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

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2012

[   ] 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)

Not Applicable
(Former name, former address and former fiscal year, if changed since last report)

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

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

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:
As of November 12, 2012, the Registrant had 137,162,641 shares of common stock outstanding.

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PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

The accompanying unaudited financial statements have been prepared in accordance with the instructions to Form 10-Q and Rule 8-03 of Regulation S-X, and, therefore, do not include all information and footnotes necessary for a complete presentation of financial position, results of operations, cash flows, and stockholders' equity in conformity with generally accepted accounting principles. In the opinion of management, all adjustments considered necessary for a fair presentation of the results of operations and financial position have been included and all such adjustments are of a normal recurring nature. Operating results for the three and nine months ended September 30, 2012 are not necessarily indicative of the results that can be expected for the year ending December 31, 2012.

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

2

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED BALANCE SHEETS

		(Unaudited)
		September 30, 2012			December 31, 2011
ASSETS
Current assets
Cash	$	1,414,583		$	521,660
Other receivables		10,029			6,482
Prepaid expenses		446,405			227,163
Deposits - related party		-			195,000
Total current assets		1,871,017			950,305
Property and equipment, net		3,200,399			3,378,487
Mineral properties		31,948,053			31,948,053
Restricted investments held for reclamation bonds		1,190,048			1,193,567
Reclamation bonds		40,000			40,000
Deposits		2,200			2,200
Total non-current assets		36,380,700			36,562,307
Total assets	$	38,251,717		$	37,512,612
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	97,138		$	81,408
Accounts payable - related party		44,926			42,181
Accrued payroll and related taxes		65,040			67,675
Due to related party		23,290			23,290
Total current liabilities		230,394			214,554
Long-term liabilities
Accrued reclamation and remediation costs		622,338			572,338
Deferred income taxes		1,193,968			2,825,752
Total long-term liabilities		1,816,306			3,398,090
Total liabilities		2,046,700			3,612,644
Commitments and contingencies - Note 9		-			-
Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares          authorized, 137,162,641 and 127,452,461           shares, respectively, issued and outstanding		137,162			127,452
Additional paid-in capital		57,601,675			52,233,054
Accumulated other comprehensive income		22,631			25,173
Accumulated deficit during exploration stage		(21,556,451	)		(18,485,711	)
Total stockholders' equity		36,205,017			33,899,968
Total liabilities and stockholders' equity	$	38,251,717		$	37,512,612

See Accompanying Notes to these Consolidated Financial Statements
F-1

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)

														For the period from
														February 20, 2001
														(date of inception)
		For the Three Months Ended						For the Nine Months Ended						through
		September 30, 2012			September 30, 2011			September 30, 2012			September 30, 2011			September 30, 2012
Revenue	$	-		$	-		$	-		$	-		$	-
Operating expenses
Mineral exploration and evaluation expenses		753,419			760,890			1,881,384			2,187,861			13,913,081
Mineral exploration and evaluation expenses - related party		134,618			122,296			417,455			396,346			3,522,052
General and administrative		665,459			632,353			1,626,126			1,796,402			10,449,795
General and administrative - related party		34,875			-			55,137			2,000			78,203
Depreciation		231,331			206,312			668,703			613,670			2,110,377
Mineral and property holding costs		24,000			23,750			71,500			53,750			619,500
Mineral and property holding costs - reimbursed to related party		-			-			-			-			295,000
Write-off of mineral rights		-			-			-			-			14,000
Total operating expenses		1,843,702			1,745,601			4,720,305			5,050,029			31,002,008
Loss from operations		(1,843,702	)		(1,745,601	)		(4,720,305	)		(5,050,029	)		(31,002,008	)
Other income (expense)
Interest income		6,740			11,691			20,143			25,787			373,120
Interest expense		(329	)		-			(992	)		-			(6,975	)
Total other income (expense)		6,411			11,691			19,151			25,787			366,145
Loss before income taxes		(1,837,291	)		(1,733,910	)		(4,701,154	)		(5,024,242	)		(30,635,863	)
Income tax benefit		645,983			1,173,643			1,630,414			2,082,263			9,079,412
Net loss	$	(1,191,308	)	$	(560,267	)	$	(3,070,740	)	$	(2,941,979	)	$	(21,556,451	)
Loss per common share - basic and diluted	$	(0.01	)	$	(0.00	)	$	(0.02	)	$	(0.02	)
Weighted average common shares outstanding - basic and diluted		137,063,740			127,452,641			134,939,612			124,741,033
Consolidated Statements of Comprehensive Loss
Net loss	$	(1,191,308	)	$	(560,267	)	$	(3,070,740	)	$	(2,941,979	)	$	(21,556,451	)
Other comprehensive (loss) income
Unrealized (loss) income on investments, net of deferred tax		(515	)		26,171			(2,542	)		26,171			22,631
Total comprehensive loss	$	(1,191,823	)	$	(534,096	)	$	(3,073,282	)	$	(2,915,808	)	$	(21,533,820	)

See Accompanying Notes to these Consolidated Financial Statements
F-2

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

											Accumulated			Accumulated
											Other			Deficit During			Total
		Common Stock						Additional			Comprehensive			Exploration			Stockholders'
		Shares			Amount			Paid-in Capital			Income (Loss)			Stage			Equity
Balance, December 31, 2010		122,434,442		$	122,434		$	48,299,851		$	(614	)	$	(14,597,082	)	$	33,824,589
Stock-based compensation		-			-			877,870			-			-			877,870
Sale of shares for cash, net		5,018,199			5,018			2,752,536			-			-			2,757,554
Unrealized gain on investments, net of $14,271 deferred tax		-			-			-			26,171			-			26,171
Net loss, September 30, 2011		-			-			-			-			(2,941,979	)		(2,941,979	)
Balance, September 30, 2011		127,452,641		$	127,452		$	51,930,257		$	25,557		$	(17,539,061	)	$	34,544,205
Balance, December 31, 2011		127,452,641		$	127,452		$	52,233,054		$	25,173		$	(18,485,711	)	$	33,899,968
Stock-based compensation		-			-			598,097			-			-			598,097
Issuance of shares for cash, net		9,710,000			9,710			4,770,524			-			-			4,780,234
Unrealized loss on investments, net of $1,370 deferred tax		-			-			-			(2,542	)		-			(2,542	)
Net loss, September 30, 2012		-			-			-			-			(3,070,740	)		(3,070,740	)
Balance, September 30, 2012		137,162,641		$	137,162		$	57,601,675		$	22,631		$	(21,556,451	)	$	36,205,017

