Ireland (IRLD) 10-Q 2010 Q1 Quarterly report

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 endedMarch 31, 2010

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

For the transition period from ________to ________

COMMISSION FILE NUMBER000-50033

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 (s. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
[ ] 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	Smaller reporting company[ x ]
company)

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 May 12, 2010, the Registrant had 121,934,442 shares of common stockoutstanding.

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 months ended March 31, 2010 are not necessarily indicative of the results that can be expected for the year ending December 31, 2010.

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

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

		March 31, 2010			December 31, 2009
ASSETS
Current assets
Cash	$	6,925,844		$	3,651,015
Advances Receivable		36,667			-
Prepaid expenses		185,345			90,284
Total current assets		7,147,856			3,741,299
Property and equipment, net		4,157,015			3,763,118
Mineral properties		31,948,053			31,948,053
Reclamation bonds		908,368			908,368
Deposits		22,200			22,200
Total non-current assets		37,035,636			36,641,739
Total assets	$	44,183,492		$	40,383,038
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	127,869		$	133,541
Accounts payable - related party		45,448			101,213
Accrued payroll and related taxes		29,138			14,799
Due to related parties		23,290			23,290
Total current liabilities		225,745			272,843
Long-term liabilities
Accrued reclamation and remediation costs		275,338			275,338
Deferred tax liability		7,038,129			7,368,534
Total long-term liabilities		7,313,467			7,643,872
Total liabilities		7,539,212			7,916,715
Commitments and contingencies - Note 11		-			-
Stockholders' equity
Common stock, $0.001 par value; 400,000,000 shares       authorized, 121,934,442 and 110,899,442 shares,       respectively, issued and outstanding		121,934			110,899
Additional paid-in capital		47,336,851			42,099,452
Common stock subscribed		-			162,000
Accumulated deficit during exploration stage		(10,814,505	)		(9,906,028	)
Total stockholders' equity		36,644,280			32,466,323
Total liabilities and stockholders' equity	$	44,183,492		$	40,383,038

See Accompanying Notes to these Consolidated Financial Statements
F-1

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

								For the period from
								February 20, 2001
								(Date of Inception)
		For the Three Months Ended						through
		March 31, 2010			March 31, 2009			March 31, 2010
Revenue	$	-		$	-		$	-
Operating expenses
Mineral exploration and evaluation expenses		311,889			587,706			7,046,131
Mineral exploration and evaluation       expenses - related party		124,149			105,000			2,171,294
General and administrative		758,700			230,221			4,271,316
General and administrative - related party		21,066			-			21,066
Depreciation		14,179			10,834			80,169
Mineral and property holding costs		15,000			15,000			425,500
Mineral and property holding costs -         reimbursed to related party		-			-			295,000
Write-off of mineral rights		-			-			14,000
Total operating expenses		1,244,983			948,761			14,324,476
Loss from operations		(1,244,983	)		(948,761	)		(14,324,476	)
Other income (expense)
Interest income		9,595			7,743			292,655
Interest expense		(3,494	)		(126	)		(5,749	)
Total other income (expense)		6,101			7,617			286,906
Loss before income taxes		(1,238,882	)		(941,144	)		(14,037,570	)
Income tax benefit		330,405			327,477			3,223,065
Net loss	$	(908,477	)	$	(613,667	)	$	(10,814,505	)
Loss per common share - basic and diluted	$	(0.01	)	$	(0.01	)
Weighted average common shares outstanding -    basic and diluted		120,217,886			97,010,087

See Accompanying Notes to these Consolidated Financial Statements
F-2

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

(UNAUDITED)

										Accumulated
							Common			Deficit During			Total
	Common Stock				Additional		Stock			Exploration			Stockholders'
	Shares		Amount		Paid-in Capital		Subscribed			Stage			Equity
Balance, December 31, 2009	110,899,442	$	110,899	$	42,099,452	$	162,000		$	(9,906,028	)	$	32,466,323
Amortization of stock options and warrants    issued to a directors, officers and    consultants over vesting period	-		-		274,912		-			-			274,912
Issuance of stock options for    67,197 shares of common stock    to an officer	-		-		19,515		-			-			19,515
Issuance of common stock for cash    Reg. S - Private Placement,    $0.45 per share, net of $6,399     financing costs	200,000		200		83,401		-			-			83,601
Issuance of common stock for cash    Reg. D - Private Placement,    $0.45 per share, net of $5,344    financing costs	10,835,000		10,835		4,859,571		(162,000	)		-			4,708,406
Net loss, March 31, 2010	-		-		-		-			(908,477	)		(908,477	)
Balance, March 31, 2010	121,934,442	$	121,934	$	47,336,851	$	-		$	(10,814,505	)	$	36,644,280

See Accompanying Notes to these Consolidated Financial Statements
F-3

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

								For the period from
								February 20, 2001
								(Date of inception)
		For the Three Months Ended						through
		March 31, 2010			March 31, 2009			March 31, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(908,477	)	$	(613,667	)	$	(10,814,505	)
Adjustments to reconcile loss from operating      to net cash used in operating activities:
Depreciation		14,179			10,834			80,169
Write-off of mineral rights		-			-			14,000
Consulting accrual		-			-			15,000
Stock based expenses		294,427			2,568			1,938,825
Changes in operating assets and liabilities:
Advances receivable		(36,667	)		-			(9,273	)
Prepaid expenses		(95,061	)		(12,959	)		(335,420	)
Other assets		-			-			(2,200	)
Reclamation deposit		-			-			(925,042	)
Mineral property acquisition costs		-			-			(1,022,663	)
Accounts payable and accrued liabilities		(47,098	)		89,327			98,853
Deferred income taxes		(330,405	)		(327,477	)		(3,223,065	)
Accrued reclamation and remediation costs		-			-			275,338
Net cash used in operating activities		(1,109,102	)		(851,374	)		(13,909,983	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment		(408,076	)		(212,374	)		(3,088,136	)
Net cash used in investing activities		(408,076	)		(212,374	)		(3,088,136	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from stock issuance		4,965,750			-			24,455,710
Proceeds from option issuance		-			-			20,000
Stock issuance costs		(11,743	)		-			(560,037	)
Common stock subscribed		(162,000	)		-			-
Proceeds from borrowings from related party		-			-			8,290
Net cash provided by financing activities		4,792,007			-			23,923,963
NET CHANGE IN CASH		3,274,829			(1,063,748	)		6,925,844
CASH AT BEGINNING OF PERIOD		3,651,015			2,565,823			-
CASH AT END OF PERIOD	$	6,925,844		$	1,502,075		$	6,925,844
SUPPLEMENTAL INFORMATION
Interest paid	$	3,494		$	126		$	5,749
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

