ROYAL STANDARD MINERALS INC (Form: 20-F/A, Received: 06/14/2012 06:02:47)

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

FORM 20-F/A

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

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended January 31, 2012

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______to ______

[ ] 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 000-28980

Royal Standard Minerals Inc.
(Exact name of Company as specified in its charter)

Not applicable
(Translation of Registrant’s name into English)

Canada
(Jurisdiction of incorporation or organization)

50 Richmond Street East, Suite 101, Toronto, Ontario M5C 1N7
(Address of principal executive offices)

George Duguay
50 Richmond Street East, Suite 101, Toronto, Ontario M5C 1N7
(416) 848-0105 george@dsacorp.ca
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)

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

None	Not applicable
(Title of each class)	(Name of each exchange on which registered)

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
(Title of Class)

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.

As of January 31, 2012: 83,853,825 Common Shares, without par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes [ ] No [X]

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of Securities Exchange Act of 1934.

Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [ ] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]

Accelerated filer [ ]

Non-accelerated filer [X]

Indicated by check mark which basis of accounting the company has used to prepare the financial statements included in this filing:

U.S. GAAP [ ]	International Financial Reporting Standards as issued by the	Other [ ]
	International Accounting Standards Board [X]

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

[ ] Item 17 [ ] Item 18

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

Yes [ ] No [X]

EXPLANATORY NOTE

This Form 20-F/A of Royal Standard Minerals Inc. (the “Company”) amends the Company’s Form 20-F Annual Report for the fiscal year ended January 31, 2012 as originally fled on June 13, 2012. This Form 20-F/A is being filed to include the Annual Financial Statements section and Management's Discussion and Analysis section, which was inadvertently excluded from the original filing.

For the convenience of the reader, this Form 20-F/A sets forth the entire Form 20-F Annual Report as originally filed with the SEC with amendments to only include the missing sections and updated page numbers. As a result, this Form 20-F/A does not reflect any events that may have occurred after the Form 20-F Annual Report was filed on June 13, 2012 and our Annual Report on Form 20-F for the fiscal year ended January 31, 2012, as amended by this Amendment, continues to speak as of the initial filing date of the Form 20-F.

The filing of this Form 20-F/A shall not be deemed an admission that the Form 20-F, when filed, included any known untrue statement of material fact or knowingly omitted to state a material fact necessary to make a statement not misleading.

T ABLE OF C ONTENTS

PART I			3
	Item 1. Identity of Directors, Senior Management and Advisers		3
	Item 2. Offer Statistics and Expected Timetable		3
	Item 3. Key Information		3
		A. Selected financial data.	3
		B. Capitalization and indebtedness.	4
		C. Reasons for the offer and use of proceeds.	4
		D. Risk factors.	4
	Item 4. Information on the Company		4
		A. History and development of the Company.	4
		B. Business overview.	5
		C. Organizational structure.	5
		D. Property, plants and equipment.	5
	Item 4A. Unresolved Staff Comments		21
	Item 5. Operating and Financial Review and Prospects		21
		A. Operating results.	21
		B. Liquidity and capital resources.	22
		C. Research and development, patents and licenses, etc.	24
		D. Trend information.	24
		E. Off-balance sheet arrangements.	24
		F. Tabular disclosures of contractual obligations.	25
		G. Safe harbor.	25
	Item 6. Directors, Senior Management and Employees		26
		A. Directors and senior management.	26
		B. Compensation.	28
		C. Board practices.	34
		D. Employees.	39
		E. Share ownership.	39
	Item 7. Major Shareholders and Related Party Transactions		39
		A. Major shareholders.	39
		B. Related party transactions.	40
		C. Interests of experts and counsel.	40
	Item 8. Financial Information		40
		A. Consolidated Statements and Other Financial Information.	40
		B. Significant Changes.	40
	Item 9. The Offer and Listing		42
		A. Offer and listing details.	42
		B. Plan of distribution.	43
		C. Markets.	43
		D. Selling shareholders.	43
		E. Dilution.	43
		F. Expenses of the issue.	44
	Item 10. Additional Information		44
		A. Share capital.	44
		B. Memorandum and articles of incorporation.	44
		C. Material contracts.	49
		D. Exchange controls.	49

		E. Taxation	49
		F. Dividends and paying agents.	55
		G. Statement by experts.	55
		H. Documents on display.	55
		I. Subsidiary Information.	56
	Item 11. Quantitative and Qualitative Disclosures about Market Risk		56
	Item 12. Description of Securities Other than Equity Securities		58
PART II			58
	Item 13. Defaults, Dividend Arrearages and Delinquencies		58
	Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds		58
	Item 15. Controls and Procedures		62
		A. Disclosure Controls and Procedures.	62
		B. Management's Annual Report on Internal Control over Financial Reporting.	62
		C. Attestation Report of the Registered Public Accounting Firm.	62
		D. Changes in Internal Control over Financial Reporting.	63
	Item 16. [Reserved]		63
	Item 16A. Audit Committee Financial Expert		63
	Item 16B. Code of Ethics		63
	Item 16C. Principal Accountant Fees and Services		63
	Item 16D. Exemptions from the Listing Standards for Audit Committees		64
	Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers		64
	Item 16F. Change in Registrant's Certifying Accountant		64
	Item 16G. Corporate Governance		65
	Item 16H. Mine Safety Disclosure		65
PART III			65
	Item 17. Financial Statements.		65
	Item 18. Financial Statements		67
	Item 19. Exhibits		68
		SIGNATURES	70

EXPLANATORY NOTE

Royal Standard Minerals Inc. (together with its subsidiaries, the “Company,” “Royal Standard” or “RSM”) is a Canadian issuer eligible to file its annual report pursuant to Section 13(a) of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), on Form 20-F. The Corporation is a “foreign private issuer” as defined in Rule 3b-4 under the Exchange Act and Rule 405 under the U.S. Securities Act of 1933, as amended (the “Securities Act”). Equity securities of the Company are accordingly under the Exchange Act exempt from Sections 14(a), 14(b), 14(c), 14(f) and 16 of the Exchange Act pursuant to Rule 3a12-3.

The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). The Company’s consolidated financial statements, which are filed with this annual report on Form 20-F, may be subject to Canadian auditing and auditor independence standards. They may not be comparable to financial statements of United States companies.

Unless otherwise indicated, all dollar amounts in this report are presented in U.S. dollars. The exchange rate of Canadian dollars into United States dollars, on January 31, 2012, based upon the Bank of Canada noon exchange rate, was U.S.$1.00 = Cdn$1.0052.

FORWARD-LOOKING STATEMENTS

This annual report on Form 20-F and the exhibits attached hereto contain “forward-looking statements” within the meaning of applicable laws concerning the Company’s plans at its properties, plans related to its business and other matters. These statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and assumptions of management.

Statements concerning mineral reserves and resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that will be encountered if any of the Goldwedge, Piñon, Fondaway, or Kentucky projects are developed, and in the case of mineral reserves or resources, such statements reflect the conclusion based on certain assumptions that the mineral deposit can be economically exploited. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects,” “anticipates,” “plans,” “estimates” or “intends,” or the negative or other variations of these words or other comparable words or phrases or stating that certain actions, events or results “may,” “could,” “would,” “might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be “forward-looking statements.” Forward-looking statements also include the potential for future growth, indications of potential for economic extraction, the extraction of material that the Company is able to process, the potential to increase throughput and resource estimates, exploration and development plans, and the execution of certain agreements including the terms of those agreements. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation:

precious metal and coal price fluctuations;
volatility in the financial markets;
operating hazards and risks;
risks and uncertainties relating to the exploration and development of mineral properties;
uncertainty attributable to the calculation of reserves, resources and metal recoveries;
uncertainty of title to mining properties;
risks associated with dilution;

risks related to environmental regulation and liability;
risks related to the possibility that the Company is a passive foreign investment company; and
uncertainty associated with U.S. investors enforcing in the United States civil liabilities of the Company and its directors and officers who are resident in Canada.

Some of the important risks and uncertainties that could affect the Company’s forward-looking statements are described further in “Item 3.D. Risk Factors.” Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Forward-looking statements are made based on management’s beliefs, estimates and opinions on the date the statements are made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should change, except as required by law. Investors are cautioned against placing undue reliance on forward-looking statements.

RESOURCE AND RESERVE ESTIMATES

The terms “mineral reserve,” “proven mineral reserve” and “probable mineral reserve” used in the Company’s disclosure are Canadian mining terms that are defined in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) under the guidelines set out in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Best Practice Guidelines for the Estimation of Mineral Resource and Mineral Reserves (the “CIM Standards”), adopted by the CIM Council on November 23, 2003. These definitions differ from the definitions in the United States Securities and Exchange Commission (the “SEC”) Industry Guide 7 under the Securities Act. Under Industry Guide 7 standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Under Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

The terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” used in the Company’s disclosure are Canadian mining terms that are defined in accordance with NI 43-101 under the guidelines set out in the CIM Standards; however, these terms are not defined terms under Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this annual report on Form 20-F and the documents incorporated by reference herein containing descriptions of the Company’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

PART I

Item 1. Identity of Directors, Senior Management and Advisers

Not applicable.

Item 2. Offer Statistics and Expected Timetable

Not applicable.

Item 3. Key Information

A. Selected financial data.

The tables below present selected statement of operations and balance sheet data for Royal Standard Minerals Inc. as at and for the fiscal years ended January 31, 2012 and 2011. The selected financial data presented herein for the fiscal years ended January 31, 2011 and 2012 is prepared in accordance with International Financial Reporting Standards. The financial data includes the accounts of the Company and its wholly-owned subsidiaries, Kentucky Standard Energy Company, Inc., and Manhattan Mining Co., both United States Companies. See “Item 4. Information on the Company”.

Royal Standard Minerals Inc.
(An Exploration Stage Enterprise)
Consolidated Financial Statement Data
For the Years Ended January 31
(Expressed in US Currency)

		2012			2011

Revenue	$	0		$	0

Finance Income	$	4,291		$	3,221
Expenses		($6,455,989	)		($1,636,066	)
Net loss for the year		($6,451,698	)		($1,632,845	)

Deficit, beginning of year		($38,101,796	)		($36,468,951	)

Loss per common share:
Basic and diluted
loss per share		($0.08	)		($0.02	)
Weighted Average Shares
Outstanding		83,853,825			83,853,825

Balance Sheet		January 31, 2012			January 31, 2011
Current Assets	$	935,828		$	215,315
Equipment, net	$	2,084,336		$	453,733
Total Assets	$	3,653,198		$	1,206,908
Current Liabilities	$	6,120,109		$	935,688
Net Assets		($5,810,547	)	$	39,210

B. Capitalization and indebtedness.

Not applicable.

C. Reasons for the offer and use of proceeds.

Not applicable.

D. Risk factors.

The operations of the Company involve a number of substantial risks and the securities of the Company are highly speculative in nature. See the risk factors found under “Risk Factors” included in Item 17 of this Form 20-F.

Item 4. Information on the Company

A. History and development of the Company.

Royal Standard Minerals Inc. was incorporated pursuant to the laws of Canada by articles of incorporation dated December 10, 1986 under its former name, Ressources Minieres Platinor Inc. ("Resources"). On April 30, 1996, Royal Standard shareholders approved the acquisition of all the issued and outstanding shares of Southeastern Resources, Inc. ("Southeastern") in a reverse take-over transaction. Pursuant to this transaction, articles of amendment were filed effective May 14, 1996, pursuant to which the name of the Company was changed to its current form of name and its shares issued and outstanding at that time were consolidated on a 7.5:1 basis. On June 28, 1996, the Common Shares commenced trading on the Montreal Exchange. On January 4, 2002 the Company was continued from the laws of Canada ( Canada Business Corporations Act , “CBCA”) to the laws of the Province of New Brunswick ( Business Corporations Act (New Brunswick)). On February 17, 2004 under the laws of the Province of New Brunswick the articles were amended to provide for an unlimited number of common shares and an unlimited number of special shares. On July 23, 2007, the Company was continued from the laws of the Province of New Brunswick to the laws of Canada, under the CBCA, and the articles of continuance provided for an unlimited number of common shares and an unlimited number of preferred shares. The Company’s Common Shares are quoted on the United States Over-the-Counter Bulletin Board (“OTC Bulletin Board”), under the symbol “RYSMF”.

The registered office of the Company is located at 50 Richmond Street East, Suite 101, Toronto, Ontario M5C 1N7. The Company’s two wholly-owned subsidiaries, Manhattan Mining Co. and Kentucky Standard Energy Company, Inc., have offices at One Main Street, Manhattan, Nevada, 89022 and 11945 North Big Creek Road, Hadfield, Kentucky, 41514, respectively.

For a description of certain of the Company’s principal capital expenditures and divestitures, see “Item 4.D. Property, plants and equipment.”

B. Business overview.

Royal Standard is a mineral exploration company primarily engaged in locating, acquiring, exploring and developing gold and precious metal deposits in the State of Nevada. The Company owns a 100% interest in five projects in three separate gold-silver districts in Nevada. These projects include the Goldwedge Project in Nye County, the Piñon and Railroad Projects in Elko County and the Fondaway Canyon and Dixie-Comstock Projects in Churchill County.

At the present time, the Company's activities include exploratory searches for gold ore in Nevada and coal in Kentucky. The Company continues evaluating the potential for economic extraction of known deposits of ore grade material on the Company's mineral exploration properties. The Company has not generated any revenues from operations at this time. See “Item 3.D. Risk Factors. On April 16, 2012, the Company announced the commissioning of its mill at its flagship Goldwedge Project. The gravity process plant has been commissioned and is permitted to process four hundred metric tons of gold ore per day.

C. Organizational structure.

The Company has two wholly-owned subsidiaries, Manhattan Mining Co., a company incorporated under the laws of the State of Nevada, and Kentucky Standard Energy Company, Inc., a company incorporated under the laws of the State of Kentucky.

D. Property, plants and equipment.

The registered office of Royal Standard Minerals Inc. is located at 50 Richmond Street East, Suite 101, Toronto, Ontario M5C 1N7. The Company’s wholly-owned subsidiary Manhattan Mining Co. also has an office at One Main Street, Manhattan, Nevada, 89022 and the Company’s wholly-owned subsidiary Kentucky Standard Energy Company, Inc. also has an office at 11945 North Big Creek Road, Hadfield, Kentucky, 41514.

Goldwedge Project

General Information

The Goldwedge Project is located in the Manhattan Mining District, section 18, T8N, R43E, Mount Diablo Meridian, approximately one mile west of the town of Manhattan in Nye County, Nevada and about eight (8) miles south of the Round Mountain mine. Located within the southern Toquima Range of central Nevada, the elevation ranges from 6,800 feet to 7,800 feet. The topography is gently rising to rolling and ruggedly steep along the north-south trending mountain range. The deposit occurs under a gravel covered dry drainage valley north of paved highway 377. The town of Tonopah is 50 miles south of the deposit and is considered the most favorable location for accommodations. Tonopah is also the county seat for Nye County.

