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, 2005 (with other information to November 30, 2005 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 _______________

OR

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

Date of event requiring this shell company report _______________

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 November 30, 2005:

11,889,426 Common Shares Without Par Value

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 x No ¨

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

 Item 17 x Item 18 ¨

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes x No ¨

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	2
ITEM 2	OFFER STATISTICS AND EXPECTED TIMETABLE	3
ITEM 3	KEY INFORMATION	4
ITEM 4	INFORMATION ON THE COMPANY	9
ITEM 5	OPERATING AND FINANCIAL REVIEW AND PROSPECTS	11
ITEM 6	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES	15
ITEM 7	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS	21
ITEM 8	FINANCIAL INFORMATION	23
ITEM 9	THE OFFER AND LISTING	24
ITEM 10	ADDITIONAL INFORMATION	26
ITEM 11	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
ITEM 12	DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES	37
ITEM 13	DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES	38
ITEM 14	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS	39
ITEM 15	CONTROLS AND PROCEDURES	40
ITEM 16	AUDIT COMMITTEE, CODE OF ETHICS, ACCOUNTANT FEES AND EXEMPTIONS	41
ITEM 17	FINANCIAL STATEMENTS	42
ITEM 18	FINANCIAL STATEMENTS	43
ITEM 19	EXHIBITS	44

PART 1
GENERAL

In this Annual Report on Form 20-F, all references to “we”, the “Company” or “Quartz” refer to Quartz Mountain Resources Ltd. and its consolidated subsidiaries.

The Company uses the United States dollar as its reporting currency. All references in this document to “dollars” or “$” are expressed in United States dollar, unless otherwise indicated.

Except as noted, the information set forth in this Annual Report is as of November 30, 2005 and all information included in this document should only be considered correct as of such date.

NOTE ON FORWARD LOOKING STATEMENTS

Except for the statements of historical fact contained herein, some information presented in this Annual Report constitutes forward-looking statements. When used in this Annual Report, the words “estimate”, “project”, “believe”, “anticipate”, “intend”, “expect”, “predict”, “may”, “should”, the negative thereof or other variations thereon or comparable terminology are intended to identify forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Quartz to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, those factors discussed in the section entitled “Risk Factors”. Although Quartz has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause actual results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Accordingly, prospective investors should not place undue reliance on forward-looking statements. The forward-looking statements in this Annual Report speak only as to the date hereof. Quartz does not undertake any obligation to release publicly any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

1

ITEM 1     IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

2

ITEM 2    OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

3

ITEM 3    KEY INFORMATION

A.    Selected Financial Data

The following table presents selected financial data derived from the audited consolidated financial statements of Quartz for the last five fiscal years ended July 31, 2005, 2004, 2003, 2002, and 2001.

Quartz’s annual financial statements have been audited by its current independent registered public accounting firm, Davidson and Company, Chartered Accountants. The financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”). Note 10 to the annual financial statements provides descriptions of the material measurement differences between Canadian GAAP and United States generally accepted accounting principles (“US GAAP”) as they relate to Quartz and reconciliation of Quartz’s financial statements to US GAAP.

Balance Sheet	As at July 31
(in US$)	2005		2004		2003		2002		2001
			(restated(1) )		(restated(1) )
Total Assets
Canadian GAAP	687,281		693,697		512,009		482,554		18,457
US GAAP(2)	687,280		693,697		499,094		481,283		18,455
Total Liabilities
Canadian GAAP	12,659		22,849		28,542		83,193		80,210
US GAAP	12,659		22,849		28,542		83,193		80,210
Working Capital (Deficiency)
Canadian GAAP	674,621		670,848		470,552		398,090		(61,755	)
US GAAP	674,621		670,848		470,552		398,090		(61,755	)
Share Capital
Canadian GAAP	20,726,303		20,627,632		20,366,625		20,299,896		20,298,625
US GAAP	20,726,303		20,627,632		20,366,625		20,299,896		20,298,625
Contributed Surplus
Canadian GAAP	54,540		64,032		9,492		–		–
US GAAP	54,540		64,032		9,492		–		–
Deficit
Canadian GAAP	(20,106,221	)	(20,020,816	)	(19,892,650	)	(19,900,535	)	(20,360,378	)
US GAAP	(20,106,222	)	(20,020,816	)	(19,905,565	)	(19,901,806	)	(20,360,380	)
Shareholders’ Equity
(Deficiency)
Canadian GAAP	674,622		670,848		483,467		399,361		(61,753	)
US GAAP	674,621		670,848		470,552		398,090		(61,755	)
Statement of Operations	Years ended July 31
(in US$)	2005		2004		2003		2002		2001
			(restated(1) )		(restated(1) )
Interest income
Canadian GAAP	15,127		11,605		11,762		305,296		3
US GAAP	15,127		11,605		11,762		305,296		3
Income (loss)
Canadian GAAP	(85,405	)	(128,166	)	7,885		459,843		(51,651	)
US GAAP(2)	(85,406	)	(115,251	)	(3,759	)	458,572		(51,651	)

4

Statement of Operations	Years ended July 31
(in US$)	2005	2004	2003	2002	2001
		(restated(1) )	(restated(1) )

Income (loss) from continuing
operations
Canadian GAAP	(85,405	)	(128,166	)	7,885		459,843	(51,651	)
US GAAP(2)	(85,406	)	(115,251	)	(3,759	)	458,572	(51,651	)
Income (loss) per common
share(4)
Canadian GAAP	(0.01	)	(0.01	)	0.00		0.05	(0.01	)
US GAAP(3)	(0.01	)	(0.01	)	0.00		0.05	(0.01	)
Weighted average number of
common shares outstanding
Canadian GAAP	11,694,601		10,091,648		9,117,231		8,584,807	8,279,690
US GAAP	11,694,601		10,091,648		9,117,231		8,584,807	8,279,690

Notes:

(1)	During the year ended July 31, 2005, the Company changed its accounting policy from capitalizing (deferring) mineral property expenditures to charging these costs to earnings in the period incurred. This change in accounting policy is applied retroactively and the amounts presented for these prior periods have been restated for this change. The effect of this change is to reduce loss for the year ended July 31, 2004 by $8,086 and to reduce income for the year ended July 31, 2003 by $8,086. There was no impact to opening deficit for the year ended July 31, 2005. For more information, see note 4 in the notes to the audited consolidated financial statements for the years ended July 31, 2005, 2004 and 2003.
(2)	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 of the audited consolidated financial statements provides descriptions of the material differences between Canadian GAAP and US GAAP for the fiscal years ended July 31, 2005, 2004 and 2003.
(3)	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.
(4)	The Company has never paid dividends on its common shares.

The following foreign exchange information is provided for the convenience of Canadian readers.

On November 30, 2005, the Bank of Canada closing rate for the conversion of United States Dollars to Canadian Dollars (“Cdn”) was US$1.00:Cdn$ 1.1669.

The following table sets out the average exchange rates for the conversion of United States dollars into Canadian dollars for the periods shown (calculated by using the average of the exchange rates on the last day of each month in such periods), based on the noon buying rates as posted by the Bank of Canada.

5

	Average Exchange Rate For the Fiscal Year
Fiscal Year Ended
July 31, 2005	1.2361
July 31, 2004	1.3355
July 31, 2003	1.4919
July 31, 2002	1.5722
July 31, 2001	1.5234

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

Month	High	Low
November 2005	1.1961	1.1657
October 2005	1.1887	1.1659
September 2005	1.1882	1.1611
August 2005	1.2187	1.1889
July 2005	1.2432	1.2051
June 2005	1.2577	1.2256

B.     Capitalization and Indebtedness

Not applicable.

C.     Reasons for the Offer and Use of Proceeds

Not applicable.

D.     Risk Factors

The securities of Quartz are highly speculative and subject to a number of risks. A prospective investor or other person reviewing Quartz for a prospective investor should not consider an investment in Quartz unless the investor is capable of sustaining an economic loss of the investment.

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 no 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 searching for a new acquisition. The Company holds a 1% net smelter return royalty (“NSR”) 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.

6

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, 2005 was approximately $20.1 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. On February 17, 2005, the Company transferred its listing from Tier 2 of the TSX Venture Exchange to NEX. NEX is a separate board of TSX Venture Exchange, established in August 2003 to provide a new trading forum for listed companies that have fallen below the TSX Venture Exchange’s ongoing listing standards due to low levels of business activity or having ceased to carry on active business. The effect of these and other factors on the market price of the common shares on the NEX suggests that the Company’s shares will continue to be volatile. The ability of the Company to reactivate itself 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.

7

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 NEX Board of 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 NEX, the Company’s stock may be subject to U.S. “penny stock rules” adopted by the United States Securities and Exchange Commission (the “SEC”) pursuant to section 15(g) of the Securities Exchange Act of 1934, as amended. The penny stock rules apply generally to companies whose common stock trades at less than $5.00 per share, subject to certain limited exemptions. Such rules require, among other things, that brokers who trade “penny stock” to persons other than “established customers” complete certain documentation, make suitability inquiries of investors and provide investors with certain information concerning trading in the security, including a risk disclosure document and quote information under certain circumstances.

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. Many brokers have decided not to trade “penny stock” because of the requirements of the "penny stock rules" and, as a result, the number of broker-dealers willing to act as market makers in such securities is limited. Further, it is more difficult for a company whose securities are subject to these rules to obtain coverage for significant news events because major wire services, such as the Dow Jones News Service, generally do not publish press releases about such companies.

The low price of the Company’s common stock also 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.

Potential Equity Dilution. At November 30, 2005, the Company had no outstanding stock options and had a total of 1,510,000 share purchase warrants which were exercisable at a price of Cdn$0.37 until April 19, 2006. As a consequence of the passage of time since the date of their original sale and issuance, no outstanding warrants of the Company remained subject to any hold period restrictions in Canada or the United States as of November 30, 2005. The eventual resale of shares resulting from the exercise of dilutive securities could 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.