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES
	Basis of presentation– The accompanying unaudited consolidated financial statements have been prepared in accordance with Securities and Exchange Commission requirements for interim financial statements. Therefore, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. The financial statements should be read in conjunction with the Form 10-K for the year ended December 31, 2009 of Ireland, Inc. (the “Company”).
	The interim financial statements present the consolidated balance sheets, statements of operations, stockholders’ equity, and cash flows of the Company. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States.
	These consolidated financial statements have been prepared by the Company without audit, and include all adjustments (which consist solely of normal recurring adjustments) which, in the opinion of management, are necessary for a fair presentation of financial position and results of operations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, although the Company believes that the disclosures are adequate to make the information presented not misleading. It is suggested that these consolidated financial statements be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2009.
	Description of business– The Company is considered an exploration stage company since its formation and the Company has not yet realized any revenues from its planned operations. The Company is primarily focused on the acquisition and exploration of mining properties. Upon identification of commercially minable reserves, the Company expects to actively prepare the site for its extraction and enter the development stage.
	History– The Company was incorporated on February 20, 2001 under the laws of the State of Nevada under the name Merritt Ventures Corp. On December 19, 2005, the Company changed its name to Ireland Inc.
	Going concern–The accompanying financial statements have been prepared assuming the Company will continue as a going concern.
	The Company incurred cumulative net losses since date of inception of $10,814,505 from operations as of March 31, 2010, and has no revenue. The future of the Company is dependent upon its ability to obtain financing and upon future profitable operations from the development of its mineral properties. Management has plans to seek additional capital through private placements and public offerings of its common stock. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary if the Company is unable to continue as a going concern.
	Principles of consolidation– The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Columbus Minerals Inc. (CMI) (including its wholly- owned single-member LLC subsidiary Columbus Salt Marsh LLC (CSM)) and Rand Metals LLC (Rand). Significant intercompany accounts and transactions have been eliminated.

F-5

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	Exploration costs- Mineral exploration costs are expensed as incurred.
	Mineral rights- The Company capitalizes acquisition and option costs of mineral property rights. The amount capitalized represents fair value at the time the mineral rights were acquired.
	The Company capitalizes acquisition and option costs of mineral rights as tangible assets. Upon commencement of commercial production, the mineral rights will be amortized using the unit-of- production method over the life of the mineral rights. If the Company does not continue with exploration after the completion of the feasibility study, the mineral rights will be expensed at that time.
	Mineral property acquisition costs– Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized 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.
	Property and equipment– Property and equipment are stated at cost less accumulated depreciation. Depreciation is provided principally on the straight-line method over the estimated useful lives of the assets, which range from 3 to 39 years. The cost of repairs and maintenance is charged to expense as incurred. Expenditures for property betterments and renewals are capitalized. Upon sale or other disposition of a depreciable asset, cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in other income (expense).
	The Company periodically evaluates whether events and circumstances have occurred that may warrant revision of the estimated useful life of property and equipment or whether the remaining balance of property and equipment should be evaluated for possible impairment. If events and circumstances warrant evaluation, the Company uses an estimate of the related undiscounted cash flows over the remaining life of the property and equipment in measuring their recoverability.
	Impairment of long-lived assets– The Company reviews and evaluates long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. The assets are subject to impairment consideration under ASC 360-10-35-17,Measurement of an Impairment Loss, if events or circumstances indicate that their carrying amount might not be recoverable. As of March 31, 2010 exploration progress is on target with the Company’s exploration and evaluation plan and no events or circumstances have happened to indicate that the related carrying values of the properties may not be recoverable. When the Company determines that an impairment analysis should be done, the analysis will be performed using the rules of ASC 930- 360-35,Asset Impairment, and 360-10-15-3 through 15-5,Impairment or Disposal of Long-Lived Assets.

F-6

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	Various factors could impact the Company’s ability to achieve forecasted production schedules. Additionally, commodity prices, capital expenditure requirements and reclamation costs could differ from the assumptions the Company may use in cash flow models used to assess impairment. The ability to achieve the estimated quantities of recoverable minerals from exploration stage mineral interests involves further risks in addition to those factors applicable to mineral interests where proven and probable reserves have been identified, due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
	Material changes to any of these factors or assumptions discussed above could result in future impairment charges to operations.
	Reclamation and remediation costs (asset retirement obligation)- The Company accrued costs associated with environmental remediation obligations in accordance with ASC 410-20,Asset Retirement Obligations. In accordance with ASC 410-20-25,Asset Retirement Obligations - Recognition, the Company records a liability for the present value of the estimated environmental remediation costs in the period in which the liability is incurred and becomes determinable, with an offsetting increase in the carrying amount of the associated asset. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability will be reduced.
	The Company accrues costs associated with environmental remediation obligation when it is probable that such costs will be incurred and they are reasonably estimable. Estimates for reclamation and other closure costs are prepared in accordance with ASC 450,Contingencies, or ASC 410-30-25,Asset Retirement and Environmental Obligations - Recognition. Costs of future expenditures for environmental remediation are not discounted to their present value unless subject to a contractually obligated fixed payment schedule. Such costs are based on management’s current estimate of amounts to be incurred when the remediation work is performed, within current laws and regulations.
	Future reclamation and environmental-related expenditures are difficult to estimate, in many circumstances, due to the early stage nature of the exploration project, and uncertainties associated with defining the nature and extent of environmental disturbance and the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence becomes available indicating that the liabilities have potentially changed. Changes in estimates are reflected in the statement of operations in the period an estimate is revised.
	Accruals for reclamation and environmental matters totaled $275,338 at March 31, 2010 and December 31, 2009. The Company is in the exploration stage and is unable to determine the estimated timing of these expenditures relating to these accruals at this time. It is reasonably possible the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known. For additional information, see Note 12.