The Goldwedge Project deposit occurs at the intersection of north and northwest trending faults. In the deposit area, the north trending Reliance fault is mineralized within the Ordovician Zanzibar limestone and siltstone. The target mineralization occurs within multiple high angle structures over a width of between 100-200 feet primarily within the Zanzibar limestone. Results of approximately 75 drill holes, primarily within the central zone over a strike length of 1,000+ feet and 100'-500' of vertical extent, indicate continuous gold oxide mineralization of potential mineable thickness and quality.

RSM has evaluated all of the pertinent drill data as part of a detailed inventory of the deposit geometry, size and overall grade.

The Goldwedge Project is one of several gold deposits in the area and is considered one of the best known projects in the district for development. Management believes the property also has excellent exploration potential for future growth.

A mining and milling permit by the Nevada Division of Environmental Protection (“ NDEP ”) has been issued. The Company has completed refurbishment of the on-site processing plant which was used for the test mining and processing that took place between 2007 and 2008. Commissioning of the plant was announced in April 2012.

Historical Activity Summary

In 2004 the Company secured all the necessary mine, mill (plant) and water use permits and rights from the State of Nevada. Also, in 2004 the Company constructed an underground portal and developed a 700 foot (underground) decline and cross cut to test one of the gold mineralized structures within a 100+ wide structural zone (Phase 1 of underground development program). Additionally, RSM completed the surface facilities necessary to process the material to be mined onsite to include silt ponds, ore pad and the onsite gold processing plant. The Company acquired a full production scale gold recovery (gravity) plant that was intended to be utilized to process the mined material as part of the test mining program.

On June 29, 2005 the Company entered into a 5-year Purchase Option Agreement with a private individual for all of his patented and unpatented mining claims in the Manhattan Mining District located in Nye County, Nevada. The land package totals approximately 1600 acres (4 patented, 70 unpatented claims). This property position adjoins the Company's Goldwedge property. The land package includes a number of exploration targets which are of interest to the Company.

The second phase of the underground development program, which commenced in 2007, included further development of the existing decline and additional crosscuts to identify, locate and assess mineralized zones at greater depth. Groundwater inflow hampered decline development as it progressed; a dewatering well and pumping facility was put in place in 2008 to lower the water table. As of 2008 approximately 5,000 feet of underground development had been completed, including 10 crosscuts intersecting the mineralized zones.

During Phases 1 and 2 of the underground development program, the surface processing facilities were installed and tested (2005) and modified (during 2006-2007) to improve recoveries. The process plant includes primary crushing and grinding facilities that feed a gravity recovery system.

Project activities in 2009 concentrated on acquiring the necessary permits with the various state and federal agencies to handle water disposal through the permit of a Rapid Infiltration Basin on the Company's properties. Project work included plant modifications as part of an effort to increase the daily throughput of gold bearing material as part of the milling process.

2011 Activity

In 2011 the Company completed construction of the Rapid Infiltration Basins (RIB), dewatered the previously completed underground development and resumed phase 2 of the underground development program. This phase of the development included the exploration of mineralized zones concurrently with advancing decline development. An 11 foot diameter ventilation shaft was excavated with raise bore equipment to enable future mine development and production as well as provide a secondary escapeway. Level development was concentrated on developing along the strike of mineralized zones to assess continuity and grade as well as prepare areas for future test stoping.

The Company contracted Northern Nevada Mining & Milling Services LLC for further construction and modification to the existing processing plant on site. The plant has been modified over the last year to replace the two smaller ball mills in the grinding circuit with a larger single 8’ x 9’ ball mill.

Recent and Current Activities

In early 2012 the ventilation raise was shotcreted, a ladderway to surface installed and bulkhead and fans installed. This alternate entry and exit to surface now in place is fully functional as a secondary escapeway and is necessary prior to further underground development.

Underground electrical infrastructure and ventilation system upgrades were performed in February and early March 2012 to meet regulatory requirements and to enable uninterrupted development. In April, an international engineering consulting firm was engaged to perform a geotechnical assessment on site and provide recommendations for ground support for both ongoing development work and future production.

Staffing levels in the underground mining, technical and administrative departments were increased, with implementation of additional shifts planned in the near future. Diamond drilling crews for both surface and underground work have been hired.

Ramp development is ongoing and approaching the next planned elevation for level access. Ore development faces continue to be identified and developed. A surface stockpile in excess of two thousand tons has been established. Mineralized material is trucked to surface, sampled and analyzed for gold values at the Company’s onsite assay laboratory which was recently refurbished and has now been approved by the NDEP. Additionally, for compliance with future NI 43-101 requirements the Company sends samples to independent accredited laboratories offsite for independent analyses.

Commissioning of the process plant was announced in April 2012. Modifications to improve throughput and recoveries are being implemented.

Surface and underground diamond drilling is underway.

Land Positions

The project area includes staked U.S. Department of the Interior Bureau of Land Management (“ BLM ”) lands; options of BLM claims owned by others and patented mining claims owned by the Company. All payments, maintenance fees, option payments and taxes to state and federal authorities are current under state and federal guidelines.

The land position controlled by RSM on the Goldwedge Project area is shown below:

Claim Name	Claim Type	BLM Serial # or Patent #
Goldwedge	Unpatented	NMC 96294 -96297
Goldwedge 1-3	Unpatented	NMC 96294-96297
Orpahnt	Patents	4095
Copper Farm-Eldorado #2	Patents	2876
GW 1-34	Unpatented	NMC 826458-826460, 824432, 824436,826461-826476, 829859-829863, 834113-824114

Location of Claims	# of Claims/Acres/Owner	Importance to Development
Goldwedge Deposit	4 Claims/50 Acres/Hill	90% of known deposit, 3% NSR, - 5-year lease term, renewable
North Plunge of Goldwedge Deposit and 1.5 miles of Mineralized Caldera Margin Trend (RSM owns 100% of Unpatented Claims)	34 Claims/450 Acres/RSM	Largest deep and unexplored mineralized caldera margin
South End of Goldwedge Deposit and East Caldera Margin Trend (RSM owns 100% of Patent Claim	1 Claim/20.03 Acres/RSM (Orphant Patent)	Approximately 5% of known deposit, Private Land for Decline and Plant Site, and 1,500 feet of mineralized caldera trend, facility site plan, 1% NSR

Wm. Michael Donovan Jr., Professional Land Surveyor #2617, surveyed the land holdings in the immediate vicinity of the deposit to determine the exact land boundaries in relation to the gold deposit. This surveying was completed in 2001 following the staking of the unpatented claims by the Company in the same year.

The Company has recorded an asset retirement obligation on its Goldwedge Project in the amount of $168,276, representing the estimated costs, on a discounted basis, of the Company's obligation to restore the property site to its original condition.

Project Expenditures

During the year ending January 31, 2012, expenses on the Goldwedge Project were $2,748,949 with cumulative expenditures to January 31, 2012 of $19,632,659. A table of detailed expenditures follows:

										Cumulative from
		January 31,		January 31,			January 31,			date of inception of
For the years ending		2012		2011			2010			exploration phase
Goldwedge Project
Opening balance	$	16,874,710	$	16,087,544		$	15,177,300			0
Property acquisition costs	$	10,000	$	40,492		$	430,028		$	1,202,167
Travel	$	71,292	$	65,983		$	6,914		$	469,552
Mine development costs	$	397,626	$	42,312		$	10,671		$	1,486,726
Drilling	$	40, 206		0			($202	)	$	988,999
General exploration		0		0			0		$	133,353
Professional fees	$	113,442	$	65,550		$	7,528		$	259,156
Consulting	$	1,238, 299	$	240,392		$	282,548		$	6,460,402
Office and general	$	393,149	$	84,314		$	118,112		$	2,151,769
Analysis and assays	$	7,392	$	2,225		$	7,983		$	165,227
Supplies, equipment and transportation	$	353,312		($9,010	)	$	54,153		$	4,031,053
Depreciation	$	124,231	$	254,908		$	322,524		$	2,605,270
Less: Proceeds from sale of exploration ore		0		0			($330,015	)		($330,015	)
Activity during the period	$	2,748,949	$	787,166		$	910,244		$	19,623,659
Closing balance	$	19,623,659	$	16,874,710		$	16,087,544		$	19,623,659

Future Programs

Underground development as well as surface and underground drilling will be directed towards further delineation and expansion of the resources on this property as well as optimization of the gravity recovery plant. Preliminary scoping for addition of a CIP circuit to further increase recoveries is in progress. All of this work will be supervised by the CEO and carried out by experienced miners and plant employees currently working for the Company. Consultants will be utilized in special instances to assist management with specific technical issues.

The Goldwedge Project requires further capital investment to move the project towards production. Various funding opportunities will be pursued.

This project is an advanced exploration project without known reserves and the proposed program is exploratory in nature. See “Item 3.D. Risk Factors.”

The Goldwedge Project forms part of the Manhattan/Round Mountain Caldera program, the Company's most advanced district play. The project area is located southeast of the town of Round Mountain, Nevada east of State route 376. The town of Manhattan is located approximately 15 miles south of Round Mountain. The Manhattan Project is located approximately 7 miles east of route 376 on route 377 and 1.5 miles west of the town of Manhattan.

The land position in the Manhattan Mining District is comprised of 70 unpatented and 6 patented lode-mining claims. An underground development program to include drill testing the extensions of the Goldwedge deposit in addition to the evaluation of several additional lode and placer properties that the Company controls in the district could significantly increase the historic gold resource estimates.

Piñon Project-Carlin Trend South

General Information

The Piñon Project located at the southeast end of the famous "Carlin Gold Trend" about 10 miles south of Newmont's Rain mine, 25 miles southwest of Elko, Nevada. The main access from Elko is west on Interstate 80 to Carlin (25 miles) then south on State Highway 51 for 22 miles to the Trout Creek access road. The project area is 7 miles east along a well-maintained BLM gravel-dirt road. There is no infrastructure in the vicinity of the property; the nearest power line is 7 miles to the west along State Highway 51.

The Carlin Trend is one of the most prolific gold trends in the world and has produced more than 50 million ounces of gold. The property is located within a region of known mineralization, which supports the potential for expanding the known gold deposits and making new discoveries. Much of the district wide exploration was undertaken prior to the start of the 1990's. Since the mid-1990's the cumulative knowledge of "Carlin-type" gold deposits has expanded tremendously. This expanded knowledge can be used to re-interpret all historic exploration data, which may identify new exploration targets at the property. Also, during the past 10+ years numerous high-grade gold deposits have been discovered along the Carlin Trend that can be mined using underground techniques. Many of these deeper deposits are associated with surface oxidized gold deposits. Essentially no significant deeper exploration has been conducted under the Piñon deposit, or at other places on the property. The exploration opportunity offers the possibility for discovery of additional gold deposits at Piñon.

The Webb Formation is mineralized above the Devils Gate limestone. However, higher-grade mineralization has been encountered at very shallow depths, mineralized oxide zones occur along a 1,300 feet strike length and occur less than 90 feet below the surface.

The Pinon deposit occurs in the basal Missippian Age Webb Formation. The basal Webb Formation is composed of calcareous siltstone and limestone that has been folded along a southeast plunging anticline. Gold mineralization continues into the underlying Devonian Age Devils Gate Limestone where karst collapse breccia has developed in the underlying limestone along the unconformity contact with the underlying Devils Gate Limestone. The gold resource is strata-bound over the fold crest and is exposed at the surface. The mineralized rock has been silicified, decalcified and argillized.

A second gold resource occurs north and adjacent to the larger Pinon Main Zone resource and trends north along a fault zone. A deeper zone of brecciation and mineralization occurs on the south end of the Pinon Main Zone resource and is currently considered to be a hydrothermal karst breccia. A coring program is required to better understand the geometry of this breccia. The current defined resource at Pinon occurs on the Company’s land holdings.

The Piñon property currently consists of a contiguous land block of 39 unpatented mining lode claims - claim fractions that are located in surveyed Township 30 North, Range 53 East, Section 22, (Mount Diablo Meridian), Elko County, Nevada. The current Piñon land position covers an area of approximately 2,720 acres (approx. 1101 hectares). All payments, maintenance fees to federal and state authorities are current. Landowner option payments are also current and in good standing for this land position. Included in the land block are the following claims:

	County Recordation
Claim Name	BLM Serial #	Book	Page	Acres
TC-1 thru TC-10	NMC 125638 thru NMC 133862	304	6 thru 15	180
TC-11	NMC 133862	309	114	20
TC-12 thru TC-28	NMC 148871 thru NMC 148887	329	58 THRU 74	320
TC-29 thru TC-39	NMC 403761 thru NMC 403771	588	426 thru 436	200

The TC claim group is under (100%) control by the company. The TC claims are located on federal public domain lands that are managed (both surface and mineral estates) by the Bureau of Land Management ("BLM"). Initially staked in 1979, this ground was previously open to mineral location with no significant restrictions. Location certificates for all claims staked in the group were filed and recorded with the BLM and the Elko County Recorder's Office in Elko according to federal and state laws/regulations.

The TC claim group is surrounded by private fee lands containing a complicated mixture of severed surface and mineral estates that were previously controlled in part by the Piñon Joint Venture through various lease-option agreements. These lands have since been dropped by the joint venture. An ownership summary for several of the more important sections is shown below.

T30N, R53E

Section 21: All (640 acres)

Surface estate
J. Tomera Ranch (100%)

Mineral estate
J. Tomera family (50%)
Rudnick Trust (16.6%)
L&R Rudnick family (16.6%)

Section 27: NE1/4 NW1/4 , NE1/4, NE1/4 SE1/4 (640 acres)

Surface estate
Pereira Trust (100%)

Mineral estate
Pereira Trust (50%)
O. Rudnick family (16.67%)
Rudnick Trust (8.33%)

Section 27: NW1/4 NW1/4 , S1/2 NW1/4, SW1/4, NW1/4 SE1/4, S1/2 SE1/4 (640 acres)

Surface estate
J. Tomera Ranch (100%)

Mineral estate
J. Tomera family (50%)
O. Rudnick family (16.67%)
Rudnick Trust (8.33%)
R. Rudnick family (8.3%)

The Piñon Project is made up of a number of lease agreements to lease certain properties in Elko County, Nevada. The Company is obligated to incur certain payments and exploration expenditures to keep the leases in good standing. The lessors retain a 5% net smelter return royalty.

The Railroad Project was made up of two lease agreements to lease certain properties in Elko County, Nevada. The Company was obligated to incur payments of $8,000 to keep one lease in good standing and pay $1,765,000 to exercise the option to purchase the leased property under the other agreement by August 31, 2009 to keep the leases in good standing. The lessors would retain a 5% net smelter return royalty. On August 31, 2009 the option was exercised to acquire 100% of this project and the property was sold for $2,965,000 to an unrelated private company for net proceeds of $1.2 million, a 1% NSR royalty and 500,000 common shares of the private company. The sale of this property resulted in a gain on the sale of $583,199.

Approximately 600 shallow drill holes have been completed on six near surface gold-silver deposits. The Company has recorded an asset retirement obligation in the amount of $28,724 on the Piñon Project, representing the estimated costs, on a discounted basis, of the Company's obligation to restore the property site to its original condition as required by the State of Nevada regulatory authorities.

