20-F

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

FORM 20-F

¨  REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

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

For the fiscal year ended July 31, 2004 (with other information to December 31, 2004 except where noted)

OR

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

For the transition period from _______________ to _______________

Commission file number 0-15490

QUARTZ MOUNTAIN RESOURCES LTD.
(Exact name of Registrant specified in its charter)

     Suite 1020 – 800 West Pender Street,
Vancouver, British Columbia, Canada, V6C 2V6
(Address of principal executive offices)

COMMON SHARES WITHOUT PAR VALUE
(Title of Class)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

Title of Each Class	Name of each exchange on which registered
None	Not applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act

Common Shares without Par Value
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. None

Number of outstanding shares of the Company’s only class of capital stock as at December 31, 2004:

11,889,426 Common Shares Without Par Value

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Indicate by check mark whether 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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

YES

Indicate by check mark which financial statement item Registrant has elected to follow:

Item 17 x   Item 18 ¨  

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T A B L E    O F    C O N T E N T S

		Page
ITEM 1	IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS	1
ITEM 2	OFFER STATISTICS AND EXPECTED TIMETABLE	1
ITEM 3	KEY INFORMATION	1
ITEM 4	INFORMATION ON THE COMPANY	5
ITEM 5	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	9
ITEM 6	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	13
ITEM 7	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	19
ITEM 8	FINANCIAL INFORMATION	21
ITEM 9	THE OFFER AND LISTING	21
ITEM 10	ADDITIONAL INFORMATION	23
ITEM 11	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	31
ITEM 12	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	32
ITEM 13	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	32
ITEM 14	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	32
ITEM 15	CONTROLS AND PROCEDURES	32
ITEM 16	AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS	33
ITEM 17	FINANCIAL STATEMENTS	34
ITEM 18	FINANCIAL STATEMENTS	34
ITEM 19	EXHIBITS	35

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PART 1

ITEM 1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable

ITEM 2 OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable

ITEM 3 KEY INFORMATION

A.           Selected Financial Data

The following constitutes selected financial data for Quartz Mountain Resources Ltd. (“Quartz” or the “Company”) for the last five fiscal years ended July 31, 2004, in United States dollars, presented in accordance with Canadian generally accepted accounting principles (“GAAP”) and US GAAP.

(US$)	As at July 31
Balance Sheet	2004		2003		2002		2001		2000
Total Assets	693,697		520,095		482,554		18,457		3,156
Total Liabilities	22,849		28,542		83,193		80,210		48,290
Working Capital (Deficiency)	670,848		470,552		398,090		(61,755	)	(45,136	)
Share Capital	20,627,632		20,366,625		20,299,896		20,298,625		20,263,593
Contributed Surplus	64,032		9,492		--		--		--
Deficit	(20,020,816	)	(19,884,564	)	(19,900,535	)	(20,360,378	)	(20,308,727	)
Shareholders’ Equity
(Deficiency) - Canadian GAAP	670,848		491,553		399,361		(61,753	)	(45,134	)
Shareholders’ Equity
(Deficiency) - US GAAP	670,848		470,552		398,090		(61,755	)	(45,134	)
(US$)	Years ended July 31
Operations	2004		2003		2002		2001		2000
Other Items	11,605		11,762		305,296		3		25
Income (loss) – Canadian
GAAP	(136,252	)	15,971		459,843		(51,651	)	(25,837	)
Income (loss) – US GAAP	(115,251	)	(3,759	)	458,572		(51,651	)	(25,837	)
Income (loss) from continuing
operations	(136,252	)	15,971		459,843		(51,651	)	(25,837	)
Income (loss) per common
share – Canadian GAAP	(0.01	)	0.01		0.05		(0.01	)	(0.01	)
Income (loss) per common
share – US GAAP	(0.01	)	(0.01	)	0.05		(0.01	)	(0.01	)
Weighted average number of
common shares outstanding (3)	10,091,648		9,117,231		8,584,807		8,279,690		8,096,210

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Notes:

(1)	The Company follows Canadian GAAP whereby mineral exploration expenditures can be deferred on prospective properties until such time as it is determined that further exploration is not warranted, at which time the property costs are written off. Under US GAAP exploration costs are generally written off unless there is a feasibility report which confirms the existence of economic ore making the recovery of costs likely. Note 10 in the notes to the audited consolidated financial statements details the material differences between Canadian GAAP and US GAAP for the fiscal years ended July 31, 2004, 2003 and 2002.
(2)	Statement of Financial Accounting Standards No. 128 Earnings per Share (“SFAS 128”), replaces the presentation of primary earnings per share (“EPS”) with a presentation of both basic and diluted EPS for all entities with complex capital structures, including a reconciliation of each numerator and denominator. Basic EPS excludes dilutive securities and is computed by dividing income available to common stockholders by the weighted-average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if dilutive securities were converted into common stock and is computed similarly to fully diluted EPS pursuant to previous accounting pronouncement. SFAS 128 applied equally to loss per share presentations.
(3)	The Company has never paid dividends on its common shares.

All monetary amounts contained in this Annual Report are, unless otherwise indicated, expressed in United States (“US”) dollars. On December 31, 2004, the Bank of Canada closing rate for the conversion of US Dollars to Canadian Dollars was US$1.00: Cdn$1.2020.

The following table sets out the exchange rates, based on the noon buying rates as certified by the Bank of Canada, for the conversion of Canadian dollars into United States dollars in effect at the end of the following periods, and the average exchange rates (based on the average of the exchange rates on the last day of the month in such periods) and the range of high and low exchange rates for such periods.

		Annual Rates		July 31
Period Ended	Average	High	Low	Rate
December 31, 2004	1.2191	1.3968	1.1774	1.3295	(2004)
December 31, 2003	1.4013	1.5645	1.2822	1.3821	(2003)
December 31, 2002	1.5704	1.6132	1.5110	1.5845	(2002)
December 31, 2001	1.5487	1.6023	1.4933	1.5325	(2001)
December 31, 2000	1.4855	1.5583	1.4353	1.4880	(2000)

The following table sets out the high and low exchange rates, based on the noon buying rates as posted by the Bank of Canada (www.bankofcanada.ca), for the conversion of Canadian dollars into United States dollars in effect for the following months:

Month	Low	High
December 2004	1.1858	1.2413
November 2004	1.1774	1.2270
October 2004	1.2197	1.2725
September 2004	1.2639	1.3068
August 2004	1.2963	1.3326

See Item 17 of the accompanying audited year-end financial statements for further details.

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B.           Capitalization and Indebtedness

Not applicable

C.           Reasons for the Offer and Use of Proceeds

Not applicable

D.           Risk Factors

No Assurance That A Prospective Property Of Merit Will Be Identified. There is no assurance that a prospective property of merit will be identified, will be available if identified or that the Company will be able to enter into an acquisition agreement. Further, any acquisition will most likely be subject to the Company obtaining additional financing, of which there is assurance. Even if a property is acquired, further funds will be required to fund exploration efforts.

The Company’s Mineral Property Interests Contain No Known Ore. The Company does not currently have an active exploration project, but is actively searching for a new acquisition. The Company holds a 1% net smelter returns royalty on the Quartz Mountain Property, an exploration stage prospect in Oregon. The Company’s interest in the property will be limited to any future NSR that would be forthcoming if or when any mining commences on the property. There is currently no known body of commercially viable ore on the property. Extensive additional exploration work will be required to ascertain if any mineralization may be economic. Exploration for minerals is a speculative venture necessarily involving substantial risk. There is no certainty that the expenditures to be made by the Company on any of its mineral properties will result in discoveries of commercial quantities of ore.

The Company Has No History of Earnings and No Foreseeable Earnings. The Company has no history of earnings and, due to the nature of its business, there can be no assurance that the Company will ever be profitable. The Company has paid no dividends on its shares since incorporation and does not anticipate paying dividends or being profitable in the foreseeable future.

Going Concern Assumption. The Company’s consolidated financial statements have been prepared assuming the Company will continue on a going concern basis, however unless additional funding is obtained this assumption will have to change. The Company has incurred losses since inception (deficit at July 31, 2004 is $20.0 million), which casts substantial doubt on the ability of the Company to continue as a going concern.

General Mining Risks. If the Company should ever determine ore exists on a property it acquires, then it notes that the mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of ore are discovered, a profitable market may exist for the sale of minerals produced by the Company. Factors beyond the control of the Company may affect the marketability of any substances discovered. Mineral prices, in particular gold and silver prices, have fluctuated widely in recent years. The marketability of minerals is also affected by numerous other factors beyond the control of the Company. These other factors include government regulations relating to price, royalties, and allowable production and importing and exporting of minerals. The operations of the Company may require licences and permits from various governmental authorities. There can be no assurances that the Company will be able to obtain all necessary licences and permits that may be required to carry out exploration, development and eventually operations at its projects. The mineral industry is intensely competitive in all its phases. The Company competes with many companies possessing far greater financial resources and technical facilities than itself for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees.

The Company’s Share Price is Volatile. The market price of a publicly traded stock, especially a junior resource issuer like the Company, is affected by many variables not directly related to the exploration success of the Company, including the market in which it is traded, the strength of the economy generally, the availability and attractiveness of alternative investments, and the breadth of the public market for the stock. The effect of these and other factors on the market price of the common shares on the TSX Venture Exchange suggests that the Company’s

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shares will continue to be volatile. The ability of the Company to maintain its active status as a Tier 2 Issuer on the TSX Venture Exchange is dependent on its ability to acquire a mineral project for active exploration.

The Company’s Directors and Officers are Part-Time and Serve as Directors and Officers of Other Companies. All of the directors and officers of the Company serve as officers and/or directors of other resource exploration companies and are engaged in and will continue to be engaged in the search for additional resource opportunities on their own behalf and on behalf of other companies. Situations may arise where these directors and officers will be in direct competition with the Company. Such conflicts, if any, will be dealt with in accordance with the relevant provisions of British Columbia corporate and common law. In order to avoid the possible conflict of interest which may arise between the directors’ duties to the Company and their duties to the other companies on whose boards they serve, the directors and officers of the Company expect that participation in exploration prospects offered to the directors will be allocated between the various companies that they serve on the basis of prudent business judgement and on the relative financial abilities and needs of the companies to participate. The success of the Company and its ability to continue to carry on operations is dependent upon its ability to retain the services of certain key employees and members of its board of directors.

Foreign Jurisdiction Risks. The Company’s activities could be subject not only to risks common to operations in the mining industry, but also the political and economic uncertainties of operating in a foreign jurisdiction. All laws may result in risk such as possible misinterpretation of laws, unilateral modification of mining or exploration rights, operating restrictions, increased taxes, environmental regulation, mine safety and other risks arising out of sovereignty over mining, any or all of which could have an adverse impact upon the Company. The Company’s operations may also be affected in varying degrees by political and economic instability, terrorism, crime, extreme fluctuations in currency exchange rates and inflation. The Company’s operations and exploration activities are subject to federal and state laws and regulations governing protection of the environment. These laws are continually changing and, as a general matter, are becoming more restrictive.

Likely PFIC Status Has Consequences for United States Investors. Potential investors who are United States (“U.S.”) taxpayers should be aware that the Company expects to be classified for U.S. tax purposes as a passive foreign investment company (“PFIC”) for the current fiscal year, and may also have been a PFIC in prior and may also be a PFIC in subsequent years. If the Company is a PFIC for any year during a U.S. taxpayer’s holding period, then such U.S. taxpayer generally will be required to treat any so-called “excess distribution” received on its common shares, or any gain realized upon a disposition of common shares, as ordinary income and to pay an interest charge on a portion of such distribution or gain, unless the taxpayer makes a qualified electing fund (“QEF”) election or a mark-to-market election with respect to the shares of the Company. In certain circumstances, the sum of the tax and the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company’s net capital gain and ordinary earnings for any year in which the Company is a PFIC, whether or not the Company distributes any amounts to its shareholders. A U.S. taxpayer who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s tax basis therein. See also Item 10E – Passive Foreign Investment Company.

Shares of the Company may be Affected Adversely by Penny Stock Rules. The Company’s stock may be subject to U.S. “penny stock” rules which may make the stock more difficult to trade on the open market. The Company’s common shares currently trade on the TSX Venture Exchange. For further details on the market performance of the Company’s common stock, see “Item 9 The Offer and Listing.” Although the Company’s common stock trades on the TSX Venture Exchange or “TSX Venture”, the Company’s stock may be subject to U.S. “penny stock” rules. A “penny stock” is defined by regulations of the U.S. Securities and Exchange Commission (“SEC”) as an equity security with a market price of less than $5 per share. However, an equity security with a market price under $5 will not be considered a penny stock if it fits within any of the following exceptions:

(i)	the equity security is listed on Nasdaq or a national securities exchange;
(ii)	the issuer of the equity security has been in continuous operation for LESS than three years, and either has (a) net tangible assets of at least $5,000,000, or (b) average annual revenue of at least $6,000,000; or

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(iii)      the issuer of the equity security has been in continuous operation for MORE than three years, and has net tangible assets of at least $2,000,000.

If an investor buys or sells a penny stock, SEC regulations require that the investor receive, prior to the transaction, a disclosure explaining the penny stock market and associated risks. Furthermore, trading in the Company’s common stock is currently subject to Rule 15g-9 of the Exchange Act, which relates to non-Nasdaq and non-exchange listed securities. Under this rule, broker/dealers who recommend the Company’s securities to persons other than established customers and accredited investors must make a special written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Securities are exempt from this rule if their market price is at least $5 per share.

Penny stock regulations will tend to reduce market liquidity of the Company’s common stock, because they limit the broker/dealers’ ability to trade, and a purchaser’s ability to sell, the stock in the secondary market. The low price of the Company’s common stock has a negative effect on the amount and percentage of transaction costs paid by individual shareholders. The low price of the Company’s common stock also limits the Company’s ability to raise additional capital by issuing additional shares. There are several reasons for these effects. First, the internal policies of certain institutional investors prohibit the purchase of low-priced stocks. Second, many brokerage houses do not permit low-priced stocks to be used as collateral for margin accounts or to be purchased on margin. Third, some brokerage house policies and practices tend to discourage individual brokers from dealing in low-priced stocks. Finally, broker’s commissions on low-priced stocks usually represent a higher percentage of the stock price than commissions on higher priced stocks. As a result, the Company’s shareholders pay transaction costs that are a higher percentage of their total share value than if the Company’s share price were substantially higher.

The rules described above concerning penny stocks may adversely affect the market liquidity of the Company’s common shares. The Company can provide no assurances concerning the market liquidity of its stock or that its stock will not be subject to “penny stock” rules. For more information about penny stocks, contact the Office of Filings, Information and Consumer Services of the U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549, or by telephone at (202) 272-7440.

Potential Equity Dilution. A summary of the Company’s diluted share capital is as follows:

At December 31, 2004, the Company has no outstanding stock options and has a total of 1,510,000 share purchase warrants which are exercisable at a price of Cdn$0.37 until April 19, 2006. These warrants are in-the-money at December 31, 2004 and could be exercised in the future which will likely act as an upside damper on the trading range of the Company’s shares. As a consequence of the passage of time since the date of their original sale and issuance, no shares of the Company remain subject to any hold period restrictions in Canada or the United States as at December 31, 2004. The resale of outstanding shares from the exercise of dilutive securities would have a depressing effect on the market for the Company’s shares. Dilutive securities represent approximately 12.7% of the Company’s currently issued shares.

ITEM 4 INFORMATION ON THE COMPANY

A.           History and Development of the Company

1.	The legal name of the Company, which is the subject of this 20-F is “Quartz Mountain Resources Ltd.”
2.	Quartz Mountain Resources Ltd. was incorporated on August 3, 1982, in British Columbia, Canada. The Company was originally incorporated as Wavecrest Resources Ltd., but changed its name to Quartz Mountain Gold Corp. on June 18, 1986. On November 5, 1997, the name of the Company was changed from Quartz Mountain Gold Corp. to Quartz Mountain Resources Ltd. and the shares were consolidated on a reverse ten old for one new share basis.
3.	The Company’s business office is located at Suite 1020 – 800 West Pender Street, Vancouver, British Columbia V6C 2V6; telephone (604) 684-6365. The Company was incorporated under and continues

5

to subsist under the laws of the Province of British Columbia. The Company’s registered office is  Suite 1500 – 1055 West Georgia Street, Vancouver, British Columbia V6E 4N7 (604) 689-9111. 

Unless the context requires otherwise, references herein to the “Company” or “Quartz” includes its subsidiaries. The Company’s common shares were quoted on the United States NASDAQ Small-Cap Issuers Market until May 12, 1994 when it no longer met the minimum listing requirements for this market. The Company’s common shares were listed on The Toronto Stock Exchange, until November 10, 1994, when it no longer met the minimum listing requirements for listing on The Toronto Stock Exchange. Prior to November 15, 1989, the shares were also listed on the Vancouver Stock Exchange. The Company voluntarily removed its share listing from the Vancouver Stock Exchange (now the TSX Venture Exchange) at that time. The Company then traded in Canada on the Canadian Unlisted market. In October 2000 the Canadian Unlisted market was amalgamated into the TSX Venture Exchange. On December 23, 2003, the Company was reclassified as a Tier 2 company and its trading symbol was changed to QZM.V. Currently, the Company’s shares trade on Tier 2 on the TSX Venture Exchange under the symbol QZM.V and the over the counter market and on the Other OTC or “Pink Sheets” in the United States under the symbol QZMRF.