See Accompanying Notes to these Consolidated Financial Statements
F-3

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

								For the period from
								February 20, 2001
								(date of inception)
		For the Nine Months Ended						through
		September 30, 2012			September 30, 2011			September 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,070,740	)	$	(2,941,979	)	$	(21,556,451	)
Adjustments to reconcile loss from operations to net cash used in operating activities:
Depreciation		668,703			613,670			2,110,377
Write-off of mineral rights		-			-			14,000
Stock-based expenses		598,097			877,870			4,671,087
Changes in operating assets and liabilities:
Other receivables		(3,547	)		9,011			(10,029	)
Prepaid expenses and deposits		(269,242	)		(11,635	)		(841,479	)
Reclamation bonds and other deposits		-			888,368			(10,940	)
Accounts payable and accrued liabilities		15,840			(33,331	)		103,502
Deferred income taxes		(1,630,414	)		(2,082,263	)		(9,079,412	)
Accrued reclamation and remediation costs		50,000			297,000			622,338
Net cash used in operating activities		(3,641,303	)		(2,383,289	)		(23,977,007	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment, net of refunds		(245,615	)		(75,821	)		(4,939,930	)
Purchase of restricted investments held for reclamation bonds		(393	)		(275,152	)		(1,155,231	)
Net cash used in investing activities		(246,008	)		(350,973	)		(6,095,161	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from stock issuance		4,822,500			2,760,009			32,083,219
Stock issuance costs		(42,266	)		(2,455	)		(604,758	)
Proceeds from borrowings - related party		-			-			8,290
Net cash provided by financing activities		4,780,234			2,757,554			31,486,751
NET CHANGE IN CASH		892,923			23,292			1,414,583
CASH AT BEGINNING OF PERIOD		521,660			1,602,179			-
CASH AT END OF PERIOD	$	1,414,583		$	1,625,471		$	1,414,583
SUPPLEMENTAL INFORMATION
Interest paid	$	329		$	-		$	6,312
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-4

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
	Description of business - Ireland Inc. (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.
	Basis of presentation - The financial statements present the consolidated balance sheets, statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows of the Company. These consolidated financial statements have been prepared without audit in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). In the opinion of management, all adjustments and disclosures necessary for the fair presentation of these interim statements have been included. All such adjustments are, in the opinion of management, of a normal recurring nature. The results reported in these interim consolidated financial statements are not necessarily indicative of the results that may be reported for the entire year. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2011, filed with the SEC on March 30, 2012.
	Certain prior year amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on the Company’s financial position or results of operations.
	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 $21,533,820 as of September 30, 2012. This amount is comprised of net loss from operations of $21,556,451 and other comprehensive income of $22,631. 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”). Intercompany accounts and transactions have been eliminated.

F-5

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

The Company’s financial instruments consist of restricted investments in U.S. Treasury Notes and certificates of deposit. These investments are classified within Level 1 of the fair value hierarchy as their fair value is determined using quoted prices in active markets.

Restricted investments held for reclamation bonds - Restricted investments serve as collateral for reclamation bonding. The investments are classified as available for sale and are recorded at fair value based on quoted market prices with the unrealized gains and losses reflected in accumulated other comprehensive income (loss) until realized. Realized gains and losses are determined on a specific identification method and are recognized in the consolidated 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-than-temporarily impaired, the Company recognizes the loss in the consolidated statement of operations.

Mineral properties - Costs of acquiring mineral properties are capitalized upon acquisition. Exploration costs and costs to maintain mineral properties are expensed as incurred while the project is in the exploration stage. Development costs and costs to maintain mineral properties are capitalized as incurred while the property is in the development stage. When a property reaches the production stage, the related capitalized costs are amortized using the units-of-production basis over the proven and probable reserves.

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

F-6

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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).
	Impairment of long-lived assets - The Company reviews and evaluates its long-lived assets for impairment at each balance sheet date due to its planned exploration stage losses and documents such impairment testing. Mineral properties in the exploration stage are monitored for impairment based on factors such as the Company’s continued right to explore the property, exploration reports, drill results, technical reports and continued plans to fund exploration programs on the property. To date, no such impairments have been identified.
	The tests for long-lived assets in the exploration, development or producing stage that have a value beyond proven and probable reserves will be monitored for impairment based on factors such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.
	The Company's policy is to record an impairment loss in the period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value. While the Company incurred losses from operations, these losses have not been in excess of planned expenditures on the specific mineral properties in order to ultimately realize their value.
	Reclamation and remediation costs (asset retirement obligation) - For its exploration stage properties, the Company accrues the estimated costs associated with environmental remediation obligations in the period in which the liability is incurred or becomes determinable. Until such time that a project life is established, the Company records the corresponding cost as an exploration stage expense. The costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability will be reduced.
	Future reclamation and environmental-related expenditures are difficult to estimate in many circumstances due to the early stage nature of the exploration project, the uncertainties associated with defining the nature and extent of environmental disturbance, the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. 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 consolidated statement of operations in the period an estimate is revised.
	The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to reclamation accruals. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known.

F-7

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	Per share amounts - Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding. In computing diluted earnings per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities, such as stock options and warrants. Potentially dilutive shares, such as stock options and warrants, are excluded from the calculation when their inclusion would be anti-dilutive, such as periods when a net loss is reported or when the exercise price of the instrument exceeds the fair market value. At September 30, 2012 and 2011, 54,156,154 and 42,180,654 stock options and warrants were outstanding, respectively, but were not considered in the computation of diluted earnings per share as their inclusion would be anti-dilutive.
	Stock-based compensation - Stock-based compensation awards are recognized in the financial statements based on the grant date fair value of the award which is estimated using 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 the actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period. Upon exercise, shares issued will be newly issued shares from authorized common stock.
	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.
	Income taxes - The Company follows the liability method of accounting for income taxes. This method recognizes certain temporary differences between the financial reporting basis of liabilities and assets and the related income tax basis for such liabilities and assets. This method generates either a net deferred income tax liability or asset as measured by the statutory tax rates in effect. The effect of a change in tax rates is recognized in operations in the period that includes the enactment date. The Company records a valuation allowance against any portion of those deferred income tax assets when it believes, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred income tax asset will not be realized.
	For acquired properties that do not constitute a business, a deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with Accounting Standards Codification (“ASC”) 740-10-25-51, Acquired Temporary Differences in Certain Purchase Transactions that Are Not Accounted for as Business Combinations, and is reflected as an increase in the total purchase price which is then applied to the underlying acquired assets in the absence of there being a goodwill component associated with the acquisition transactions.