8

ITEM 4     INFORMATION ON THE COMPANY

A.     History and Development of the Company

1.	The legal name of the Company 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 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; telephone (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 SmallCap Market until May 12, 1994 when it ceased to meet 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 ceased to meet 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, and became Tier 3 of, the TSX Venture Exchange. On December 23, 2003, the Company was reclassified as a Tier 2 company. On February 17, 2005, the Company transferred its listing to NEX, a separate board of TSX Venture Exchange, established in August 2003 to provide a new trading forum for listed companies that have fallen below the TSX Venture Exchange’s ongoing listing standards due to low levels of business activity, or due to having ceased to carry on active business. Currently, the Company’s shares trade on NEX under the symbol QZM.H, and certain broker-dealers in the United States make market in the Company’s shares on the OTC Bulletin Board 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, but retained a 1% net smelter return (“NSR”) royalty on it.

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”).

9

At closing, Seabridge issued 300,000 Seabridge common shares, 200,000 Seabridge common share purchase warrants, US$100,000 and a 1% NSR from any future production on the Property. This transaction was approved by consent of the majority of the Company’s 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 that it received pursuant to that transaction. The Company subsequently sold the common shares that it had acquired upon the exercise of the warrants.

The Company does not expect to generate any royalty revenue from the Property for several years, and it is not known at this time when any mining will commence, if at all, on this Property. 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 Company did not make the first anniversary payment of Cdn$25,000, and as a result, the property was written off and returned to the vendor of the property.

The Company does not currently have an active exploration project, but is searching for a new acquisition. During the fiscal year ended July 31, 2005, the Company conducted property investigations of mineral property interests for a total cost of approximately $27,000. 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.     Currency

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

10

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, 2005, 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

The Company does not currently have an active exploration project. Accordingly, during the fiscal year ended July 31, 2005, the Company’s activities were primarily restricted to conducting property investigations of mineral property interests. These investigations did not lead to any acquisitions.

The Company suffered a setback when Dr. David S. Jennings, the Company’s President, Chief Executive Officer and a Director, passed away unexpectedly on May 15, 2005. Mr. Rene Carrier, a Director of the Company, was appointed President on June 16, 2005. The Board of Directors is in the process of identifying a suitable candidate (who may be an existing Director) to replace Dr. Jennings as Chief Executive Officer.

Results of Operations

		Year ended July 31
		2005			2004			2003
					(restated(1) )			(restated(1) )
Expenses (Income)
Administrative expenses	$	66,864		$	62,963		$	10,434
Exploration(1)		-			-			8,086
Foreign exchange loss gain		(47,485	)		(22,225	)		(40,487	)
Interest and other income		(15,127	)		(11,605	)		(11,762	)
Land maintenance fees		-			-			-
Mineral property investigations		27,125			44,848			-
Professional fees		35,505			16,637			7,550
Regulatory and transfer agent		18,523			22,338			17,023
Write-down of mineral property interests(1)		-			15,210			1,271
Income (loss) for the year – Canadian GAAP	$	(85,405	)	$	(128,166	)	$	7,885
US GAAP Reconciliation
Mineral property acquisition costs(2)		(1	)		-			(12,915	)
Write-off of mineral property(2)		-			12,915			-
Income (loss) for the year – US GAAP	$	(85,406	)	$	(115,251	)	$	(3,759	)

Notes:

(1) During the year ended July 31, 2005, the Company changed its accounting policy from capitalizing (deferring) mineral property expenditures to charging these costs to earnings in the period incurred. This change in accounting policy was applied retroactively. The effect of this change was to reduce loss for the year ended July 31, 2004 by $8,086 and to reduce income for the year ended July 31, 2003 by $8,086. There was no impact to opening deficit for the year ended July 31, 2005.

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(2) Under Canadian GAAP, mineral property acquisition costs, and exploration and development expenditures incurred subsequent to the determination of the feasibility of mining operations, are capitalized until the property to which they relate have been placed into production, sold, allowed to lapse or abandoned (See note 3(d) in the notes to the audited consolidated financial statements for the years ended July 31, 2005, 2004 and 2003 for more information). In contrast, under US GAAP, mineral property expenditures are expensed as incurred. (See note 10(a) of the notes to the audited consolidated financial statements for the years ended July 31, 2005, 2004 and 2003 for more information).

Years ended July 31, 2005 and July 31, 2004

Loss for the year ended July 31, 2005 decreased to $85,405 from $128,166, on a restated basis, in fiscal 2004 due to a $15,210 write-down of mineral property interest relating to the Ample-Goldmax property in fiscal 2004 and greater foreign exchange gains in fiscal 2005. Legal, accounting and audit costs and office and administration expenses were higher in fiscal 2005 compared to 2004 as a result of property investigation activities undertaken by the Company in 2005.

The increase in foreign exchange gains for the year ended July 31, 2005 was due mainly to the strengthening of the Canadian dollar (in which most of the Company’s cash and cash equivalent are held) against the United States dollar.

Interest income for the year ended July 31, 2005 was higher than the comparative year due to higher cash balances on hand.

Years ended July 31, 2004 and July 31, 2003

The principal factors contributing to the difference between the loss of $128,166 for the year ended July 31, 2004, and earnings of $7,885 for the year ended July 31, 2003, in each case on a restated basis, include:

• 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 $15,210, on a restated basis, 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.

B.     Liquidity and Capital Resources

At July 31, 2005, the Company had working capital of approximately $675,000 which is sufficient to fund expected 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, in the event that a suitable property is identified. The Company does not have sufficient funding at this time to conclude a major acquisition. Any new mineral property acquisition will require additional financing through the issuance of common shares.

Cash and cash equivalents at July 31, 2005 amounted to $670,755, a decrease of $15,631 from the previous year ended July 31, 2004, when the Company’s cash and cash equivalents amounted to $686,386. Operating activities in fiscal 2005 utilized cash of $104,810, offset in part by $89,179 in cash received upon the exercise of 711,111 share purchase warrants in November 2004. These warrants constituted part of the 711,111 units issued in a non-brokered private placement during the year ended July 31, 2003, to Hunter Dickinson Inc., a private company with certain directors in common with the Company.

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Historically, the Company's sole source of funding has been the issuance of equity securities for cash, primarily through private placements or the exercise of warrants. The Company's access to exploration financing is always uncertain, and there can be no assurance of continued access to significant equity funding.

The mining industry is capital intensive, and there can be no certainty that the Company’s existing cash balances or that the proceeds from the sale of its common shares will provide sufficient funds for all of the Company’s 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 any properties that may eventually be acquired. There is no assurance that the Company will be successful in obtaining adequate financing when it is needed, or that it would be able to obtain any such financing on terms that are reasonably acceptable to the Company.

The Company retains a 1% net smelter return royalty 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 the Quartz Mountain Property for several years, 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.

As at November 30, 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.

The Company has no long-term debt, capital lease obligations, operating leases or any other long-term obligations.

The Company has no “Purchase Obligations” defined as any agreement to purchase goods or services that is enforceable and legally binding on the Company that specifies all significant terms, including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction.

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 low risk, highly liquid investments with original maturations of three months or less.

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 $130,000 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 primary activity is the acquisition and exploration of mineral properties.

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D.     Trend Information

Average prices for precious metals have increased significantly from 2004. The average gold price for the year-to-date is US$430/oz. compared to US$399/oz in 2004. The Company’s only property interest is a net smelter royalty in an exploration property which is a gold prospect. However, since the exploration property has no known body of commercially viable ore, the Company expects that the increasing trend in gold prices will have little or no impact on the Company’s ability to attract significant equity financing.

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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ITEM 6     DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A.     Directors and Senior Management

The following table sets forth the names, ages, functions and areas of experience in the Company of each of the Company’s directors and senior officers:

Name, Position(s) with the Company and Place of Residence	Functions and Area of Experience with the Company
Rene G. Carrier President and Director North Vancouver, British Columbia, Canada	Director since January 19, 2000. Mr. Carrier serves on the Board of Directors, which is responsible for the overall management and direction of the Company.
Brian F. Causey Director Tsawwassen, British Columbia, Canada	Director since January 30, 2003. Mr. Causey serves on the Board of Directors, which is responsible for the overall management and direction of the Company.
Gordon J. Fretwell Secretary and Director West Vancouver, British Columbia, Canada	Director since January 30, 2003. Mr. Fretwell serves on the Board of Directors, which is responsible for the overall management and direction of the Company. Mr. Fretwell also serves as the secretary of the Company, and is responsible for maintaining the Company’s corporate records in such capacity.
T. Barry Coughlan Director Vancouver, British Columbia, Canada	Director since January 25, 2005. Mr. Coughlan serves on the Board of Directors, which is responsible for the overall management and direction of the Company.

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.

