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

FORM 10-K

(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, 2010

[__]     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) 932-0353
Registrant'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.
[__]

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.

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: $31,960,899 as of June 30, 2010, based on an average of the closing bid of $0.36 and the closing ask of $0.53 as quoted by the OTC Bulletin Board on 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 29, 2011, the Registrant had 122,434,442 shares of common stock outstanding.

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IRELAND INC.

ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 2010

TABLE OF CONTENTS

		PAGE
PART I		3
ITEM 1.	BUSINESS.	3
ITEM 1A.	RISK FACTORS.	5
ITEM 2.	PROPERTIES.	9
ITEM 3.	LEGAL PROCEEDINGS.	21
PART II		22
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	22
ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	23
ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	30
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	31
ITEM 9A.	CONTROLS AND PROCEDURES	31
ITEM 9B.	OTHER INFORMATION	31
PART III		32
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.	32
ITEM 11.	EXECUTIVE COMPENSATION	34
ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	37
ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	42
ITEM 14.	PRINCIPAL ACCOUNTING FEES AND SERVICES	43
ITEM 15.	EXHIBITS, FINANCIAL STATEMENT SCHEDULES.	43
SIGNATURES		45

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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 a minerals exploration and development 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 19,738 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”).

Current geologic modeling for the Columbus Project has outlined seven mineralized zones containing a total of 343.9 million tons of material in place with an average grade of 0.040 ounces per ton (“opt”) gold equivalent (“AuE”) (AuE opt = Au opt + 0.013 Ag opt) (based on $900/oz Au and $12/oz Ag). Current geologic modeling is based upon a full analysis of the technical data generated from our 2008 and 2009 drill programs and presents a refinement of the parameters previously used to delineate mineralized zones at 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, 2010:

Exercise of Options by Director

On October 27, 2010, we issued an aggregate of 500,000 shares of our common stock to Mr. Steele upon the exercise of options with an exercise price of $0.05 per share granted to Mr. Steele under our 2007 Stock Incentive Plan. The shares were issued to Mr. Steele pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act of 1933, as amended.

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Resignation of Director

On December 7, 2010, we received notice of Michael A. Steele’s intention to resign from our Board of Directors and Audit Committee effective December 31, 2010. Mr. Steele stated that his current business endeavours and demanding travel schedule did not allow him to give the time and attention necessary to be an effective participant as a member of our Board of Directors and Audit Committee. To the knowledge of our executive officers and remaining directors, there were no disagreements between Mr. Steele and us relating to our operations, policies, practices or otherwise.

Competition

We are a mineral resource exploration and development 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 12 full-time employees and 1 part-time employee.

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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 likely require additional financing to complete our exploration and development programs for our mineral projects.

We expect to spend approximately $4,320,000 on the exploration and development of our Columbus and Red Mountain Projects and the general costs of operating and maintaining our business and mineral properties for the twelve months ending December 31, 2011. 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 and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. In addition, actual costs of completing our exploration and development 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 and development 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 and development 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.

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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 March 1, 2010, Nevada’s State Assembly and Senate passed Assembly Bill No. 6 (“AB6”). AB6 has installed an additional tiered fee that is payable in conjunction with the annual filing of an affidavit of the work performed on or improvements made to a mining claim, or an affidavit of the intent to hold a mining claim applied to holders of 11 or more claims. The fee ranges from $70 per claim for holders of 11 to 199 claims up to $195 per mining claim for holders of 1,300 or more claims as of the date of filing. AB6 was approved by the Governor of Nevada on March 12, 2010.

In addition to these 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 and development 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.

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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 and development 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 and development 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.

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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.

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.

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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 296 mining and millsite claims which cover 43,178 acres and an additional 80 acres of private land, for a total of 43,258 acres. We currently own a 100% stake in 149 of the claims (which we refer to as the “CSM 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.

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Figure 1: Location of Columbus Project

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

The CSM 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 Columbus Brine Inc. (“CBI”), the former owner of CSM and the CSM claims) 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.

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Figure 2: Location of the CSM Claims and the DDB Claims

We acquired our interest in the CSM Claims and the DDB Claims from Nanominerals pursuant to an assignment by Nanominerals of its rights to both the Columbus Project and the Red Mountain Project under the terms of two letter agreements (the “Columbus Letter Agreement” and the “Red Mountain Letter Agreement,” respectively). By December 2007, under the terms of the Columbus Letter Agreement, we had earned a 15% operating interest in the Columbus Project.

In February 2008, we increased our ownership of the Columbus Project to 100% by merging CBI with and into our wholly owned subsidiary incorporated for the sole purpose of acquiring CBI, CBI Acquisition, Inc. Subsequent to the completion of the merger, CBI Acquisition, Inc.’s name was changed to Columbus Minerals Inc. To complete the merger, we issued to the former stockholders of CBI an aggregate of 10,440,087 shares of our common stock and share purchase warrants to acquire an additional 5,220,059 shares of our common stock. The warrants issued are exercisable at a price of $2.39 per share and expire on February 19, 2013. After August 19, 2010, if our common stock trades at an average price of 150% of the exercise price of the warrants over a period of 20 consecutive trading days, then we may accelerate the expiration date to a date that is 30 days after the date that we send notice of our intention to exercise the acceleration right. The warrants issued to the former stockholders of CBI provide the holder with a cashless exercise right. In addition, we agreed to honor the terms of an option previously granted by CBI to one of its former stockholders, and to extend that option to June 29, 2010. As a result, this person had an option to purchase 79,719 shares of our common stock at a price of $1.36 per share on or before June 29, 2010. None of these options were exercised before they expired.

After completing the acquisition of CBI, we acquired CBI’s rights under the terms of a mining lease that CBI entered into with the DDB Syndicate in November 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 anytime during the lease period. To date, we have paid the DDB Syndicate $190,000 under the terms of the DDB Agreement, and we must pay the DDB Syndicate a rental payment of $30,000, payable on June 30, 2011 in order to maintain our lease rights. 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.

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ACCESS AND INFRASTRUCTURE

The Columbus Project contains an existing mill site with power generator sets and an onsite fresh water 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^th century but no production is documented. Mining ceased in the Columbus Marsh around the beginning of the 20^th century.

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 AND DEVELOPMENT ACTIVITIES CONDUCTED ON THE COLUMBUS PROJECT TO DATE

Surface Sampling Program and Initial Metallurgical Work

Near surface basin sediment samples were taken in late 2006 and early 2007 and analyzed by Arrakis Inc. (“Arrakis”), an independent engineering lab based in Denver, Colorado. 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 and development work. The Permitted Mine Area (320 acres) is situated in the north end of this zone.

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Drilling Program

Figure 3: Map of 2008 and 2009 Drill Hole Locations

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 by Arrakis using a 3-acid modified version of aqua regia. 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.

Encouraging results warranted a second drill program, managed by independent consultants McEwen Geological LLC (“McEwen”), 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 a maximum depth of 400’. The sonic drilling resulted in continuous sample material, therefore providing an improved representation of each drill interval. Samples were sent to Arrakis and AuRic Metallurgical Laboratories (“AuRic”) 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 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.

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Our most recent drilling program commenced in Q3 of 2010. The activity was focused in 2 areas: (a) the existing production permitted area; and (b) a five acre area in the northwest area of the Columbus Basin in the area previously identified as Zone S North. The Zone S North area is primarily comprised of sand material. The drilling in the production permitted area consisted of 147 holes drilled to a depth of 40 feet with 10 foot sample composites. The drilling in Zone S North consisted of 28 holes drilled to a depth of 200 feet with 20 foot composite samples.

The drilling was completed in Q3 of 2010, under budget and ahead of schedule. The samples are currently being analyzed by independent laboratories under strict chain of custody standards. We will report results when they are delivered to the company.

The purpose of our drill programs is to determine the grade and tonnage consistency in the area we identified as our area of interest.

MODELING RESULTS

The following discussion is based upon geologic and mineralization modeling prepared for us by McEwen.

Geologic Model

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 1.423 tonnes/m³.

Along the western edge of the project area, alluvial material occurs 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.

Mineralization Model

Results from the computer generated mineralization model developed by McEwen were used to determine zones of potentially economic metal concentration. Seven distinct zones were identified for further evaluation. These zones will be prioritized by us for further exploration and development based on their spatial distribution, overall estimated metal content, and proximity to the existing facilities. All results are reported in total Au equivalent (AuE), calculated using the formula Au(opt)+0.013Ag(opt)=AuE(opt) (based on $900/oz Au and $12/oz Ag). A head grade cutoff value of 0.03opt was chosen based on recent metallurgical results from AuRic.

Of all seven zones identified to date, four are laterally continuous and three are two dimensional. Zones S South, B Central, and C West are two dimensional and the confidence for mineralization estimation is less than for the other zones. The most favorable zone is the S North zone. This zone is a mixed sand/clay zone. The assay results for the sand are for the most part >0.02opt, with a high value of 0.055opt AuE. Zone S South is also in the sand unit, with consistently high assay. Even though zone S South is two dimensional, it is highly likely that these zones are contemporaneous and this southern zone is of exploration significance.

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Zone A West could be thought of as an eastern extension of the S North zone. It is comprised of clay and is two dimensional with lateral extension to the south side. It appears that the trend of the blocks >0.03opt dips to the east, with the anomalous values becoming deeper. This is, however, a function of the vertical exaggeration and just an expression of the natural topography. It is presently thought that this zone is along the trend of an inferred northwesterly subsurface structure. This zone is distinguished from the S North zone by the absence of sand above 100’ depth.

Zone A East is laterally continuous, with a void between the southern and northern blocks. It is of lower concentrations and shows moderate potential. Zones B Central and C West are both two dimensional, with no lateral extension. At this time, not enough information exists to determine if these zones are of potentially sufficient concentration, thus placing them of lowest priority.

Zone C East is, like A West, laterally continuous in a single block to the north. It contains a similar average concentration, larger tonnage potential, and is open to the east and south. This makes it of interest for continued exploration. However, because of its location and distance from the existing infrastructure, it is lower in priority than the A West zone.

Figure 4: Identified Mineralized Zones

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Analytical Methodology

All reported drill results were determined by caustic fusion assay and analysis of the extracted 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.

Independent metallurgists engaged in extensive research and testing before they determined the best pyrometallurgical and hydrometallurgical methodologies for extracting gold and silver from the organic carbon rich clays at the Columbus Project.

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Caustic fusion is a standard pyrometallurgical method used for rock dissolution and subsequent analysis. A caustic fusion protocol was selected as the preferred method for head grade assays, because it has proven to be very effective in liberating and collecting gold and silver, as metal-in-hand, from the Columbus organic carbon rich clays. Independent work has shown that conventional fire assaying, another standard pyrometallurgical method, extracts extremely low gold and silver values from the Columbus Project material.

Thiosulphate leaching is a relatively new, environmentally friendly, hydrometallurgical method for extracting gold and silver from ores. Again, independent work has shown that thiosulphate leaching, followed by resin or carbon extraction, has been very effective in bench and pilot scale tests for the extraction of gold and silver, as “metalin-hand”, at the Columbus Project. Aqua regia and cyanide leaching tests proved ineffective and resulted in extremely low gold and silver extraction. It is the thiosulphate leach system that is currently being tested onsite to determine the feasibility of leaching both the clay and sand deposits.

As mentioned previously, the entombment of the precious metals in the organic carbon and clays at the Columbus Project can cause problems of detection by many methods of analysis. In January 2010, the Nevada Bureau of Mines and Geology (NBMG) reported they found no economically significant amounts of gold and silver in five surface samples from the Columbus Salt Marsh using a variety of assay methods. These results are consistent with the values initially found by our independent consultants using similar methods. However, further research and testing led to the development of a caustic fusion protocol, a thiosulphate leach process and, more recently, a standard fire assay method on gravity concentrates that has extracted economically significant values of gold and silver as “metal-in-hand,” from samples where conventional fire assay, aqua regia leach and cyanide leach of head ore extracted very low values.

The best assay of any geological sample is by quantifying the extracted metal. That is why we and our consultants rely only on extracted gold and silver as “metal-in-hand” for reporting assay results. Both the caustic fusion and the thiosulphate leach provide “metal-in-hand” and, together with the quality assurances and quality controls of the drill program, we and our consultants are confident of the results that we have reported from head ore samples.

Pilot and Bench Scale Leach Test Results

In the first quarter of 2009, AuRic conducted a pilot scale leach test on 1,738 pounds of clay material extracted from our Permitted Mine Area by Arrakis under chain of custody protocols. No mineral processing operations, such as screening, crushing, grinding, concentrating or drying were performed on the sample prior to leaching. The material was analyzed using a caustic fusion technique and reported head grades of 0.055 ounces per ton (opt) gold (Au) and 0.520 opt silver (Ag). The material was then leached, resulting in the extraction of 0.047 opt Au and 0.464 opt Ag into solution. The precious metals were subsequently collected on resins and processed to produce Au and Ag bullion, for a net extraction of 0.038 opt Au and 0.385 opt Ag. This represents leach extraction of 86.2% of Au into solution and 69.1% of Au recovered as metal. This also represents leach extraction of 89.2% of Ag into solution and 74% of Ag recovered as metal. The overall extraction was 0.043 opt AuE. Upon completion of the test, the precious metal beads were delivered to us.

In the second quarter of 2009, AuRic conducted bench scale leach tests on composite drill samples (of clay material) taken from Zone B Central by McEwen. The tested materials were composited from previously submitted and analyzed drill samples taken during our 2008 drilling program. The results of these bench scale leach tests were consistent with the results obtained from the bulk leach test conducted on the clay material extracted from the Permitted Mine Area in the first quarter of 2009.

In the third quarter of 2009, AuRic conducted additional bench scale leach tests and a pilot scale leach test on clay samples taken from Zone B Central by McEwen. The bulk materials for the pilot scale test assayed 0.070 opt Au and 0.302 opt Ag, or 0.074 opt AuE. The pilot scale leach test on this clay material extracted 0.066 opt Au and 0.181 opt Ag, or 0.068 opt AuE. The extracted precious metals were then collected on activated carbon and processed to produce Au and Ag bullion for a net extraction of 0.060 opt Au and 0.168 opt Ag, or 0.062 opt AuE. This represents leach extraction of 92.4% of AuE into solution and 84.1% of AuE as metal in hand.

All bench scale leach tests were conducted on composite samples taken from the Permitted Mine Area or the 2008 and 2009 drill programs. AuRic created 5.5 pound composites for each of the mineralized intervals tested. The composites were then assayed using a caustic fusion technique, and then leached. The leach results indicate that the mineralogy of the clays from the Permitted Mine Area and Zone B Central are similar to each other.

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Pilot Plant Installation and Surface Dredge Operations

Our pilot production plant was installed in the Permitted Mine Area by Arrakis in October 2008. The precious metals leach extraction circuit was added during the first quarter of 2010 to the onsite pilot plant and has undergone several months of leach testing on clay material mined by dredge from the permitted mine site. The pilot production process consists of a pilot scale production and processing circuit that we are using to test the commercial viability of mining and extracting precious metals from the Columbus Project. We currently have a production permit from Nevada Division of Environmental Protection that allows us to produce calcium carbonate and extract precious metals at the Permitted Mine Area at a rate of up to 792,000 tons per year.

 

 

 

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¹ Bench Scale Tests are too small to be recovered as metal with resins or activated carbon.

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Figure 5:

We are currently using a low cost surface dredge mining method at the Permitted Mine Area. The clays are mined by dredge and handled as a slurry throughout the production process. Once the clays have been slurried, we use thiosulfate leaching and carbon-in-pulp for extraction of the precious metals. This mining process has, to date, proven to be very successful and is our preferred method of mining the clays as the cost per ton is low. The leach extraction method uses thiosulphate to recover the precious metals from the mined clay material. In March 2010, we completed the installation of the leach circuit. The metallurgical data generated from operating the leach plant will be used to determine the feasibility of this process on both the clay and sand material.

