QUARTZ MOUNTAIN RESOURCES LTD.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JANUARY 31, 2015 AND 2014

Unaudited

(Expressed in Canadian Dollars, unless otherwise stated)

Notice to Readers

In accordance with subsection 4.3(3) of National Instrument 51-102, management of the Company advises that the Company's auditors have not performed a review of these condensed interim consolidated financial statements.

QUARTZ MOUNTAIN RESOURCES LTD.

Condensed Interim Consolidated Balance Sheets

(Expressed in Canadian Dollars)

		January 31			July 31
		2015			2014
		(Unaudited)
ASSETS
Current assets
Cash and cash equivalents (note 3)	$	849,456		$	1,025,320
Amounts receivable and other assets (note 4)		20,027			11,504
Total current assets		869,483			1,036,824
Non-current assets
Restricted cash		–			38,563
Amounts receivable and other assets (note 4)		8,295			8,295
Mineral property interests (note 5)		891,628			891,628
Total non-current assets		899,923			938,486
Total assets	$	1,769,406		$	1,975,310
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIENCY)
Current liabilities
Amounts payable and other liabilities	$	10,817		$	6,844
Convertible debenture (note 7)		–			600,000
Current portion of long term debt (note 7)		50,000			–
Balance due to a related party (note 8)		3,149,705			2,957,075
Total current liabilities		3,210,522			3,563,919
Long-term debt (note 7)		450,000			–
Total long-term liabilities		450,000			–
Shareholders' equity (deficiency)
Share capital (note 6)		26,050,118			26,050,118
Reserves (notes 6)		592,011			592,011
Accumulated deficit		(28,533,245	)		(28,230,738	)
Total shareholders' deficiency		(1,891,116	)		(1,588,609	)
Total liabilities and shareholders' equity	$	1,769,406		$	1,975,310

Nature and continuance of operations (note 1)
Commitments (Note 7)

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

/s/ James Kerr	/s/ Ronald W. Thiessen
James Kerr	Ronald W. Thiessen
Director	Director

QUARTZ MOUNTAIN RESOURCES LTD.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Unaudited - Expressed in Canadian Dollars)

		Three months ended January 31						Six months ended January 31
		2015			2014			2015			2014
Expenses: (note 9)
Exploration and evaluation	$	1,169		$	24,763		$	5,722		$	261,000
Assays and analysis		414			–			3,362			20,431
Drilling		–			–			–			90,773
Geological		755			21,440			1,675			81,782
Graphics		–			–			85			1,972
Property payments		–			–			–			208
Site activities		–			3,323			–			28,342
Sustainability		–			–			600			17,182
Transportation		–			–			–			4,770
Travel and accommodation		–			–			–			15,540
General and administration		102,442			187,070			279,096			352,799
Conferences and travel		–			2,299			–			6,853
Legal, accounting and audit		4,484			36,898			34,775			38,174
Office and administration		93,652			141,568			230,923			291,880
Regulatory, trust and filing		2,395			2,885			9,909			9,651
Shareholder communications		1,911			3,420			3,489			6,241
Loss from operations		(103,611	)		(211,833	)		(284,818	)		(613,799	)
Interest income		3,126			1,186			6,321			2,567
Interest expense (note 7)		(10,479	)		(9,074	)		(24,010	)		(18,148	)
Flow-through share premium		–			–			–			35,639
Tax related to flow-through financing		–			(235	)		–			(235	)
Loss and comprehensive loss for the period	$	(110,964	)	$	(219,956	)	$	(302,507	)	$	(593,976	)
Basic and diluted loss per common share	$	–		$	(0.01	)	$	(0.01	)	$	(0.02	)
Weighted average number of common shares outstanding		27,299,513			27,299,513			27,299,513			27,299,513

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

QUARTZ MOUNTAIN RESOURCES LTD.

Consolidated Statement of Changes in Equity (Deficiency)

(Unaudited - Expressed in Canadian Dollars)

	Share Capital				Reserves
										Total
					Equity-settled					shareholders'
					share-based		Accumulated			equity
	Number		Share Capital		payments		deficit			(deficiency)
Balance at August 1, 2013	27,299,513	$	26,050,118	$	592,011	$	(27,365,311	)	$	(723,182	)
Loss for the period	–		–		–		(593,976	)		(593,976	)
Balance at January 31, 2014	27,299,513	$	26,050,118	$	592,011	$	(27,959,287	)	$	(1,317,158	)
Balance at August 1, 2014	27,299,513	$	26,050,118	$	592,011	$	(28,230,738	)	$	(1,588,609	)
Loss for the period	–		–		–		(302,507	)		(302,507	)
Balance at January 31, 2015	27,299,513	$	26,050,118	$	592,011	$	(28,533,245	)	$	(1,891,116	)

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

QUARTZ MOUNTAIN RESOURCES LTD.