RENE G. CARRIER – President, Director

Mr. Carrier is a past Vice-President of Pacific International Securities Inc. for ten years where he worked until 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:

Company	Position(s) Held	From	To
Chartwell Technology Inc.	Director	June 1991	Present
Rockwell Ventures Inc.	Director President	April 1993 April 1993	Present November 2000
Quartz Mountain Resources Ltd.	Director President	January 2000 June 2005	Present Present
Acrex Ventures Ltd.	Director	September 2000	September 2003
Continental Minerals Corporation	Director	February 2001	Present
International Royalty Corporation	Lead Director	June 2003	Present

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 of Peat Marwick Thorne (now KPMG LLP) (1969-1977), Mr. Causey is currently director of Project Finance for Hunter Dickinson Inc., a position he was appointed to in 2001. Mr. Causey was within the past five years, an officer of the following public companies:

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Company	Position(s) Held	From	To
Zenith Transport Ltd.	President and Chief Executive Officer	1981	2001
Quartz Mountain Resources Ltd.	Director	January 2003	Present

T. BARRY COUGHLAN, B.A. - Director

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:

Company	Position(s) Held	From	To
Tri-Gold Resources Corp. (formerly Tri-Alpha Investments Ltd.)	President and Director	June 1986	Present
Icon Industries Ltd.	President, CEO and Director	September 1991	Present
Casamiro Resource Corp	Director	February 1995	August 2002
Farallon Resources Ltd.	Director	March 1998	Present
Great Basin Gold Ltd.	Director	February 1998	Present
Taseko Mines Limited	Director	February 2001	Present
AMS Homecare Inc.	Director	November 2001	November 2004
Quartz Mountain Resources Ltd.	Director	January 2005	Present

GORDON J. FRETWELL, B.Comm. LLB. – Director, Secretary

Gordon J. 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 five years, an officer and/or director of the following public companies:

COMPANY	Position(s) Held	From	To
Rockwell Ventures Inc.	Director and Secretary	March 1998	Present
Copper Ridge Explorations Inc.	Director and Secretary	September 1999	Present
Antarex Metals Ltd.	Director	December 2000	September 2002

Icon Industries Limited	Vice President of Legal Services Director	December 2000 July 2004	Present Present
Continental Minerals Corporation	Director	February 2001	Present
Bell Resources Corporation	Director	June 2001	Present
Tri-Gold Resources Corp.	Director Secretary CFO	July 2001 July 2001 November 2005	October 2003 September 2003 Present
Grandcru Resources Corp.	Director	December 2002	Present
Quartz Mountain Resources Ltd.	Director	January 2003	Present
Pine Valley Mining Corp.	Director	August 2003	Present
Keegan Resources Inc.	Director	February 2004	Present
Northern Dynasty Minerals Ltd.	Director	June 2004	Present
International Royalty Corporation	Director	February 2005	Present

B.     Compensation

“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.

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At July 31, 2005, Mr. Rene Carrier, the Company’s President and Mr. Jeffrey R. Mason, the Company’s Principal Accounting Officer, were the “Named Executive Officers” of the Company. Dr. David S. Jennings, the Company’s former President, Chief Executive Officer and Director, passed away unexpectedly on May 15, 2005, and Mr. Carrier was appointed to replace him on June 16, 2005. Ms. Shannon M. Ross served as the Company’s Chief Financial Officer until her resignation on January 21, 2005. Mr. Mason has been serving as the Company’s Principal Accounting Officer since January 22, 2005.

A total of Cdn$3,691 in cash compensation was paid for services provided by these Named Executive Officers in all capacities to the Company during the year ended July 31, 2005. Included in this amount is Cdn$700 paid for consulting services to a private company controlled by Mr. Carrier.

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.

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. The compensation, in Canadian dollars, paid to the Named Executive Officers during the Company’s three most recently completed financial years is set out below:

Summary Compensation Table (in Cdn$)

NAMED EXECUTIVE OFFICERS Name and Principal Position	Year	Annual Compensation			Long Term Compensation			All Other Compensation (Cdn$)
					Awards		Payouts
		Salary (Cdn$)	Bonus (Cdn$)	Other Annual Compen-  sation (Cdn$)	Securities Under Options  Granted (#)	Shares or Units Subject to Resale Restrictions (Cdn$)	LTIP Payouts (Cdn$)
David S. Jennings, PhD(1) Former President and Chief Executive Officer	2005 2004 2003	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil l Nil Nil	Nil Nil Nil
Rene G. Carrier (2) Current President and Director	2005 2004 2003	Nil Nil Nil	Nil Nil Nil	700 (3) Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Shannon M. Ross (4) Former Vice-President, Secretary and Chief Financial Officer	2005 2004 2003	Nil Nil Nil	Nil Nil Nil	Nil 50,000 (6) Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil
Jeffrey R. Mason (5) Principal Accounting Officer	2005 2004 2003	2,991 Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil	Nil Nil Nil

Notes:

(1)	David S. Jennings passed away on May 15, 2005.
(2)	Rene G. Carrier was appointed President of the Company on June 16, 2005.
(3)	This amount represents US$571 paid to Euro-American Capital Corporation, a private company controlled by Rene G. Carrier for management services.
(4)	Shannon M. Ross resigned as Vice-President, Secretary and Chief Financial Officer on January 21, 2005.
(5)	Jeffrey R. Mason has been Principal Accounting Officer since January 22, 2005.
(6)	These amounts represent amounts paid to 583559 B.C. Ltd., a private company controlled by Shannon M. Ross, for consulting services.

Stock Options

The Company has adopted a stock option plan for the granting of incentive stock options to the officers, employees and directors. 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.

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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.

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.

Long-Term Incentive Plan

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.

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 Ms. Shannon Ross (who did not stand for re-election) and Mr. Barry Coughlan (who was appointed in January 2005), 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. One of the directors, Dr. David Jennings passed away unexpectedly during his term of office. All officers have a term of office lasting until their removal or replacement by the Board of Directors.

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

The Company has no compensation or remuneration committee.

The Board of Directors has appointed an Audit Committee and the current members of that committee are Messrs. Gordon J. Fretwell, Brian F. Causey and Rene G. Carrier.

Audit Committee

The Board has adopted a charter for the Audit Committee to follow in carrying out its audit and financial review functions. The text of the audit committee charter (excluding specified definitions of independence and financial literacy under stock exchange policies and securities law) is attached as a schedule to this Registration Statement. The Audit Committee reviews all financial statements of the Company prior to their publication, reviews audits, considers the adequacy of audit procedures, recommends the appointment of independent auditors, reviews and approves the professional services to be rendered by them and reviews fees for audit services. The Board has established definitions for “financial literacy” and has determined that all members of the Audit Committee are financially literate. The Audit Committee meets separately (without management present) with the Company’s auditors to discuss the various aspects of the Company’s financial statements and the independent audit.

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D.     Employees

At July 31, 2005, 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 November 30, 2005, there were 11,889,426 common shares, 1,510,000 share purchase warrants and no stock options issued and outstanding. The share purchase warrants are immediately exercisable at a price of CAD$0.37 until April 19, 2006. Directors and officers of the Company held the following securities of the Company at November 30, 2005:

Name and Office Held	Securities Beneficially Owned(1)	As a percentage of outstanding shares
Rene G. Carrier President and Director	110,000 common shares 110,000 warrants(2)	0.9%
Brian F. Causey Director	Nil	Nil
Gordon J. Fretwell Secretary and Director	Nil	Nil
T. Barry Coughlan Director	Nil	Nil

Notes:

(1)	This information has been provided by the individual directors as provided by them on www.sedi.ca
(2)	Rene G. Carrier holds warrants to purchase a total of 110,000 Common Shares at an exercise price of $0.37, which expire on April 19, 2006.

(b)     Share Purchase Plan and Share Option Plan

A stock option plan pursuant to the rules of the TSX Venture Exchange was presented to and approved by shareholders at the Company’s Annual General Meeting held on January 21, 2004. On February 17, 2005, the Company transferred its listing from Tier 2 of the TSX Venture Exchange to NEX, a separate board of the TSX Venture Exchange. Therefore, the stock option plan is subject to certain policies of the TSX Venture Exchange that apply only to companies listed on the NEX board. 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”) in January 2004. Under the Plan, a total of up to 1,900,000 shares of the Company 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.

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Eligible Optionees

Under the policies of TSX Venture Exchange (“TSX-V”), 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 TSX-V 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 TSX-V.

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;
(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 TSX-V); 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.

Equity Compensation Plan Information

	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
Plan Category	(a)	(b)	(c)
Equity compensation plans approved by securityholders – share option plan (the Plan)	Nil	Nil	1,900,000
Equity compensation plans not approved by security holders	Nil	Nil	Nil
Total	Nil	Nil	1,900,000

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ITEM 7     MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.     Major Shareholders

Quartz is a publicly-held corporation, with its shares held by residents of Canada, the United States of America and other countries. To the best of its knowledge, the Company is not directly or indirectly owned or controlled by a corporation or foreign government. As of November 30, 2005, the Company has authorized an unlimited number of 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 November 30, 2005, 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. For these purposes, “beneficial ownership” means the sole or shared power to vote or direct the voting or to dispose or direct the disposition of any security.

		Percentage Beneficially
Identity of Person or Group	Shares	Owned of Class
Estate of David S. Jennings (1)	3,895,292	32.7%
Hunter Dickinson Inc.(2)	1,422,222	12.0%
Robert A. Dickinson	1,313,900	11.1%

Notes:

1.	Dr. Jennings passed away on May 15, 2005. At the time of his death, he was the President, Chief Executive Officer and a director 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.

Transfer Agent

The Company’s securities are recorded on the books of its transfer agent, Computershare Trust Company of Canada located at 4th Floor, 510 Burrard Street, Vancouver, B.C. V6C 3B9; telephone (604) 661-0271 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). Quartz does not have knowledge or access to the identities of the beneficial owners of such shares registered through intermediaries.

Control

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 November 30, 2005, directors and officers of the Company as a group (four persons) owned or controlled an aggregate of 110,000 common shares (less than 1%) of the Company.

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Insider Reports under the British Columbia Securities Act

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 Company's securities. Electronic copies of such reports are available for public inspection via the System of Electronic Disclosure for Insiders (or SEDI) established by the applicable Canadian securities regulatory authorities, and accessible from the SEDI website (www.sedi.ca).