We announced in May 2010 that the pilot plant was operational as a thiosulphate leach carbon-in-pulp circuit. We also reported that the primary goal of the initial test runs was to demonstrate that the pilot plant facility could extract gold and silver from continuous runs of large tonnages of mineralized clays. This was achieved with the extraction of 0.011 opt gold and 0.037 opt silver from an estimated 58.58 tons of low grade (0.02 opt Au, 0.39 opt Ag) head ore. This represents a weighted average recovery rate of 51% for gold and 9.5% for silver.

To date we have completed 50 onsite bench and bulk sample tests. As of yet we have not been able to exceed the above mentioned 0.011 opt gold and 0.037 opt silver recovery from the clay material, even on higher grade head material. We have discovered that the clays from the dredge pit contain large quantities of organics which severely interfere with both leaching and extraction of the precious metals. We have tested a variety of different methods designed to either reduce or eliminate the organic problems, but have been unsuccessful to date. Although testing of the clay continues, we have recently decided to focus our efforts on the sand materials, located on the west side of the basin, where organics are minimal and previous testing has yielded positive results. Work is currently underway in this regard.

The 2010 drilling program was managed by McEwen, under chain-of-custody, and focused on testing both the clays in the permitted mine area and the sands in the north western part of the basin. The drill samples are being assayed by AuRic using the standard caustic fusion method developed for the Columbus clays and sands. As well, metal extraction tests are being conducted on sand samples, both from drill hole composites and surface samples, in order to further validate the potential commercial viability of the sands. Results will be reported when available.

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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. Additional exploration work will be required before probable or proven reserves can be established. There are no assurances that the results of our pre-feasibility and technical 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 60 mineral claims covering approximately 7,500 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

We acquired our rights to the Red Mountain Project on August 14, 2007, pursuant to an assignment to us by Nanominerals of its rights and interests under the Red Mountain Letter Agreement between it and RMM.

The Red Mountain Letter Agreement provides that we are to:

	(a)	pay $5,000 per month to RMM until December 31, 2011;
	(b)	spend a total of $200,000 by December 31, 2008 on examining, testing, exploring or developing the Red Mountain Project (the “RMP Phase 1 Expenditures”); and
	(c)	spend a total of $1,000,000 by December 31, 2011 on examining, testing, exploring or developing the Red Mountain Project (the “RMP Phase 2 Expenditures”).

For each $100,000 spent by us on the RMP Phase 1 or RMP Phase 2 Expenditures, we will earn a 5% interest in the Red Mountain Project (or a proportionate fractional interest for expenditures in denominations of less than $100,000). We will earn a maximum 60% interest in the Red Mountain Project if we spend the full $1,200,000 of the RMP Phase 1 and RMP Phase 2 Expenditures by the deadlines set out above.

In addition, at any time, we may acquire a 100% interest in the Red Mountain Project (the “RM Acquisition Rights”) by:

	(a)	paying and issuing to RMM the following consideration:
		(i)	$100,000 in cash;
		(ii)	between 280,000 and 5,600,000 shares of our common stock, with the actual number of shares to be issued to be determined by dividing $1,400,000 by the Acquisition Price (defined below);
		(iii)	for every four shares issued under (a)(ii), we will be required to issue one share purchase warrant to acquire one additional share of our common stock at a price per share equal to 125% of the Acquisition Price, for a period of two years; and
	(b)	if the Red Mountain Project achieves commercial production, paying and issuing to RMM the following additional consideration:

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	(i)	an additional $100,000 in cash;
	(ii)	between 480,000 and 9,600,000 additional shares of our common stock, with the actual number of additional shares to be issued to be determined by dividing $2,400,000 by the Acquisition Price; and
	(iii)	for every four additional shares issued under (b)(ii), we will be required to issue one additional share purchase warrant to acquire one additional share of our common stock at a price per share equal to 125% of the Acquisition Price, for a period of two years.

The Acquisition Price to be used to calculate the aggregate number of shares and share purchase warrants to be issued to RMM under the terms of the Red Mountain Letter Agreement will be the average closing price of our common stock during the 60 days prior to the acquisition date, provided, however, that the Acquisition Price shall not be lower than $0.25 and shall not be greater than $5.00.

As of December 31, 2010, the date of our most recently available financial statements, we had spent $819,499 on the Red Mountain Project, meaning that, as of December 31, 2010, we owned a 41% interest in the project. We are currently negotiating to extend our option rights on the Red Mountain Project for an additional five years to December 31, 2016.

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

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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 had Arrakis review 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. The results of RMM’s tests show values ranging from less than 0.01 troy ounces of gold per ton to over 1.00 troy ounces of gold per ton. Those test results reportedly show an average of 0.06 opt. Arrakis reported that the grades were similar to other grades that have been reported in the area on similar mine sites.

Based on their review of the existing reports and a field visit to the Red Mountain Project site, Arrakis has recommended that we proceed with 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 and development program for the Red Mountain Project currently consists of a drilling and sampling program. Currently the Red Mountain Project is not in active development. We have set a budget of $75,000 for the Red Mountain Project for the 12 months ended December 31, 2011. 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.

ITEM 3. LEGAL PROCEEDINGS.

We are not a party to any other legal proceedings and, to our knowledge, no other legal proceedings are pending, threatened or contemplated.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

MARKET INFORMATION

Quotations of our common stock are entered on the OTC Bulletin Board under the symbol “IRLD.” The following is the high and low bid information for our common stock during each fiscal quarter of our last two fiscal years.

Quotations entered on the OTC Bulletin Board reflect inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.

PENNY STOCK RULES

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document prepared by the SEC, which:

	(a)	contains a description of the nature and level of risk in the market for penny stocks in both public offerings and secondary trading;
	(b)	contains a description of the broker's or dealer's duties to the customer and of the rights and remedies available to the customer with respect to a violation of such duties or other requirements of securities laws;
	(c)	contains a brief, clear, narrative description of a dealer market, including bid and ask prices for penny stocks and the significance of the spread between the bid and ask price;
	(d)	contains a toll-free telephone number for inquiries on disciplinary actions;
	(e)	defines significant terms in the disclosure document or in the conduct of trading in penny stocks; and
	(f)	contains such other information and in such form as the SEC shall require by rule or regulation.

The broker-dealer also must, prior to effecting any transaction in a penny stock, provide the customer with:

	(a)	bid and offer quotations for the penny stock;
	(b)	the compensation of the broker-dealer and its salesperson in the transaction;
	(c)	the number of shares to which such bid and ask prices apply, or other comparable information relating to the depth and liquidity of the market for such stock; and
	(d)	monthly account statements showing the market value of each penny stock held in the customer's account.

In addition, the penny stock rules require that, prior to a transaction in a penny stock that is not otherwise exempt from those rules, the broker-dealer must:

	(a)	make a special written determination that the penny stock is a suitable investment for the purchaser; and
	(b)	receive from the purchaser his or her written acknowledgement of receipt of the determination and a written agreement to the transaction.

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These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our common stock and therefore stockholders may have difficulty selling those securities.

REGISTERED HOLDERS OF OUR COMMON STOCK

As of March 29, 2011, there were 168 registered holders of record of our common stock. We believe that a large number of stockholders hold stock on deposit with their brokers or investment bankers registered in the name of stock depositories.

DIVIDENDS

We have not declared any dividends on our common stock since our inception and we do not expect to declare any dividends in the foreseeable future. We expect to spend any funds legally available for the payment of dividends on the development of our mineral properties. There are no dividend restrictions that limit our ability to pay dividends on our common stock in our Articles of Incorporation or bylaws. Chapter 78 of the Nevada Revised Statutes (the “NRS”), does provide certain limitations on our ability to declare dividends. Section 78.288 of Chapter 78 of the NRS prohibits us from declaring dividends where, after giving effect to the distribution of the dividend:

	(a)	we would not be able to pay our debts as they become due in the usual course of business; or
	(b)	except as may be allowed by our Articles of Incorporation, our total assets would be less than the sum of our total liabilities plus the amount that would be needed, if we were to be dissolved at the time of the distribution, to satisfy the preferential rights upon dissolution of stockholders who may have preferential rights and whose preferential rights are superior to those receiving the distribution.

RECENT SALES OF UNREGISTERED SECURITIES

Other than as previously disclosed in our Quarterly Reports on Form 10-Q or our Current Reports on Form 8-K, we have not completed any unregistered sales of equity securities during the fiscal year ended December 31, 2010.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

PLAN OF OPERATION

During the next 12 months, we intend to proceed with our exploration and development programs for the Columbus Project and the Red Mountain Project.

The Columbus Project

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

(a)

Mineral Resources/Reserves: Exploration and development work to date has identified three different host materials (clay, sand, brine) each of which could potentially contain commercial quantities of silver and gold 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. Minimal work has been done by the Company on the brine zone, however previous work has shown some potential for both silver and gold in the brine. The Company’s exploration efforts 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.

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The 2008 and 2009 drilling program identified some 343 million tons of mineralized sand and/or clay material, grading 0.040 opt gold equivalent from the surface to 100 feet depth. (AuE opt = Au opt + 0.013 Ag opt)(based on $900/oz Au and $12/oz Ag). The boundaries of these mineralized zones were identified at a wide drill hole spacing (about ¼ mile X ½ mile). The 2010 drill program was designed to both infill drill and to extend these previously drilled mineralized zones. All drill programs have been conducted by independent and qualified third parties under strict Chain-of-Custody, Quality Assurance and Quality Control standards. Samples will continue to be assayed using caustic fusion and metal extraction methods.

The first phase of the 2010 drill program consisted of 147 holes drilled to a depth of 40 feet (permitted production mining depth) within the permitted 320-acre mine site area. The goal of this drilling is to further define the mineralogy and grades within these mineralized clays. The second phase of the 2010 drill program consisted of 28 holes to a depth of 200 feet within the clay and sand zones located in the northwest sector of the property. These holes are designed to both infill and extend the mineral resources in this area. The 2010 drill program was completed in October 2010, ahead of schedule and under budget. Results will be reported as received.

	(b)	Feasibility Study: The Company currently has a production permit for the Columbus Project. The production permit allows for the extraction of precious metals and the production of calcium carbonate on the 378 acre site (320 acre mine site and 58 acre mill site) at a mine rate of up to 792,000 tons per year. During the period 2008-2010 the Company has developed a dredge mine, constructed a Pilot Plant and began operations to develop and prove the extractive metallurgy for the Columbus project.
		To date we have completed 50 onsite bench and bulk sample tests. As of yet we have not been able to exceed the above mentioned 0.011 opt gold and 0.037 opt silver recovery from the clay material, even on higher grade head material. We have discovered that the clays from the dredge pit contain large quantities of organics which severely interfere with both leaching and extraction of the precious metals. We have tested a variety of different methods designed to either reduce or eliminate the organic problems, but have been unsuccessful to date. Although testing of the clay continues, we have recently decided to focus our efforts on the sand materials, located on the west side of the basin, where organics are minimal and previous testing has yielded positive results. Work is currently underway in this regard.
		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, 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 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. 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 $1,950,000 on our exploration and development program and $500,000 on our capital expenditures for the Columbus Project from January 1, 2011 until December 31, 2011.

The Red Mountain Project

Sampling and Drilling Program: Our exploration and development program for the Red Mountain Project currently consists of a Drilling and Sampling program. Currently the Red Mountain Project is not in active development. We have set a budget of $75,000 for property payments and maintenance costs for the Red Mountain Project for the year ending December 31, 2011. 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.

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Cash Requirements

We have budgeted for the following cash expenditures for the period from January 1, 2011 until December 31, 2011:

As of December 31, 2010, we had cash in the amount of $1,602,179 and a working capital surplus of $2,541,774. We do not currently have sufficient financial resources to pay for our anticipated cash expenditures for the period from January 1, 2011 until December 31, 2011. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. If we are unable to obtain sufficient financing to complete our planned exploration and development plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

RESULTS OF OPERATIONS

Summary of Year End Results

	Year Ended December 31,
								Percentage
								Increase /
		2010			2009			(Decrease)
Revenue	$	-		$	-			n/a
Operating expenses		(6,689,101	)		(4,962,226	)		34.8%
Interest income		35,830			17,763			101.7%
Interest expense		(3,728	)		(2,255	)		65.3%
Income tax benefit		1,965,945			1,698,066			15.8%
Net loss	$	(4,691,054	)	$	(3,248,652	)		44.4%

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.

25

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Expenses

The major components of our expenses for the years ended December 31, 2010 and 2009 are outlined in the table below:

	Year Ended December 31,
								Percentage
		2010			2009			Increase / (Decrease)
Mineral exploration and evaluation expenses	$	2,592,912		$	3,158,132			(17.9)%
Mineral exploration and evaluation expenses – related party		535,974			520,831			2.9%
General and administrative		2,925,358			1,177,632			148.4%
General and administrative – related party		21,066			-			100.0%
Depreciation		553,791			45,631			1113.6%
Mineral and property holding costs		60,000			60,000			0.0%
Total operating expenses	$	6,689,101		$	4,962,226			34.8%

Our operating expenses for the year ended December 31, 2010 increased as compared with our December 31, 2009 fiscal year. The increase in operating expenses was due to increases in general and administrative expenses and depreciation. This increase was offset by a decrease in mineral exploration and evaluation activities.

The item “Mineral exploration and evaluation expenses – related party” represents (a) amounts paid or reimbursed to Nanominerals for exploration work conducted on the Columbus and Red Mountain Projects; and (b) amounts paid in respect of the DDB Claims to the DDB Syndicate, an entity owned by related parties.

During our 2010 fiscal year, we incurred fees payable to Nanominerals of $420,000 for technical and financing related services relating primarily to the Columbus and Red Mountain Projects. In addition, we incurred $115,974 in respect to reimbursable expenses paid for by Nanominerals. At December 31, 2010, we were indebted to Nanominerals in the amount of $43,657 for unpaid fees and reimbursable expenses.

During our 2010 fiscal year, we made $30,000 in rental payments to the DDB Syndicate under the terms of our lease agreement for the DDB Claims. The DDB Syndicate is a mining syndicate made up of a limited liability company controlled by Douglas D.G. Birnie (our President, Chief Executive Officer and a member of our Board of Directors), Lawrence E. Chizmar, Jr., a former member of our Board of Directors (and a former director of CBI), three former officers, directors and affiliates of CBI, and three companies affiliated with Nanominerals. The $30,000 in rental payments made to the DDB Syndicate consisted of $3719 paid to each member of the DDB Syndicate, plus an additional $250 paid to a company controlled by Mr. Birnie for the reimbursement of expenses related to exploration work done on the DDB Claims.

We also had an outstanding balance for accrued compensation due to Douglas D.G. Birnie (our President, Chief Executive Officer and a member of our Board of Directors) in the amount of $9,375, payable to a company controlled by Mr. Birnie.

During 2010, we incurred fees of $21,066 for services performed by Mark Brennan, one of our independent directors, primarily for executive search assistance.

The change in general and administrative expenses from 2010 to 2009 is primarily attributable to the expensing of consultant’s and director’s stock based vesting and grants. In addition, the depreciation of the site acquisition costs and capital expenditures began, totaling $553,791 for the year versus $45,631 in 2009.

We anticipate that our operating expenses will increase significantly as we pursue our exploration and development programs for the Columbus Project and the Red Mountain Project.

