Ireland (IRLD) 10-Q 2010 Q3 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 endedSeptember 30, 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 (§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 company)	Smaller reporting company[ x ]

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:As of November 15, 2010, the Registrant had 122,434,442 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 and nine months ended September 30, 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)
		September 30, 2010			December 31, 2009
ASSETS
Current assets
Cash	$	3,166,543		$	3,651,015
Short-term investments		898,632			-
Other receivables		30,000			-
Prepaid expenses		140,143			90,284
Total current assets		4,235,318			3,741,299
Property and equipment, net		4,211,241			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		37,089,862			36,641,739
Total assets	$	41,325,180		$	40,383,038
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable	$	354,579		$	133,541
Accounts payable - related party		54,513			101,213
Accrued payroll and related taxes		51,613			14,799
Due to related party		23,290			23,290
Total current liabilities		483,995			272,843
Long-term liabilities
Accrued reclamation and remediation costs		275,338			275,338
Deferred tax liability		6,032,792			7,368,534
Total long-term liabilities		6,308,130			7,643,872
Total liabilities		6,792,125			7,916,715
Commitments and contingencies - Note 13		-			-
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		47,935,352			42,099,452
Common stock subscribed		-			162,000
Accumulated other comprehensive income		14,890			-
Accumulated deficit during exploration stage		(13,539,121	)		(9,906,028	)
Total stockholders' equity		34,533,055			32,466,323
Total liabilities and stockholders' equity	$	41,325,180		$	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						For the nine months ended						through
		September 30, 2010			September 30, 2009			September 30, 2010			September 30, 2009			September 30, 2010
Revenue	$	-		$	-		$	-		$	-		$	-
Operating expenses
Mineral exploration and evaluation expenses		1,077,039			1,167,184			1,887,936			2,432,731			8,622,178
Mineral exploration and evaluation expenses - related party		136,827			126,780			423,641			375,971			2,470,786
General and administrative		698,765			302,605			2,252,184			781,181			5,764,800
General and administrative - related party		-			-			21,066			-			21,066
Depreciation		181,009			10,901			370,521			32,637			436,511
Mineral and property holding costs		15,000			15,000			45,000			45,000			455,500
Mineral and property holding costs - reimbursed to related party		-			-			-			-			295,000
Write-off of mineral rights		-			-			-			-			14,000
Total operating expenses		2,108,640			1,622,470			5,000,348			3,667,520			18,079,841
Loss from operations		(2,108,640	)		(1,622,470	)		(5,000,348	)		(3,667,520	)		(18,079,841	)
Other income (expense)
Interest income		9,310			2,184			27,223			12,544			310,283
Interest expense		(234	)		(200	)		(3,728	)		(626	)		(5,983	)
Total other income (expense)		9,076			1,984			23,495			11,918			304,300
Loss before income taxes		(2,099,564	)		(1,620,486	)		(4,976,853	)		(3,655,602	)		(17,775,541	)
Income tax benefit		564,611			557,197			1,343,760			1,265,857			4,236,420
Net loss	$	(1,534,953	)	$	(1,063,289	)	$	(3,633,093	)	$	(2,389,745	)	$	(13,539,121	)
Loss per common share - basic and diluted	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.02	)
Weighted average common shares outstanding - basic and diluted		121,934,442			98,261,756			121,368,545			97,431,895

See Accompanying Notes to these Consolidated Financial Statements

F-2

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

AND COMPREHENSIVE INCOME

(UNAUDITED)

										Accumulated		Accumulated
							Common			Other		Deficit During			Total
	Common Stock				Additional		Stock			Comprehensive		Exploration			Stockholders'
	Shares		Amount		Paid-in Capital		Subscribed			Income		Stage			Equity
Balance, December 31, 2008	97,010,087	$	97,010	$	36,059,449	$	-		$	-	$	(6,657,376	)	$	29,499,083
Amortization of stock options issued to a   director and employees over   vesting periods	-		-		32,717		-			-		-			32,717
Issuance of common stock for cash   Reg. S - Private Placement,   $0.45 per share, net of $21,711   financing costs	400,000		400		157,889		-			-		-			158,289
Issuance of common stock for cash   Reg. D - Private Placement,   $0.45 per share, net of $2,292   financing costs	863,800		863		385,555		-			-		-			386,418
Issuance of common stock for cash   Reg. S - Private Placement,   $0.45 per share, net of $39,107   financing costs	1,546,111		1,546		655,097		(195,750	)		-		-			460,893
Issuance of common stock for cash   Reg. D - Private Placement,   $0.45 per share, net of $1,062   financing costs	400,000		400		178,538		-			-		-			178,938
Net loss, September 30, 2009	-		-		-		-			-		(2,389,745	)		(2,389,745	)
Balance, September 30, 2009	100,219,998	$	100,219	$	37,469,245	$	(195,750	)	$	-	$	(9,047,121	)	$	28,326,593
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 directors, officers and   consultants over vesting periods	-		-		813,097		-			-		-			813,097
Issuance of stock options   to directos and officers	-		-		79,831		-			-		-			79,831
Issuance of common stock for cash   Reg. S - Private Placement,   $0.45 per share, net of $6,399   financing costs	200,000		200		83,401		-			-		-			83,601
Issuance of common stock for cash   Reg. D - Private Placement,   $0.45 per share, net of $5,344   financing costs	10,835,000		10,835		4,859,571		(162,000	)		-		-			4,708,406
Unrealized gain on short-term investments,   net of $8,018 deferred tax	-		-		-		-			14,890		-			14,890
Net loss, September 30, 2010	-		-		-		-			-		(3,633,093	)		(3,633,093	)
Balance, September 30, 2010	121,934,442	$	121,934	$	47,935,352	$	-		$	14,890	$	(13,539,121	)	$	34,533,055