Geographic Breakdown of Shareholders

The following lists the geographical distribution of shareholders at November 30, 2005:

	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 ended July 31, 2005, the Company entered into the following transactions with related parties:

(a)	The Company has paid $57,732 (2004 - $19,776; 2003 - $17,010) 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.
	In November 2004, HDI exercised previously issued share purchase warrants and purchased 711,111 common shares at a price of Cdn$0.15 per share. These share purchase warrants had been issued as part of a private placement offering of 711,111 units completed during the year ended July 31, 2003 at a price of  Cdn$0.1125 per unit. Each unit consisted on one common share and one share purchase warrant.
(b)	The Company has paid $571 (2004 - $606; 2003 - $2,065) for consulting services to a director.
(c)	The Company paid $nil (2004 - $40,580; 2003 - $nil) in consulting fees and reimbursement of expenses to a private company controlled by a former director and officer of the Company. In fiscal 2003, the Company paid $3,863 in legal fees to a law firm in which a director is a partner.

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, 2005.

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, 2005.

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ITEM 9     THE OFFER AND LISTING

A.     Offer and Listing Details

    1.     Trading Markets

The following table sets forth trading data on the Company’s common shares on Tier 2 on the TSX Venture Exchange until February 17, 2005, and thereafter on the NEX board of the TSX Venture Exchange:

Fiscal		Period ended	High	Low
Year			(Cdn$)	(Cdn$)
	Annual
2005	Twelve months	To July 31, 2005	0.68	0.23
2004	Twelve months	To July 31, 2004	0.55	0.14
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
	By Quarter
2006	First quarter	October 31, 2005	0.40	0.30
2005	Fourth quarter	July 31, 2005	0.37	0.23
	Third quarter	April 30, 2005	0.41	0.27
	Second quarter	January 31, 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
	Monthly
	November 2005		0.36	0.33
	October 2005		0.40	0.31
	September 2005		0.31	0.31
	August 2005		0.31	0.30
	July 2005		0.37	0.25
	June 2005		0.27	0.23

The Company’s share trading information is also available through free Internet search services (eg–http://finance.yahoo.com, enter QZM-H.V). The trading prices on the OTC Bulletin Board are similar to the Canadian prices allowing for a currency exchange factor. Trading on the OTC Bulletin Board (under the symbol QZMRF) had a 52 week high to November 30, 2005, of US$0.35 and a 52 week low of US$0.185. The closing price on the OTC Bulletin Board on November 30, 2005, was US$0.281. The 52-week trading range ending on November 30, 2005, on the TSX Venture Exchange and NEX ranges from Cdn$0.23 to Cdn$0.47.

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B.     Plan of Distribution

Not applicable

C.     Markets

Prior to February 17, 2005, the Company’s common shares were 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 on the TSX Venture Exchange, under the symbol YQZT.V.

On February 17, 2005, the Company transferred its listing to NEX, a separate board of TSX Venture Exchange, established in August 2003 to provide a new trading forum for listed companies that have fallen below the TSX Venture Exchange’s ongoing listing standards due to low levels of business activity, or due to having ceased to carry on active business. Currently, the Company’s common shares trade on NEX under the symbol QZM.H, and certain broker-dealers in the United States make market in the Company’s shares on the OTC Bulletin Board under the symbol QZMRF.

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 Notice of Articles, 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

Background

The British Columbia Business Corporations Act came into force on March 29, 2004. As a result, the British Columbia Company Act - which governed the Company up to that time - was repealed, and the Company became a “pre-existing company” subject to the provisions of the new Act and the “Pre-Existing Company Provisions” set forth in Table 3 to the British Columbia Business Corporations Regulation. The Company's incorporation number was varied slightly by adding the prefix "BC0", so that it is now BC0253743.

The Pre-Existing Company Provisions carry over certain requirements that the Company was subject to under the former Company Act (British Columbia). For example, they provide that the majority of votes required for a pre-existing company to pass a special resolution at a general meeting of shareholders is 3/4 of the votes cast on that resolution. A copy of the Pre-Existing Company Provisions may be viewed during normal business hours at the office of the Company’s solicitors, Lang Michener LLP, at 1500 – 1055 West Georgia Street, Vancouver, British Columbia.

Every pre-existing company is required to file a Transition Application containing a Notice of Articles with the British Columbia Registrar of Companies, as a result of which the Notice of Articles will be deemed to supersede and replace the company’s Memorandum. A pre-existing company that fails to file a Transition Application containing a Notice of Articles no later than March 29, 2006 is subject to dissolution. Further, a pre-existing company that has not transitioned itself under the new Act may not effect any changes to its Memorandum (which is analogous to Articles of Incorporation of many U.S. companies) or Articles (which are analogous to corporate bylaws).

Once a company has filed the Transition Application containing a Notice of Articles, it can amend its corporate charter with the requisite shareholder approval to take advantage of certain provisions of the new Business Corporations Act that are intended to give greater flexibility to companies in terms of corporate governance. For example:

• a company may amend its articles to specify the level of shareholder approval required to pass a special resolution at a meeting of shareholders, provided the required level of approval is at least 2/3 and not more than 3/4 of the votes cast;

• a company may amend its authorized share structure to provide for an unlimited number of authorized shares; and

• a company may hold its own shares instead of returning them to treasury, and a subsidiary company may hold the shares of its parent company.

Filing of Transition Application

On October 11, 2005, the Company caused a Transition Application to be filed with the Registrar of Companies, as authorized by directors’ resolutions adopted December 1, 2004. The new Business Corporations Act does not permit a company to make any changes to its charter as part of the filing of the Transition Application. Therefore, the information contained in the Company’s Transition Application reflected the current status of the Company at the time of its filing, including the Company’s authorized capital, its existing Articles, and the mandatory

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application of the Pre-Existing Company Provisions. Information respecting the Company’s then authorized share capital and its Articles has been previously disclosed in the Company’s Annual Report on Form 20-F dated January 28, 2003.

Alteration to Notice of Articles

At the annual general meeting of the Company held on January 21, 2005, the Company’s shareholders adopted special resolutions to change the number of common shares that the Company is authorized to issue from 60,000,000 to an unlimited number. On October 11, 2005, the Company caused a Notice of Alteration to be filed with the British Columbia Registrar of Companies, thereby altering the Company’s Notice of Articles to give effect to this change to the authorized share structure of the Company. As a result, the Company is now authorized to issue an unlimited number of common shares without par value.

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 2005 exceeds CAD$250 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 established that, on the acquisition, the Company was not controlled in fact by the acquiror through the ownership of the Common Shares.

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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

Certain Canadian Federal Income Tax Consequences

The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of common stock of Quartz for a shareholder of Quartz who is not a resident of Canada but is a resident of the United States and who will acquire and hold shares of common stock of Quartz as capital property for the purposes of the Income Tax Act (Canada) (the “Canadian Tax Act”). This summary does not apply to a shareholder who carries on business in Canada through a “permanent establishment” situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholder’s holding in Quartz is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law although no assurance can be given in this respect. This discussion is general only and is not, nor is it intended to provide a detailed analysis of the income tax implications of any particular shareholder’s interest. Investors are advised to obtain independent advice from a shareholder’s own Canadian and U.S. tax advisors with respect to income tax implications pertinent to their particular circumstances.

The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including the Canada-United States Income Tax Convention (1980), as amended (the “Convention”).

Dividends on Common Shares and Other Income

Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been paid to him or her by a corporation resident in Canada. Quartz is responsible for withholding of tax at the source. The Convention limits the rate to 15 percent if the shareholder is a resident of the United States and the dividends are beneficially owned by and paid to such shareholder and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.

The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or stated capital of Quartz had increased by reason of the payment of such dividend. Quartz will furnish additional tax information to shareholders in the event of such a dividend. Interest paid or deemed to be paid on Quartz’s debt securities held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.

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The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization constituted and operated exclusively to administer a pension, retirement or employee benefit fund or plan, if the organization is a resident of the United States and is exempt from income tax under the laws of the United States.

Dispositions of Common Shares

Under the Canadian Tax Act, a taxpayer’s capital gain or capital loss from a disposition of a share of common stock of Quartz is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of disposition. The capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. The capital gains net of losses included in income are as follows. For gains net of losses realized before February 28, 2000, as to 75%. For gains net of losses realized after February 27, 2000 and before October 18, 2000, as to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%. There are special transitional rules to apply capital losses against capital gains that arose in different periods. The amount by which a shareholder’s capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.

Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct allowable capital losses, realized on a disposition of “taxable Canadian property.” Shares of common stock of Quartz will constitute taxable Canadian property of a shareholder at a particular time if the shareholder used the shares in carrying on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in the capital stock of Quartz belonged to one or more persons in a group comprising the shareholder and persons with whom the shareholder and persons with whom the shareholder did not deal at arm’s length and in certain other circumstances.

The Convention relieves United States residents from liability for Canadian tax on capital gains derived on a disposition of shares unless

(a) the value of the shares is derived principally from “real property” in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production,

(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he or she ceased to be resident in Canada, or

(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in Canada within the 12 months preceding the disposition.

United States Tax Consequences

United States Federal Income Tax Consequences

The following is, in the opinion of Quartz after consultation with its professional advisors, a discussion of material United States federal income tax consequences, under current law, generally applicable to a U.S. Holder (as hereinafter defined) of common shares of Quartz. 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, holders and prospective holders of common shares of Quartz are urged to 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 Quartz, 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

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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.

U.S. Holders

As used herein, a “U.S. Holder” means a holder of common shares of Quartz 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 entity created or organized in or under the laws of the United States or of any political subdivision thereof which has elected to be treated as a corporation for United States federal income tax purposes (under Treasury Regulation Section 301.7701 -3), 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 in 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 Quartz. 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.