The Company is engaged in the acquisition and exploration of mineral properties, with a principal concentration on gold and silver. In the first three years of its existence the Company was active in the exploration of small gold and silver prospects in Canada but none of these prospects warranted further development. In 1986, the Company acquired the Quartz Mountain gold property located in south central Oregon and until January 2002 most of the Company’s effort was expended on the exploration and maintenance of these claims. Interests in this property and other properties were acquired by direct purchase, lease, and option or through joint ventures. The Company sold the Quartz Mountain property during the fiscal year ended July 31, 2002.

B.           Business Overview

1.           The Company’s Business Strategy and Principal Activities

The Company is a junior resource exploration issuer, and is in the business of acquiring interests in (usually by option) and the exploration of these mineral property interests. During the year ended July 31, 2002, the Company sold its 100% interest in the Quartz Mountain Gold Property (the “Property”), in Lake County, Oregon, to Seabridge Resources Ltd. and Seabridge Resources Inc. (collectively “Seabridge”).

At closing, Seabridge issued 300,000 Seabridge common shares, 200,000 Seabridge common share purchase warrants, US$100,000 and a 1% net smelter return (“NSR”) royalty from any future production on the Property. This transaction was approved by consent of the majority of the Company shareholders.

During fiscal 2002, the Company sold the 300,000 common shares of Seabridge that it received in the disposition of its interest in the Quartz Mountain property in Oregon and also exercised the 200,000 common share purchase warrants to acquire 200,000 common shares that it received pursuant to that transaction. The Company subsequently sold the common shares.

The Company does not expect to generate any royalty revenue from operations for several years from the Property, and it is not known at this time when any mining will commence, if at all, on this Property by its current owners. The Company maintained an interest in 67 unpatented mining claims essential to the property and leased land contiguous to these claims. Seabridge or any future owner of the Property will be responsible for all costs relating to the Property and the Company’s interest in the Property is limited to any future NSR that would be forthcoming if or when any mining commences on the Property.

In fiscal 2003, Quartz entered into a Letter Option Agreement to acquire a 100% interest in the Ample-Goldmax Mineral Claims located in the Lillooet Mining Division, British Columbia. Quartz paid the optionors Cdn$10,000 at the time of signing and issued 25,000 common shares on the date of regulatory approval, and every three months thereafter for a period of three years (100,000 were issued), at the discretion of the Company. Cash payments of Cdn$25,000 were due on the first anniversary and Cdn$50,000 on the second anniversary of the approval date. A Cdn$100,000 work program within 24 months was also required. During the nine months ended April 30, 2004, the

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Company did not make the first anniversary payment of Cdn$25,000, and as a result, the property was written off by $23,296, and the property was returned to the vendor of the property.

The Company does not currently have an active exploration project, but is actively searching for a new acquisition. During the last quarter of fiscal 2004, the Company conducted several property investigations of mineral property interests, for a total cost of approximately $42,000. Property investigation costs include geological consulting and travel related to examination of mineral properties. To date, mineral property investigations have not resulted in an acquisition.

The Company continues to review mineral properties to determine whether there are any properties of merit that could be financed by the Company.

The Company does not have any operating revenue and anticipates that it will rely on sales of its equity securities in order to finance its acquisition and exploration activities.

C.           Organizational Structure

The Company conducts its business affairs through its wholly-owned subsidiaries: Quartz Mountain Gold Inc., a Nevada corporation, and the latter company’s wholly-owned subsidiary Wavecrest Resources Inc., a Delaware corporation.

D.           Property, Plants and Equipment

The Company has no mining or plant equipment.

E.           Glossary of Mining Terms

In this Form 20 F, the following terms have the meanings set forth herein:

1.           Geological Terms

Alteration	Any change in the mineralogic composition of a rock that is brought about by  physical or chemical means.
Bedrock	Solid rock exposed at the surface of the earth, or overlain by surficial deposits.
Breccia	Rock made up of angular fragments.
Contact	The place or surface where two different kinds of rocks come together.
Deposit	A natural occurrence of a useful mineral or ore in sufficient extent and degree of  concentrating to invite exploitation.
Disseminated	Fine particles of mineral dispersed through the enclosing rock.
Fault	A fracture in a rock along which there has been relative movement either  vertically or horizontally.
Feasibility study	Engineering study to determine if a mineral property can be developed at a profit,  and the methods to develop it.
Geological mapping	Surveys defining the surface distribution of rock varieties, age relationships and  structural features.

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Grade	The quality of an ore; in effect, the metal content.
Hectare	A square of 100 metres on each side.
Intrusive	Said of an igneous rock which invades older rocks.
Lode	See “vein”.
Mineralization	The concentration of metals and their chemical compounds within a body of rock.
Outcrop	An exposure of bedrock at the surface.
Pyrite	Iron sulfide (FeS2 ).
Replacement mineralization	Mineral deposit formed by replacement of previous rock.
Rhyolite	A siliceous volcanic rock with a high potassium in feldspar component.
Siliceous	Said of a rock rich in silica.
Sulfide	A group of minerals in which one or more metals are found in combination with  sulfur.
Vein	A tabular or sheet-like body of minerals, which has been intruded into a joint  fissure, or system of fissures, in rocks.

2.           Element Symbols

The following mineral symbols may be used in the following technical discussion.

Au – gold	O – oxygen
Ag – silver	Pd – palladium
Cu – copper	Pt – platinum
Fe – iron	Pb – lead
Na – sodium	S – sulphur
Ni - nickel	Zn - zinc

F.           Currency and Measurement

All currency amounts in this Annual Report are stated in United States dollars unless otherwise indicated. (see Item 3 for exchange rate information).

The following measurements may be used.

Ton	Imperial measure equal to 2,000 pounds.
Tonne	Metric measure of mass equal to 1,000 kilograms or 2,204.6 pounds.

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Conversion of metric units into imperial equivalents is as follows:

Metric Units	Multiply by	Imperial Units
hectares	2.471	= acres
metres	3.281	= feet
kilometres	0.621	= miles (5,280 feet)
grams	0.032	= troy ounces
tonnes	1.102	= short tons (2,000 lbs)
grams/tonne	0.029	= troy ounces per ton

ITEM 5 OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion and analysis should be read in conjunction with the audited consolidated financial statements of the Company for the years ended July 31, 2004 and 2003, and related notes thereto. The Company’s consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. The material differences in generally accepted accounting principles in Canada and the United States are detailed in note 10 of the audited consolidated financial statements.

A.           Operating Results Overview Results of Operations

		Year ended			Year ended			Year ended
		July 31, 2004			July 31, 2003			July 31, 2002
Expenses (Income)
Administrative expenses	$	62,963		$	10,434		$	11,155
Regulatory and transfer agent		22,338			17,023			8,076
Professional fees		16,637			7,550			5,769
Land maintenance fees		-			-			6,700
Foreign exchange loss (gain)		(22,225	)		(40,487	)		9,258
Mineral property investigations		44,848			-			-
Gain on sale of mineral property		-			-			(195,505	)
Write-off of mineral property		23,296			1,271			-
		(147,857	)		(4,209	)		(154,547	)
Other Items
Interest and other income		11,605			11,762			2,354
Gain on disposal of investment in shares		-			-			302,942
Income (loss) for the year	$	(136,252	)	$	15,971		$	459,843

Years ended July 31, 2004 and July 31, 2003

The principal factors contributing to the difference between the loss of $136,252 for the year ended July 31, 2004, and the earnings of $15,971 for the year ended July 31, 2003 include:

9

- An increase in office and administrative costs from $10,434 in fiscal 2003 to $62,963, due to payment of consulting fees and reimbursement of costs incurred of $40,580, with no comparative expense in fiscal  2003;

- An increase in mineral property investigation costs from $nil in fiscal 2003 to $44,848 in fiscal 2004, as a  result of new investigations undertaken by the Company in its efforts to acquire a new mineral property;

- An increase in regulatory and transfer agent costs from $17,023 in fiscal 2003 to $22,338, due to the fees  related to mineral property interests and/or investigation activities, stock exchange fees and other securities  fees;

- The write off of the Company’s interest in the Ample-Goldmax mineral property (Newton Hill) amounting  to $23,296 during the year ended July 31, 2004; and

- A decrease in foreign exchange gain from $40,487 in fiscal 2003 to $22,225 due primarily to the  strengthening of the Canadian dollar (in which most of the Company’s cash and cash equivalents are held)  against the United States dollar.

Years ended July 31, 2003 and July 31, 2002

The principal factors contributing to the difference between the earnings of $15,971 for the year ended July 31, 2003, and the earnings of $459,843 for the year ended July 31, 2002, include:

- An increase in regulatory and transfer agent expense from $8,076 in fiscal 2002 to $17,023, due to the fees related to mineral property interests, stock exchange fees and other securities fees; 

- A decrease in land maintenance fees from $6,700 in fiscal 2002 to $ Nil in fiscal 2003 due to the sale of the  Quartz Mountain property in Oregon; 

- Foreign exchange gains on accounts payable of $40,487 during the year; 

- A gain on disposal of $195,505 of the Quartz Mountain property in Oregon in fiscal 2002 compared to a  write-down of the Newton Hill property of $1,271 in fiscal 2003, and 

- A gain on disposal of investment in shares of $302,942, with no comparative gain in fiscal 2003. 

B.           Liquidity and Capital Resources

At July 31, 2004, the Company’s cash equivalents amounted to $686,386 an increase of $196,033 from the previous year end. The major contributors to the change in net cash position during the year ended July 31, 2004 were:

- Operating expenses, which utilized cash of $117,219; and 

- A financing of 1,510,000 common shares at a price of Cdn$0.28 per share to provide $313,252 to the  treasury (net of issue costs). 

The Company currently has sufficient working capital to fund administrative costs for the next twelve months and to conduct property acquisition investigation activities. Additional working capital will be required to fund any major acquisition undertaken. The Company does not have sufficient funding at this time to conclude a major acquisition.

At July 32, 2003, the Company’s cash equivalents amounted to $490,353, an increase of $16,166 from the prior year end. The major contributors to the change in net cash position during the year ended July 31, 2003, were operating expenses, which utilized cash of $39,054; and a financing, consisting of 711,111 common shares at a price of Cdn$0.1125 per share, which provided $69,652 to the treasury (net of issue costs).

The Company retains a 1% net smelter returns royalty (“NSR”) in the Quartz Mountain Property which it sold during the year ended July 31, 2002. The Company does not expect to generate royalty revenue from operations for several years from the Quartz Mountain Property, and it is not known at this time when any mining will commence, if at all, on this property. The size of the property is limited to 67 unpatented mining claims essential to the property and leased land contiguous to these claims. Seabridge Resources Ltd, the purchaser, is responsible for all costs relating to the Quartz Mountain Property and the Company’s interest in the property will be limited to any future NSR that would be forthcoming if or when any mining commences on the Quartz Mountain Property.

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The inactive status of the Company was removed effective at the opening on January 29, 2003. Effective at the opening on January 29, 2003, the Company’s trading symbol changed from YQZ.T to YZQ. With effect from December 23, 2003 the Company’s trading symbol changed to QZM.

During the year ended July 31, 2003, the Company entered into a non-brokered private placement of 711,111 units at Cdn$0.1125 per unit with Hunter Dickinson Inc., a private company with certain directors in common with the Company. Each unit consisted of one common share and one share purchase warrant, with one warrant entitling the holder to purchase one common share of the Company at Cdn$0.15 per share during the 24 months subsequent to closing of the placement. On November 8, 2004, these warrants were exercised and 711,111 shares were issued.

On April 19, 2004, the Company issued 1,510,000 units at a price of Cdn$0.28 for gross proceeds of Cdn$422,800. Each unit is comprised of one common share and one share purchase warrant. Each warrant entitles the holder to purchase a further common share exercisable until April 19, 2006, at a price of Cdn$0.37 per common share.

The mining industry is capital intensive and there can be no certainty that the Company’s existing cash balances or the proceeds from the sale of its common shares will provide sufficient funds for all of its cash requirements. Should the need arise, the Company may pursue other financing options or rely on joint venture partners to supply some of the funds required to explore and develop its properties. There is no assurance that the Company will be successful in obtaining the funds it may require for its programs or that the terms of any financing obtained will be acceptable.

As at January 31, 2005, the Company does not have any unused banking commitments or lines of credit, which could provide additional working capital. Any new acquisition must rely financing such as the sale of common shares to provide sufficient working capital.

The Company is in the exploration and development stage and has not earned any revenue from mining operations and no revenue is expected to be generated in the foreseeable future.

Financial Instruments

The Company holds its financial instruments predominantly denominated in Canadian dollars and does not engage in any hedging operations with respect to currency or in-situ minerals. Funds which are currently in excess of the Company’s current expenditures are invested in Government of Canada or like debt obligations and other short term near-cash investments pending the use of those funds.

The Company does not have any material commitments for capital expenditures and, accordingly, can remain relatively flexible in gearing its activities to the availability of funds.

The Company estimates that the cost of maintaining its corporate administrative activities is approximately $100,000 per year, if the Company does not commence any exploration programs on any property which it acquires. This is an estimated minimum annual cost to maintain the Company. Any exploration program would require funds above these minimum administration costs which include office, legal, audit, filing, and transfer agent fees.

C.           Research Expenditures

The Company does not have a program of intellectual property development or patenting or licensing issues as its primarily activity is the acquisition and exploration of mineral properties.

D.           Trend Information

The Company’s only property interest is a net smelter royalty in an exploration property which is a gold prospect. Average prices for precious metals have increased significantly from 2003. The average gold price for the year-to-date is US$399/oz, compared to US$364/oz in 2003.

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E.           Off – Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on its financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.

As used in this Item 5.E., the term off-balance sheet arrangement means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with the company is a party, under which the company has:

(a)	Any obligation under a guarantee contract that has any of the characteristics identified in paragraph 3 of FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others (November 2002) (“FIN 45”), as may be modified or supplemented, excluding the types of guarantee contracts described in paragraphs 6 and 7 of FIN 45;
(b)	A retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to such entity for such assets;
(c)	Any obligation under a derivative instrument that is both indexed to the company’s own stock and classified in stockholders’ equity, or not reflected, in the company’s statement of financial position; or
(d)	Any obligation, including a contingent obligation, arising out of a variable interest (as referenced in FASB Interpretation No. 46, Consolidation of Variable Interest Entities (January 2003), as may be modified or supplemented) in an unconsolidated entity that is held by, and material to, the company, where such entity provides financing, liquidity, market risk or credit risk support to, or engages in leasing, hedging or research and development services with, the company.

F.           Tabular Disclosure of Contractual Obligations

	Payments due by period
Contractual Obligations	Total	Less than 1 year	1-3 years	3-5 years	More than 5 years
Long-Term Debt Obligations	Nil	Nil	Nil	Nil	Nil
Capital Finance/Lease	Nil	Nil	Nil	Nil	Nil
Operating Lease	Nil	Nil	Nil	Nil	Nil
Purchase Obligations	Nil	Nil	Nil	Nil	Nil
Other long-term liabilities  reflected on the Company’s  balance sheet under the GAAP of  the primary financial statements	Nil	Nil	Nil	Nil	Nil
Total	Nil	Nil	Nil	Nil	Nil

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G.           Safe Harbor

The safe harbor provided in Section 27A of the Securities Act and Section 21E of the Exchange Act applies to forward-looking information provided pursuant to Item 5.E and F above.

ITEM 6 DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.           Directors and Senior Management

The names, positions, offices with the Company, business experience, and periods of service of all directors and executive officers are stated below. As at December 31, 2004, there were five directors of the Company.

Name, Position with the Company and Province  and Country of Residence	Period as a Director of the  Company	Shares Beneficially  Owned or Controlled(1)
David S. Jennings, Ph.D.  President, Chief Executive Officer and Director  Bowen Island, British Columbia, Canada	Since August l, 1986	3,962,424
Rene G. Carrier  Director  North Vancouver, British Columbia, Canada	Since January 19, 2000	110,000
Brian F. Causey  Director  Tsawwassen, British Columbia, Canada	Since January 30, 2003	Nil
Shannon M. Ross  Vice President and Director  Burnaby, British Columbia, Canada	Since January 31, 1997	253,353
Gordon J. Fretwell  Director  West Vancouver, British Columbia, Canada	Since January 30, 2003	Nil

Notes:

1.      This information has been provided by the individual directors as provided by them on www.sedi.ca. The Company cannot and has not verified these figures.

Directors are elected to serve until the next annual meeting of shareholders. Executive officers are appointed by the Board of Directors to serve until terminated by the Board of Directors or until their successors are appointed.

There are no family relationships between any director, executive officer or any nominee to be a director or executive officer.

There is no arrangement or understanding with major shareholders or others pursuant to which any director or officer was selected as a director or member of senior management.

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David S. Jennings, Ph.D. – President, Chief Executive Officer and Director

Dr. Jennings is a mineral deposits geologist holding a B.Sc. (Hons.) degree in geology from Lehigh University and a Ph.D. degree in geology from McMaster University. He has 29 years of major and junior company experience focusing on major project acquisitions, evaluations and explorations discovery. Dr. Jennings is employed by and a director of Hunter Dickinson Inc., a company providing management and administrative services to publicly traded companies focusing on major project acquisitions, evaluations and explorations discovery. He is a member of management of several exploration companies.

Dr. Jennings is, or was within the past years, an officer and/or director of the following public companies: Anooraq Resources Corporation, Director (September 1996 to present); Farallon Resources Ltd., Director (July 1991 to present), President (July 1991 to September 2000), Chief Financial Officer (June 1996 to December 1997); Great Basin Gold Ltd., Director (June 2001 to present); Quartz Mountain Resources Ltd., President, Chief Executive Officer (May 1988 to present), Director (August 1986 to present); Cornucopia Resources Ltd., Vice-President Exploration (September 1991 to March 1996), Director (June 1986 to January 1999); Continental Minerals Corporation, Director (June 1998 to February 2001); and Taseko Mines Limited, Director (November 4, 1998 to February 2001).

