase an additional share of our common stock at an exercise price of $0.80 per share for a period expiring March 31, 2015. After September 30, 2012, we may accelerate the expiration date of the Warrants if the volume weighted average price for our common stock exceeds $2.40 per share for 20 consecutive trading days.

US Private Placement: We sold an aggregate of 9,260,000 Units to U.S. persons for total gross proceeds of $4,630,000 pursuant to the provisions of Rule 506 of Regulation D of the United States Securities Act of 1933, as amended (the “Securities Act”). Each U.S. subscriber except one represented that they were an accredited investor as defined under Regulation D of the Securities Act. The one non-accredited investor was provided with the disclosure required by Rule 502 of Regulation D and provided representations that investor otherwise met the requirements under Rule 506 for persons that do not qualify as an accredited investor.

Offshore Private Placement: We sold a total of 300,000 Units to non-U.S. persons for total gross proceeds of $150,000 pursuant to the provisions of Regulation S of the Securities Act. We did not engage in a distribution of the Offshore Private Placement in the United States. Each of the subscribers represented that they were not “US persons” as defined in Regulation S of the Securities Act and that they were not acquiring the shares for the account or benefit of a US person.

Finder’s Fees: We agreed to pay total finder’s fees of $14,000 in cash and 28,000 share purchase warrants (the “Finder’s Warrants”) in respect of Units sold under the US Private Placement and the Offshore Private Placement. In addition, we will pay the finder an additional cash fee of 4% of the exercise price of any warrants exercised by the subscribers introduced by the finder. The finder is a registered broker dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.

Competition

We are a mineral resource exploration company. We compete with other mineral resource exploration and development companies for the acquisition of new mineral properties, the services of contractors, equipment and financing. Many of the mineral resource exploration and development companies with whom we compete may have greater access to a limited supply of qualified technical personnel and contractors and to specialized equipment needed in the exploration, development and operation of mineral properties. This could have an adverse effect on our ability to explore and develop our properties in a timely manner. In addition, because many of our competitors are more established and have a longer operating history than us, they may have greater access to promising mineral properties.

In addition, many of our competitors have greater financial resources than us. Accordingly, these competitors may be able to spend greater amounts on acquisitions of mineral properties of merit, on exploration of their mineral properties and on development of their mineral properties. In addition, they may be able to afford greater geological expertise in the targeting and exploration of mineral properties. This may make our competitors more attractive to potential investors and could adversely impact our ability to obtain additional financing if and when needed.

Government Regulations

The mining industry in the United States is highly regulated. We intend to secure all necessary permits for the exploration of the Columbus Project and the Red Mountain Project and, if development is warranted on the properties, will file final plans of operation prior to starting any mining operations. The consulting geologists that we hire are experienced in conducting mineral exploration activities and are familiar with the necessary governmental regulations and permits required to conduct such activities. As such, we expect that our consulting geologists will inform us of any government permits that we will be required to obtain prior to conducting any planned activities on the Columbus Project and the Red Mountain Project. We are not able to estimate the full costs of complying with environmental laws at this time since the full nature and extent of our proposed mining activities cannot be determined until we complete our exploration program.

If we enter into the development or production stages of any mineral deposits found on our mineral properties, of which there are no assurances, the cost of complying with environment laws, regulations and permitting requirements will be substantially greater than in the exploration phases because the impact on the project area is greater. Permits and regulations will control all aspects of any mineral deposit development or production program if the project continues to those stages because of the potential impact on the environment. Examples of regulatory requirements include:

Water discharge will have to meet water standards;
Dust generation will have to be minimal or otherwise remediated;
Dumping of material on the surface will have to be recontoured and revegetated;
An assessment that all material to be left on the surface will need to be environmentally benign;
Ground water will have to be monitored for any potential contaminants;
The socio-economic impact of the project will have to be evaluated and if deemed negative, will have to be remediated; and,
There will have to be a report of the potential impact of the work on the local fauna and flora.

Employees

As of the date of this Annual Report, other than our officers and directors, we have 10 full-time employees and 1 part-time employee.

Research and Development Expenditures

We have not incurred any research or development expenditures since our incorporation.

ITEM 1A.

RISK FACTORS.

The following are some of the important factors that could affect our financial performance or could cause actual results to differ materially from estimates contained in our forward-looking statements. We may encounter risks in addition to those described below. Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial, may also impair or adversely affect our business, financial condition or results of operation.

Although we have installed the leach circuit of the onsite pilot production module for the Columbus Project, there is no assurance that this project is commercially feasible.

We have begun testing and optimizing the onsite pilot production module at the Columbus Project. This pilot production module is part of our pre-feasibility study for the Columbus Project and is designed to evaluate the commercial viability of the Columbus Project. There is no assurance that the results of our pre-feasibility program will result in a decision to enter into commercial production.

Additional exploration work is required before proved or probable reserves can be established.

We intend to report the results of our exploration activities promptly after those results have been received and analyzed. However, there is no assurance that the test results reported by us will be indicative of extraction rates throughout our mineral properties. We have not yet established proved or probable reserves on the Columbus Project or on our other mineral properties and additional exploration work will be required before proved or probable reserves can be established.

We will require additional financing to complete our exploration programs for our mineral projects.

We expect to spend approximately $5,670,000 on the exploration of our Columbus and Red Mountain Projects and the general costs of operating and maintaining our business and mineral properties during the twelve months ending December 31, 2012. We do not currently have sufficient financial resources to pay for our anticipated expenditures for that period. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration programs until October 31, 2012. We will require additional financing to complete our planned exploration plans. In addition, actual costs of completing our exploration plans could be greater than anticipated and we may need additional financing sooner than anticipated. If we are unable to obtain sufficient financing to complete our planned exploration plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

Our ability to obtain future financing will be subject to a number of factors, including the variability of market prices for gold and silver, investor interest in our mineral projects, and the performance of equity markets in general. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If we are not able to obtain financing when needed or in an amount sufficient to enable us to complete our programs, we may be required to scale back our exploration programs.

If we complete additional financings through the sale of our common stock, our existing stockholders will experience dilution.

The most likely source of future financing presently available to us is through the sale of shares of our common stock. The only other anticipated alternative for the financing of further exploration would be the offering by us of an interest in our mineral properties to be earned by another party or parties carrying out further exploration thereof, which is not presently contemplated. In addition, if our management decides to exercise the right to acquire a 100% interest in the Red Mountain Project, we will be required to issue significantly more shares of our common stock. Issuing shares of our common stock, for financing purposes or otherwise, will dilute the interests of our existing stockholders.

In order to maintain the rights to our mineral properties, we will be required to make annual filings with federal and state regulatory agencies and/or be required to complete assessment work or pay fees in respect of those properties.

In order to maintain the rights to our mineral projects, we will be required to make annual filings and pay fees with federal and state regulatory authorities. On June 16, 2011, the Governor of Nevada approved Senate Bill 493 (SB 493), which repealed a one-time tiered fee hike on mining claims in Nevada. SB 493 also eliminated a number of tax deductions that had previously been available for companies with mining operations in Nevada. However, we are currently an exploration stage company and do not have significant mineral extraction activities or any revenues from mining operations and do not expect the elimination of these tax deductions to have a significant impact on our current exploration activities or financial prospects. However, if we do, in the future engage in significant mineral extraction operations, of which there is no assurance, the elimination of these tax deductions could affect our future financial results.

In addition to claim maintenance fees, we may be required by federal and/or state legislation or regulations to complete minimum annual amounts of mineral exploration work on our mineral properties. A failure by us to meet the annual maintenance requirements under federal and state laws could cause our mineral rights to lapse.

Because we are an exploration stage company, we face a high risk of business failure.

To date, our primary business activities have involved the acquisition of mineral claims and the exploration on these claims. We have not earned any revenues as of the date of this report. Potential investors should be aware of the difficulties normally encountered by exploration stage companies and the high rate of failure of such enterprises. The likelihood of success must be considered in light of the problems, expenses, difficulties, complications and delays encountered in connection with the exploration of the mineral properties that we plan to undertake. These potential problems include, but are not limited to, unanticipated problems relating to exploration, and additional costs and expenses that may exceed current estimates.

Because we anticipate that our operating expenses will increase prior to earning revenues, we may never achieve profitability.

Prior to exiting the exploration stage, we anticipate that we will incur increased operating expenses without realizing any revenues. We therefore expect to incur significant losses into the foreseeable future. We recognize that if we are unable to generate significant revenues from the exploration of our mineral claims and the production of minerals thereon, if any, we will not be able to earn profits or continue operations. There is no history upon which to base any assumption as to the likelihood that we will prove successful, and we may not be able to ever generate any operating revenues or achieve profitable operations. If we are unsuccessful in addressing these risks, our business will most likely fail.