F-7

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES(continued)
	Revenue recognition- Revenues are recognized during the period in which the revenues are earned. Costs and expenses are recognized during the period in which they are incurred.
	Use of estimates- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates.
	Earnings (loss) per share- The Company follows ASC 260,Earnings Per Share,and ASC 480,Distinguishing Liabilities from Equity,which establish standards for the computation, presentation and disclosure requirements for basic and diluted earnings per share for entities with publicly-held common shares and potential common stock issuances. Basic earnings (loss) per share are computed by dividing net income 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. Common stock equivalent shares are excluded from the computation if their effect is antidilutive. Weighted average of common stock equivalents, which include stock options and warrants to purchase common stock, on March 31, 2010 and 2009 that were not included in the computation of diluted EPS, because the effect would be antidilutive, were 35,325,684 and 19,335,428, respectively.
	Expenses of offering- The Company accounts for specific incremental costs directly to a proposed or actual offering of securities as a direct charge against the gross proceeds of the offering.
	Income taxes– The Company accounts for its income taxes in accordance with ASC 740,Income Taxes, which requires recognition of deferred tax assets and liabilities for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.
	For acquired properties that do not constitute a business as defined in ASC 805-10-55-4,Definition ofaBusiness, deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future federal and state income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with ASC 740-10-25-51,Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, and is reflected as an increase to 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

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1.	DESCRIPTION OF BUSINESS, HISTORY AND SUMMARY OF SIGNIFICANT POLICIES (continued)
	Stock-based compensation- The Company accounts for share based payments in accordance with ASC 718,Compensation – Stock Compensation, which requires all share-based payments to employees, including grants of employee stock options, to be recognized in the financial statements based on the grant date fair value of the award. In accordance with ASC 718-10-30-9,Measurement Objective – Fair Value at Grant Date, the Company estimates the fair value of the award using a valuation technique. For this purpose, the Company uses the Binomial Lattice option pricing model. The Company believes that this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The compensation cost is recognized over the requisite service period which is generally equal to the vesting period.
	New accounting pronouncements– From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.
	Effective July 1, 2009, the FASB (Financial Accounting Standards Board) Accounting Standards Codification (ASC) (Topic 105,Generally Accepted Accounting Principles), became the single source for authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative U.S. GAAP for SEC registrants. The ASC does not change U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. Effective September 15, 2009, all public filings of the Company will reference the ASC as the sole source of authoritative literature.
	In January 2010, the FASB issued ASU 2010-06,Improving Disclosures About Fair Value Measurements, which requires reporting entities to make new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements and information on purchases, sales, issuances, and settlements on a gross basis in the reconciliation of Level 3 fair value measurements. ASU 2010-6 is effective for annual reporting periods beginning after December 15, 2009, except for Level 3 reconciliation disclosures which are effective for annual periods beginning after December 15, 2010. The Company does not have any assets or liabilities classified as Level 3. As the update only pertains to disclosures, its adoption is not expected to have an impact on the Company’s financial position, results of operations, or cash flows.
	In February 2010, the FASB issued ASU 2010-09,Subsequent Events (Topic 855), Amendment to Certain Recognition and Disclosure Requirements, to remove the requirement for SEC filers to disclose the date through which an entity has evaluated subsequent events. This change removes potential conflicts with current SEC guidance and clarifies the intended scope of the reissuance disclosure provisions. The update was effective upon its date of issuance, February 24, 2010, and the Company has adopted the amendments accordingly. As the update only pertained to disclosures, it had no impact on the Company’s financial position, results of operations, or cash flows upon adoption.

F-9

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

				December 31,
		March 31, 2010		2009
Claims maintenance	$	19,523	$	34,166
Insurance policies		143,857		49,973
Rent		5,975		--
Retainers		12,000		2,000
Other		3,990		4,145
	$	185,345	$	90,284

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

				December 31,
		March 31, 2010		2009
Furniture and fixtures	$	8,921	$	8,921
Computers and equipment		41,165		39,137
Land		30,000		30,000
Site improvements		99,949		99,631
Site equipment		231,035		231,035
Vehicles		23,595		23,595
Construction in progress:
Building		500,000		500,000
Site improvements		2,613,187		2,325,198
Site equipment		689,332		571,591
		4,237,184		3,829,108
Less accumulated depreciation		80,169		65,990
	$	4,157,015	$	3,763,118

Depreciation expense was $14,179 and $10,834 for the three months ended March 31, 2010 and 2009, respectively.

F-10

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	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-11

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	COLUMBUS PROJECT(continued)
	The Company applied EITF 98-03 (which has been superseded by ASC 805-10-25-1) with regard to the acquisition of the Columbus Project. The Company determined that the acquisition of the Columbus Project did not constitute an acquisition of a business, as that term is defined in ASC 805- 10-55-4, and the Company recorded the acquisition as a purchase of assets.
	As required by ASC 930-805-30,Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55,Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the purchase price of $32 million was allocated to the assets acquired and liabilities assumed, based on their respective fair values at the date of acquisition. The purchase price allocated to the real properties was based on fair market values determined using an independent real estate appraisal firm (Arden Salvage Company) and the fair value of the remaining assets acquired and liabilities assumed were based on management’s best estimates taking into account all available information at the time.
	Pursuant to the terms of the acquisition of CBI, the Company issued an aggregate of 10,440,087 shares of common stock and 5,220,059 share purchase warrants to the former shareholders of CBI. Each share purchase warrant issued by the Company entitles the holder to purchase one additional share of the Company’s common stock at a price of $2.39 per share for a period of 5 years. Each warrant provides the holder with a cashless right of exercise. If the holder chooses to utilize this cashless exercise right, the total number of shares that the holder will be entitled to exercise will be determined by the following formula: [(A–B)C] ÷Awhere:
	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-12

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

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

The following table reflects the components of the Columbus Project:

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

F-13

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

F-14

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

6.	PRIVATE PLACEMENTS
	For the three months ended March 31, 2010, the Company completed the following private placements:

a)

On January 14, 2010, the Company completed a private placement offering for gross proceeds of $90,000 to non-US persons in reliance of Regulation S promulgated under the Securities Act of 1933. A total of 200,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the private placement offering in the amount of $6,300 in cash and issued warrants to purchase up to 6,000 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $99.

b)

On January 14, 2010, the Company completed a private placement offering for gross proceeds of $4,875,750 to US accredited investors pursuant to Rule 506 of Regulation D promulgated under the Securities Act of 1933. A total of 10,835,000 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrants. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. Financing costs related to this offering were $5,344.