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 nine months ended						through
		September 30, 2010			September 30, 2009			September 30, 2010
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,633,093	)	$	(2,389,745	)	$	(13,539,121	)
Adjustments to reconcile loss from operating to net cash used in operating activities:
Depreciation		370,521			32,637			436,511
Write-off of mineral rights		-			-			14,000
Consulting accrual		-			-			15,000
Stock based expenses		892,928			32,717			2,537,326
Changes in operating assets and liabilities:
Other receivables		(30,000	)		27,394			(2,606	)
Prepaid expenses		(49,859	)		15,599			(290,218	)
Other assets		-			-			(2,200	)
Reclamation deposit		-			24,720			(925,042	)
Mineral property acquisition costs		-			-			(1,022,663	)
Accounts payable and accrued liabilities		211,152			588,980			357,103
Deferred income taxes		(1,343,760	)		(1,265,857	)		(4,236,420	)
Accrued reclamation and remediation costs		-			-			275,338
Net cash used in operating activities		(3,582,111	)		(2,933,555	)		(16,382,992	)
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of property and equipment		(818,644	)		(224,342	)		(3,498,704	)
Purchase of short-term investments		(875,724	)		-			(875,724	)
Net cash used in investing activities		(1,694,368	)		(224,342	)		(4,374,428	)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from stock issuance		4,965,750			1,248,710			24,455,710
Proceeds from option issuance		-			-			20,000
Stock issuance costs		(11,743	)		(64,172	)		(560,037	)
Common stock subscribed		(162,000	)		-			-
Proceeds from borrowings from related party		-			-			8,290
Net cash provided by financing activities		4,792,007			1,184,538			23,923,963
NET CHANGE IN CASH		(484,472	)		(1,973,359	)		3,166,543
CASH AT BEGINNING OF PERIOD		3,651,015			2,565,823			-
CASH AT END OF PERIOD	$	3,166,543		$	592,464		$	3,166,543
		-
		-
SUPPLEMENTAL INFORMATION
Interest paid	$	3,728		$	626		$	5,983
Income taxes paid	$	-		$	-		$	-
Non-cash investing and financing activities:
Assets acquired for common stock and warrants issued for mineral properties	$	-		$	-		$	21,584,351
Net deferred tax liability assumed	$	-		$	-		$	10,261,194

See Accompanying Notes to these Consolidated Financial Statements

F-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 comprehensive income, 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.
	Since its formation, the Company has incurred cumulative net losses of $13,539,121 as of September 30, 2010. This amount is comprised of net losses from operations of $13,539,121 and other comprehensive income of $14,890. The Company has not commenced its commercial mining and mineral processing operations; rather, it is still in the exploration stage, raising substantial doubt about the Company’s ability to continue as a going concern. The Company will seek additional sources of capital through the issuance of debt or equity financing, but there can be no assurance the Company will be successful in accomplishing its objectives.
	The ability of the Company to continue as a going concern is dependent on additional sources of capital and the success of the Company’s plan. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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)
	Principles of consolidation– The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Columbus Minerals Inc. (“CMI”) (including its wholly- owned single-member LLC subsidiary Columbus Salt Marsh LLC (“CSM”)) and Rand Metals LLC (“Rand”). Significant intercompany accounts and transactions have been eliminated.
	Exploration costs– Mineral exploration costs are expensed as incurred.
	Fair value of financial instruments- Fair value accounting establishes a fair value hierarchy that prioritizes the inputs of valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below:

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

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

Short-term investments– Short-term investments generally have a maturity of three months to five years at the date of purchase. Investments with maturities beyond one year are classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Short-term investments classified as available-for-sale are recorded at fair value based on quoted market prices with the unrealized gains and losses reflected in accumulated other comprehensive income until realized. Realized gains and losses are determined on a specific identification method and are recognized in the statement of operations.

The Company evaluates unrealized losses, if any, in its investment securities for other-than temporary impairment using both qualitative and quantitative criteria. In the event that an investment is determined to be other-then-temporarily impaired, the Company recognizes the loss in the statement of operations. The Company generally only invests in debt securities.

Mineral rights– The Company capitalizes acquisition and option costs of mineral property rights. The amount capitalized represents fair value at the time the mineral rights were acquired.

The Company capitalizes acquisition and option costs of mineral rights as tangible assets. Upon commencement of commercial production, the mineral rights will be amortized using the unit-of-production method over the life of the mineral rights. If the Company does not continue with exploration after the completion of the feasibility study, the mineral rights will be expensed at that time.

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)
	Mineral property acquisition costs– Costs of acquiring mining properties are capitalized upon acquisition. Mine development costs incurred to develop new ore deposits, to expand the capacity of mines, or to develop mine areas substantially in advance of current production are also capitalized once proven and probable reserves exist and the property is a commercially mineable property. Costs incurred to maintain current production or to maintain assets on a standby basis are charged to operations. Costs of abandoned projects are charged to operations upon abandonment. The Company evaluates the carrying value of capitalized assets to determine if these costs are in excess of their recoverable amount whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. The periodic evaluation of the carrying value of capitalized costs and any related property and equipment costs are based upon expected future cash flows and/or estimated salvage value in accordance with Accounting Standards Codification (“ASC”) 360-10-35- 15,Impairment or Disposal of Long-Lived Assets.
	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 September 30, 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-7

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. These additional risks are due to the lower level of confidence that the identified mineralized material can ultimately be mined economically.
	Material changes to any of these factors or assumptions discussed above could result in future impairment charges to operations.
	Reclamation and remediation costs (asset retirement obligation)– The Company 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. 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, the uncertainties associated with defining the nature and extent of environmental disturbance and the application of laws and regulations by regulatory authorities and changes in reclamation or remediation technology. The Company periodically reviews accrued liabilities for such reclamation and remediation costs as evidence indicating that the liabilities have potentially changed becomes available. Changes in estimates are reflected in the statement of operations in the period an estimate is revised.
	Accruals for reclamation and environmental matters totaled $275,338 at September 30, 2010 and December 31, 2009. The Company is in the exploration stage and is unable to determine the estimated timing of expenditures relating to these accruals at this time. It is reasonably possible that the ultimate cost of reclamation and remediation could change in the future and that changes to these estimates could have a material effect on future operating results as new information becomes known. For additional information, see Note 14.

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)
	Use of estimates– The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from these estimates.
	Earnings (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. The weighted average of common stock equivalents, which include stock options and warrants to purchase common stock, on September 30, 2010 and 2009 that were not included in the computation of diluted EPS, because the effect would be antidilutive, were 36,670,762 and 19,599,686, 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 of aBusiness, deferred income tax liability is recorded on GAAP basis over income tax basis using statutory federal and state rates. The resulting estimated future federal and state income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is computed in accordance with ASC 740-10-25-51,Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations. The amount is reflected as an increase to the total purchase price which is then applied to the underlying acquired assets in the absence of a goodwill component associated with the acquisition transactions.

F-9

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.

The fair value of performance-based stock option grants is determined on their grant date through use of the Binomial Lattice option pricing model. The total value of the award is recognized over the requisite service period only if management has determined that achievement of the performance condition is probable. The requisite service period is based on management’s estimate of when the performance condition will be met. Changes in the requisite service period or the estimated probability of achievement can materially affect the amount of stock-based compensation recognized in the financial statements.

The fair value of market-based stock option grants is determined on their grant date through use of an option pricing model which uses a combination of Monte Carlo simulation and a Trinomial Lattice function. The requisite service period for market-based awards is derived from the model. Achievement of the market condition earlier than estimated can materially affect the amount of stock-based compensation recognized in the financial statements.