Because of the speculative nature of exploration of mining properties, there is substantial risk that no commercially exploitable minerals will be found.

The search for valuable minerals as a business is extremely risky. Although we have been encouraged by the results of the exploration work conducted by us to date, further exploration work is required before proven or probable reserves can be established, and there are no assurances that we will be able to establish any proven or probable reserves. Exploration for minerals is a speculative venture, necessarily involving substantial risk. The expenditures to be made by us may not result in the discovery of commercial quantities of ore. Problems such as unusual or unexpected formations and other conditions are involved in mineral exploration and often result in unsuccessful exploration efforts.

Because of the inherent dangers involved in mineral exploration, there is a risk that we may incur liability or damages if and when conducting mineral exploration activities.

The search for valuable minerals involves numerous hazards. As a result, when conducting exploration activities we may become subject to liability for such hazards, including pollution, cave-ins and other hazards against which we cannot insure or against which we may elect not to insure. The payment of such liabilities may have a material adverse effect on our financial position.

Even if we establish proven or probable reserves on our mineral claims, we may not be able to successfully reach commercial production.

We anticipate using a low cost, high volume surface dredge operation to mine the Columbus Project. Our pre-feasibility program for the Columbus Project is designed to test and optimize our planned mining process for the Columbus Project. There is no assurance that this pre-feasibility program will result in a decision to enter into commercial production. In addition, expanding our production facilities to accommodate commercial operations is expected to require substantially more financial resources than what we currently have available to us.

There is a risk that we will not be able to obtain such financing if and when needed.

Even if we can successfully reach commercial production, any change to mining laws or regulations or levy of additional taxes in the future may make our planned production process nonviable economically.

Several bills have been introduced by the US federal government that would levy resource taxes on mineral exploration companies. Any levy of additional taxes would have an adverse effect on our business. In addition, laws and regulations governing the exploration of mineral properties and the mining process are subject to change. Changes to mining laws and regulations that would have the effect of increasing the cost of mineral exploration and mining activities would adversely impact our business.

We are subject to compliance with government regulations. The costs of complying with these regulations may change without notice, and may increase the anticipated cost of our exploration programs.

There are several government regulations that materially restrict the exploration of minerals. We will be required to obtain work permits, post bonds and perform remediation work for any physical disturbance to the land in order to comply with these laws. While our planned exploration program budgets for regulatory compliance, there is a risk that new regulations could increase our costs of doing business and prevent us from carrying out our exploration program.

In addition, if our applications for permits from the relevant regulatory bodies are denied, we may not be able to proceed with our exploration programs.

If we decide to pursue commercial production, we may be subject to an environmental review process that may delay or prohibit commercial production.

Our planned method for mining the Columbus Project is not expected to generate any significant long term environmental impact. However, we have not yet had a comprehensive environmental review conducted on our planned mining operations for the Columbus Project.

Compliance with an environmental review process may be costly and may delay commercial production. Furthermore, there is the possibility that we would not be able to proceed with commercial production upon completion of the environmental review process if government authorities do not approve our mine or if the costs of compliance with government regulation adversely affected the commercial viability of the proposed mine.

The market for our common stock is limited and investors may have difficulty selling their stock.

Our shares are currently traded on the over the counter market, with quotations entered for our common stock on the OTC Bulletin Board under the symbol “IRLD.” However, the volume of trading in our common stock is currently limited. As a result, holders of our common stock may have difficulty selling their shares.

Because our common stock is a penny stock, stockholders may be further limited in their ability to sell their shares.

Our shares constitute a penny stock under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and are expected to remain classified as a penny stock for the foreseeable future. Classification as a penny stock makes it more difficult for a broker-dealer to sell the stock into a secondary market, which makes it more difficult for a purchaser to liquidate his or her investment. Any broker-dealer engaged by the purchaser for the purpose of selling his or her shares will be subject to Rules 15g-2 through 15g-9 of the Exchange Act. Rather than having to comply with these rules, some broker-dealers will refuse to attempt to sell a penny stock.

No assurance that forward looking assessments will be realized.

Our ability to accomplish our objectives and whether or not we are financially successful is dependent upon numerous factors, each of which could have a material effect on the results obtained. Some of these factors are in the discretion and control of management and others are beyond management’s control. The assumptions and hypothesis used in preparing any forward-looking assessments contained herein are considered reasonable by management. There can be no assurance, however, that any projections or assessments contained herein or otherwise made by management will be realized or achieved at any level.

If we are, or were, a U.S. real property holding corporation, non-U.S. holders of our common stock or other security convertible into our common stock could be subject to U.S. federal income tax on the gain from the sale, exchange, or other disposition of such security.

If we are or ever have been a U.S. real property holding corporation (a “USRPHC”) under the Foreign Investment Real Property Tax Act of 1980, as amended (“FIRPTA”) and applicable United States Treasury regulations (collectively, the “FIRPTA Rules”), unless an exception described below applies, certain non-U.S. investors in our common stock (or options or warrants for our common stock) would be subject to U.S. federal income tax on the gain from the sale, exchange or other disposition of shares of our common stock (or such options or warrants), and such non-U.S. investor would be required to file a United States federal income tax return. In addition, the purchaser of such common stock, option or warrant would be required to withhold from the purchase price an amount equal to 10% of the purchase price and remit such amount to the U.S. Internal Revenue Service.

In general, under the FIRPTA Rules, a company is a USRPHC if its interests in U.S. real property comprise at least 50% of the fair market value of its assets. If we are or were a USRPHC, so long as our common stock is “regularly traded on an established securities market” (as defined under the FIRPTA Rules), a non-U.S. holder who, actually or constructively, holds or held no more than 5% of our common stock is not subject to U.S. federal income tax on the gain from the sale, exchange, or other disposition of our common stock under FIRPTA. In addition, other interests in equity of a USRPHC may qualify for this exception if, on the date such interest was acquired, such interests had a fair market value no greater than the fair market value on that date of 5% of our common stock. Any of our common stockholders (or owners of options or warrants for our common stock) that are non-U.S. persons and own or anticipate owning more than 5% of our common stock (or, in the case of options or warrants, of a value greater than the fair market value of 5% of our common stock) should consult their tax advisors to determine the consequences of investing in our common stock (or options or warrants). We have not conducted a formal analysis of whether we are or have ever been a USRPHC. We do not believe that we are or have ever been a USRPHC. However, if we later determine that we were a USRPHC, then we believe that we would have ceased to be a USRPHC as of June 1, 2005 and that non-U.S. holders would not be subject to FIRPTA with respect to a sale, exchange, or other disposition of shares of our common stock (or options or warrants) after June 1, 2010.

As a result of the public’s lack of familiarity with the assaying methods used by us to analyze samples taken from the sand and clay zones of the Columbus Project, we may occasionally encounter resistance to the reliability of our grade estimates for the Columbus Project. Although we use proven assaying methods, only report extracted and weighed gold and silver and have instituted rigorous testing to ensure the reliability of our exploration results, we may face resistance in the future, which could negatively impact our business, our ability to obtain future financing, and our stock price.

Contrary to popular belief, pyrometallurgical and hydrometallurgical tests on a rock sample do not determine the amount of gold or silver present in a sample. Instead, these tests report the amount of gold or silver that is extracted from the sample by the analytical method used. We have engaged in extensive research and testing to determine the best pyrometallurgical and hydrometallurgical methods for extracting gold and silver from the sands and clays present at the Columbus Project. Our research has indicated that caustic fusion (head ore, concentrates) and thiosulphate or cyanide leaching (concentrates) are the best pyrometallurgical and hydrometallurgical methods for extracting gold and silver from the Columbus Project. The pyrometallurgical and hydrometallurgical methods that were chosen by us result in the actual physical extraction of gold and silver from the tested samples.

Caustic fusion is a standard pyrometallurgical method that uses fluxes melted at low temperature to dissolve the sample rock and liberate the contained minerals or metals for subsequent extraction and analysis. Caustic fusion was developed in South Africa over 100 years ago and was first used to liberate diamonds from their refractory kimberlites. It has since been used to quantify other minerals/metals in rocks by analyzing the fused product. Caustic fusion has proven to be a very effective method for extracting gold and silver from the refractory minerals (organics, silicates) in the sand and clay at Columbus, and has been confirmed by extracting comparable precious metal values from bulk leach tests (+/- 1 ton samples).