Warrants associated with the 2010 equity issuances do not constitute a registration payment arrangement.

A summary of investor warrant activity for the three months ended March 31, 2010 is as follows:

	Number of
	Shares		Exercise Price
Outstanding and exercisable, December 31, 2009	22,598,357	$	0.75 - 2.39
Granted	5,523,500		0.75
Exercised	--		--
Forfeited/expired	--		--
Outstanding and exercisable, March 31, 2010	28,121,857	$	0.75 - 2.39

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

F-15

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	SHARE BASED COMPENSATION
	On March 27, 2007, the Board of Directors adopted the 2007 Stock Incentive Plan (the “Plan”). Under the terms of the Plan, options to purchase up to 6,000,000 shares of the common stock of the Company, subject to an increase each quarter equal to 15% of the increase in the total number of outstanding shares during the previous quarter, may be granted to officers, directors, employees and eligible consultants.
	The Company utilizes the Binomial Lattice pricing model to estimate the fair value of options and warrants granted in exchange for services. The Company believes that this model provides the best estimate of fair value due to its ability to incorporate inputs that change over time, such as volatility and interest rates, and to allow for actual exercise behavior of option holders. The Company used the following assumptions to estimate the fair value of the options granted as follows:

	2010
Dividend yield	--
Expected volatility	118.68%
Risk-free interest rate	1.88 – 3.33 %
Expected life (years)	2.75 – 4.25 years

The expected life represents the weighted-average period the awards are expected to remain outstanding and is a derived output of the Binomial Lattice model. The expected life is impacted by all of the underlying assumptions and calibration of the Company’s model. The Binomial Lattice model estimates the probability of exercise as a function of these variables based on the entire history of exercises and cancellations on all past grants made by the Company.

For grants awarded during 2010 the expected volatility is based on the historical volatility levels of the Company’s common stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over equivalent lives of the options.

F-16

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	SHARE BASED COMPENSATION(continued)
	Expenses for the three months ended March 31, 2010 and 2009, related to the granting and vesting of share based payments were $294,427 and $2,568, respectively. Such expenses are included in general and administrative expense and mineral exploration and evaluation expense.
	During the three months ended March 31, 2010, the Company granted stock options and warrants as follows:
	a)	On March 8, 2010, the Company granted 200,000 options to an Officer. The options are exercisable at $0.82 per share, vest at a rate of 25,000 options per fiscal quarter, beginning on March 31, 2010, and expire five years after the particular vesting date.
	b)	On March 2, 2010, the Company granted nonqualified stock options for the purchase of 67,197 shares of common stock at $0.81 per share to a director. The options were immediately vested and expire March 2, 2015.
	c)	On February 19, 2010, the Company granted 500,000 warrants to a consultant. The warrants are exercisable at $0.75 per share and expire on June 30, 2013. The warrants vest 25% at each quarter end from March 31, 2010 through December 31, 2010.
	d)	On January 7, 2010, the Company granted 3,300,000 warrants to a consultant. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. The warrants vest 25% on June 30, 2010, 25% on December 31, 2010, 25% on June 30, 2011 and 25% on December 31, 2011. After June 30, 2010, the Company will have the right to accelerate the expiration date of the vested warrants if the volume weighted average trading price for the shares is above $4.50 per share for twenty consecutive trading days.
	The following table summarizes the Company’s stock option and warrant activity for the three months ended March 31, 2010:

			Weighted
	Number of		Average
	Shares		Exercise Price
Balance, December 31, 2009	4,724,719	$	0.23
Options granted and assumed	4,067,197		0.75
Options expired	--		--
Options forfeitures	--		--
Options exercised	--		--
Balance, March 31, 2010	8,791,916	$	0.47

F-17

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	SHARE BASED COMPENSATION(continued)
	The following table summarizes information about options and warrants granted during the three months ended March 31, 2010:

	Exercise Price
	Equals, Exceeds
Number of Options	or	Weighted
and Warrants	is Less than Mkt.	Average	Range of	Weighted
Granted	Price of Stock	Exercise	Exercise	Average Fair
During 2010	on Grant Date	Price	Price	Value
767,197	Equals	$ 0.77	$0.75 - $0.82	$ 0.35
3,300,000	Exceeds	$ 0.75	$ 0.75	$ 0.42
--	Less Than	$ --	$ --	$ --

The following table summarizes the changes of the Company’s stock options and warrants issued for stock based compensation subject to vesting for the three months ended March 31, 2010:

				Weighted Average
	Number of			Grant Date
	Shares			Fair Value
Unvested, December 31, 2009	540,000		$	0.46
Granted	4,000,000			0.41
Vested	(210,000	)		0.35
Forfeited	--			--
Unvested, March 31, 2010	4,330,000		$	0.42

As of March 31, 2010, there was $1,826,496 of total unrecognized compensation cost related to unvested stock options and warrants. This cost is expected to be fully recognized as follows:

2010	$	982,956
2011		843,540
2012		--
Total	$	1,826,496

The above tables do not include warrants issued in private placements which are discussed above in Note 6.