F-8

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	Recent accounting standards - From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) that are adopted by the Company as of the specified effective date. The Company has evaluated all the recent accounting pronouncements and unless otherwise discussed, believes they will not have a material effect on the financial statements.
	In May 2011, the FASB issued additional guidance regarding fair value measurement and disclosure requirements. The most significant change relates to Level 3 fair value measurements and requires disclosure of quantitative information about unobservable inputs used, a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements. The guidance is effective for interim and annual periods beginning on or after December 15, 2011. The Company adopted the additional fair value measurement and disclosure requirements during the first quarter of 2012. Adoption did not have a material impact on its financial position or results of operations.
	In June 2011, the FASB issued amended standards to increase the prominence of items reported in other comprehensive income. These amendments eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and require that all changes in stockholders’ equity, except investments by, and distributions to, owners, be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, these amendments require presentation, on the face of the financial statements, of reclassification adjustments for items that are reclassified from other comprehensive income to net income. These new standards are effective beginning in the first quarter of 2012 and are to be applied retrospectively. The Company adopted this amended standard during the quarter of 2012. Adoption did not have a material impact on its financial position or results of operations.

F-9

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2.	PROPERTY AND EQUIPMENT
	Property and equipment consisted of the following:

			September 30, 2012									December 31, 2011
						Accumulated			Net book						Accumulated			Net book
			Cost			depreciation			value			Cost			depreciation			value
	Furniture and fixtures	$	20,854		$	(9,590	)	$	11,264		$	20,854		$	(7,355	)	$	13,499
	Computers and equipment		45,370			(37,190	)		8,180			45,370			(33,800	)		11,570
	Land		30,000			-			30,000			30,000			-			30,000
	Site improvements		2,925,731			(1,322,327	)		1,603,404			2,925,731			(911,898	)		2,013,833
	Site equipment		1,765,224			(600,379	)		1,164,845			1,274,609			(388,769	)		885,840
	Vehicles		23,595			(20,056	)		3,539			23,595			(16,517	)		7,078
	Building		500,000			(120,833	)		379,167			500,000			(83,333	)		416,667
		$	5,310,774		$	(2,110,375	)	$	3,200,399		$	4,820,159		$	(1,441,672	)	$	3,378,487

	Depreciation expense was $668,703 and $613,670 for the nine month periods ended September 30, 2012 and 2011, respectively.
3.	MINERAL PROPERTIES
	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-10

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.	MINERAL PROPERTIES (continued)
	The Company applied ASC 805-10-25-1 (formerly Emerging Issues Task Force (“EITF”) 98-03) 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-11

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.	MINERAL PROPERTIES (continued)
	The following table reflects the recorded purchase consideration for the Columbus Project:

The following table reflects the components of the Columbus Project:

Red Mountain Project – On July 20, 2011, the Company entered into an Amended and Restated Option Agreement (the “Amendment”) on the Red Mountain Project. The Amendment acknowledged that the Company had earned an undivided 30.6% interest in the original Red Mountain Claims and amended the terms of the original Letter Agreement as follows:

	a)	To maintain the buyout option, the Company is required to pay $8,000 per month effective July 1, 2011 until December 31, 2016 and spend an aggregate of $600,000 in additional qualifying expenditures by December 31, 2016. For each $2,000 in qualifying expenditures, the Company will earn a 0.1% interest in in the Red Mountain Claims, up to a maximum of an additional 29.4% interest.
	b)	The Company may at any time during the life of the Red Mountain Project earn a 100% interest by paying $200,000 and by issuing shares with an aggregate value of $3,800,000. The share price will be equal to the volume weighted average trading price during the 20 trading days immediately prior to the date of the notice of exercise.

F-12

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

3.	MINERAL PROPERTIES (continued)
	Pursuant to the option assignment agreement the Company granted a 5% net smelter return royalty to NMC.
	Reclamation bonds - The Company maintains required reclamation bonding with the Bureau of Land Management (“BLM”). Reclamation bonding consists of cash bonding held with the BLM and restricted investments held by the Company. Restricted investments consist of U.S. Treasury Notes and certificates of deposit. At September 30, 2012 and December 31, 2011, cash bonding amounted to $40,000, respectively. At September 30, 2012 and December 31, 2011, restricted investments amounted to $1,190,048 and $1,193,567, respectively, and exceeded bonding requirements by $40,048 and $43,567, respectively. The Company anticipates using the excess amount for future collateral requirements.
	The following is a summary of restricted investments held for reclamation bonds:

												Aggregate
			Amortized			Unrealized			Unrealized			Estimated
			Cost			Gains			Losses			Fair Value
	September 30, 2012
	US Treasury Notes	$	879,553		$	34,817		$	-		$	914,370
	Certificates of deposit		275,678			-			-			275,678
	Total available-for-sale securities	$	1,155,231		$	34,817		$	-		$	1,190,048
	December 31, 2011
	US Treasury Notes	$	879,553		$	38,729		$	-		$	918,282
	Certificates of deposit		275,285			-			-			275,285
	Total available-for-sale securities	$	1,154,838		$	38,729		$	-		$	1,193,567

Unrealized gains and losses on available-for-sale securities are included as a component of other comprehensive (loss) income net of deferred taxes. Unrealized (loss) gain was $(3,912) and $40,442 for the nine month periods ended September 30, 2012 and 2011, respectively.

The US Treasury Notes mature in July 2015. The Company has two certificates of deposit maturing in April 2016 and June 2013, respectively. Each certificate is set up for automatic renewal for one year periods until the Company or the financial institution elect not to renew.

Reclamation and remediation activities – Accrued reclamation and remediation costs relate to the Columbus Project and amounted to $622,338 and $572,338 as of September 30, 2012 and December 31, 2011, respectively.