Fire assaying is the most common pyrometallurgical method used for extracting gold and silver from rock. Fire assaying relies on the use of standardized chemical fluxes to reduce the melting point of the minerals entombing the gold and silver so that they can be liberated and then collected in a lead “button” and examined. Although this process works well for extracting gold entombed in sulfides (e.g. pyrite) and silica, such as that found in Carlin-type gold deposits, the chemical fluxes used in fire assaying methods are ineffective at liberating the gold and silver from refractory minerals (organics and silicates (Fe-Mg-Al-Si-Ox)) as are found at the Columbus Project. As a result, in our tests, fire assaying has shown to be ineffective at extracting commercial values of gold and silver from the sand and clay from the Columbus Project. Similarly, aqua regia digestion has also proven to be ineffective at extracting gold and silver from the sands and clays at Columbus.

To ensure the reliability of our results, we have instituted rigorous QA/QC protocols, including blind random sampling, and the inclusion of blanks, standards and duplicates. To further ensure reliability, we measure only the actual amount of gold and silver physically extracted from our test samples when reporting assay results. We also have extracted gold and silver from large samples (+/- 200-3000 lbs.) by thiosulphate leaching, with the extraction results being comparable to caustic fusion assay results on the same samples, thereby confirming the reliability of the caustic fusion process, However, because caustic fusion is not commonly used and understood for gold and silver assaying, and because gold and silver in the sands and clays at Columbus cannot be confirmed by metal-in-hand extraction using fire assay or aqua regia digestion, we may encounter some resistance to our analytical methods and assay results, which could negatively impact our business, our ability to obtain additional financing, and our stock price.

FOR ALL OF THE AFORESAID REASONS AND OTHERS SET-FORTH AND NOT SET-FORTH HEREIN, AN INVESTMENT IN OUR SECURITIES INVOLVES A CERTAIN DEGREE OF RISK. ANY PERSON CONSIDERING TO INVEST IN OUR SECURITIES SHOULD BE AWARE OF THESE AND OTHER FACTORS SET-FORTH IN THIS REPORT AND IN THE OTHER REPORTS AND DOCUMENTS THAT WE FILE FROM TIME TO TIME WITH THE SEC AND SHOULD CONSULT WITH HIS/HER LEGAL, TAX AND FINANCIAL ADVISORS PRIOR TO MAKING AN INVESTMENT IN OUR SECURITIES. AN INVESTMENT IN OUR SECURITIES SHOULD ONLY BE ACQUIRED BY PERSONS WHO CAN AFFORD TO LOSE THEIR TOTAL INVESTMENT.

ITEM 2.

PROPERTIES.

We currently lease office space located at Suite 100, 2441 W. Horizon Ridge Parkway, Henderson, NV 89052 at a rate of $5,975 per month. The lease terms expired on August 31, 2008, and we continue to rent the existing space on a month-to-month basis.

We currently own an interest in, or rights to, two mineral projects that we refer to as the Columbus Project and the Red Mountain Project.

THE COLUMBUS PROJECT

The Columbus Project is a sediment hosted gold and silver exploration project located in western Nevada. It is comprised of 584 unpatented placer federal mining and millsite claims on BLM land which cover 48,938 acres and an additional 80 acres of private land, for a total of 49,018 acres. It includes a permitted and operational pilot plant and mine site. We currently own a 100% stake in 149 of the claims (which we refer to as the “CSM Claims”), a 100% stake in an additional 288 claims (which we refer to as the “Ireland Claims”), with rights to an additional 147 peripheral claims (which we refer to as the “DDB Claims”).

LOCATION

The mineral claims that make up the Columbus Project are located in the Columbus Salt Marsh, Esmeralda County, Nevada, northwest of Coaldale Junction, approximately 50 miles west of Tonopah (Fig. 1) halfway between Las Vegas and Reno. Access is from the junction of US6 and Nevada Highway 95, approximately 10 miles north of Coaldale Junction, to a gravel road westerly to the mill site and to the remains of the town of Columbus.

The Columbus Salt Marsh is an enclosed basin and is a dry lake bed for the majority of the year. All surface drainage from a surrounding 360 square mile area flows into the Columbus Salt Marsh.

Figure 1: Location of Columbus Project

TITLE AND OWNERSHIP RIGHTS TO THE CSM CLAIMS, IRELAND CLAIMS AND THE DDB CLAIMS

We acquired our initial interest in the CSM Claims and the DDB Claims in 2007 from Nanominerals pursuant to an assignment by Nanominerals of its rights to the Columbus Project. In February 2008 we acquired a 100% interest in the CSM claims by merging the previous owner of the CSM Claims, Columbus Brine Inc. (“CBI”) with and into our wholly owned subsidiary incorporated for the sole purpose of acquiring CBI, CBI Acquisition Inc. Upon completion of the merger, CBI Acquisition Inc. changed its name to Columbus Minerals Inc.

The Ireland Claims were staked by us in September 2011, and we own a 100% interest in the Ireland Claims.

The CSM Claims and the Ireland Claims are wholly owned by Columbus S.M., LLC (“CSM”). CSM is a wholly owned subsidiary of Columbus Minerals Inc., which is a wholly owned subsidiary of Ireland Inc. The DDB Claims are wholly owned by a mining syndicate known as the DDB Syndicate. Lawrence E. Chizmar, Jr., a former member of our Board of Directors (and a former director of CBI) and a limited liability company controlled by Douglas D.G. Birnie, our President and Chief Executive Officer, and a member of our Board of Directors, are each the owners of a 1/8 interest in the DDB Syndicate. The remaining members of the DDB Syndicate are made up of the former officers and directors of CBI, the brother of a former officer and director of CBI, and certain affiliates of Nanominerals Corp. (“Nanominerals”). Nanominerals is a significant shareholder in our Company. Mr. Birnie also owns a 3.5% interest in Nanominerals. The DDB Claims were located by the DDB Syndicate in February 2007, prior to Mr. Birnie’s, Nanominerals’ or Mr. Chizmar’s involvement with our Company. Mr. Birnie also acquired his interest in Nanominerals prior to his involvement with our Company.

Figure 2: Columbus Project Property Map

Our rights to the DDB Claims are pursuant to the terms of a mining lease with the DDB Syndicate dated November 30, 2007 (the “DDB Agreement”). The DDB Agreement provides us with a five year lease on the DDB Claims, ending on November 29, 2012, with an option to purchase the DDB Claims at any time during the lease period. To date, we have paid the DDB Syndicate $220,000 under the terms of the DDB Agreement. Under the option rights provided under the DDB Agreement, we may purchase the DDB Claims at any time by either:

	(a)	paying the DDB Syndicate the purchase price of $400,000 (with all previously made rental payments credited against such purchase price); or

	(b)	paying the DDB Syndicate $10, plus granting the DDB Syndicate a royalty of 2% of net smelter returns on the DDB Claims.

Current budget includes a payment to the DDB Syndicate of $180,000 in 2012 to fulfill the purchase agreement for the DDB claims.

Each of the CSM, Ireland and DDB Claims are unpatented placer federal claims. In order to maintain these claims, we are required to pay annual maintenance fees to the US Bureau of Land and Minerals (the “BLM”) by September 1 of each year. The annual claim maintenance fees paid to the BLM for the 2011 claim years for the CSM and DDB Claims totaled $44,548. The Ireland Claims were staked after the end of the 2011 claim year. Our annual maintenance fees are expected to increase for 2012 and forward as a result of the addition of the Ireland Claims. We are responsible for paying the claim maintenance fees for the DDB Claims as well as the CSM and Ireland Claims. A summary of the Columbus Project Claims was included as an exhibit to our Annual Report on Form 10-K/A filed with the SEC on January 11, 2013.

ACCESS AND INFRASTRUCTURE

The Columbus Project contains an operational pilot plant, lab and living facilities with power supplied by generators and water from an onsite well. Water used for processing is available from existing wells located on the surrounding basin (the “Columbus Basin”). There is also a high voltage grid located at the Candelaria Mines, approximately three miles from the Columbus Project.

Permits have been obtained for the extraction of precious metals and the production of calcium carbonate from an area of interest consisting of approximately 378 acres, including millsite, roads and mineable acreage.

HISTORY

The Columbus area has had mining activity for over 100 years. Silver was discovered in 1863 in the area of the Candelaria Mine, to the northwest of the Columbus Basin. These deposits were mined intermittently by different companies through 1999, producing large quantities of silver and minor gold. Salt was first mined in the Columbus Salt Marsh in 1864, followed by borax in 1871. Precious metals were thought to exist in the basin sediments as early as the late 19^thcentury but no production is documented. Mining ceased in the Columbus Marsh around the beginning of the 20^thcentury.

The Columbus Project is located in an area that has historically been known as a well mineralized region. A silver and gold mining operation known as the Candelaria Mine is located approximately five miles northwest of the Columbus Project. The Round Mountain project is a gold operation located approximately 60 miles northeast of the Columbus Project. The Clayton Valley Brine Project, a lithium extraction project, is located approximately 25 miles southeast of the Columbus Project.