Project Expenditures

During the year ended January 31, 2012, expenditures on the Piñon Project were $71,188 with cumulative expenditures to January 31, 2012 of $2,159,700. During 2010, the expenditures relating to the Railroad Project in the amount of $617,300 were applied against the proceeds received. These costs were incurred in connection with various activities performed by the Company on a discretionary basis. A table of detailed expenditures follows:

										Cumulative from
		January 31,		January 31,			January 31,			date of inception of
For the years ending		2012		2011			2010			exploration phase
Piñon Project
Opening balance	$	2,088,512	$	2,001,517		$	1,931,122		$	0
Property Acquisition costs	$	69,571	$	102,706		$	54,013		$	782,494
Travel		0		0			0		$	78,326
Drilling		0		0			0		$	130,600
General exploration		0		0			0		$	7,765
Professional fees		0		0		$	19,668		$	85,941
Office and general		0		0			0		$	98,120
Geologist		0		0			0		$	32,653
Consulting, wages and salaries	$	1,617		($15,711	)	$	258		$	645,241
Reclamation costs		0		0			0		$	167,785
Analysis and assays		0		0			0		$	74,042
Supplies, equipment and transportation		0		0			($3,544	)	$	56,733
Activity during the period	$	71,188	$	86,995		$	70,395		$	2,159,700
Closing balance	$	2,159,700	$	2,088,512		$	2,001,517		$	2,159,700

Railroad Project
Opening balance		0		0		$	460,013			0
Property acquisition costs		0		0		$	5,980		$	465,993
Professional fees		0		0		$	123,580		$	123,580
Consulting, wages and salaries		0				$	27,727		$	27,727
Sale of Property		0		0			($617,300	)		($617,300	)
Activity during the period		0		0			($460,013	)		0
Closing balance	$	0	$	0		$	0		$	0

Future Programs

Any future work will involve twinning of historic drilling to bring historic data to 43-101 standard. Subsequent modelling will allow a decision to be made on further exploration or development.

The property is without known reserves and the proposed program is exploratory in nature. See “Item 3.D. Risk Factors.”

Fondaway Canyon Project

The 100% controlled Fondaway Canyon gold project is located in Churchill County, Nevada in the Stillwater range. The Fondaway property is accessible from Fallon east along U.S. Highway 50, then north on Hwy 116 to the settlement of Stillwater, then north on an improved gravel road for 30 miles along the front range of the Stillwater Mountains to Fondaway Canyon. The elevation of the property ranges from 5000 to 6000 feet. Access east into Fondaway Canyon is steep but adequate with existing mine roads. The Fondaway deposit is located on the west flank of the Stillwater Range in Sections 1 and 2, T22N, R33E, and Sections 5 and 6, T22N, R34E.

The Fondaway Canyon property consists of 148 contiguous unpatented lode-mining claims (approximately 3000 acres) on BLM land held under a lease agreement assigned from Nevada Contact Inc. (NCI) to the Company. Eighteen claims were staked by NCI, quitclaimed to the owner, and included in the assignment to the Company. The lease terms include a 3% net smelter return royalty to the owner Richard Fisk and advanced royalty payments of $25,000 per year. The annual payments graduated to $35,000 in 2006 and years following. Details of the option agreement are as follows:

Required Cash Payments to Optionors		Royalty	Exercise of Option
Commencing in fiscal 2003. $25,000 in year one, $30,000 in years two and three and $35,000 each of the next seven years apply to the purchase price		3% NSR	July 2013 $600,000

All of the maintenance filing fees are current and in good standing.

Nearly-vertical, east-west trending mineralized shear zones host the Half Moon, Paperweight, Hamburger Hill and South Pit gold resources that are hosted within a Mesozoic sedimentary package. The Mesozoic sedimentary package has been intruded by a Mesozoic-Tertiary aged intrusive. The vertical extent tested by historic drilling of the higher grade gold mineralized shear zones is greater than 1,000 feet. Horizontal continuation of gold mineralization at the Paperweight and Hamburger Hill mineralized shear zone is 3,700 feet with widths commonly 5'-20+ feet. Records indicate that 568 holes have been drilled for a total estimated footage of 200,000 feet of RC drilling and 22,000 feet of core drilling: 455 reverse circulation, 49 core and 64 air track holes over a strike length of approximately 12,000 feet. Tenneco Minerals Inc., the most active company, drilled approximately 350 holes (130,000 feet) and drove a 500' adit for sulfide metallurgical sampling during the period 1987-1996. Tenneco also operated a small oxide gold open pit mine for a short time during this period. Nevada Contact Inc. (“NCI”) acquired the property in 2001 and drilled 11 reverse circulation holes. The Company acquired the property from NCI in early 2003 as part of a property swap with NCI retaining a 1% NSR overriding royalty in the Fondaway Canyon property and $25,000 advance minimum royalty payments to the claim holder until 2006 at which time the payments increase to $35,000 per year that includes a 3% NSR royalty until buyout. There is a buyout option of $600,000 for the owners' interest .

Estimates of prior expenditures on this property are approximately $5-6 million. The largest portion of these expenditures was contributed by Tenneco Minerals and Tundra Mines LTD. This work included extensive drilling, development of a small open pit production project and an advanced exploration adit on the property.

Project Expenditures

During the year ended January 31, 2012, expenditures on the Fondaway Project were $37,297, with cumulative expenditures to January 31, 2012 of $435,110. These costs were incurred in connection with various activities performed by the Company on a discretionary basis. The Company will continue to pay all lease payments to keep this project in good standing. A table of detailed expenditures follows:

								Cumulative from date
		January 31,		January 31,		January 31,		of inception of
For the years ending		2012		2011		2010		exploration phase
Fondaway Project
Opening balance	$	397,813	$	339,776	$	302,279	$	0
Property Acquisition costs	$	35,000	$	58,037	$	37,497	$	413,537
Travel		0		0		0	$	15,646
Drilling		0		0		0	$	351
Office and General	$	2,297		0		0	$	2,297
Analysis and assays		0		0		0	$	3,279
Activity during the period	$	37,297	$	58,037	$	37,497	$	435,110
Closing balance	$	435,110	$	397,813	$	339,776	$	435,110

Future Programs

The Company does not anticipate performing exploration activities until additional funding is obtained. The Company will maintain its 2013 lease payment obligations and claim renewal fees.

The property is without known reserves and any proposed program would be exploratory in nature. See “Item 3.D. Risk Factors.”

Kentucky Project

In an effort to achieve diversity within its natural resource portfolio on November 19, 2008, the Company and Sharpe Resources Corporation (“ Sharpe ”) entered into an option agreement whereby the Company agreed to an option to acquire a 50% interest in coal properties in Kentucky by advancing to the project $2 million prior to December 9, 2009. Once the option is exercised by the Company a 50/50 Joint Venture agreement will be entered into between the Company and Sharpe at which time all expenditures incurred and revenues earned from the coal projects will be shared 50% by the Company and 50% by Sharpe.

Under the terms of the option agreement a 100% interest in a surface mine coal project in Wolfe County, Kentucky was acquired. The transaction costs included $250,000 to acquire the project and $178,700 for a reclamation bond to cover the state of Kentucky reclamation requirements for this property. The property consists of approximately 1,000 acres of coal mineral rights under lease and includes an approved Kentucky Mining Permit, I.D. No. 919-0066.

On September 11, 2009 this option agreement was amended to allow the Company to acquire its 50% interest in the properties by advancing to the project $2 million by December 9, 2011. As consideration for this amendment the Company cancelled the promissory note receivable from Sharpe held by the Company and received a new note from Sharpe in the amount of $120,409 on September 9, 2009 repayable in three equal installments on September 9, 2011, 2012, and 2013. During 2011, the Company wrote off the promissory note receivable.

On December 7, 2011, the Company exercised its option. Pursuant to the terms of the agreement, the Company requested Sharpe to provide additional cash to the Kentucky Project, to match that of the Company, which had exceeded $2,000,000. As of the date hereof, Sharpe has not responded. The Company is currently reviewing its options for the Kentucky Project.

The Kentucky Project is approximately 5 miles southeast of the Town of Campton adjacent to paved highway 15 and is situated in Wolfe County at an elevation of 900 feet. The topography is gently rising to rolling and moderately steep terrain that reflects a dendritic drainage pattern of valleys and ridges that occur at the head of these drainages. The ridge elevations within the project area are on the order of 900-1,250 above sea level with the valley floors in the 900-1000 feet above sea level. The area is covered with a hard wood forest that is well supplied with regular rainfall and ample vegetation. Electrical power was installed from a nearby power line crossing the property from the Licking River Electric Cooperative. The nearest large city is Lexington, Kentucky located approximately 70 miles northwest of the project area.

Within Wolfe County, the Company holds mining interests on seven properties, containing six coal seams capable of production, namely, in order from the bottom sequence to the top: 1) Vires, 2) Grassy, 3) Cannel City, 4) Whitesburg, 5) Fire Clay and 6) Fire Clay Rider, hereinafter known as the Seams. The Seams range in thickness from 12 inches up to nearly 30 inches within the leasehold boundary. These are all surface-minable seams. The Campton mine is made up of seven (7) separately owned land parcels having coal mining rights by any mining methods, aggregating 974 acres. Of the 974 acres, 272.19 acres are permitted for surface mining.

Original Owner or Lessor	Area (Acres)	Mining Types	Kentucky Seams	Royalty Rate
David Rudd	280 +/-	C/Area	All Seams	6% F.O.B. Pit
Kevin and Tara Patton	85 +/-	C/Area	All Seams	6% F.O.B. Pit
Earl Patton	150 +/-	C/Area	All Seams	6% F.O.B. Pit
William and Maggie Hutton	90 +/-	C/Area	All Seams	6% F.O.B. Pit
Elizabeth and Taylor Caldwell	109 +/-	C/Area	All Seams	6% F.O.B. Pit
Pauline Caldwell	110 +/-	C/Area	All Seams	6% F.O.B. Pit
Wick & Phyllis Clemons	150 +/-	C/Area	All Seams	6% F.O.B. Pit

C/Area = Contour and Auger/Area or Mountain-top Removal;
F.O.B. = Freight on Board sales prices, with deductions for freight and sales commissions

The Company has recorded an asset retirement obligation in the amount of $95,315 on its Kentucky Project, representing the estimated costs of the Company's obligation to restore the property site to its original condition as required by the State of Kentucky regulatory authorities.

Project Expenditures

During the year ended January 31, 2012, expenditures on the Kentucky Project were $96,922 with cumulative expenditures to January 31, 2012 of $1,580,478, which together with expenditures which indirectly were made for the benefit of the Kentucky Project totals in excess of $2 million. These costs were incurred in connection with various activities performed by the Company on a discretionary basis. A detailed table of expenditures follows:

									Cumulative from
		January 31,		January 31,			January 31,		date of inception of
For the years ending		2012		2011			2010		exploration phase
Kentucky Project
Opening balance	$	1,483,556	$	1,370,849		$	1,136,682		0
Property Acquisition costs		0		($300	)	$	300	$	418,000
Travel	$	12,764	$	62		$	12,162	$	38,815
Reclamation Costs		0	$	444		$	2,925	$	22,646
Professional fees	$	2,400	$	17,786		$	29,673	$	98,539
Consulting, wages and salaries	$	46,300	$	49,150		$	43,694	$	302,972
Office and general	$	12,794	$	15,223		$	35,825	$	124,497
Supplies, equipment & transportation	$	10,552	$	13,646		$	93,508	$	424,511
Rent		0		0		$	750	$	94,010
Amortization		0		0			0		0
Depreciation	$	12,112	$	16,696		$	15,330	$	56,488
Activity during the period	$	96,922	$	112,707		$	234,167	$	1,580,478
Closing balance	$	1,580,478	$	1,483,556		$	1,370,849	$	1,580,478

Future Programs

The Company is currently reviewing its options regarding this joint venture.

Item 4A. Unresolved Staff Comments

Not applicable.

Item 5. Operating and Financial Review and Prospects

A. Operating results.

Royal Standard is an exploration and pre-development stage enterprise and is in the process of exploring its resource properties and has not determined whether the properties contain economically recoverable reserves. The recovery of the amounts shown for the resource properties and the related deferred expenditures is dependent upon the existence of economically recoverable reserves, confirmation of the Company's interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the exploration and, upon future profitable production.

As Royal Standard is an exploration and pre-development stage enterprise, it currently has no producing properties and no operating income or cash flow, other than interest earned on funds invested in short-term deposits. (See “Item 3.D. - Risk Factors”.)

Year Ended January 31, 2012 Compared to the Year Ended January 31, 2011

The Company's net loss totaled $6,451,698 for the year ended January 31, 2012, with basic and diluted losses per share of $0.08. This compares with net loss of $1,632,845 with basic and diluted losses per share of $0.02 for the year ended January 31, 2011. The increase of $4,818,853 in net loss was principally due to increased exploration activities at the Goldwedge property, professional legal fees for various activities and claims during the year and the fair value of the stock options granted during the year ended January 31, 2012.

Year Ended January 31, 2011 Compared to the Year Ended January 31, 2010

The Company's net loss totaled $1,632,845 for the year ended January 31, 2011, with basic and diluted losses per share of $0.02. This compares with a net loss of $821,104 with basic and diluted losses per share of $0.01 for the year ended January 31, 2010. In 2010, the Company’s exploration and evaluation expenditures were capitalized under Canadian Generally Accepted Accounting Principles. The increase of $811,741 in net loss was principally due to exploration activities expensed during the year, the write down of advances made to a related party offset by decreases in consulting, wages, salaries and a gain on disposal of marketable securities in the year ended January 31, 2011.

B. Liquidity and capital resources.

The activities of the Company, principally the acquisition of properties prospective for gold and coal are financed through the completion of equity or debt financing, the exercise of stock options or the sale of exploration properties or marketable securities owned by the Company. For the year ended January 31, 2012, the cash resources of the Company increased by $527,515. The increase in cash resources is a result of the Gold Stream Facility provided by Waterton Global Value L.P. (“ Waterton ”). There is no assurance that future sales and equity or debt capital will be available to the Company in the amounts or at the times desired, or on terms that are acceptable to the Company, if at all. (“Item 3.D. - Risk Factors”.)

Year Ended January 31, 2012 Compared to the Year Ended January 31, 2011

As at January 31, 2012, the Company had $629,553 in cash (January 31, 2011: $102,038). The Company had a working capital deficiency of $5,184,281 as of January 31, 2012, compared to a working capital deficiency of $720,373 as of January 31, 2011. Working capital has decreased for the current period presented as a result of increased exploration expenditures, construction of the mill operations and the increase in professional legal fees. On May 8, 2012 the Company had secured an additional $2,000,000 loan extension from Waterton. This now brings the total funds provided by Waterton to $10,000,000.

As at January 31, 2012, the Company had current liabilities of $6,120,109 compared to $935,688 as at January 31, 2011. Current liabilities have increased due primarily to costs relating to the refurbishment of the mill, increased professional legal fees and the current portion of the Gold Stream Facility. The Company's cash and marketable securities as at January 31, 2012, were not sufficient to pay these liabilities.