Rene G. Carrier – Director

Mr. Carrier is a past Vice-President of Pacific International Securities Inc. where he worked from 1981 to 1991. Since that time he has been President of Euro-American Capital Corporation, a private company which specializes in restructuring and raising venture capital funds for junior companies. Mr. Carrier is an officer and/or director of the following public companies: Acrex Ventures Ltd. (September 2000 to present); Chartwell Technology Inc., Director (June 1991 to present); Continental Minerals Corporation, Director (February 2001 to present); Quartz Mountain Resources Ltd., Director (January 2000 to present); Rockwell Ventures Inc., Director (April 1993 to present) and President (April 1993 to November 2000).

Brian Causey, B.Comm., C.A. - Director

Mr. Causey holds a B.Comm. degree and was admitted to the Institute of Charted Accountants of British Columbia in 1971. Formerly a partner Peat Marwick Thorne (now KPMG LLP) (1969-1977), Mr. Causey is currently the Director of Project Finance for Hunter Dickinson Inc., a position he was appointed to in 2001.

Mr. Causey was within the past years, an officer of the following companies: B.C. Packers Ltd. (George Weston Group), Vice-President, Finance (1977-1981) and Zenith Transport Ltd., President and Chief Executive Officer (1981-2001).

Shannon M. Ross, C.A. – Vice President, Principal Accounting Officer, Secretary and Director

Ms. Ross is a Chartered Accountant and has been Vice President, Corporate Affairs of the Company since February 1990. She is also Secretary to the Company.

Ms. Ross was in the past, Controller of Dia Met Minerals Ltd (January 1999 to July 1999) and Corporate Secretary (March 1999 to July 1999) to same; and Controller of Hunter Dickinson Inc. (July 1996 to January 1999).

Since June 2001, Ms. Ross has been Chief Financial Officer of Northern Orion Explorations Ltd, since January 2000, Chief Financial Officer and Secretary for Sultan Minerals Inc., Valerie Gold Resources Ltd., Emgold Mining Corporation and Cream Minerals Ltd.

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Gordon J. Fretwell, B.Comm., L.L.B. – Director

Mr. Fretwell holds a B.Comm. degree and graduated from the University of British Columbia in 1979 with his Bachelor of Law degree. Formerly a partner in a large Vancouver law firm, Mr. Fretwell has since 1991 been a self-employed solicitor (Gordon Fretwell Law Corporation) in Vancouver practicing primarily in the areas of corporate and securities law.

Mr. Fretwell is, or was within the past years, an officer and/or director of the following public companies: Bell Resources Corporation, Director and Secretary (September 1998 to present); Copper Ridge Explorations Inc., Director and Secretary (August 1999 to present); International Antarex Metals Ltd., Director (December 2000 to September 2002); Continental Minerals Corporation (formerly Continental Mountain Gold Limited), Director (February 2001 to present); Rockwell Ventures Inc., Director (March 1998 to present); Tri-Alpha Investments Ltd., Director and Secretary (July 2001 to present), Foran Mining Corp., Director (February 1998 to March 2000), Merit Industries Inc., Director (October 1999 to February 2000), La Teko Resources Ltd., Director (November 1995 to February 1999) and Icon Industries Limited (December 2000 to present).

T. Barry Coughlan, B.A. – Nominee at December 31, 2004, who was elected to the Board on January 21, 2005

T. Barry Coughlan is a self-employed businessman and financier, who over the past 23 years has been involved in the financing of publicly traded companies. His principal occupation is President and Director of TBC Investments Ltd., a private investment company.

Mr. Coughlan is, or was within the past 5 years, an officer and or a director of the following companies: Farallon Resources Ltd., Director (March 1998 to present); Great Basin Gold Ltd., Director (February 1998 to present); Taseko Mines Limited, Director (February 2001 to present); AMS Homecare Inc., Director (November 2001 to present); Casamiro Resource Corp., Director (February 1995 to August 2002); Tri-Alpha Investments Ltd., President, Chief Executive Officer and Director (June 1986 to present); and Icon Industries Ltd., President, Chief Executive Officer and Director (September 1991 to present).

B.           Compensation

During fiscal 2004, there were two executive officers of the Company - David S. Jennings and Shannon M. Ross. A total of C$50,000 in cash compensation was paid for services provided by the executive officers in all capacities to the Company during the year ended July 31, 2004.

Directors of the Company do not receive any fee or other compensation for attending meetings of the Board of Directors. The Directors are however reimbursed for actual expenses incurred in connection with attending such meetings. Directors are eligible to receive options to purchase common shares of the Company.

The Company has not set aside or accrued any funds during the last fiscal year to provide pension, retirement or similar benefits for any director, officer, consultant, or employee. The Company has instituted no pension or retirement benefits and none are proposed at this time.

The Company has a formalized stock option plan for the granting of incentive stock options to the officers, employees and directors, but which was formalized under the rules of the Toronto Stock Exchange. The Company presented an amendment to the plan which was approved by shareholders at the Company’s annual general meeting held in January 2004 pursuant to the rules of the TSX Venture Exchange. There are no options outstanding under the current plan at this time. The purpose of granting such options is to assist the Company in compensating, attracting, retaining and motivating the directors of the Company and to closely align the personal interests of such persons to that of the shareholders.

Stock options are a significant component of the compensation received by directors and serve to provide incentive to such individuals to act in the best interests of the Company and its shareholders.

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“Named Executive Officer” means each the Chief Executive Officer, the Chief Financial Officer and each of the three most highly compensated executive officers (other than each Chief Executive Officer and Chief Financial Officer) who were serving as executive officers at the end of the most recently completed fiscal year and whose total salary and bonus exceeds $150,000 and any additional individuals for whom disclosure would have been provided except that the individual was not serving as an officer of the Company at the end of the most recently completed financial year end.

David S. Jennings, the Company’s President and Chief Executive Officer, and Shannon M. Ross, the Company’s Vice-President, Chief Financial Officer and Secretary, are the “Named Executive Officers” of the Company for the purposes of the following disclosure. The compensation paid to the Named Executive Officers during the Company’s three most recently completed financial years is as set out below:

The Company paid C$50,000 (US$40,580) for consulting services and reimbursement of expenses to a private company controlled by Shannon Ross and US$606 for consulting services to a private company controlled by Rene Carrier in the year ended July 31, 2004.

The Company paid US$19,776 for rent and administrative services, professional fees and geological costs to Hunter Dickinson Inc, a private company with certain directors in common with the Company.

These transactions were in the normal course of operations and were measured at the exchange value which represents the amount of consideration established and agreed to by the related parties.

There are no other arrangements under which directors are or were compensated by the Company and its subsidiaries during the most recently completed financial year for their services in their capacity as directors or consultants.

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Summary Compensation Table

NAMED EXECUTIVE  OFFICERS  Name and Principal  Position	Year	Annual Compensation			Long Term Compensation			All Other Compensation ($)
					Awards		Payouts
		Salary ($)	Bonus ($)	Other Annual Compen- sation ($)	Securities Under Options Granted (#)	Shares or Units Subject to Resale Restrictions ($)	LTIP Payouts ($)
David S. Jennings, Ph D  President and Chief  Executive Officer	2004 2003 2002	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Shannon M. Ross  Vice-President, Chief  Financial Officer and  Secretary	2004 2003 2002	Nil Nil Nil	Nil Nil Nil	US$40,580(1) Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

Notes:

1.           This amount was paid to 583559 B.C. Ltd., a private company controlled by Shannon Ross, for consulting services.

The Company does not have a long-term incentive plan pursuant to which cash or non-cash compensation intended to serve as an incentive for performance (whereby performance is measured by reference to financial performance or the price of the Company’s securities) was paid.

There were no options granted during the most recently completed financial year.

The Named Executive Officers did not exercise any options during the most recently completed financial year.

The Company and its subsidiaries have no employment contracts with any Named Executive Officer.

The Company and its subsidiaries have no compensatory plan or arrangement in respect of compensation received or that may be received by the Named Executive Officers in the Company’s most recently completed or current financial year to compensate such executive officers in the event of the termination of employment (resignation, retirement, change of control) or in the event of a change in responsibilities following a change in control.

C.           Board Practices

All directors, other than Shannon Ross (who did not stand for re-election), were re-elected at the last annual and extraordinary general meeting held on January 21, 2005 and have a term of office expiring at the next annual general meeting of the Company expected to be held in January 2006. All officers have a term of office lasting until their removal or replacement by the Board of Directors.

The Company or any of its subsidiaries have no directors’ service contracts providing for benefits upon termination of employment.

The Company does not have an Executive Committee of its directors. The Company is required to have an Audit Committee and the current members of that committee are David S. Jennings, Brian F. Causey and Rene G. Carrier.

The audit committee is elected annually by the directors of the Company at the first meeting of the board held after the Company’s annual general meeting. Its primary function is to review the financial statements of the Company before they are submitted to the board for approval. The audit committee is also available to assist the board if

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required with matters relating to the appointment of the Company’s auditor and the overall scope and results of the audit, internal financial controls, and financial information for publication for various purposes.

The Company has no remuneration committee.

D.           Employees

At July 31, 2004, and each of the past three years, the Company has had no employees and has contracted staff on an as-needed basis. The directors of the Company primarily administer the Company’s functions through the employees of Hunter Dickinson Inc., a private company with certain directors in common with the Company.

E.           Share Ownership

(a)           Share Ownership

At December 31, 2004 directors and officers of the Company held an aggregate of 4,325,777 shares (36.4% of the then issued and outstanding shares). See Item 6(A) above. There are no stock options outstanding which have been granted to directors and officers of the Company.

(b)           Share Purchase Plan and Share Option Plan

A stock option plan pursuant to the rules of the TSX Venture Exchange (the “TSXV”) was presented to and approved by shareholders at the Company’s Annual General Meeting held on January 21, 2004. Details of the plan are presented below.

Share Option Plan

In order to provide incentive to directors, officers, employees, management and others who provide services to the Company to act in the best interests of the Company, management of the Company proposed, and shareholders adopted a new share option plan (the “Plan”). Under the Plan, a total of up to 1,900,000 shares of the Company (which represent approximately 20% of the Company’s outstanding shares) have been reserved for share incentive options to be granted at the discretion of the Company’s board of directors to eligible optionees (the "Optionees"). At the date of this Form 20-F there are no options outstanding pursuant to this plan.

Eligible Optionees

Under the policies of TSXV, to be eligible for the issuance of a stock option under the Plan an Optionee must either be a director, officer, employee, consultant or an employee of a company providing management or other services to the Company or its subsidiary at the time the option is granted.

Options may be granted only to an individual or to a company that is wholly-owned by individuals eligible for an option grant. If the option is granted to a company, the company must provide TSXV with an undertaking that it will not permit any transfer of its Shares, nor issue further Shares, to any other individual or entity as long as the incentive stock option remains in effect without the consent of TSXV.

Material Terms of the Plan

The following is a summary of the material terms of the Plan:

(a)	all options granted under the Plan are non-assignable and non-transferrable and for a period of up to 5 years;
(b)	for stock options granted to employees or service providers (inclusive of management company employees), the Company is required to represent that the proposed Optionee is a bona fide employee or service provider (inclusive of a management company employee), as the case may be, of the Company or of any of its subsidiaries;

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(c)	if an Optionee ceases to be employed by the Company (other than as a result of termination with cause) or ceases to act as a director or officer of the Company or a subsidiary of the Company, any option held by such Optionee may be exercised within 90 days after the date such Optionee ceases to be employed as an officer or director or, as the case may be, or within 30 days if the Optionee is engaged in investor relations activities and ceases to be employed to provide investor relations activities;
(d)	the minimum exercise price of an option granted under the Plan must not be less than the Discounted Market Price (as defined in the policies of TSXV); and
(e)	no Optionee can be granted an option or options to purchase more than 5% of the outstanding listed Shares of the Company in a one year period.

ITEM 7 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.           Major Shareholders

The Company’s securities are recorded on the books of its transfer agent in registered form, however, the majority of such shares are registered in the name of intermediaries such as brokerage houses and clearing houses on behalf of their respective brokerage clients, and the Company does not have knowledge or access to information about of the beneficial owners thereof. To the best of its knowledge, the Company is not directly or indirectly owned or controlled by a corporation or foreign government. As of December 31, 2004, the Company had authorized 60,000,000 common shares without par value of which 11,889,426 were issued and outstanding.

The following table sets forth certain information with respect to beneficial ownership of the Company’s common stock as of December31, 2004, by (i) each shareholder known to be the beneficial owner of more than 5% of the common stock and (ii) the officers and directors as a group indirectly, by any other corporation or by any foreign government.

		Percentage Beneficially
Identity of Person or Group	Shares	Owned of Class
David S. Jennings (1)
Bowen Island, British Columbia	3,962,424	33.3%
Hunter Dickinson Inc.(2)
Vancouver, British Columbia	711,111	6.0%

Notes:
1.	Dr. Jennings is a director and officer of the Company.
2.	Hunter Dickinson Inc. is a private company with certain directors and officers in common.

The Company’s major shareholders do not have any different voting rights than other shareholders.

To its knowledge, the Company is not owned or controlled, directly or indirectly, by any other corporation or foreign government, and there are no other arrangements which may, at a subsequent date, result in a change in control of the Company.

All other known shareholders with greater than 5% are brokerage clearinghouses.

As of December 31, 2004, directors and officers of the Company as a group (five persons) owned or controlled an aggregate of 4,325,777 common shares (36.4%) of the Company.

Under the British Columbia Securities Act insiders (generally officers, directors, holders of 10% or more of the Company's shares) are required to file insider reports of changes in their ownership within 10 days of a trade in the

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Company's securities. Copies of such reports are available for public inspection at the offices of the British Columbia Securities Commission, P.O. Box 10142 Pacific Centre, 701 West Georgia Street, Vancouver, British Columbia Canada V7Y 1L2 (phone (604) 899-6500) or at the British Columbia Securities Commission web site (www.bcsc.bc.ca).

The following lists the geographical distribution of shareholders at December 31, 2004:

	Number of registered
Location	shareholders	Number of shares
Canada	34	10,213,751
United States	1,547	1,437,121
Other	14	238,554
Total	1,595	11,889,426

Shares registered in intermediaries were assumed to be held by residents of the same country in which the clearing-house was located.

B.           Related Party Transactions

During the year, the Company entered into the following transactions with related parties:

(a)	The Company has paid $19,776 (2003 - $17,010; 2002 - $11,004) to Hunter Dickinson Inc. (“HDI”), a private company with certain directors in common with the Company, for rent and administrative services, professional fees and geological costs. During the year ended July 31, 2003, the Company completed a private placement with this private company of 711,111 units comprised of one common share and one share purchase warrant at a price of Cdn$0.1125 per unit.
	In November 2004, HDI exercised its warrants and purchased 711,111 common shares at a price of Cdn$0.15 per share.
(b)	The Company has paid $606 (2003 - $2,065; 2002 - $Nil) for consulting services to a director and $Nil (2002 - $3,863; 2002 - $4,423) in legal fees to a law firm in which a director is a partner.
(c)	The Company paid $40,580 (2003 - $Nil; 2002 - $Nil) in consulting fees and reimbursement of expenses to a private company controlled by a director and officer of the Company, which is included in administration expenses.
(d)	During the year ended July 31, 2004, 710,000 units of a private placement completed during the year were subscribed to by directors of the Company or to directors of a private company performing administrative and other services to the Company.

The amounts charged to the Company for the services provided have been determined by negotiation among the parties and, in certain cases, are covered by signed agreements. These transactions were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.

Other than disclosed herein, no director or senior officer, and no associate or affiliate of the foregoing persons, and no insider has or has had any material interest, direct or indirect, in any transactions, or in any other proposed transaction, during the year ended July 31, 2004.

C.           Interests of Experts and Counsel

Not applicable.

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ITEM 8 FINANCIAL INFORMATION

A.           Consolidated Statements and Other Financial Information

See “Item 17 Financial Statements”.

Legal Proceedings

The Company is not involved in any litigation or legal proceedings and to the Company’s knowledge; no material legal proceedings involving the Company or its subsidiaries are to be initiated against the Company.

Dividend Policy

The Company has not paid any dividends on its outstanding common shares since its incorporation and does not anticipate that it will do so in the foreseeable future. All funds of the Company are being retained for administration expenses and mineral property investigations.

B.           Significant Changes

The Company had no significant changes in its activities during the year ended July 31, 2004.