GEOLOGY

The Columbus Project covers a flat enclosed basin with a surface composed of salt deposits and is primarily devoid of vegetation. Older sediments, which host the silver deposits of Candelaria, underlie several sequences of volcanic rocks, with the youngest being the 15Ma Gilbert Andesite. The region has undergone older thrust faulting, which hosts the Candelaria deposits, and later extensional faulting as a result of movement along the Walker Lane. The Columbus Basin is one of several structural basins in the region caused by right lateral movement along the Walker Lane and the subsequent clockwise rotation and oblique extensional down dropping of the blocks within this structural domain.

EXPLORATION ACTIVITIES

Exploration work to date has identified three different host materials (sand, clay, brine) each of which could potentially contain commercial quantities of gold and silver mineralization within the project area. The sand zones outcrop on the western side of the Columbus basin and dip gently eastward. The clay zones also outcrop and overlay the sand zones. The brine zone occurs as an aquifer at some 400 feet depth underlying the sand/clay zones. Our exploration efforts to date have focused on drilling both the sand and clay zones within the approximately 5,000 acre Columbus Project Area of Interest outlined by previous geochemical exploration work. Our recent work has focused on the North Sand Zone.

To date, 34 holes have been drilled in the 0.67 square mile North Sand Zone, and 3 holes in the 0.48 square mile South Sand Zone. Drilling has been completed to depths ranging from 165 feet to 400 feet in both sand zones. We have yet to drill through the sand zone with any of our drilling to date.

We have been granted the permit for our Phase Four drill program, which will consist of 31 drill holes to a depth of at least 200 feet. The drill program will cover an additional 0.48 square miles adjacent to the southern boundary of the North Sand Zone. The goal of this program is to expand the boundaries of the North Sand Zone. Following completion of the Phase Four drill program, we will re-evaluate the boundaries of the sand zones, the quantity of the tonnage contained therein and the quality of the mineralization estimates within these areas.

Figure 3: Map of North and South Sand Zones

Historical Surface Sampling Program and Drill Programs

Near surface basin sediment samples were taken in late 2006 and early 2007. 64 surface samples, four shallow boring samples, and a bulk sample were taken and analyzed using a four acid total digestion and atomic absorption analysis. Samples were analyzed for Au, Ag, Cu, and Fe. This work led to the discovery of a 5,000 acre surface gold anomaly in the northwestern part of the basin. This gold anomaly is the primary focus of current exploration work. The Permitted Mine Area (320 acres) is situated in the north end of this zone.

2007 Drill Program

An 18-hole hollow stem auger drill program was undertaken in Q3 2007 in the Permitted Mine Area to establish mineral potential at depth. Samples were 18” in length, taken every 10’ with a split spoon sampler. Material was analyzed using a 3-acid modified version of aqua regia, followed by atomic absorption analysis. A split was analyzed by CBI staff at the onsite facility using a standard fire assay and it was found that standard fire assay was ineffective. Repeated firing of the slag showed that various amounts of the metals remained in the slag after each firing. The results from the 2007 drill program have been discounted by us as the analytical methodology used then did not rely on metal-in-hand of gold or silver.

2008 and 2009 Drill Programs

Encouraging results from the 2007 drill program warranted a second drill program, which took place in Q2-Q3 2008, consisting of 39 widely spaced holes and a total of just less than 10,000 feet using sonic drilling technology. 25 holes were drilled in the ‘A’ program, 14 holes in the ‘B’ program. For this program, holes were drilled to depths ranging from 200 feet to 400 feet. The sonic drilling resulted in continuous sample material, therefore providing an improved representation of each 10 ft drill interval. Samples of the 10 ft composites were sent for analysis under chain of custody protocols.

A follow up drilling program was initiated in Q2 of 2009 to delineate mineralized zones and further define the extent of gold and silver mineralization potential in the project area. 58 holes, for a total of 15,270 feet, were drilled as a follow up to the ~10,000 feet drilled in 2008. Sample composite intervals were changed from 10’ to 20’ because of the homogeneity of the sample material. Again, the drill material was stored in polyethylene bags in the onsite core facility. Samples were submitted to AuRIC for caustic fusion analysis under chain of custody protocols. In addition, 211 clay samples were taken at various depths for density determinations.

2010 Drill Program

In 2010, we drilled 28 holes in the North Sand Zone and 147 short holes in the permitted mine clay zone. As the sand zones are the focus of the technical program, the samples from the clay zone drilling have been inventoried and will be analyzed later. Sampling protocol remained at 20 ft composite intervals.

Mineralized Intervals

To determine the mineralized intervals in the North and South Sand Zone, we chose a minimum grade of 0.015 opt Au to identify mineralized material, and identification of at least three contiguous mineralized samples indicated a mineralized zone. Upon completion of a feasibility study a commercial grade mineralized cut off will be determined and mineralized zones will be recalculated. The caustic fusion assay results from the 2008, 2009 and 2010 drilling programs are listed below, broken down by area. It should be noted that because of the nature of the geology, the material must be mined from the surface down, so therefore, mineralized averages that start at depth rather than at the surface, may appear higher than they would be in production.

To date, 34 holes have been drilled in the North Sand Zone. Drilling in the North Sand Zone covered approximately 0.67 square miles, to depths ranging from 165 feet to 400 feet beneath the surface of the Columbus Marsh Basin, In addition, 3 holes have been drilled in the South Sand Zone, to depths of between approximately 200 to 400 feet.

Mineralized Intervals – North Sand Zone

Hole ID	From (ft)	to (ft)	Au opt	Ag opt
CS-09-S1A	0	200	0.044	0.194
CS-09-S2A	0	200	0.039	0.179
CS-09-S3A	0	200	0.038	0.175
CS-09-S4A	80	200	0.040	0.170
CS-09-S5A	0	400	0.036	0.157
CS-09-S7A	60	200	0.038	0.170
CS-10-S1A	40	165	0.038	0.199
CS-10-S2A	60	200	0.038	0.152
CS-10-S3A	180	200	0.049	0.332
CS-10-S4A	80	200	0.043	0.238
CS-10-S5A	180	200	0.045	0.236
CS-10-S6A	80	200	0.036	0.163
CS-10-S8A	120	160	0.045	0.234
CS-10-S9A	0	100	0.047	0.301
	120	200	0.050	0.304
CS-10-S10A	80	200	0.036	0.145
CS-10-S12A	60	200	0.050	0.268
CS-10-S13A	120	180	0.060	0.105
CS-10-S14A	100	200	0.046	0.261
CS-10-S15A	80	160	0.050	0.320
CS-10-S16A	100	200	0.040	0.215
CS-10-S17A	180	200	0.042	0.246
CS-10-S18A	60	200	0.050	0.303
CS-10-S19A	180	200	0.032	0.189
CS-10-S20A	60	200	0.040	0.213
CS-10-S21A	60	100	0.029	0.153
	120	200	0.029	0.152
CS-10-S22A	120	200	0.020	0.092
CS-10-S23A	180	200	0.038	0.196
CS-10-S24A	60	200	0.053	0.326
CS-10-S25A	0	60	0.034	0.152
	80	200	0.053	0.326
CS-10-S26A	0	60	0.031	0.189
	100	200	0.038	0.234
CS-10-S27A	100	160	0.031	0.145
CS-10-S28A	60	200	0.029	0.164

Mineralized Intervals - South Sand Zone

Hole ID	from (ft)	to (ft)	Au opt	Ag opt
CS-08-S1B	40	400	0.046	0.233
CS-09-S1B	0	200	0.038	0.186
CS-09-S2B	20	190	0.041	0.192

Sampling Procedures

An onsite core facility was constructed for logging and sampling of the material from the drill programs. Core intervals were set up on tables for geological logging. Once logged, the intervals were sampled by taking a continuous wedge of material from the outside to the center of the core. A smaller split was taken at random intervals. These samples were placed in standard heavy duty Ziploc bags. A slice of the core was taken at depths of approximately 50’ intervals. These were weighed wet and their dimensions were taken and documented for density determination. Sample splits were then sent to an independent laboratory for analysis.

QA/QC Procedures

Quality control for the Columbus Project was established during the 2008 drill program to guarantee the quality of the analytical results for that and all subsequent drilling/sampling programs on this project. All samples were submitted in random order to monitor laboratory precision. This is done to check for instrument variation, or ‘drift’, and cross contamination during the analytical process. Duplicate samples, standard reference material (standards), and blanks were introduced at approximately 1 for every 20 samples. Duplicate samples are used to evaluate the sample variability and stability of the analytical method. The standards are comprised of material that has been subjected to analysis from numerous labs around the world and is of an accepted concentration of gold with a very slight variance. The blanks are nothing more than pulverized environmental grade silica sand and should contain negligible concentrations of metals.