On June 29, 2011, the Company's wholly owned subsidiary, Manhattan Mining Co. ("Manhattan") entered into a secured bridge loan agreement (the “Bridge Loan”) with Waterton Global Value, L.P. (“Waterton”) pursuant to which Waterton agreed to provide an $8,000,000 bridge loan (the “Credit Facility”) available to Manhattan. Of the total $8,000,000 Bridge Loan, $4,000,000 was available on closing and the remaining $4,000,000 after the satisfaction of certain covenants. Under the Bridge Loan agreement, the amounts drawn down under the Credit Facility would incur interest at 6% per annum, and the scheduled repayment date of the Credit Facility was 16 months after the initial closing date. In connection with the Credit Facility, Manhattan agreed to pay Waterton a structuring fee, and also provided Waterton with certain royalty interests relating to its Goldwedge Property. Manhattan and Waterton have also entered into a gold purchase agreement pursuant to which Waterton had agreed to purchase Manhattan’s production. The Credit Facility was secured by, amongst other items, the Company’s real property assets in Nevada.

On August 26, 2011, Manhattan amended its existing Bridge Loan with Waterton such that the Bridge Loan was transitioned into a more permanent senior secured gold stream debt facility (the “Gold Stream Facility”) amongst the parties. Under the Gold Stream Facility, Waterton will make $8,000,000 (the “Principal Amount”) available to Manhattan. The Principal Amount is repayable by Manhattan to Waterton in monthly payments commencing in August 2012 and ending in July 2013. Under the Gold Stream Facility, each monthly repayment of the Principal Amount will be made by the delivery by Manhattan to Waterton of gold bullion ounces where the number of ounces to be delivered shall be based on the spot price of gold on the business day immediately preceding the repayment date less an applicable discount or by the payment of the cash equivalent of such number of ounces. In addition, there is a profit participation formula which is triggered when the spot price of gold is in excess of $1,600 an ounce on the business day immediately preceding the repayment ("Profit Participation"). The Principal Amount will accrue interest at 9.0% per annum. The Gold Stream Facility is secured by, amongst other items, Manhattan's real property assets in Nevada.

The Company considers Profit Participation as an embedded derivative. As at January 31, 2012, the gross proceeds received under the Gold Stream Facility was $5,970,350, which was allocated to the embedded derivative based on the initial fair values of the embedded derivative determined when proceeds were received ($170,721), and then the residual value was allocated to the liability portion. The Company estimates the future cash flow needs in terms of Profit Participation using the gold future contract prices of repayment periods and discounted to the present value using 9% as annual discount rate. As of January 31, 2012, the Company estimates the gold future price during the repayment period from August 2012 to July 2013 to be $1,750 per ounce.

As consideration for entering into the Gold Stream Facility, a structuring fee equal to 2% of the aggregate amount of the Gold Stream Facility and an establishment fee of $80,000 was payable by Manhattan to Waterton in cash and Manhattan also granted Waterton certain royalty interests over its exploration stage projects. In addition, Manhattan and Waterton have agreed that Waterton shall have the right to purchase all of the gold produced by Manhattan from its Nevada projects at a price per ounce that will be equal to an agreed discount to the existing spot price of gold at the time of any such purchase. Bayfront Capital Partners Ltd. acted as placement agent in connection with the Gold Stream Facility in consideration for a placement fee equal to 4% of any Principal Amounts actually drawn by Manhattan under the Gold Stream Facility.

The Gold Stream Facility contains covenants for Manhattan such as, among other things, providing Waterton with updates on its operations, carrying on its business in accordance with prudent mining industry practices, and providing Waterton with certain rights of inspection. Until all amounts outstanding under the Gold Stream Facility have been repaid in full or otherwise satisfied in accordance with the terms of such facility, certain standard restrictive covenants shall apply to Manhattan limiting its ability to (without limitation): incur additional indebtedness, create liens on its assets or dispose of its assets. These negative covenants are subject to certain carve-outs that facilitate Manhattan's ability to operate its business efficiently. The Gold Stream Facility also includes certain event of default provisions pursuant to which, immediately and automatically upon the occurrence of an event of default, all amounts outstanding under the Gold Stream Facility would be automatically accelerated and immediately due and payable to Waterton.

At any time, without penalty, the Gold Stream Facility provides Manhattan the option to prepay in whole or in part, on five business days prior notice. Prepayments may be made in physical gold ounces or cash. The amount of any prepayment shall be calculated using the spot price of gold on the business day immediately preceding the prepayment.

As of January 31, 2012, the Company had met its capital commitment obligations to keep all of its property agreements in good standing.

Year Ended January 31, 2011 Compared to the Year Ended January 31, 2010

As at January 31, 2011, the Company had $102,038 in cash and cash equivalents (January 31, 2010: $745,779). The Company had a working capital deficiency of $720,373 as of January 31, 2011, compared to working capital of $529,435 as of January 31, 2010. Working capital has decreased for the current period presented as a result of funds spent on gold and coal projects and maintaining the Company's reporting issuer status and operating activities offset by the sale of the marketable securities for the amount of $275,695.

Current liabilities as at January 31, 2011 were of $935,688 compared to $301,381 as at January 31, 2010 due to the Company's inability to meet its current obligations. The current liabilities are primarily due to accruals for exploration expenditures, wages and general expenditures. The Company's cash and cash equivalents and short-term investments as at January 31, 2011, were not sufficient to pay these liabilities. As at January 31, 2011, the Company was attempting to secure a debt and/or equity financing in order to rectify the working capital deficiency that existed. On June 29, 2011, the Company announced that it has entered into a secured bridge loan agreement with Waterton Global Value, L.P. ("Waterton") pursuant to which Waterton has agreed to make an $8,000,000 bridge loan (the "Credit Facility") available to the Company.

C. Research and development, patents and licenses, etc.

See “Item 4.D – Property, plants and equipment.” and “Item 5.A. – Operating results”.

D. Trend information.

The economic crisis that started in the financial sector has continued to worsen and the Company is in the midst of a global recession. The mineral exploration business is undergoing massive scaling down. Capital investment in mineral exploration has dramatically declined with major new projects being cancelled and delayed, and producing properties are subject to shut downs and reduced production. Credit markets have become increasingly inaccessible and many exploration companies that, just one year ago, had large cash resources to invest in exploration activities are now struggling to finance day-to-day operations.

There are uncertainties regarding the price of commodities and the availability of equity and debt financing for the purpose of mineral exploration and development. The financial markets have made it difficult to raise new capital.

Current financial markets are likely to be volatile in Canada and the United States for the remainder of 2012 and potentially into 2013, reflecting ongoing concerns about the stability of the global economy and weakening global growth prospects. As well, concern about global growth has led to sustained drops in the commodity markets. Unprecedented uncertainty in the credit markets has also led to increased difficulties in borrowing or raising funds. As a result, the Company may have difficulties raising equity or debt financing for the purposes of project development. (See “Item 3.D. – Risk Factors” and “Item 5.A. – Operating results”.)

E. Off-balance sheet arrangements.

None.

F. Tabular disclosures of contractual obligations.

The Company's liabilities and obligations for the following five years as of January 31, 2012, are summarized below:

Less Than

More than 5

Contractual Obligations

Total

1 Year

1-3 Years

3-5 Years

Years

Long-Term Debt Obligations

7,960,465

3,980,232

3,980,233

Nil

Goldwedge Project

In order to maintain property on the Goldwedge project, the Company has to pay claim renewal fees to the BLM of approximately $11,743.

Piñon Project

In order to maintain its lease agreements on the Piñon Project, the Company must make annual payments, exploration expenses and BLM claim maintenance fees.

Fondaway Project

In order to maintain the lease agreements on the Fondaway Project, the Company must make option payments of $35,000 and must pay claim renewal fees to BLM of approximately $22,278.

Management believes that the Company's cash and cash equivalents and short term investments are not sufficient to meet its expenditures for the next five years as the Company had a working capital deficiency balance of $5,184,281 as of January 31, 2012. As a result, the Company will be required to raise some capital during this period by way of an equity or debt financing, the exercise of options or the sale of an asset to meet its obligations. There is no guarantee that the five year time horizon that management has presented will be realized. See “Item 3.D. – Risk Factors”.

G. Safe harbor.

Not applicable.

Item 6. Directors, Senior Management and Employees

A. Directors and senior management.

Name and Residence	Position with the Company	Date First Elected a Director / Held Office
James B. Clancy ^(1)(2)(3) Toronto, Ontario, Canada	Director	March 2009
John Fitzgerald ⁽¹⁾ ⁽²⁾⁽³⁾ O akville, Ontario, Canada	Director	January 2012
Riyaz Lalani ⁽²⁾ ⁽³⁾ Toronto, Ontario, Canada	Director	January 2012
Ken M. Strobbe ⁽³⁾ Arizona, U.S.A.	Director	January 2012
Paul G. Smith ⁽¹⁾ ⁽²⁾⁽³⁾ Toronto, Ontario, Canada	Chairman and Director	March 2009
Philip Gross London, U.K.	Interim President and Chief Executive Officer	October 2011
Ike Makrimichalos Newmarket, Ontario, Canada	Chief Financial Officer	August 2011
George A. Duguay Toronto, Ontario, Canada	Secretary	March 2009

Notes :

	(1)	Member of the Audit Committee.
	(2)	Member of the Corporate Governance and Compensation Committee.
	(3)	Member of the Health, Safety, Environmental and Technical Committee.

The following is a brief biography of each of the Company’s directors and executive officers:

James B. Clancy

Mr. Clancy has been Senior Advisor of SableRidge Capital Partners Inc. since March 2011 and President of Clancy Consultants Inc. since October 2009. Prior thereto, Mr. Clancy was Director-Finance for Techint E. & C. Canada, a federally incorporated private company , from March 2006 to October 2009. Mr. Clancy has been involved as General Manager and/or Chief Financial Officer in the pipeline construction industry in Canada and overseas for over thirty years. He has an Honours Commerce degree from the University of Toronto and is a member of the Canadian Institute of Chartered Accountants. Mr. Clancy presently sits on the board, and is Chairman, of the Audit Committee of Galantas Gold Corporation (a federal company listed on the TSX-V).

John Fitzgerald

Mr. Fitzgerald has over 20-years experience in the mining industry. Mr. Fitzgerald is Director of Mining at AuRico Gold Inc. (formerly, Northgate Minerals Corporation), an Ontario company. Prior thereto, Mr. Fitzgerald was: Associate Director at Scotia Capital Inc. company from 2010 to 2011; an independent consultant in Toronto and Brisbane, Australia from 2008 to 2010; Principal Adviser – Underground Mining with Rio Tinto Ltd., an Australian company in Brisbane from 2007 to 2008; and Manager, Engineering, at Barrick Gold Corporation, an Ontario company from 2004 to 2007; as well as engineer with various other mining companies from 1990. Mr. Fitzgerald holds a B. Eng. degree from Nottingham University and an MBA from Durham University, England.

Riyaz Lalani

Mr. Lalani is the Chief Operating Officer of Kingsdale Shareholder Services Inc., Canada’s largest and most active proxy solicitation and shareholder services advisory firm. He has been involved in, and led the client services teams tasked with, completing dozens of high profile client engagements, including hostile bids, complex M&A transactions and proxy contests. Mr. Lalani is frequently called upon to brief public issuers and their directors on shareholder engagement and corporate governance practices. Prior to joining Kingsdale, Mr. Lalani was employed by Acqua Capital Management LP (international asset management company) in New York and Toronto from 2003 to February 2010. Mr. Lalani worked in a variety of analytical, business development and operational roles at the firm, eventually heading up the overall research and operational efforts. Teamed with the Chief Investment Officer, he helped originate, negotiate and structure billions of dollars of direct and secondary market equity investments into small, mid and large cap public companies in North America, Asia, Europe and the Middle East. Mr. Lalani’s prior experience includes roles with two Canadian bank-owned investment dealers. He is also a director of Difference Capital Funding Inc. (formerly TriNorth Capital Inc.) (a federal company listed on the TSX-V) and was previously a director of URSA Major Minerals Incorporated (an Ontario company listed on the TSX).

Ken M. Strobbe

Mr. Strobbe has been a consultant since August 2011. He was employed at Barrick Gold Corporation, an Ontario company, as a Manager, Underground Projects, Capital Projects Group (January 2009 to August 2011) and Senior Engineer Operations, Corporate Group (May 2006 to January 2008) . From 2004 until 2006, Mr. Strobbe was a Production Planning Team Member, Integrated Business Systems at Placer Dome Inc. (now Barrick Gold Corporation). From 2001 until 2004, he was an Underground Supervisor and Production Planner at Placer Dome Canada’s Musselwhite Mine in Northern Ontario. Prior thereto, he held the position of Mine Engineer at the Lupin Mine (Echo Bay Mines Ltd., a mining company) and was a Senior Mine Engineer, Planning Engineer and Ventilation Engineer at the Giant Mine (Royal Oak Mines Ltd., a mining company). Mr. Strobbe has extensive experience in the areas of mine design, underground development and production planning and execution, and evaluating underground mining projects, including participation in scoping, pre-feasibility and feasibility studies. Mr. Strobbe holds a Bachelor of Applied Science (BASc.) in Mining Engineering from the University of British Columbia.

Paul G. Smith

Mr. Smith has been President, Chief Executive Officer since January 2009, Executive Vice President and Chief Financial Officer from December 2004 to December 2008 and a director of Equity Financial Holdings Inc. (listed on the TSX as (“Equity”), a financial services firm, whose principal subsidiary is Equity Financial Trust Company. Prior to Equity, Mr. Smith held management positions at BCE Inc., a federal company; served as Executive Assistant to the Prime Minister of Canada; and was an aide to the Minister of External Affairs and to the Minister of International Cooperation. He holds an MBA from INSEAD, an MPA from Carleton University, and undergraduate degrees (Accounting, Political Science) from the University of Ottawa. He is a graduate of the Directors Education Program of the Institute of Corporate Directors and holds the institute’s ICD.D designation. Mr. Smith is Chairman of the Board of VIA Rail Canada Inc., a position he has held since December, 2010, after serving as a director since 2006.

He is also a member of the board of directors of StorageVault Canada Inc., (a Canadian public company listed on the TSX-V).

Philip Gross

Mr. Gross possesses many years of experience in the commodities industry and has worked extensively in both the physical and financial aspects of the industry. Mr. Gross has previously worked for one of the largest global commodities supply chain management firms, where he was the Head of Non-Ferrous Metals. Mr. Gross managed the firm’s non-ferrous metals team from incubation to successful maturity and, ultimately, oversaw the firm’s relevant commercial operations in India, South Korea, Taiwan, Singapore, Venezuela, Brazil and Australia. Over the course of his career, Mr. Gross has assisted firms of various sizes in developing and sustaining their commodities portfolio management businesses.

Ike Makrimichalos

Mr. Makrimichalos is a Chartered Accountant with a BA from the University of Toronto, with over 27 years of experience in servicing public and private companies for Deloitte & Touche LLP in Toronto. In addition, Mr. Makrimichalos also provides services as a CFO and consultant for several private companies and was recently a Controller for Mukuba Resources Limited, a junior mining exploration company.