ITEM 9 THE OFFER AND LISTING

A.           Offer and Listing Details

          1.           Trading Markets

Fiscal	Period ended		High	Low
Year			(Cdn$)	(Cdn$)
	Annual
2002	Twelve months	To July 31, 2004	0.55	0.145
2003	Twelve months	To July 31, 2003	0.28	0.10
2002	Twelve months	To July 31, 2002	0.20	0.04
2001	Twelve months	To July 31, 2001	0.25	0.10
2000	Three months	To July 31, 2000	0.40	0.30
	By Quarter
2005	Second quarter	To January 5, 2005	0.51	0.38
	First quarter	October 31, 2004	0.68	0.36
2004	Fourth quarter	July 31, 2004	0.55	0.45
	Third quarter	April 30, 2004	0.50	0.365
	Second quarter	January 31, 2004	0.40	0.21
	First quarter	October 31, 2003	0.25	0.145

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Fiscal		Period ended	High	Low
Year			(Cdn$)	(Cdn$)
2003	Fourth quarter	July 31, 2003	0.13	0.12
	Third quarter	April 30, 2003	0.15	0.12
	Second quarter	January 31, 2003	0.20	0.10
	First quarter	October 31, 2002	0.28	0.11
	Monthly
	December 2004		0.47	0.38
	November 2004		0.51	0.41
	October 2004		0.68	0.41
	September 2004		0.50	0.37
	August 2004		0.50	0.36
	July 2004		0.45	0.45

The Company’s share trading information is also available through free Internet search services (eg– http://finance.yahoo.com, enter QZM.V). The trading prices on the Other OTC or Pink Sheets market are similar to the Canadian prices allowing for a currency exchange factor. Trading on the Other OTC had a 52 week high to December 31, 2004, of US$0.489 and a 52 week low of US$0.195. The close price on December 31, 2004, was US$0.32. The 52-week trading range ending on December 31, 2004, on the TSX Venture Exchange ranges from $0.29 to $0.68.

B.           Plan of Distribution

Not applicable

C.           Markets

The Common Shares are listed and traded in Canada on Tier 2 on the TSX Venture Exchange under the symbol QZM.V. The transition to Tier 2 became effective December 23, 2003. Prior to this, the Company traded on Tier 3, under the symbol YQZT.V on the TSX Venture Exchange. The shares are quoted under the symbol QZMRF.PK on the Over-The-Counter market in the United States.

There are currently no limitations imposed by Canadian federal or provincial laws on the rights of non-resident or foreign owners of Canadian securities to hold or vote the securities held. There are no such limitations imposed by the Company’s Memorandum, Articles or contracts of which the management of the Company is aware.

D.           Selling Shareholders

Not applicable

E.           Dilution

Not applicable

F.           Expenses of the Issue

Not applicable

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ITEM 10 ADDITIONAL INFORMATION

A.           Share Capital

Not applicable

B.           Memorandum and Articles of Association

This information has been previously disclosed in the Company’s Annual Report on Form 20-F dated January 28, 2003.

C.           Material Contracts

Hunter Dickinson Inc. ("HDI") is a private company with certain directors in common with the Company that provides geological, technical, corporate development, administrative and management services to, and incur third party costs on behalf of, the Company on a full cost recovery basis pursuant to an agreement dated December 31, 1996.

D.           Exchange Controls

The Company is a Province of British Columbia, Canada corporation. There is no law or governmental decree or regulation in Canada that restricts the export or import of capital, or affects the remittance of dividends, interest or other payments to a non-resident holder of Common Shares, other than withholding tax requirements. Any such remittances to United States residents are generally subject to withholding tax, however no such remittances are likely in the foreseeable future. See “Taxation”, below.

There is no limitation imposed by the laws of Canada or by the charter or other constituent documents of the Company on the right of a non-resident to hold or vote the Common Shares, other than as provided in the Investment Canada Act (Canada) (the “Investment Act”). The following discussion summarizes the material features of the Investment Act for a non-resident who proposes to acquire a controlling number of the Company’s Common Shares. It is general only, it is not a substitute for independent advice from an investor’s own advisor, and it does not anticipate statutory or regulatory amendments. The Company does not believe the Investment Act will have any affect on it or on its non-Canadian shareholders due to a number of factors including the nature of its operations and the Company’s relatively small capitalization.

The Investment Act generally prohibits implementation of a “reviewable” investment by an individual, government or agency thereof, corporation, partnership, trust or joint venture (each an “entity”) that is not a “Canadian” as defined in the Investment Act (a “non-Canadian”), unless after review the Director of Investments appointed by the minister responsible for the Investment Act is satisfied that the investment is likely to be of net benefit to Canada. The size and nature of a proposed transaction may give rise to an obligation to notify the Director to seek an advance ruling. An investment in the Common Shares by a non-Canadian (other than a “WTO Investor” as that term is defined in the Investment Act and which term includes entities which are nationals of or are controlled by nationals of member states of the World Trade Organization) when the Company was not controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of the Company and the value of the assets of the Company, as determined in accordance with the regulations promulgated under the Investment Act, was over a certain figure, or if an order for review was made by the federal cabinet on the grounds that the investment related to Canada’s cultural heritage or national identity, regardless of the value of the assets of the Company. An investment in the Common Shares by a WTO Investor, or by a non-Canadian when the Company was controlled by a WTO Investor, would be reviewable under the Investment Act if it was an investment to acquire control of the Company and the value of the assets of the Company, as determined in accordance with the regulations promulgated under the Investment Act, was not less than a specified amount, which for 2004 exceeds Cdn$237 million. A non-Canadian would acquire control of the Company for the purposes of the Investment Act if the non-Canadian acquired a majority of the Common Shares. The acquisition of less than a majority but one-third or more of the Common Shares would be presumed to be an acquisition of control of the Company unless it could be

23

established that, on the acquisition, the Company was not controlled in fact by the acquiror through the ownership of the Common Shares.

The foregoing assumes the Company will not engage in the production of uranium or own an interest in a producing uranium property in Canada, or provide any financial service or transportation service, as the rules governing these businesses are different.

Certain transactions relating to the Common Shares would be exempt from the Investment Act, including:

(a)	an acquisition of the Common Shares by a person in the ordinary course of that person’s business as a trader or dealer in securities,
(b)	an acquisition of control of the Company in connection with the realization of security granted for a loan or other financial assistance and not for a purpose related to the provisions of the Investment Act, and
(c)	an acquisition of control of the Company by reason of an amalgamation, merger, consolidation or corporate reorganization following which the ultimate direct or indirect control in fact of the Company, through the ownership of the Common Shares, remained unchanged.

E.           Taxation

1.           Material Canadian Federal Income Tax Consequences for United States Residents

The following discussion summarizes the material Canadian federal income tax consequences which are generally applicable to the holding and disposition of Common Shares by a holder (in this summary, a “U.S. Holder”) who, (a) for the purposes of the Income Tax Act (Canada) (the “Tax Act”), is not resident in Canada, deals at arm’s length with the Company, holds the Common Shares as capital property and does not use or hold the Common Shares in the course of carrying on, or otherwise in connection with, a business in Canada, and (b) for the purposes of the Canada-United States Income Tax Convention, 1980 (the “Treaty”), is a resident solely of the United States, has never been a resident of Canada, and has not held or used (and does not hold or use) Common Shares in connection with a permanent establishment or fixed base in Canada. This summary does not apply to traders or dealers in securities, limited liability companies, tax-exempt entities, insurers, financial institutions (including those to which the mark-to-market provisions of the Tax Act apply), or any other U.S. Holder to which special considerations apply.

This summary is based on the current provisions of the Tax Act including all regulations thereunder, the Treaty, all proposed amendments to the Tax Act, the regulations and the Treaty publicly announced by the Government of Canada to the date hereof, and the current administrative practices of the Canada Customs and Revenue Agency. It has been assumed that all currently proposed amendments will be enacted as proposed and that there will be no other relevant change in any governing law or administrative practice, although no assurances can be given in these respects. This summary does not take into account provincial, U.S., state or other foreign income tax law or practice. The tax consequences to any particular U.S. Holder will vary according to the status of that holder as an individual, trust, corporation, partnership or other entity, the jurisdictions in which that holder is subject to taxation, and generally according to that holder’s particular circumstances. Accordingly, this summary is not, and is not to be construed as, Canadian tax advice to any particular U.S. Holder.

2.           Dividends

Dividends paid or deemed to be paid to a U.S. Holder by the Company will be subject to Canadian withholding tax. Under the Treaty, the rate of withholding tax on dividends paid to a U.S. Holder is generally limited to 15% of the gross amount of the dividend (or 5% if the U.S. Holder is a corporation and beneficially owns at least 10% of the Company’s voting shares). The Company will be required to withhold the applicable withholding tax from any such dividend and remit it to the Canadian government for the U.S. Holder’s account.

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3.           Disposition

A U.S. Holder is not subject to tax under the Tax Act in respect of a capital gain realized on the disposition of a Common Share in the open market unless the share is “taxable Canadian property” to the holder thereof and the U.S. Holder is not entitled to relief under the Treaty. A Common Share will be taxable Canadian property to a U.S. Holder if, at any time during the 60 months preceding the disposition, the U.S. Holder or persons with whom the U.S. Holder did not deal at arm’s length alone or together owned, or had rights to acquire, 25% or more of the Company’s issued shares of any class or series.

A U.S. Holder whose Common Shares do constitute taxable Canadian property, and who might therefore be liable for Canadian income tax under the Tax Act, will generally be relieved from such liability under the Treaty unless the value of such shares at the time of disposition is derived principally from real property situated in Canada.

4.           United States Tax Consequences

a.           United States Federal Income Tax Consequences

The following is a discussion of all material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of the Company. This discussion does not address all potentially relevant federal income tax matters and it does not address consequences peculiar to persons subject to special provisions of federal income tax law, such as those described below as excluded from the definition of a U.S. Holder. In addition, this discussion does not cover any state, local or foreign tax consequences. (see “Taxation – Canadian Federal Income Tax Consequences” above). Accordingly, we urge holders and prospective holders of common shares of the Company should consult their own tax advisors about the specific federal, state, local, and foreign tax consequences to them of purchasing, owning and disposing of common shares of the Company, based upon their individual circumstances.

The following discussion is based upon the sections of the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations, published Internal Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial, of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.

b.           U.S. Holders

As used herein, a “U.S. Holder” means a holder of common shares of the Company who is a citizen or individual resident of the United States, a corporation or partnership created or organized in or under the laws of the United States or of any political subdivision thereof, an estate whose income is taxable in the United States irrespective of source or a trust subject to the primary supervision of a court within the United States and control of a United States fiduciary as described Section 7701(a)(30) of the Code. This summary does not address the tax consequences to, and U.S. Holder does not include, persons subject to specific provisions of federal income tax law, such as tax-exempt organizations, qualified retirement plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies, broker-dealers, non-resident alien individuals, persons or entities that have a “functional currency” other than the U.S. dollar, shareholders subject to the alternative minimum tax, shareholders who hold common shares as part of a straddle, hedging or conversion transaction, and shareholders who acquired their common shares through the exercise of employee stock options or otherwise as compensation for services. This summary is limited to U.S. Holders who own common shares as capital assets and who own (directly and indirectly, pursuant to applicable rules of constructive ownership) no more than 5% of the value of the total outstanding stock of the Company. This summary does not address the consequences to a person or entity holding an interest in a shareholder or the consequences to a person of the ownership, exercise or disposition of any options, warrants or other rights to acquire common shares. In addition, this summary does not address special rules applicable to United States persons (as defined in Section 7701(a)(30) of the Code) holding common shares through a foreign partnership or to foreign persons holding common shares through a domestic partnership.

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c.           Distribution on Common Shares of the Company

In general, U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of the Company are required to include in gross income for United States federal income tax purposes the gross amount of such distributions, equal to the U.S. dollar value of such distributions on the date of receipt (based on the exchange rate on such date), to the extent that the Company has current or accumulated earnings and profits, without reduction for any Canadian income tax withheld from such distributions. Such Canadian tax withheld may be credited, subject to certain limitations, against the U.S. Holder’s federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s federal taxable income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below). The dividend distributions are not currently expected to be "Qualified Dividends" subject to reduced U.S. tax rates. To the extent that distributions exceed current or accumulated earnings and profits of the Company, they will be treated first as a return of capital up to the U.S. Holder’s adjusted basis in the common shares and thereafter as gain from the sale or exchange of property. Preferential tax rates for long-term capital gains are applicable to a U.S. Holder which is an individual, estate or trust. There are currently no preferential tax rates for long-term capital gains for a U.S. Holder which is a corporation.

In the case of foreign currency received as a dividend that is not converted by the recipient into U.S. dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain, provided that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.

Dividends paid on the common shares of the Company generally will not be eligible for the dividends received deduction provided to corporations receiving dividends from certain United States corporations. A U.S. Holder which is a corporation and which owns shares representing at least 10% of the voting power and value of the Company may, under certain circumstances, be entitled to a 70% (or 80% if the U.S. Holder owns shares representing at least 20% of the voting power and value of the Company) deduction of the United States source portion of dividends received from the Company (unless the Company qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below). The Company does not anticipate that it will earn any United States income, however, and therefore does not anticipate that any U.S. Holder will be eligible for the dividends received deduction.

Under current Treasury Regulations, dividends paid on the Company’s common shares, if any, generally will not be subject to information reporting and generally will not be subject to U.S. backup withholding tax. However, dividends and the proceeds from a sale of the Company’s common shares paid in the U.S. through a U.S. or U.S. related paying agent (including a broker) will be subject to U.S. information reporting requirements and may also be subject to the 31% U.S. backup withholding tax, unless the paying agent is furnished with a duly completed and signed Form W-9. Any amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S. federal income tax liability, provided the required information is furnished to the IRS.

d.           Foreign Tax Credit

A U.S. Holder who pays (or has withheld from distributions) Canadian income tax with respect to the ownership of common shares of the Company may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for such foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces United States federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to tax. This election is made on a year-by-year basis and generally applies to all foreign taxes paid by (or withheld from) the U.S. Holder during that year. There are significant and complex limitations which apply to the credit; among which is the general limitation that the credit cannot exceed the proportionate share of the U.S. Holder’s United States income tax liability that the U.S. Holder’s foreign source income bears to his or its worldwide taxable income. In the determination of the application of this limitation, the various items of income and deduction must be classified into foreign and domestic sources. Complex rules govern this classification

26

process. In addition, this limitation is calculated separately with respect to specific classes of income such as “passive income”, “high withholding tax interest,” “financial services income,” “shipping income,” and certain other classifications of income. Dividends distributed by the Company will generally constitute “passive income” or, in the case of certain U.S. Holders, “financial services income” for these purposes. The availability of the foreign tax credit and the application of the limitations on the credit are fact specific, and U.S. Holders of common shares of the Company are urged to consult their own tax advisors regarding their individual circumstances.

e.           Disposition of Common Shares of the Company

In general, U.S. Holders will recognize gain or loss upon the sale of common shares of the Company equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the shareholder’s tax basis in the common shares of the Company. Preferential tax rates apply to long-term capital gains of U.S. Holders which are individuals, estates or trusts. In general, gain or loss on the sale of common shares of the Company will be long-term capital gain or loss if the common shares are a capital asset in the hands of the U.S. Holder and are held for more than one year. Deductions for net capital losses are subject to significant limitations. For U.S. Holders which are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to be offset against capital gains until such net capital loss is thereby exhausted.

f.           Other Considerations

Set forth below are certain material exceptions to the above-described general rules describing the United States federal income tax consequences resulting from the holding and disposition of common shares:

g.           Foreign Personal Holding Company

If at any time during a taxable year more than 50% of the total combined voting power or the total value of the Company’s outstanding shares is owned, directly or indirectly (pursuant to applicable rules of constructive ownership), by five or fewer individuals who are citizens or residents of the United States and 60% or more of the Company’s gross income for such year is derived from certain passive sources (e.g., from certain interest and dividends), the Company may be treated as a “foreign personal holding company.” In that event, U.S. Holders that hold common shares would be required to include in gross income for such year their allocable portions of such passive income to the extent the Company does not actually distribute such income. The Company does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that the Company will not be considered a foreign personal holding company for the current or any future taxable year.

h.           Foreign Investment Company

If 50% or more of the combined voting power or total value of the Company’s outstanding shares is held, directly or indirectly, by citizens or residents of the United States, United States domestic partnerships or corporations, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), and the Company is found to be engaged primarily in the business of investing, reinvesting, or trading in securities, commodities, or any interest therein, it is possible that the Company may be treated as a “foreign investment company” as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling or exchanging common shares to be treated as ordinary income rather than capital gain. The Company does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that the Company will not be considered a foreign investment company for the current or any future taxable year.

i.           Passive Foreign Investment Company

United States income tax law contains rules governing “passive foreign investment companies” (“PFIC”) which can have significant tax effects on U.S. Holders of foreign corporations. These rules do not apply to non-U.S. Holders. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the United States if, for any taxable

27

year, either (i) 75% or more of its gross income is “passive income,” which includes interest, dividends and certain rents and royalties or (ii) the average percentage, by fair market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more. The Company appears to have been a PFIC for the fiscal year ended July 31, 2001, and at least certain prior fiscal years. In addition, the Company expects to qualify as a PFIC for the fiscal year ending July 31, 2003, and may also qualify as a PFIC in future fiscal years. Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect such U.S. Holder’s tax situation.

Each U.S. Holder who holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to United States federal income taxation under one of three alternative tax regimes at the election of such U.S. Holder. The following is a discussion of such alternative tax regimes applied to such U.S. Holders of the Company. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined voting power of all classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled Foreign Corporation” below).

A U.S. Holder who elects to treat the Company as a qualified electing fund (“QEF”) will be subject, under Section 1293 of the Code, to current federal income tax for any taxable year to which the election applies in which the Company qualifies as a PFIC on his pro rata share of the Company’s (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will be taxed as long-term capital gain, and (ii) “ordinary earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income, in each case, for the shareholder’s taxable year in which (or with which) the Company’s taxable year ends, regardless of whether such amounts are actually distributed. A U.S. Holder’s tax basis in the common shares will be increased by any such amount that is included in income but not distributed.