26

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LIQUIDITY AND CAPITAL RESOURCES

Working Capital
	At December 31,
								Percentage
		2010			2009			Increase / (Decrease)
Current assets	$	2,768,882		$	3,741,299			(26.0)%
Current liabilities		(227,138	)		(272,843	)		(16.8)%
Working capital surplus	$	2,541,774		$	3,468,456			(26.7)%

Cash Flows
	Year Ended December 31,
		2010			2009
Cash flows used in operating activities	$	(5,113,797	)	$	(4,611,805	)
Cash flows used in investing activities		(1,752,046	)		(430,572	)
Cash flows from financing activities		4,817,007			6,127,569
Net change in cash during period	$	(2,048,836	)	$	1,085,192

At December 31, 2010 we had a working capital surplus of $2,541,774 as compared with a working capital surplus of $3,468,456 at December 31, 2009. The decrease in our working capital surplus is primarily attributable to decreases in cash from operating expenses, and purchases of property and equipment.

Financing Requirements

We do not currently have sufficient financial resources to pay for our anticipated cash expenditures for the period from January 1, 2011 until December 31, 2011. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. If we are unable to obtain sufficient financing to complete our planned exploration and development plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

During our fiscal year ended December 31, 2010, we sold an aggregate of 11,035,000 Units at a price of $0.45 per Unit in separate private placement offerings made to accredited and foreign investors (the “2010 US Offering” and the “2010 Foreign Offering” respectively) for total proceeds of $4,965,750. Each Unit offered was comprised of one share of our common stock and one-half of one share purchase warrant, with each full share purchase warrant entitling the holder to purchase an additional share of our common stock at an exercise price of $0.75 per share, expiring June 30, 2013. We will have the right to accelerate the expiration date of the warrants if:

	(a)	the volume weighted average price (“VWAP”) for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
	(b)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.

We agreed to pay $6,300 and issue 6,000 share purchase warrants as finders fees for the units subscribed for by foreign investors.

On October 27, 2010, we issued an aggregate of 500,000 shares of our common stock to Michael A. Steele, a former member of our board of directors, upon the exercise of options with an exercise price of $0.05 per share. The options were granted to Mr. Steele under our 2007 Stock Incentive Plan. The shares were issued to Mr. Steele pursuant to the exemptions from registration provided by Section 4(2) of the Securities Act of 1933, as amended.

27

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There is no assurance that the actual costs of our exploration and development programs will not exceed our estimates. Furthermore, we may need additional financing to proceed beyond our current exploration and development plans. Our ability to obtain additional 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 adjust our exploration and development plans depending upon our existing capital resources.

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 additional capital and the success of our business plan.

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.

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, 2010 included in this Annual Report on Form 10-K.

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.

Exploration Costs

Mineral exploration costs are expensed as incurred.

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.

28

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Reclamation and Remediation Costs (Asset Retirement Obligation)

We accrued costs associated with environmental remediation obligations in accordance with ASC 410-20, Asset Retirement Obligations. In accordance with ASC 410-20-25, Asset Retirement Obligations - Recognition, we record a liability for the present value of the estimated environmental remediation costs in the period in which the liability is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The liability will be accreted and the asset will be depreciated over the life of the related assets. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability is reduced.

We accrue costs associated with environmental remediation obligation when it is probable that such costs will be incurred and they are reasonably estimable. Estimates for reclamation and other closure costs are prepared in accordance with ASC 450, Contingencies, or ASC 410-30-25, Asset Retirement and Environmental Obligations -Recognition. Costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. Such costs are based on management’s current estimate of amounts to be incurred when the remediation work is performed, within current laws and regulations.

Future reclamation and environmental-related expenditures are difficult to estimate, in many circumstances, due to the early stage nature of the exploration project, uncertainties associated with defining the nature and extent of environmental disturbance and 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 becomes available indicating that the liabilities have potentially changed. Changes in estimates are reflected in the statement of operations in the period an estimate is revised.

Accruals for reclamation and environmental matters totaled $275,338 at December 31, 2010 and December 31, 2009. We are in the exploration stage and are unable to determine the estimated timing of expenditures relating to these accruals at this time. It is reasonably possible 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. For additional information, see Note 15 of the financial statements included with this Annual Report on Form 10-K.

29

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

Index to Financial Statements:

Audited financial statements for the year ended December 31, 2010, including:

1.	Report of Independent Registered Accounting Firm (Brown Armstrong Accountancy Corporation);
2.	Consolidated Balance Sheets as of December 31, 2010 and 2009;
3.	Consolidated Statements of Operations for the years ended December 31, 2010 and 2009 and the period on February 20, 2001 (date of inception) to December 31, 2010;
4.	Consolidated Statement of Stockholders’ Equity for the period from February 20, 2001 (date of inception) through December 31, 2010; and
5.	Consolidated Statements of Cash Flows for the years ended December 31, 2010 and 2009 and the period on February 20, 2001 (date of inception) to December 31, 2010;
6.	Notes to Consolidated Financial Statements.

30

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BROWN ARMSTRONG
ACCOUNTANCY CORPORATION

 

 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and
Stockholders of Ireland Inc.

We have audited the accompanying consolidated balance sheets of Ireland Inc. (An Exploration Stage Company) (the Company) as of December 31, 2010 and 2009, and the related consolidated statements of operations, including inception cumulative data prospectively from February 20, 2001, stockholders’ equity, and cash flows for each of the years in the two-year period ended, and from inception to December 31, 2010. Ireland Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ireland Inc. (An Exploration Stage Company) as of December 31, 2010 and 2009, and the results of its operations, including inception cumulative data, and its cash flows for each of the years in the two-year period ended, and from inception to, December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company’s operating losses raise substantial doubt about its ability to continue as a going concern, unless the Company attains future profitable operations and/or obtains additional financing. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

	BROWN ARMSTRONG
	ACCOUNTANCY CORPORATION

March 30, 2011
Bakersfield, California

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
CONSOLIDATED BALANCE SHEETS

		December 31, 2010			December 31, 2009
ASSETS
Current assets
Cash	$	1,602,179		$	3,651,015
Short-term investments		878,608			-
Other receivables		30,000			-
Prepaid expenses		258,095			90,284
Total current assets		2,768,882			3,741,299
Property and equipment, net		4,081,820			3,763,118
Mineral properties		31,948,053			31,948,053
Reclamation bonds		908,368			908,368
Deposits		22,200			22,200
Total non-current assets		36,960,441			36,641,739
Total assets	$	39,729,323		$	40,383,038
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	90,783		$	133,541
Accounts payable - related party		67,190			101,213
Accrued payroll and related taxes		45,875			14,799
Due to related party		23,290			23,290
Total current liabilities		227,138			272,843
Long-term liabilities
Accrued reclamation and remediation costs		275,338			275,338
Deferred income taxes		5,402,258			7,368,534
Total long-term liabilities		5,677,596			7,643,872
Total liabilities		5,904,734			7,916,715
Commitments and contingencies - Note 14		-			-
Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares              authorized, 122,434,442 and 110,899,442              shares, respectively, issued and outstanding		122,434			110,899
Additional paid-in capital		48,299,851			42,099,452
Common stock subscribed		-			162,000
Accumulated other comprehensive loss		(614	)		-
Accumulated deficit during exploration stage		(14,597,082	)		(9,906,028	)
Total stockholders' equity		33,824,589			32,466,323
Total liabilities and stockholders' equity	$	39,729,323		$	40,383,038

See Accompanying Notes to these Consolidated Financial Statements
F-2

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF OPERATIONS

								For the period from
								February 20, 2001
								(date of inception)
		For the Year Ended			For the Year Ended			through
		December 31, 2010			December 31, 2009			December 31, 2010
Revenue	$	-		$	-		$	-
Operating expenses
Mineral exploration and evaluation expenses		2,592,912			3,158,132			9,327,154
Mineral exploration and evaluation        expenses - related party		535,974			520,831			2,583,119
General and administrative		2,925,358			1,177,632			6,437,974
General and administrative - related party		21,066			-			21,066
Depreciation		553,791			45,631			619,781
Mineral and property holding costs		60,000			60,000			470,500
Mineral and property holding costs -        reimbursed to related party		-			-			295,000
Write-off of mineral rights		-			-			14,000
Total operating expenses		6,689,101			4,962,226			19,768,594
Loss from operations		(6,689,101	)		(4,962,226	)		(19,768,594	)
Other income (expense)
Interest income		35,830			17,763			318,890
Interest expense		(3,728	)		(2,255	)		(5,983	)
Total other income (expense)		32,102			15,508			312,907
Loss before income taxes		(6,656,999	)		(4,946,718	)		(19,455,687	)
Income tax benefit		1,965,945			1,698,066			4,858,605
Net loss	$	(4,691,054	)	$	(3,248,652	)	$	(14,597,082	)
Loss per common share - basic and diluted	$	(0.04	)	$	(0.03	)
Weighted average common shares outstanding -     basic and diluted		121,600,223			100,165,208

See Accompanying Notes to these Consolidated Financial Statements
F-3

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

														Accumulated			Accumulated
											Common			Other			Deficit During			Total
		Common Stock						Additional			Stock			Comprehensive			Exploration			Stockholders'
		Shares			Amount			Paid-in Capital			Subscribed			Loss			Stage			Equity
Balance, February 20, 2001		-		$	-		$	-		$	-		$	-		$	-		$	-
Issuance of common stock for cash,    $0.001 per share		20,000,000			20,000			(15,000	)		-			-			-			5,000
Issuance of common stock for cash,    $0.0025 per share		8,000,000			8,000			12,000			-			-			-			20,000
Issuance of common stock for cash,   $0.025 per share		1,750,000			1,750			42,000			-			-			-			43,750
Net loss		-			-			-			-			-			(16,045	)		(16,045	)
Balance, December 31, 2001		29,750,000			29,750			39,000			-			-			(16,045	)		52,705
Net loss		-			-			-			-			-			(49,313	)		(49,313	)
Balance, December 31, 2002		29,750,000			29,750			39,000			-			-			(65,358	)		3,392
Net loss		-			-			-			-			-			(32,516	)		(32,516	)
Balance, December 31, 2003		29,750,000			29,750			39,000			-			-			(97,874	)		(29,124	)
Net loss		-			-			-			-			-			(51,000	)		(51,000	)
Balance, December 31, 2004		29,750,000			29,750			39,000			-			-			(148,874	)		(80,124	)
Issuance of common stock for cash,   $0.025 per share		6,800,000			6,800			163,200			-			-			-			170,000
Net loss		-			-			-			-			-			(54,025	)		(54,025	)
Balance, December 31, 2005		36,550,000			36,550			202,200			-			-			(202,899	)		35,851
Net loss		-			-			-									(95,279	)		(95,279	)
Balance, December 31, 2006		36,550,000			36,550			202,200			-			-			(298,178	)		(59,428	)
Issuance of common stock to   Nanominerals Corp. for a deed of   assignment to the option interests   in the Columbus and the Red Mountain   projects		30,000,000			30,000			195,000			-			-			-			225,000
Issuance of stock options for   3,820,000 shares of common stock   to officers and consultants		-			-			91,441			-			-			-			91,441
Issuance of common stock for cash   Reg. S - Private Placement,   $0.65 per share, net of $106,925   commissions		8,188,000			8,188			5,207,088			-			-			-			5,215,276
Issuance of common stock for cash   Reg. D - Private Placement,   $0.65 per share, net of $136,728   commission		11,812,000			11,812			7,529,260			-			-			-			7,541,072
Amortization of stock options   issued to employee over   vesting period		-			-			9,876			-			-			-			9,876
Net loss		-			-			-			-			-			(2,243,271	)		(2,243,271	)
Balance, December 31, 2007		86,550,000			86,550			13,234,865			-			-			(2,541,449	)		10,779,966

See Accompanying Notes to these Consolidated Financial Statements
F-4

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

														Accumulated			Accumulated
											Common			Other			Deficit During			Total
		Common Stock						Additional			Stock			Comprehensive			Exploration			Stockholders'
		Shares			Amount			Paid-in Capital			Subscribed			Loss			Stage			Equity
Issuance of common stock   for cash, $0.05 per share   from exercise of options		20,000			20			980			-			-			-			1,000
Issuance of common stock in   connection with the acquisition   to the former shareholders of CBI,   $1.92 per share		10,440,087			10,440			19,989,560			-			-			-			20,000,000
Fair value of share purchase warrants   issued in connection with the   acquisition of CBI		-			-			1,359,351			-			-			-			1,359,351
Amortization of stock options   issued to employee and a director over   vesting period		-			-			58,285			-			-			-			58,285
Effect of modification of stock   options issued to a nonemployee   former shareholder of CBI		-			-			19,935			-			-			-			19,935
Effect of stock option forfeiture		-			-			(21,012	)		-			-			-			(21,012	)
Effect of modification of stock   options issued to officers, director,   and consultant		-			-			1,417,485			-			-			-			1,417,485
Net loss, December 31, 2008		-			-			-			-			-			(4,115,927	)		(4,115,927	)
Balance, December 31, 2008		97,010,087			97,010			36,059,449			-			-			(6,657,376	)		29,499,083
Amortization of stock options and warrants   issued to a director, employee and   consultants over vesting period		-			-			88,323			-			-			-			88,323
Issuance of stock options for   200,000 shares of common stock   to a consultant		-			-			20,000			-			-			-			20,000
Issuance of common stock for cash   Reg. S - Private Placement,   $0.45 per share, net of $243,143   financing costs		8,561,111			8,561			3,600,796			-			-			-			3,609,357
Issuance of common stock for cash   Reg. D - Private Placement,   $0.45 per share, net of $61,498   financing costs		5,328,244			5,327			2,330,885			(63,000	)		-			-			2,273,212
Common stock subscribed		-			-			-			225,000			-			-			225,000
Net loss, December 31, 2009		-			-			-			-			-			(3,248,652	)		(3,248,652	)
Balance, December 31, 2009		110,899,442			110,899			42,099,452			162,000			-			(9,906,028	)		32,466,323

See Accompanying Notes to these Consolidated Financial Statements
F-5

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

														Accumulated			Accumulated
											Common			Other			Deficit During			Total
		Common Stock						Additional			Stock			Comprehensive			Exploration			Stockholders'
		Shares			Amount			Paid-in Capital			Subscribed			Loss			Stage			Equity
Amortization of stock options and warrants   issued to directors, officers and   consultants over vesting periods		-			-			1,153,096			-			-			-			1,153,096
Issuance of stock options   to directors and officers		-			-			79,831			-			-			-			79,831
Issuance of common stock for cash   Reg. S - Private Placement,   $0.45 per share, net of $6,399   financing costs		200,000			200			83,401			-			-			-			83,601
Issuance of common stock for cash   Reg. D - Private Placement,   $0.45 per share, net of $5,344   financing costs		10,835,000			10,835			4,859,571			(162,000	)		-			-			4,708,406
Issuance of common stock   for cash, $0.05 per share   from exercise of options		500,000			500			24,500			-			-			-			25,000
Unrealized loss on short-term investments,   net of $331 deferred tax		-			-			-			-			(614	)		-			(614	)
Net loss, December 31, 2010		-			-			-			-			-			(4,691,054	)		(4,691,054	)
Balance, December 31, 2010		122,434,442		$	122,434		$	48,299,851		$	-		$	(614	)	$	(14,597,082	)	$	33,824,589