New accounting pronouncements– From time to time, new accounting pronouncements are issued by the FASB that are adopted by the Company as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards did not or will not have a material impact on the Company’s consolidated financial statements upon adoption.

In January 2010, the FASB issued 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-10

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

2.

SHORT-TERM INVESTMENTS

The Company’s short-term investments are classified as available for sale and consist of U.S. Treasury Notes which are publicly traded and valued. All investments are measured at fair value on a recurring basis based on quoted market prices. Therefore, all investments are considered to be within Level 1 of the fair value hierarchy. As of September 30, 2010, the Company’s investments were as follows:

				Unrealized		Unrealized
				Gains in		Losses in
				Accumulated		Accumulated
				Other		Other
				Comprehensive		Comprehensive		Recorded
		Cost Basis		Income		Income		Basis
Available for sale
U.S. Treasury Notes	$	875,724	$	22,908	$	--	$	898,632
	$	875,724	$	22,908	$	--	$	898,632

	All available for sale investments mature in July 2015. The Company did not have any investments as of December 31, 2009.
3.	PREPAID EXPENSES
	Prepaid expenses at September 30, 2010 and December 31, 2009 consisted of the following:

		September 30,		December 31,
		2010		2009
Claims maintenance	$	66,182	$	34,166
Insurance policies		55,095		49,973
Retainers		12,000		2,000
Other		6,866		4,145
	$	140,143	$	90,284

F-11

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

4.	PROPERTY AND EQUIPMENT
	Property and equipment consisted of the following as of September 30, 2010 and December 31, 2009:

		September 30,		December 31,
		2010		2009
Furniture and fixtures	$	20,456	$	8,921
Computers and equipment		41,165		39,137
Land		30,000		30,000
Site improvements		2,909,067		99,631
Site equipment		1,123,469		231,035
Vehicles		23,595		23,595
Building		500,000		--
Construction in progress:
Building		--		500,000
Site improvements		--		2,325,198
Site equipment		--		571,591
		4,647,752		3,829,108
Less accumulated depreciation		436,511		65,990
	$	4,211,241	$	3,763,118

Construction in progress consisted of capital expenditures for construction of the Company’s pilot plant leach circuit. During the second quarter of 2010, the pilot plant began operating on a continuous basis and $3,802,519 of construction in progress was placed in service.

Depreciation expense was $370,521 and $32,637 for the nine months ended September 30, 2010 and 2009, respectively.

F-12

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

F-13

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

5.	COLUMBUS PROJECT(continued)
	The Company applied EITF 98-03 (which has been superseded by ASC 805-10-25-1) with regard to the acquisition of the Columbus Project. The Company determined that the acquisition of the Columbus Project did not constitute an acquisition of a business, as that term is defined in ASC 805- 10-55-4, and the Company recorded the acquisition as a purchase of assets.
	As required by ASC 930-805-30,Mining – Business Combinations – Initial Recognition, and ASC 740-10-25-49-55,Income Taxes – Overall – Recognition – Acquired Temporary Differences in Certain Purchase Transactions that are Not Accounted for as Business Combinations, the purchase price of $32 million was allocated to the assets acquired and liabilities assumed based on their respective fair values at the date of acquisition. The purchase price allocated to the real properties was based on fair market values determined using an independent real estate appraisal firm (Arden Salvage Company), and the fair value of the remaining assets acquired and liabilities assumed were based on management’s best estimates taking into account all available information at the time.
	Pursuant to the terms of the acquisition of CBI, the Company issued an aggregate of 10,440,087 shares of common stock and 5,220,059 share purchase warrants to the former shareholders of CBI. Each share purchase warrant issued by the Company entitles the holder to purchase one additional share of the Company’s common stock at a price of $2.39 per share for a period of 5 years. Each warrant provides the holder with a cashless right of exercise. If the holder chooses to utilize this cashless exercise right, the total number of shares that the holder will be entitled to exercise will be determined by the following formula: [(A–B)C] ÷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-14

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

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

The following table reflects the components of the Columbus Project:

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

F-15

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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

F-16

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	PRIVATE PLACEMENTS
	For the nine months ended September 30, 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 warrant. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with the private placement offering in the amount of $6,300 in cash and issued warrants to purchase up to 6,000 shares of common stock. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. Financing costs related to this offering were $99.
		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 warrant. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. Financing costs related to this offering were $5,344.

For the nine months ended September 30, 2009, the Company completed two private placement offerings each to US accredited investors and non-US persons for total gross proceeds of $1,248,710. A total of 3,209,911 units were issued at a price of $0.45. Each unit sold consisted of one share of the Company’s common stock and one-half of one share purchase warrant. Each whole share purchase warrant entitles the holder to purchase one additional share of the Company’s common stock at a price of $0.75 per share for a period expiring June 30, 2013. The Company incurred commissions payable to agents in connection with these private placements in the amount of $55,648 in cash and issued warrants to purchase up to 52,998 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 these offerings were $8,524.

F-17

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

7.	PRIVATE PLACEMENTS(continued)
	Warrants associated with the 2010 and 2009 equity issuances do not constitute a registration payment arrangement.
	A summary of investor warrant activity for the nine months ended September 30, 2010 and 2009 is as follows:

	Number of
	Shares		Exercise Price
Outstanding and exercisable, December 31, 2008	15,380,709	$	0.75 – 2.39
Granted	1,658,043		0.75
Exercised	--		--
Forfeited/expired	--		--
Outstanding and exercisable, September 30, 2009	17,038,752	$	0.75 - 2.39
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, September 30, 2010	28,121,857	$	0.75 - 2.39

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

F-18

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	SHARE BASED COMPENSATION
	On March 27, 2007, the Board of Directors adopted the 2007 Stock Incentive Plan (the “Plan”). Under the terms of the Plan, options to purchase up to 6,000,000 shares of the common stock of the Company, subject to an increase each quarter equal to 15% of the increase in the total number of outstanding shares during the previous quarter, may be granted to officers, directors, employees and eligible consultants.
	At September 30, 2010, the Company had options outstanding that vest on three different types of vesting schedules:

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

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

	2010	2009
Dividend yield	--	--
Expected volatility	116 .8 - 118.7%	73.9%
Risk-free interest rate	1.69 – 3.33 %	3.07 – 3.32 %
Expected life (years)	2.75 – 8.0	4.25 – 6.5

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

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

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

F-19

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.SHARE BASED COMPENSATION(continued)

For grants awarded during 2010 the expected volatility is based on the historical volatility levels of the Company’s common stock. For 2009 grants, the expected volatility was based on the average volatility of a representative peer group. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues over the equivalent contractual lives of the options.