The procedure a U.S. Holder must comply with in making an effective QEF election, and the consequences of such election, will depend on whether the year of the election is the first year in the U.S. Holder’s holding period in which the Company is a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a “timely” QEF election, then the U.S. Holder may make the QEF election by simply filing the appropriate documents at the time the U.S. Holder files his tax return for such first year. If, however, the Company qualified as a PFIC in a prior year during the U.S. Holder’s holding period, then, in order to avoid the Section 1291 rules discussed below, in addition to filing documents, the U.S. Holder must elect to recognize under the rules of Section 1291 of the Code (discussed herein), (i) any gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or (ii) if the Company is a controlled foreign corporation, the U.S. Holder’s pro rata share of the Company’s post-1986 earnings and profits as of the qualification date. The qualification date is the first day of the Company’s first tax year in which the Company qualified as a QEF with respect to such U.S. Holder. For purposes of this discussion, a U.S. Holder who makes (i) a timely QEF election, or (ii) an untimely QEF election and either of the above-described gain-recognition elections under Section 1291 is referred to herein as an “Electing U.S. Holder.” A U.S. Holder who holds common shares at any time during a year of the Company in which the Company is a PFIC and who is not an Electing U.S. Holder (including a U.S. Holder who makes an untimely QEF election and makes neither of the above-described gain-recognition elections) is referred to herein as a “Non-Electing U.S. Holder.” An Electing U.S. Holder (i) generally treats any gain realized on the disposition of his Registrant common shares as capital gain; and (ii) may either avoid interest charges resulting from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on his share of the Company’s annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the U.S. Holder is not a corporation, any interest charge imposed under the PFIC regime would be treated as “personal interest” that is not deductible.

In order for a U.S. Holder to make (or maintain) a valid QEF election, the Company must provide certain information regarding its net capital gains and ordinary earnings and permit its books and records to be examined to verify such information. The Company intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to the Company. The Company urges each U.S. Holder to consult a tax advisor regarding the availability of, and procedure for making, the QEF election.

A QEF election, once made with respect to the Company, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or terminated, or the IRS consents to revocation of the

28

election. If a U.S. Holder makes a QEF election and the Company ceases to qualify as a PFIC in a subsequent tax year, the QEF election will remain in effect, although not applicable, during those tax years in which the Company does not qualify as a PFIC. Therefore, if the Company again qualifies as a PFIC in a subsequent tax year, the QEF election will be effective and the U.S. Holder will be subject to the rules described above for Electing U.S. Holders in such tax year and any subsequent tax years in which the Company qualifies as a PFIC. In addition, the QEF election remains in effect, although not applicable, with respect to an Electing U.S. Holder even after such U.S. Holder disposes of all of his or its direct and indirect interest in the shares of the Company. Therefore, if such U.S. Holder reacquires an interest in the Company, that U.S. Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which the Company qualifies as a PFIC.

In the case of a Non-Electing U.S. Holder, special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be realized by reasons of a pledge) of his Registrant common shares and (ii) certain “excess distributions,” as defined in Section 1291(b), by the Company.

A Non-Electing U.S. Holder generally would be required to pro rate all gains realized on the disposition of his Registrant common shares and all excess distributions on his Registrant common shares over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder (excluding any portion of the holder’s period prior to the first day of the first year of the Company (i) which began after December 31, 1986, and (ii) for which the Company was a PFIC) would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation must treat this interest charge as “personal interest” which, as discussed above, is wholly non-deductible. The balance, if any, of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance. In certain circumstances, the sum of the tax and the PFIC interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized, by the U.S. Holder.

If the Company is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Registrant common shares, then the Company will continue to be treated as a PFIC with respect to such Registrant common shares, even if it is no longer definitionally a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such Registrant common shares had been sold on the last day of the last taxable year for which it was a PFIC.

Effective for tax years of U.S. Holders beginning after December 31, 1997, U.S. Holders who hold (actually or constructively) marketable stock of a foreign corporation that qualifies as a PFIC may elect to mark such stock to the market annually (a “mark-to-market election”). If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable with respect to the Company common shares. A U.S. Holder who makes the mark-to market election will include in income for each taxable year for which the election is in effect an amount equal to the excess, if any, of the fair market value of the common shares of the Company as of the close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in the common shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains for the common shares in the Company included by such U.S. Holder for prior tax years, including any amount which would have been treated as a mark-to-market gain for any prior tax year but for the Section 1291 rules discussed above with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax basis in the common shares of the Company will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year, unless the Company common shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election. Because the IRS has not established procedures for making a mark-to-market election, U.S. Holders are urged to consult their tax advisor regarding the manner of making such an election. No view is expressed regarding whether common shares of the Company are marketable for these purposes or whether the election will be available.

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Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis of the Company common shares in the hands of the transferee and the basis of any property received in the exchange for those common shares would be increased by the amount of gain recognized. Under the Proposed Treasury Regulations, an Electing U.S. Holder would not be taxed on certain transfers of PFIC stock, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. The transferee’s basis in this case will depend on the manner of the transfer. In the case of a transfer by an Electing U.S. Holder upon death, for example, the transferee’s basis is generally equal to the fair market value of the Electing U.S. Holder’s common shares as of the date of death under Section 1014 of the Code. The specific tax effect to the U.S. Holder and the transferee may vary based on the manner in which the common shares are transferred. Each U.S. Holder of the Company is urged to consult a tax advisor with respect to how the PFIC rules affect his or its tax situation.

Whether or not a U.S. Holder makes a timely QEF election with respect to common shares of the Company, certain adverse rules may apply in the event that both the Company and any foreign corporation in which the Company directly or indirectly holds shares is a PFIC (a “lower-tier PFIC”). Pursuant to certain Proposed Treasury Regulations, a U.S. Holder would be treated as owning his or its proportionate amount of any lower-tier PFIC shares, and generally would be subject to the PFIC rules with respect to such indirectly-held PFIC shares unless such U.S. Holder makes a timely QEF election with respect thereto. The Company intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to each subsidiary of the Company that is a PFIC.

Under the Proposed Treasury Regulations, a U.S. Holder who does not make a timely QEF election with respect to a lower-tier PFIC generally would be subject to tax (and the PFIC interest charge) on (i) any excess distribution deemed to have been received with respect to his or its lower-tier PFIC shares and (ii) any gain deemed to arise from a so-called “indirect disposition” of such shares. For this purpose, an indirect disposition of lower-tier PFIC shares would generally include (i) a disposition by the Company (or an intermediate entity) of lower-tier PFIC shares, and (ii) any other transaction resulting in a diminution of the U.S. Holder’s proportionate ownership of the lower-tier PFIC, including an issuance of additional common shares by the Company (or an intermediate entity). Accordingly, each prospective U.S. Holder should be aware that he or it could be subject to tax even if such U.S. Holder receives no distributions from the Company and does not dispose of its common shares. The Company strongly urges each prospective U.S. Holder to consult a tax advisor with respect to the adverse rules applicable, under the Proposed Treasury Regulations, to U.S. Holders of lower-tier PFIC shares.

Certain special, generally adverse, rules will apply with respect to Registrant common shares while the Company is a PFIC unless the U.S. Holder makes a timely QEF election. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.

j.           Controlled Foreign Corporation

If more than 50% of the total combined voting power of all classes of shares entitled to vote or the total value of the shares of the Company is owned, actually or constructively, by citizens or residents of the United States, United States domestic partnerships or corporation, or estates or trusts other than foreign estates or trusts (as defined by the Code Section 7701(a)(31)), each of which own, actually or constructively, 10% or more of the total combined voting power of all classes of shares entitled to vote of the Company (“United States Shareholder”), the Company could be treated as a controlled foreign corporation (“CFC”) under Subpart F of the Code. This classification would effect many complex results, one of which is the inclusion of certain income of a CFC which is subject to current U.S. tax. The United States generally taxes United States Shareholders of a CFC currently on their pro rata shares of the Subpart F income of the CFC. Such United States Shareholders are generally treated as having received a current distribution out of the CFC’s Subpart F income and are also subject to current U.S. tax on their pro rata shares of increases in the CFC’s earnings invested in U.S. property. The foreign tax credit described above may reduce the U.S. tax on these amounts. In addition, under Section 1248 of the Code, gain from the sale or exchange of shares by a U.S. Holder of common shares of the Company which is or was a United States Shareholder at any time during the five-year period ending on the date of the sale or exchange is treated as ordinary income to the extent of earnings and profits of the Company attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and

30

a CFC, the foreign corporation generally will not be treated as a PFIC with respect to United States Shareholders of the CFC. This rule generally will be effective for taxable years of United States Shareholders beginning after 1997 and for taxable years of foreign corporations ending with or within such taxable years of United States Shareholders. Special rules apply to United States Shareholders who are subject to the special taxation rules under Section 1291 discussed above with respect to a PFIC. Because of the complexity of Subpart F, a more detailed review of these rules is outside of the scope of this discussion. The Company does not believe that it currently qualifies as a CFC. However, there can be no assurance that the Company will not be considered a CFC for the current or any future taxable year.

F.           Dividends and Paying Agents

Not applicable.

G.           Statement by Experts

Not applicable

H.           Documents on Display

Exhibits attached to this Form 20-F are also available for viewing at the offices of the Company, Suite 1020, 800 West Pender Street, Vancouver, British Columbia V6C 2V6 or on request of the Company. Copies of the Company’s financial statements and other continuous disclosure documents required under the British Columbia Securities Act are available for viewing at www.SEDAR.com.

I.           Subsidiary Information

Not applicable.

ITEM 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A.           Transaction Risk and Currency Risk Management

The Company’s operations do not employ financial instruments or derivatives and given that the Company keeps its excess funds in high-grade short-term instruments it does not have significant or unusual financial market risks.

B.           Exchange Rate Sensitivity

The majority of the Company’s operations are in Canada and hence it is not significantly affected by exchange rate risk. Its liabilities are all denominated in Canadian dollars. The Company does not hedge this risk, and it does not consider this exposure to be material in the context of its operations.

C.           Interest Rate Risk and Equity Price Risk

The Company is equity financed and does not have any debt.

D.           Commodity Price Risk

While the value of the Company’s resource properties, if any, can always be said to relate to the price of precious metals and the outlook for same, the Company does not have any operating mines and hence does not have any hedging or other commodity based operations risks respecting its business activities.

31

ITEM 12 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.           Debt Securities

Not applicable

B.           Warrants and Rights

Not applicable

C.           Other Securities

Not applicable

D.           American Depositary Shares

Not applicable

PART II

ITEM 13 DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

ITEM 14 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not applicable.

ITEM 15 CONTROLS AND PROCEDURES

As a consequence of the Sarbanes-Oxley Act of 2002, the Company’s principal executive and financial officers are required to review the Company’s internal controls and corporate disclosure controls and procedures based on their evaluation as of a date within 90 days prior to the filing of the Annual Report. As of the date of filing of this Annual Report the executive and financial officers are currently reviewing the Company’s controls and procedures and establishing policies in regard to them. It is not currently possible to provide a conclusion; however the Company notes that its relatively modest asset base and limited number of transactions suggests that sophisticated financial and disclosure controls and procedures will not be warranted for the Company. The Company’s financial procedures require that two officers or directors sign all payments and other banking documents and the executive officers are able to personally review all material payments made by the Company. Exploration results are reviewed by the Company’s consulting geologists and its Chief Executive Officer and other board members on a need-to-know basis and are otherwise kept confidential prior to any dissemination of these results.

There have not been any significant changes in the Company’s internal controls or other factors that could significantly affect these controls over the last several years.

32

The Company expects to further formalize and document controls and procedures in the ensuing fiscal year as a consequence of the executive review.

ITEM 15 AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS

A.           Audit Committee Financial Expert

The board of directors has determined that Mr. Brian Causey is a member of the audit committee of the Company who qualifies as a "financial expert” based on his education and experience. Mr. Causey is "independent", as the term is defined by the American Stock Exchange, which is a national securities exchange.

B.           Code of Ethics

The Company has adopted a code of ethics that applies to the Company's chief executive officer, the chief financial officer, and other members of senior management. The Code of Ethics is appended as an exhibit to this Form 20-F.

C.           Principal Accountant Fees and Services

The following table discloses the aggregate fees billed for each of the last two fiscal years for professional services rendered by the Company's audit firm for various services. The figures in the table below are expressed in Canadian Dollars.

Services:		Year ended
		July 31, 2004		July 31, 2003
Audit Fees	C$	20,500	C$	C$ 21,500
Audit Related Fees		—		—
Tax Fees		2,300		2,350
All Other Fees		—		—
	C$	22,800	C$	C$ 23,850

Audit related fees comprise of fees billed for assurance and advisory services related to the annual audit.

From time to time, management of the Company recommends to and requests approval from the audit committee for non-audit services to be provided by the Company's auditors. The audit committee routinely considers such requests at committee meetings, and if acceptable to a majority of the audit committee members, pre-approves such non-audit services by a resolution authorizing management to engage the Company's auditors for such non-audit services, with set maximum dollar amounts for each itemized service. During such deliberations, the audit committee assesses, among other factors, whether the services requested would be considered "prohibited services" as contemplated by the US Securities and Exchange Commission, and whether the services requested and the fees related to such services could impair the independence of the auditors.

D.           Exemptions from Listing Standards for Audit Committees

Not applicable

E.           Purchases Of Equity Securities by the Issuer and Affiliated Purchasers

None

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PART III

ITEM 17 FINANCIAL STATEMENTS

The following attached financial statements are incorporated herein:

(1)	Independent Auditors’ Report on the consolidated balance sheets as at July 31, 2004 and 2003, and the consolidated statements of operations, cash flows and shareholders’ equity (deficiency) for the years ended July 31, 2004, 2003 and 2002;
(2)	Consolidated balance sheets as at July 31, 2004 and 2003;
(3)	Consolidated statements of operations for the years ended July 31, 2004, 2003 and 2002;
(4)	Consolidated statements of cash flows for the years ended July 31, 2004, 2003 and 2002;
(5)	Consolidated statement of shareholders’ equity (deficiency) for the years ended July 31, 2004, 2003 and 2002; and
(6)	Notes to the consolidated financial statements.

A reconciliation to Unites States generally accepted accounting principles has been presented in note 10 of the financial statements.

ITEM 18 FINANCIAL STATEMENTS

NOT APPLICABLE    . See Item 17.

34

ITEM 19 EXHIBITS

Key to the following document types:

1.	Articles of Incorporation and Memorandum of the Company.
2.	Other Instruments defining the rights of the holders of equity or debt securities.
3.	Voting trust agreements.
4
	a.	Material contracts not made in the ordinary course of business or which are to be performed in whole or in part at or after the filing of the Registration Statement or which was entered into not more than two years before filing.
	b.
		(i)	Agreements to which Directors, Officers, promoters voting trustees or security holders or their affiliates named in the Registration Statement are parties other than contracts involving only the purchase or sale of current assets having a determinable market price;
		(ii)	contracts on which the Company’s business is substantially dependent;
		(iii)	contracts for the acquisition or sale of property exceeding 15% of the Company’s fixed assets; and
		(iv)	material leases.
	c.	Management Contracts, compensation plans.
5. - 9.	Not applicable.
10.	Other

The following Exhibits have been filed with the Company's Annual Report on Form 20-F in previous years:

Type of
Document	Description
1	Certificate of Incorporation and Memorandum, as amended, June 5, 1986, (incorporated by reference to Exhibit 3 to the Company’s Statement of Form 10, Commission File No. 0-15490).
1	Articles July 28, 1982, (incorporated by reference to Exhibit 3 to the Company’s Statement on Form 10, Commission File No. 0-15490).
1	Certificate of Change of Name, November 5, 1997.
1	Articles, July 28, 1982 (incorporated by reference to Exhibit 4 to the Company’s Registration Statement on Form 10, Commission file No. 0-15490).

35

Type of
Document	Description
10	Quartz Mountain Resources Ltd. Stock Incentive Plan, as amended, (incorporated by reference to Exhibit 4 to the Company’s Form S-8 Registration Statement dated November 27, 1989, Commission File No. 33-32388).
10	Indemnity Agreement dated February 1989, between the Company and David S. Jennings (incorporated by reference to Exhibit 10(a) to the Company’s Form S-8 Registration No. 33-32388).
10	Letter Agreement dated August 21, 1995, between Wavecrest Resources, Inc. and Newmont Exploration Limited. (Incorporated by Reference to Exhibit 10.1 on the Company’s Form 8-K dated August 21, 1995).
10	Exploration, Development and Mining Operations Agreement dated December 31, 1995, between Newmont Exploration Limited and the Company. (Incorporated by Reference to Exhibit 10.1 on the Company’s Form 10-QSB dated April 30, 1996.)

Exhibits included as part of this Form 20-F are as follows:

Type of
Document	Description
99.1	Audited financial statements of the Company
	(1)	Independent Auditors’ Report on the consolidated balance sheets as at July 31, 2004 and 2003, and the consolidated statements of operations, cash flows and shareholders’ equity (deficiency) for the years ended July 31, 2004, 2003 and 2002;
	(2)	Consolidated balance sheets as at July 31, 2004 and 2003;
	(3)	Consolidated statements of operations for the years ended July 31, 2004, 2003 and 2002;
	(4)	Consolidated statements of cash flows for the years ended July 31, 2004, 2003 and 2002;
	(5)	Consolidated statement of shareholders’ equity (deficiency) for the years ended July 31, 2004, 2003 and 2002; and
	(6)	Notes to the consolidated financial statements.
11.1	Code of Ethics
10.1	Audit Committee Charter
10.2	Geological and Management Services Agreement between Hunter Dickinson Inc. and the Company

36

Certification documents included as part of this Form 20-F are as follows:

Type of
Document	Description
12.1	302 Certification of the Chief Executive Officer of the Corporation pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 dated January 21, 2005
12.2	302 Certification of the Principal Accounting Officer of the Corporation pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 dated January 21, 2005
13.1	906 Certification of the Chief Executive Officer and Principal Accounting Officer of the Corporation pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934 and Section 1350 of Chapter 63 of Title 18 of the United States Code dated January 21, 2005

The Company certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

QUARTZ MOUNTAIN RESOURCES LTD.