Condensed Interim Consolidated Statements of Cash Flows

(Unaudited - Expressed in Canadian Dollars)

		Six months ended January 31
		2015			2014
Cash flows from operating activities:
Loss for the period	$	(302,507	)	$	(593,976	)
Adjusted for:
Flow-through share premium		–			(35,639	)
Interest income		(6,321	)		(2,567	)
Interest expense		24,010			18,148
Restricted cash		38,563			84,802
Changes in non-cash working capital items:
Amounts receivable and other assets		(8,523	)		119,057
Amounts payable and other liabilities		470			(115,612	)
Balance due to a related party		192,630			267,694
Net cash used in operating activities		(61,678	)		(258,093	)
Cash flows from investing activities:
Disposition of mineral property interest		–			402,636
Interest received		6,321			2,567
Net cash provided by investing activities		6,321			405,203
Cash flows from financing activities:
Repayment of long-term (note 7)		(100,000	)		–
Interest paid on convertible debenture (note 7)		(20,507	)		(18,148	)
Net cash used in financing activities		(120,507	)		(18,148	)
(Decrease) increase in cash and cash equivalents		(175,864	)		128,962
Cash and cash equivalents, beginning of period		1,025,320			706,393
Cash and cash equivalents, end of period (note 3)	$	849,456		$	835,355

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

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

1. NATURE AND CONTINUANCE OF OPERATIONS

Quartz Mountain Resources Ltd. ("Quartz Mountain") is a Canadian public company incorporated in British Columbia on August 3, 1982. The Company's corporate office is located at 1040 West Georgia Street, 15th Floor, Vancouver, British Columbia (“BC”), Canada. The Company is primarily engaged in the acquisition and exploration of mineral properties.

These condensed consolidated interim financial statements (the "Financial Statements") of the Company as at and for the three and six months ended January 31, 2015 include the financial statements of Quartz Mountain Resources Ltd. and those of its wholly-owned subsidiary, Wavecrest Resources Inc. (together referred to as the "Company"). Quartz Mountain is the ultimate parent entity of the Company.

The Company is in the process of acquiring and exploring mineral property interests (note 5). The Company's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of these projects, obtaining the necessary permits to mine, the future profitable production of any mine and the proceeds from the disposition of the mineral property interest.

These Financial Statements have been prepared on a going concern basis which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. At January 31, 2015, the Company had cash and cash equivalents of $0.85 million, and a working capital deficit of $2.3 million. The Company had current liabilities of $3.2 million, of which $3.1 million is payable to Hunter Dickinson Services Inc. ("HDSI"), a related party (note 8(b)). The Company has received confirmation from HDSI that, HDSI will not demand, prior to November 1, 2015, payment of amounts outstanding as of the reporting date and will continue to provide services to the Company.

During the current period, the Company entered into an agreement with the holder of its convertible debenture to restructure the payment terms of the debenture (note 7).

Management believes that it is able to maintain its mineral rights in good standing for the next 12 month period. Additional debt or equity financing, or joint ventures will be required to fund exploration or development programs. The Company has a reasonable expectation that additional funds will be available when necessary to meet ongoing exploration and development costs. However, there can be no assurance that the Company will continue to obtain additional financial resources and/or achieve profitability or positive cash flows. If the Company is unable to obtain adequate additional financing, the Company will be required to re-evaluate its planned expenditures until additional funds can be raised through financing activities. These material uncertainties cast significant doubt on the ability of the Company to continue as a going concern.

These Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

2.	SIGNIFICANT ACCOUNTING POLICIES
(a)	Statement of compliance
	These Financial Statements have been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting ("IAS 34"), as issued by the International Accounting Standards Board ("IASB") and its interpretations. Accordingly, they do not include all of the information and note disclosures as required by International Financial Reporting Standards ("IFRS") for annual financial statements. Unless stated otherwise, the accounting policies and methods of computation applied by the Company in these Financial Statements are the same as those applied by the Company in its most recent annual consolidated financial statements which are filed on the Company's profile on SEDAR at www.sedar.com. These Financial Statements should be read in conjunction with the Company’s financial statements as at and for the year ended July 31, 2014. Results for the period ended January 31, 2015 are not necessarily indicative of future results.
	Issuance of these Financial Statements was authorized by a committee of the Board of Directors on March 25, 2015.
(b)	Basis of presentation
	These Financial Statements have been prepared on a historical cost basis, except for financial instruments measured at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information.
(c)	Significant accounting estimates and judgments
	The preparation of these Financial Statements in conformity with IAS 34 requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from such estimates.
	In preparing these Financial Statements, significant judgements made by management in applying the Company's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements as at and for the year ended July 31, 2014.
(d)	Accounting standards, interpretations and amendments to existing standards
	Effective August 1, 2014, the Company adopted new and revised IFRS that were issued by the IASB. The application of these new and revised IFRS has not had any material impact on the amounts reported for the current and prior periods but may affect the accounting for future transactions or arrangements.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