See Accompanying Notes to these Consolidated Financial Statements
F-6

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF CASH FLOWS

								For the period from
								February 20, 2001
								(date of inception)
		For the Year Ended						through
		December 31, 2010			December 31, 2009			December 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(4,691,054	)	$	(3,248,652	)	$	(14,597,082	)
Adjustments to reconcile loss from operating       to net cash used in operating activities:
Depreciation		553,791			45,631			619,781
Write-off of mineral rights		-			-			14,000
Consulting accrual		-			-			15,000
Stock based expenses		1,232,927			88,323			2,877,325
Changes in operating assets and liabilities:
Other receivables		(30,000	)		27,394			(30,000	)
Prepaid expenses		(167,811	)		51,051			(408,170	)
Other assets		-			-			(2,200	)
Reclamation deposit		-			24,720			(897,108	)
Mineral property acquisition costs		-			-			(1,022,663	)
Accounts payable and accrued liabilities		(45,705	)		97,794			100,246
Deferred income taxes		(1,965,945	)		(1,698,066	)		(4,858,605	)
Accrued reclamation and remediation costs		-			-			275,338
Net cash used in operating activities		(5,113,797	)		(4,611,805	)		(17,914,138	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment		(872,493	)		(430,572	)		(3,552,553	)
Purchase of short-term investments		(879,553	)		-			(879,553	)
Net cash used in investing activities		(1,752,046	)		(430,572	)		(4,432,106	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from stock issuance		4,990,750			6,250,210			24,480,710
Proceeds from option issuance		-			20,000			20,000
Stock issuance costs		(11,743	)		(304,641	)		(560,037	)
Common stock subscribed		(162,000	)		162,000			-
Proceeds from borrowings - related party		-			-			8,290
Net cash provided by financing activities		4,817,007			6,127,569			23,948,963
NET CHANGE IN CASH		(2,048,836	)		1,085,192			1,602,719
CASH AT BEGINNING OF PERIOD		3,651,015			2,565,823			-
CASH AT END OF PERIOD	$	1,602,179		$	3,651,015		$	1,602,719
SUPPLEMENTAL INFORMATION
Interest paid	$	3,728		$	2,255		$	5,983
Income taxes paid	$	-		$	-		$	-
Non-cash investing and financing activities:
Assets acquired for common stock and warrants issued for mineral properties	$	-		$	-		$	21,584,351
Net deferred tax liability assumed	$	-		$	-		$	10,261,194

See Accompanying Notes to these Consolidated Financial Statements
F-7

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
	Basis of presentation – These financial statements and related notes are presented in accordance with United States generally accepted accounting principles (“GAAP”) as issued by the Financial Accounting Standards Board (“FASB”). The Company’s fiscal year-end is December 31.
	Description of business – The Company is considered an exploration stage company since its formation and the Company has not yet realized any revenues from its planned operations. The Company is primarily focused on the acquisition and exploration of mining properties. Upon identification of commercially minable reserves, the Company expects to actively prepare the site for its extraction and enter the development stage.
	History – The Company was incorporated on February 20, 2001 under the laws of the State of Nevada under the name Merritt Ventures Corp. On December 19, 2005, the Company changed its name to Ireland Inc.
	Going concern – The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
	Since its formation, the Company has incurred comprehensive cumulative net losses of $14,597,696 as of December 31, 2010. This amount is comprised of net loss from operations of $14,597,082 and other comprehensive loss of $614. The Company has not commenced its commercial mining and mineral processing operations; rather, it is still in the exploration stage, raising substantial doubt about the Company’s ability to continue as a going concern. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
	The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
	Principles of consolidation – The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Columbus Minerals Inc. (“CMI”) (including its wholly- owned single-member LLC subsidiary Columbus Salt Marsh LLC (“CSM”)) and Rand Metals LLC (“Rand”). Significant intercompany accounts and transactions have been eliminated.
	Exploration costs – Mineral exploration costs are expensed as incurred.
	Fair value of financial instruments - Fair value accounting establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

	Level 1	Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;
	Level 2	Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and
	Level 3	Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

F-8

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	The Company’s financial instruments consist of investments in U.S. Treasury Notes. These investments are classified within Level 1 of the fair value hierarchy as their fair value is determined using quoted prices in active markets.
	Short-term investments – Short-term investments generally have a maturity of three months to five years at the date of purchase. Investments with maturities beyond one year are classified as short- term based on their highly liquid nature. Short-term investments classified as available-for-sale are recorded at fair value based on quoted market prices with the unrealized gains and losses reflected in accumulated other comprehensive income until realized. Realized gains and losses are determined on a specific identification method and are recognized in the statement of operations.
	The Company evaluates unrealized losses, if any, in its investment securities for other-than temporary impairment using both qualitative and quantitative criteria. In the event that an investment is determined to be other-then-temporarily impaired, the Company recognizes the loss in the statement of operations. The Company generally only invests in debt securities.
	Mineral rights – The Company capitalizes acquisition and option costs of mineral property rights. The amount capitalized represents fair value at the time the mineral rights were acquired.
	The Company capitalizes 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 the Company does not continue with exploration after the completion of the 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 to develop new ore deposits, to 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. The Company evaluates the carrying value of capitalized assets 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 the 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.

F-9

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	Property and equipment – Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which range from 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).
	The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of property and equipment or whether the remaining balance of property and equipment should be evaluated for possible impairment. If events and circumstances warrant evaluation, the Company uses an estimate of the related undiscounted cash flows over the remaining life of the property and equipment in measuring their recoverability.
	Impairment of long-lived assets – The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17, Measurement of an Impairment Loss, if events or circumstances indicate that their carrying amount might not be recoverable. As of December 31, 2010, exploration progress is on target with the Company’s exploration and evaluation plan, and no events or circumstances have happened to indicate that the related carrying values of the properties may not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of ASC 930-360-35, Asset Impairment, and ASC 360-10-15-3 through 15-5, Impairment or Disposal of Long-Lived Assets.
	Various factors could impact the Company’s ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions the Company may use in cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified. These additional risks are due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
	Material changes to any of these factors or assumptions discussed above could result in future impairment charges to operations.
	Reclamation and remediation costs (asset retirement obligation) – The Company accrues costs associated with environmental remediation obligations in accordance with ASC 410-20, Asset Retirement Obligations. The Company records a liability for the present value of the estimated environmental remediation costs in the period in which the liability is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The liability will be accreted, and the asset will be depreciated over the life of the related assets. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability will be reduced.

F-10

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	The Company accrues costs associated with environmental remediation obligations when it is probable that such costs will be incurred, and they are reasonably estimable. Estimates for reclamation and other closure costs are prepared in accordance with ASC 450, Contingencies, or ASC 410-30-25, Asset Retirement and Environmental Obligations - Recognition. Costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. Such costs are based on management’s current estimate of amounts to be incurred when the remediation work is performed, within current laws and regulations.
	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 and the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews 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 statement of operations in the period an estimate is revised.
	Accruals for reclamation and environmental matters totaled $275,338 at December 31, 2010 and December 31, 2009. The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to these accruals at this time. 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. For additional information, see Note 15.
	Use of estimates – The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates.
	Earnings per share – The Company follows ASC 260, Earnings Per Share, and ASC 480, Distinguishing Liabilities from Equity, which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share (“EPS”) for entities with publicly-held common shares and potential common stock issuances. Basic EPS is computed by dividing net income by the weighted average number of common shares outstanding. In computing diluted EPS, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. The weighted average of common stock equivalents, which include stock options and warrants to purchase common stock, on December 31, 2010 and 2009 that were not included in the computation of diluted EPS, because the effect would be antidilutive, were 36,925,346 and 21,094,051, respectively.
	Expenses of offering – Specific incremental costs that are directly attributable to a proposed or actual offering of securities are recorded as a direct charge against the gross proceeds of the offering.

F-11

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	Income taxes – The Company accounts for its income taxes in accordance with ASC 740, Income Taxes, which requires recognition of deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
	For acquired properties that do not constitute a business as defined in ASC 805-10-55-4, Definition of a Business, deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future federal and state income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with ASC 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations. The amount is reflected as an increase to the total purchase price which is then applied to the underlying acquired assets in the absence of a goodwill component associated with the acquisition transactions.
	Stock-based compensation – The Company accounts for share-based payments in accordance with ASC 718, Compensation – Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9, Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Binomial Lattice option pricing model. The Company believes that this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period.
	The fair value of performance-based stock option grants is determined on their grant date through use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.
	The fair value of market-based stock option grants is determined on their grant date through use of an option pricing model which uses a combination of Monte Carlo simulation and a Trinomial Lattice function. The requisite service period for market-based awards is derived from the model. Achievement of the market condition earlier than estimated can materially affect the amount of stock- based compensation recognized in the financial statements.

F-12

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	New accounting pronouncements – From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company 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 the Company’s consolidated financial statements upon adoption.
	In January 2010, the FASB issued Accounting Standards Update (“ASU”) 2010-06, Improving Disclosures About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The Company does not have any assets or liabilities classified as Level 3. As the update only pertains to disclosures, its adoption is not expected to have an impact on the Company’s financial position, results of operations or cash flows.
	In February 2010, the FASB issued ASU 2010-09, Subsequent Events (Topic 855), Amendment to Certain Recognition and Disclosure Requirements, to remove the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. This change removes potential conflicts with current SEC guidance and clarifies the intended scope of the reissuance disclosure provisions. The update was effective upon its date of issuance, February 24, 2010, and the Company has adopted the amendments accordingly. As the update only pertained to disclosures, it had no impact on the Company’s financial position, results of operations or cash flows upon adoption.

F-13

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.	SHORT-TERM INVESTMENTS
	The Company’s short-term investments are classified as available for sale and consist of U.S. Treasury Notes which are publicly traded and valued. All investments are measured at fair value on a recurring basis based on quoted market prices. Therefore, all investments are considered to be within Level 1 of the fair value hierarchy. As of December 31, 2010, the Company’s investments were as follows:

All available for sale investments mature in July 2015. The Company did not have any investments as of December 31, 2009.

Subsequent to year end, the Bureau of Land Management (“BLM”) recognized receipt of $875,000 face value treasury security as replacement for $775,000 of cash collateral on one of the Company’s reclamation bonds. At that time, the short term investments were reclassified to restricted investments held for reclamation bonds. The Company anticipates using the remaining value of the treasury security for future collateral requirements.

3.	PREPAID EXPENSES
	Prepaid expenses at December 31, 2010 and December 31, 2009 consisted of the following:

			December 31,			December 31,
			2010			2009
	Claims maintenance	$	46,327		$	34,166
	Insurance policies		145,292			49,973
	Retainers and services		52,645			2,000
	Other		13,831			4,145
		$	258,095		$	90,284

F-14

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

4.	PROPERTY AND EQUIPMENT
	Property and equipment consisted of the following as of December 31, 2010 and December 31, 2009:

			December 31,			December 31,
			2010			2009
	Furniture and fixtures	$	20,854		$	8,921
	Computers and equipment		41,165			39,137
	Land		30,000			30,000
	Site improvements		2,934,409			99,631
	Site equipment		1,151,578			231,035
	Vehicles		23,595			23,595
	Building		500,000			--
	Construction in progress:
	Building		--			500,000
	Site improvements		--			2,325,198
	Site equipment		--			571,591
			4,701,601			3,829,108
	Less accumulated depreciation		619,781			65,990
		$	4,081,820		$	3,763,118

Construction in progress consisted of capital expenditures for construction of the Company’s pilot plant leach circuit. During the second quarter of 2010, the pilot plant began operating on a continuous basis and all of the construction in progress was placed in service.

Depreciation expense was $553,791 and $45,631 for the years ended December 31, 2010 and 2009, respectively.

F-15

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.	COLUMBUS PROJECT
	As of December 31, 2007, the Company had earned a 15% interest in the Columbus Project by satisfying its option agreement requirements and had the right to merge with the corporation holding the remaining 85% interest in the Columbus Project in Esmeralda County, Nevada.
	Pursuant to the option assignment agreement dated March 30, 2007, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to Nanominerals Corp (“NMC”), one of the principal stockholders of the Company.
	On February 20, 2008, the Company, through its wholly-owned subsidiary CMI, acquired a 100% interest in the Columbus Project, including an option for additional mining claims, by way of merger with the owner of the Columbus Project, Columbus Brine Inc. (“CBI”). Under the terms of the Merger Agreement, the Company issued an aggregate of 10,440,087 shares of its common stock and 5,220,059 share purchase warrants to the former shareholders of CBI. Each share purchase warrant issued by the Company entitles the holder to purchase one additional share of the Company’s common stock at a price of $2.39 per share for a period of 5 years. This acquisition supersedes the option agreement.
	The Company believes that the acquisition of the Columbus Project was beneficial because it provides for 100% ownership of the properties and fosters greater opportunity to finance and further develop the project.
	This merger was treated as a statutory merger for tax purposes whereby CMI was the surviving merger entity.

F-16

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.	COLUMBUS PROJECT (continued)
	The Company applied EITF 98-03 (which has been superseded by ASC 805-10-25-1) with regard to the acquisition of the Columbus Project. The Company determined that the acquisition of the Columbus Project did not constitute an acquisition of a business, as that term is defined in ASC 805- 10-55-4, and the Company recorded the acquisition as a purchase of assets.
	As required by ASC 930-805-30, Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55, Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the purchase price of $32 million was allocated to the assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The purchase price allocated to the real properties was based on fair market values determined using an independent real estate appraisal firm (Arden Salvage Company), and the fair value of the remaining assets acquired and liabilities assumed were based on management’s best estimates taking into account all available information at the time.
	Pursuant to the terms of the acquisition of CBI, the Company issued an aggregate of 10,440,087 shares of common stock and 5,220,059 share purchase warrants to the former shareholders of CBI. Each share purchase warrant issued by the Company entitles the holder to purchase one additional share of the Company’s common stock at a price of $2.39 per share for a period of 5 years. Each warrant provides the holder with a cashless right of exercise. If the holder chooses to utilize this cashless exercise right, the total number of shares that the holder will be entitled to exercise will be determined by the following formula: [( A – B ) C ] ÷ A where:
	A = the average closing price of the Company’s common stock during the five trading days prior to exercise.
	B = the exercise price of $2.39.
	C = the maximum number of shares of the Company’s common stock issuable upon exercise of the warrants.
	If the holder chooses to utilize the cashless exercise right, the holder must do so with respect to all of the unexercised warrants held by him.
	The Company will have the right to accelerate the expiration date of the warrants at any time after August 19, 2010 if the average closing price of the Company’s common stock over any 20 consecutive trading days is equal to or greater than 150% of the exercise price. If the Company exercises this acceleration right, the expiration date for the warrants will be accelerated to 30 days after the Company sends out notice that it is exercising the acceleration right.
	The Company estimated the fair value of warrants issued in connection with the acquisition of CBI using the Binomial Lattice pricing model.

F-17

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

5.	COLUMBUS PROJECT (continued)
	The following table reflects the recorded purchase consideration for the Columbus Project:

	Purchase price:
	Common stock issued	$	20,000,000
	Fair value of warrants issued		1,359,351
	Acquisition costs		600,000
	Total purchase price		21,959,351
	Net deferred income tax liability assumed		10,261,194
	Total	$	32,220,545

The following table reflects the components of the Columbus Project:

	Allocation of acquisition cost:
	Mineral properties (including deferred tax liability assumed of $10,261,194)	$	31,948,053
	Property, plant and equipment		202,430
	Deposits		44,720
	Cash		6,570
	Prepaid expenses		24,925
	Accounts payable		(6,153	)
	Total	$	32,220,545

F-18

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

6.	RED MOUNTAIN PROJECT
	The Red Mountain Project, located in San Bernardino, California, is subject to an underlying option assignment agreement, as amended August 8, 2007. Under the terms of this agreement, to earn a 60% interest, the Company is required to pay $5,000 per month until December 31, 2011 and spend an aggregate of $1,200,000 in additional qualifying expenditures by December 31, 2011.
	The Company may at any time during the life of the Red Mountain Project earn a 100% interest by paying $100,000, issuing shares of common stock with an aggregate value of $1,400,000 and issuing share purchase warrants to purchase up to an additional 25% of the number of shares of common stock to be issued. If the project achieves commercial production, the Company will be required to pay an additional $100,000, issue shares of common stock with an aggregate value of $2,400,000 and issue share purchase warrants to purchase up to an additional 25% of the number of shares of common stock to be issued.
	Pursuant to the option assignment agreement, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to NMC.