GEOLOGIC MODEL

The SEC’s Industry Guide 7 sets out the reporting and disclosure requirements for issuers engaged in mineral exploration activities. Under the provisions of Industry Guide 7, only proven or probable reserves may be disclosed in filings with the SEC. “Reserves” are defined as that “part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.” The calculation of reserves requires the preparation of a feasibility study demonstrating the economic and legal feasibility of mining and processing the mineralization at the project site. We do not currently have any proven or probable reserves. Industry Guide 7 does not permit us to disclose of inferred, indicated or measured resources in our filings with the SEC.

The North Sand Zone, our focus area for sampling and drilling operations, covers a surface area of approximately 0.67 mi2. The South Sand Zone covers a surface are of approximately 0.48 mi2. The location of the North and South Sand Zones is shown in Figure 3.

These Sand Zones, located along the western edge of the project area, are alluvial material occurring as ‘fans’ which descend beneath the clay toward the center of the basin. The depth to this sand was gridded and contoured. This information is very useful for determining where this sand unit might be encountered during future drilling. In general, changes in sand depth parallel the basin. The average dry bulk density of the sands is 1.165 ton/yd³ (1.383 tonnes/m³). The sand zone averages 91.4% -1/4” as determined from 258 screen analysis of sonic drill samples from 0-200 ft. depth.

The lakebed clay varies in color, moisture content, texture, and organic content. Because of the wide drill hole spacing, it is not possible to correlate between individual clay units. At present, the clay will not be sub-classified and will be referred to as a single unit. Average dry bulk density of the clay, taken from the 200+ samples, is 1.198 tons/yd3 (1.423 tonnes/m3).

The North Sand Zone and South Sand Zone are comprised of mostly sand, but also contains some silt and clays. Even though the South Sand Zone is two dimensional, it is highly likely that these zones are contemporaneous and this southern zone is of exploration significance.

Analytical Methodology

All reported drill results were determined by caustic fusion assay and analysis of the extracted and weighed metal for gold and silver. Sampling and analyses were conducted by qualified independent professionals, under chain of custody procedures, and included blind labeling of samples, the insertion of blanks, standard reference material and repeats to ensure the quality of results.

AuRIC and our metallurgists engaged in extensive research and testing before they determined the best pyrometallurgical and hydrometallurgical methodologies for extracting gold and silver from the refractory sands and clays that warehouse these metals at the Columbus Project.

Our research has indicated that caustic fusion (on head ore and concentrates) and thiosulphate or cyanide leaching (on concentrates) are the best pyrometallurgical and hydrometallurgical methods for extracting gold and silver from the Columbus Project. Caustic fusion is a standard pyrometallurgical method that uses chemical fluxes melted at low temperature to dissolve the sample rock and liberate the contained minerals or metals for subsequent extraction and/or analysis. Caustic fusion was developed in South Africa over 100 years ago and was first used to liberate diamonds from their refractory kimberlites. It has since been used to quantify other minerals/metals in rocks by analyzing the fused product. The caustic fusion assay protocol utilized by AuRIC for our analytical methodology has not been sent to other third parties for testing. We have confirmed the reliability of our caustic fusion protocols during subsequent bulk leach tests (±200-3000 lb), whereby the amount of gold and silver extracted as metal-in-hand by thiosulphate leaching of bulk samples has been comparable to caustic fusion assay results on representative splits from the same samples. Caustic fusion has, therefore been proven to be a very effective method for extracting gold and silver from the refractory minerals (organics, silicates) in the sand and clay at Columbus.

Thiosulphate leaching technology is over 100 years old. It was first used for dissolving silver from silver chloride deposits. In recent years, thiosulphate leaching has been extensively studied as an alternative to cyanide because it is an environmentally friendly, hydrometallurgical method for extracting gold and silver from ores. Our work has shown that thiosulphate leaching of head ore concentrates followed by resin extraction, has been very effective in bench and pilot scale tests for the extraction of gold and silver, as “metal-in-hand”, at the Columbus Project. Aqua regia and cyanide leaching tests of head ore and aqua regia leaching of concentrates have proved ineffective and resulted in extremely low gold and silver extraction. However, both thiosulphate and cyanide leaching of concentrates have extracted commercial values at Columbus. It is the thiosulphate leach system that is currently being tested onsite to determine the feasibility of leaching both the sand and clay deposits.

Fire assaying is the most common pyrometallurgical method used for extracting gold and silver from rock. Fire assaying relies on the use of standardized chemical fluxes to reduce the melting point of the minerals entombing the gold and silver so that they can be liberated and collected in a lead “button” and examined. Although this process works well for extracting gold entombed in sulfides (eg. pyrite) and silica, such as that found in Carlin-type gold deposits, the chemical fluxes used in fire assaying methods are ineffective at liberating the gold and silver from refractory minerals (organics and silicates (Fe-Mg-Al-Si-Ox)) as are found at the Columbus Project. These refractory silicates are similar in composition to the crucibles used during the firing process, which also does not melt. As a result, in our tests, fire assaying has shown to be ineffective at extracting gold and silver from the sand and clay from the Columbus Project.

As mentioned previously, the entombment of the precious metals in the refractory organics and silicates at the Columbus Project can cause problems of extraction, and therefore detection by many methods of analysis. The early test work (2006-2009) completed by AuRIC and our metallurgists demonstrated that fire assaying and multi-acid digesting were ineffective at extracting commercial values of gold and silver from the head samples of sand and clay from the Columbus In January 2010, the Nevada Bureau of Mines and Geology (the “NBMG”) reported that they had conducted a small sampling program on our claims¹. It should be noted that the location of the NBMG sample sites were approximately 1 to 3 miles away from our current area of operations and testing, and in a different geology. We have not conducted our own tests on sample materials extracted from this location. However, the results reported by the NBMG are consistent with our expectations based on our work using similar assaying methods. According to the report prepared by the NBMG, they took 5 near surface samples, taken to a depth of 30-52 cm (approx. 1 ft), from the Columbus Salt Marsh. Splits of each of the samples were then reportedly analyzed by fire assay (Au and Ag), fire assay fusion followed by instrumental neutron activation finish (Au and Ag), fire assay and inductively coupled plasma atomic emission (Au), four acid near total digestion (Ag) and aqua regia digestion (Au and Ag). The NBMG reported that they found small quantities of gold (0.00035 opt to 0.000029 opt) and silver (0.00233 opt to 0.00029 opt for four acid digestion – other tests were reportedly below their detection limits).

^{____________________________________
1}Nevada Bureau of Mines and Geology Open-File Report 10-1: Geochemical Sampling of Selected Playas in Nevada: Alkali Lake (Esmeralda County), Columbus Salt Marsh (Esmeralda County). Rhodes Salt Marsh (Mineral County), and Winnemucca Dry Lake (Washoe County).

MINING AND RECOVERY METHODOLOGY

The Company currently has a Water Pollution Control permit granted by the Nevada Division of Environmental Protection for the Columbus Project. This permit allows for the extraction of precious metals and the production of calcium carbonate on the 380 acre site (320 acre mine site and 60-acre mill site) at a mine rate of up to 792,000 tons per year to a depth of 40 feet. During the period from 2008-2011, the Company developed a dredge mine, constructed a pilot plant and began operations to develop and prove the extractive metallurgy for the Columbus Project. Initial metallurgical testing was primarily focused on extracting gold and silver from the clay material. As previously reported, problems with organic material interfered with the extraction of precious metals from the clays, and this has led us to focus our current efforts on extraction of the precious metals from the sands.

The Company recently announced the results of tests completed by AuRIC Metallurgical Laboratories of Salt Lake City, Utah. AuRIC completed three bulk tests (194 lb., 220 lb., 3,000 lb.) on sand material collected from a single site within the North Sand Zone using a new gravity concentration circuit. The total results of the tests were: 13:1 concentration ratio; 121% Au recovery; and 42% Ag recovery (0.100 opt AuE² , 0.084 opt Au and 0.642 opt Ag).

The purpose of these bulk tests is to determine the net recovery of gold and silver from the Columbus sands. The focus has been on optimizing the new gravity concentration circuit developed specifically for these sands. Readers are cautioned not to place undue weight on the metal grades reported in these tests. The recent gravity concentration tests were completed on material that was probably significantly higher in head grade than the overall average head grade of the North Sand Zone. The area from which these samples were taken may represent an anomaly within the North Sand Zone and may not be representative of the entire zone. The head grade of the sands tested has varied, and will probably continue to vary, at each sample location. The varied head grade of the sands has little relevance, because the contained gold and silver has the same concentrating characteristics. Based on the limited bulk test results, to date, we can make no new assumptions or assertions regarding the overall head grade of the North Sand Zone. Additional gravity concentration tests on bulk samples from different sites within the North Sand Zone are planned.