Distribution on Common Shares of Quartz

In general, U.S. Holders receiving dividend distributions (including constructive dividends) with respect to common shares of Quartz 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 Quartz 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). To the extent that distributions exceed current or accumulated earnings and profits of Quartz, 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 that 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 Quartz 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 Quartz 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 Quartz) deduction of the United States source portion of dividends received from Quartz (unless Quartz qualifies as a “foreign personal holding company” or a “passive foreign investment company,” as defined below). Quartz 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.

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Under current Treasury Regulations, dividends paid on Quartz’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 Quartz’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 30.5% 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.

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 Quartz 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 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 Quartz 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 Quartz should consult their own tax advisors regarding their individual circumstances.

Disposition of Common Shares of Quartz

In general, U.S. Holders will recognize gain or loss upon the sale of common shares of Quartz 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 Quartz. Preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts. In general, gain or loss on the sale of common shares of Quartz 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 that 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.

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:

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 Quartz’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 Quartz’s gross income for such year is derived from certain passive sources (e.g., from certain interest and dividends), Quartz 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 Quartz does not

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actually distribute such income. Quartz does not believe that it currently qualifies as a foreign personal holding company. However, there can be no assurance that Quartz will not be considered a foreign personal holding company for the current or any future taxable year.

Foreign Investment Company

If 50% or more of the combined voting power or total value of Quartz’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 Code Section 7701(a)(31)), and Quartz 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 Quartz 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. Quartz does not believe that it currently qualifies as a foreign investment company. However, there can be no assurance that Quartz will not be considered a foreign investment company for the current or any future taxable year.

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 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. Quartz appears to have been a PFIC for the fiscal year ended May 31, 2005, and at least certain prior fiscal years. In addition, Quartz expects to qualify as a PFIC for the fiscal year ending May 31, 2006 and may also qualify as a PFIC in future fiscal years. Each U.S. Holder of Quartz 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 Quartz. 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 Quartz 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 Quartz qualifies as a PFIC on his pro rata share of Quartz’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) Quartz’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 Quartz 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, Quartz 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 Quartz is a controlled foreign corporation, the U.S. Holder’s pro rata share of Quartz’s post-1986 earnings and profits as of the qualification date. The qualification date is the first day of Quartz’s first tax year in which Quartz 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

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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 Quartz in which Quartz 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 Company 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 Quartz’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, Quartz 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. Quartz intends to make the necessary information available to U.S. Holders to permit them to make (and maintain) QEF elections with respect to Quartz. Quartz 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 Quartz, 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 election. If a QEF election is made by a U.S. Holder and Quartz 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 Quartz does not qualify as a PFIC. Therefore, if Quartz 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 Quartz 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 Quartz. Therefore, if such U.S. Holder reacquires an interest in Quartz, that U.S. Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which Quartz 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 Quartz common shares and (ii) certain “excess distributions,” as defined in Section 1291(b), by Quartz.

A Non-Electing U.S. Holder generally would be required to pro rate all gains realized on the disposition of his Quartz common shares and all excess distributions on his Quartz 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 Quartz (i) which began after December 31, 1986, and (ii) for which Quartz 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 Quartz is a PFIC for any taxable year during which a Non-Electing U.S. Holder holds Quartz common shares, then Quartz will continue to be treated as a PFIC with respect to such Quartz 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 Quartz 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

33

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 Quartz 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 Quartz 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 Quartz 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 Quartz 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 Quartz 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 should consult their tax advisors regarding the manner of making such an election. No view is expressed regarding whether common shares of Quartz are marketable for these purposes or whether the election will be available.

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 Quartz 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 Quartz 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 Quartz, certain adverse rules may apply in the event that both Quartz and any foreign corporation in which Quartz 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. Quartz 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 Quartz 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 Quartz (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 Quartz (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 Quartz and does not dispose of its common shares. Quartz 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 Quartz common shares while Quartz 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.

34

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.

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 Quartz 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 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 Quartz (“United States Shareholder”), Quartz 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 Quartz 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 Quartz attributable to the shares sold or exchanged. If a foreign corporation is both a PFIC and 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. Quartz does not believe that it currently qualifies as a CFC. However, there can be no assurance that Quartz 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.

35

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

A significant portion of Quartz's administrative operations are in Canada.

The Company typically holds most of its funds in Canadian dollars and reports the results of its operations in United States dollars so is therefore affected by exchange rate risk.

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.

36

ITEM 12     DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

A.     Debt Securities

Not applicable.

B.     Warrants and Rights

At November 30, 2005, the Company had 1,510,000 warrants exercisable at Cdn$0.37 and expiring on April 19, 2006 outstanding.

Each warrant is exercisable for one common share of Quartz.

C.     Other Securities

Not applicable.

D.     American Depositary Shares

Not applicable.

37

PART II

ITEM 13     DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

Not applicable.

38

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

Not applicable.

39

ITEM 15     CONTROLS AND PROCEDURES

Not applicable.

40

ITEM 16     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 in Item 401(e) of Regulation S-B.

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 was appended as an exhibit to the Annual Report on Form 20-F filed in January 2005.

During the most recently completed fiscal year, the Company has neither: (a) amended its Code of Ethics; nor (b) granted any waiver (including any implicit waiver) form any provision of its Code of Ethics.

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, 2005		July 31, 2004
Audit Fees	C$	23,307	C$	20,500
Audit Related Fees		—		—
Tax Fees		1,800		2,300
All Other Fees		—		—
	C$	25,107	C$	22,800

Audit related fees are comprised of fees billed for assurance and advisory services related to the annual audit which are not reported under “audit fees”.

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.

41

PART III

ITEM 17     FINANCIAL STATEMENTS

The following financial statements are filed as part of this annual report:

(1)	Report of the Independent Registered Public Accounting Firm on the consolidated balance sheets as at July 31, 2005 and 2004; consolidated statements of operations and deficit, and cash flows for the years ended July 31, 2005, 2004 and 2003;
(2)	Consolidated balance sheets as at July 31, 2005 and 2004;
(3)	Consolidated statements of operations and deficit for each of the years ended July 31, 2005, 2004 and 2003;
(4)	Consolidated statements of cash flows for the years ended July 31, 2005, 2004 and 2003;
(5)	Notes to the consolidated financial statements, of which note 10 includes a reconciliation to United States generally accepted accounting principles.

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ITEM 18     FINANCIAL STATEMENTS

Not applicable. See Item 17.

43

ITEM 19     EXHIBITS

Key to the following document types:

1.	Articles of Incorporation and Bylaws, or comparable instruments, 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 annual report 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).

44

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 to 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 to the Company’s Form 10-QSB dated April 30, 1996.)
10	Audit Committee Charter (incorporated by reference to Exhibit 10.1 to the Company’s annual report on Form 20-F for the year ended July 31, 2004.)
10	Geological and Management Services Agreement between Hunter Dickinson Inc. and the Company (incorporated by reference to Exhibit 10.2 to the Company’s annual report on Form 20-F for the year ended July 31, 2004).
10.1	Code of Ethics

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

Type of
Document	Description
1	Transition Application dated October 11, 2005
1	Notice of Articles dated October 11, 2005
1	Notice of Alteration of Articles dated October 11, 2005
10	Audit Committee Charter
99.1	Consolidated balance sheets as at July 31, 2005 and 2004; consolidated statements of operations and deficit, and cash flows for each of the years ended July 31, 2005, 2004 and 2003, together with Report of Independent Registered Public Accounting Firm thereon;

45

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

Type of
Document	Description
12.1	302 Certification of the President of the Corporation pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934 dated December 15, 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 December 15, 2005
13.1	906 Certification of the President 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 December15, 2005
13.2	906 Certification of the 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 December 15, 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:

/s/Rene Carrier
Rene Carrier
President

Dated: December 15, 2005

46

EX-1

EX-1

EX-1

EX-10

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 honest and minimize actual and perceived conflicts of interest. We will be fair and not allow prejudice or bias to override our objectivity.

- 2 -

	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.

- 3 -

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-10

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., 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, whereby a minimum of one director shall be an Independent Director, as described in Section V of this Charter. The composition of the Committee shall comply with all independence standards established by the applicable legal requirements and stock exchange regulations.

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 fulfill 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 not to be an Independent Director according to the following:

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 $60,000 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-12.1

EXHIBIT 12.1

SARBANES-OXLEY CEO CERTIFICATION

I, Rene G. Carrier, President of Quartz Mountain Resources Ltd., certify that:

1. I have reviewed this Annual Report on Form 20-F of Quartz Mountain Resources Ltd.

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the Company’s auditors and the audit committee of Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date:	15 December 2005
	/s/ Rene G. Carrier
By:	Rene G. Carrier
Title:	President

EX-12.2

EXHIBIT 12.2

SARBANES-OXLEY CFO CERTIFICATION

I, Jeffrey R. Mason, Principal Accounting Officer of Quartz Mountain Resources Ltd., certify that:

1. I have reviewed this Annual Report on Form 20-F of Quartz Mountain Resources Ltd.

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4. The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5. The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the Company’s auditors and the audit committee of Company’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date:	15 December 2005
	/s/ Jeffrey R. Mason
By:	Jeffrey R. Mason
Title:	Principal Accounting Officer

EX-13.1

EXHIBIT 13.1

CERTIFICATION OF

CHIEF EXECUTIVE OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Rene G. Carrier, President of Quartz Mountain Resources Ltd. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 20-F of the Company for the fiscal year ended July 31, 2005 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	15 December 2005
	/s/ Rene G. Carrier
By:	Rene G. Carrier
Title:	President

This written statement is being furnished to the Securities and Exchange Commission as an exhibit to the Company’s Annual Report on Form 20-F. A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Annual Report on Form 20-F pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-13.2

EXHIBIT 13.2

CERTIFICATION OF

CHIEF FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

I, Jeffrey R. Mason, Principal Accounting Officer of Quartz Mountain Resources Ltd. (the “Company”), hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:

(i) the Annual Report on Form 20-F of the Company for the fiscal year ended July 31, 2005 (the “Annual Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(ii) the information contained in the Annual Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	15 December 2005
	/s/ Jeffrey R. Mason
By:	Jeffrey R. Mason
Title:	Principal Accounting Officer

This written statement is being furnished to the Securities and Exchange Commission as an exhibit to the Company’s Annual Report on Form 20-F. A signed original of this statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

This certification accompanies this Annual Report on Form 20-F pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by such Act, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent that the Company specifically incorporates it by reference.