Total expense for the nine months ended September 30, 2010 and 2009 related to the granting and vesting of all share based payments was $892,928 and $32,717, respectively. Such expenses are included in general and administrative expense and mineral exploration and evaluation expense.

During the nine months ended September 30, 2010, the Company granted stock options and warrants as follows:

a)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 200,000 and 200,000 shares of common stock, to its two independent directors. The options are exercisable at $0.53 per share and vest as follows: 100,000 on the grant date, 50,000 on September 30, 2010 and 50,000 on December 31, 2010. The options expire five years after the particular vesting date.
b)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 300,000 shares of common stock at $0.75 per share to the CEO. The options vest as follows: 50,000 on the grant date, 50,000 on December 31, 2010 and 50,000 every six months thereafter commencing on December 31, 2012. The options expire five years after the particular vesting date.
c)	On July 22, 2010, the Company granted nonqualified stock options for the purchase of 100,000 shares of common stock at $0.75 per share to the CFO. The options vest as follows: 16,667 on the grant date, 16,667 on December 31, 2010 and 16,667 every six months thereafter. The final group of 16,665 options vest on December 31, 2012. The options expire five years after the particular vesting date.
d)	On July 22, 2010, the Company granted nonqualified market-based stock options for the purchase of 150,000 and 50,000 shares of common stock at $0.53 per share to the CEO and CFO, respectively. The options vest on the first date after the grant date that the closing price of the Company’s common stock exceeds $1.00 per share for twenty consecutive trading days. The options expire five years after the date that they vest. The requisite service periods for these stock option awards, as derived from the Monte Carlo -Trinomial Lattice model was determined to be one year.

F-20

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	SHARE BASED COMPENSATION(continued)
	e)	On July 22, 2010, the Company granted nonqualified performance-based stock options for the purchase of 150,000 and 50,000 shares of common stock at $0.53 per share to the CEO and CFO, respectively. The options vest upon the Board of Directors determining, by resolution, that the Company has, from the date of grant, made adequate and sufficient progress on the Company’s technical and feasibility programs for the Columbus Mineral Project. The options expire five years after the date that they vest.
		On the grant date, the Company determined that achievement of the performance condition was probable. The Company’s best estimate of the requisite service period was determined to be eight months. The Company reviewed and confirmed these determinations at September 30, 2010.
	f)	On March 8, 2010, the Company granted 200,000 options to an Officer. The options are exercisable at $0.82 per share, vest at a rate of 25,000 options per fiscal quarter, beginning on March 31, 2010, and expire five years after the particular vesting date.
	g)	On March 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.
	h)	On February 19, 2010, the Company granted 500,000 warrants to a consultant. The warrants are exercisable at $0.75 per share and expire on June 30, 2013. The warrants vest 25% at each quarter end from March 31, 2010 through December 31, 2010.
	i)	On January 7, 2010, the Company granted 3,300,000 warrants to a consultant. The warrants have an expiration date of June 30, 2013 and an exercise price of $0.75 per share. The warrants vest 25% on June 30, 2010, 25% on December 31, 2010, 25% on June 30, 2011 and 25% on December 31, 2011. After June 30, 2010, the Company will have the right to accelerate the expiration date of the vested warrants if the volume weighted average trading price for the shares is above $4.50 per share for twenty consecutive trading days.

During the nine months ended September 30, 2009, the Company granted 270,000 stock options to a director and an employee with a weighted average exercise price of $0.48 per share. During the nine months ended September 30, 2009, the Company granted 200,000 warrants to a consultant with a weighted average exercise price of $0.55 per share.

F-21

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	SHARE BASED COMPENSATION(continued)
	The following table summarizes the Company’s stock option and warrant activity for the nine months ended September 30, 2010 and 2009:

			Weighted
	Number of		Average
	Shares		Exercise Price
Balance, December 31, 2008	3,954,719	$	0.15
Options granted and assumed	470,000		0.51
Options expired	--		--
Options forfeitures	--		--
Options exercised	--		--
Balance, September 30, 2009	4,424,719	$	0.19

				Weighted
	Number of			Average
	Shares			Exercise Price
Balance, December 31, 2009	4,724,719		$	0.23
Options granted and assumed	5,267,197			0.72
Options expired	(79,719	)		1.36
Options forfeitures	--			--
Options exercised	--			--
Balance, September 30, 2010	9,912,197		$	0.48

F-22

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	SHARE BASED COMPENSATION(continued)
	The following table summarizes information about options and warrants granted during the nine months ended September 30, 2009:

	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 2009	on Grant Date		Price	Price		Value
470,000	Equals	$	0.51	$0.48 - $0.55	$	0.26
--	Exceeds		--	--		--
--	Less Than		--	--		--

The following table summarizes information about options and warrants granted during the nine months ended September 30, 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
567,197	Equals	$	0.76	$0.75 - $0.81	$	0.27
4,500,000	Exceeds	$	0.71	$0.53 - $0.75	$	0.37
200,000	Less Than	$	0.82	$0.82	$	0.56

F-23

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

8.	SHARE BASED COMPENSATION(continued)
	The following table summarizes the status of the Company’s unvested shares as of September 30, 2009 and changes during the nine months ended September 30, 2009:

				Weighted Average
	Number of			Grant Date
	Shares			Fair Value
Unvested, December 31, 2008	37,500		$	0.55
Options granted	270,000			0.39
Options vested	(107,500	)		0.30
Options forfeited	--			--
Unvested, September 30, 2009	200,000		$	0.47

The following table summarizes the changes of the Company’s stock options and warrants issued for stock based compensation subject to vesting for the nine months ended September 30, 2010:

				Weighted Average
	Number of			Grant Date
	Shares			Fair Value
Unvested, December 31, 2009	540,000		$	0.46
Granted	4,833,333			0.38
Vested	(1,565,000	)		0.39
Forfeited	--			--
Unvested, September 30, 2010	3,808,333		$	0.39

As of September 30, 2010, there was $1,275,585 of total unrecognized compensation cost related to unvested stock options and warrants. This cost is expected to be fully recognized as follows:

2010	$	320,689
2011		909,637
2012		45,259
Total	$	1,275,585

F-24

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

9.	WARRANTS AND OPTIONS
	The following table summarizes all of the Company’s stock option and warrant activity for the nine months ended September 30, 2010 and 2009, including private placement warrants and share based payment stock options and warrants:

				Weighted
	Number of			Average
	Shares			Exercise Price
Balance, December 31, 2008	19,335,428		$	1.07
Options granted and assumed	2,128,043			0.70
Options expired	--			--
Options forfeitures	--			--
Options exercised	--			--
Balance, September 30, 2009	21,463,471		$	1.03
Balance, December 31, 2009	27,323,076		$	0.97
Options granted and assumed	10,790,697			0.74
Options expired	(79,719	)		1.36
Options forfeitures	--			--
Options exercised	--			--
Balance, September 30, 2010	38,034,054		$	0.90