F-19

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.	ISSUANCES OF COMMON STOCK
	For the year ended December 31, 2010, the Company issued common stock as follows:
	a)	On October 27, 2010, the Company issued 500,000 shares of common stock from the exercise of stock options. The options were issued for directors compensation, had an exercise price of $0.05 per share and an expiration date of March 30, 2012.
	b)	On January 14, 2010, the Company completed a private placement offering for gross proceeds of $90,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 200,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the private placement offering in the amount of $6,300 in cash and issued warrants to purchase up to 6,000 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $99.
	c)	On January 14, 2010, the Company completed a private placement offering for gross proceeds of $4,875,750 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 10,835,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. Financing costs related to this offering were $5,344.
	For the year ended December 31, 2009, the Company issued common stock as follows:
	a)	On November 14, 2009, the Company completed a private placement offering for gross proceeds of $315,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 700,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $22,050 in cash and issued warrants to purchase up to 21,000 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $627.

F-20

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.	ISSUANCES OF COMMON STOCK (continued)
	b)	On November 14, 2009, the Company completed a private placement offering for gross proceeds of $1,500,500 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 3,334,444 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $17,150 in cash and issued warrants to purchase up to 16,333 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $2,995. As of December 31, 2009, $63,000 of proceeds from this private placement offering was recorded as subscriptions receivable. This subscription is due from Mark Brennan, one of the Company’s independent directors. Subsequent to year end, the subscription was paid in full.
	c)	On October 9, 2009, the Company completed a private placement offering for gross proceeds of $2,661,750 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 5,915,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $174,983 in cash and issued warrants to purchase up to 166,650 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $5,313.
	d)	On October 9, 2009, the Company completed a private placement offering for gross proceeds of $328,500 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 730,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $16,695 in cash and issued warrants to purchase up to 15,900 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $656.
	e)	On September 2, 2009, the Company completed a private placement offering for gross proceeds of $695,750 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 1,546,111 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $35,000 in cash and issued warrants to purchase up to 33,333 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $4,107.

F-21

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.	ISSUANCES OF COMMON STOCK (continued)
	f)	On September 2, 2009, the Company completed a private placement offering for gross proceeds of $180,000 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 400,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. There was no commission paid to agents in connection with this offering. Financing costs related to this offering were $1,062.
	g)	On August 14, 2009, the Company completed a private placement offering for gross proceeds of $180,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 400,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. There was no commission paid or payable to agents in connection with this offering. Financing costs related to this offering were $1,063.
	h)	On August 14, 2009, the Company completed a private placement offering for gross proceeds of $388,710 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 863,800 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the Offering private placement in the amount of $20,648 in cash and issued warrants to purchase up to 19,665 shares of common stock. Financing costs related to this offering were $2,292.
	For the year ended December 31, 2008, the Company issued common stock as follows:
	a)	On January 28, 2008, the Company issued 20,000 shares of common stock from the exercise of stock options. The options had an exercise price of $0.05 per share and an expiration date of March 28, 2009.
	b)	On February 20, 2008, the Company issued an aggregate of 10,440,087 shares of its common stock, and 5,220,059 share purchase warrants to the former shareholders of CBI in connection with the acquisition. Each share purchase warrant issued by the Company entitles the holder to purchase one additional share of the Company’s common stock at a price of $2.39 per share of 5 years.
	Warrants associated with the 2010, 2009 and 2008 equity issuances do not constitute a registration payment arrangement.

F-22

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

7.	COMMON STOCK ISSUANCES (continued)
	During the year ended December 31, 2007, the Company issued common stock as follows:
	a)	The Company completed four tranches of a US and foreign private placement offering. A total of 8,188,000 unites at a price of $0.65 per unit were issued under the foreign private placement offering to non-US persons as contemplated under Regulation S of the Securities Act of 1933. The Company paid commissions totaling $106,925 and the agent also received warrants to purchase 70,500 shares of its common stock. Also, the Company issued 11,812,000 units at a price of $0.65 per unit under the US private placement offering to US accredited investors as defined in Rule 506 of Regulation D of the Securities Act. The Company paid commissions totaling $136,728 and the agent also received warrants to purchase 90,150 shares of its common stock.
	b)	On April 25, 2007, the Company affected a forward stock split on the basis of four new common shares for the cancellation of one old common share. Authorized capital was increased from 100,000,000 common shares, par value $0.001 each, to 400,000,000 common shares, par value $0.001 each. All authorized and issued shares have been retroactively adjusted.
	c)	Pursuant to the Columbus and Red Mountain Projects option assignment agreement entered into on March 30, 2007, the Company issued 30,000,000 common shares to NMC and, in return, received a deed of assignment to the option interests in the Columbus Project and to the Red Mountain Project.

F-23

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

8.	PRIVATE PLACEMENT WARRANTS
	A summary of investor warrant activity for the years ended December 31, 2010 and 2009 is as follows:

			Number of
			Shares		Exercise Price
	Outstanding and exercisable, December 31, 2008		15,380,709		$ 0.75 – 2.39
	Granted		7,217,648		0.75
	Forfeited/expired		--		--
	Outstanding and exercisable, December 31, 2009		22,598,357		$ 0.75 - 2.39
	Outstanding and exercisable, December 31, 2009		22,598,357		$ 0.75 - 2.39
	Granted		5,523,500		0.75
	Forfeited/expired		--		--
	Outstanding and exercisable, December 31, 2010		28,121,857		$ 0.75 - 2.39

The table above does not include warrants issued to employees, non-employee directors and consultants as they are included under “Share Based Compensation” in Note 9.

Amendment of Private Placement Warrants - On November 13, 2009, the Company made several amendments the 2009 US and Foreign Private Placement Offering warrants and the 2007 US and Foreign Private Placement Offering warrants.

The 2009 US and Foreign Private Placement Offering warrants were amended to extend the expiration date from June 30, 2012 to June 30, 2013 and by amending the conditions under which the Company may exercise the expiration date acceleration rights by increasing the minimum volume weighted average trading price threshold from $3.00 per share for 20 consecutive trading days to $4.50 per share for 20 consecutive trading days; and by requiring that the average daily trading volume for the Company’s common stock during the 20 consecutive trading days referred to above be not less than 0.2% of the Company’s free float during such 20 consecutive trading days.

The 2007 US and Foreign Private Placement Offering warrants were amended to extend the expiration date from June 30, 2012 to June 30, 2013, reduce the exercise price from $1.00 per share to $0.75 per share and by amending the conditions under which the Company may exercise the expiration date acceleration rights by increasing the minimum volume weighted average trading price threshold from $3.50 per share for 20 consecutive trading days to $4.50 per share for 20 consecutive trading days; and by requiring that the average daily trading volume for the Company’s common stock during the 20 consecutive trading days referred to above be not less than 0.2% of the Company’s free float during such 20 consecutive trading days.

On June 17, 2009, the Company extended the expiration date for the outstanding warrants issued by the Company under its US and Foreign Private Placement Offerings completed in 2007 to June 30, 2012. No other changes were made with respect to the terms and conditions of the warrants.

The Company determined that the amendments to the private placement warrants which were originally issued as part of equity transactions did not result in an expense to the Company. The warrants were not a component to any debt transaction, registration agreement or services rendered to the Company.

F-24

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION
	On March 27, 2007, the Board of Directors adopted the 2007 Stock Incentive Plan (the “Plan”). Under the terms of the Plan, options to purchase up to 6,000,000 shares of the common stock of the Company, subject to an increase each quarter equal to 15% of the increase in the total number of outstanding shares during the previous quarter, may be granted to officers, directors, employees and eligible consultants.
	At December 31, 2010, the Company had options outstanding that vest on three different types of vesting schedules:

	1.	Service-based;
	2.	Performance-based; and
	3.	Market-based.

For service-based and performance-based stock option grants the Company utilizes the Binomial Lattice pricing model to estimate the fair values of options and warrants granted in exchange for services. The Company used the following assumptions to estimate the fair value of the options granted:

			2010			2009
	Dividend yield		--			--
	Expected volatility		116 .8 - 118.7%			112.9 – 137.0%
	Risk-free interest rate		1.69 – 3.33 %			1.27 – 3.33 %
	Expected life (years)		2.75 – 8.0			3.0 – 6.5

For market-based stock option grants the Company utilizes a combination of a Monte Carlo simulation and a Trinomial Lattice function to estimate the fair values of options in exchange for services. The Company used the following assumptions to estimate the fair value of the options granted:

			2010
	Dividend yield		--
	Expected volatility		116 .8%
	Risk-free interest rate		2.96 %
	Expected life (years)		8.0

The expected life represents the weighted-average period the awards are expected to remain outstanding and is a derived output of the option pricing models. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s models. The models estimate the probability of exercise as a function of these variables based on the history of exercises and cancellations on past grants made by the Company. The requisite service period for market-based stock option awards is a derived output of the hybrid Monte Carlo -Trinomial Lattice model.

F-25

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION (continued)
	For grants awarded during 2010 and 2009 the expected volatility is based on the historical volatility levels of the Company’s common stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent contractual lives of the options.
	During the year ended December 31, 2010, the Company granted stock options and warrants as follows:
	a)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 200,000 shares of common stock to each of its two independent directors. The options are exercisable at $0.53 per share and vest as follows: 100,000 on the grant date, 50,000 on September 30, 2010 and 50,000 on December 31, 2010. The options expire five years after the particular vesting date.
	b)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 300,000 shares of common stock at $0.75 per share to the CEO. The options vest as follows: 50,000 on the grant date, 50,000 on December 31, 2010 and 50,000 every six months thereafter commencing on December 31, 2012. The options expire five years after the particular vesting date.
	c)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 100,000 shares of common stock at $0.75 per share to the CFO. The options vest as follows: 16,667 on the grant date, 16,667 on December 31, 2010 and 16,667 every six months thereafter. The final group of 16,665 options, vest on December 31, 2012. The options expire five years after the particular vesting date.
	d)	On July 22, 2010, the Company granted nonqualified market-based stock options for the purchase of 150,000 and 50,000 shares of common stock at $0.53 per share to the CEO and CFO, respectively. The options vest on the first date after the grant date that the closing price of the Company’s common stock exceeds $1.00 per share for twenty consecutive trading days. The options expire five years after the date that they vest. The requisite service periods for these stock option awards, as derived from the Monte Carlo - Trinomial Lattice model was determined to be one year.

F-26

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION (continued)
	e)	On July 22, 2010, the Company granted nonqualified performance-based stock options for the purchase of 150,000 and 50,000 shares of common stock at $0.53 per share to the CEO and CFO, respectively. The options vest upon the Board of Directors determining, by resolution, that the Company has, from the date of grant, made adequate and sufficient progress on the Company’s technical and feasibility programs for the Columbus Mineral Project. The options expire five years after the date that they vest.
		On the grant date, the Company determined that achievement of the performance condition was probable. The Company’s best estimate of the requisite service period was determined to be eight months. The Company reviewed and confirmed these determinations at December 31, 2010.
	f)	On March 8, 2010, the Company granted 200,000 options to an officer. The options are exercisable at $0.82 per share, vest at a rate of 25,000 options per fiscal quarter, beginning on March 31, 2010, and expire five years after the particular vesting date.
	g)	On March 3, 2010, the Company granted nonqualified stock options for the purchase of 67,197 shares of common stock at $0.81 per share to a director. The options were immediately vested and expire March 3, 2015.
	h)	On February 19, 2010, the Company granted 500,000 warrants to a consultant. The warrants are exercisable at $0.75 per share and expire on June 30, 2013. The warrants vest 25% at each quarter end from March 31, 2010 through December 31, 2010.
	i)	On January 7, 2010, the Company granted 3,300,000 warrants to a consultant. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. The warrants vest 25% on June 30, 2010, 25% on December 31, 2010, 25% on June 30, 2011 and 25% on December 31, 2011. The Company determined that sufficient consulting services had not been received during 2010 to satisfy the vesting requirements for the second tranche of warrants. The Company anticipates receipt of such services during 2011. After June 30, 2010, the Company will have the right to accelerate the expiration date of the vested warrants if the volume weighted average trading price for the shares is above $4.50 per share for twenty consecutive trading days.
	During the year ended December 31, 2009, the Company granted stock options and warrants as follows:

	a)	On August 11, 2009, the Company granted nonqualified stock options for the purchase of 250,000 shares of common stock at $0.48 per share to a director. 50,000 of the options vested immediately and expire on August 10, 2014. Of the remaining 200,000 options, 50,000 vest on December 31, 2009, June 30, 2010, December 31, 2010 and June 30, 2011. The options expire five years after the vesting date.
	b)	On August 19, 2009, the Company granted nonqualified stock options for the purchase of 20,000 shares of common stock at $0.48 per share to an employee. The options vested immediately and expire on August 19, 2014.

F-27

---

IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION (continued)
	c)	On December 17, 2009, the Company granted 200,000 warrants under a twenty month consulting agreement. In exchange for the warrants, the consultants paid the Company $20,000 and will represent and advise the Company in financing and investor relations matters. The warrants have an expiration date of December 17, 2012 and an exercise price of $0.55 per share. The warrants vested as follows: 50,000 immediately, 10,000 per month for the first three months with the balance vesting on the first day of the fourth month.
	d)	On December 24, 2009, the Company granted 300,000 warrants under a two year consulting agreement. In exchange for the warrants, the consultant will advise the President of the Company on financing, corporate structure, tax, marketing and operational matters. The warrants have an expiration date of December 31, 2014 and have an exercise price of $0.75 per share. The warrants vest 20% on December 31, 2009 and thereafter, 10% will vest at the end of each quarter through December 31, 2011. After June 30, 2010, the Company will have the right to accelerate the expiration date of the warrants if the volume weighted average trading price for the shares is above $4.50 per share for twenty consecutive trading days.

Total expense for the years ended December 31, 2010 and 2009 related to the granting and vesting of all share based payments was $1,232,927 and $88,323, respectively. Such expenses are included in general and administrative expense and mineral exploration and evaluation expense.

Cash received from the exercise of stock options amounted to $25,000 for the year ended December 31, 2010. Tax benefits realized from the exercise of stock options amounted to $71,750 for the year ended December 31, 2010. No stock options were exercised during the year ended December 31, 2009.