Accounting standards issued but not yet effective

Effective for annual periods beginning on or after January 1, 2016

• Annual improvements to IFRS 2012 – 2014 Cycle

• Amendments to IFRS 10, Consolidated Financial Statements

• Amendments to IFRS 11, Joint Arrangements

• Amendments to IAS 1, Presentation of Financial Statements

• Amendments to IAS 16, Property, Plant and Equipment

• Amendments to IAS 27, Separate Financial Statements (2011)

• Amendments to IAS 28, Investments in Associates and Joint Ventures (2011)

• Amendments to IAS 38, Intangible Assets

Effective for annual periods beginning on or after January 1, 2017

• IFRS 15, Revenue from Contracts with Customers

Effective for annual periods beginning on or after January 1, 2018

• IFRS 9, Financial Instruments – Classification and measurement

The Company has not early-adopted these revised standards and is currently assessing the impact that these standards will have on the Company's financial statements.

3.	CASH AND CASH EQUIVALENTS
	The Company’s cash and cash equivalents are invested in business and saving accounts.

4. AMOUNTS RECEIVABLE AND OTHER ASSETS

		January 31,		July 31,
		2015		2014
Current:
Sales tax receivable	$	5,114	$	4,834
Prepaid insurance		14,913		6,670
Total	$	20,027	$	11,504
Non-current:
British Columbia Mineral Exploration Tax Credit	$	8,295	$	8,295

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

5. MINERAL PROPERTY INTERESTS

		January 31,		July 31,
		2015		2014
Galaxie Project (note 5(a))	$	891,627	$	891,627
Angel's Camp royalty (note 5(b))		1		1
Total	$	891,628	$	891,628

(a)	Galaxie Project
	The Company holds a 100% mineral property interest in the Galaxie Project, which is situated in the Stikine Terrane, a region in northwestern BC, and it includes Gnat Pass Property and Hotailuh Slope mineral claims. The Company’s mineral property interest in Gnat Pass Property is subject to a net smelter returns (NSR) royalty agreement which requires the payment to a third party of a 1% NSR royalty – up to a maximum of $7,500,000.
(b)	Angel's Camp Property
	The Company retains a 1% net smelter return royalty payable to the Company on any production from the Angel's Camp property located in Lake County, Oregon. The Angel's Camp property is currently held by Alamos Gold Inc.
	The royalty has been recorded at a nominal amount of $1.

6.	CAPITAL AND RESERVES
(a)	Authorized and issued share capital
	At January 31, 2015, the authorized share capital of the Company comprised an unlimited number of common and preferred shares without par value.
	The Company has no preferred shares issued and outstanding. All issued shares are fully paid.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

(b)	Equity-Settled Share-Based Payments
	The following summarizes the changes in the Company's share purchase options for the six months periods ended January 31, 2015 and 2014:

Number of options with exercise price of $0.45	Six months ended January 31,
	2015		2014
Options outstanding at beginning of period	1,587,000		1,705,800
Forfeited during the period	(36,900	)	(70,500	)
Expiration during the period	(722,100	)	–
Options outstanding and exercisable at the end of period	828,000		1,635,300

The weighted average contractual remaining life of the share purchase options outstanding and exercisable at January 31, 2015 was 1.9 years (July 31, 2014 – 1.5 years).