F-18

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

			Weighted
	Number of		Average
	Shares		Exercise Price
Balance, December 31, 2009	27,323,076	$	0.97
Options granted and assumed	9,590,697		0.75
Options expired	--		--
Options forfeitures	--		--
Options exercised	--		--
Balance, March 31, 2010	36,913,773	$	0.92

F-19

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.	INCOME TAXES
	The Company is a Nevada corporation and is subject to federal income taxes. Nevada does not impose a corporate income tax.
	The income tax benefit consisted of the following at March 31, 2010 and March 31, 2009:

		March 31, 2010			March 31, 2009
Income tax benefit based on statutory tax rate	$	(433,609	)	$	(329,400	)
Non-deductible and other		172			384
Change in valuation allowance		103,032			1,539
Income tax benefit	$	(330,405	)	$	(327,477	)

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

		March 31,			December 31,
		2010			2009
Deferred income tax assets:
Net operating loss carryforward	$	4,029,062		$	3,698,657
Option compensation		678,588			575,539
Reclamation and remediation costs		96,368			96,368
Gross deferred income tax asset		4,804,018			4,370,564
Valuation allowance		(772,622	)		(669,590	)
		4,031,396			3,700,974
Deferred income tax liabilities:
Property, plant & equipment		2,334			2,317
Acquisition related liabilities		11,067,191			11,067,191
Net deferred income tax liability	$	7,038,129		$	7,368,534

A valuation allowance for deferred tax related to option compensation, accrued reclamation and remediation costs was established for net deferred tax assets not allocated to offset acquisition related deferred tax liabilities due to the uncertainty of realizing these deferred tax assets based on conditions existing at March 31, 2010 and December 31, 2009.

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

F-20

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.	INCOME TAXES(continued)
	The resulting estimated future federal income tax liability associated with the temporary difference between the acquisition consideration and the tax basis as computed in accordance with ASC 740 is reflected as an increase to the total purchase price which has been applied to the underlying mineral and Columbus project assets in the absence of there being a goodwill component associated with the acquisition transactions.
	The Company had cumulative net operating losses of approximately $11,511,605 and $10,567,591 as of March 31, 2010 and December 31, 2009, respectively for federal income tax purposes. Cumulative net operating losses from December 31, 2006 and previous years are effectively nil due to the annual limitation imposed by the Internal Revenue Code of 1986 as a result of the ownership percentage change limitations. The net operating loss carryforwards will be expiring between 2027 and 2030.
	The Company and its subsidiary file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statues of limitations, which may result in the payment of income taxes and/or decrease its net operating losses available for carryforwards. The Company is no longer subject to income tax examinations by US federal tax authorities for years prior to 2006. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company currently has no tax years under examination.

F-21

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10.	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, provide CSM with a lease, extending for approximately 5 years, with an option to purchase the DDB Claims at any time during the lease period. To maintain the lease rights, CSM paid the DDB Syndicate $130,000 by June 30, 2008, with annual rental payments thereafter of $30,000 per year, payable on June 30, 2009, 2010, and 2011 respectively. CSM may exercise its option to purchase the DDB Claims by paying a purchase price of $400,000, less any rental payments made by CSM prior to exercising the option, or paying the DDB Syndicate $10, plus the grant of a 2% royalty of net smelter returns on the DDB Claims.
	The following table summarizes the rental payments under the mining lease agreement:

June 30, 2010	$	30,000
June 30, 2011		30,000
	$	60,000

The Company had made $30,000 in rental payments during the year ended December 31, 2009, which consists of $3,651 in payments to each of the eight owners of DDB Syndicate including reimbursement of expenses of $792 to a company controlled by Douglas D.G. Birnie.

11.	COMMITMENTS AND CONTINGENCIES
	Lease obligations– The Company rents office space in Henderson, Nevada. The lease terms expired on September 1, 2008 and the Company continues to rent the existing space under month-to-month terms for $4,625 per month.
	Rental expense, resulting from this operating lease agreement, was $13,875 and $13,875 for the three months ended March 31, 2010 and 2009, respectively.
	Columbus Project- Pursuant to the option assignment agreement dated March 30, 2007, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to Nanominerals Corp (NMC), one of the principal stockholders of the Company. The Columbus Project is further discussed in Note 4.
	Red Mountain Project- Pursuant to the option assignment agreement, 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. The Red Mountain Project is further discussed in Note 5.

F-22

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

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

The activity in the accrued reclamation and remediation cost liability for the three months ended March 31, 2010, was as follows:

Balance, December 31, 2009	$	275,338
Accruals for estimated costs		--
Balance, March 31, 2010	$	275,338

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

13.

CONCENTRATION OF CREDIT RISK

The Company maintains its cash accounts in three financial institutions. Cash accounts at these financial institutions are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per financial institution. 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 March 31, 2010, the Company had deposits in excess of FDIC insured limits in the amount of $6,250,391.

F-23

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

14.	RELATED PARTY TRANSACTIONS
	During the three months ended March 31, 2010, the Company utilized the services of NMC to provide technical assistance and financing related activities. These services related primarily to the Columbus project and the Red Mountain project. NMC is the Company’s largest shareholder, owning approximately 33% of the Company’s outstanding common stock.
	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 three months ended March 31, 2010, the Company incurred total fees and reimbursements of expenses to NMC of $105,000 and $19,149, respectively, for a total of $124,149. At March 31, 2010, the Company had an outstanding balance due to NMC of $36,448.
	Accounts payable – related party also includes $9,000 payable to one of the Company’s independent directors for director compensation.
	Accounts payable – related party totaled $45,448 as of March 31, 2010.
	Due to related parties includes amounts due to former officers of the Company. At March 31, 2010, the remaining amount of due to related parties was $23,290.
	For the three months ended March 31, 2010, the Company incurred fees for services performed by one of its independent directors, Mark Brennan of $21,066 primarily for executive search assistance.
15.	CONCENTRATION OF ACTIVITY
	For the three months ended March 31, 2010, the Company purchased services from one major vendor, NMC, which exceeded more than 10% of total purchases and amounted to $124,149. NMC is a related party as further discussed in Note 14.

F-24

ITEM 2. MANAGEMENT'S DISCUSSIONANDANALYSISOFFINANCIALCONDITIONANDRESULTS OF OPERATIONS.