F-13

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	STOCKHOLDERS’ EQUITY
	Issuance of common stock - During the nine month period ended September 30, 2012, the Company issued common stock as follows:

	1.	On September 24, 2012, the Company issued 100,000 shares of common stock from the exercise of stock options for gross proceeds of $5,000. The options had an exercise price of $0.05 and an expiration date of March 30, 2017.
	2.	On July 11, 2012, the Company issued 50,000 shares of common stock from the exercise of stock warrants for gross proceeds of $37,500. The warrants had an exercise price of $0.75 per share and an expiration date of June 30, 2013.
	3.	On March 15, 2012, the Company issued an aggregate of 4,030,000 units at a price of $0.50 per unit in private placement offerings for aggregate proceeds of $2,015,000. All units were issued to US persons pursuant to the provisions of Rule 506 of Regulation D of the Securities Act. Each unit is comprised of one share of common stock and one share purchase warrant with each warrant entitling the holder to purchase an additional share of common stock at an exercise price of $0.80 per share for a period expiring March 31, 2015. After September 30, 2012, the Company may accelerate the expiration date of the warrants if the volume weighted average price for our common stock exceeds $2.40 per share for 20 consecutive trading days.
		The Company paid a finder’s fee of $8,000 in cash and 16,000 share purchase warrants related to the private placement. The finder is a registered broker dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as amended.
	4.	On February 23, 2012, the Company issued an aggregate of 5,530,000 units at a price of $0.50 per unit in separate concurrent private placement offerings for aggregate proceeds of $2,765,000, as described below. Each unit is comprised of one share of common stock and one share purchase warrant, with each warrant entitling the holder to purchase an additional share of common stock at an exercise price of $0.80 per share for a period expiring March 31, 2015. After September 30, 2012, the Company may accelerate the expiration date of the warrants if the volume weighted average price for our common stock exceeds $2.40 per share for 20 consecutive trading days.
		US Private Placement - The Company issued 5,230,000 Units to U.S. persons for gross proceeds of $2,615,000 pursuant to the provisions of Rule 506 of Regulation D of the United States Securities Act of 1933, as amended (the “Securities Act”). Each U.S. subscriber represented that they were an accredited investor as defined under Regulation D of the Securities Act.

F-14

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	STOCKHOLDERS’ EQUITY (continued)

Offshore Private Placement - The Company issued 300,000 Units to non-U.S. persons for gross proceeds of $150,000 pursuant to the provisions of Regulation S of the Securities Act. Each of the subscribers represented that they were not “US persons” as defined in Regulation S of the Securities Act and that they were not acquiring the shares for the account or benefit of a US person.

The Company paid a finder’s fee of $6,000 in cash and 12,000 share purchase warrants related to the Offshore Private Placement. In addition, the Company will pay the finder an additional cash fee of 4% of the exercise price of any warrants exercised by subscribers introduced by the finder. The finder is a registered broker dealer pursuant to Section 15 of the Securities Exchange Act of 1934, as amended. There were no finder’s fees paid in respect of the U.S. Private Placement.

Filing and legal fees related to these issuances were $28,266. Total fees, including finder’s fees, filing and legal fees amounted to $42,266.

Private Placement Warrants - A summary of investor warrant activity for the nine month period ended September 30, 2012 was as follows:

									Weighted
									Average
									Remaining
									Contractual
			Number of			Exercise			Life
			Shares			Price			(Years)
	Outstanding and exercisable, December 31, 2011		30,630,957		$	0.75 - 2.39			1.52
	Granted		9,588,000		$	0.80			2.50
	Exercised		(50,000	)	$	0.75			n/a
	Outstanding and exercisable, September 30, 2012		40,168,957		$	0.75 - 2.39			1.18

The table above does not include warrants issued to employees, non-employee directors and consultants as they are included under “Stock-Based Compensation” in Note 5.

F-15

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	STOCK-BASED COMPENSATION
	Stock-based compensation includes grants of stock options and purchase warrants to eligible directors, employees and consultants as determined by the Board of Directors.
	Stock option plans - 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, 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. As of September 30, 2012, the Company had granted 10,441,916 options under the Plan, of which, 9,487,197 were outstanding.
	Stock warrants - Upon approval of the Board of Directors, the Company grants stock warrants to consultants for services performed.
	Valuation of awards - At September 30, 2012, 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. 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:

Inputs used in these models are determined as follows:

	1.	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.
	2.	The requisite service period for market-based stock option awards is a derived output of the hybrid Monte Carlo-Trinomial Lattice model.
	3.	Volatility is based on the average historical volatility levels of a representative peer group.
	4.	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.

F-16

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	STOCK-BASED COMPENSATION (continued)
	During the nine month period ended September 30, 2012, the Company granted stock options as follows:

	1.	On April 23, 2012, the Company granted non-qualified stock options to certain executive officers under the 2007 Stock Incentive Plan for an aggregate of 800,000 shares of common stock at an exercise price of $0.90 per option. The options vest upon completion of defined events and milestones. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
		On the grant date, the Company determined that achievement of the performance conditions was probable. The Company’s best estimate of the requisite service period was determined to be fourteen months from the grant date. The Company reviewed and confirmed these determinations at September 30, 2012.
	2.	On April 23, 2012, the Company granted non-qualified stock options to certain executive officers under the 2007 Stock Incentive Plan for an aggregate of 800,000 shares of common stock at an exercise price of $0.90 per option. The options vest upon the Company’s stock price achieving defined targets. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. Each of the options will automatically vest and become exercisable upon the occurrence of a change in control.
	3.	On April 23, 2012, the Company granted non-qualified stock options to Company’s independent director under the 2007 Stock Incentive Plan for an aggregate of 200,000 shares of common stock at an exercise price of $0.90 per option. The options vest upon completion of defined events and milestones. The options expire on the fifth anniversary of the date that they vest, but in no event later than the tenth anniversary of the agreement. The options will automatically vest and become exercisable upon the occurrence of a change in control.
		On the grant date, the Company determined that achievement of the performance conditions was probable. The Company’s best estimate of the requisite service period was determined to be fourteen months from the grant date. The Company reviewed and confirmed these determinations at September 30, 2012.
	4.	On April 23, 2012, the Company granted 200,000 options exercisable at $0.90 per share to the Company’s independent director. 25% of the options were immediately vested and the remaining options vest at a rate of 25% per fiscal quarter, beginning June 30, 2012 and ending December 31, 2012. The options expire five years after the date that they vest.
	5.	On April 23, 2012, the Company granted 37,500 options exercisable at $0.90 per share to an employee. 25% of the options were immediately vested and the remaining options vest at a rate of 25% per fiscal quarter, beginning June 30, 2012 and ending December 31, 2012. The options expire five years after the date that they vest.

F-17

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	STOCK-BASED COMPENSATION (continued)

6.

On April 23, 2012, the Company granted 400,000 options and 100,000 options exercisable at $0.90 per share to consultants. 25% of the options were immediately vested and the remaining options vest at a rate of 25% per fiscal quarter, beginning June 30, 2012 and ending December 31, 2012. The options expire five years after the date that they vest.

Total expense for the nine month periods ended September 30, 2012 and 2011 related to the granting, vesting and modification of all stock-based compensation awards was $598,097 and $877,870, respectively. Such expenses are included in general and administrative expense and mineral exploration and evaluation expense.