These test results all exceeded our 75% gold extraction rate goals for the Columbus Project. These gravity concentration tests also indicated that more gold was extracted by leaching concentrates derived from large head samples (88,330 g – 1,363,636 g) than was predicted by the many caustic fusion assays performed on small head samples (5 g each). These results are consistent with the ‘nugget effect’ common in alluvial deposits such as those discovered at the Columbus Project and continue to indicate the need to process large samples and extract the gold and silver in order to best determine the head grade.

AuRIC is currently completing the metallurgical tests and design work in support of the new gravity concentration circuit to be installed at the on-site pilot plant at the Columbus Project. To date, the test work at AuRIC has focused on optimization and scale-up of the capacity of the gravity concentration circuit. The reliability of this new concentrating circuit continues to be verified by the extraction of limited quantities of gold and silver during the course of this work, as previously disclosed.

^{____________________________________
2}AuE opt = Au opt + 0.025 Ag

We are currently installing the framework for upgrades to the Columbus Project on-site pilot plant, and we will move forward with the upgrades upon completion of AuRIC’s tests. After the installation and performance assessment of the on-site gravity concentration circuit, we will commence the bulk testing of up to 2,000 tons of sand material.

If the operation of the pilot plant proves, to our satisfaction, that the Columbus Project is economically viable, we may seek to expand the production permitted area, reconfigure the production process and/or construct additional production circuits within the mill site to increase production capacity. The production model for the Columbus Project is anticipated to be a low cost, high volume mining operation.

Readers are cautioned that, although we believe that the results of our exploration activities to date have been sufficiently positive to proceed with the installation and operation of a pilot processing facility at the Columbus Project millsite, we have not yet established any probable or proven reserves and we have not yet completed a preliminary economic assessment, pre-feasibility or feasibility study. Additional exploration work will be required before probable or proven reserves can be established. There are no assurances that the results of our exploration programs will result in a decision to enter into commercial production.

THE RED MOUNTAIN PROJECT

The Red Mountain Project is a potential gold, silver and tungsten project that consists of 100 unpatented placer federal mineral claims on BLM land covering approximately 13,729 acres, all located in San Bernardino County and Kern County, California. Title to these mineral claims is currently recorded in the names of a number of individuals who, together, make up a mining syndicate known as Red Mountain Mining (“RMM”). We have been notified that some of the claims making up the Red Mountain Project may conflict with other existing mineral claims and other property rights covering the location of the project. We intend to work with RMM in order to resolve these issues.

RIGHTS TO THE RED MOUNTAIN PROJECT

On July 20, 2011, we entered into an amended and restated option agreement for the Red Mountain Project (the “Amended Red Mountain Option”). The Amended Red Mountain Option replaces the Red Mountain Letter Agreement under which we had previously earned a 30.6% undivided interest in the Red Mountain Project. Under the terms of the Amended Red Mountain Option, we have the option (the “Buyout Option”) to buyout all of the optionor’s interest in the Red Mountain Project by paying to the optionor $200,000 in cash and (i) if the Buyout Option is exercised on or before March 31, 2012, issuing to the optionor $2,800,000 worth of our common stock, or (ii) if the Buyout Option is exercised after March 31, 2012, issuing to the optionor $3,800,000 worth of our common stock. If we exercise the Buyout Option, of which there is no assurance, we will own 100% of the Red Mountain Project. We have until December 31, 2016 to exercise the Buyout Option.

To maintain the Buyout Option, we must (i) pay the optionor the sum of $8,000 per month, and (ii) spend a total of $600,000 on the Red Mountain Project. For every $2,000 that we spend on the Red Mountain Project, we will earn an additional 0.1% undivided interest, up to an additional 29.4% undivided interest (which would bring our total undivided interest in the Red Mountain Project to 60.0%) . On execution of the Amended Red Mountain Option, we prepaid $35,000 to the optionor to be applied against the monthly payment amounts.

The project acreage of all claims under the Red Mountain Option Agreement now totals 13,729.

Each of the claims making up the Red Mountain Project are unpatented placer federal claims. In order to maintain these claims, we are required to pay annual maintenance fees to the US Bureau of Land and Minerals (the “BLM”) by September 1 of each year. The annual claim maintenance fees paid to the BLM for the 2011 claim years for the Red Mountain claims totaled $14,100. We are responsible for paying the claim maintenance fees for the Red Mountain claims. Amounts paid to maintain the claims are counted against the amounts we are obligated to spend on the project to maintain our option rights. A summary of the Red Mountain Project Claims was included as an exhibit to our Annual Report on Form 10-K/A filed with the SEC on January 11, 2013.

LOCATION AND ACCESS

The Red Mountain Project is located at the base of Red Mountain, which is 27 miles south of Ridgecrest in San Bernardino County and Kern County, California, approximately 75 miles northeast of Los Angeles. The Red Mountain Project can be accessed by using a gravel road that bisects the project from northwest to southeast.

The Red Mountain Project does not contain any useable infrastructure other than a water well.

Figure 6: Location of the Red Mountain Project

HISTORY

The Red Mountain Project is east of and adjacent to the Rand Mining District, initially discovered in 1894. The Rand Mining District was mined off and on until just recently for gold, silver and tungsten. The majority of the mines in the area consisted of small independent operations. There is currently no commercial mining occurring on the Red Mountain Project site.

GEOLOGY

The area surrounding the Red Mountain Project is highly mineralized with recorded production of gold, silver and tungsten.

Nanominerals reviewed the Red Mountain Project, including the existing reports on work previously done by RMM. RMM has excavated over 100 test pits at the project site and has gravity concentrated the bulk samples taken from these pits.

Based on a review of the existing reports and a field visit to the Red Mountain Project site, we developed an exploration program to verify the reported gold grades in RMM’s studies and to test the recoverability in order to assess the economic viability of the Red Mountain Project.

CURRENT EXPLORATION

Our exploration program for the Red Mountain Project consists of a drilling and sampling program. The Red Mountain Project is not currently active. We have set a budget of $100,000 for the Red Mountain Project for the 12 months ending December 31, 2012.

PART II

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes appearing elsewhere in this report. This discussion and analysis may contain forward-looking statements based on assumptions about our future business. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including but not limited to those set forth under “Risk Factors” and elsewhere in this report.

This discussion presents management’s analysis of our results of operations and financial condition as of and for each of the years in the two-year period ended December 31, 2011. The discussion should be read in conjunction with our financial statements and the notes related thereto which appear elsewhere in this report.

Executive Overview

During the next twelve months, we intend to proceed with our exploration program for the Columbus Project, while the Red Mountain Project remains not in active development.

The Columbus Project

The technical program for the Columbus Project has two primary objectives: (a) to identify the mineral resources and (b) to determine the feasibility of mining and extracting precious metals from the project.

(a)	Mineralization: Exploration work to date has identified three different host materials (sand, clay, brine) each of which could potentially contain commercial quantities of gold and silver mineralization within the project area. The sand zones outcrop on the western side of the Columbus basin and dip gently eastward. The clay zones also outcrop and overlay the sand zones. The brine zone occurs as an aquifer at some 400 feet depth underlying the sand/clay zones. Our exploration efforts to date have focused on drilling both the sand and clay zones within the approximately 5,000 acre Columbus Project Area of Interest outlined by previous geochemical exploration work. Our recent work has focused on the North Sand Zone.

	To date, 34 holes have been drilled in the 0.67 square mile North Sand Zone, and 3 holes in the 0.48 square mile South Sand Zone. Drilling has been completed to depths ranging from 165 feet to 400 feet in both sand zones. We have yet to drill through the sand zone with any of our drilling to date.

	We have been granted the permit for our Phase Four drill program, which will consist of 31 drill holes to a depth of at least 200 feet. The drill program will cover an additional 0.48 square miles adjacent to the southern boundary of the North Sand Zone. The goal of this program is to expand the boundaries of the North Sand Zone. Following completion of the Phase Four drill program, we will re-evaluate the boundaries of the sand zones, the quantity of the tonnage contained therein and the quality of the mineralization estimates within these areas.