EX-99.1

QUARTZ MOUNTAIN RESOURCES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED

JULY 31, 2005, 2004 AND 2003

(Expressed in United States Dollars, unless otherwise stated)

F-i

DAVIDSON & COMPANY LLP Chartered Accountants A Partnership of Incorporated Professionals

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of
Quartz Mountain Resources Ltd.

We have audited the consolidated balance sheets of Quartz Mountain Resources Ltd. as at July 31, 2005 and 2004 and the consolidated statements of operations and deficit and cash flows for the years ended July 31, 2005, 2004 and 2003. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated 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, 2005 and 2004 and the results of its operations and its cash flows for the years ended July 31, 2005, 2004 and 2003 in accordance with Canadian generally accepted accounting principles.

"DAVIDSON & COMPANY LLP"

Vancouver, Canada	Chartered Accountants
October 14, 2005

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA –
U.S. REPORTING DIFFERENCE

In the United States, reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by conditions and events that cast substantial doubt on the Company's ability to continue as a going concern, such as those described in Note 1 to the financial statements. Our report to the shareholders dated October 14, 2005 is expressed in accordance with Canadian reporting standards which do not permit a reference to such events and conditions in the auditors' report when these are adequately disclosed in the financial statements.

"DAVIDSON & COMPANY LLP"

Vancouver, Canada	Chartered Accountants
October 14, 2005

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

F-1

QUARTZ MOUNTAIN RESOURCES LTD.

Consolidated Balance Sheets

(Expressed in United States Dollars, unless otherwise stated)

		July 31			July 31
		2005			2004
ASSETS
Current assets
Cash and equivalents	$	670,755		$	686,386
Amounts receivable and prepaids		16,525			7,311
		687,280			693,697
Mineral property interests (note 5)		1			–
	$	687,281		$	693,697
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	8,726		$	19,477
Amounts due to related parties (note 7)		3,933			3,372
		12,659			22,849
Shareholders' equity
Share capital (note 6)		20,726,303			20,627,632
Contributed surplus (note 6(d))		54,540			64,032
Deficit		(20,106,221	)		(20,020,816	)
		674,622			670,848
	$	687,281		$	693,697

Nature and continuance of operations (note 1)

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

Approved by the Board of Directors

/s/ Rene G. Carrier	/s/ Brian F. Causey
Rene G. Carrier	Brian F. Causey
Director	Director

F-2

QUARTZ MOUNTAIN RESOURCES LTD.

Consolidated Statements of Operations

(Expressed in United States Dollars, unless otherwise stated)

		Years ended July 31
		2005			2004			2003
					(Note 4 - Restated			(Note 4 - Restated
					due to change in			due to change in
					accounting policy)			accounting policy)
Expenses
Exploration	$	–		$	–		$	8,086
Foreign exchange gain		(47,485	)		(22,225	)		(40,487	)
Interest income		(15,127	)		(11,605	)		(11,762	)
Legal, accounting and audit		35,505			16,637			7,550
Mineral property investigations		27,125			44,848			–
Office and administration		66,864			62,963			10,434
Regulatory, trust and filing		18,523			22,338			17,023
Write-down of mineral property interests		–			15,210			1,271
Loss (income) for the year	$	85,405		$	128,166		$	(7,885	)
Basic and diluted loss per common share	$	0.01		$	0.01		$	(0.00	)
Weighted average number of common shares outstanding		11,694,601			10,091,648			9,117,231

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

Consolidated Statements of Deficit

(Expressed in United States Dollars, unless otherwise stated)

		Years ended July 31
		2005		2004		2003
				(Note 4 - Restated		(Note 4 - Restated
				due to change in		due to change in
				accounting policy)		accounting policy)
Deficit, beginning of year	$	20,020,816	$	19,892,650	$	19,900,535
Loss for the year		85,405		128,166		(7,885	)
Deficit, end of year	$	20,106,221	$	20,020,816	$	19,892,650

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

F-3

QUARTZ MOUNTAIN RESOURCES LTD.

Consolidated Statements of Cash Flows

(Expressed in United States Dollars, unless otherwise stated)

		Years ended July 31
Cash provided by (used in)		2005			2004			2003
					(Note 4 - Restated			(Note 4 - Restated
					due to change in			due to change in
					accounting policy)			accounting policy)
Operating activities
Income (loss) for the year	$	(85,405	)	$	(128,166	)	$	7,885
Items not involving cash
Write-down of mineral property interests		–			15,210			1,271
Changes in non-cash working capital items
Amounts receivable and prepaids		(9,214	)		1,430			(1,645	)
Accounts payable and accrued liabilities		(10,752	)		(8,248	)		2,541
Amounts due to related parties		561			2,555			(57,192	)
		(104,810	)		(117,219	)		(47,140	)
Investing activities
Mineral property interests		–			–			(6,346	)
Financing activities
Warrants exercised and shares issued net of issue costs		89,179			313,252			69,652
Increase (decrease) in cash and equivalents
during the year		(15,631	)		196,033			16,166
Cash and equivalents, beginning of year		686,386			490,353			474,187
Cash and equivalents, end of year	$	670,755		$	686,386		$	490,353
Components of cash and equivalents are as follows:
Cash	$	7,786		$	22,327		$	24,585
Commercial paper		68,687			79,959			89,201
Bankers acceptances		594,282			584,100			376,567
	$	670,755		$	686,386		$	490,353
Non-cash items
Shares issued on acquisition of mineral property interests	$	–		$	2,295		$	6,569
Fair value of warrants exercised transferred to share capital	$	9,492		$	–		$	–

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

F-4

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

1.	NATURE AND CONTINUANCE OF OPERATIONS
	Quartz Mountain Resources Ltd. (the “Company”) is a Canadian public company incorporated in British Columbia. The Company is primarily engaged in the acquisition and exploration of mineral properties.
	These consolidated financial statements have been prepared using Canadian generally accepted accounting principles assuming a going concern. At July 31, 2005, the Company had working capital of approximately $675,000 (2004 – $671,000). Other than incidental interest income, the Company has incurred operating losses since its inception. The ability of the Company to continue as a going concern depends upon its ability to develop profitable operations and to continue to raise adequate financing. There can be no assurance that the Company will be able to secure additional financial resources nor achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing or enter into business alliances, the Company will be required to curtail its operations and exploration activities. Failure to continue as a going concern would require that the Company’s assets and liabilities be restated on a basis which could differ significantly from the going concern basis.
2.	BASIS OF PRESENTATION AND PRINCIPLES OF CONSOLIDATION
	These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. These consolidated financial statements include the accounts of (i) Quartz Mountain Resources Ltd., (ii) Quartz Mountain Gold Inc., a wholly-owned subsidiary incorporated in the State of Nevada, and (iii) Wavecrest Resources Inc., a wholly-owned subsidiary of Quartz Mountain Gold Inc., incorporated in the State of Delaware.
	All material intercompany balances and transactions have been eliminated upon consolidation.
	The results of applying measurement accounting principles generally accepted in the United States are set out in note 10.

3. SIGNIFICANT ACCOUNTING POLICIES

(a)	Cash and equivalents
	Cash and equivalents include highly liquid investments with original maturities of three months or less.
	At July 31, 2005, the Company held Canadian-dollar-denominated cash and equivalents totaling Cdn$735,417 (2004 – Cdn$803,379).
(b)	Financial instruments
	The Company’s financial instruments consist of cash and equivalents, amounts receivable, accounts payable and accrued liabilities and amounts due to related parties. It is management’s opinion that the Company is not exposed to significant interest 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.
	The Company maintains its cash and equivalents substantially in Canadian dollars and is subject to currency risk.

F-5

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

(c)	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, 2005 and 2004.
(d)	Mineral property interests
	Mineral property acquisition costs, and exploration and development expenditures incurred subsequent to the determination of the feasibility of mining operations, are capitalized until the property to which they relate is placed into production, sold, allowed to lapse or abandoned. Mineral property acquisition costs include the cash consideration and the fair value of common shares and warrants issued for mineral property interests, pursuant to the terms of the relevant agreement. These costs are amortized over the estimated life of the property following commencement of commercial production, or written off if the property is sold, allowed to lapse or abandoned, or when an impairment in value has been determined to have occurred.
	Exploration expenses incurred prior to determination of the feasibility of mining operations, including periodic option payments and administrative expenditures are expensed as incurred.
	The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.
(e)	Asset retirement obligations
	Effective August 1, 2004, the Company retroactively adopted the provisions of the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3110 (“HB3110”). HB3110 requires the recognition of a liability at its fair value for the obligation associated with the retirement of a tangible long-lived asset.
	The Company records the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. The Company also records a corresponding asset which is amortized over the life of the asset. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the passage of time (accretion expense) and changes in the estimated future cash flows underlying the obligation (asset retirement cost).
	The adoption of this standard has no effect on amounts previously reported.
(f)	Foreign currency translation
	All of the Company’s foreign operations are considered integrated.
	Monetary assets and liabilities of the Company and its integrated foreign operations are translated into United States dollars at exchange rates in effect at the balance sheet date. Non-monetary assets and liabilities are translated at historical exchange rates unless such items are carried at market, in which case they are translated at the exchange rates in effect on the balance sheet date. Revenues and expenses, except amortization, are translated at the average exchange rates for the period. Amortization is translated at the same exchange rate as the assets to which it relates. Gains or losses on translation are recorded in the statement of operations.