The following table summarizes the Company’s stock-based compensation activity for the nine month period ended September 30, 2012:

									Weighted
									Average
						Weighted			Remaining
			Number of			Average			Contractual Life
			Shares			Exercise Price			(Years)
	Balance, December 31, 2011		11,587,197		$	0.54			3.93
	Options/warrants granted		2,537,500			0.90			6.70
	Options/warrants exercised		(100,000	)		(0.05	)		n/a
	Options/warrants expired		(37,500	)		(1.88	)		n/a
	Balance, September 30, 2012		13,987,197		$	0.60			3.82

F-18

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	STOCK-BASED COMPENSATION (continued)
	The following table summarizes the changes of the Company’s stock-based compensation awards subject to vesting for the nine month period ended September 30, 2012:

						Weighted Average
			Number of			Grant Date
			Shares			Fair Value
	Unvested, December 31, 2011		1,345,832		$	0.31
	Granted		2,353,125			0.42
	Vested		(1,004,167	)		(0.30	)
	Forfeited		-			-
	Unvested, September 30, 2012		2,694,790		$	0.40

As of September 30, 2012, there was $798,788 of total unrecognized compensation cost related to unvested equity awards. This cost is expected to be fully recognized as follows:

6.	WARRANTS AND OPTIONS
	The following table summarizes all of the Company’s stock option and warrant activity for the nine month period ended September 30, 2012, including private placement warrants and stock options and warrants granted for compensation:

									Weighted
									Average
									Remaining
						Weighted			Contractual
			Number of			Average			Life
			Shares			Exercise Price			(Years)
	Balance, December 31, 2011		42,218,154		$	0.90			2.18
	Options/warrants granted		12,125,500			0.82			3.38
	Options/warrants exercised		(150,000	)		(0.25	)		n/a
	Options/warrants expired		(37,500	)		(1.88	)		n/a
	Balance, September 30, 2012		54,156,154		$	0.88			1.86

F-19

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	INCOME TAXES
	The Company is a Nevada corporation and is subject to federal income taxes. Nevada does not impose a corporate income tax.
	Significant components of the Company’s net deferred income tax assets and liabilities at September 30, 2012 and December 31, 2011 were as follows:

			September 30,			December 31,
			2012			2011
	Deferred income tax assets:
	Net operating loss carryforward	$	8,449,548		$	7,105,330
	Option compensation		1,522,661			1,333,021
	Property, plant & equipment		403,932			307,376
	Reclamation and remediation costs		217,818			200,318
	Gross deferred income tax assets		10,593,959			8,946,045
	Less: valuation allowance		(708,550	)		(691,050	)
	Net deferred income tax assets		9,885,409			8,254,995
	Deferred income tax liabilities:
	Unrealized gains on investments		(12,186	)		(13,556	)
	Acquisition related liabilities		(11,067,191	)		(11,067,191	)
	Net deferred income tax liabilities	$	(1,193,968	)	$	(2,825,752	)

A valuation allowance was established for deferred tax assets related to certain option compensation and accrued reclamation and remediation costs due to the uncertainty of realizing these deferred tax assets based on conditions existing at September 30, 2012 and December 31, 2011, respectively.

The realizability of deferred tax assets are reviewed at each balance sheet date. The majority of the Company’s deferred tax liabilities are depletable. Such depletion will begin with the processing of mineralized material once production has commenced. Therefore, the deferred tax liabilities will reverse in similar time periods as the deferred tax assets. The Company assesses both positive and negative evidence to determine whether it is more likely than not that such reversal will occur to realize the deferred tax assets prior to their exploration. The reversal of the deferred tax liabilities is sufficient to support the net deferred tax assets.

The acquisition related liabilities are a result of the estimated future federal income tax liability associated with the temporary difference between the acquisition consideration and the tax basis. The deferred tax liabilities were 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.

F-20

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	INCOME TAXES (continued)
	A reconciliation of the tax benefit for the nine month periods ended September 30, 2012 and 2011 at US federal tax rates to the actual tax provision recorded in the financial statements consisted of the following components:

			September 30,			September 30,
			2012			2011
	Income tax benefit based on statutory tax rate	$	1,645,404		$	1,758,485
	Reconciling items:
	Non-deductible items		2,510			(21,559	)
	Change in valuation allowance		(17,500	)		(345,337	)
	Income tax benefit	$	1,630,414		$	2,082,263

The Company had cumulative net operating losses of approximately $24,141,567 and $20,300,944 as of September 30, 2012 and December 31, 2011, 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 2033.

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 2008. 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.

F-21

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	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, beginning November 30, 2007 and extending for 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 is evaluating each of the alternatives as the November 30, 2012 option exercise date approaches.
	The annual rental payment consists of $3,651 in payments to each of the eight owners of DDB Syndicate and reimbursement of expenses of $792 to a company controlled by Douglas D.G. Birnie.
9.	COMMITMENTS AND CONTINGENCIES
	Lease obligations – The Company rents office space in Henderson, Nevada on month-to-month terms. Rental expense for office space was $53,775 and $53,775 for the nine month periods ended September 30, 2012 and 2011, respectively. During the nine month period ended September 30, 2012, $12,375 of rent expense was paid to DOSA Consulting, LLC which is a consulting firm owned by the Company’s CEO.
	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 3.
	Red Mountain Project – Pursuant to the option assignment agreement 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 3.
	Stand-by letter of credit – In June 2011, a financial institution issued a stand-by letter of credit to the BLM for up to $175,000 on behalf of the Company. The stand-by letter of credit was issued to guarantee the Company’s compliance with reclamation bonding requirements. The letter of credit expires on June 24, 2013 and will be automatically renewed for one year periods unless either party elects not to renew. The Company is required to maintain a $175,000 certificate of deposit with the financial institution which is included in “restricted investments held for reclamation bonds” on the balance sheet. The Company is also required to pay an annual fee of 2% of the total value of the letter of credit. As of September 30, 2012, no draws have been made on the letter of credit.