The following table summarizes the Company’s share based compensation activity for the years ended December 31, 2010 and 2009:

					Weighted
			Number of		Average
			Shares		Exercise Price
	Balance, December 31, 2008		3,954,719		$ 0.15
	Options granted		770,000		0.60
	Options expired		--		--
	Options forfeitures		--		--
	Options exercised		--		--
	Balance, December 31, 2009		4,724,719		0.23
	Options/warrants granted		5,267,197		0.72
	Options expired		(79,719	)	1.36
	Options forfeitures		--		--
	Options exercised		(500,000	)	0.05
	Balance, December 31, 2010		9,412,197		$ 0.50

F-28

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION (continued)
	The following table summarizes information about options and warrants granted during the year ended December 31, 2010:

	Number of Options and Warrants Granted During 2010	Exercise Price Equals, Exceeds or is Less than Mkt. Price of Stock on Grant Date	Weighted Average Exercise Price	Range of Exercise Price	Weighted Average Fair Value
	567,197	Equals	$ 0.76	$ 0.75 - $0.81	$ 0.27
	4,500,000	Exceeds	$ 0.71	$ 0.53 - $0.75	$ 0.37
	200,000	Less Than	$ 0.82	$ 0.82	$ 0.56

The following table summarizes information about options granted during the year ended December 31, 2009:

	Number of Options and Warrants Granted During 2009	Exercise Price Equals, Exceeds or is Less than Mkt. Price of Stock on Grant Date	Weighted Average Exercise Price	Range of Exercise Price	Weighted Average Fair Value
	270,000	Equals	$ 0.48	$0.48	$ 0.39
	500,000	Exceeds	$ 0.67	$0.55 - $0.75	$ 0.43
	--	Less Than	--	--	--

F-29

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9.	SHARE BASED COMPENSATION (continued)
	The following table summarizes the changes of the Company’s stock options and warrants issued for stock based compensation subject to vesting for the year ended December 31, 2010:

					Weighted Average
			Number of		Grant Date
			Shares		Fair Value
	Unvested, December 31, 2009		540,000		$ 0.46
	Granted		4,933,333		0.38
	Vested		(2,061,667	)	0.37
	Forfeited		--		--
	Unvested, December 31, 2010		3,411,666		$ 0.40

As of December 31, 2010, there was $954,896 of total unrecognized compensation cost related to unvested stock options and warrants. This cost is expected to be fully recognized as follows:

2011	$	909,637
2012		45,259
Total	$	954,896

F-30

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

10.	WARRANTS AND OPTIONS
	The following table summarizes all of the Company’s stock option and warrant activity for the years ended December 31, 2010 and 2009, including private placement warrants and share based payment stock options and warrants:

					Weighted
			Number of		Average
			Shares		Exercise Price
	Balance, December 31, 2008		19,335,428		$ 1.07
	Options granted		7,987,648		0.74
	Options expired		--		--
	Options forfeitures		--		--
	Options exercised		--		--
	Balance, December 31, 2009		27,323,076		0.97
	Options granted		10,790,697		0.74
	Options expired		(79,719	)	1.36
	Options forfeitures		--		--
	Options exercised		(500,000	)	0.05
	Balance, December 31, 2010		37,534,054		$ 0.92

F-31

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.	INCOME TAXES
	The Company is a Nevada corporation and is subject to federal income taxes. Nevada does not impose a corporate income tax.
	The income tax benefit consisted of the following for the years ended December 31, 2010 and December 31, 2009:

			December 31,			December 31,
			2010			2009
	Income tax benefit based on statutory tax rate	$	2,329,950		$	1,731,342
	Non-deductible and other		2,792			(2,865	)
	Change in valuation allowance		(366,797	)		(30,411	)
	Income tax benefit	$	1,965,945		$	1,698,066

Significant components of the Company’s net deferred income tax assets and liabilities at December 31, 2010 and December 31, 2009 were as follows:

			December 31,			December 31,
			2010			2009
	Deferred income tax assets:
	Net operating loss carryforward	$	5,541,704		$	3,698,657
	Option compensation		940,019			575,539
	Property, plant & equipment		122,898			--
	Unrealized losses on short-term investments		331			--
	Reclamation and remediation costs		96,368			96,368
	Gross deferred income tax asset		6,701,320			4,370,564
	Valuation allowance		(1,036,387	)		(669,590	)
			5,664,933			3,700,974
	Deferred income tax liabilities:
	Property, plant & equipment		--			2,317
	Acquisition related liabilities		11,067,191			11,067,191
	Net deferred income tax liability	$	5,402,258		$	7,368,534

A valuation allowance was established for deferred tax assets related to option compensation and accrued reclamation and remediation costs due to the uncertainty of realizing these deferred tax assets based on conditions existing at December 31, 2010 and December 31, 2009.

Deferred income tax liability was recorded on GAAP basis over income tax basis using the statutory federal rate with the corresponding increase in the purchase price allocation to the assets acquired.

F-32

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

11.	INCOME TAXES (continued)
	The resulting estimated future federal income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is reflected as an increase to the total purchase price which has been applied to the underlying mineral and Columbus project assets in the absence of there being a goodwill component associated with the acquisition transactions.
	The Company had cumulative net operating losses of approximately $15,833,440 and $10,567,591 as of December 31, 2010 and December 31, 2009, respectively for federal income tax purposes. Cumulative net operating losses from December 31, 2006 and previous years are effectively nil due to the annual limitation imposed by the Internal Revenue Code of 1986 as a result of the ownership percentage change limitations. The net operating loss carryforwards will expire between 2027 and 2030.
	The Company and its subsidiary file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statues of limitations, which may result in the payment of income taxes and/or a decrease in the net operating losses available for carryforwards. The Company is no longer subject to income tax examinations by US federal tax authorities for years prior to 2006. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company currently has no tax years under examination.
12.	COMPREHENSIVE LOSS
	The components of comprehensive loss, net of tax, were as follows for the year ended December 31, 2010:

			December 31,
			2010
	Net Loss	$	(4,691,054	)
	Other Comprehensive Loss, net of tax:
	Unrealized loss on short-term investments		(614	)
	Comprehensive Loss	$	(4,691,668	)

The tax effect of each component of comprehensive loss for the year ended December 31, 2010:

			December 31,
			2010
	Unrealized holding losses	$	(945	)
	Income tax benefit		331
	Total unrealized loss, net of tax	$	(614	)

For the year ended December 31, 2009, there was no other comprehensive loss recognized.

F-33

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

13.	PROPERTY RENTAL AGREEMENTS AND LEASES
	The Company, through its subsidiary CMI, has a lease agreement for mining claims with DDB Syndicate, an entity owned by related parties, including Douglas D.G. Birnie, Chief Executive Officer of the Company; Mr. Chizmar, a former director of the Company; three former officers and directors of CBI; Geotech Mining Inc., Jack Corp. and Wiser Corp. Geotech Mining Inc., Jack Corp. and Wiser Corp. are affiliates of Nanominerals Corp.
	The DDB Syndicate has leased the DDB Claims to CSM, a wholly owned subsidiary of the Company. The mining lease agreement (the “DDB Agreement”), between the DDB Syndicate and CSM, provides CSM with a lease, extending for approximately 5 years, with an option to purchase the DDB Claims at any time during the lease period. To maintain the lease rights, CSM paid the DDB Syndicate $130,000 by June 30, 2008, with annual rental payments thereafter of $30,000 per year, payable on June 30, 2009, 2010, and 2011, respectively. CSM may exercise its option to purchase the DDB Claims by paying a purchase price of $400,000, less any rental payments made by CSM prior to exercising the option, or paying the DDB Syndicate $10, plus the grant of a 2% royalty of net smelter returns on the DDB Claims.
	The Company paid the $30,000 rental payments due on June 30, 2010 and 2009, respectively. The payments consist of $3,651 in payments to each of the eight owners of DDB Syndicate including reimbursement of expenses of $792 to a company controlled by Douglas D.G. Birnie.
14.	COMMITMENTS AND CONTINGENCIES
	Lease obligations – The Company rents office space in Henderson, Nevada. The lease terms expired on September 1, 2008 and the Company continues to rent the existing space under month-to-month terms.
	Rental expense resulting from this operating lease agreement was $67,650 and $55,000 for the years ended December 31, 2010 and 2009, respectively.
	Columbus Project – Pursuant to the option assignment agreement dated March 30, 2007, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to NMC, one of the principal stockholders of the Company. The Columbus Project is further discussed in Note 5.
	Red Mountain Project – Pursuant to the option assignment agreement, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to NMC, one of the principal stockholders of the Company. The Red Mountain Project is further discussed in Note 6.

F-34

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

15.	ENVIRONMENTAL AND RECLAMATION ACTIVITIES
	The liabilities accrued for the reclamation and remediation costs at December 31, 2010 and December 31, 2009, were as follows:

			December 31,			December 31,
			2010			2009
	Exploration properties:
	Columbus	$	275,338		$	275,338
	Reclamation and remediation costs, long-term	$	275,338		$	275,338

The Company maintains reclamation bonds with the BLM in the amount of $908,368 as of December 31, 2010 and December 31, 2009, respectively.

16.	CONCENTRATION OF CREDIT RISK
	The Company maintains its cash accounts in financial institutions. Cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000 per financial institution. Additionally, all non-interest bearing transactional accounts are fully insured by the FDIC through December 31, 2012. The Company has never experienced a material loss or lack of access to its cash accounts; however, no assurance can be provided that access to the Company’s cash accounts will not be impacted by adverse conditions in the financial markets. At December 31, 2010, the Company had deposits in excess of FDIC insured limits in the amount of $759,120.
17.	RELATED PARTY TRANSACTIONS
	Pursuant to option assignment agreements related to both the Columbus and Red Mountain projects, the Company granted a 5% net smelter return royalty to NMC. NMC is the Company’s largest shareholder, owning approximately 33% of the Company’s outstanding common stock. The Columbus Project is further discussed in Note 5. The Red Mountain Project is further discussed in Note 6.
	During the year ended December 31, 2010, the Company utilized the services of NMC to provide technical assistance and financing related activities. These services related primarily to the Columbus project and the Red Mountain project.
	In addition to the above services, NMC provided dedicated use of its laboratory, instrumentation, milling equipment and research facilities. NMC provided invoices for these fees plus expenses.
	For the year ended December 31, 2010, the Company incurred total fees and reimbursements of expenses to NMC of $420,000 and $115,974, respectively, for a total of $535,974. At December 31, 2010, the Company had an outstanding balance due to NMC of $43,657.
	The Company also had an outstanding balance for accrued compensation to Douglas D.G. Birnie, its executive officer, of $9,375. The amount is payable to a company wholly owned by Douglas D.G. Birnie.
	The Company also had an outstanding balance for accrued director fees to Michael Steele of $14,158.

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IRELAND INC.
(AN EXPLORATION STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

17.	RELATED PARTY TRANSACTIONS (continued)
	Accounts payable – related party totaled $67,190 as of December 31, 2010.
	Due to related parties includes amounts due to former officers of the Company. At December 31, 2010, the remaining amount of due to related parties was $23,290.
	As further discussed in Note 13, the Company, through its subsidiary CMI, has a lease agreement for mining claims with DDB Syndicate, an entity owned by related parties, including Douglas D.G. Birnie, Chief Executive Officer of the Company; Mr. Chizmar, a former director of the Company; three former officers and directors of CBI; Geotech Mining Inc., Jack Corp. and Wiser Corp. Geotech Mining Inc., Jack Corp. and Wiser Corp. are affiliates of NMC. Rental payments to DDB Syndicate were $30,000 for the year ended December 31, 2010 and 2009, respectively.
	For the year ended December 31, 2010, the Company incurred fees of $21,066 for services performed by one of its independent directors, Mark Brennan, primarily for executive search assistance.
18.	CONCENTRATION OF ACTIVITY
	For the year ended December 31, 2010, the Company purchased services from two major vendors, Boart Longyear and NMC, in amounts exceeding 10% of total purchases and amounted to $461,988 and $535,974, respectively. NMC is a related party as further discussed in Note 17.
19.	SUBSEQUENT EVENTS
	Subsequent to year end, the Bureau of Land Management (“BLM”) recognized receipt of $875,000 face value treasury security as replacement for $775,000 of cash collateral on one of the Company’s reclamation bonds. At that time, the short term investments were reclassified to restricted investments held for reclamation bonds. The Company anticipates using the remaining value of the treasury security for future collateral requirements.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

None.

ITEM 9A. CONTROLS AND PROCEDURES.

Disclosure Controls and Procedures

We carried out an evaluation of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) as of December 31, 2010 (the “Evaluation Date”). This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the Evaluation Date.

Management's Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, for the Company.

Our internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with United States generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the financial statements.

Under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting, as of the Evaluation Date, based on the framework set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation under this framework, management concluded that our internal control over financial reporting was effective as of the Evaluation Date.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit us to provide only management's report in this annual report.

Changes in Internal Control Over Financial Reporting

As of the Evaluation Date, there were no changes in our internal control over financial reporting that occurred during the fiscal year ended December 31, 2010 that have materially affected, or that are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls and Procedures

Our management, including our Chief Executive Officer and the Chief Financial Officer, do not expect that the our controls and procedures will prevent all potential error and fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

ITEM 9B. OTHER INFORMATION.

None.

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PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE.

Directors and Executive Officers

Name	Age	Positions
Douglas D.G. Birnie	40	President, Chief Executive Officer, Secretary and Director
Robert D. McDougal	78	Chief Financial Officer, Treasurer and Director
David Z. Strickler, Jr.	45	Vice President of Finance and Administration
Mark H. Brennan	51	Director

Douglas D.G. Birnie. Mr. Birnie was appointed as our Chief Executive Officer, President and a member of our Board of Directors on June 29, 2007. Mr. Birnie was also appointed as our Secretary on March 30, 2007. Mr. Birnie was appointed as our President and Secretary, and as one of our directors pursuant to the terms of our assignment agreement with Nanominerals. Mr. Birnie graduated with a Bachelor of Commerce degree from the University of British Columbia in 1994. In 1995, Mr. Birnie was a founder of Columbus Group Communications Inc., a privately held internet solutions company. In 1998, Mr. Birnie received the Ernst and Young Entrepreneur of the Year award and the Business Development Bank of Canada Young Entrepreneur of the Year Award. During his tenure at Columbus Group, Mr. Birnie held the positions of CFO and COO until the company was acquired by TELUS Corp. in 2001. Mr. Birnie continued to work for TELUS Corp. as Director – Strategic Planning with the e.Solutions department until 2003.

Robert D. McDougal. Mr. McDougal was appointed as our Chief Financial Officer on March 30, 2007 and has served as a member of our Board of Directors since December 14, 2007. Mr. McDougal was also appointed as our Treasurer on January 23, 2008. Mr. McDougal was appointed as our Chief Financial Officer pursuant to the terms of our assignment agreement with Nanominerals. Mr. McDougal is a Certified Public Accountant. He began practicing public accounting in 1973 and established his own practice in 1981. The majority of his practice is focused on mining and mining related clients including public companies, private companies’ partnerships and individuals. Mr. McDougal was a Director and Officer of GEXA Gold Corporation, a publicly traded mining company, from 1985 to 2001. Mr. McDougal was one of the founders of Millennium Mining Corporation, which was subsequently merged into Gold Summit Corporation, a publicly traded company. He is the managing partner of GM Squared, LLC, which holds numerous mining claims. He served on the Nevada Society of Certified Public Accountants Committee on Natural Resources for seven years, four years as chairman. Prior to this time Mr. McDougal spent 20 years in the United States Air Force, retiring with the rank of Major. Mr. McDougal is currently a member of the Board of Directors of Searchlight Minerals Corp.

David Z. Strickler, Jr. Mr. Strickler was appointed as our Vice President of Finance and Administration on March 8, 2010. Mr. Strickler has worked in the construction and real estate industries for 15 years with expertise in both finance and operations. During the last 8 years, he served as the Executive VP Finance for a leading luxury homebuilder in Las Vegas, with operations involving between 80 and 120 employees. In addition, he owned and operated an accounting services business and was an owner of a snowboard manufacturing business. Mr. Strickler has a bachelor's degree in Accounting and an MBA, with a concentration in Finance from the Pennsylvania State University.

Mark H. Brennan. Mr. Brennan was appointed as a member of our Board of Directors on June 24, 2009. Mr. Brennan has served as the president of his own consulting firm, the Brennan Consulting Group, through which he has managed a number of long-term, multi-year management and operations consulting engagements in various business sectors. In addition to his ongoing management consulting practice, Mr. Brennan has also founded and operated a number of private companies beginning in the early 1990’s. Mr. Brennan is the founding chairman of the Vegas Valley Angels, a non-profit organization of accredited investors whose purpose is to search out, invest in, mentor and foster the development of new and developing companies located in the southwestern United States. Mr. Brennan is also an active member of the board of advisors for both the Nevada Center for Entrepreneurship and Technology (NCET) and the University of Nevada Las Vegas Center for Entrepreneurship. Mr. Brennan holds an MBA from the Harvard Business School and a MA in Management from National University. Early in Mr. Brennan’s career he served his country for eight years as a fighter pilot and instructor pilot with the United States Air Force after earning his BS degree from the United States Air Force Academy.

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TERMS OF OFFICE

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our stockholders or until removed from office in accordance with our bylaws. Our officers are appointed by our Board of Directors and hold office until removed by the Board.

SIGNIFICANT EMPLOYEES AND CONSULTANTS

Nanominerals Corp. Nanominerals Corp. (“Nanominerals”) is a private company controlled by its sole officer and director Dr. Charles A. Ager. Nanominerals is our largest shareholder and acts as a consultant to us on technical exploration and financial matters. In addition, Nanominerals owns a 5% royalty interest on any net smelter returns from either the Columbus Project or the Red Mountain Project.