George A. Duguay

Since January 1989, Mr. Duguay has been the President of G. Duguay Services Inc., which was a partner of Duguay and Ringler Corporate Services, a provider of corporate and financial administrative services to public companies, until February 2006. G. Duguay Services Inc. continues to act as a consultant in this area. Mr. Duguay is Corporate Secretary of three public companies in the resource sector, and a Director and Chairman of the Audit Committee of Intrinsyc Software International, Inc., a company listed on the Toronto Stock Exchange that provides proprietary software, hardware, and services for the growing market of mobile handheld products. Mr. Duguay also serves or has served as a board member for several other public and private companies. Mr. Duguay was a co-founder of Equity Financial Trust Co., a provider of transfer agent and corporate trust services to companies. Mr. Duguay is a Certified General Accountant (C.G.A.) and a Fellow of the Institute of Chartered Secretaries.

B. Compensation.

Compensation Discussion and Analysis

Background

The Company is an exploration stage company and as at January 31, 2012, was engaged in the acquisition, exploration and development of coal and precious metal properties in the United States. The Company has no commercial operations and does not earn any operating revenues from its mineral properties.

Overview

The Board of Directors (the “Board”) is responsible for setting the overall compensation strategy of the Company and for evaluating and approving the compensation of directors and executive officers. The Company has delegated these responsibilities to the Corporate Governance and Compensation Committee (the “CGC Committee”). The CGC Committee annually reviews, and recommends to the Board, the base salary, incentive compensation and long-term compensation for the Company’s executive officers to determine if the compensation package for executive officers continues to be appropriate or if any modifications are required. Factors considered by the CGC Committee in establishing suitable compensation packages for its executive officers include, the early stage of development of the Company, the small number of executive officers, financial resources available to the Company, competitive factors and the time committed by the executive officer to the affairs of the Company. The CGC Committee has determined that the current compensation is appropriate for the risk and responsibilities assumed by the officers.

Corporate Governance and Compensation Committee

The CGC Committee currently consists of Messrs. Lalani, Smith, Fitzgerald and Clancy, all of whom are independent directors and have direct and indirect expertise, experience and education relevant to their role as members of the Committee.

Objectives of Compensation Program

It is the objective of the Company’s compensation program to attract and retain highly qualified executives and to link incentive compensation to performance and shareholder value. It is the goal of the CGC Committee to endeavor to ensure that the compensation of executive officers is sufficiently competitive to achieve the objectives of the executive compensation program. The CGC Committee gives consideration to the Company’s contractual obligations, performance, quantitative financial objectives, including relative shareholder return, as well as to the qualitative aspects of the individual’s performance and achievements.

Role of Executive Officers in Compensation Decisions

The CGC Committee will receive and review any recommendations of the President and Chief Executive Officer relating to the general compensation structure and policies and programs for the Company and the salary and benefit levels for executive officers.

Elements of the Compensation Program

The Company’s compensation program comprises (i) base salary and (ii) long-term incentives, including the 2011 Amended and Restated Stock Option Plan (the “Stock Option Plan”). Each component of the executive compensation program is addressed below.

The CGC Committee recognizes that certain elements of compensation could promote unintended inappropriate risk-taking behaviors, but the Company seeks to ensure that the Company’s executive compensation package is comprised of a mix of cash and equity compensation, balancing short term incentives (e.g., cash bonuses) and long-term incentives (e.g., options). Base salaries and personal benefits are sufficiently competitive and not subject to performance risk. To receive the benefit of long-term incentives (options), the executive officers must be employed by the Company (subject to limited exceptions), thereby better aligning executive performance with the interests of the Company and its shareholders. The CGC Committee believes that executive compensation risk management is reinforced by ongoing Board oversight of, among other things, the Company’s financial results, regulatory disclosure, strategic plans, fraud and error reporting, the Audit Committee’s regular meetings with the external auditors (the “auditors”) (including without the presence of management the Company’s internal control, management information systems and financial control systems. As a result, the CGC Committee does not believe that its compensation practices and policies are reasonably likely to have a material adverse effect on the Company.

Base Salaries and Benefits

Salaries for executive officers are reviewed annually based on corporate and personal performance and on individual levels of responsibility. Salaries of the executive officers are not determined based on a specific formula, nor is a formal benchmarking process used. The Board, on the recommendation of the CGC Committee considers, and, if deemed appropriate, approves salaries recommended by the President and Chief Executive Officer for the other executive officers of the Company. As stated above, base salaries are established to be competitive in order to attract and retain highly qualified executives.

The Company does not provide any pension or retirement benefits to its executive officers.

Long-Term Incentives and Stock Option Pan

The CGC Committee administers the Stock Option Plan that is designed to provide a long-term incentive that is linked to shareholder value. The Board, on the recommendation of the CGC Committee, determines the number of options to be granted to each executive officer based on the level of responsibility and experience required for the position. The CGC Committee regularly reviews and where appropriate adjusts the number of options granted to individuals and determines the vesting provisions of such options. The Board, on the recommendation of the CGC Committee, sets the number of options, as appropriate, designed to attract and retain qualified and talented personnel. The Board also takes account of the Company’s contractual obligations and the award history for all participants in the Stock Option Plan.

Option-based Awards

A description of the process that the Company uses to grant option-based awards to executive officers, including the role of the Board and executive officers, is included under the heading “Compensation Discussion and Analysis – Elements of Compensation Program – Long-Term Incentives and Stock Option Plan” above.

The Company did not grant any option-based awards to executive officers or directors during the year ended January 31, 2012.

Hedging

The Company has not initiated any policies related to the purchase of financial instruments (including prepaid variable forward contracts, equity swaps, collars, or units of exchange funds) by directors or Named Executive Officers (as defined below), that are designed to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by any director or Named Executive Officer.

Compensation of Executive Officers

Summary Compensation Table for Executive Officers

The following table sets forth all compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, for each of the Company’s three most recently completed financial years to the Chief Executive Officer (“ CEO ”) and the Chief Financial Officer (“ CFO ”) and each of the Company’s three most highly compensated executive officers, other than the CEO and CFO, who were serving as executive officers at the end of the most recently completed financial year and whose total salary and bonus exceeds $150,000 (collectively the “ Named Executive Officers ”). Total compensation encompasses, as applicable, regular salary, dollar amount of option awards, non-equity incentive plan compensation which would include discretionary and non-discretionary bonuses, pension value with compensatory amounts for both defined and non-defined contribution retirement plans, and all other compensation which could include perquisites, tax gross-ups, premiums for certain insurance policies, payments resulting from termination, resignation, retirement or a change in control and all other amounts not reported in another column.

Name and Principal Position	Fiscal Year Ended January 31	Salary ($)	Share- based awards ($)	Option-based awards ($)	Non-equity incentive plan compensation ($)		Pension Value ($)	All other compensation ($)	Total compensation ($)
Name and Principal Position	Fiscal Year Ended January 31	Salary ($)	Share- based awards ($)	Option-based awards ($)	Annual incentive plans ($)	Long-term incentive plans ($)	Pension Value ($)	All other compensation ($)	Total compensation ($)
Philip Gross , Interim President & Chief Executive Officer ⁽¹⁾	2012	27,620	Nil	142,000	Nil	Nil	N/A	Nil	169,620
Ike Makrimichalos Chief Financial Officer ⁽²⁾	2012	56,616	Nil	28,400	Nil	Nil	N/A	Nil	85,016
Roland M. Larsen , President & Chief Executive Officer ⁽³⁾	2012	227,876	Nil	Nil	Nil	Nil	N/A	7,853 ⁴	235,729
	2011	249,995	Nil	Nil	Nil	Nil	N/A	10,520 ⁽⁴⁾	260,515
	2010	249,986	Nil	2,260,424 ⁽⁵⁾	Nil	Nil	N/A	10,520 ⁽⁴⁾	2,520,930
J. Allan Ringler , Chief Financial Officer ⁽⁶⁾	2012	14,129	Nil	Nil	Nil	Nil	N/A	Nil	14,129
	2011	40,921	Nil	Nil	Nil	Nil	N/A	Nil	40,921
	2010	34,146	Nil	190,400 ⁽⁵⁾	Nil	Nil	N/A	Nil	224,546

Notes :

(1)	Mr. Gross became Interim President and Chief Executive Officer on December 6, 2011.
(2)	Mr. Makrimichalos became Chief Financial Officer in August 2011.
(3)	Mr. Larsen ceased to be President and Chief Executive Officer on December 6, 2011.
(4)	This amount represents $2,468 (2011 - $3,346; 2010 - $3,346) for medical insurance paid by the Company and $5,385 (2011 - $7,174; 2010 - $7,174) for premiums pertaining to a $1,000,000 Term Life Insurance policy on the life of Mr. Larsen.
(5)	Mr. Larsen was granted options to acquire 4,155,191 Common Shares on June 26, 2009, exercisable at a price of $0.10 per Common Share and expiring on June 26, 2014. Mr. Ringler was granted options to acquire 350,000 Commons Shares on June 26, 2009, exercisable at a price of $0.10 per Common Share. Mr. Ringler’s options expired on September 17, 2011. The value of the option- based award is calculated using the grant date fair value ($0.544) multiplied by the number of options granted. The grant date fair value of $0.544 for each option has been calculated using the Black-Scholes Option Pricing Model using the following assumptions: risk-free interest rate of 2.53%; expected volatility of 187.73%; expected dividend yield of Nil; and expected option life of five years. Mr. Larsen’s options expired on April 11, 2012
(6)	Mr. Ringler was Chief Financial Officer from March 5, 2009 to June 17, 2011.
(7)	Mr. Gross was granted options to acquire 500,000 Common Shares on January 20, 2012, exercisable at a price of $0.30 per Common Share and expiring on January 20, 2017. Mr. Makrimichalos was granted options to acquire 100,000 Commons Shares on January 20, 2012, exercisable at a price of $0.30 per Common Share and expiring on January 20, 2017. The value of the option-based award is calculated using the grant date fair value ($0.284) multiplied by the number of options granted. The grant date fair value of $0.284 for each option has been calculated using the Black-Scholes Option Pricing Model using the following assumptions: risk-free interest rate of 1.29%; expected volatility of 206.2%; expected dividend yield of Nil; and expected option life of five years.

Incentive Plan Awards for Named Executive Officers

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth information concerning all option-based and share-based awards for each Named Executive Officer outstanding at the end of the financial year ended January 31, 2012, including awards granted before the financial year ended January 31, 2012.

Name	Option-based Awards ⁽¹⁾				Share-based Awards
Name	Number of securities underlying unexercised options (#)	Option exercise price (U.S. $)	Option expiration date	Value of unexercised in-the-money options ($) ⁽¹⁾	Number of Shares or units of Shares that have not vested (#)	Market or payout value of share- based awards that have not vested ($)
Philip Gross	500,000	0.30	January 20, 2017	Nil	Nil	Nil
Ike Makrimichalos	100,000	0.30	January 20, 2017	Nil	Nil	Nil
Roland Larsen	4,155,191 ⁽²⁾	0.10	June 26, 2014	Nil	Nil	Nil

Notes:

	(1)	Based on the closing price of the common shares on the OTC Bulletin Board of U.S. $0.26 on January 31, 2012 less the exercise price in respect of such options.
	(2)	Mr. Larsen’s options expired on April 11, 2012.

See “Compensation Discussion and Analysis – Elements of the Compensation Program” and “Compensation Discussion and Analysis Option-based Awards.”

Incentive Plan Awards – Value Vested or Earned During the Year

There was no value of option-based awards granted to Named Executive Officers which vested during the year ended January 31, 2012. The Company has not granted any share based awards nor does it have a non-equity compensation plan.

Pension Plan Benefits

The Company does not have any pension plans that provide for payments of benefits at, following or in connection with retirement, or provide for retirement or deferred compensation plans for its Named Executive Officers or directors.

Compensation of Directors

Summary Compensation Table for Directors

The following table sets forth all amounts of compensation provided to the non-executive directors of the Company for the financial year ended January 31, 2012.

Name	Fees earned ($)	Share-based awards ($)	Option-based awards ($)	Non-equity incentive plan compensation ($)	Pension value ($)	All other compensation ($)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
James B. Clancy ⁽³⁾	Cdn$62,575	Nil	Cdn$240,145	Nil	Nil	Nil	Cdn$302,720
John Fitzgerald ⁽¹⁾⁽³⁾	Cdn$575	Nil	Cdn$211,892	Nil	Nil	Nil	Cdn$212,467
Riyaz Lalani ⁽¹⁾⁽³⁾	Cdn$575	Nil	Cdn$211,892	Nil	Nil	Nil	Cdn$212,467

Name	Fees earned ($)	Share-based awards ($)	Option-based awards ($)	Non-equity incentive plan compensation ($)	Pension value ($)	All other compensation ($)	Total ($)
(a)	(b)	(c)	(d)	(e)	(f)	(g)	(h)
Ken M. Strobbe ⁽¹⁾⁽³⁾	Cdn$575	Nil	Cdn$211,892	Nil	Nil	Nil	Cdn$212,467
Paul G. Smith ⁽³⁾	Cdn$57,575	Nil	Cdn$240,145	Nil	Nil	Nil	Cdn$297,720
Kimberly L. Koerner ⁽¹⁾	$8,381	Nil	NIL	Nil	Nil	Nil	$8,831

	(1)	Messrs. Fitzgerald, Lalani and Strobbe became directors on January 11, 2012.
	(2)	Ms. Koerner ceased to be a director on January 11, 2012.
	(3)	Fees received in Canadian dollars. Amounts shown based on the January 31, 2012 Bank of Canada noon rate of CDN$1 = USD$0.9948.

Board Fees

During the financial year ended January 31, 2012, each of the non-executive directors was entitled to annual compensation in the amount of Cdn$7,000 and the payments in connection with attending meetings of the Board and meetings of the Board’s committees. The Chairman of the Audit Committee was entitled to additional annual compensation of Cdn$5,000. Effective January 11, 2012, each of the non-executive directors were entitled to annual compensation on the amount of Cdn$10,000 in connection with attending meetings of the Board and meeting of the Board’s committees.

The directors are also entitled to receive stock options under the Stock Option Plan.

Incentive Plan Awards for Directors

Outstanding Share-Based Awards and Option-Based Awards

The following table sets forth information concerning all option-based and share-based awards for each non-executive director outstanding at January 31, 2012, including awards granted before the financial year ended January 31, 2012.

Name	Option grant date	Option-based Awards				Share-based Awards
Name	Option grant date	Number of securities underlying unexercised options (#) ⁽¹⁾	Option exercise price (U.S.$)	Option expiration date	Value of unexercised in-the-money options (U.S.$) ⁽¹⁾	Number of shares or units of shares that have not vested (#)	Market or payout value of share- based awards that have not vested ($)
(a)		(b)	(c)	(d)	(e)	(f)	(g)
James Clancy	June 26, 2009	200,000	0.10	June 26, 2014	32,000	Nil	Nil
	January 20, 2012	850,000	0.30	January 20, 2017	Nil
John Fitzgerald	January 20, 2012	750,000	0.30	January 20, 2017	Nil	Nil	Nil
Riyaz Lalani	January 20, 2012	750,000	0.30	January 20, 2017	Nil	Nil	Nil
Ken M. Strobbe	January 20, 2012	750,000	0.30	January 20, 2017	Nil	Nil	Nil
Paul G. Smith	June 26, 2009	200,000	0.10	June 26, 2014	32,000	Nil	Nil
	January 20, 2012	850,000	0.30	January 20, 2017	Nil
Kimberly L. Koerner ⁽²⁾	June 26, 2009	2,405,000	0.10	June 26, 2014	Nil	Nil	Nil

Notes

	(1)	Based on the closing price of the Common Shares on the OTC Bulletin Board of $0.26 on January 31, 2012 less the exercise price in respect of such options.
	(2)	Ms. Koerner’s options expired on April 11, 2012.