(b)	Mining and Recovery Methodology: The Company currently has a Water Pollution Control permit granted by the Nevada Division of Environmental Protection for the Columbus Project. The production permit allows for the extraction of precious metals and the production of calcium carbonate on the 380 acre site (320 acre mine site and 60-acre mill site) at a mine rate of up to 792,000 tons per year to a depth of 40 feet. During the period from 2008-2011 the Company developed a dredge mine, constructed a pilot plant and began operations to develop and prove the extractive metallurgy for the Columbus Project. Initial metallurgical testing was primarily focused on extracting gold and silver from the clay material. As previously reported, problems with organic material interfered with the extraction of precious metals from the clays, and this has led Ireland to focus on extraction of precious metals from the sands.

	We recently announced the results of tests completed by AuRIC Metallurgical Laboratories of Salt Lake City, Utah. AuRIC completed three bulk tests (194 lb., 220 lb., 3,000 lb.) of sand material collected from a single site within the North Sand Zone using a new gravity concentration circuit. These test results all exceeded our 75% gold extraction rate goals for the Columbus Project. The total results of the tests were as follows: 13:1 concentration ratio; 121% Au recovery; and 42% Ag recovery (0.100 opt AuE³ , 0.084 opt Au and 0.642 opt Ag).

	The purpose of these bulk tests was to determine the net recovery of gold and silver from the Columbus sands. The focus has been on optimizing the new gravity concentration circuit developed specifically for these sands. Readers are cautioned not to place undue weight on the metal grades reported in these tests. The recent gravity concentration tests were completed on material that was probably significantly higher in head grade than the overall average head grade of the North Sand Zone. The area from which these samples were taken may represent an anomaly within the North Sand Zone and may not be representative of the entire zone. The head grade of the sands tested has varied, and will probably continue to vary, at each sample location. The varied head grade of the sands has little relevance, because the contained gold and silver has the same concentrating characteristics. Based on the limited bulk test results, to date, we can make no new assumptions or assertions regarding the overall head grade of the North Sand Zone. Additional gravity concentration tests on bulk samples from different sites within the North Sand Zone are planned.

^{_____________________________________
3}AuE opt = Au opt + 0.025 Ag opt

These gravity concentration tests also indicated that more gold was extracted by leaching concentrates derived from large head samples (88,330 g – 1,363,636 g) than was predicted by the many caustic fusion assays performed on small head samples (5 g each). These results are consistent with the ‘nugget effect’ common in alluvial deposits such as those discovered at the Columbus Project and continue to indicate the need to process large samples and extract the gold and silver in order to best determine the head grade.

Readers are cautioned that, although we believe that the results of our exploration activities to date are sufficiently positive to proceed with the installation and operation of a pilot production circuit for the Columbus Project, we have not yet established any probable or proven reserves and we have not yet completed a preliminary economic assessment, pre-feasibility or feasibility study. There is no assurance that we will be able to establish that any commercially extractable ore reserves exist on the Columbus Project or that we will enter into commercial production.

We anticipate spending approximately $5,390,000 on our exploration program and $280,000 on our capital expenditures for the Columbus Project from January 1, 2012 until December 31, 2012.

The Red Mountain Project

Sampling and Drilling Program: Our exploration program for the Red Mountain Project currently consists of a Drilling and Sampling program. The Red Mountain Project is not currently active. We have set a budget of $100,000 for property payments and maintenance costs for the Red Mountain Project for the year ending December 31, 2012. We have reallocated funds originally budgeted towards the Red Mountain Project in order to provide us with maximum flexibility in achieving our technical milestones at our lead project.

Critical Accounting Policies

The preparation of financial statements in conformity with United States generally accepted accounting principles requires our management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Our management routinely makes judgments and estimates about the effects of matters that are inherently uncertain.

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are also disclosed in the notes to our audited consolidated financial statements for the period ended December 31, 2011 included in this Annual Report on Form 10-K.

Use of estimates – The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. By their nature, these estimates are subject to measurement uncertainty and the effect on the financial statements of changes in such estimates in future periods could be significant. Significant areas requiring estimates and assumptions include the valuation of stock-based compensation, impairment analysis of long-lived assets, accrued reclamation and remediation costs and realizability of deferred tax assets. Actual results could differ from those estimates.

Mineral Rights - We capitalize acquisition and option costs of mineral property rights. The amount capitalized represents fair value at the time the mineral rights are acquired. We capitalize acquisition and option costs of mineral rights as tangible assets. Upon commencement of commercial production, the mineral rights will be amortized using the unit-of-production method over the life of the mineral rights. If we do not continue with exploration after the completion of a feasibility study, the mineral rights will be expensed at that time.

Mineral Property Acquisition Costs - Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred either to develop new ore deposits, expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. We evaluate the carrying value of capitalized mining costs and related property and equipment costs to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The periodic evaluation of carrying value of capitalized costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (ASC) 360-10-35-15, Impairment or Disposal of Long-Lived Assets.

Mineral Exploration and Development Costs - Exploration expenditures incurred prior to entering the development stage are expensed and included in “Mineral exploration and evaluation expenses”.

Property and Equipment – Property and equipment is stated at cost less accumulated depreciation. Depreciation is principally provided on the straight-line method over the estimated useful lives of the assets, which are generally 3 to 39 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).

Impairment of long-lived assets – We review and evaluate our long-lived assets for impairment at each balance sheet date due to our planned exploration stage losses and document such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as our continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property.

The tests for long-lived assets in the exploration, development or producing stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.

Our policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value. To date, no such impairments have been identified.

Reclamation and Remediation Costs (Asset Retirement Obligation) - For our exploration stage properties, we accrue the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, our records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability will be reduced.

Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. We periodically review accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the consolidated statement of operations in the period an estimate is revised.

We are in the exploration stage and are unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known.

Liquidity and Capital Resources

Our financial position was as follows at December 31, 2011:

		2011		2010

Cash	$	521,660	$	1,602,179
Short-term investments	$	-	$	878,608
Current liabilities	$	214,554	$	227,138
Accrued reclamation costs	$	572,338	$	275,338
Stockholders' equity	$	33,899,968	$	33,824,589

During 2011, our liquidity position was affected by the following:

Continued exploration stage losses of $3,888,629. Significant non-cash expenses included depreciation of $821,891 and share based compensation of $1,180,667. Significant non-cash income included the income tax benefit of $2,590,393.
Purchases of new equipment in the amount of $118,558.
Purchase of restricted investments held for reclamation bonding of $275,285.
Net proceeds from the completion of a private placement offering of $2,757,554.
Short-term investments were reclassified to restricted investments held for reclamation bonds.

During 2010, liquidity position was affected by the following:

Continued exploration stage losses of $4,691,054. Significant non-cash expenses included depreciation of $553,791 and share based compensation of $1,232,927. Significant non-cash income included income tax benefit of $1,965,945.
Purchases of new equipment in the amount of $872,493.
Purchase of short-term investments of $879,553.
Net proceeds from the completion of a private placement offering of $4,792,007.
Proceeds for the exercise of stock options of $25,000.

Looking Forward

We have budgeted for the following cash expenditures for the period from January 1, 2012 until December 31, 2012:

Columbus Project
	Property Payments	$	180,000
	Drilling Program and Mineralization Estimates		1,317,000
	Pilot Plant / Project Feasibility		2,001,000
	Total for Columbus Project	$	3,498,000
Red Mountain Project
	Property Acquisition and Maintenance Costs	$	100,000
	Sampling Exploration Program
	Total for Red Mountain Project	$	100,000
General and Administration
	Total for General and Administration	$	1,792,000
Total Expected Expenses		$	5,390,000
Total Expected Capital Expenditures		$	280,000
Total Expected Cash Expenditures		$	5,670,000

In 2012, we will continue to focus our efforts on developing the Columbus Project, resulting in the following expectations for 2012:

Our management anticipates that the minimum cash requirements for funding our proposed exploration programs and our continued operations through December 31, 2012 will be approximately $5,670,000. As of March 21, 2012, we had cash reserves in the amount of approximately $4,300,000. Our current financial resources are not expected to be sufficient to allow us to meet the anticipated cash expenditures for the year ended December 31, 2012. We anticipate that our current financial resources will be sufficient only to pay for the anticipated costs of our exploration activities to October 31, 2012. We will require additional financing to complete our exploration plans. If we are unable to obtain additional financing, we will adjust our operating plan depending upon our existing financial resources.
Subsequent to our fiscal year end we sold an aggregate of 9,560,000 Units under our US and Offshore Private Placements for total gross proceeds of $4,780,000. We do not have any additional financing agreements in place.
Our 2012 budget includes capital expenditures of $280,000; however, we do not have any commitments for capital expenditures.