Per:

“Shannon M. Ross”                  
Shannon M. Ross
Principal Accounting Officer

Dated: January 21, 2005

37

EX-10.1

QUARTZ MOUNTAIN RESOURCES LTD.

AUDIT COMMITTEE CHARTER

This Charter shall govern the activities of the Audit Committee of the Board of Directors of Quartz Mountain Resources Ltd. (the "Company"), when and to the extent that said Committee is carrying out its audit and financial review functions.

I.           COMMITTEE PURPOSES

The essential functions of the Audit Committee (the “Committee”) in assisting the Board of Directors in fulfilling its oversight responsibilities are to review:

1.	the financial reports and other financial information provided by the Company to governmental entities and the public; the Company’s systems of internal controls regarding finance, accounting, legal compliance and ethics that the Company’s management and the Board have established; and the Company’s auditing, accounting and financial reporting processes generally,
2.	the procedures of the Company and its subsidiaries regarding the appointment of the independent public auditors, and the scope of and fees for their audits, and
3.	any and all related party agreements and arrangements between the Company and its affiliates and any disputes that may arise thereunder.

The Committee’s primary duties and responsibilities are to:

1.	serve as an independent and objective party to monitor the Company’s financial reporting process and internal control system,
2.	review and appraise the audit efforts of the Company’s independent auditors,
3.	provide an open avenue of communication among the independent auditors, the Company’s financial and senior management, and the Board of Directors, and
4.	review and appraise the fairness of related party transactions.

II.           COMPOSITION

The Committee shall be comprised of three or more directors as determined by the Board, each of whom shall be an Independent Director, as described in Section V of this Charter, and otherwise free from any relationship that, in the opinion of the Board, would interfere with the exercise of his or her independent judgement as a member of the Committee.

All members of the Committee shall have a working familiarity with basic finance and accounting practices including the ability to read and understand fundamental financial statements, including the balance sheet, income statement, and statement of cash flows.

At least one member of the Committee shall have accounting or related financial expertise. Financial expertise includes past employment experience in finance, banking, or accounting; requisite professional certification in accounting; or prior comparable experience, such as being or having been charged with financial oversight responsibilities, which results in the member’s financial sophistication.

The Members of the Committee shall be appointed by the Board at the annual organizational meeting of the Board or until their successors shall be duly elected and qualified. A Chair of the Audit Committee shall be elected by majority vote of the full Committee membership.

III.           MEETINGS

The Committee shall meet at least each fiscal quarter, or more frequently as circumstances dictate. As part of its job to foster open communication, the Committee should meet at least annually with management and with the independent auditors in separate executive sessions to discuss any matters that the Committee or each of these groups believe should be discussed privately. In addition, the Committee or its Chair should meet with management quarterly to review the Company’s financial statements as described in Section IV.3, below, and the Committee or a designated member of the Committee should meet or discuss the interim financial statements with the Chief Financial Officer and/or the Controller of the Company on a regular and periodic basis as the Committee may deem appropriate.

IV.           RESPONSIBILITIES AND DUTIES

To fulfil its responsibilities and duties the Committee shall:

Documents/Reports Review

1.	Review this Charter at least annually for adequacy and update its provisions, as conditions dictate.
2.	Review with the Company’s financial management and the independent auditors the Company’s annual financial statements, and the financial statements included in the Form 20F, AIF, and any other annual reports or other financial information submitted to any governmental body, or the public, including any certification, report, opinion, or review rendered by the independent auditors.
3.	Review with the Company’s financial management and, if deemed appropriate by the Committee, with the independent auditors, the Company’s interim financial statements, prior to its filing with any governmental body and prior to the release of earnings. One member designated by the Committee may represent the entire Committee for the purposes of this review.

Independent Auditors

4.	Recommend to the Board on the nomination of the independent auditors for the Company’s shareholders’ approval, considering independence and effectiveness and approve the fees and other compensation to be paid to the independent auditors. The Committee is to require the independent auditors to submit to the Committee on a periodic basis (at least annually) a formal written statement delineating all relationships between themselves and the Company. On an annual basis, the Committee should review and discuss with the independent auditors all relationships the auditors have with the Company that might affect their objectivity and independence. The Committee shall recommend to the Board any action to take to ensure the independence of the independent auditors. The Committee is to advise the independent auditors that they ultimately accountable to the Board and the Committee, as representatives of the shareholders of the Company.
5.	Review, evaluate, and report to the Board on the performance of the independent auditors, and when circumstances warrant, any proposed discharge of the independent auditors.
6.	Periodically consult with the independent auditors out of the presence of the Company’s management about internal controls and the completeness and accuracy of the financial statements.

Financial Reporting Process

7.	In consultation with the independent auditors, review the integrity of the Company’s financial reporting processes, both internal and external.
8.	Consider the independent auditors’ judgements about the quality and appropriateness of the Company’s accounting principles as applied in its financial reporting.
9.	Consider and approve, if appropriate, major changes to the Company’s accounting principles and practices as suggested by the independent auditors or management.

Process Improvement

10.	Establish regular and separate systems of reporting to the Committee by each of management and the independent auditors regarding any significant judgements made in management’s preparation of the financial statements and the view of each as to appropriateness of such judgements.
11.	Following completion of the annual audit, review separately with each of management and the independent auditors any significant difficulties encountered during the course of the audit, including any restrictions on the scope of work or access to required information.
12.	Review any significant disagreement among management and the independent auditors in connection with the preparation of the financial statements.
13.	Review with the independent auditors and management the extent to which changes or improvements in financial or accounting practices, as approved by the Committee, have

been implemented. This review should be conducted at an appropriate time subsequent to implementation of changes or improvements, as decided by the Committee.

Legal Compliance

14.	Confirm that the Company’s management has the proper review system in place to ensure that Company’s financial statements, reports and other financial information disseminated to governmental organizations and the public satisfy legal requirements.
15.	Review financial reporting compliance matters with the Company’s general counsel.
16.	Review with the Company’s general counsel any legal matter that the Committee understands could have a significant impact on the Company’s financial statements.
17.	Conduct or authorize investigations into matters within the Committee’s scope of responsibilities. The Committee is authorized to retain independent counsel, accountants, auditors, or others to assist the Committee in the conduct of any such investigation.
18.	Perform any other activities, consistent with this Charter, the Company’s by-laws and governing law, as the Committee or the Board deem necessary or appropriate.

Related Party Transactions

19.

Review for fairness to the Company and its subsidiaries, as applicable, proposed transactions or other arrangements between any affiliated or related party and either the Company or any of its subsidiaries, and recommend to the Board whether the transactions or other arrangements should be approved. As used herein, the term “related party” means any officer, director or shareholder holding a greater than 5% interest in the Company, or any entity in which any such person has a financial interest.

20.

Review and make recommendations to the Board regarding any dispute between any affiliated or related party and either or both the Company and its subsidiaries.

Limitation of Responsibility

21.      While the Audit Committee has the responsibilities and powers provided by this Charter, it is not the duty of the Committee to plan or conduct audits or to determine whether the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. This is the responsibility of management and the independent auditors. Similarly, it is not the duty of the Committee to conduct investigations, to resolve disagreements, between management and the independent auditors, or to assure compliance with laws, regulations or the Company’s Code of Professional Conduct.

V.           INDEPENDENCE OF DIRECTORS

For purposes of this Charter, a director is deemed to be an Independent Director according to the following requirements;

1.	a director who is an employee (including non-employee executive officers) of the Company, its subsidiaries, or any of its affiliates may not serve on the Committee until three years following termination of employment. “Affiliate” includes a subsidiary, sibling company, predecessor, parent company, or former parent company,
2.	a director who is a partner, controlling shareholder, or executive officer of a for-profit business organization to which the Company made, or from which the Company received, payments (other than those arising solely from investment’s in the Company’s securities) that exceed 5% of the Company’s or business organization’s consolidated gross revenues for that year, or $200,000, whichever is more, in any of the past three years is not considered to be independent. This restriction does not apply if the director has terminated his or her relationship with the organization more then three years preceding appointment to the Committee. “Business relationships” can include commercial, industrial, banking, consulting, legal, accounting, and other relationships. A director can have this relationship directly with the company, or the director can be a partner, officer, or employee of an organization that has such a relationship,
3.	a director who has, or within the preceding three years has had, a direct business relationship with the Company may serve on the Committee only if the Board of Directors determines in its business judgment that the relationship does not interfere with the director’s exercise of independent judgment, and
4.	a director who is employed as an executive of another Company where any of the Company’s executives serves on that Company’s compensation committee may not serve on the Committee.

A director who is an immediate family member of an individual who is, or who was during the preceding three years an executive officer of the Company or any of its affiliates, may not serve on the Committee. “Immediate family” includes a person’s spouse, common law spouse, parent, child, sibling, and in-law.

EX-10.2

GEOLOGICAL, MANAGEMENT AND
ADMINISTRATION SERVICES AGREEMENT

THIS AGREEMENT dated for reference the 31st day of December, 1996

BETWEEN:

HUNTER DICKINSON INC., a company incorporated under the federal laws of Canada having a registered office at Suite 1500, 1055 West Georgia Street, Vancouver, British Columbia, V6E 4N7

(herein “HDI”)

OF THE FIRST PART

AND:

QUARTZ MOUNTAIN GOLD CORP., a British Columbia company having a business office at Suite 1020, 800 West Pender Street, Vancouver, British Columbia, V6C 2V6

(herein “Quartz Mountain“)

OF THE SECOND PART

WHEREAS:

(A)                   HDI is a company established to provide geological, corporate development, administrative and management services for public companies involved in the acquisition and exploration of natural resource properties;

(B)                   Quartz Mountain and HDI have agreed that HDI will provide the services more particularly described herein on the terms and conditions of this Agreement and that Quartz Mountain will assist HDI by requiring one of Quartz Mountain’s directors to serve on the board of directors of HDI.

NOW THEREFORE in consideration of the premises and mutual covenants herein contained, the parties hereto agree as follows:

- 2 -

PART 1

ADMINISTRATION SERVICES

1.1                               During the term of this Agreement HDI shall provide Quartz Mountain and/or Quartz Mountain’s affiliates with the following administration services:

(a)                   use of HDI’s business premises located at Suite 1020, 800 West Pender Street, Vancouver, British Columbia, on a non-exclusive basis with access to the reception area, the boardroom and other offices as available and agreed to from time to time;

(b)                   use of HDI’s reception and telephone answering personnel;

(c)                   reasonable use of office equipment including telephone systems, photocopying, telecopier and computers, and other equipment as required;

(d)                   administration service personnel including accounting, purchasing, secretarial and like support staff on an “as needed” and “as available” basis.

1.2                               The administration fee payable by Quartz Mountain to HDI for the administration services shall be invoiced by HDI on a monthly basis based on a fee which represents a full cost-recovery basis to HDI and which fee will be reasonably described in the invoice. The fee shall represent a reasonable pro-rationing of HDI’s costs amongst all its client companies with regard to the level of service requirements of each such company. The fee will be reviewed from time to time and the basis may be changed on notice by HDI in the event Quartz Mountain’s use of the administration services is in excess of historical experience or HDI’s costs change or in the event a greater or lesser number of other public companies are using HDI’s services.

1.3                               Quartz Mountain acknowledges that HDI has or intends to enter into substantially identical agreements with other public companies and HDI may add, delete or vary such arrangements with such other companies in HDI’s sole discretion. As of the date hereof such other companies are more particularly described on Schedule “A” hereto.

PART 2

GEOLOGICAL AND MANAGEMENT SERVICES

2.1                               In addition to the administration services, HDI shall supply technical, geological, management and corporate development services to Quartz Mountain on a non-exclusive and on an “as needed” and “as available” basis. HDI shall, at least annually, review the resource property portfolio of Quartz Mountain together with Quartz Mountain’s board of directors and such other independent consultants as Quartz Mountain desires to involve with a view to recommending and implementing programs of exploration.

- 3 -

2.2                               Such recommendations shall be accompanied by reasonable details of programs including scheduling, description of activities and related budgets. Upon acceptance (with or without variations) of such recommendations by Quartz Mountain (which acceptance is in the sole discretion of Quartz Mountain) HDI shall generally carry out the program as the agent of Quartz Mountain and shall:

(a)                   retain and/or itself provide the necessary technical and support staff;

(b)                   negotiate third party service contracts and provide them to Quartz Mountain for execution or execute same as agent for Quartz Mountain. Such third party contracts shall generally include geophysical and geochemical surveys, sampling, line cutting, diamond drilling, engineering, environmental, independent analyses and reporting and such other work as has been recommended by HDI or approved by Quartz Mountain;

(c)                   apply for necessary government exploration or work permits and licences;

(d)                   provide field staff to supervise and oversee the work of HDI staff and other contractors and subcontractors;

(e)                   obtain insurance and assist in making application and relevant filings pertaining to the maintenance of titles to the property as well as filing of assessment work respecting exploration work carried out and paid for by Quartz Mountain;

(f)                   general administration of the exploration program including accounting, payment of third party invoices and reporting thereon; and

(g)                   provide assistance with corporate awareness programs regarding Quartz Mountain.

2.3                               For purposes of administration of any exploration program Quartz Mountain shall be deemed to be the operator of all of Quartz Mountain’s joint venture agreements and HDI’s function shall be as general advisor and agent.

2.4                               The fee to HDI for the above technical services shall be included with and agreed as part of budgets which are provided to and subject to the approval of Quartz Mountain. Except for overruns, significant variations (greater than 50%) in the planned programs shall require the prior approval of Quartz Mountain but the costs incurred with respect to such overruns and variations shall notwithstanding, be for the account of Quartz Mountain.

- 4 -

PART 3

ADDITIONAL RIGHTS AND DUTIES OF HDI

3.1                               Quartz Mountain agrees to indemnify and hold harmless HDI (and any subsidiary), their officers, directors, employees and agents, from any and all claims, suits or demands arising out of the performance of HDI hereunder. Without restricting the generality of the foregoing Quartz Mountain agrees to promptly pay HDI invoices and to advance funds against written cash calls wherever reasonably required by HDI to pay for or secure services, to secure equipment, contractors, deposits and the like and to honour all agreements which HDI enters into in good faith as agent on behalf of Quartz Mountain with third parties. The foregoing indemnity shall not apply to losses, claims or suits arising out of HDI’s negligence or wilful misconduct.

3.2                               HDI agrees to carry out its advisory, administrative and operating activities hereunder in a competent and workmanlike manner, in good faith with a view to the best interests of Quartz Mountain.

3.3                               HDI shall take reasonable precautions to ensure that only authorized personnel of HDI and Quartz Mountain are provided with information respecting the business affairs, exploration results and properties of Quartz Mountain. HDI shall limit access to information respecting exploration developments to its own staff on a need-to-know basis and shall ensure that its personnel acknowledge the need to protect confidentiality of information respecting Quartz Mountain which is developed by or comes into the possession of HDI and that they are in a “special relationship” with Quartz Mountain as contemplated by securities legislation. HDI shall generally maintain confidentiality of Quartz Mountain's affairs and shall take reasonable precautions to protect the integrity and security of information developed for Quartz Mountain.

3.4                               HDI shall not compete with Quartz Mountain and will not endeavour to acquire any interest in any property of Quartz Mountain or related to or which can reasonably be said to be derived from any property of Quartz Mountain, without the prior written consent of Quartz Mountain which consent shall be in Quartz Mountain's sole discretion.

3.5                               HDI shall not be obligated whatsoever to provide any information or advice to Quartz Mountain respecting resource property prospects and opportunities which come to the attention of HDI personnel unless such prospects and opportunities can be clearly demonstrated to be presented primarily as a result of the provision of services by HDI to Quartz Mountain under the terms of this Agreement. Quartz Mountain acknowledges that HDI is entering into substantially identical agreements with other resource companies and as a consequence HDI will be exposed to resources property opportunities in the ordinary course and may receive resource property prospects and opportunities as a consequence of services to such other resource companies in the ordinary course. As well, Quartz Mountain acknowledges that HDI may receive unsolicited proposals and opportunities from sources wholly unrelated to Quartz Mountain or any of the other client companies of HDI and those opportunities are acknowledged by Quartz Mountain to be the sole property of HDI.

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3.6                               HDI may be retained by other client companies or terminate its relationship with any client company in its sole discretion and without notice to any client company.

PART 4

OTHER RIGHTS AND DUTIES OF QUARTZ MOUNTAIN

4.1                               So long as this Agreement is in effect Quartz Mountain shall require one of Quartz Mountain’s directors to be a director of HDI who shall by virtue of such appointment have the right to review all aspects of HDI’s operations. Quartz Mountain shall obtain an agreement from such nominee director that he shall not seek confidential information respecting any other client company of HDI (unless such director is also a director of such other client company) and shall in any event maintain appropriate confidentiality with respect to any HDI information provided to or obtained by such director and particularly with respect to any other client company or where such information about another client company or its exploration prospects is inadvertently acquired by the director. Such nominee shall further agree to promptly resign from the board of HDI in the event this Agreement is terminated for any reason. Such nominee shall not use any information acquired by virtue of his directorship in HDI for the purpose of competing with HDI or competing with any other client company of HDI. Such nominee shall be in a “special relationship” with any other client company of which he is not already an “insider”.

4.2                               Any authorized representative of Quartz Mountain shall at all reasonable times have full access to all of the records or information of HDI pertaining to the affairs of Quartz Mountain. Such access shall be extended to the auditors and other professional advisors of Quartz Mountain.