F-25

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10.	INCOME TAXES
	The Company is a Nevada corporation and is subject to federal income taxes. Nevada does not impose a corporate income tax.
	The income tax benefit consisted of the following for the nine months ended September 30, 2010 and September 30, 2009:

		September 30,			September 30,
		2010			2009
Income tax benefit based on statutory tax rate	$	1,741,899		$	(1,279,461	)
Non-deductible and other		(1,729	)		2,177
Change in valuation allowance		(396,410	)		11,427
Income tax benefit	$	1,343,760		$	(1,265,857	)

Significant components of the Company’s net deferred income tax assets and liabilities at September 30, 2010 and December 31, 2009 were as follows:

		September 30,			December 31,
		2010			2009
Deferred income tax assets:
Net operating loss carryforward	$	5,042,417		$	3,698,657
Option compensation		888,064			575,539
Property, plant & equipment		81,568			--
Reclamation and remediation costs		96,368			96,368
Gross deferred income tax asset		6,108,417			4,370,564
Valuation allowance		(1,066,000	)		(669,590	)
		5,042,417			3,700,974
Deferred income tax liabilities:
Property, plant & equipment		--			2,317
Unrealized gain on short-term investments		8,018			--
Acquisition related liabilities		11,067,191			11,067,191
Net deferred income tax liability	$	6,032,792		$	7,368,534

A valuation allowance was established for deferred tax assets related to option compensation and accrued reclamation and remediation costs due to the uncertainty of realizing these deferred tax assets based on conditions existing at September 30, 2010 and December 31, 2009.

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

F-26

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

10.	INCOME TAXES(continued)
	The resulting estimated future federal income tax liability associated with the temporary difference between the acquisition consideration and the tax basis is reflected as an increase to the total purchase price which has been applied to the underlying mineral and Columbus project assets in the absence of there being a goodwill component associated with the acquisition transactions.
	The Company had cumulative net operating losses of approximately $14,406,905 and $10,567,591 as of September 30, 2010 and December 31, 2009, respectively for federal income tax purposes. Cumulative net operating losses from December 31, 2006 and previous years are effectively nil due to the annual limitation imposed by the Internal Revenue Code of 1986 as a result of the ownership percentage change limitations. The net operating loss carryforwards will expire between 2027 and 2030.
	The Company and its subsidiary file income tax returns in the United States. These tax returns are subject to examination by taxation authorities provided the years remain open under the relevant statues of limitations, which may result in the payment of income taxes and/or a decrease in the net operating losses available for carryforwards. The Company is no longer subject to income tax examinations by US federal tax authorities for years prior to 2006. While the Company believes that its tax filings do not include uncertain tax positions, the results of potential examinations or the effect of changes in tax law cannot be ascertained at this time. The Company currently has no tax years under examination.
11.	COMPREHENSIVE INCOME
	The components of comprehensive income, net of tax, were as follows for the nine months ended September 30, 2010:

		September 30,
		2010
Net Loss	$	(3,633,093	)
Other Comprehensive Income, net of tax:
Unrealized gain on short-term investments		14,890
Comprehensive Income	$	(3,618,203	)

The tax effect of each component of comprehensive income for the nine months ended September 30, 2010:

		September 30,
		2010
Unrealized holding gains	$	22,908
Income tax expense		(8,018	)
Total unrealized gains, net of tax	$	14,890

For the nine months ended September 30, 2009, there was no other comprehensive income recognized.

F-27

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

12.	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 (“NMC”).
	The DDB Syndicate has leased the DDB Claims to CSM, a wholly owned subsidiary of the Company. The mining lease agreement (the “DDB Agreement”), between the DDB Syndicate and CSM, provides CSM with a lease, extending for approximately 5 years, with an option to purchase the DDB Claims at any time during the lease period. To maintain the lease rights, CSM paid the DDB Syndicate $130,000 by June 30, 2008, with annual rental payments thereafter of $30,000 per year, payable on June 30, 2009, 2010, and 2011, respectively. CSM may exercise its option to purchase the DDB Claims by paying a purchase price of $400,000, less any rental payments made by CSM prior to exercising the option, or paying the DDB Syndicate $10, plus the grant of a 2% royalty of net smelter returns on the DDB Claims.
	The Company paid the $30,000 rental payments due on June 30, 2010 and 2009, respectively. The payments consist of $3,651 in payments to each of the eight owners of DDB Syndicate including reimbursement of expenses of $792 to a company controlled by Douglas D.G. Birnie.
13.	COMMITMENTS AND CONTINGENCIES
	Lease obligations– The Company rents office space in Henderson, Nevada. The lease terms expired on September 1, 2008 and the Company continues to rent the existing space under month-to-month terms.
	Rental expense resulting from this operating lease agreement was $49,725 and $41,625 for the nine months ended September 30, 2010 and 2009, respectively.
	Columbus Project– Pursuant to the option assignment agreement dated March 30, 2007, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to NMC, one of the principal stockholders of the Company. The Columbus Project is further discussed in Note 5.
	Red Mountain Project– Pursuant to the option assignment agreement, as amended August 8, 2007, the Company granted a 5% net smelter return royalty to NMC, one of the principal stockholders of the Company. The Red Mountain Project is further discussed in Note 6.

F-28

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

14.	ENVIRONMENTAL AND RECLAMATION ACTIVITIES
	The liabilities accrued for the reclamation and remediation costs at September 30, 2010 and December 31, 2009, were as follows:

		September 30,		December 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 nine months ended September 30, 2010, was as follows:

Balance, December 31, 2009	$	275,338
Accruals for estimated costs		--
Balance, September 30, 2010	$	275,338

	The Company maintains reclamation bonds with the Bureau of Land Management in the amount of $908,368 as of September 30, 2010 and December 31, 2009, respectively.
15.	CONCENTRATION OF CREDIT RISK
	The Company maintains its cash accounts in financial institutions. Cash accounts are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250,000 per financial institution. The Company has never experienced a material loss or lack of access to its cash accounts; however, no assurance can be provided that access to the Company’s cash accounts will not be impacted by adverse conditions in the financial markets. At September 30, 2010, the Company had deposits in excess of FDIC insured limits in the amount of $2,375,941.

F-29

IRELAND INC.