F-22

---

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.	COMMITMENTS AND CONTINGENCIES (continued)
	Consultant bonus – In April 2012, the Company entered into an Agreement for Services (the “Agreement”) with a consulting firm. The Company agreed to pay the firm at their standard rates in exchange for services provided. In addition, the Company agreed to pay bonuses to the firm upon completion of milestones as defined in the agreement. The bonuses consist of cash payments up to $400,000 and issuance of up to 3,000,000 warrants at a price of $0.90 per share and expiring March 31, 2017. The Agreement does not contain any performance commitments; therefore, the fair value of the warrants will be measured and recognized on the dates that the milestones are reached. As of September 30, 2012, no milestones have been reached for which a bonus was due or paid.
10.	CONCENTRATIONS
	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 September 30, 2012, the Company had $596,079 in excess of FDIC insured limits.
	Concentration of activity - The Company currently utilizes a metallurgical consulting firm to perform significant portions of its exploration work programs. A change in the lead metallurgical consulting firm could cause a delay in the progress of the Company’s exploration programs and would cause the Company to incur significant transition expense and may affect operating results adversely.
11.	COMPREHENSIVE LOSS
	The components of comprehensive loss, net of tax, were as follows for the nine month period ended September 30, 2012:

	Net loss	$	(3,070,740	)
	Other comprehensive loss, net of tax:
	Unrealized loss on restricted investments		(2,542	)
	Comprehensive loss	$	(3,073,282	)

The tax effects of each component of comprehensive loss for the nine month period ended September 30, 2012 were as follows:

	Unrealized holding loss	$	(3,912	)
	Income tax benefit		1,370
	Total unrealized loss, net of tax	$	(2,542	)

F-23

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IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

12.	RELATED PARTY TRANSACTIONS
	DOSA Consulting, LLC (“DOSA”) – DOSA is a consulting firm owned by the Company’s CEO. DOSA provided the Company with use of its employees and office space. The total fees paid to DOSA for these services were $32,637 for the nine month period ended September 30, 2012. Services provided by NMC are also at times coordinated for the Company by DOSA. No management fees are billed to the Company for these services. The total fees billed to the Company by DOSA for NMC’s services were $134,618 for the nine month period ended September 30, 2012. At September 30, 2012, the Company owed DOSA $42,426 for services provided by NMC. The CEO’s salary and reimbursable expenses are also paid to DOSA.
	NMC - 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 29% of the Company’s outstanding common stock. The Columbus Project and the Red Mountain Project are further discussed in Note 3.
	The Company utilizes 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 nine month period ended September 30, 2012, the Company incurred total fees and reimbursement of expenses to NMC of $315,000 and $52,455, respectively. Additionally, the Company paid NMC $50,000 for equipment purchases. Of this amount, $134,618 was invoiced by DOSA on behalf of NMC. At September 30, 2012, the Company owed DOSA $42,426 for services provided by NMC.
	McNeil Consulting Group, LLC (“MCG”) – MCG is a consulting firm owned by an affiliate of NMC. MGC provides the Company with management advisory services. The Company incurred total fees to MCG of $22,500 during the nine month period ended September 30, 2012. At September 30, 2012, the Company owed MCG $2,500.

F-24

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Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this Quarterly Report on Form 10-Q constitute "forward-looking statements.” These statements, identified by words such as “plan,” "anticipate,” "believe,” "estimate,” "should,” "expect" and similar expressions include our expectations and objectives regarding our future financial position, operating results and business strategy. These statements reflect the current views of management with respect to future events and are subject to risks, uncertainties and other factors that may cause our actual results, performance or achievements, or industry results, to be materially different from those described in the forward-looking statements. Such risks and uncertainties include those set forth under the caption "Part II, Item 1A. Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q. We advise you to carefully review the reports and documents we file from time to time with the United States Securities and Exchange Commission (the “SEC”), particularly our periodic reports filed with the SEC pursuant to the Securities Exchange Act of 1934 (the “Exchange Act”).

OVERVIEW

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 25,498 acres of placer mineral claims, including a 380 acre Permitted Mine Area (60-acre mill site and mill facility, 266-acre mine site with 54 acres defined as “undisturbed area”). 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 23,280 acres of placer mineral claims adjoining the current project area (the “DDB Claims”). Our current exploration efforts are focused on the North and South Sand Zones of the Columbus Project.

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

The discussion provided in this Quarterly Report should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the United States Securities and Exchange Commission (the “SEC”) on March 30, 2012.

PLAN OF OPERATIONS

Executive Overview

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

The Columbus Project

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

(a)

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

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	To date, 34 holes have been drilled in the North Sand Zone. Analyses of drill samples have outlined a deposit covering approximately 0.67 square miles, to a depth of 200 feet beneath the surface of the Columbus Marsh Basin, with a weight mean average head grade of 0.034 ounces per ton (opt) gold (Au) and 0.179 opt silver (Ag) (0.038 opt AuE1 ). We estimate the drill-inferred tonnage of mineralized sands within this zone at approximately 145 million (MM) tons. In addition, the drill-inferred tonnage of the mineralized sands within the South Sand Zone, to a depth of 100 feet, is currently estimated at approximately 29 MM tons with a weight mean average head grade of 0.036 opt Au and 0.182 opt Ag 0.041 opt AuE, resulting in a total of 174MM tons. Previous drilling has indicated that the mineralized sands in both North and South Sand Zones extend below 200 feet in depth.
	We have been granted the permit for our Phase 4 Sand Zone Drill Program, which will consist of 31 drill holes to a depth of at least 200 feet. The drill program will cover an additional 0.48 square miles adjacent to the North Sand Zone. The goal of this program is to expand the boundaries of the North and South Sand Zones. Following completion of the Phase 4 Sand Zone Drill Program, we will re-evaluate the boundaries of the sand zones, the quantity of the tonnage contained therein and the quality of the mineralization estimates within these areas.
(b)	Feasibility Study/Mining and Recovery Methodology: We currently have 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 380-acre site (266-acre mine site, 60-acre mill site, and 54 acres defined as “undisturbed area”) at a mine rate of up to 792,000 tons per year. During the period from 2008-2011 we developed a dredge mine, constructed a pilot plant and began operations to develop and prove the extractive metallurgy for the Columbus Project. Initial metallurgical testing was primarily focused on extracting gold and silver from the clay material. As previously reported, problems with organic material interfered with the extraction of precious metals from the clays, and this has led us to focus on extraction of precious metals from the sands. In the second fiscal quarter of 2012, we completed the onsite installation of a new gravity concentration circuit. The pilot plant is now capable of producing and leaching concentrates from the sand material located in the northwest section of the Columbus Project.
	Since the beginning of 2012, we have been conducting bulk sample tests on sand materials extracted from the same site in the North Sand Zone using the new gravity concentration circuit. The first tests were conducted using the gravity concentration circuit under laboratory conditions at AuRIC Metallurgical Laboratories’ facilities in Salt Lake City. Later tests were processed at the onsite gravity concentration circuit. To date, a total of 48,919 lbs. (24.45 tons) from four separate sand material tests have been processed through the onsite gravity concentration circuit on sand material extracted from the same site in the North Sand Zone. In each test, concentrates were then sent to AuRIC’s facilities in Salt Lake City for leaching, resin collection and metal extraction. The combined results of the tests resulted in an average extraction of 0.046 opt Au and 0.143 opt Ag, or 0.049 AuE. The test results each met or exceeded our extraction goal of 0.03 opt AuE. Each test was run under different operating variables, and none of the tests were optimized based on previous test results.