See “Compensation Discussion and Analysis – Elements of the Compensation Program” and “Compensation Discussion and Analysis – Option-based Awards”, above.

Incentive Plan Awards – Value Vested or Earned During the Year

There was no value of option-based awards granted to directors which vested during the year ended January 31, 2012. The Company has not granted any share based awards nor does it have a non-equity compensation plan.

C. Board practices.

Information regarding the length of service of the members of the Board is shown in “Item 6.A. Directors and senior management.” Each director elected will hold office until the next annual meeting or until his successor is appointed, unless his office is earlier vacated in accordance with the CBCA and the bylaws of the Company.

There are no contracts providing for benefits upon termination to any director.

Responsibilities of the Board

The Board is responsible for the stewardship of the business and affairs of the Company and has adopted a set of principles and practices setting out its stewardship responsibilities. Under its mandate, the Board seeks to discharge such responsibility by reviewing, discussing and approving the Company's strategic planning and organizational structure, and supervising management to ensure that the foregoing enhance and preserve the underlying value of the Company for the benefit of all shareholders. As part of the strategic planning process, the Board contributes to the development of a strategic direction for the Company by reviewing, on an annual basis, the Company's principal opportunities, the processes that are in place to identify such opportunities and the full range of business risks facing the Company, including strategic, financial, operational, leadership, partnership and reputation risks. On an ongoing basis, the Board also reviews with management how the strategic environment is changing, what key business risks and opportunities are appearing and how they are managed, including the implementation of appropriate systems to manage these risks and opportunities. The performance of management, including the Company's Chief Executive Officer, is also supervised to ensure that the affairs of the Company are conducted in an ethical manner. The Board, directly and through its committees, ensures that the Company puts in place, and reviews at least on an annual basis, comprehensive communication policies to address how the Company (i) interacts with analysts, investors, other key stakeholders and the public, and (ii) complies with its continuous and timely disclosure obligations and avoids selective disclosure. Finally, the Board monitors the integrity of corporate internal control procedures and management information systems to manage such risks and ensure that the value of the underlying asset base is not eroded.

The Board from time to time delegates to senior executives the authority to enter into certain types of transactions, including financial transactions, subject to specified limits. According to the Company's policy, investments and other similar expenditures above the specified limits, including major capital projects as well as material transactions outside the ordinary course of business, whether on or off balance sheet, are reviewed by, and subject to, the prior approval of the Board.

Following are the principles of the Company's corporate governance arrangements:

Subject to the relatively small size of the Company and to business needs, the size of the Board must be kept to a sufficiently low number to facilitate open and effective dialogue and full participation and contribution of each director.
The Board must function as a cohesive team, with shared responsibilities and accountabilities that are clearly defined, understood and respected.
The Board must have the ability to exercise all its supervisory responsibilities independent of any influence by management.
The Board must have access to all the information needed to carry out its full responsibilities. Information must be available in a timely manner and in a format conducive to effective decision making.
The Board must develop, implement, and measure effective corporate governance practices, processes and procedures.

Committees of the Board

There are currently three committees of the Board being the Audit Committee, the CGC Committee and the Health, Safety, Environmental and Technical Committee (the “Technical Committee”). In addition to regularly scheduled meetings of the Board, its members are in continuous contact with one another and with the members of senior management.

Audit Committee

The Audit Committee shall be composed of three or more directors as determined by the Board, the composition of which shall satisfy applicable independence requirements of applicable securities regulatory authorities. Members shall be appointed annually from among the members of the Board. The Chair of the Audit Committee shall be appointed by the Board. All members of the Audit Committee shall be financially literate. An Audit Committee member who is not financially literate may be appointed to the Audit Committee provided that the member becomes financially literate within a reasonable period of time. The following persons have been appointed to the Audit Committee: James B. Clancy (Chair), John Fitzgerald and Paul G. Smith.

The Audit Committee's primary duties and responsibilities are to:

(a) Identify and monitor the management of the principal risks that could impact the financial reporting of the Company;

(b) Oversee and monitor the integrity of the Company's financial reporting process and system of internal controls regarding financial reporting and accounting compliance;

(d) Provide an avenue of communication among the external auditors, management and the Board.

The Audit Committee has the authority to conduct any investigation appropriate to fulfilling its responsibilities, and it has direct access to the external auditors as well as anyone in the organization. The Audit Committee has the ability to retain, at the Company's expense, special legal, accounting, or other consultants or experts it deems necessary in the performance of its duties.

The Audit Committee shall, in addition to any other duties and responsibilities specifically assigned or delegated to it from time to time by the Board:

(a) Be directly responsible for overseeing the work of the external auditors engaged for the purpose of preparing or issuing an auditor’s report or performing other audit, review or attest services for the Company, including the resolution of disagreements between management and the auditors regarding financial reporting;

(b) Meet with the auditors and the senior management of the Company to review, and recommend to the Board for approval, the year-end audited financial statements, related Management’s Discussion and Analysis (“MD&A”) and earnings releases and financial reporting contained in public disclosure documents, including annual reports and annual information forms of the Company prior to any public disclosure thereof;

(e) Review with senior management and, if necessary, the auditors, and recommend to the Board for approval, the interim financial statements, related MD&A and earnings releases of the Company prior to any public disclosure thereof;

(f) Review, and recommend to the Board for approval, all financial statements or results of the Company which have not previously been approved by the Board and which are to be included in a prospectus, press release, material change report, offering document or other public disclosure document of the Company;

(g) Consider and be satisfied that adequate policies and procedures are in place for the review of the Company’s disclosure of financial information extracted or derived from the Company’s financial statements, and periodically assess the adequacy of such procedures;

(h) Review the audit plans and the independence of the auditors;

(i) Review and approve the Company’s hiring policies regarding partners, employees and former partners and employees of the present and former auditors of the Company;

(j) Meet with the auditors independently of management, including to consider any matter which the Audit Committee or auditors believe should be brought to the attention of the Board or the shareholders of the Company;

(k) In consultation with senior management, review annually and recommend for approval by the Board:

(i) the appointment of auditors at the annual general meeting of shareholders of the Company;

(ii) the remuneration of the auditors; and

(iii) the pre-approval of all non-audit services to be provided to the Company by the auditors. In fulfilling such requirement, if the Audit Committee deems it appropriate, the Audit Committee may form and delegate to subcommittees consisting of one or more members, the authority to grant pre-approvals of audit and permitted non-audit services, provided that decisions of such subcommittee to grant pre-approvals shall be presented to the full Audit Committee at its next scheduled meeting. The pre-approval of services pursuant to delegated authority may be given at any time up to one year before commencement of the specified service;

(l) Review with the auditors:

(iv) the scope of the audit;

(v) the significant changes in the Company's accounting principles, practices or policies; and

(vi) new developments in accounting principles, reporting matters or industry practices which may materially affect the financial statements of the Company;

(m) Review with the auditors and senior management the results of the annual audit, and make appropriate recommendations to the Board, having regard to, among other things:

(vii) the financial statements;

(viii) management's discussion and analysis and related financial disclosure contained in continuous disclosure documents;

(ix) significant changes, if any, to the initial audit plan;

(x) accounting and reporting decisions relating to significant current year events and transactions;

(xi) the audit findings report and management letter, if any, outlining the auditors' findings and recommendations, together with management's response, with respect to internal controls and accounting procedures;

(xii) any difficulties encountered in the course of the audit work, any restrictions on the scope of activities or access to requested information, and any significant disagreements with management; and

(xiii) any other matters relating to the conduct of the audit, including the review and opportunity to provide comments in respect of any press releases announcing year-end financial results prior to issue and such other matters which should be communicated to the Audit Committee under generally accepted auditing standards;

(n) Review with the auditors the adequacy of management's internal control procedures and management information systems and inquiring of management and the auditors about significant risks, including fraud risk, and exposures to the Company that may have a material adverse impact on the Company's financial statements, and inquiring of the auditors as to the efforts of management to mitigate such risks and exposures;

(o) Review disclosures made to the Audit Committee by the Chief Executive Officer and Chief Financial Officer of the Company during their certification process related to the Company’s annual and quarterly regulatory filings, including with respect to any significant deficiencies in the design or operation of the Company’s internal control over financial reporting or material weaknesses therein, and any fraud involving management or other employees who have a significant role in the Company’s internal control over financial reporting;

(p) Monitor policies and procedures for reviewing directors' and officers' expenses and perquisites, and inquire about the results of such reviews;

(q) Review and approve written risk management policies and guidelines including the effectiveness of the overall process for identifying the principal risks affecting financial reporting;

(r) Review, and advise the Board of, issues relating to legal, ethical and regulatory responsibilities to monitor management's efforts to seek to ensure compliance, including any legal matters that could have a significant impact on the Company’s financial statements, the Company’s compliance with applicable laws and regulations and inquiries received from regulators of governmental agencies. Discuss with management and the auditors any correspondence with respect to such inquiries and published reports that raise material issues regarding the Company’s financial statements and accounting policies; and

(s) Establish procedures for:

(xiv) the receipt, retention and treatment of complaints received by the issuer regarding accounting, internal accounting controls, or auditing matters; and

(xv) the confidential, anonymous submission by employees of the issuer of concerns regarding questionable accounting or auditing matters.

Corporate Governance and Compensation Committee

The CGC Committee shall be composed of a minimum of three directors, each of whom shall be independent for the purposes of National Instrument 58-101 Disclosure of Corporate Governance Practices . Members shall be appointed annually from among the members of the Board. The Chair of the CGC Committee shall be appointed by the Board. All members of the CGC Committee shall, subject to applicable exemptions therefrom, satisfy the experience requirements, if any, imposed by applicable securities regulatory authorities. The following persons have been appointed to the CGC Committee: Riyaz Lalani (Chair), James B. Clancy, John Fitzgerald and Paul G. Smith.

The overall purpose of the CGC Committee is to assist the Board in maintaining high standards of corporate governance by developing, recommending and monitoring effective guidelines and procedures applicable to the Company and to fulfil its oversight responsibilities in relation to compensation by developing, monitoring and assessing the Company’s approach to the compensation of its directors and senior management. The mandate of the CGC Committee includes reviewing and making recommendations to the Board, on an annual basis, the compensation paid to the Company’s executive officers and the Board and overseeing the administration of the Company’s compensation programs. The CGC Committee also recommends to the Board candidates for chief executive officer, the size and composition of the Board, qualification criteria for the selection of new directors, director nominees and nominees for the Chairman of the Board (and if applicable, the lead director).

Health, Safety, Environmental and Technical Committee

The Technical Committee shall be composed of a minimum of three directors, each of whom shall satisfy independence requirements of National Instrument 58-101 Disclosure of Corporate Governance Practices. Members shall be appointed annually from among the members of the Board. The Chair of the Technical Committee shall be appointed by the Board. All members of the CGC Technical Committee shall satisfy the experience requirements, if any, imposed by applicable securities regulatory authorities. The following persons have been appointed to the Technical Committee: John Fitzgerald (Chair), James B. Clancy, Riyaz Lalani, Ken Strobbe and Paul G. Smith.

The overall purpose of the Technical Committee is to assist the Board in its oversight responsibilities relating the Company’s establishment of health, safety and environmental policies for its mining operations and to review their appropriateness on an ongoing basis to reflect the Company’s commitment to the health and safety of workers at its sites; and the Company’s commitment to environmental stewardship, public responsibility, social progress and economic growth. The Technical Committee also is charged with the responsibility for reviewing the technical aspects of the Company’s exploration, development, permitting, construction and mining programs and, in the Technical Committee’s discretion, make recommendations to the Board for consideration.

Conflicts of Interest

Some of the directors and officers of Royal Standard also serve as directors and officers of other companies involved in the resource exploration sector. Consequently, there exists a possibility for any such officer or director to be placed in a position of conflict. Each such director or officer is subject to fiduciary duties and obligations to act honestly and in good faith with a view to the best interests of the Company. Similar duties and obligations will apply to such other companies. Thus, any future transaction between the Company and such other companies will be for bona fide business purposes and approved by a majority of disinterested directors of the Company.

D. Employees.

In addition to the listed officers, at January 31, 2012, the Company had 18 full-time and no part-time employees.

E. Share ownership.

		*Number of Common*	*Percentage of Common*
		*Shares Beneficially*	*Shares Beneficially*
		*Owned as of April 30,*	*Owned as of April 30,*
*Name*	*Office Held*	*2012*	*2012*
James B. Clancy	Director	Nil	0%
John Fitzgerald	Director	Nil	0%
Riyaz Lalani	Director	Nil	0%
Ken M. Strobbe	Director	Nil	0%
Paul G. Smith	Chairman and Director	300,000	0.36%
Philip Gross	Interim President and Chief Executive Officer	Nil	0%
Ike Makrimichalos	Chief Financial Officer	Nil	0%

See “B. Compensation - Compensation of Executive Officers – Incentive Plan Awards for Named Executive Officers” and “B. Compensation - Compensation of Directors – Incentive Plan Awards for Directors” for details of options granted to the above officers and directors.

Item 7. Major Shareholders and Related Party Transactions

A. Major shareholders.

To the knowledge of the directors and officers of the Company based on reports filed on Schedule 13G/A pursuant to Rule 13d-1(c) of the Securities Exchange Act of 1934 (Amendment No. 5) and on www.sedar.com pursuant to National Instrument 62-103 of the Canadian Securities Administrators, Sprott Asset Management LP exercises direction or control over 11.8% of the outstanding voting securities of the Company of which the Sprott Canadian Equity Fund beneficially owns 6.9% .

B. Related party transactions.

Other than as described below, no director, senior officer, principal holder of securities, or any associate, affiliate, or family member thereof, of the Company has any material interest, direct or indirect, in any transaction since the commencement of the Company's last fiscal year or in any proposed transaction which, in either case, has or will materially affect the Company.

The Company paid salaries and benefits to directors and officers in the amount of $471,380 for the year ended January 31, 2012 and $316,911 for the year ended January 31, 2011. The Company also made $501,799 in stock-based payments. The board of directors does not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services.

Paul G. Smith, a director and Chairman of the Board, is the President and Chief Executive Officer of Equity Financial Holdings Inc., a company providing financial services to the Company.

C. Interests of experts and counsel.

Not applicable.

Item 8. Financial Information

A. Consolidated Statements and Other Financial Information.

Financial Statements

See “Item 17. Financial Statements.”

Legal Proceedings

See note “18. Contingencies” in the notes to the above-referenced financial statements.