(AN EXPLORATION STAGE ENTERPRISE)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

16.	RELATED PARTY TRANSACTIONS
	Pursuant to option assignment agreements related to both the Columbus and Red Mountain projects, the Company granted a 5% net smelter return royalty to NMC. NMC is the Company’s largest shareholder, owning approximately 33% of the Company’s outstanding common stock. The Columbus Project is further discussed in Note 5. The Red Mountain Project is further discussed in Note 6.
	During the nine months ended September 30, 2010, the Company utilized the services of NMC to provide technical assistance and financing related activities. These services related primarily to the Columbus project and the Red Mountain project.
	In addition to the above services, NMC provided dedicated use of its laboratory, instrumentation, milling equipment and research facilities. NMC provided invoices for these fees plus expenses.
	For the nine months ended September 30, 2010, the Company incurred total fees and reimbursements of expenses to NMC of $315,000 and $78,641, respectively, for a total of $393,641. At September 30, 2010, the Company had an outstanding balance due to NMC of $43,052.
	The Company also had an outstanding balance for accrued compensation to Douglas D.G. Birnie, its executive officer, of $11,461. The amount is payable to a company wholly owned by Douglas D.G. Birnie.
	Accounts payable – related party totaled $54,513 as of September 30, 2010.
	Due to related parties includes amounts due to former officers of the Company. At September 30, 2010, the remaining amount of due to related parties was $23,290.
	As further discussed in Note 12, the Company, through its subsidiary CMI, has a lease agreement for mining claims with DDB Syndicate, an entity owned by related parties, including Douglas D.G. Birnie, Chief Executive Officer of the Company; Mr. Chizmar, a former director of the Company; three former officers and directors of CBI; Geotech Mining Inc., Jack Corp. and Wiser Corp. Geotech Mining Inc., Jack Corp. and Wiser Corp. are affiliates of NMC. Rental payments to DDB Syndicate were $30,000 for the nine months ended September 30, 2010 and 2009, respectively.
	For the nine months ended September 30, 2010, the Company incurred fees of $21,066 for services performed by one of its independent directors, Mark Brennan, primarily for executive search assistance.
17.	CONCENTRATION OF ACTIVITY
	For the nine months ended September 30, 2010, the Company purchased services from two major vendors, Boart Longyear and NMC, which exceeded more than 10% of total purchases and amounted to $442,488 and $393,641, respectively. NMC is a related party as further discussed in Note 16.

F-30

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”).

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

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

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 filed with the United States Securities and Exchange Commission (the “SEC”) on April 15, 2010.

RECENT CORPORATE DEVELOPMENTS

The following significant developments occurred since our fiscal quarter ended June 30, 2010:

Grant of Options to the Chief Executive Officer and the Chief Financial Officer under the 2007 Stock IncentivePlan

Effective July 22, 2010, we granted to Douglas D.G. Birnie, CEO, and Robert D. McDougal, CFO, non-qualified stock options to acquire an aggregate of 800,000 shares of our common stock under the 2007 Stock Incentive Plan as follows:

3

1.	Mr. Birnie was granted non-qualified stock options to purchase an aggregate of 600,000 shares of our common stock pursuant to the 2007 Stock Incentive Plan as follows:
	(a)	Options to purchase an aggregate of 300,000 shares of our common stock vesting on the dates and in the amounts, exercisable at the price, and expiring on the dates, each as set out below:

Number of Options to	Exercise Price	Vesting Date	Expiration Date
Vest	Per Share
50,000	$0.75	June 30, 2010	June 29, 2015
50,000	$0.75	December 31, 2010	December 30, 2015
50,000	$0.75	June 30, 2011	June 29, 2016
50,000	$0.75	December 31, 2011	December 30, 2016
50,000	$0.75	June 30, 2012	June 30, 2017
50,000	$0.75	December 31, 2012	December 30, 2017

(b) Options to purchase an aggregate of 150,000 shares of our common stock at an exercise price of $0.53 per share, vesting on the dates and in the amounts, and expiring on the dates, each as set out below:

Number of Options to
Vest	Vesting Date	Expiration Date
150,000	The first date after the Grant Date that the closing price for our common stock (as quoted by the principal market or exchange on which such shares trade) exceeds $1.00 per share for 20 consecutive trading days.	The date that is 5 years after the vesting date.

(c) Options to purchase an aggregate of 150,000 shares of our common stock at an exercise price of $0.53 per share, vesting upon the Board of Directors determining, by resolution, that we have, from the Grant Date, made adequate and sufficient progress on our technical and feasibility programs for our Columbus Mineral Project, and expiring on the date that is 5 years after the vesting date.

2.	Mr. McDougal was granted non-qualified stock options to purchase an aggregate of 200,000 shares of our common stock pursuant to the 2007 Stock Incentive Plan as follows:
	(a)	Options to purchase an aggregate of 100,000 shares of our common stock vesting on the dates and in the amounts, exercisable at the price, and expiring on the dates, each as set out below:

Number of Options to	Exercise Price	Vesting Date	Expiration Date
Vest	Per Share
16,667	$0.75	June 30, 2010	June 29, 2015
16,667	$0.75	December 31, 2010	December 30, 2015
16,667	$0.75	June 30, 2011	June 29, 2016
16,667	$0.75	December 31, 2011	December 30, 2016
16,667	$0.75	June 30, 2012	June 30, 2017
16,665	$0.75	December 31, 2012	December 30, 2017

(b) Options to purchase an aggregate of 50,000 shares of our common stock at an exercise price of $0.53 per share, vesting on the dates and in the amounts, and expiring on the dates, each as set out below:

Number of Options to
Vest	Vesting Date	Expiration Date
50,000	The first date after the Grant Date that the closing price for our common stock as quoted by the principal market or exchange on which such shares trade exceeds $1.00 per share for 20 consecutive trading days.	The date that is 5 years after the vesting date.

4

(c) Options to purchase an aggregate of 50,000 shares of our common stock at an exercise price of $0.53 per share, vesting upon the Board of Directors determining, by resolution, that we have, from the Grant Date, made adequate and sufficient progress on our technical and feasibility programs for our Columbus Mineral Project, and expiring on the date that is 5 years after the vesting date.

Pursuant to the option agreements between the Company and Mr. Birnie and Mr. McDougal with respect to the above grants, each of the options granted to Mr. Birnie and Mr. McDougal will automatically vest and become exercisable upon the occurrence of a change in control of the Company.