4.3                               HDI shall indemnify and save harmless Quartz Mountain from any claim, suit or demand which may arise by virtue of any improper act or gross negligence of HDI occurring as a result of the performance by HDI of this Agreement.

4.4                               On execution hereof Quartz Mountain shall subscribe for a single common share of HDI for $1.00 and shall resell such share to HDI for $1.00 on termination of this Agreement. Quartz Mountain shall in no event sell, transfer or otherwise dispose of or encumber such share during the currency of this Agreement. The parties acknowledge that Quartz Mountain shall be owned by its client companies and that each client company shall own one common share of HDI and that HDI shall not allow any other person to subscribe or be issued shares in HDI nor will HDI otherwise authorize, create or issue any other shares or any other securities in its capital stock without the consent of all of its client companies.

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PART 5

TERMINATION

5.1                               This Agreement may be terminated by either party hereto on 30 days written notice to the other party. From the date of notice to the date of termination, HDI shall not enter into any new arrangements on behalf of Quartz Mountain (unless already legally committed to do so) without Quartz Mountain’s prior consent.

5.2                               In the event of termination during the course of implementation of any exploration or other program the parties shall negotiate in good faith to minimize any interruption of such program and to ensure that the costs related thereto are properly accounted for and duly discharged by Quartz Mountain. Notwithstanding any termination of this Agreement Quartz Mountain shall continue to be bound by any agreements contracted for on its behalf by HDI prior to termination.

5.3                               The confidentiality and non-competition provisions of this Agreement shall survive any termination of this Agreement and continue in full force and effect for three years thereafter.

5.4                               Upon termination hereof Quartz Mountain shall cease to use the HDI premises, phone number, etc. and shall make arrangements for the orderly transition of administrative and accounting responsibilities by advice letter to HDI. HDI shall turn over all business, technical, and like records pertaining to the affairs and properties of Quartz Mountain as may be in the possession of HDI although HDI may retain copies for its own records where reasonably required.

PART 6

MISCELLANEOUS

6.1                               This Agreement is not assignable by the parties and any purported assignment thereof is void ab initio.

6.2                               This Agreement shall be binding upon and enure to the benefit of the parties hereto and their respective successors.

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6.3                               This Agreement shall be construed in accordance with the laws of the province of British Columbia and the parties agree to attorn to such jurisdiction in the event of a dispute hereunder.

6.4                               Notices shall be considered effectively given hereunder when personally delivered to a party by personal service or by fax, in each case addressed to the President.

IN WITNESS WHEREOF the parties have caused this Agreement to be executed as of the date and year first above written.

HUNTER DICKINSON INC.
Per:	/s/ Jeffrey R. Mason
	Authorized Signatory
QUARTZ MOUNTAIN GOLD CORP.
Per:	/s/ David S. Jennings
	Authorized Signatory

EX-11.1

QUARTZ MOUNTAIN RESOURCES LTD.
(the “Company”)

CODE OF ETHICS

1.	Introduction and Purpose
	This Code of Ethics sets out the ethical and behavioural standards expected of the Company's directors, officers, employees and contractors.
	The purpose of the Code is to underpin and support the Company's vision and values that govern our individual and collective behaviour. The vision and values set out below are an integral part of the Company's Code of Ethics.
2.	The Company’s Corporate Vision
	The Company's vision is to become a successful and innovative mining and mineral exploration corporation.
	To achieve this vision we include the following values in all our activities:
		responsibly explore for and develop mineral resources;
		be respectful of the environment;
		be an industry leader and participate in industry organizations devoted to improving the industry;
		be a strong and honest competitor;
		be a responsible corporate citizen and contribute to the community;
		deal fairly with our customers, suppliers and joint venture participants;
		provide a safe and rewarding work environment; and
		deliver value to shareholders.
3.	Integrity and Objectivity
	We have an obligation to be straightforward, honest and sincere in our approach to our work and to avoid improper personal benefits as a result of our position.
	We have an obligation to ensure that our individual interests do not interfere, or appear to interfere, with the Company's interests. We will be impartial, intellectually and morally

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	honest and minimize actual and perceived conflicts of interest. We will be fair and not allow prejudice or bias to override our objectivity.
	We will not have any undisclosed and unapproved business relationships, including with joint venture participants, suppliers, customers or competitors, that might impair, or appear to impair, the independence of any judgement that we may make on behalf of the Company.
	We will not pay or accept any bribe, gratuity or other inducements in the course of our business dealings on behalf of the Company.
4.	Fair Dealing, Due Care
	We will deal honestly and fairly in all our dealings with the Company's shareholders, joint venture participants, customers, suppliers, professional advisors, competitors and other stakeholders.
	We will maintain a high standard of competence, only undertaking work that we can expect to complete with professional competence. We will complete our obligations with due care and in a timely manner. We will carry out our work in accordance with the highest technical and professional standards appropriate to that work.
	We will use the utmost skill and care in our recruitment and employment practices, and treat all colleagues with respect and dignity.
5.	Use of Company Assets and Property
	We will use our best endeavours to protect the Company's assets and property in our control for the legitimate business purposes of the Company, and will not use that property for any other purpose, including for personal gain.
6.	Use of Company Information
	We will use the Company's corporate information gained during our relationship with the Company only in the best interests of the Company and not for personal gain. We will keep the Company's corporate information confidential, at all times. We will trade our shares on the Company in strict compliance with all applicable laws and where required, will properly and timely report such trading.
	We will ensure that the Company provides full, fair, accurate, timely and understandable disclosure in all reports and documents publicly disclosed, so that the public is properly informed and not misled by statements or omissions.

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7.	Compliance with all Laws, Regulations and Rules
	We will at all times act honestly and in good faith, and comply with all applicable laws, including legislation, regulations, local by-laws and Rules (including the TSX Listing Rules) and codes of practice in the countries in which the Company operates or where it has registered issuer status. We will ensure our exploration and development practices not only comply with all applicable laws and regulations but adhere to “best in class” standards.
8.	Professional Behaviour, Compliance with Corporate Policies
	We will conduct ourselves, both at work and outside of business hours, in a manner consistent with the good reputation of the Company and refrain from any conduct that might bring discredit to the Company. In particular, all staff will refrain from taking any action that improperly influences, coerces, manipulates, or misleads the firm engaged in the performance of the audit of the financial statements of the Company (and subsidiaries).
	We will at all times behave and conduct ourselves in a manner that is consistent with the Company's vision and values set out in this Code, and will comply with all Corporate Policies.
9.	Compliance with Code of Ethics
	This Code forms part of every one of the Company's employee's conditions of employment and for all officers and directors as well. Failure to comply with the Code can result in disciplinary action including, where appropriate, dismissal. Compliance with this Code shall be taken into account on a regular basis when assessing individual performance. Failure of contractors to comply with this Code may result in termination of the contractor’s contract for services with the Company.
	If any person becomes aware of a breach, or suspected breach, of this Code, they must report it immediately to their manager and company secretary for action. If this is inappropriate or uncomfortable for the individual, the breach, or suspected breach, should be reported to another member of the senior management team and the company secretary for action. No action will be taken against any individual reporting a breach, or suspected breach, by virtue of that report. Subject to any legal restriction, the name of the person disclosing the information pertaining to breach, or suspected breach, of this Code will be kept confidential.
10.	CEO and Senior Financial Officers
	The Sarbanes Oxley Act 2002 (USA) encourages all corporations subject to SEC regulations to maintain a code of ethics covering senior financial officers, including the CEO. The ethical and behavioural standards reflected in that Act are the basic tenets of ethical and professional conduct adopted by the Company in this Code for all its staff and contractors, and as such apply equally to the CEO and CFO, and any other senior finance staff.

EX-12.1

CERTIFICATION

I, David S. Jennings, certify that:

1.	I have reviewed this annual report on Form 20-F of Quartz Mountain Resources Ltd. (herein the “Registrant”):
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
	(a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	(b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
	(c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

	Date: January 21, 2005
/s/ David S. Jennings
David S. Jennings
Director, President, and Chief Executive Officer

EX-12.2

CERTIFICATION

I, Shannon M. Ross, certify that:

1.	I have reviewed this annual report on Form 20-F of Quartz Mountain Resources Ltd. (herein the “Registrant”):
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
4.	The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:
	(a)	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	(b)	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the "Evaluation Date"); and
	(c)	presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officer and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	(a)	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	(b)	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officer and I have indicated in this annual report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

	Date: January 21, 2005
/s/ Shannon M. Ross
Shannon M. Ross
Principal Accounting Officer

EX-13.1

SECTION 906 CERTIFICATION
QUARTZ MOUNTAIN RESOURCES LTD.
(the "Company")

Pursuant to section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of the Company, do hereby certify, to such officer’s knowledge, that:

• the Annual Report on Form 20-F for the year ended July 31, 2004 of the Company fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, and
   
• the information contained in the Form 20-F fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: January 21, 2005	Date: January 21, 2005
/s/ David S. Jennings	/s/ Shannon M. Ross
David S. Jennings	Shannon M. Ross
Director and Chief Executive Officer	Principal Accounting Officer

EX-99.1

QUARTZ MOUNTAIN RESOURCES LTD.

CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)

JULY 31, 2004

DAVIDSON & COMPANY Chartered Accountants A Partnership of Incorporated Professionals

INDEPENDENT AUDITORS’ REPORT

To the Shareholders of
Quartz Mountain Resources Ltd.

We have audited the consolidated balance sheets of Quartz Mountain Resources Ltd. as at July 31, 2004 and 2003 and the consolidated statements of operations, shareholders' equity (deficiency) and cash flows for the years ended July 31, 2004, 2003 and 2002. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards and with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform an audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at July 31, 2004 and 2003 and the results of its operations and its cash flows for the years ended July 31, 2004, 2003 and 2002 in accordance with Canadian generally accepted accounting principles.

"DAVIDSON & COMPANY"

Vancouver, Canada	Chartered Accountants
November 25, 2004

A Member of SC INTERNATIONAL

1200 - 609 Granville Street, P.O. Box 10372, Pacific Centre, Vancouver, BC, Canada, V7Y 1G6
Telephone (604) 687-0947 Fax (604) 687-6172

QUARTZ MOUNTAIN RESOURCES LTD.
CONSOLIDATED BALANCE SHEETS
(Stated in United States dollars)
As at July 31

		2004			2003
Assets
Current assets
Cash and cash equivalents	$	686,386		$	490,353
Receivables, net of allowance of $Nil (2003 - $Nil)		7,311			8,741
Total current assets		693,697			499,094
Mineral properties (Note 3)		-			21,001
Total assets	$	693,697		$	520,095
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable and accrued liabilities	$	19,477		$	27,725
Accounts payable, related parties		3,372			817
Total current liabilities		22,849			28,542
Shareholders’ equity
Share capital (Note 4)
Authorized
60,000,000 common shares without par value
Issued and fully paid
11,178,315 common shares (2003 – 9,643,315)		20,627,632			20,366,625
Contributed surplus (Note 4)		64,032			9,492
Deficit		(20,020,816	)		(19,884,564	)
Total shareholders’ equity		670,848			491,553
Total liabilities and shareholders’ equity	$	693,697		$	520,095

Continuing operations (Note 1)
Subsequent event (Note 9)

Approved by the Board:

“David S. Jennings”  Director  “Brian F. Causey”  Director 

The accompanying notes are an integral part of these consolidated financial statements.

QUARTZ MOUNTAIN RESOURCES LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Stated in United States dollars)
Year ended July 31

		2004			2003			2002
EXPENSES (INCOME)
Administrative expenses (Note 5)	$	62,963		$	10,434		$	11,155
Regulatory and transfer agent		22,338			17,023			8,076
Professional fees (Note 5)		16,637			7,550			5,769
Land maintenance fees		-			-			6,700
Foreign exchange loss (gain)		(22,225	)		(40,487	)		9,258
Mineral property investigations		44,848			-			-
Gain on sale of mineral property		-			-			(195,505	)
Write-off of mineral property (Note 3)		23,296			1,271			-
		147,857			(4,209	)		(154,547	)
OTHER ITEMS
Interest and other income		11,605			11,762			2,354
Gain on disposal of investment in shares (Note 3)		-			-			302,942
		11,605			11,762			305,296
Income (loss) for the year	$	(136,252	)	$	15,971		$	459,843
Basic and diluted earnings (loss) per common share	$	(0.01	)	$	0.01		$	0.05
Weighted average number of common shares outstanding, basic and diluted		10,091,648			9,117,231			8,584,807

The accompanying notes are an integral part of these consolidated financial statements.

QUARTZ MOUNTAIN RESOURCES LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (DEFICIENCY)
(Stated in United States dollars)
Year ended July 31

				Common Shares
	Number of Shares	Price		Issued and		Contributed		Deficit			Total
				Outstanding		Surplus
Balance, July 31, 2001	8,572,204		$	20,298,625	$	-	$	(20,360,378	)	$	(61,753	)
Mineral property	25,000	0.051		1,271		-		-			1,271
Income for the year	-			-		-		459,843			459,843
Balance, July 31, 2002	8,597,204			20,299,896		-		(19,900,535	)		399,361
Private placement,	711,111	0.071		40,895		9,492		-			50,387
less issuance costs
Exercise of warrants	260,000	0.074		19,265		-		-			19,265
Mineral property	75,000	0.088		6,569		-		-			6,569
Income for the year	-			-		-		15,971			15,971
Balance, July 31, 2003	9,643,315			20,366,625	$	9,492		(19,884,564	)		491,553
Private placement,	1,510,000	0.210		258,712		54,540		-			313,252
less issuance costs
Mineral property	25,000	0.092		2,295		-		-			2,295
Loss for the year	-			-		-		(136,252	)		(136,252	)
Balance, July 31, 2004	11,178,315		$	20,627,632	$	64,032	$	(20,020,816	)	$	670,848

The accompanying notes are an integral part of these consolidated financial statements.

QUARTZ MOUNTAIN RESOURCES LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in United States dollars)
Year ended July 31

		2004			2003			2002
Cash flows from operating activities
Income (loss) for the year	$	(136,252	)	$	15,971		$	459,843
Items not affecting working capital
Gain on disposal of investment in shares		-			-			(302,942	)
Gain on sale of mineral property		-			-			(195,505	)
Write-off of mineral property		23,296			1,271			-
Changes in non-cash working capital items
(Increase) decrease in receivable		1,430			(1,645	)		569
Increase (decrease) in accounts payable and accrued liabilities		(8,248	)		2,541			(4,172	)
Increase (decrease) in accounts payable, related parties		2,555			(57,192	)		7,154
Net cash used in operating activities		(117,219	)		(39,054	)		(35,053	)
Cash flows from investing activities
Mineral properties		-			(14,432	)		-
Cash received on disposal of marketable securities		-			-			513,862
Cash received on sale of mineral property		-			-			100,000
Cash paid for investment in marketable securities		-			-			(115,412	)
Net cash provided by (used in) investing activities		-			(14,432	)		498,450
Cash flows from financing activities
Issue of common shares, net of issuance costs		313,252			69,652			-
Net cash provided by financing activities		313,252			69,652			-
Increase in cash and cash equivalents		196,033			16,166			463,397
Cash and cash equivalents, beginning of year		490,353			474,187			10,790
Cash and cash equivalents, end of year	$	686,386		$	490,353		$	474,187
Cash paid during the year for interest	$	-		$	-		$	-
Cash paid during the year for income taxes		-			-			-

The components of cash and cash equivalents are as follows:
Cash	$	22,327	$	24,585	$	4,362
Bonds		79,959		89,201		88,048
Bankers acceptance		584,100		376,567		381,777
	$	686,386	$	490,353	$	474,187

Supplemental disclosure with respect to cash flows (Note 7)

The accompanying notes are an integral part of these consolidated financial statements.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

1.	CONTINUING OPERATIONS
	Quartz Mountain Resources Ltd. (the “Company”) is a Canadian company incorporated in British Columbia. The Company is primarily engaged in the acquisition and exploration of mineral properties in British Columbia, Canada.
	These consolidated financial statements are prepared in accordance with accounting principles applicable to a going concern. The Company is in the exploration stage and has not, as yet, achieved commercial production. The continuing operations of the Company and the recoverability of the amounts shown for interests in mineral properties are dependent upon the continued support from the Company’s significant shareholders, the existence of economically recoverable reserves, the ability of the Company to obtain financing to complete development of the properties, on the outcome or timing of legislative or regulatory developments relating to environmental protection, and on future profitable operations or proceeds from the disposition thereof.
	The Company’s working capital at July 31, 2004, is sufficient to meet the Company’s objectives as presently planned. Management recognizes that the Company must generate additional resources to enable it to continue operations. Management’s plans also include consideration of alliances or other partnership agreements with entities interested in and with resources to support the Company’s exploration and development objectives, or other business transactions which would generate sufficient resources to assure continuation of the Company’s operations and exploration and development program. However, there can be no assurances that the Company will achieve profitability or positive cash flows.
	If the Company is unable to obtain adequate additional financing or enter into business alliances, management will be required to curtail the Company’s operations and exploration and development activities.
2.	SIGNIFICANT ACCOUNTING POLICIES
	These consolidated financial statements have been prepared in accordance with accounting principles generally accepted in Canada.
	Use of estimates
	The presentation of consolidated financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant areas requiring the use of management estimates relate to the determination of impairment of assets, reclamation obligations and rates for amortization. Actual results could differ from those estimates.
	Principles of consolidation
	These consolidated financial statements include the accounts of the Company, Quartz Mountain Gold Inc., a wholly-owned subsidiary incorporated in the State of Nevada, and the latter company's wholly-owned subsidiary, Wavecrest Resources Inc. (“Wavecrest”), a company incorporated in the State of Delaware.
	All significant inter-company transactions have been eliminated.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