Dr. Ager is an accomplished geophysical engineer with over forty years experience in the mining industry, combining an extensive academic background with international business development experience in the founding of several successful mining enterprises. Dr. Ager earned a PhD in Geophysics and a Master of Science (M.Sc) in Geophysics from the University of British Columbia. Dr. Ager attended California State University in Sacramento, California for his Bachelor of Arts in Math/Physics. He graduated with honors in 1968.

Throughout his career, Dr. Ager has been a trailblazer in the mining industry. Dr. Ager has discovered and/or participated in the discovery of numerous metal deposits throughout Canada and the United States. He is also the developer and owner of a number of patents and intellectual property rights for technological innovations in the mining field. Through Nanominerals, Dr. Ager developed ways of using nanotechnology to discover several precious metal deposits. Dr. Ager is also responsible for inventing the satellite/electron microscope technology that has led to the identification of a new class of gold deposits in the Southwestern United States. Some of the mineral deposits that Dr. Ager was critically involved in as either developer or discoverer include the Jamestown Gold Deposit & Mine in the Mother Lode District in Jamestown, California; the Glendale Gold Deposits in the N. Glendale Basin in Clark County, Nevada; the Eldorado Gold Deposit in the Eldorado Valley in Clark County, Nevada; the Pine Tree Gold Deposit in the Mother Lode District in Mariposa County, California; and the Rich Gulch Gold Deposit in the Mother Lode District in Plumas County, California.

The Company’s President and Chief Executive Officer, Douglas D.G. Birnie, owns a 3.5% interest in Nanominerals.

AUDIT COMMITTEE

Our audit committee is composed of Mark H. Brennan and Robert D. McDougal. Mr. Brennan and Mr. McDougal are “audit committee financial experts” as defined by the applicable rules of the SEC. Mr. Brennan is currently the sole independent member of our audit committee. Mr. McDougal is not independent as he also acts as our Chief Financial Officer and Treasurer.

Michael A. Steele resigned from our audit committee, effective December 31, 2010.

CODE OF ETHICS

We adopted a Code of Ethics applicable to our officers and directors which is a "code of ethics" as defined by applicable rules of the SEC. If we make any amendments to our Code of Ethics other than technical, administrative, or other non-substantive amendments, or grant any waivers, including implicit waivers, from a provision of our Code of Ethics to our Chief Executive Officer, Chief Financial Officer, or certain other finance executives, we will disclose the nature of the amendment or waiver, its effective date and to whom it applies in a current report on Form 8-K filed with the SEC. A copy of our Code of Ethics was attached as an exhibit to our Annual Report filed with the SEC on September 28, 2004.

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SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Exchange Act requires our executive officers and directors, and persons who beneficially own more than 10% of our equity securities (collectively, the “Reporting Persons”), to file reports of ownership and changes in ownership with the SEC. Reporting Persons are required by SEC regulation to furnish us with copies of all forms they file pursuant to Section 16(a). Based on our review of the copies of such forms received by us, other than as described below, no other reports were required for those persons.

The following persons have, during our 2010 fiscal year, failed to file, on a timely basis, the identified reports required by Section 16(a) of the Exchange Act:

	Number of Late	Transactions Not	Known Failures to File
Name and Principal Position	Reports	Timely Reported	a Required Form
David Z. Strickler, Jr.,
Vice President of Finance and	1	1	0
Administration

ITEM 11. EXECUTIVE COMPENSATION.

COMPENSATION TO EXECUTIVE OFFICERS

The following table sets forth the total compensation paid or accrued to our named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K during our last two completed fiscal years.

	(1)	Represents consulting fees paid or accrued to a limited liability company of which Mr. Birnie is the sole member for services provided by Mr. Birnie as an executive officer and director of Ireland.
	(2)	Mr. Birnie was granted options to purchase 300,000 shares of our common stock at a price of $0.75 per share and options to purchase an additional 300,000 shares of our common stock at a price of $0.53 per share. The options exercisable at $0.75 per share vest and become exercisable at a rate of 50,000 shares every six months. 150,000 of the options exercisable at $0.53 per share will vest and become exercisable on the first date that our shares trade at or above $1.00 per share for 20 consecutive trading days, and the remaining 150,000 options exercisable at $0.53 per share will vest and become exercisable upon our Board of Directors determining that we have made adequate and sufficient progress on our technical and feasibility programs for our Columbus Project. All 600,000 options granted will immediately vest and become exercisable in the event of a change in control of the Company. Each option expires 5 years after the particular grant date. Mr. Birnie is also a 1/8 owner in the DDB Syndicate, which owns the DDB Claims at our Columbus Project. Mr. Birnie receives 1/8 of any payment made to the DDB Syndicate.

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	(3)	Mr. McDougal was granted options to purchase 100,000 shares of our common stock at a price of $0.75 per share and options to purchase an additional 100,000 shares of our common stock at a price of $0.53 per share. The options exercisable at $0.75 per share vest and become exercisable in equal increments every six months. 50,000 of the options exercisable at $0.53 per share will vest and become exercisable on the first date that our shares trade at or above $1.00 per share for 20 consecutive trading days, and the remaining 50,000 options exercisable at $0.53 per share will vest and become exercisable upon our Board of Directors determining that we have made adequate and sufficient progress on our technical and feasibility programs for our Columbus Project. All 200,000 options granted will immediately vest and become exercisable in the event of a change in control of the Company. Each option expires 5 years after the particular grant date.
	(4)	Mr. Strickler was granted options to purchase 200,000 share of our common stock at a price of $0.82 per share. The options granted to Mr. Strickler vest at a rate of 25,000 options per fiscal quarter, beginning March 31, 2010 and expire 3 years after the particular vesting date. All 200,000 options granted will immediately vest and become exercisable in the event of a change of control of the Company.

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END

The following table provides information concerning unexercised options for each of our named executive officers, as that term is defined in Item 402(m)(2) of Regulation S-K as of our fiscal year end of December 31, 2010.

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Notes:

(1)	300,000 options granted to Mr. Birnie vest and become exercisable at a rate of 50,000 shares every six months commencing June 30, 2010.
(2)	150,000 options will vest on the first date after the date that the closing price for our common stock (as quoted by the principal market or exchange on which such shares trade) exceeds $1.00 per share for 20 consecutive trading days and the options will expire 5 years after the vesting date.
(3)	150,000 options will vest upon our Board of Directors determining that the Issuer has made adequate and sufficient progress on its technical and feasibility programs for its Columbus Mineral Project, and the options will expire 5 years after the vesting date.
(4)	100,000 options granted to Mr. McDougal vest and become exercisable in equal installments every six months commencing June 30, 2010.
(5)	50,000 options will vest on the first date after the date that the closing price for our common stock (as quoted by the principal market or exchange on which such shares trade) exceeds $1.00 per share for 20 consecutive trading days and the options will expire 5 years after the vesting date.
(6)	50,000 options will vest upon our Board of Directors determining that the Issuer has made adequate and sufficient progress on its technical and feasibility programs for its Columbus Mineral Project, and the options will expire 5 years after the vesting date.
(7)	200,000 options granted to Mr. Strickler vest at a rate of 25,000 options per fiscal quarter, beginning March 31, 2010.

DIRECTOR COMPENSATION

The following table sets forth the compensation paid to our directors during our December 31, 2010 fiscal year, other than directors who were also named executive officers as that term is defined in Item 402(m)(2). Compensation paid to directors who were also named executive officers during our December 31, 2010 fiscal year is set out in the tables above.

	Notes:
	(1)	Since January 1, 2010, we have compensated our independent directors at a rate of $3,000 per month.
	(2)	We granted Mr. Brennan options to purchase 200,000 shares of our common stock at an exercise price of $0.53 per share. 100,000 of the options vested on June 30, 2010, 50,000 of the options vested on September 30, 2010 and an additional 50,000 options vested on December 31, 2010. These options were granted to Mr. Brennan in addition to the cash compensation he is entitled to as an independent member of our Board of Directors. On March 3, 2010, we issued to Mr. Brennan options to purchase 67,197 shares of our common stock at an exercise price of $0.81 per share, expiring March 2, 2015.
	(3)	Other Compensation paid to Mr. Brennan consisted of the following: (1) $16,930 in cash payments in lieu of stock options; (2) $21,066 for consulting fees primarily related to executive search assistance; and (3) $6,000 for travel pay.
	(4)	On December 7, 2010, Mr. Steele resigned from our Board of Directors effective December 31, 2010. Mr. Steele was granted options to purchase 200,000 shares of our common stock at an exercise price of $0.53 per share. 100,000 of the options vested on June 30, 2010, 50,000 of the options vested on September 30, 2010 and the remaining 50,000 options vested on December 31, 2010. Each of the options held by Mr. Steele automatically ceased to be exercisable under their terms 30 days after his resignation.

EMPLOYMENT CONTRACTS

On February 23, 2010, our Board of Directors approved an increase in the compensation payable to Douglas D.G. Birnie, our Chief Executive Officer, President and Secretary. Mr. Birnie’s compensation was increased from $108,000 in 2009 to $225,000 per year, retroactive to January 1, 2010. The compensation payable to Mr. Birnie is paid to a limited liability company of which Mr. Birnie is the sole member. We do not have a written compensation contract with Mr. Birnie or his limited liability company.

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On February 26, 2010, our Board of Directors approved an increase in the compensation to Robert D. McDougal, our Chief Financial Officer and Treasurer from $48,000 in 2009 to $84,000 per year, retroactive to January 1, 2010. The Company does not have a written compensation contract with Mr. McDougal.

David Z. Strickler, Jr.’s employment contract entitles him to a salary of $150,000 per year. In addition, we granted to Mr. Strickler options to purchase 200,000 shares of our common stock at a price of $0.82 per share. The options granted to Mr. Strickler vest at a rate of 25,000 options per fiscal quarter, beginning March 31, 2010, and expire five years after the particular vesting date.

Upon a change in control, all of the options granted to Mr. Birnie, Mr. McDougal and Mr. Strickler in 2010 will automatically vest and become exercisable.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

EQUITY COMPENSATION PLANS

The following table sets forth certain information concerning all equity compensation plans previously approved by stockholders and all previous equity compensation plans not previously approved by stockholders, as of the most recently completed fiscal year.

Equity Compensation Plan Information

	(1)	Includes options and warrants to purchase an aggregate of 4,400,000 shares of our common stock issued to consultants outside of our 2007 Stock Incentive Plan (see below).
	(2)	Our 2007 Stock Incentive Plan contains provisions that automatically increase the number of shares available for issuance (see below).

2007 Stock Incentive Plan

On March 27, 2007, we established our 2007 Stock Incentive Plan (the “2007 Plan”). The purpose of the 2007 Plan is to enhance the long-term stockholder value of the Company by offering opportunities to our directors, officers, employees and eligible consultants and any entity that directly or indirectly is in control of or is controlled by the Company (a “Related Company”) to acquire and maintain stock ownership in the Company in order to give these persons the opportunity to participate in our growth and success, and to encourage them to remain in our service or in the service of a Related Company.

The 2007 Plan is administered by our Board of Directors or by a committee of two or more directors appointed by our Board of Directors (the "Plan Administrator"). Subject to the provisions of the 2007 Plan, the Plan Administrator has full and final authority to grant the awards of stock options and to determine the terms and conditions of the awards and the number of shares to be issued pursuant thereto. The 2007 Plan authorizes the grant of options that are intended to qualify as “incentive stock options” under the Internal Revenue Code of 1986 or nonqualified stock options.

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All of our employees and members of our Board of Directors are eligible to be granted options. Individuals who have rendered or are expected to render advisory or consulting services to us are also eligible to receive options so long as they do not provide capital raising services or promote or maintain a market for our securities. Upon adoption, the maximum number of shares of our common stock with respect to which options or rights could be granted under the 2007 Plan to any participant was 6,000,000 shares. The 2007 Plan contains an automatic adjustment provision where the number of shares authorized to be subjected to option grants increases on the first day of each quarter beginning with the fiscal quarter commencing July 1, 2007 by the lesser of the following amounts: (1) 15% of the total number of outstanding shares of the Company’s Common Stock, less any shares that were previously available under the 2007 Plan and any shares available under any other stock option plan that we may adopt; or (2) a lesser number of shares of Common Stock as may be determined by our Board of Directors, subject to certain adjustments to prevent dilution.

The exact terms of the option granted are contained in an option agreement between us and the person to whom such option is granted. Eligible employees are not required to pay anything to receive options. The exercise price for options intending to qualify as incentive stock options must be no less than 100% of the fair market value of our common stock on the date of grant. The exercise price for nonqualified stock options is determined by the Plan Administrator but may not be less than 75% of the fair market value of our common stock on the date of the grant. Fair market value for purposes of the 2007 Plan is calculated based on the price of our common stock during the 10 trading days prior to the grant date. An option holder may exercise options from time to time, subject to vesting. Options will vest immediately upon death or disability of a participant and upon certain change of control events.

The Plan Administrator may amend the 2007 Plan at any time and in any manner, however no recipient of any award may, without his or her consent, be deprived thereof or of any of his or her rights thereunder or with respect thereto as a result of such amendment or termination.

The 2007 Plan terminates on March 27, 2017 unless sooner terminated by action of our Board of Directors. No option is exercisable by any person after such expiration. If an award expires, terminates or is canceled, the shares of our Common Stock not purchased thereunder may again be made available for issuance under the 2007 Plan.

Options and Warrants Granted to Consultants Outside of 2007 Plan

At the end of our 2010 fiscal year, we had the following outstanding options and warrants that had been issued outside of our 2007 Plan to certain consultants in exchange for their services:

	(a)	Options to purchase 100,000 shares of our common stock exercisable at a price of $1.75 per share, expiring on August 15, 2017.
	(b)	Warrants to purchase up to 200,000 shares of our common stock at a price of $0.55 per share, expiring on December 17, 2012. 50,000 of the warrants were vested at the date of grant, with the remaining warrants vesting at a rate of 10,000 warrants per month to March 1, 2010, with the remaining 120,000 warrants vesting on April 1, 2010.
	(c)	Warrants to purchase up to 300,000 shares of our common stock exercisable at a price of $0.75 per share, expiring on December 31, 2014. 60,000 of these warrants vested and became exercisable on December 31, 2009. An additional 30,000 warrants will vest and become exercisable at the end of each of our fiscal quarters beginning with our fiscal quarter ending March 31, 2010 and ending with our fiscal quarter ending December 31, 2011. Any warrants that have not yet vested will immediately vest upon any of the following events:
		(i)	The acquisition of more than 50% of the Company’s outstanding shares of common stock by any person other than an affiliate of the Company, an entity controlled by or under common control with an affiliate of the Company or a wholly owned subsidiary of the company; or
		(ii)	The sale by the Company of a greater than 50% interest in the Columbus Project.

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Upon termination of the services agreement, any warrants that have not vested will immediately terminate while any vested warrants shall continue to be exercisable as set out above. We may accelerate the expiration date of these warrants at any time after June 30, 2010 if:

	(i)	the volume weighted average price (“VWAP”) for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
	(ii)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.