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 are a minerals exploration and development company focused on the discovery and extraction of precious metals from mineral deposits in the Southwestern United States.

In February 2008, we acquired our lead project, a prospective gold, silver and calcium carbonate property located in Esmeralda County, Nevada, that we call the “Columbus Project.” The Columbus Project consists of 19,738 acres of placer mineral claims, including a 378 acre Permitted Mine Area (58-acre mill site and mill facility, and 320-acre mine site). Our current permits allow us to mine up to 792,000 tons per year to 40 feet in depth for the purpose of extracting precious metals and calcium carbonate from the Permitted Mine Area. We also have a mineral lease covering, and the option to acquire, an additional 23,440 acres of placer mineral claims adjoining the current project area (the “DDB Claims”).

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, 2009.

RECENT CORPORATE DEVELOPMENTS

The following significant developments occurred since the completion of our fiscal year ended December 31, 2009:

Warrants Issued For Consulting Services

(a)	On January 7, 2010, we agreed to issue 3,300,000 warrants exercisable at a price of $0.75 per share expiring on June 30, 2013 to a consultant. The warrants will vest at a rate of 825,000 warrants every six months beginning June 30, 2010 and ending December 31, 2011. Any warrants that have not yet vested will immediately vest upon any of the following events:
	(i)	The acquisition of more than 50% of the Company’s outstanding shares of common stock by any person other than an affiliate of the Company, an entity controlled by or under common control with an affiliate of the Company or a wholly owned subsidiary of the Company;
	(ii)	The sale by the Company of a greater than 50% interest in the Columbus Project; or
	(iii)	The approval by the Company’s Board of Directors of a tender offer (as that term is defined in the Exchange Act) for more than 50% of the Company’s outstanding shares made by a person introduced to the Company by the consultant.

3

	Upon termination of the services agreement, any warrants that have not vested will immediately terminate while any vested warrants shall continue to be exercisable as set out above. We may accelerate the expiration date of these warrants at any time after June 30, 2010 if:
	(i)	the volume weighted average price (“VWAP”) for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
	(ii)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.
	This consultant provided representations that he is not a U.S. person as that term is defined in Regulation S of the Securities Act.
(b)	On February 19, 2010, we agreed to issue 500,000 warrants to a separate consultant exercisable at a price of $0.75 per share and expiring on June 30, 2013. 125,000 of the warrants granted vested and became exercisable on March 31, 2010. An additional 125,000 warrants will vest and become exercisable at the end of each of our fiscal quarters beginning with our fiscal quarter ending June 30, 2010 and ending with our fiscal quarter ending December 31, 2010. Any warrants that have not yet vested will immediately vest upon any of the following events:
	(i)	The acquisition of more than 50% of the Company’s outstanding shares of common stock by any person other than an affiliate of the Company, an entity controlled by or under common control with an affiliate of the Company or a wholly owned subsidiary of the company; or
	(ii)	The sale by the Company of a greater than 50% interest in the Columbus Project.
	Upon termination of the services agreement, any warrants that have not vested will immediately terminate while any vested warrants shall continue to be exercisable as set out above. We may accelerate the expiration date of these warrants at any time after June 30, 2010 if:
	(i)	VWAP for our shares on the principal market on which they trade is above $4.50 per share for twenty consecutive trading days; and
	(ii)	the average daily trading volume for our shares on the principal market on which they trade during those twenty consecutive trading days is equal to or greater than 0.2% of our free float.
	The consultant provided representations that he is an accredited investor as that term is defined in Regulation D of the Securities Act.

January 2010 US and Foreign Private Placements

In January 2010, we issued an aggregate of 11,035,000 Units at a price of $0.45 per Unit in separate private placement offerings made to US accredited and foreign investors for total proceeds of $4,965,750. Each Unit offered was comprised of one share of our common stock and one-half of one share purchase warrant, with each full share purchase warrant entitling the holder to purchase an additional share of our common stock at an exercise price of $0.75 per share, expiring June 30, 2013. We may accelerate the expiration date for the warrants after June 30, 2010 if the VWAP for the shares on our principal market exceeds $4.50 per share for twenty consecutive trading days, and the average daily trading volume for our common stock on our principal market during those twenty trading days is not less than 0.2% of our free float. We agreed to pay $6,300 and issue 6,000 share purchase warrants as finder’s fees for the units subscribed for by foreign investors.

4

Compensation Increases to Executive Officers

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

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

Vice President of Finance and Administration

On March 8, 2010, we appointed David Z. Strickler, Jr. as our Vice President of Finance and Administration. We have agreed to pay Mr. Strickler an annual salary of $150,000 per year. In addition, we granted to Mr. Strickler options to purchase 200,000 shares of our common stock at an exercise price of $0.82 per share. The options granted to Mr. Strickler vest at a rate of 25,000 options per fiscal quarter, beginning on March 31, 2010, and expire five years after the particular vesting date.

New Geologic Modeling Completed

On April 13, 2010 we announced our new geologic modeling for our Columbus Project. The modeling is based upon a full analysis of the technical data generated from Ireland’s 2008 and 2009 drill programs and presents a refinement of the parameters previously used to delineate mineralized zones at the Columbus Project. The new geologic modeling has outlined seven mineralized zones containing a total of 343.9 million tons of material in place with an average grade of 0.040 ounces per ton (“opt”) gold equivalent (“AuE”) (AuE (opt) = Au (opt) +0.013 Ag (opt)) (based on $900/oz Au and $12/oz Ag).

PLAN OF OPERATION

During our 2010 fiscal year, we intend to proceed with our exploration and development programs for the Columbus Project and the Red Mountain Project.

The Columbus Project

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

(a)

Determining Project Mineralization: The goal of the drilling program is to determine whether there is sufficient mineralization at the Columbus Project for economic viability. Our 2008 and 2009 drill programs for the Columbus Project were conducted with a wide drill hole spacing (~1/4 mile x ½ mile) in order to determine the boundaries of mineralization in the previously identified area of interest covering approximately 5,000 acres. Our 2010 drill program is being designed to determine the grade and tonnage consistency between the drill holes in mineralized zones outlined to date. The goal of this program is to upgrade the mineralization estimates for inclusion in the project feasibility study.