2.	SIGNIFICANT ACCOUNTING POLICIES (continued)
	Cash and cash equivalents
	Cash and cash equivalents include highly liquid investments with original maturities of three months or less.
	Financial instruments
	The Company’s financial instruments consist of cash and cash equivalents, receivables, accounts payable and accrued liabilities and accounts payable, related parties. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. The fair value of these financial instruments approximates their carrying values due to their short term nature.
	Allowance for receivables
	The Company establishes an allowance for receivables on a specific account basis. No allowance for receivables was recorded by the Company as at July 31, 2004 and 2003.
	Interests in mineral properties
	Property acquisition costs and exploration and development costs are capitalized until the property to which they relate is placed into production, sold, abandoned or management has determined there to be an impairment in value. These costs are to be charged to future operations on a unit-of-production basis following commencement of production using estimated recoverable reserves of the property as a base or written off if the property is sold, abandoned or where there is an impairment in value. Proceeds received on options for mineral properties are credited against mineral property acquisition costs and exploration and development costs of the related mineral properties.
	On an on-going basis, the Company evaluates each property based on results to date to determine the nature of exploration and development work that is warranted in the future. If there is little prospect of further work on a property being carried out, the deferred costs related to that property are written down to the estimated amount recoverable.
	Translation of foreign currencies
	Monetary assets and liabilities are translated at the exchange rate in effect at the balance sheet date and non-monetary assets and liabilities at the rate in effect at the time of acquisition or issue. Revenues and expenses are translated at rates approximating exchange rates in effect at the time of the transactions. Gains or losses arising on currency translation are included in operations in the year they occur.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

2.	SIGNIFICANT ACCOUNTING POLICIES (continued)
	Future income taxes
	Future income taxes are recorded using the asset and liability method. Under the asset and liability method, future tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply when the asset is realized or the liability settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that substantive enactment or enactment occurs. To the extent that the Company does not consider it more likely than not that a future tax asset will be recovered, it provides a valuation allowance against the excess.
	Share capital
	Shares issued for other than cash consideration are recorded at the fair market value based upon the trading price of the shares on the date the agreement to issue the shares was reached.
	Stock-based compensation
	Effective August 1, 2002, the Company adopted CICA Handbook Section 3870 “Stock-Based Compensation and Other Stock-Based Payments”, which establishes standards for the recognition, measurement and disclosure of stock-based compensation and other stock-based payments made in exchange for goods and services. Direct awards of stock granted to employees are recorded at fair value on the date of grant and the associated expense is amortized over the vesting period. During the current year, no stock options were granted.
	Earnings per share
	The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar instruments. Under this method the dilutive effect on earnings per share is recognized on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that the proceeds would be used to purchase common shares at the average price during the period. For the years presented, this calculation proved to be anti-dilutive. At July 31, 2004, 2003 and 2002, the total number of potentially dilutive shares excluded from loss per share was 2,221,111; 711,111, and 260,000, respectively.
	Basic earnings (loss) per share is calculated using the weighted-average number of shares outstanding during the year.
	Comparative figures
	Where necessary, prior year’s figures have been reclassified to conform with the current year’s presentation.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

3.	MINERAL PROPERTIES
				2004			2003
		Newton Hill Property, British Columbia (a)
		Acquisition costs
		Balance, beginning of year	$	-		$	1,271
		Written-off during the year		-			(1,271	)
		Balance, end of year		-			-
		Ample-Goldmax Property, British Columbia (b)
		Acquisition costs
		Balance, beginning of year		12,915			-
		Incurred during the year		2,295			12,915
		Written- off during the year		(15,210	)		-
		Balance, end of year		-			12,915
		Exploration costs
		Balance, beginning of year		8,086			-
		Incurred during the year		-			8,086
		Written-off during the year		(8,086	)		-
		Balance, end of year		-			8,086
		Total mineral properties	$	-		$	21,001
	(a)	The Company entered into an option agreement to acquire a 100% interest in the Newton Hill property located in the Clinton Mining District in British Columbia. To earn its interest in the property, the Company was required to issue a total of 100,000 common shares (25,000 issued to date). The acquisition was also subject to a net smelter return royalty of 2%. During the year ended July 31, 2003, the Company terminated its option, and accordingly, wrote-off its interest in the amount of $1,271. The Company has no further obligation under the option agreement.
	(b)	During the year ended July 31, 2003, the Company entered into a Letter Option Agreement to acquire a 100% interest in the Ample-Goldmax Mineral Claims located in the Lillooet Mining Division, British Columbia. The Company paid the optionors Cdn$10,000 at the time of signing and issued 25,000 common shares on the date of regulatory approval, and issued payments of 25,000 common shares every three months for a total of 75,000 common shares until the property was written-off, of which 25,000 was issued in fiscal 2004. Cash payments of Cdn$25,000 were due on the first anniversary and Cdn$50,000 on the second anniversary of the approval date. Completion of a Cdn$100,000 work program within twenty-four months was also required. No cash payments were made and during the current year, the Company terminated its option, and accordingly, wrote-off its interest in the amount of $23,296. The Company has no further obligation under the option agreement.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

3.	MINERAL PROPERTIES (continued)
	(c)	During the year ended July 31, 2002, the Company sold 100% of its title, right and interest in the Quartz Mountain property located in Lake County, Oregon to Seabridge Resources Inc. ("Seabridge"). As consideration, Seabridge:
		(i)	issued 300,000 common shares of Seabridge to the Company;
		(ii)	issued 200,000 common share purchase warrants of Seabridge to the Company exercisable by the Company at Cdn$0.90 for a period of two years;
		(iii)	paid US$100,000 to the Company;
		(iv)	will pay a 1% Net Smelter Return royalty to the Company on any production from the property.
		This resulted in a gain on sale of mineral property interest of $195,505.
		During the period subsequent to the sale of the Quartz Mountain property, the Company held the 300,000 common shares of Seabridge at a book value of $95,506. The Company sold the 300,000 shares received on the sale of the property and the 200,000 shares acquired at Cdn$0.90 each upon exercise of 200,000 share purchase warrants for a gain on disposal of investment in shares of $302,942.
	Shares issued for mineral properties are valued at the closing market value on the date of the commitment to issue the shares.
	Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many mineral properties. The Company has investigated title to all of its mineral properties and, to the best of its knowledge, title to all of its properties are in good standing.
4.	SHARE CAPITAL
	Stock options and warrants

Warrants	Number of Warrants			Price
Balance at July 31, 2001 and 2002	260,000		Cdn $	0.10
Private placement	711,111		Cdn $	0.15
Exercised	(260,000	)	Cdn $	0.10
Balance at July 31, 2003	711,111		Cdn $	0.15
Private placement	1,510,000		Cdn $	0.37
Balance at July 31, 2004	2,221,111

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

4.	SHARE CAPITAL (continued)
	Stock options and warrants (continued)
	On December 2, 2002, the Company issued 711,111 units at a price of Cdn$0.1125 for gross proceeds of Cdn$80,000. Each unit is comprised of one common share and one share purchase warrant. Each warrant entitles the holder to purchase a further common share exercisable until December 2, 2004 at a price of Cdn$0.15. The Company incurred professional fees of $793 in connection with this share issuance. The share purchase warrants issued as part of this private placement, have been recorded at a fair value of $9,492 and are included in contributed surplus.
	On April 19, 2004, the Company issued 1,510,000 units at a price of Cdn$0.28 for gross proceeds of Cdn$422,800. Each unit is comprised of one common share and one share purchase warrant. Each warrant entitles the holder to purchase a further common share exercisable until April 19, 2006, at a price of Cdn$0.37 per common share. The Company incurred professional fees of $3,833 in connection with this share issuance. The share purchase warrants issued as part of this private placement, have been recorded at a fair value of $54,540 and are included in contributed surplus.
	The Company has a Share Option Plan adopted in January 2004 the (“2004 Share Option Plan”). Under the Share Option Plan, participants, who are to be directors and employees of the Company and who, in the opinion of the Board of Directors, are in a position to contribute to the Company’s success or are worthy of special recognition, may be granted options to purchase common shares of the Company at a price per share as allowed under the rules and policies of the TSX Venture Exchange. The maximum aggregate number of shares that may be reserved for issuance under the 2004 Share Option Plan is 1,900,000 unless the plan is amended pursuant to the requirements of the TSX Venture Exchange policies. No service provider can be granted an option if that option would result in the service provider receiving shares, in conjunction with other share compensation arrangement, of greater than 5% of the outstanding listed shares. No option is exercisable until it has vested according to a vesting schedule specified by the Board of Directors at the time of the grant of the option. An option is exercisable for any period specified by the Board of Directors at the time of the grant of the option up to a maximum of five years after the date of grant. The previous plan has been cancelled.
	There were no stock options outstanding at July 31, 2004, 2003 and 2002.
5.	RELATED PARTY TRANSACTIONS
	During the year, the Company entered into the following transactions with related parties:
	(a)	The Company has paid $19,776 (2003 - $17,010; 2002 - $11,004) to a private company, for rent and administrative services, professional fees and geological costs, of which two of the directors of the Company are directors. During the year ended July 31, 2003, the Company completed a private placement with this private company of 711,111 units comprised of one common share and one share purchase warrant at a price of Cdn$0.1125 per unit.
	(b)	The Company has paid $606 (2003 - $2,065; 2002 - $Nil) for consulting services to a director and $Nil (2002 - $3,863; 2002 - $4,423) in legal fees to a law firm in which a director is a partner.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

5.	RELATED PARTY TRANSACTIONS (continued)
	(c)	The Company paid $40,580 (2003 - $Nil; 2002 - $Nil) in consulting fees and reimbursement of expenses to a private company controlled by a director and officer of the Company, which is included in administration expenses.
	(d)	During the year ended July 31, 2004, 710,000 units of a private placement completed during the year were issued to directors of the Company or to directors of a private company performing administrative and other services to the Company.
	The amounts charged to the Company for the services provided have been determined by negotiation among the parties and, in certain cases, are covered by signed agreements. These transactions were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.
6.	INCOME TAXES
	At July 31, 2004, the Company had estimated income tax losses available for application against future years’ taxable income of approximately $1,551,000 in the United States which, if unused, will predominantly expire between fiscal years ending 2005 and 2023. The Company also has tax losses in Canada of approximately $89,000, which if unused, will expire between fiscal 2005 and 2012. The Company also has resource allowance expenditures and capital asset deductions of approximately $949,000 and $30,000, respectively, which carry forward indefinitely. Because of the uncertainty regarding the Company's ability to utilize these amounts in future years, an allowance equal to the amount of the tax asset relating to these amounts has been provided.
	A reconciliation of income tax expense at the statutory rate of 35.62% (2003 – 37.62%; 2002 – 42.6%) with reported taxes is as follows:

		2004			2003			2002
Income (loss) before income taxes (recovery)	$	(136,252	)	$	15,971		$	459,843
Income taxes at statutory rates	$	(48,533	)	$	6,005		$	195,893
Unrecognized (recognized) benefit of non-capital		-			-			(2,479	)
losses of subsidiary taxed at a different rate
Unrecognized (recognized) benefit of non-capital losses		48,533			(6,005	)		(28,887	)
Reduction of taxes due to capital gain		-			-			(64,527	)
Reduction of taxes due to resource allowance		-			-			(100,000	)
Net income taxes (recovery)	$	-		$	-		$	-

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

6.	INCOME TAXES (continued)
	Amounts of future tax assets and liabilities are as follows:

		2004			2003			2002
Tax benefit of:
Losses carried forward – Canada	$	89,000		$	911,000		$	370,000
Losses carried forward – United States		1,551,000			3,349,000			3,762,000
Resource allowance		949,000			1,255,000			1,501,000
Property and equipment		30,000			40,400			48,140
		2,619,000			5,555,400			5,681,140
Valuation allowance		(2,619,000	)		(5,555,400	)		(5,681,140	)
Deferred tax asset	$	-		$	-		$	-

7. SUPPLEMENTAL DISCLOSURE WITH RESPECT TO CASH FLOWS

		2004		2003		2002
Issuance of share capital for mineral property	$	2,295	$	6,569	$	1,271
Receipt of marketable securities on sale of mineral property		-		-		95,506

8.	SEGMENTED INFORMATION
	Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly in deciding how to allocate resources and in assessing performance. The Company evaluates performance based on several factors, of which the primary financial measure is business segment income before taxes. As of July 31, 2004, all of the Company's assets and operations are located in British Columbia, Canada, principally in the resource industry.
9.	SUBSEQUENT EVENT
	Subsequent to July 31, 2004, the Company issued 711,111 common shares at a price of Cdn$0.15 per common share pursuant to the exercise of warrants.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

10.	DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
	These consolidated financial statements have been prepared in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”). Material variations in accounting principles, practices and methods used in preparing these consolidated financial statements from principles, practices and methods accepted in the United States (“US GAAP”) are described and quantified below:
	Consolidated statements of operations, balance sheets and cash flows

	Year ended July 31,
		2004			2003			2002
Income (loss) for the year, Canadian GAAP	$	(136,252	)	$	15,971		$	459,843
Mineral property acquisition costs		-			(21,001	)		(1,271	)
Write-off of mineral property		21,001			1,271			-
Income (loss) for the year, US GAAP	$	(115,251	)	$	(3,759	)	$	458,572
Basic and diluted earnings (loss) per common share, US GAAP	$	(0.01	)	$	(0.01	)	$	0.05
Weighted average shares outstanding, basic and diluted, US GAAP		10,091,648			9,117,231			8,584,807
					July 31, 2004			July 31, 2003
Total assets, Canadian GAAP				$	693,697		$	520,095
Mineral property acquisition costs expensed per US GAAP					-			(21,001	)
Total assets – US GAAP				$	693,697		$	499,094
Current liabilities, Canadian GAAP and US GAAP				$	22,849		$	28,542
Shareholders’ equity, Canadian GAAP					670,848			491,553
Mineral property acquisition costs
2004					-			-
2003 and earlier					-			(21,001	)
Shareholders’ equity, US GAAP
					670,848			470,552
Total liabilities and shareholders’ equity, US GAAP				$	693,697		$	499,094

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

10.	DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
	Consolidated statements of operations, balance sheets and cash flows (continued)

	Year ended July 31,
		2004			2003			2002
Cash flows used in operating activities, Canadian GAAP	$	(117,219	)	$	(39,054	)	$	(35,053	)
Adjustments to mineral properties		-			(14,432	)		-
Cash flows used in operating activities, US GAAP		(117,219	)		(53,486	)		(35,053	)
Cash flows provided by (used in) investing activities, Canadian GAAP		-			(14,432	)		498,450
Adjustments to mineral properties		-			14,432			-
Cash flows provided by investing activities, US GAAP		-			-			498,450
Cash flows provided by financing activities, Canadian GAAP and US GAAP		313,252			69,652			-
Increase in cash and cash equivalents during the year		196,033			16,166			463,397
Cash and cash equivalents, beginning of year		490,353			474,187			10,790
Cash and cash equivalents, end of year	$	686,386		$	490,353		$	474,187

Mineral properties

Under Canadian GAAP, mineral properties, including exploration, development and acquisition costs, are carried at cost and written down if the properties are abandoned, sold or if management decides not to pursue the properties. Under United States GAAP, mineral property expenditures are expensed as incurred. Once a final feasibility study has been completed, additional costs incurred to bring the mine into production are capitalized as development costs. Costs incurred to access ore bodies identified in the current mining plan after production has commenced are considered production costs and are expensed as incurred. Costs incurred to extend production beyond those areas identified in the mining plan where additional reserves have been established are deferred as development costs until the incremental reserves are produced. Capitalized costs are amortized using the unit-of-production method over the estimated life of the ore body based on proven and probable reserves.

QUARTZ MOUNTAIN RESOURCES LTD.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Stated in United States dollars)
July 31, 2004

10.	DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (continued)
	Asset retirement obligation
	Under United States GAAP Statement Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" requires companies to record the fair value of the liability for closure and removal costs associated with the legal obligation upon retirement or removal of any tangible long-lived asset. Under this standard, the initial recognition of the liability is capitalized as part of the asset cost and depreciated over its estimated useful life. The Company has determined that there were no asset retirement obligations as at July 31, 2004.
	Under Canadian GAAP, the Company was not required to record asset retirement obligations as at July 31, 2004.
	Recent accounting pronouncements
	In January 2003, FASB issued Financial Interpretation No. 46 “Consolidation of Variable Interest Entities” ("FIN 46") (revised in December 17, 2003). The objective of FIN 46 is to improve financial reporting by companies involved with variable interest entities. A variable interest entity is a corporation, partnership, trust, or any other legal structure used for business purposes that either (a) does not have equity investors with voting rights or (b) has equity investors that do not provide sufficient financial resources for the entity to support its activities. FIN 46 requires a variable interest entity to be consolidated by a company if that company is subject to a majority of the risk of loss from the variable interest entity's activities or entitled to receive a majority of the entity's residual returns or both. FIN 46 also requires disclosures about variable interest entities that the company is not required to consolidate but in which it has a significant variable interest. The consolidation requirements of FIN 46 is required in financial statements of public entities that have interests in variable interest entities for periods ending after December 15, 2003. The consolidation requirements applying to all other types of entities are required in financial statements for periods ending after March 15, 2004.
	The adoption of this new pronouncement is not expected to have a material effect on the Company's consolidated financial position or results of operations.