Dividends

The Company does not anticipate paying dividends in the foreseeable future

B. Significant Changes.

IFRS – The Canadian Accounting Standards Board ("AcSB") has confirmed that IFRS will replace current Canadian GAAP for publicly accountable enterprises, effective for fiscal years beginning on or after January 1, 2011. Accordingly, the Company began reporting interim and annual consolidated financial statements (with comparatives) in accordance with IFRS beginning with the quarter ended April 30, 2011. The Company's 2012 interim and annual consolidated financial statements included comparative 2011 financial statements, adjusted to comply with IFRS. See the Company's Management Discussion and Analysis for the Year Ended January 31, 2012 included in Item 17 of this annual report on Form 20-F.

IFRS 9 Financial Instruments ("IFRS 9")

IFRS 9 was issued by the IASB in October 2010 and will replace IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2015. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IFRS 10 Consolidated Financial Statements ("IFRS 10")

IFRS 10 provides a single model to be applied in the control analysis for all investees, including entities that currently are SPEs ("Special purpose entities") in the scope of SIC-12. In addition, the consolidation procedures are carried forward substantially unmodified from IAS 27 (2008). IFRS 10 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IFRS 11 Joint Arrangements ("IFRS 11")

IFRS 11 replaces the guidance in IAS 31 Interests in Joint Ventures and SIC 13 - Joint Controlled Entities Non-Monetary Contributions by Venturers. IFRS 11 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”)

IFRS 12 was issued by the IASB in May 2011. IFRS 12 is a new standard which provides disclosure requirements for entities reporting interests in other entities, including joint arrangements, special purpose vehicles, and off balance sheet vehicles. IFRS 12 is effective for annual periods beginning on or after January 1, 2013. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IFRS 13 Fair Value Measurement ("IFRS 13")

IFRS 13, Fair Value Measurement was issued by the IASB on May 12, 2011. The new standard converges IFRS and US GAAP on how to measure fair value and the related fair value disclosures. The new standard creates a single source of guidance for fair value measurements, where fair value is required or permitted under IFRS, by not changing how fair value is used but how it is measured. The focus will be on an exit price. IFRS 13 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IAS 1 Presentation of Financial Statements

IAS 1 was amended by the IASB in June 2011 in order to align the presentation of items in other comprehensive income with US GAAP standards. Items in other comprehensive income will be required to be presented in two categories: items that will be reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement of comprehensive income as one statement or two separate statements of profit and loss and other comprehensive income remains unchanged. The amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012.

IAS 28 Investments in Associates and Joint Ventures

As a consequence of the issue of IFRS 10, IFRS 11 and IFRS 12, IAS 28 has been amended and will further provide the accounting guidance for investments in associates and will set out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. This standard will be applied by the Company when there is joint control, or significant influence over an investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not include control or joint control of those policy decisions. When determined that the Company has an interest in a joint venture, the Company will recognize an investment and will account for it using the equity method in accordance with IAS 28. IAS 28 is required to be applied for annual periods beginning on or after January 1, 2013, with earlier adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

Future Accounting Changes

The IASB is expected to publish new IFRSs on the following topics in early 2012. The Company will assess the impact of these new standards on the Company’s operations as they are published.

Hedge accounting
Leases
Revenue recognition and
Financial instruments

Item 9. The Offer and Listing

A. Offer and listing details.

The issued and outstanding share capital of Royal Standard consists solely of its Common Shares. The Common Shares of Royal Standard are without nominal or par value. Subject to the prior rights of holders of Preferred Shares (as hereinafter defined), if any, each Common Share ranks equally with all other Common Shares with respect to dissolution, liquidation or winding-up of Royal Standard and payment of dividends. The holders of Common Shares are entitled to one vote for each share held of record on all matters to be voted on by such holders and are entitled to receive pro rata such dividends as may be declared by the Board of Royal Standard out of funds legally available therefor and to receive pro rata the remaining property of Royal Standard on dissolution. The holders of Common Shares have no preemptive or conversion rights. The rights attaching to the Common Shares can only be modified by the affirmative vote of at least two-thirds of the votes cast at a meeting of shareholders called for that purpose.

The common shares of the Company are quoted on the OTC Bulletin Board under the symbol “RYSMF.” The Company’s common shares were previously listed and traded on the TSX Venture Exchange (the “TSXV”) and were voluntarily delisted from the TSXV effective May 11, 2009.

The following tables set forth the reported high and low sales prices on the TSXV and the OTC Bulletin Board, respectively, for the periods specified below.

TSXV (Cdn$)

	Period	High (Cdn$)	Low (Cdn$)
	Fiscal year ended January 31, 2008	0.90	0.34

Fiscal year ended January 31, 2009

0.45

0.04

OTC Bulletin Board (US$)

Period	High	Low

Fiscal year ended January 31, 2008	0.80	0.35
Fiscal year ended January 31, 2009	0.46	0.04
Fiscal year ended January 31, 2010	0.15	0.03
Fiscal year ended January 31, 2011	0.12	0.06
Fiscal year ended January 31, 2012	0.29	0.06

Period	High	Low

Quarter ended April 30, 2010	0.12	0.06
Quarter ended July 31, 2010	0.11	0.07
Quarter ended October 31, 2010	0.09	0.06
Quarter ended January 31, 2011	0.09	0.06
Quarter ended April 30, 2011	0.12	0.07
Quarter ended July 31, 2011	0.14	0.06
Quarter ended October 31, 2011	0.18	0.10
Quarter ended January 31, 2012	0.29	0.14

Period	High	Low

November 2011	0.17	0.14
December 2011	0.23	0.18
January 2012	0.29	0.21
February 2012	0.28	0.24
March 2012	0.26	0.22
April 2012	0.25	0.15

B. Plan of distribution.

Not applicable.

C. Markets.

The Common Shares currently trade on the OTC Bulletin Board under the symbol "RYSMF".

D. Selling shareholders.

Not applicable.

E. Dilution.

Not applicable

F. Expenses of the issue.

Not applicable.

Item 10. Additional Information

A. Share capital.

Not applicable.

B. Memorandum and articles of incorporation.

The articles of incorporation, amendments thereto and articles of continuance, as well as the location of the registered office of the Company, are described under Item 4.A.”History and Development of the Company”, above. The Company is continued under the CBCA under Corporation No. 681198-1. The articles of continuance of the Company do not place any restrictions on the Company’s objects and purposes.

On December 12, 2011 the Board approved the repeal of former general By-Law No. 1 and adopted ByLaw No. 2, being a new by-law relating generally to the conduct of the business and affairs of the Company. On January 11, 2012, the shareholders of the Company ratified the repeal of By-Law No. 1 and confirmed By-Law No. 2 as the new general by-law.

Meetings of Shareholders

Subject to the CBCA, meetings of shareholders are held at such time and at such place, within or outside Canada, as the Board, the chair of the Board, the chief executive officer or the president may from time to time determine. Annual shareholders’ meetings must be held yearly, not later than fifteen months after the preceding general meeting but no later than six months after the end of its preceding financial year, to consider the financial statements and auditor’s report thereon, elect directors, appoint auditors and consider such other business that may properly brought before the meeting.

Pursuant to the CBCA the holders of not less than five percent of the issued and outstanding shares that carry the rights to vote (i.e. Common Shares) may requisition the Board to call a meeting of shareholders for the purposes stated in the requisition by sending the requisition to each director and to the Company’s registered office. Upon the requisition of shareholders, the Board must proceed to convene the meeting or meetings to be held in the manner set forth in the Company’s by-laws and the CBCA, as applicable. The requisition shall state the business to be transacted at the meeting.

Subject to the CBCA and applicable securities law, notice of the time and place of each meeting of shareholders, along with a management information circular and form of proxy, shall be sent not less than 21 days nor more than 60 days before the meeting to each shareholder entitled to vote at the meeting, to each director and to the auditors. These materials are filed with the Canadian securities regulatory authorities and the SEC. If a meeting of shareholders is adjourned for less than 30 days it is not necessary to give notice of the adjourned meeting other than by announcement at the earliest meeting that is adjourned.

A quorum is present at a meeting of shareholders if two persons are present in person, each being a shareholder entitled to vote thereat or a duly appointed proxyholder for an absent shareholder so entitled, and together holding or representing by proxy not less than five percent of the outstanding shares of the Company entitled to vote at the meeting. The only persons entitled to be present at a meeting of shareholders are those entitled to vote thereat and others who, although not entitled to vote, are entitled or required under any provisions of the CBCA, other applicable law or the articles to be present at the meeting. Any other person maybe admitted only on the invitation of the chair of the meeting or with the consent of the meeting.

The CBCA also prescribes the method under which proposals may be made by shareholders entitled to vote. The shareholder must submit to the Company, within a prescribed period, a notice of any matter that the person proposes to raise at the meeting. The Company is required to set out the proposal in the management proxy circular and the proposing shareholder may request to include a supporting statement. If the Company does not include the proposal in the management proxy circular, it must send a notice of refusal to the proposing shareholder including the reasons why the proposal will not be included. Either the shareholder and/or the Company may apply to the courts claiming grievance.

Directors

The Board shall manage, or supervise the management of, the business and affairs of the Company. Each of the directors and officers shall act honestly and in good faith with a view to the best interests of the Company and exercise care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. Directors stand for election at the annual general meeting of shareholders, and there are no staggered terms. At least 25 percent of the Board must be resident Canadians. However, if there are less than four directors, at least one director must be a resident Canadian.. A director is not required to hold any shares of the Company to qualify as a director. Neither the articles nor the by-laws provide for retirement or non-retirement of directors under an age limit.

Subject to the Company’s by-laws and articles, the Board may fix the remuneration of the members of the Board. To the extent permitted by law, no director or officer for the time being of the Company shall be liable for: (i) the acts, receipts, neglects or defaults of any other director or officer or employee; (ii) joining in any receipt or other act for conformity; (iii) any loss, damage or expense happening to the Company through the insufficiency or deficiency of title to any property acquired by the Company or for or on behalf of the Company; (iv) the insufficiency or deficiency of any security in or upon which any of the moneys of or belonging to the Company shall be placed out or invested; (v) any loss or damage arising from the bankruptcy, insolvency or tortious act of any person with whom or which any moneys, securities or other assets belonging to the Company shall be lodged or deposited; (vi) any loss, conversion, misapplication or misappropriation of or any damage resulting from any dealings with any moneys, securities or other assets belonging to the Company or for any other loss, damage or misfortune whatever which may happen in the execution of the duties of his respective office or trust or in relation thereto; unless the same shall happen by or through his failure to act honestly and in good faith with a view to the best interests of the Company and in connection therewith to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. If any director or officer of the Company shall be employed by or shall perform services for the Company otherwise than as a director or officer or shall be a member of a firm or a shareholder, director or officer of a body corporate which is employed by or performs services for the Company, the fact of his being a director or officer of the Company shall not disentitle such director or officer or such firm or body corporate, as the case may be, from receiving proper remuneration for such services.

The Company shall indemnify its directors and officers, a former director or officer of the Company or another individual who acts or acted at the Company’s request as a director or officer, or an individual acting in a similar capacity, of another entity against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by such individual in respect of any civil, criminal or administrative, investigative or other proceeding in which the individual is involved because of that association with the Company or other entity. The Company may not indemnify an individual in connection with the foregoing unless the individual: (a) acted honestly and in good faith with a view to the Company’s best interests or that of another entity for which the individual acted as a director or officer or in a similar capacity at the Company’s request, as the case may be; and (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, had reasonable grounds for believing that his conduct was lawful. The Company has entered into such indemnity agreements with its directors and officers.

A director or officer who is a party to a material transaction or material contract or proposed material transaction or material contract with the Company, is a director or an officer of, or acts in a capacity similar to a director or officer of, or has a material interest in any person who is, a party to a material transaction or material contract or proposed material transaction or material contract with the Company shall disclose the nature and extent of his interest at the time and in the manner provided in the CBCA. Except as provided in the CBCA (including in the case of director remuneration), no such director of the Company shall vote on any resolution to approve any transaction. If a material transaction or material contract is made between the Company and one or more of its directors or officers, or between the Company and another person of which a director or officer of the Company is a director or officer or in which he/she has a material interest, the transaction is neither void nor voidable by reason only of that relationship, or by reason only that a director with an interest in the transaction or contract is present at or is counted to determine the presence of a quorum at a meeting of the Board or committee of Board that authorized the transaction, if the director or officer disclosed his interest in accordance with the provisions of the CBCA, the transaction or contract was approved by Board or shareholders, as the case may be, and it was reasonable and fair to the Company at the time it was approved.

The CBCA provides that, unless the articles or by-laws otherwise provide, the directors may:

	(a)	borrow money upon the credit of the Company;

	(b)	issue, reissue, sell or pledge or hypothecate debt obligations of the Company;

	(c)	give a guarantee on behalf of the Company to secure performance of an obligation of any person; and

	(d)	mortgage, hypothecate, charge, pledge or otherwise create a security interest in all or any property of the Company, owned or subsequently acquired, to secure any obligation of the Company.

The directors may, by resolution, make, amend or repeal any by-laws that regulate the business or affairs of the Company. The CBCA requires the directors to submit any such by-law, amendment or repeal to the Company’s shareholders at the next meeting of shareholders, and the shareholders may, by ordinary resolution, confirm, reject or amend the by-law, amendment or repeal.

Limitations on Ownership of Securities

Except as described under Item 10.D. “Exchange Controls”, below, there are no limitations on the right to own securities imposed by foreign law to the Company’s knowledge or by the articles of the Company.

Share Capital

The authorized capital of the Company consists of an unlimited number of Common Shares without par value, and an unlimited number of preferred shares issuable in series (“Preferred Shares”). Please see Item 9.A. “Offer and listing details”, for the rights, privileges, restrictions and conditions attaching to the Common Shares. The rights attaching to the Common Shares and the Preferred Shares can only be modified by the affirmative vote of at least two-thirds of the votes cast at a meeting of shareholders called for that purpose.

The following summarizes the key rights, privileges, restrictions and conditions attached to Preferred Shares.

Series

The Preferred Shares are issuable in series with such preferred, deferred or other special rights, privileges, restrictions, conditions and designations attached thereto as shall be fixed from time to time by any resolutions which may be passed by the directors, including:

	(a)	the rate, amount or method of calculation of any dividends, provided always that dividends on each series of Preferred Shares shall be non-cumulative;

	(b)	any right of redemption and/or purchase and the redemption or purchase prices and terms and conditions of any such right;

	(c)	any right of retraction vested in the holders of Preferred Shares of such series and the prices and terms and conditions of any such rights;

	(d)	any rights upon dissolution, liquidation or winding-up of the Company;

	(e)	any voting rights; and

	(f)	any other provisions attaching to any such series of Preferred Shares.

Priority

The Preferred Shares of each series shall, with respect to the payment of dividends and the distribution of assets or return of capital in the event of liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, rank on a parity with the Preferred Shares of every other series and be entitled to a preference and priority over the Common Shares and over any other shares of the Company ranking junior to the Preferred Shares.