Grant of Options to Independent Directors Pursuant to the 2007 Stock Incentive Plan

On July 22, 2010, the Company granted to its two independent directors non-qualified stock options to acquire an aggregate of 400,000 shares of our common stock under our 2007 Stock Incentive Plan summarized below:

1. Michael A. Steele was granted non-qualified stock options to purchase an aggregate of 200,000 shares of our common stock, vesting on the dates and in the amounts, exercisable at the price, and expiring on the dates, each as set out below:

Number of Options to	Exercise Price	Vesting Date	Expiration Date
Vest	Per Share
100,000	$0.53	June 30, 2010	June 29, 2015
50,000	$0.53	September 30, 2010	September 29 2015
50,000	$0.53	December 31, 2010	December 30, 2015

2. Mark H. Brennan was granted non-qualified stock options to purchase an aggregate of 200,000 shares of our common stock, vesting on the dates and in the amounts, exercisable at the price, and expiring on the dates, each as set out below:

Number of Options to	Exercise Price	Vesting Date	Expiration Date
Vest	Per Share
100,000	$0.53	June 30, 2010	June 29, 2015
50,000	$0.53	September 30, 2010	September 29 2015
50,000	$0.53	December 31, 2010	December 30, 2015

Pursuant to the option agreements between the Company and Mr. Steele and Mr. Brennan with respect to the above option grants, each of the options granted to Mr. Steele and Mr. Brennan will automatically vest and become exercisable upon the occurrence of a change in control of the Company.

Exercise of Options by Director

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

PLAN OF OPERATIONS

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

5

The Columbus Project

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

(a)	Mineral Resources/Reserves: Exploration and development work to date has identified three different host materials (clay, sand, brine) each of which could potentially contain commercial quantities of silver and gold mineralization within the project area. The sand zones outcrop on the western side of the Columbus basin and dip gently eastward. The clay zones also outcrop and overlay the sand zones. The brine zone occurs as an aquifer at some 400 feet depth underlying the sand/clay zones. Minimal work has been done by the Company on the brine zone, however previous work has shown some potential for both silver and gold in the brine. The Company’s exploration efforts have focused on drilling both the sand and clay zones within the approximately 5,000 acre Columbus Project Area of Interest outlined by previous geochemical exploration work.
	The 2008 and 2009 drilling program identified some 343 million tons of mineralized sand and/or clay material, grading 0.040 opt gold equivalent from the surface to 100 feet depth. (AuE opt = Au opt + 0.013 Ag opt)(based on $900/oz Au and $12/oz Ag). The boundaries of these mineralized zones were identified at a wide drill hole spacing (about ¼ mile X ½ mile). The 2010 drill program was designed to both infill drill and to extend these previously drilled mineralized zones. All drill programs have been conducted by independent and qualified third parties under strict Chain-of-Custody, Quality Assurance and Quality Control standards. Samples will continue to be assayed using caustic fusion and metal extraction methods.
	The first phase of the 2010 drill program consisted of 147 holes drilled to a depth of 40 feet (permitted mining depth) within the permitted 320-acre mine site area. The goal of this drilling is to further define the mineralogy and grades within these mineralized clays. The second phase of the 2010 drill program consisted of 28 holes to a depth of 200 feet within the clay and sand zones located in the northwest sector of the property. These holes are designed to both infill and extend the mineral resources in this area. The 2010 drill program was completed in October 2010, ahead of schedule and under budget. Results will be reported as received.
(b)	Feasibility Study: The Company currently has a production permit for the Columbus Project. The production permit allows for the extraction of precious metals and the production of calcium carbonate on the 378 acre site (320 acre mine site and 58 acre mill site) at a mine rate of up to 792,000 tons per year. During the period 2008-2010 the Company has developed a dredge mine, constructed a Pilot Plant and began operations to develop and prove the extractive metallurgy for the Columbus project. To date the pilot facility has focused on the extraction of precious metals from the clays found within the permitted mine area. These clays contain a significant amount of organic material which has limited the gold and silver extraction in the CIP thiosulphate circuit. As an example, 0.011 opt gold and 0.037 opt silver was extracted as metal from 58.58 tons of low grade (0.02 opt Au, 0.39 opt Ag) head ore that was processed through the plant. This represented an average recovery of 51% fo r Au and 9.5% for Ag. During this initial test, no effort was made to optimize either head grade or extraction rates.
	Since the first test runs, activities have focused on maximizing gold and silver extraction rates and minimizing processing costs. Maximizing gold and silver extraction involves the optimization of five primary variables of the process flow sheet: percentage of solids in the slurry, thiosulphate concentration, leach time, oxidation method and carbon loading. Process testing has substantially determined the first three variables and is now focused on oxidation and carbon loading. It is here where solving the current organic issue will allow final optimization of the oxidation and carbon loading circuit. When this work is completed, we expect to engage independent engineers to operate the pilot plant to confirm results and to complete the feasibility study.
	If the operation of the pilot plant proves, to our satisfaction, that the Columbus Project is economically viable, we may seek to expand the production process and/or construct additional production circuits within the mill site to increase production capacity. The production model for the Columbus Project is anticipated to be a low cost, high volume mining operation.

6

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 $3,370,000 on our exploration and development program and $255,000 on our capital expenditures for the Columbus Project from October 1, 2010 until September 30, 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 $440,000 for Drilling and Sampling at Red Mountain for the twelve months ending September 30, 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 period from October 1, 2010 until September 30, 2011:

Columbus Project
	Property Payments	$	100,000
	Drilling Program and Mineralization Estimates		1,545,000
	Pilot Plant / Project Feasibility		1,725,000
	Total for Columbus Project	$	3,370,000
Red Mountain Project
	Property Acquisition and Maintenance Costs	$	80,000
	Sampling Exploration Program		360,000
	Total for Red Mountain Project	$	440,000
General and Administration
	Total for General and Administration	$	1,850,000
Total Expected Expenses		$	5,660,000
Total Expected Capital Expenditures		$	255,000
Total Expected Cash Expenditures		$	5,915,000

7

As of September 30, 2010, we had cash in the amount of $3,166,543 and a working capital surplus of $3,751,323. We do not currently have sufficient financial resources to pay for our anticipated cash expenditures for the period from October 1, 2010 to September 30, 2011. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. If we are unable to obtain sufficient financing to complete our planned exploration and development plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

RESULTS OF OPERATIONS

Three Months and Nine Months Summary

		Three Months Ended					Percentage		Nine Months Ended					Percentage
		September 30,					Increase /		September 30,					Increase /
		2010			2009		(Decrease)		2010			2009		(Decrease)
Revenue	$	-		$	-		n/a	$	-		$	-		n/a
Operating Expenses		(2,108,640	)		(1,622,470	)	30.0%		(5,000,348	)		(3,667,520	)	36.3%
Other Income (Expense)		9,076			1,984		357.5%		23,495			11,918		97.1%
Income Tax Benefit		564,611			557,197		1.3%		1,343,760			1,265,857		6.2%
Net Loss	$	(1,534,953	)	$	(1,063,289	)	44.4%	$	(3,633,093	)	$	(2,389,745	)	52.0%

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 and nine months ended September 30, 2010 and 2009 consisted of the following:

		Three Months Ended			Percentage		Nine Months Ended			Percentage
		September 30,			Increase /		September 30,			Increase /
		2010		2009	(Decrease)		2010		2009	(Decrease)
Mineral exploration and evaluation expenses	$	1,077,039	$	1,167,184	(7.7)%	$	1,887,936	$	2,432,731	(22.4)%
Mineral exploration and evaluation expenses related party		136,827		126,780	7.9%		423,641		375,971	12.7%
General and administrative		698,765		302,605	130.9%		2,252,184		781,181	188.3%
General and administrative – related party		-		-	n/a		21,066		-	100.0%
Depreciation		181,009		10,901	1560.5%		370,521		32,637	1035.3%
Mineral and property holding costs		15,000		15,000	n/a		45,000		45,000	n/a
Total Expenses	$	2,108,640	$	1,622,470	30.0%	$	5,000,348	$	3,667,520	36.3%

8

Operating expenses for our third fiscal quarter ended September 30, 2010 increased as compared to our third fiscal quarter ended September 30, 2009. General and administrative expenses increased during this period primarily due to the recognition of stock based vesting expenses as well as increases in legal, accounting and consulting expenses. In addition, depreciation of the property, plant, and equipment commenced this period.

The item “Mineral exploration and evaluation expenses – related party” represents (a) amounts paid or reimbursed to Nanominerals Corp. for exploration work conducted on the Columbus and Red Mountain Projects; and (b) amounts paid in respect of the DDB Claims to the DDB Syndicate, an entity owned by related parties. Nanominerals is our largest shareholder, owning approximately 32.8% of our outstanding common stock.

During the fiscal quarter ended September 30, 2010, we incurred fees payable to Nanominerals of $105,000 for technical and financing related services relating primarily to the Columbus and Red Mountain Projects. In addition, we incurred $31,827 in respect to reimbursable expenses paid for by Nanominerals. At September 30, 2010, we were indebted to Nanominerals in the amount of $43,052 for unpaid fees and reimbursable expenses.

During the nine months ended September 30, 2010, we made $30,000 in rental payments to the DDB Syndicate under the terms of our lease agreement for the DDB Claims. The DDB Syndicate is a mining syndicate made up of a company controlled by Douglas D.G. Birnie (our President and Chief Executive Officer and a member of our Board of Directors), Lawrence E. Chizmar (a former member of our Board of Directors and a former director of CBI), three former officers, directors and affiliates of CBI, and three companies affiliated with Nanominerals. The $30,000 in rental payments made to the DDB Syndicate consisted of $3,719 paid to each member of the DDB Syndicate, including $250 paid to a company controlled by Mr. Birnie for the reimbursement of legal and government filing fees related to the DDB Claims.

We also had an outstanding balance for accrued compensation due to Douglas D.G. Birnie (our President and Chief Executive Officer and a member of our Board of Directors) in the amount of $ 11,461, payable to a company controlled by Mr. Birnie.

We anticipate that our operating expenses will continue to increase significantly 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 September 30, 2010			At December 31, 2009		Increase / (Decrease)
Current Assets	$	4,235,318		$	3,741,299		13.2%
Current Liabilities		(483,995	)		(272,843	)	77.4%
Working Capital	$	3,751,323		$	3,468,456		8.2%

Cash Flows
		Nine Months Ended			Nine Months Ended
		September 30, 2010			September 30, 2009
Cash Flows used in Operating Activities	$	(3,582,111	)	$	(2,933,555	)
Cash Flows used in Investing Activities		(1,694,368	)		(224,342	)
Cash Flows from Financing Activities		4,792,007			1,184,538
Net Change in Cash During Period	$	(484,472	)	$	(1,973,359	)

9

At September 30, 2010 we had a working capital surplus of $3,751,323 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 $4,965,750 in proceeds that were received in January 2010 from the sale of 11,035,000 units.

Financing Requirements

We do not currently have sufficient financial resources to pay for our anticipated cash expenditures for the period from October 1, 2010 until September 30, 2011. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. If we are unable to obtain sufficient financing to complete our planned exploration and development plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

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 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.

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

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

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

OFF-BALANCE SHEET ARRANGEMENTS

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

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CRITICAL ACCOUNTING POLICIES

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

We have identified certain accounting policies, described below, that are most important to the portrayal of our current financial condition and results of operations. Our significant accounting policies are also disclosed in the notes to our unaudited consolidated financial statements for the period ended September 30, 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. As reclamation work is performed or liabilities are otherwise settled, the recorded amount of the liability is reduced.

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

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

Accruals for reclamation and environmental matters totaled $275,338 at September 30, 2010 and December 31, 2009. We are in the exploration stage and are unable to determine the estimated timing of expenditures relating to these accruals at this time. It is reasonably possible the ultimate cost of reclamation and remediation could change in the future, and that changes to these estimates could have a material effect on future operating results as new information becomes known. For additional information, see Note 14 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 September 30, 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 September 30, 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.

During the fiscal quarter ended September 30, 2010, there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

None.

ITEM 1A. RISK FACTORS.

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 $5,915,000 on the exploration and development of our Columbus and Red Mountain Projects and the general costs of operating and maintaining our business and mineral properties for the twelve months ending September 30, 2011. We do not currently have sufficient financial resources to pay for our anticipated expenditures for that period. We anticipate that our existing financial resources are sufficient only to pay for the anticipated costs of our exploration and development programs until June 30, 2011. Thereafter, we anticipate that we will require additional financing to complete our planned exploration and development plans. In addition, actual costs of completing our exploration and development plans could be greater than anticipated and we may need additional financing sooner than anticipated. If we are unable to obtain sufficient financing to complete our planned exploration and development plans, we will scale back our plans depending upon our existing financial resources. We do not currently have any financing arrangements in place.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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.

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 OURSECURITIES SHOULD ONLY BE ACQUIRED BY PERSONS WHO CAN AFFORD TO LOSE THEIR TOTAL INVESTMENT.

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

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

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)

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Exhibit
Number	Description of Exhibit
10.12	Non-Qualified Stock Option Agreement for Douglas D.G. Birnie.(14)
10.13	Non-Qualified Stock Option Agreement for Robert D. McDougal.(14)
10.14	Non-Qualified Stock Option Agreement for Michael A. Steele.(14)
10.15	Non-Qualified Stock Option Agreement for Mark H. Brennan.(14)
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.

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

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			IRELAND INC.
Date:	November 22, 2010	By:	/s/ Douglas D.G. Birnie
			DOUGLAS D.G. BIRNIE
			Chief Executive Officer, President and Secretary
			(Principal Executive Officer)
Date:	November 22, 2010	By:	/s/ Robert D. McDougal
			ROBERT D. MCDOUGAL
			Chief Financial Officer and Treasurer
			(Principal Financial Officer)