_________________________
¹AuE opt = Au opt + Ag opt/50

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Summary of Onsite Bulk Sand Leach Tests²

The purpose of these bulk tests was to demonstrate the continued effectiveness of the onsite gravity concentration components of the precious metals extraction circuit, while also assisting in the determination of which operating parameters increase or decrease precious metals extraction. Readers should note that the tests referred to above were all from a single bulk sample test site and may not be representative of grades or recovery rates that can be expected for the overall North Sand Zone. Based on the results of these four tests, we makes no assumptions or assertions that the overall head grade of the North Sand Zone differs from the previously disclosed average of 0.038 opt AuE (0.034 opt Au, 0.179 opt Ag). While some of the recent bulk tests have shown greater recovery rates than 0.038 opt AuE, the area from which these samples were taken may represent an anomaly within the North Sand Zone and may not be representative of the entire zone. Additional gravity concentration tests on bulk samples from different sites within the North Sand Zone will follow.

We are satisfied that the offsite bulk concentrates leach testing completed to date has validated the effectiveness of the onsite gravity concentration system. We now plan to proceed with onsite leach testing. Our current focus is the onsite extraction of precious metals from the gravity concentrates utilizing the leaching circuit. This will be followed by the activation of the resin extraction circuit, which is designed to remove gold and silver from the pregnant leach solution. After completing our onsite leach and resin extraction tests, we expect to commence continuous processing operations and precious metal extraction at the onsite pilot plant. Our goal is to commence pilot scale production of gold and silver from the onsite processing plant in Q4 of fiscal 2012.

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 proven or probable 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 $4,955,000 on our exploration and development program and $200,000 on our capital expenditures for the Columbus Project from October 1, 2012 until September 30, 2013.

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 $196,000 for property payments and maintenance costs for the Red Mountain Project for the twelve months ending September 30, 2013. We have reallocated certain 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.

^{________________________________________
2} Tests 4028H, 4029H, 4037H and 4046H have been previously disclosed

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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 unaudited financial statements for the nine month period ended September 30, 2012 included in this Quarterly Report on Form 10-Q.

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

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

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

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

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

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

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

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

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

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

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

Liquidity and Capital Resources

Our financial position was as follows at September 30, 2012 and December 31, 2011:

During the nine-month interim period ended September 30, 2012, our liquidity position was affected by the following:

• Completion of three private placements during our first quarter for net proceeds of $4,737,734.
• Continued exploration stage losses of $3,070,740 for the nine months ended September 30, 2012. Significant non-cash expenses through this period included depreciation of $668,703, stock based compensation of $598,097 and significant non-cash income included the income tax benefit of $1,630,414.

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• Increase in accrued reclamation costs based upon management’s estimate given the gravity concentration circuit’s continued expansion.

Looking Forward

We have budgeted for the following cash expenditures for the period from October 1, 2012 until September 30, 2013:

During the next twelve months, we will continue to focus our efforts on developing the Columbus Project, resulting in the following expectations:

• Our management anticipates that the minimum cash requirements for funding our proposed exploration programs and our continued operations through September 30, 2013 will be approximately $7,106,000. As of November 1, 2012, we had cash reserves in the amount of approximately $1,080,000. Our current financial resources are not expected to be sufficient to allow us to meet the anticipated cash expenditures for the twelve month period ending September 30, 2013. We anticipate that our current financial resources will be sufficient only to pay for the anticipated costs of our exploration and development activities to December 31, 2012. We will require additional financing to complete our planned exploration and development plans. If we are unable to obtain additional financing, we will adjust our operating plan depending upon our existing financial resources.

• Our twelve month budget includes capital expenditures of $200,000; however, we do not have any commitments for capital expenditures.

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

• We have not yet earned any operational revenues since our inception. We may not generate sufficient revenues from our proposed business plan in the future to achieve profitable operations. If we are not able to achieve profitable operations at some point in the future, we eventually may have insufficient working capital to maintain our operations as we presently intend to conduct them or to fund our expansion plans. Our current financial resources may not be sufficient to allow us to meet our anticipated cash expenditures during for the next 12 months and we may require additional financing. We do not currently have any financing arrangements in place, and there are no assurances that we will be able to obtain additional financing in an amount sufficient to meet our needs or on terms that are acceptable to us.

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• Obtaining additional financing is subject to a number of factors, including the market prices for base and precious metals, investor interest in our mineral projects, and the performance of equity markets in general. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If adequate funds are not available or if they are not available on acceptable terms, our ability to fund our business plan could be significantly limited and we may be required to suspend our business operations.

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

RESULTS OF OPERATIONS

Revenues

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

Operating Expenses

Mineral exploration and evaluation expenses decreased by 1% to $753,419 during the quarter ended September 30, 2012 from $760,890 during the quarter ended September 30, 2011.

Mineral exploration and evaluation expenses – related party increased by 10% to $134,618 for the quarter ended September 30, 2012 from $122,296 during the quarter ended September 30, 2011. These amounts represent fees and reimbursement of expenses to Nanominerals Corp. related to exploration work conducted on the Columbus and Red Mountain Projects. Nanominerals Corp. is our largest shareholder. The increase is due to additional work being completed on the gravity concentration circuit.

General and administrative expenses increased by 5% to $665,459 during the quarter ended September 30, 2012 from $632,353 during the quarter ended September 30, 2011. General and administrative expenses increased primarily as a result of increases in legal and property tax expenses offset by a reduction in vesting expenses related to options and warrants.

General and administrative expenses – related party increased to $34,875 during the quarter ended September 30, 2012 from $0 during the quarter ended September 30, 2011. General and administrative expenses increased primarily as a result of amounts paid to Ian McNeil, the son-in-law of Charles Ager, the principal of Nanominerals Corp. for executive and director search services. In addition, $15,000 was paid to DOSA Consulting LLC for 9 months of office rent. Douglas D.G. Birnie is the principal of DOSA Consulting.

Other Income and Expenses

Total other income and expense decreased by 45% to $6,411 during the quarter ended September 30, 2012 from $11,691 during the quarter ended September 30, 2011. The decrease was a result of less interest income recognized during the quarter ended September 30, 2012.

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Income Tax Benefit

Income tax benefit decreased by 45% to $645,983 during the quarter ended September 30, 2012 from $1,173,643 during the quarter ended September 30, 2011. The decrease in the benefit was primarily a result of reducing the valuation allowance on certain stock based compensation in the quarter.

Net Loss

The aforementioned factors resulted in a net loss of $1,191,308, or $.01 per common share, for the quarter ended September 30, 2012, as compared with a net loss of $560,267, or $.004 per common share, for the quarter ended September 30, 2011.