F-6

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

(g)	Income taxes
	The Company uses the asset and liability method of accounting for income taxes. Under this method, future income tax assets and liabilities are computed based on differences between the carrying amount of existing assets and liabilities on the balance sheet and their corresponding tax values, generally using the substantively enacted income tax rates expected to apply to taxable income in the years in which the asset is realized or the liability settled. Future income tax assets also result from unused loss carry forwards and other deductions. Future tax assets are recognized to the extent that they are considered more likely than not to be realized. The valuation of future income tax assets is adjusted, if necessary, by the use of a valuation allowance to reflect the estimated realizable amount.
(h)	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 TSX Venture Exchange (“TSXV”) on the date of issue or as otherwise provided under the agreement terms to issue the shares. The Company records proceeds from share issuances net of issue costs.
(i)	Stock-based compensation
	The Company has a share option plan which is described in note 6(e). The Company records all stock- based payments granted using the fair value method.
	Under the fair value method, stock-based payments are measured at the fair value of the consideration received or the fair value of the equity instruments issued or liabilities incurred, whichever is more reliably measurable and are charged to operations over the vesting period. The offset is credited to contributed surplus.
	Consideration received upon the exercise of stock options is credited to share capital and the related contributed surplus is transferred to share capital.
	During the years ended July 31, 2005, 2004 and 2003, no stock options were granted.
(j)	Loss 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 loss 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.
	Basic loss per share is calculated by dividing the loss available to common shareholders for the period by the weighted average number of shares outstanding during the period. At July 31, 2005 1,510,000 (2004 – 2,221,111; 2003 – 711,111) potentially dilutive shares arising from options and warrants were excluded from loss per share as they would be anti-dilutive.
(k)	Use of estimates
	The preparation 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 as at the reporting date of the financial statements and the reported amounts of revenue and expenses for the reporting period. Significant areas requiring the use of management estimates relate to the determination of impairment of

F-7

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

	assets, reclamation obligations and rates for amortization as well as the assumptions used in determining the fair value of non-cash stock-based compensation and warrants. Actual results could differ from those estimates.
(l)	Comparative figures
	Certain of the prior years’ figures have been reclassified to conform with the current year’s presentation.

4. CHANGE IN ACCOUNTING POLICY

Mineral property interest

During the year ended July 31, 2005, the Company changed its policy from capitalizing (deferring) mineral property exploration expenditures to charging these costs to earnings in the period incurred. This change in accounting policy is applied retroactively and the amounts presented for prior periods have been restated for this change. The effect of this change is to reduce loss for the year ended July 31, 2004 by $8,086 and to reduce income for the year ended July 31, 2003 by $8,086. There was no impact to opening deficit for the year ended July 31, 2005. The impact of this restatement on the July 31, 2004 and 2003 consolidated financial statements is as follows:

		As
		previously
		reported			Adjustment			As restated
Year ended July 31, 2004:
Write-down of mineral property interests	$	23,296		$	(8,086	)	$	15,210
Loss for the year		136,252			(8,086	)		128,166
Loss (income) per share		0.01			0.00			0.01
Cash provided by (used in) operating activities		(117,219	)		–			(117,219	)
Cash provided by (used in) investing activities		–			–			–
Year ended July 31, 2003:
Exploration	$	–		$	8,086		$	8,086
Income for the year		15,971			(8,086	)		7,885
Loss (income) per share		(0.00	)		0.00			(0.00	)
Cash provided by (used in) operating activities		(39,054	)		(8,086	)		(47,140	)
Cash provided by (used in) investing activities		(14,432	)		8,086			(6,346	)

F-8

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

5. MINERAL PROPERTY INTERESTS

		Year ended July 31
		2005		2004
Ample-Goldmax Property, British Columbia				(Restated due to
				change in
				accounting policy
				(note 4))
Acquisition costs
Balance, beginning of year	$	–	$	12,915
Incurred during the year		–		2,295
Written off during the year		–		(15,210	)
Balance, end of year		–		–
Exploration costs
Balance, beginning of year		–		–
Written off during the year		–		–
Balance, end of year		–		–
Quartz Mountain Property
Net smelter royalty		1		–
Total mineral property interests	$	1	$	–

(a)	Ample-Goldmax Property British Columbia, Canada
	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. 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. An additional 75,000 common shares were issued in fiscal 2003 and 25,000 common shares were issued in fiscal 2004 pursuant to the option agreement. During the year ended July 31, 2004, the Company terminated its option, and accordingly, wrote off its interest in the amount of $15,210. The Company has no further obligations under the option agreement.
(b)	Quartz Mountain Property Oregon, USA
	During the year ended July 31, 2002, the Company sold 100% of its title, rights and interest in the Quartz Mountain property located in Lake County, Oregon to Seabridge Resources Inc. ("Seabridge") for 300,000 common shares of Seabridge, 200,000 common share purchase warrants of Seabridge, cash of $100,000, and a 1% net smelter return royalty payable to the Company on any production from the Quartz Mountain property.

F-9

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

6. SHARE CAPITAL

(a)	Authorized share capital
	The Company’s authorized share capital consists of an unlimited number of common shares, without par value.
	At the Company’s Annual and Special General Meeting held on January 21, 2005, an increase in authorized share capital from 60 million to an unlimited number of common shares was approved by shareholders.
(b)	Issued and outstanding common shares

	Number of	Price		Amount
Common shares issued	Shares	(US$)		(US$)
Balance at July 31, 2002	8,597,204		$	20,299,896
Private placement, net of issue costs (i)	711,111	0.0710		40,895
Exercise of warrants	260,000	0.0740		19,265
Ample-Goldmax property option payment (note 5(a))	75,000	0.0880		6,569
Balance at July 31, 2003	9,643,315			20,366,625
Private placement, net of issue costs (ii)	1,510,000	0.2100		258,712
Ample-Goldmax property option payment (note 5(a))	25,000	0.0920		2,295
Balance at July 31, 2004	11,178,315			20,627,632
Cash received on exercise of warrants (i)	711,111	0.1254		89,179
Fair value of warrants exercised	–			9,492
Balance at July 31, 2005	11,889,426		$	20,726,303

(i)

On December 2, 2002, the Company issued 711,111 units at a price of Cdn$0.1125 (US$0.071) per unit for gross proceeds of Cdn$80,000 (net proceeds of US$40,895). Each unit was comprised of one common share and one share purchase warrant. Each warrant entitled the holder to purchase a further common share exercisable until December 2, 2004 at a price of Cdn$0.15. The share purchase warrants issued as part of this private placement had been recorded at an estimated fair value of $9,492. In November 2004, these warrants were exercised by the warrant holders.

(ii)

On April 19, 2004, the Company issued 1,510,000 units at a price of Cdn$0.28 (US$0.210) per unit for net proceeds of $258,712. Each unit was comprised of one common share and one share purchase warrant. Each warrant is exercisable until April 19, 2006 and entitles the holder to purchase a further common share at a price of Cdn$0.37 per common share. The share purchase warrants issued as part of this private placement have been recorded at an estimated fair value of $54,540 and are included in contributed surplus.

F-10

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

(c)	Share purchase warrants
	The continuity of share purchase warrants (each exercisable into one common share) for the year ended July 31, 2005 and 2004 is:

	Number of
Share purchase warrants issued	Warrants		Price
Balance at July 31, 2002	260,000		Cdn$0.10
Private placement, December 2002 (note 6(b)(i))	711,111		Cdn$0.15
Exercised during the year	(260,000	)	Cdn$0.10
Balance at July 31, 2003	711,111		Cdn$0.15
Private placement, April 2004 (note 6(b)(ii))	1,510,000		Cdn$0.37
Balance at July 31, 2004	2,221,111
Exercised (note 6(b)(i))	(711,111	)	Cdn$0.15
Balance at July 31, 2005	1,510,000		Cdn$0.37

(d) Contributed surplus

Balance at July 31, 2002	$	–
Private placement, December 2002 (note 6(b)(i))		9,492
Balance at July 31, 2003 (note 6(b)(i))		9,492
Share purchase warrants issued, April 2004 (note 6(b)(ii))		54,540
Balance at July 31, 2004		64,032
Share purchase warrants exercised for common stock (note 6(b)(i))		(9,492	)
Balance at July 31, 2005	$	54,540

(e)	Share purchase options
	At its Annual and Special General Meeting held in January 2004, shareholders of the Company approved a Share Purchase Option Plan in accordance with the policies of the TSXV. Under this plan, the Company is authorized to grant up to 1,900,000 share purchase options to directors, officers, employees and consultants. The exercise price of each option normally equals or exceeds the market price of the Company's shares as calculated on the date of grant. No service provider can be granted an option if that option would result in the service provider receiving shares, in conjunction with any other share compensation arrangement, of greater than 5% of the outstanding listed shares. Options granted are for a term of no greater than five years. Vesting of options is at the discretion of the Board of Directors at the time the options are granted.
	To July 31, 2005, no share purchase options had been granted under this plan. Accordingly, there were no stock options outstanding as at July 31, 2005, 2004 and 2003.

F-11

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

7. RELATED PARTY BALANCES AND TRANSACTIONS

Balances payable				As at July 31
				2005		2004
Hunter Dickinson Inc. (a)			$	3,933	$	3,168
Due to a director				–		204
			$	3,933	$	3,372
Transactions		Year ended July 31
		2005		2004		2003
Services rendered and expenses reimbursed
Hunter Dickinson Inc. (a)	$	57,732	$	19,776	$	17,010
Euro-American Capital Corporation (b)		571		606		2,065
Other (c)		–		40,580		3,863

Related party balances receivable arise from advances by the Company for normal course in-progress and near-term planned exploration and other work on the mineral properties.