Certain key factors will affect our future financial and operating results. These include, but are not limited to the following:

We have not yet earned any operational revenues since our inception. We may not generate sufficient revenues from our proposed business plan in the future to achieve profitable operations. If we are not able to achieve profitable operations at some point in the future, we eventually may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion plans. Our current financial resources may not be sufficient to allow us to meet our anticipated cash expenditures during 2012 and we may require additional financing. We do not currently have any financing arrangements in place, and there are no assurances that we will be able to obtain additional financing in an amount sufficient to meet our needs or on terms that are acceptable to us.
Obtaining additional financing is subject to a number of factors, including the market prices for base and precious metals, investor interest in our mineral projects, and the performance of equity market in general. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund our business plan could be significantly limited and we may be required to suspend our business operations.

For these reasons, our financial statements filed herewith include a statement that these factors raise substantial doubt about our ability to continue as a going concern. Our ability to continue as a going concern will be dependent on our raising of additional capital and the success of our business plan.

Results of Operations

Revenue

We have not earned any operational revenues since our inception and we do not anticipate earning revenues until our mineral properties enter into commercial production, of which there are no assurances. Our pilot production plant at the Columbus Project is currently being operated for pre-feasibility testing purposes only. We are currently in the exploration stage of our business and we can provide no assurances that we will be able to establish the existence of probable or proved mineral reserves on our properties, or if such reserves are established, that we will be able to enter into commercial production.

Operating Expenses

Mineral exploration and evaluation expenses increased by 4.31% to $2,704,545 during the year ended December 31, 2011 from $2,592,912 during the year ended December 31, 2010. The increase was primarily the result of an increase made to the accrued reclamation and remediation costs.

Mineral exploration and evaluation expenses – related party decreased by 2.70% to 521,478 for the year ended December 31, 2011 from $535,974 during the year ended December 31, 2010. These amounts represent fees and reimbursement of expenses to Nanominerals Corp. related to exploration work conducted on the Columbus and Red Mountain Projects. Nanominerals Corp. is our largest shareholder.

General and administrative expenses decreased by 18.45% to $2,385,695 during the year ended December 31, 2011 from $2,925,358 during the year ended December 31, 2010. General and administrative expenses decreased primarily as a result of decreases in consulting, legal, travel, liability insurance accrual, and stock based vesting expenses.

Other Income and Expenses. Total other income and expenses increased by 6.18% to $34,087 during the year ended December 31, 2011 from $32,102 during the year ended December 31, 2010. The increase was primarily due to no interest expense incurred in 2011 as a result of not financing certain insurance policies as was done in 2010.

Income Tax Benefit. Income tax benefit increased by 31.76% to $2,590,393 during the year ended December 31, 2011 from $1,965,945 during the year ended December 31, 2010. The increase was primarily a result of updating our estimate of the realization of deferred tax assets related to stock based compensation as of December 31, 2011.

Net Loss. The aforementioned factors resulted in a net loss of $3,888,629, or $0.03 per common share, for the year ended December 31, 2011, as compared to a net loss of $4,691,054, or $0.04 per common share, for the year ended December 31, 2010.

Off-Balance Sheet Arrangements

We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Recent Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (the “FASB”) that are adopted by us, as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on our consolidated financial statements upon adoption.

In May 2011, the FASB issued additional guidance regarding fair value measurement and disclosure requirements. The most significant change relates to Level 3 fair value measurements and requires disclosure of quantitative information about unobservable inputs using a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements. The guidance is effective for interim and annual periods beginning on or after December 15, 2011. We do not expect adoption of the additional fair value measurement and disclosure requirements to have a material impact on our financial position or results of operations.

In June 2011, the FASB issued amended standards to increase the prominence of items reported in other comprehensive income. These amendments eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and require that all changes in stockholders’ equity, except investments by, and distributions to, owners, be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, these amendments require presentation, on the face of the financial statements, of reclassification adjustments for items that are reclassified from other comprehensive income to net income. These new standards are effective beginning in the first quarter of 2012 and are to be applied retrospectively. These amended standards will impact the presentation of other comprehensive loss but will not impact our financial position or results of operations.

PART III

ITEM 15.

EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

The following exhibits are either provided with this Annual Report or are incorporated herein by reference:

Exhibit
Number	Description of Exhibit
3.1	Articles of Incorporation.⁽¹⁾
3.2	Certificate of Amendment to Articles - Name Change from Merritt Ventures Corp. to Ireland Inc.⁽²⁾
3.3	Certificate of Change – 4-for-1 Stock Split.⁽³⁾
3.4	Bylaws.⁽¹⁾
10.1	2007 Stock Incentive Plan.⁽⁴⁾
10.2	Consulting Agreement between the Company and RJ Falkner & Company, Inc., dated for reference as of November 5, 2007.⁽⁵⁾
10.3	Consultant Non-Qualified Stock Option Agreement between the Company and R. Jerry Falkner, dated effective as of November 5, 2007.⁽⁵⁾
10.4	Mining Lease Agreement dated November 30, 2007 between DDB Syndicate and Columbus S.M., LLC.⁽⁷⁾
10.5	Management Employment Agreement for David Z. Strickler.⁽¹⁴⁾
10.6	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.⁽⁹⁾
10.7	Non-Qualified Stock Option Agreement for Robert D. McDougal.⁽⁹⁾
10.8	Non-Qualified Stock Option Agreement for Michael A. Steele.⁽⁹⁾
10.9	Non-Qualified Stock Option Agreement for Mark H. Brennan.⁽⁹⁾
10.10	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr.⁽¹⁰⁾
10.11	Non-Qualified Stock Option Agreement dated April 8, 2011 for Mark H. Brennan.⁽¹¹⁾
10.12	Amended and Restated Option Agreement dated July 20, 2011 between Sierra Mineral Management Inc. and Ireland Inc.⁽¹²⁾
10.13	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.⁽¹³⁾
10.14	Non-Qualified Stock Option Agreement for Robert D. McDougal.⁽¹³⁾
10.15	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr.⁽¹³⁾
14.1	Code of Ethics.⁽⁶⁾
21.1	List of Subsidiaries.⁽¹⁰⁾
23.1	Consent of Brown Armstrong Accountancy Corporation.⁽¹⁴⁾
23.2	Consent of AuRIC Metallurgical Laboratories, LLC. ⁽¹⁵⁾
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95.1	Mine Safety Disclosures.⁽¹⁴⁾
99.1	Columbus Project Claims Summary.⁽¹⁵⁾
99.2	Red Mountain Project Claims Summary.⁽¹⁵⁾
101.INS	XBRL Instance Document.⁽¹⁴⁾
101.SCH	XBRL Taxonomy Extension Schema.⁽¹⁴⁾
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.⁽¹⁴⁾
101.DEF	XBRL Taxonomy Extension Definition Linkbase.⁽¹⁴⁾
101.LAB	XBRL Taxonomy Extension Label Linkbase.⁽¹⁴⁾
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.⁽¹⁴⁾

(1)	Filed as an exhibit to our Registration Statement on Form SB-2 originally filed on April 18, 2002, as amended.
(2)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2005 filed on April 12, 2006.
(3)	Filed as an exhibit to our Current Report on Form 8-K filed on April 30, 2007.
(4)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2006 filed on April 5, 2007.
(5)	Filed as an exhibit to our Current Report on Form 8-K filed on November 9, 2007.
(6)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2003 filed on September 28, 2004.
(7)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2007 filed on March 31, 2008.
(8)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2009 filed on April 15, 2010.
(9)	Filed as an exhibit to our Current Report on Form 8-K filed on July 28, 2010.
(10)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2010 filed on March 30, 2011.
(11)	Filed as an exhibit to our Current Report on Form 8-K filed on April 13, 2011.
(12)	Filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended June 30, 2011 filed on August 19, 2011.
(13)	Filed as an exhibit to our Current Report on Form 8-K filed on August 26, 2011.
(14)	Filed as an exhibit to our original Annual Report on Form 10-K for the year ended December 31, 2011 filed on March 30, 2012.
(15)	Filed as an exhibit to our Amendment No. 1 on Form 10-K/A for the year ended December 31, 2011 filed on January 11, 2013.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			IRELAND INC.



Date:	February 18, 2013	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			(Principal Executive Officer)



Date:	February 18, 2013	By:	/s/ Robert D. McDougal
			ROBERT D. MCDOUGAL
			Chief Financial Officer and Treasurer
			(Principal Financial Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date:	February 18, 2013	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			Director



Date:	February 18, 2013	By:	/s/ Robert D. McDougal
			ROBERT D. MCDOUGAL
			Chief Financial Officer and Treasurer
			Director



Date:	February 18, 2013	By:	/s/ Mark H. Brennan
			MARK H. BRENNAN
			Director

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Tuesday, February 19, 2013

UNITED STATES SECURITIES AND EXCHANGE COMMISSION-FORM 10-K/A-IRELAND INC.

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