(b)

Project Feasibility: We currently have a production permit for the Columbus Project. The production permit allows us to extract precious metals and produce calcium carbonate on the 378 acre (320 acre mine site and 58 acres of mill sites) Permitted Mine Area located at the Columbus Project at a mine rate of up to 792,000 tons per year. We have recently installed a precious metals leach extraction circuit at our onsite pilot plant. We are currently conducting testing and optimization of the leach circuit. Once testing and process optimization are completed, we expect to commence continuous operations of the pilot plant as part of our technical program goal of establishing economic feasibility.

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

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

We anticipate spending approximately $4,650,000 on our exploration and development program and capital expenditures for the Columbus Project from April 1, 2010 until March 31, 2011.

The Red Mountain Project

Sampling and Drilling Program: Our exploration and development program for the Red Mountain Project currently consists of a Drilling and Sampling program. Currently the Red Mountain Project is not in active development. We have set a budget of $255,000 for Drilling and Sampling at Red Mountain for the twelve months ending March 31, 2011; however, this program is contingent on certain milestones being achieved at our lead project, the Columbus Project. We have reallocated funds originally budgeted towards the Red Mountain Project in order to provide us with maximum flexibility in achieving our technical milestones at our lead project.

Cash Requirements

We have budgeted for the following cash expenditures for the twelve months ending March 31, 2011:

Columbus Project
	Property Payments	$	130,000
	Drilling Program and Resource Estimates		2,155,000
	Pilot Plant / Project Feasibility		2,065,000
	Total for Columbus Project	$	4,350,000
Red Mountain Project
	Property Acquisition and Maintenance Costs	$	105,000
	Sampling Exploration Program		150,000
	Total for Red Mountain Project	$	255,000
General and Administration
	Total for General and Administration	$	1,960,000
Total Expected Expenses		$	6,565,000
Total Expected Capital Expenditures		$	300,000
Total Expected Cash Expenditures		$	6,865,000

As of March 31, 2010, we had cash in the amount of $6,925,844 and a working capital surplus of $6,922,111. In January 2010, we sold an aggregate of 11,035,000 Units at a price of $0.45 per Unit under our 2010 US Offering and our 2010 Foreign Offering for total proceeds of $4,965,750. As a result, we currently have sufficient capital to pay for the anticipated costs of our exploration and development programs until March 31, 2011. However, actual costs could be greater than we have anticipated and we have no additional financing arrangements in place.

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RESULTS OF OPERATIONS

Three Months Summary

		Three Months Ended					Percentage
		March 31, 2010			March 31, 2009		Increase / (Decrease)
Revenue	$	-		$	-		n/a
Operating Expenses		(1,244,983	)		(948,761	)	31.2%
Other Income		6,101			7,617		(19.9)%
Income Tax Benefit		330,405			327,477		0.9%
Net Loss	$	(908,477	)	$	(613,667	)	48.0%

Revenue

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

Operating Expenses

Our operating expenses for the three months ended March 31, 2010 and 2009 consisted of the following:

		Three Months Ended			Percentage
		March 31, 2010		March 31, 2009	Increase / (Decrease)
Mineral exploration and evaluation expenses	$	311,889	$	587,706	(46.9)%
Mineral exploration and evaluation expenses – related party		124,149		105,000	18.2%
General and administrative		758,700		230,221	229.6%
General and administrative – related party		21,066		-	n/a
Depreciation		14,179		10,834	30.9%
Mineral and property holding costs		15,000		15,000	0.0%
Total Operating Expenses	$	1,244,983	$	948,761	31.2%

Operating expenses for our first fiscal quarter ended March 31, 2010 increased as compared with our first fiscal quarter ended March 31, 2009. The increase in operating expenses was a result of a large increase in general and administrative expenses during the period.

Mineral exploration and evaluation expenses decreased as there were no significant drilling or sampling activities during our first fiscal quarter of 2010. Costs incurred during our first fiscal quarter of 2010 associated with bringing the pilot plant online have been capitalized.

The item “Mineral exploration and evaluation expenses – related party” represents amounts paid or reimbursed to Nanominerals Corp. for exploration work conducted on the Columbus and Red Mountain Projects, Nanominerals is our largest shareholder, owning approximately 30% of our outstanding common stock.

During the fiscal quarter ended March 31, 2010, we incurred fees to Nanominerals of $105,000 for technical and financing related services relating primarily to the Columbus and Red Mountain Projects. In addition, we incurred $19,149 in respect to reimbursable expenses paid by Nanominerals. At March 31, 2010, we were indebted to Nanominerals in the amount of $36,448 for unpaid fees and reimbursable expenses.

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The increase in general and administrative expenses is primarily attributable to an increase in stock based compensation of $244,820. This increase in stock based compensation was attributable to warrants issued during the period to consultants. In addition, accounting and legal expenses were greater during the fiscal quarter ended March 31, 2010.

General and administrative expenses to related parties consist of $21,066 paid to Mark Brennan, a member of our Board of Directors, as consulting fees related to executive search assistance.

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

LIQUIDITY AND CAPITAL RESOURCES

Working Capital
							Percentage
		At March 31, 2010			At December 31, 2009		Increase / (Decrease)
Current Assets	$	7,147,856		$	3,741,299		91.1%
Current Liabilities		(225,745	)		(272,843	)	(17.3)%
Working Capital	$	6,922,111		$	3,468,456		99.6%

Cash Flows
		Three Months Ended			Three Months Ended
		March 31, 2010			March 31, 2009
Cash Flows used in Operating Activities	$	(1,109,102	)	$	(851,374	)
Cash Flows used in Investing Activities		(408,076	)		(212,374	)
Cash Flows from Financing Activities		4,792,007			-
Net Increase (Decrease) in Cash During Period	$	3,274,829		$	(1,063,748	)

At March 31, 2010 we had a working capital surplus of $6,922,111 as compared with a working capital surplus of $3,468,456 at December 31, 2009. The increase in our working capital surplus is primarily attributable to the completion of our 2010 US and foreign private placements in January 2010 as described below.