	(d)	Warrants to purchase up to 3,300,000 shares of our common stock exercisable at a price of $0.75 per share, expiring on June 30, 2013. The warrants vest at a rate of 825,000 warrants every six months beginning June 30, 2010 and ending December 31, 2011, provided that the warrant holder continues to provide the contracted services without interruption through the particular vesting date. (As of the date of this Annual Report, only 825,000 of these warrants have vested and become exercisable as the consultant has not provided the contracted for services through the contracted vesting dates, including December 31, 2010. For disclosure purposes, we have treated the remaining warrants as outstanding but unvested.) Any warrants that have not yet vested will immediately vest upon any of the following events:
		(i)	The acquisition of more than 50% of the Company’s outstanding shares of common stock by any person other than an affiliate of the Company, an entity controlled by or under common control with an affiliate of the Company or a wholly owned subsidiary of the company;
		(ii)	The sale by the Company of a greater than 50% interest in the Columbus Project; or
		(iii)	The approval by the Company’s Board of Directors of a tender offer (as that term is defined in the Exchange Act) for more than 50% of the Company’s outstanding shares made by a person introduced to the Company by the consultant.
		Upon termination of the services agreement, any warrants that have not vested will immediately terminate while any vested warrants shall continue to be exercisable as set out above. We may accelerate the expiration date of these warrants at any time after June 30, 2010 if:
		(i)	the volume weighted average price (“VWAP”) for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
		(ii)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.
	(e)	Warrants to purchase 500,000 shares of our common stock, exercisable at a price of $0.75 per share and expiring on June 30, 2013. 125,000 of the warrants granted vested and became exercisable on March 31, 2010. An additional 125,000 warrants will vest and become exercisable at the end of each of our fiscal quarters beginning with our fiscal quarter ending June 30, 2010 and ending with our fiscal quarter ending December 31, 2010. Any warrants that have not yet vested will immediately vest upon any of the following events:
		(i)	The acquisition of more than 50% of the Company’s outstanding shares of common stock by any person other than an affiliate of the Company, an entity controlled by or under common control with an affiliate of the Company or a wholly owned subsidiary of the company; or
		(ii)	The sale by the Company of a greater than 50% interest in the Columbus Project.

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Upon termination of the services agreement, any warrants that have not vested will immediately terminate while any vested warrants shall continue to be exercisable as set out above. We may accelerate the expiration date of these warrants at any time after June 30, 2010 if:

	(i)	the volume weighted average price (“VWAP”) for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
	(ii)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information concerning the number of shares of our common stock owned beneficially as of March 29, 2011 by: (i) each person (including any group) known to us to own more than five percent (5%) of any class of our voting securities, (ii) each of our directors and each of our named executive officers (as defined under Item 402(m)(2) of Regulation S-K), and (iii) officers and directors as a group. Unless otherwise indicated, the shareholders listed possess sole voting and investment power with respect to the shares shown.

* Less than 1%.

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(1)	Under Rule 13d-3, a beneficial owner of a security includes any person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise has or shares: (i) voting power, which includes the power to vote, or to direct the voting of shares; and (ii) investment power, which includes the power to dispose or direct the disposition of shares. Certain shares may be deemed to be beneficially owned by more than one person (if, for example, persons share the power to vote or the power to dispose of the shares). In addition, shares are deemed to be beneficially owned by a person if the person has the right to acquire the shares (for example, upon exercise of an option) within 60 days of the date as of which the information is provided. In computing the percentage ownership of any person, the amount of shares outstanding is deemed to include the amount of shares beneficially owned by such person (and only such person) by reason of these acquisition rights. As a result, the percentage of outstanding shares of any person as shown in this table does not necessarily reflect the person’s actual ownership or voting power with respect to the number of shares of common stock actually outstanding. As of March 29, 2011, there were 122,434,442 shares of our common stock issued and outstanding.
(2)	The shares listed as beneficially owned directly by Mr. Birnie consists of: (i) 1,900,000 shares of our common stock held by Mr. Birnie; (ii) warrants to acquire 100,000 shares of our common stock at an exercise price of $0.75 per share; (iii) options to acquire 2,200,000 shares of our common stock at an exercise price of $0.05 per share; and (iv) options to acquire 100,000 shares of our common stock at an exercise price of $0.75 per share. The shares listed as beneficially owned indirectly by Mr. Birnie consists of (i) 100,000 shares of our common stock held by Dosa Consulting, LLC, a company controlled by Mr. Birnie; and (ii) warrants held by Dosa Consulting, LLC to acquire 50,000 shares of our common stock at an exercise price of $0.75 per share. Mr. Birnie also owns a 3.5% interest in Nanominerals Corp. The shares listed as beneficially owned by Mr. Birnie do not include any part of the shares of our common stock owned by Nanominerals as Mr. Birnie does not have any voting or investment power over the shares owned by Nanominerals. Mr. Birnie also directly owns additional options to acquire: (i) 200,000 shares of our common stock at a price of $0.75 per share, vesting at a rate of 50,000 shares every six months beginning June 30, 2011 and expiring 5 years after the particular vesting date; (ii) 150,000 shares of our common stock at a price of $0.53 per share that will vest on the first date after the date that the closing price for our common stock (as quoted by the principal market or exchange on which such shares trade) exceeds $1.00 per share for 20 consecutive trading days, expiring 5 years after the vesting date; and (iii) 150,000 shares of our common stock at a price of $0.53 per share that will vest upon our Board of Directors determining that we have made adequate and sufficient progress on our technical and feasibility programs for the Columbus Project, expiring 5 years after the vesting date. These options do not vest within the next 60 days and have not been included in the number of shares listed as being beneficially owned by him.
(3)	The shares listed as beneficially owned by Mr. McDougal consists of: (i) 1,200,000 shares of our common stock held by Mr. McDougal; (ii) options to acquire 500,000 shares of our common stock at an exercise price of $0.05 per share ; and (iii) options to acquire 33,334 shares of our common stock at an exercise price of $0.75 per share. Mr. McDougal also owns additional options to acquire (i) 66,666 shares of our common stock at a price of $0.75 per share, vesting at a rate of 16,667 shares every six months beginning June 30, 2011 (16,665 on December 31, 2012) and expiring 5 years after the particular vesting date; (ii) 50,000 shares of our common stock at a price of $0.53 per share that will vest on the first date after the date that the closing price for our common stock (as quoted by the principal market or exchange on which such shares trade) exceeds $1.00 per share for 20 consecutive trading days, expiring 5 years after the vesting date; and (iii) 50,000 shares of our common stock at a price of $0.53 per share that will vest upon our Board of Directors determining that we have made adequate and sufficient progress on our technical and feasibility programs for the Columbus Project, expiring 5 years after the vesting date. These options do not vest within the next 60 days, and have not been included in the number of shares listed as being beneficially owned by him.
(4)	The shares listed as beneficially owned by Mr. Strickler consist (i) 7,500 shares of our common stock held by Mr. Strickler; and (ii) options to acquire 125,000 shares of our common stock at an exercise price of $0.82 per share. Mr. Strickler also owns options to acquire an additional 75,000 shares of our common stock also at $0.82 per share. These options do not vest within the next 60 days, and have not been included in the number of shares listed as being beneficially owned by him.
(5)	The shares listed as beneficially owned by Mr. Brennan consists of: (i) 165,000 shares of our common stock held by Mr. Brennan; (ii) warrants to purchase 70,000 shares of our common stock at an exercise price of $0.75 per share; (iii) options to acquire 200,000 shares of our common stock at an exercise price of $0.48 per share; (iv) options to acquire 200,000 shares of our common stock at an exercise price of $0.53 per share; and (v) options to acquire 67,197 shares of our common stock at an exercise price of $0.81 per share. Mr. Brennan also owns options to acquire an additional 50,000 shares of our common stock at a price of $0.48 per share that do not vest within the next 60 days, and have not been included in the number of shares listed as being beneficially owned by him.
(6)	The shares listed as beneficially owned by Mr. Steele consists of 500,000 shares of our common stock. The shares listed as beneficially owned indirectly by Mr. Steele consists of (i) 400,000 shares held by Avonlea Ventures #2 Inc. and (ii) warrants held by Avonlea Ventures #2 Inc. to acquire an additional 200,000 shares at a price of $0.75 per share. Mr. Steele owns a 50% interest in Avonlea Ventures #2 Inc. Mr. Steele resigned as a member of our Board of Directors effective December 31, 2010. All outstanding options owned by Mr. Steele expired 30 days after his resignation.

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(7)

The sole officer and director of Nanominerals is Dr. Charles A. Ager. In addition, pursuant to a shareholders agreement, Dr. Ager has control over a majority of the shareholder voting power of Nanominerals. As such, Dr. Ager has voting and dispositive power over the 40,150,000 shares of our common stock listed as beneficially owned by Nanominerals and we have listed those shares as being indirectly beneficially owned by him. Individually, Dr. Ager owns 2,100,000 shares of our common stock. Also included in the number of shares listed as being indirectly beneficially owned by Dr. Ager are 300,000 shares of our common stock owned by Dr. Ager’s wife. The shares owned by Dr. Ager and Mrs. Ager have not been included in the shares beneficially owned by Nanominerals. Mr. Birnie also owns a 3.5% interest in Nanominerals Corp. The shares listed as beneficially owned by Mr. Birnie have not been included in the shares beneficially owned by Nanominerals.

CHANGES IN CONTROL

We are not aware of any arrangement which may result in a change in control in the future.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

Except as disclosed below, none of the following parties has, during our December 31, 2010 fiscal year, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:

	(a)	Any of our directors or officers;
	(b)	Any person proposed as a nominee for election as a director;
	(c)	Any person who beneficially owns, directly or indirectly, more than 5% of our outstanding common stock; or
	(d)	Any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, sister-in-law of any person listed in (a) to (c), above, or any person (other than a tenant or employee) who shares the household of any person listed in (a) to (c), above.

DDB Claims

Mr. Chizmar, a former member of our Board of Directors, and a limited liability company controlled by Douglas D.G. Birnie, our CEO, President and Secretary, and a member of our Board of Directors, are each the owners of a 1/8 interest in the mining syndicate known as the DDB Syndicate. The former officers and directors of CBI (other than Mr. Chizmar), and an affiliate of one of those former officers and directors of CBI, collectively own a 3/8 interest in the DDB Syndicate. The remaining 3/8 interest in the DDB Syndicate is collectively owned by affiliates of Nanominerals Corp. (“Nanominerals”). Mr. Birnie is also the owner of a 3.5% interest in Nanominerals. Mr. Birnie, Nanominerals and Nanominerals’ affiliates acquired their respective interests in the DDB Syndicate and the DDB Claims prior to his and their involvement with the Company. Mr. Birnie acquired his interest in Nanominerals prior to their involvement with the Company. On November 30, 2007, the DDB Syndicate leased the DDB Claims to Columbus S.M. LLC (“CSM”), formerly a wholly owned subsidiary of CBI, and now a wholly owned subsidiary of the Company. To date, we have paid the DDB Syndicate $190,000 under the terms of the DDB Agreement, and we must pay the DDB Syndicate a rental payment of $30,000 on June 30, 2011 to maintain our lease rights. 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 a purchase price of $400,000 (with all previously made rental payments credited against such purchase price); or
	(b)	paying the DDB Syndicate $10, plus the grant of a 2% royalty of net smelter returns on the DDB Claims.

As the owners of a 1/8 interest each in the DDB Syndicate, Mr. Chizmar and a limited liability company controlled by Mr. Birnie are each entitled to 1/8 of any amounts paid by us under the DDB Agreement. During the year ended December 31, 2010, we paid a total of $30,000 to the DDB Syndicate under the terms of the DDB Agreement.

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Nanominerals Corp.

Nanominerals Corp. (“Nanominerals”) is the owner of 40,150,000 shares, or 32.9%, of our common stock. Nanominerals acts as a consultant to us on technical exploration and financial matters. Mr. Birnie is the owner of a 3.5% interest in Nanominerals. Mr. Birnie acquired his interest in Nanominerals prior to his and their involvement with our Company. During the year ended December 31, 2010, we incurred fees totaling $420,000 due to Nanominerals for services provided. In addition, during the year ended December 31, 2010, we reimbursed Nanominerals a total of $115,974 in respect of expenses incurred by Nanominerals in relation to our exploration and development activities on the Columbus Project and the Red Mountain Project. At December 31, 2010, we had an outstanding balance due to Nanominerals of $43,657.

Affiliates of Nanominerals are also the owners of a 3/8 interest in the DDB Syndicate, which owns the DDB Claims as described above.

DIRECTOR INDEPENDENCE

Our common stock is quoted on the OTC Bulletin Board interdealer quotation system, which does not have director independence requirements. In determining whether any of our directors are independent directors, we have applied the definition for independence set out in NASDAQ Rule 5605(a)(2). In applying this definition, we have determined that Mark H. Brennan is an independent director. Neither of Douglas D.G. Birnie nor Robert D. McDougal qualifies as an independent member of our Board of Directors.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

The aggregate fees billed for the two most recently completed fiscal years for professional services rendered by the principal accountant for the audit of our annual financial statements and review of the financial statements included in our Quarterly Reports on Form 10-Q and services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal periods were as follows:

	Year Ended December 31, 2010	Year Ended December 31, 2009
Audit Fees	$61,218	$77,824
Audit-Related Fees	Nil	Nil
Tax Fees	Nil	Nil
All Other Fees	Nil	Nil
Total	$61,218	$77,824

Our audit committee reviewed the qualifications of Brown Armstrong Accountancy Corporation, prior to engaging them as our auditors in accordance with Rule 2-01(c)(7)(i)(A).

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

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

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Exhibit
Number	Description of Exhibit
10.3	Letter Agreement dated July 22, 2006 among Columbus Brine Inc., Columbus S.M. LLC and Nanominerals Corp., assigned to the Company by Nanominerals Corp.(11)
10.4	Letter Agreement dated March 15, 2007 between Red Mountain Mining and Nanominerals Corp., assigned to the Company by Nanominerals Corp. (11)
10.5	Agency Agreement dated effective as of June 19, 2007 between the Company and S & P Investors, Inc. (5)
10.6	Amendment Agreement to Assignment Agreement among the Company, Nanominerals Corp. and Lorrie Archibald, dated for reference as of August 8, 2007.(6)
10.7	Consulting Agreement between the Company and RJ Falkner & Company, Inc., dated for reference as of November 5, 2007.(7)
10.8	Consultant Non-Qualified Stock Option Agreement between the Company and R. Jerry Falkner, dated effective as of November 5, 2007.(7)
10.9	Agreement and Plan of Merger dated December 14, 2007 among the Company, Columbus Brine Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr.(8)
10.10	Amendment Agreement to Agreement and Plan of Merger entered into on January 31, 2008 among the Company, CBI Acquisition, Inc., Columbus Brine Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr.(9)
10.11	Mining Lease Agreement dated November 30, 2007 between DDB Syndicate and Columbus S.M., LLC.(12)
10.12	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.(14)
10.13	Non-Qualified Stock Option Agreement for Robert D. McDougal. (14)
10.14	Non-Qualified Stock Option Agreement for Michael A. Steele. (14)
10.15	Non-Qualified Stock Option Agreement for Mark H. Brennan. (14)
10.16	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr.
14.1	Code of Ethics. (10)
21.1	List of Subsidiaries.
23.1	Consent of Brown Armstrong Accountancy Corporation.
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.

(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 June 21, 2007.
(6)	Filed as an exhibit to our Current Report on Form 8-K filed on August 14, 2007.
(7)	Filed as an exhibit to our Current Report on Form 8-K filed on November 9, 2007.
(8)	Filed as an exhibit to our Current Report on Form 8-K filed on December 20, 2007.
(9)	Filed as an exhibit to our Current Report on Form 8-K filed on February 6, 2008.
(10)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2003, filed on September 28, 2004.
(11)	Filed as a Schedule to Exhibit 10.2.
(12)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2007 filed on March 31, 2008.
(13)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2009 filed on April 15, 2010.
(14)	Filed as an exhibit to our Current Report on Form 8-K filed on July 28, 2010.

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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:	March 30, 2011	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			(Principal Executive Officer)
Date:	March 30, 2011	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:	March 30, 2011	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			Director
Date:	March 30, 2011	By:	/s/ Robert D. McDougal
			ROBERT D. MCDOUGAL
			Chief Financial Officer and Treasurer
			Director
Date:	March 30, 2011	By:	/s/ Mark H. Brennan
			MARK H. BRENNAN
			Director

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