(a)	Hunter Dickinson Inc. ("HDI") is a private company with certain directors in common with the Company. HDI provides geological, corporate development, administrative and management services to, and incurs third party costs on behalf of, the Company and its subsidiaries on a full cost recovery basis pursuant to an agreement dated December 31, 1996. These costs are included in office and administration expenses.
	During the year ended July 31, 2003, the Company completed a private placement with HDI of 711,111 units comprised of one common share and one share purchase warrant at a price of Cdn$0.1125 per unit. The share purchase warrants were subsequently exercised in the year ended July 31, 2005 by HDI (note 6(b)(i)).
(b)	Euro-American Capital Corporation is a private company controlled by a director of the Company that provides management services to the Company based on the fair market value of those services.
(c)	During the year ended July 31, 2004, the Company paid $40,580 in consulting fees and reimbursement of expenses to a private company controlled by a former director and officer of the Company. These costs were included in office and administration expenses in fiscal 2004. In fiscal 2003, the Company paid $3,863 in legal fees to a law firm in which a director is a partner.

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

8. INCOME TAXES

At July 31, 2005, the Company had estimated income tax losses available for application against future years’ taxable income of approximately $2,516,000 (2004 – $4,430,000) in the United States which, if unused, will predominantly expire between fiscal years ending 2006 and 2023. The Company also has tax losses in Canada of approximately $314,000 (2004 – $249,000), which if unused, will expire between fiscal

F-12

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

2006 and 2015. The Company also has resource allowance expenditures and capital asset deductions of approximately $2,975,000 (2004 – $2,667,000) and $93,000 (2004 – $85,000), 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 35.6% (2004 – 35.62%, 2003 – 37.62%) with reported taxes is as follows:

		Year ended July 31
Income tax expense		2005			2004			2003
Income (loss) before income taxes (recovery)	$	(85,405	)	$	(128,166	)	$	7,885
Income taxes (recovery) at statutory rates		(30,404	)		(45,652	)		2,966
Unrecognized (recognized) benefit of non-
capital losses		30,404			45,652			(2,966	)
Net income taxes (recovery)	$	–		$	–		$	–

Amounts of future tax assets and liabilities are as follows:

Future tax assets and liabilities		July 31			July 31
		2005			2004
Tax benefit of:
Losses carried forward – Canada	$	112,000		$	89,000
Losses carried forward – United States		881,000			1,551,000
Resource allowance		1,059,000			949,000
Property and equipment		33,000			30,000
		2,085,000			2,619,000
Valuation allowance		(2,085,000	)		(2,619,000	)
Future income tax asset (liability)	$	–		$	–

9. SEGMENTED INFORMATION

As at and during the years ended July 31, 2005, 2004 and 2003, all of the Company's assets and operations, other than its net smelter royalty, were located in Canada.

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:

F-13

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

Consolidated statements of operations

		Year ended July 31
		2005			2004			2003
					(Restated due to			(Restated due to
					change in			change in
					accounting policy			accounting policy
					(note 4))			(note 4))
Income (loss) for the year, Canadian GAAP	$	(85,405	)	$	(128,166	)	$	7,885
Mineral property acquisition costs		(1	)		–			(12,915	)
Write–off of mineral property		–			12,915			1,271
Income (loss) for the year, US GAAP	$	(85,406	)	$	(115,251	)	$	(3,759	)
Basic and diluted earnings (loss) per common share,
US GAAP	$	(0.01	)	$	(0.01	)	$	(0.01	)
Weighted average shares outstanding,
basic and diluted, US GAAP		11,694,601			10,091,648			9,117,231

Consolidated balance sheets

		July 31 2005			July 31 2004
Total assets, Canadian GAAP	$	687,281		$	693,697
Mineral property acquisition costs expensed per US GAAP		(1	)		–
Total assets – US GAAP	$	687,280		$	693,697
Current liabilities, Canadian GAAP and US GAAP	$	12,659		$	22,849
Shareholders’ equity, Canadian GAAP		674,622			670,848
Mineral property acquisition costs
2005		(1	)		–
Shareholders’ equity, US GAAP		674,621			670,848
Total liabilities and shareholders’ equity, US GAAP	$	687,280		$	693,697

F-14

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

Consolidated statements of cash flows

		Year ended July 31
		2005			2004			2003
					(Restated due to			(Restated due to
					change in			change in
					accounting policy			accounting policy
					(note 4))			(note 4))
Cash flows used in operating activities, Canadian
GAAP	$	(104,809	)	$	(117,219	)	$	(47,140	)
Adjustments to mineral properties		–			–			(6,346	)
Cash flows used in operating activities, US GAAP		(104,810	)		(117,219	)		(53,486	)
Cash flows provided by (used in) investing activities,
Canadian GAAP		–			–			(6,346	)
Adjustments to mineral properties		–			–			6,346
Cash flows provided by investing activities, US
GAAP		–			–			–
Cash flows provided by financing activities,
Canadian GAAP and US GAAP		89,179			313,252			69,652
Increase in cash and cash equivalents during the year		(15,631	)		196,033			16,166
Cash and cash equivalents, beginning of year		686,386			490,353			474,187
Cash and cash equivalents, end of year	$	670,755		$	686,386		$	490,353

(a) Mineral properties

Under Canadian GAAP, mineral property interests are accounted for as disclosed in note 3(d). 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.

(b) Asset retirement obligation

Under United States GAAP, Statement of Financial Accounting Standards No. 143, "Accounting for Asset Retirement Obligations" ("SFAS 143") 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, effective for years beginning on or after January 1, 2003. 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, 2005.

F-15

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

For Canadian GAAP purposes, effective August 1, 2004, the Company retroactively adopted the provisions of CICA Handbook Section 3110 (“HB3110”). HB3110 requires essentially the same accounting treatment of asset retirement obligations as SFAS 143. Consequently, the Company believes there is no difference in asset retirement obligations under United States GAAP and Canadian GAAP for the Company upon the adoption of this standard, and there is no effect on amounts previously reported.

(c) Other presentation items

Pursuant to US GAAP, the Company would be considered an exploration stage company as it is devoting its efforts to establishing a commercially viable mineral property. However, the identification of the Company as such for accounting purposes does not impact the measurement principles applied in these consolidated financial statements.

(d) Recent accounting pronouncements

(i)	In March 2004, the Emerging Issues Task Force ("EITF") issued EITF 04-3, "Mining Assets: Impairment and Business Combinations". EITF 04-3 requires mining companies to consider cash flows related to the economic value of mining assets (including mineral properties and rights) beyond those assets' proven and probable reserves, as well as anticipated market price fluctuations, when assigning value in a business combination in accordance with SFAS 141 and when testing the mining assets for impairment in accordance with SFAS 144. The consensus is effective for fiscal periods beginning after March 31, 2004. The adoption of EITF 04-3 had no impact the Company’s financial position, results of operations or cash flows.
(ii)	In December 2004, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS123(R)"), which is a revision of SFAS 123. SFAS 123(R) supersedes APB Opinion No. 25, "Accounting for Stock Issued to Employees". Generally, the approach in SFAS 123(R) requires all share-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. Pro forma disclosure is no longer an alternative. As the Company currently uses the fair value method to account for all stock option grants this statement is not expected to have any material impact on the financial statements when adopted.
(iii)	In December 2004, the FASB issued Statement of Financial Accounting Standards No. 153, "Exchanges of Non-Monetary Assets - An Amendment of APB Opinion No. 29" ("SFAS 153"). The guidance in APB No. 29, "Accounting for Non-Monetary Transactions" is based on the principle that exchanges of non-monetary assets should be measured based on the fair value of the assets exchanged. The guidance in that Opinion, however, included certain exceptions to that principle. SFAS 153 amends APB No. 29 to eliminate the exception for exchanges of similar productive assets and replaces it with a general exception for exchanges of non-monetary assets that do not have commercial substance. A non-monetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. SFAS 153 will be effective for fiscal periods beginning after June 15, 2005. Earlier application is permitted for non-monetary asset exchanges incurred during fiscal years beginning after the date this Statement is issued. The Company believes the SFAS 153 will have no impact on the financial statements of the Company once adopted.
(iv)	In March 2005, the EITF issued EITF 04-6, "Accounting for Stripping Costs in the Mining Industry". The consensus indicated that costs of removing overburden and waste materials ("stripping costs") after production begins, represent variable production costs and should be

F-16

QUARTZ MOUNTAIN RESOURCES LTD.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2005, 2004 and 2003

(Expressed in United States Dollars, unless otherwise stated)

considered a component of mineral inventory cost subject to the guidance in Chapter 4 of Accounting Research Bulletin No. 43, "Restatement and Revision of Accounting Research Bulletins". EITF 04-6 is effective for fiscal years beginning after December 15, 2005 and upon adoption, can be applied by either retroactively restating prior periods or using a cumulative catch- up adjustment. The Company believes this Statement will have no impact on the financial statements of the Company once adopted.

(v)

In June 2005, the FASB issued Statement of Financial Accounting Standards No. 154, "Accounting Changes and Error Corrections - a replacement of APB Opinion No. 20 and FASB Statement No. 3" ("SFAS 154"). SFAS 154 requires retrospective application to prior periods’ financial statements of a change in accounting principle unless it is impracticable to do so. This is a change from the existing practice that requires most accounting changes to be accounted for by including in net income in the period of the change the cumulative effect of changing to the new accounting principle. SFAS 154 will be effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The impact of SFAS 154 cannot be determined until which time the Company makes a change in accounting policy.

F-17