Financing Requirements

We currently have sufficient financial resources to pay for the expected costs of our exploration and development programs for fiscal 2010 and the first quarter of fiscal 2011.

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

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

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

There is no assurance that the actual costs of our exploration and development programs will not exceed our estimates. Furthermore, we may need additional financing to proceed beyond our current exploration and development plans. Our ability to obtain additional financing will be subject to a number of factors, including the variability of market prices for gold and silver, investor interest in our mineral projects, and the performance of equity markets in general. These factors may make the timing, amount, terms or conditions of additional financing unavailable to us. If we are not able to obtain financing when needed or in an amount sufficient to enable us to complete our programs, we may be required to adjust our exploration and development plans depending upon our existing capital resources.

8

OFF-BALANCE SHEET ARRANGEMENTS

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

CRITICAL ACCOUNTING POLICIES

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

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are also disclosed in the notes to our unaudited consolidated financial statements for the three months ended March 31, 2010 included in this Quarterly Report on Form 10-Q.

Mineral Rights

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

Exploration Costs

Mineral exploration costs are expensed as incurred.

Mineral Property Acquisition Costs

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

Reclamation and Remediation Costs (Asset Retirement Obligation)

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

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

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

Accruals for reclamation and environmental matters totaled $275,338 at March 31, 2010 and December 31, 2009. We are in the exploration stage and are unable to determine the estimated timing of these expenditures relating to these accruals at this time. It is reasonably possible the ultimate cost of reclamation and remediation could change in the future, and that changes to these estimates could have a material effect on future operating results as new information becomes known. For additional information, see Note 12 of the financial statements included with this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Not Applicable.

ITEM 4. CONTROLS AND PROCEDURES.

As of March 31, 2010, 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 March 31, 2010, 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.

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.

10

During the quarter ended March 31, 2010, there were no changes in the Company's internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

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

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

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

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

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

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

We expect to spend approximately $6,865,000 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 March 31, 2011. We currently have sufficient capital resources to pay for the anticipated costs of operating our business and completing our exploration and development plans until March 31, 2011. However, the actual costs of completing those programs could be greater than anticipated and we may need additional financing sooner than anticipated. In addition, based on our current budget estimates, we expect to need additional financing to proceed with our exploration and development programs beyond the first quarter of 2011.

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.

12

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

In order to maintain the rights to our mineral projects, we will be required to make annual filings and pay fees with federal and state regulatory authorities. On March 1, 2010, Nevada’s State Assembly and Senate passed Assembly Bill No. 6 (“AB6”). AB6 has installed an additional tiered fee that is payable in conjunction with the annual filing of an affidavit of the work performed on or improvements made to a mining claim, or an affidavit of the intent to hold a mining claim applied to holders of 11 or more claims. The fee ranges from $70 per claim for holders of 11 to 199 claims up to $195 per mining claim for holders of 1,300 or more claims as of the date of filing. AB6 was approved by the Governor of Nevada on March 12, 2010.

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

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

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

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

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

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

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

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

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

13

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Our shares constitute a penny stock under the Securities Exchange Act of 1934 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.

14

No Assurance That Forward Looking Assessments Will Be Realized.

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

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

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

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

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

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

15

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

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	Assignment Agreement dated for reference as of March 29, 2007, among Nanominerals Corp., the Company and Lorrie Archibald.(4)
10.3	Letter Agreement dated July 22, 2006 among Columbus Brine Inc., Columbus S.M. LLC and Nanominerals Corp., assigned to the Company by Nanominerals Corp.(11)
10.4	Letter Agreement dated March 15, 2007 between Red Mountain Mining and Nanominerals Corp., assigned to the Company by Nanominerals Corp.(11)
10.5	Agency Agreement dated effective as of June 19, 2007 between the Company and S & P Investors, Inc.(5)
10.6	Amendment Agreement to Assignment Agreement among the Company, Nanominerals Corp. and Lorrie Archibald, dated for reference as of August 8, 2007.(6)
10.7	Consulting Agreement between the Company and RJ Falkner & Company, Inc., dated for reference as of November 5, 2007.(7)
10.8	Consultant Non-Qualified Stock Option Agreement between the Company and R. Jerry Falkner, dated effective as of November 5, 2007.(7)
10.9	Agreement and Plan of Merger dated December 14, 2007 among the Company, Columbus Brine Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr.(8)
10.10	Amendment Agreement to Agreement and Plan of Merger entered into on January 31, 2008 among the Company, CBI Acquisition, Inc., Columbus Brine Inc., John T. Arkoosh, William Maghan and Lawrence E. Chizmar, Jr.(9)
10.11	Mining Lease Agreement dated November 30, 2007 between DDB Syndicate and Columbus S.M., LLC.(12)
14.1	Code of Ethics.(10)
21.1	List of Subsidiaries.(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.

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(1)	Filed as an exhibit to our Registration Statement on Form SB-2 originally filed on April 18, 2002, as amended.
(2)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2005 filed on April 12, 2006.
(3)	Filed as an exhibit to our Current Report on Form 8-K filed on April 30, 2007.
(4)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2006 filed on April 5, 2007.
(5)	Filed as an exhibit to our Current Report on Form 8-K filed on June 21, 2007.
(6)	Filed as an exhibit to our Current Report on Form 8-K filed on August 14, 2007.
(7)	Filed as an exhibit to our Current Report on Form 8-K filed on November 9, 2007.
(8)	Filed as an exhibit to our Current Report on Form 8-K filed on December 20, 2007.
(9)	Filed as an exhibit to our Current Report on Form 8-K filed on February 6, 2008.
(10)	Filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2003, filed on September 28, 2004.
(11)	Filed as a Schedule to Exhibit 10.2.
(12)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2007 filed on March 31, 2008.
(13)	Filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2009 filed on April 15, 2010.

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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:	May 14, 2010	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			(Principal Executive Officer)
Date:	May 14, 2010	By:	/s/ Robert D. McDougal
			ROBERT D. MCDOUGAL
			Chief Financial Officer and Treasurer
			(Principal Financial Officer)