7.	LONG TERM DEBT
	Pursuant to the purchase of the Gnat Pass Property (note 5(a)) in fiscal 2013, the Company issued an unsecured $650,000 convertible debenture (the "Debenture") to a vendor, Bearclaw Capital Corp. (“Bearclaw”), as part of the purchase price. In July 2013, Quartz Mountain and the holder of the Debenture entered into an agreement to amend the Debenture, whereby among other things, a principal payment of $50,000 toward the Debenture was made, reducing the outstanding balance to $600,000. The interest rate applicable on the new balance of $600,000 and for the remaining term of the Debenture was increased to 10% per annum from 8% per annum, and the maturity date was extended to October 31, 2014 from October 31, 2013. Interest on the Debenture was payable quarterly in arrears and the principal sum of Debenture, along with any unpaid interest, is convertible at the option of the debenture holder into the Company's common shares at $0.15 per share (previously $0.40 per share) on or before maturity of the Debenture on October 31, 2014.
	Effective October 1, 2014, the Company and Bearclaw amended the terms of the Debenture pursuant to which, on October 8, 2014, the Company made a payment of $50,000 to Bearclaw against the principal sum of the Debenture and the remaining balance of $550,000 (the “Principal Sum”) is now payable in equal annual installments of $50,000, commencing on January 31, 2015 (completed) and thereafter on or before January 31 of each subsequent year until the Principal Sum is fully repaid. Effective October 1, 2014, the Principal Sum outstanding will bear interest at 7.5% per annum, payable quarterly in arrears.
	Upon a completion by the Company of an equity financing (the “New Financing”) for a minimum amount of $1,000,000, at least 50% of any outstanding balance of the Principal Sum along with any interest accrued thereon will be automatically converted (the “Automatic Conversion”) into the Company’s common shares. Bearclaw may elect to convert, concurrent to the Automatic Conversion, any portion of the remaining 50% of outstanding balance of the Principal Sum and accrued interest thereon (the “Optional Conversion”). For the purposes of Automatic Conversion and Optional Conversion of any principal sum, subject to the rules and policies of the TSX Venture Exchange the conversion price will be determined as greater of (i) the volume-weighted average trading price (VWAP) of Common Shares of the Company on the Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the date of such conversion and (ii) the price at which the Company issues common shares pursuant to the New Financing. For the purposes of Automatic Conversion and Optional Conversion of any accrued interest, the conversion price will be the market price of the Company’s common shares on the date of conversion. Except pursuant to the Automatic Conversion and Optional Conversion provisions, Bearclaw does not have an option to convert the Debenture into the Company’s common shares.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

As at January 31, 2015, long-term debt repayments over the next five years are as follows:

Fiscal year		Payments (principal and
		interest)
2015 (after the current quarter)	$	18,914
2016		86,051
2017		82,209
2018		78,459
2019		74,709
2020		71,010
Remaining term		298,555
Total	$	709,907

8.	RELATED PARTY BALANCES AND TRANSACTIONS
(a)	Transactions with Key Management Personnel
	Key management personnel are those individuals that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition include the directors of the Company.
	During the period ended January 31, 2015 and 2014, the Company compensated key management personnel as follows:

		Three months ended				Six months ended
		January 31				January 31
		2015		2014		2015		2014
Short-term employee benefits	$	41,258	$	50,516	$	91,361	$	89,114

Short-term employee benefits include salaries, directors’ fees and amounts paid to HDSI (note 8(b)) for services provided to the Company by certain HDSI personnel who serve as executive directors and officers of the Company.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

(b)	Entities with Significant Influence over the Company
	The Company's management believes that certain entities have the power to participate in the financial or operating policies of the Company. Several directors and other key management personnel of those entities, who are close business associates, are also key management personnel of the Company. Pursuant to management agreements between the Company and these entities which have significant influence over the Company, the Company receives geological, engineering, corporate development, administrative, management and shareholder communication services from such entities.
	Hunter Dickinson Services Inc.
	Hunter Dickinson Services Inc. ("HDSI") is a private company which has certain directors and officers in common with the Company. HDSI provides geological, corporate development, administrative and management services to, and incurs third party costs on behalf of the Company pursuant to an agreement dated July 2, 2010, and is based on annually set rates.
	Transactions and outstanding balances
	Transactions with HDSI were as follows:

		Three months ended					Six months ended
		January 31					January 31
		2015		2014			2015		2014
Services received based on management services agreement	$	52,232	$	134,230		$	150,265	$	340,615
Reimbursement of third party expenses paid		12,421		(3,485	)		33,049		11,094

The balance due to relating party represents the amount due to HDSI in relation with the services provided to, and reimbursable expenses incurred on behalf of, the Company.

HDSI has agreed not to demand repayment of these unsecured amounts prior to November 1, 2015.

Quartz Mountain Resources Ltd.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended January 31, 2015 and 2014

(Unaudited – Expressed in Canadian Dollars, unless otherwise stated)

9.	EMPLOYEES BENEFIT EXPENSES
	Employees' salaries and benefits included in various expenses are as follows:

		Three months ended				Six months ended
		January 31				January 31
		2015		2014		2015		2014
Exploration and evaluation expenses	$	755	$	21,440	$	2,420	$	104,297
General and administration expenses		79,757		114,729		187,277		244,317
Total	$	80,511	$	136,169	$	189,696	$	348,614

General and administration expenses include equity-settled share-based payments expense.

10.	OPERATING SEGMENTS
	The Company operates in a single reportable operating segment – the acquisition, exploration and development of mineral properties.