Off-Balance Sheet Arrangements

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

Recent Accounting Pronouncements

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

In May 2011, the FASB issued additional guidance regarding fair value measurement and disclosure requirements. The most significant change relates to Level 3 fair value measurements and requires disclosure of quantitative information about unobservable inputs using a description of the valuation processes used, and a qualitative discussion about the sensitivity of the measurements. We adopted the additional fair value measurement and disclosure requirements during the quarter ended March 31, 2012. Adoption did not have a material impact on our financial position or results of operations.

In June 2011, the FASB issued amended standards to increase the prominence of items reported in other comprehensive income. These amendments eliminate the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity and require that all changes in stockholders’ equity, except investments by, and distributions to owners, be presented either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In addition, these amendments require presentation, on the face of the financial statements, of reclassification adjustments for items that are reclassified from other comprehensive income to net income. We adopted this amended standard during the quarter ended March 31, 2012. Adoption did not have a material impact on our financial position or results of operations.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4.

CONTROLS AND PROCEDURES.

As of September 30, 2012, an evaluation was performed under the supervision and with the participation of our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures. These controls and procedures are based on the definition of disclosure controls and procedures in Rule 13a-15(e) and Rule 15d-15(e) promulgated under the Securities Exchange Act of 1934.

Based on that evaluation as of September 30, 2012, our management, including the CEO and CFO, concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms.

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Management, including our CEO and CFO, have concluded that our disclosure controls and procedures provide reasonable assurance that the controls and procedures will meet their desired control objectives. In designing and evaluating our control system, management recognized that any control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. Further, the design of a control system must reflect the fact that there are resource constraints, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any that may affect our operations have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.

During the third quarter ended September 30, 2012, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

None.

ITEM 1A.

RISK FACTORS.

An investment in our securities involves a high degree of risk. You should carefully consider the risks described below and the other information contained in the reports that we file with the SEC before investing in our securities. If any of the following risks occur, our business, operating results and financial condition could be seriously harmed. The market price of our securities could decline due to any of these risks, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties, including those of which we are currently unaware or that we deem immaterial, could also affect our business or an investment in our securities.

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

We expect to spend approximately $7,106,000 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 September 30, 2013. 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 December 31, 2012. 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.

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.

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

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

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There has been an increase in the 2012 claim maintenance fees related to association placer claims. Previously, we paid $140 per year per placer claim. Claims can be up to 160 acres each. The new regulations require placer claimants to pay a fee of $140 for each twenty acres of a placer claim. The fee for a 160 acre placer claim rose from $140 to $1,120 per claim and our current obligation for all claimed property increased from $102,402 to $446,259.

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

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

To date, our primary business activities have involved the acquisition of mineral claims and the exploration 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.

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

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.

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.

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.

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

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

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

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

No assurance that forward looking assessments will be realized.

Our ability to accomplish our objectives and whether or not we are financially successful is dependent upon numerous factors, each of which could have a material effect on the results obtained. Some of these factors are in the discretion and control of management and others are beyond management’s control. The assumptions and hypotheses 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.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4.

MINE SAFETY DISCLOSURES.

None.

ITEM 5.

OTHER INFORMATION.

None.

ITEM 6.

EXHIBITS.

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

Exhibit
Number	Description of Exhibit
3.1	Articles of Incorporation.(1)
3.2	Certificate of Amendment to Articles - Name Change from Merritt Ventures Corp. to Ireland Inc.(2)
3.3	Certificate of Change – 4-for-1 Stock Split.(3)
3.4	Bylaws.(1)
10.1	2007 Stock Incentive Plan.(4)
10.2	Consulting Agreement between the Company and RJ Falkner & Company, Inc., dated for reference as of November 5, 2007.(5)
10.3	Consultant Non-Qualified Stock Option Agreement between the Company and R. Jerry Falkner, dated effective as of November 5, 2007.(5)
10.4	Mining Lease Agreement dated November 30, 2007 between DDB Syndicate and Columbus S.M., LLC.(6)
10.5	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.(7)
10.6	Non-Qualified Stock Option Agreement for Robert D. McDougal.(7)
10.7	Non-Qualified Stock Option Agreement for Michael A. Steele.(7)
10.8	Non-Qualified Stock Option Agreement for Mark H. Brennan.(7)
10.9	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr.(8)
10.10	Non-Qualified Stock Option Agreement dated April 8, 2011 for Mark H. Brennan.(9)
10.11	Amended and Restated Option Agreement dated July 20, 2011 between Sierra Mineral Management Inc. and Ireland Inc.(10)
10.12	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.(11)
10.13	Non-Qualified Stock Option Agreement for Robert D. McDougal.(11)
10.14	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr.(11)

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Exhibit
Number	Description of Exhibit
10.15	Management Employment Agreement for David Z. Strickler.(12)
10.16	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie. (13)
10.17	Non-Qualified Stock Option Agreement for Robert D. McDougal. (13)
10.18	Non-Qualified Stock Option Agreement for David Z. Strickler, Jr. (13)
10.19	Non-Qualified Stock Option Agreement for Mark H. Brennan.(13)
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.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	XBRL Taxonomy Extension Label Linkbase.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase.

(1)	Filed as an exhibit to our Registration Statement on Form SB-2 originally filed on April 18, 2002, as amended.
(2)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2005 filed on April 12, 2006.
(3)	Filed as an exhibit to our Current Report on Form 8-K filed on April 30, 2007.
(4)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2006 filed on April 5, 2007.
(5)	Filed as an exhibit to our Current Report on Form 8-K filed on November 9, 2007.
(6)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2007 filed on March 31, 2008.
(7)	Filed as an exhibit to our Current Report on Form 8-K filed on July 28, 2010.
(8)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2010 filed on March 30, 2011.
(9)	Filed as an exhibit to our Current Report on Form 8-K filed on April 13, 2011.
(10)	Filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended June 30, 2011 filed on August 19, 2011.
(11)	Filed as an exhibit to our Current Report on Form 8-K filed on August 26, 2011.
(12)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2011 filed on March 30, 2012.
(13)	Filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended March 31, 2012 filed on May 15, 2012.

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SIGNATURES

Pursuant to the requirements 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: November 14, 2012	By:	/s/ Douglas D.G. Birnie
		DOUGLAS D.G. BIRNIE
		Chief Executive Officer, President and Secretary
		(Principal Executive Officer)
Date: November 14, 2012	By:	/s/ Robert D. McDougal
		ROBERT D. MCDOUGAL
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)

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