Notices and Voting

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares, the holders of Preferred Shares shall not, as such, be entitled to receive notice of or to attend meetings of the shareholders of the Company nor shall they have any voting rights for the election of directors or for any other purpose except as provided in the CBCA.

Purchase for Cancellation

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares, the Company may at any time or from time to time purchase for cancellation the whole or any part of the Preferred Shares outstanding at such time. In the case of the purchase for cancellation by private contract, the Company shall not, except as required by law, be required to purchase Preferred Shares from all holders or series of Preferred Shares or to offer to purchase the shares of any other class or any series of shares before proceeding to purchase from any one holder of Preferred Shares nor shall it be required to make purchases from holders of Preferred Shares on a pro rata basis.

Redemption

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares, the Company may, at its option, redeem all or from time to time any part of the outstanding Preferred Shares on payment to the holders thereof, for each share to be redeemed, the redemption price per share, together with all dividends declared thereon and unpaid

Retraction

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares and partial redemption obligations set forth below, a holder of Preferred Shares shall be entitled to require the Company to redeem at any time and from time to time after the date of issue of any Preferred Shares, upon giving notice, all or any number of the Preferred Shares registered in the name of such holder on the books of the Company at the redemption price per share, together with all dividends declared thereon and unpaid.

Partial Redemption

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares, if the redemption by the Company on any option redemption date of all of the Preferred Shares to be redeemed on such date would be contrary to any provisions of the CBCA or any other applicable law, the Company shall be obligated to redeem only the maximum number of Preferred Shares which the Company determines it is then permitted to redeem, such redemptions to be made pro rata (disregarding fractions of shares) according to the number of Preferred Shares required by each such holder to be redeemed by the Company. The Company shall, before redeeming any other Preferred Shares, redeem on the first day of each month thereafter the maximum number of such Preferred Shares so required by holders to be redeemed as would not then by contrary to any provisions of the CBCA or any other applicable law, until all of such shares have been redeemed.

Liquidation, Dissolution and Winding Up

Subject to the rights, privileges, restrictions and conditions that may be attached to a particular series of Preferred Shares, in the event of liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of Preferred Shares shall be entitled to receive, before any distribution of any part of the assets of the Company among the holders of any other shares, for each Preferred Share, an amount equal to the redemption price of such share and any dividends declared thereon and unpaid.

C. Material contracts.

1.	Senior Secured Gold Stream Credit Agreement between Manhattan Mining Co., certain guarantors and Waterton Global Value, L.P., by the general partner of its general partner, Cortleigh Limited, dated August 26, 2011. See note 12 to the Consolidated Financial Statements, included in Item 17 of this annual report or Form 20-F.

2.	In order to maintain its property on the Goldwedge project, the Company has to pay annual claim renewal fees to the BLM of approximately $15,000.

3.	In order to maintain its lease agreements on the Piñon Project, the Company had to make annual payments of $79,100 for the year ended January 31, 2012 and a commitment of $175,000 (incurred) in exploration expenses, which include claim renewal fees of $15,000 to the BLM.

4.	In order to maintain the lease agreements on the Fondaway Project, the Company has to make option payments of $35,000 and has to pay claim renewal fees to the BLM of approximately $15,000.

D. Exchange controls.

There is no law, governmental decree or regulation in Canada that restricts the export or import of capital, including foreign exchange controls, or that affects the remittance of dividends, interest or other payments to non-resident holders of Common Shares, other than withholding tax requirements and potential capital gain on the disposition of the Common Shares under certain circumstances. See “Item 10.E. Taxation”.

E. Taxation

Canadian Federal Income Tax Considerations

The following is a summary of certain Canadian federal income tax provisions under the Income Tax Act (Canada) and the regulations promulgated thereunder (the “Tax Act”) applicable to United States corporations, citizens and resident alien individuals purchasing Common Shares. The discussion is only a general summary and does not purport to deal with all aspects of Canadian federal taxation that may be relevant to shareholders, including those subject to special treatment under the Tax Act. Shareholders are advised to consult their own tax advisors regarding the Canadian federal income tax consequences of holding and disposing of the Company's Common Shares, as well as any consequences arising under U.S. federal, state or local tax laws or tax laws of other jurisdictions outside the United States. The summary is based on the assumption that, for Canadian tax purposes, the purchasers or shareholders (i) deal at arm'slength with the Company, (ii) are not resident or deemed to be resident in Canada, (iii) hold the Common Shares as capital property and (iv) do not use or hold Common Shares in, or in the course of, carrying on business in Canada (a "Non-Resident Holder").

This summary does not apply to a shareholder that is a “financial institution” (as defined in the Tax Act for the purpose of the “mark-to-market” rules), to a shareholder an interest in which is a “tax shelter investment” (as defined in the Tax Act) or to a shareholder that has elected to report its “Canadian tax results” (as defined in the Tax Act) in a currency other than Canadian currency.

Dividends paid or credited or deemed to be paid or credited to a Non-Resident Holder on the Common Shares will generally be subject to Canadian withholding tax at a rate of 25%, subject to reduction under the provisions of an applicable income tax treaty or convention between Canada and the country in which the Non-Resident Holder is resident. For this purpose, dividends will include amounts paid by the Company in excess of the paid-up capital of the Common Shares on a redemption or a purchase for cancellation of such shares by the Company (other than purchases on the open market).

Where a Non-Resident Holder is a resident of the United States for purposes of the Canada-United States Tax Convention (1980) and is fully entitled to the benefits under such treaty, the applicable rate of Canadian withholding tax is generally reduced to 15% of the gross amount of the dividends (or 5% in the case of a resident of the United States that is a company beneficially owning at least 10% of the Company’s voting shares).

A Non-Resident Holder will generally not be subject to tax in Canada on capital gains realized from disposition of Common Shares, unless such shares are "taxable Canadian property" within the meaning of the Tax Act and the Non-Resident Holder is not entitled to relief under an applicable tax treaty.

The Common Shares will generally not constitute taxable Canadian property of the Non-Resident Holder unless at any time during the 60-month period that ends at that time more than 50% of the fair market value of the Common Shares of the Company was derived directly or indirectly from one, or any combination of, real or immovable property situated in Canada, Canadian resource properties (as defined in the Tax Act), timber resource properties (as defined in the Tax Act), and options in respect of, or interests in, or for civil law rights in, any such properties (whether or not such property exists). Certain provisions of the Tax Act may deem property to be ‘‘taxable Canadian property’’ of a Non-Resident Holder in specific circumstances. Non-Resident Holders should consult their own tax advisors for advice having regard to their particular circumstances.

United States Federal Income Tax Considerations

TO ENSURE COMPLIANCE WITH TREASURY DEPARTMENT CIRCULAR 230, PROSPECTIVE INVESTORS ARE HEREBY NOTIFIED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS ANNUAL REPORT IS NOT INTENDED OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY INVESTORS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED UNDER THE CODE; (B) SUCH DISCUSSION IS BEING USED IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN; AND (C) PROSPECTIVE INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.

The following summary describes certain material U.S. federal income tax considerations generally applicable to “U.S. Holders” (as defined below) with respect to the ownership and disposition of the Company’s common shares offered hereunder. This summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether final, temporary or proposed), administrative rulings of the Internal Revenue Service (“IRS”), judicial decisions and the Convention Between Canada and the United States of America with Respect to Taxes on Income and on Capital, signed September 26, 1980, as amended (the “U.S.-Canada tax treaty”), as in effect and available as of the date of this annual report, all of which are subject to change, possibly with retroactive effect. It addresses only U.S. Holders that hold the Company’s common shares as capital assets within the meaning of Section 1221 of the Code (generally, assets held for investment purposes). The following summary does not purport to be a complete analysis of all of the potential U.S. federal income tax considerations that may be relevant to particular U.S. Holders in light of their particular circumstances, nor does it deal with persons that are subject to special tax rules, such as brokers, dealers in securities or currencies, financial institutions, mutual funds, insurance companies, tax-exempt entities, qualified retirement plans, regulated investment companies, common trust funds, U.S. Holders subject to the alternative minimum tax, U.S. Holders holding the Company’s common shares as part of a straddle, hedge or conversion transaction or as part of a synthetic security or other integrated transaction, traders in securities that elect to use a mark-to market method of accounting for their securities holdings, U.S. Holders that have a “functional currency” other than the U.S. dollar, U.S. expatriates, and persons that acquired the Company’s common shares in connection with the performance of services. In addition, this summary does not address persons that hold an interest in a partnership or other pass-through entity that holds the Company’s common shares, or tax considerations arising under the laws of any state, local or non-U.S. jurisdiction or other U.S. federal tax considerations (e.g., estate or gift tax) other than those pertaining to the income tax.

As used herein, the term “U.S. Holder” means a beneficial owner of the Company’s common shares that is (i) a citizen or individual resident of the U.S. for U.S. federal income tax purposes, (ii) a corporation (or an entity classified as a corporation for U.S. federal income tax purposes) created or organized in or under the laws of the U.S. or any political subdivision thereof, (iii) an estate, the income of which is subject to U.S. federal income taxation regardless of its source, or (iv) a trust if (A) a U.S. court is able to exercise primary supervision over its administration and one or more U.S. persons, within the meaning of Section 7701(a)(30) of the Code, have authority to control all of its substantial decisions or (B) it has properly elected under applicable Treasury Regulations to be treated as a U.S. person.

The tax treatment of a partner in a partnership (or other entity classified as a partnership for U.S. federal income tax purposes) may depend on both the partner’s and the partnership’s status and the activities of such partnership. Partnerships that are beneficial owners of the Company’s common shares, and partners in such partnerships, should consult their own tax advisors regarding the U.S. federal, state, local and non-U.S. tax considerations applicable to them with respect to the ownership and disposition of the Company’s common shares.

THIS SUMMARY IS OF A GENERAL NATURE ONLY. IT IS NOT INTENDED TO CONSTITUTE, AND SHOULD NOT BE CONSTRUED TO CONSTITUTE, LEGAL OR TAX ADVICE TO ANY PARTICULAR U.S. HOLDER. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.

Ownership and Disposition of the Company’s Common Shares

Distributions . Subject to the discussion below under “United States Federal Income Tax Considerations – Passive Foreign Investment Company Rules” and “United States Federal Income Tax Considerations – Controlled Foreign Corporations,” distributions made with respect to the Company’s common shares (including any Canadian taxes withheld from such distributions) generally will be included in the gross income of a U.S. Holder as dividend income to the extent of the Company’s current and accumulated earnings and profits, as determined under U.S. federal income tax principles. Distributions in excess of the Company’s current and accumulated earnings and profits, if made with respect to the Company’s common shares, will be treated as a return of capital to the extent of the U.S. Holder’s adjusted tax basis in such common shares, and thereafter as capital gain.

For taxable years beginning before January 1, 2013, a dividend paid by the Company generally will be taxed at the preferential tax rates applicable to long-term capital gains if (a) the Company is a “qualified foreign corporation” (as defined below), (b) the U.S. Holder receiving such dividends is an individual, estate, or trust, and (c) such dividend is paid on the Company’s shares that have been held by such U.S. Holder for at least 61 days during the 121-day period beginning 60 days before the ex-dividend date.

The Company generally will be a “qualified foreign corporation” under Section 1(h)(11) of the Code (a “QFC”) if the Company is eligible for the benefits of the U.S.-Canada tax treaty or, if not, the Company’s shares are readily tradable on an established securities market in the U.S. However, even if the Company satisfies one or more of such requirements, the Company will not be treated as a QFC if the Company is a PFIC for the taxable year during which it pays a dividend or for the preceding taxable year.

As discussed below, the Company has not made a determination of whether it is or has been a PFIC. It is possible that the Company currently is, may have been or will be a PFIC.

If any dividends are paid in Canadian dollars, the amount includible in gross income will be the U.S. dollar value of such dividend, calculated by reference to the exchange rate in effect on the date of actual or constructive receipt of the payment, regardless of whether the payment is actually converted into U.S. dollars. If any Canadian dollars actually or constructively received by a U.S. Holder are later converted into U.S. dollars, such U.S. Holder may recognize gain or loss on the conversion, which will be treated as ordinary gain or loss. Such gain or loss generally will be treated as gain or loss from sources within the U.S. for U.S. foreign tax credit purposes.

A U.S. Holder may be entitled to deduct or claim a credit for Canadian withholding taxes, subject to applicable limitations in the Code. Complex limitations apply to the foreign tax credit, including the general limitation that the credit cannot exceed the proportionate share of a U.S. Holder’s U.S. federal income tax liability that such U.S. Holder’s “foreign source” taxable income bears to such U.S. Holder’s worldwide taxable income. In applying this limitation, a U.S. Holder’s various items of income and deduction must be classified, under complex rules, as either “foreign source” or “U.S. source.” However, the amount of a distribution with respect to the common shares that is treated as “dividend” may be lower for U.S. federal income tax purposes than it is for Canadian federal income tax purposes, resulting in a reduced foreign tax credit allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of income. Dividends paid to a U.S. Holder generally will constitute “foreign source” income and generally will be categorized as “passive category” income. U.S. Holders should consult their own tax advisors regarding the availability of the foreign tax credit in their particular circumstances.

Dispositions. Subject to the discussion below under “United States Federal Income Tax Considerations – Passive Foreign Investment Company Rules” and “United States Federal Income Tax Considerations – Controlled Foreign Corporations,” upon the sale, exchange or other taxable disposition of the Company’s common shares, a U.S. Holder generally will recognize capital gain or loss equal to the difference between (i) the amount of cash and the fair market value of any other property received upon the sale, exchange or other taxable disposition and (ii) the U.S. Holder’s adjusted tax basis in such common shares. Capital gain or loss recognized upon a sale, exchange or other taxable disposition of the Company’s common shares will generally be long-term capital gain or loss if the U.S. Holder’s holding period with respect to such common shares disposed of is more than one year at the time of the sale, exchange or other taxable disposition. The deductibility of capital loss is subject to limitations.

Passive Foreign Investment Company Rules

The foregoing discussion assumes that the Company is not a PFIC. Certain adverse U.S. federal income tax rules generally apply to a U.S. person that owns or disposes of stock in a non-U.S. corporation that is treated as a PFIC. In general, a non-U.S. corporation will be treated as a PFIC for any taxable year during which, after applying relevant look-through rules with respect to the income and assets of subsidiaries, either (i) 75% or more of the non-U.S. corporation’s gross income is passive income, or (ii) 50% or more of the average value of the non-U.S. corporation’s assets produce or are held for the production of passive income. Special rules apply where a non-U.S. corporation owns, directly or indirectly, at least 25% (by value) of the shares of another corporation (a “lower-tier corporation”).

For purposes of determining whether the Company is a PFIC, it will be treated as if it held its proportionate share of the assets of any lower-tier corporation and received directly its proportionate share of the income of any lower-tier corporation.

For purposes of the PFIC rules, and subject to certain exceptions, passive income generally includes dividends, interest, certain rents and royalties, and the excess of gains over losses from certain commodities transactions, including transactions involving oil and gas. However, gains and losses from commodities transactions generally are excluded from the definition of passive income if (i) such gains or losses are derived by a non-U.S. corporation in the active conduct of a commodity business, and (ii) “substantially all” of such corporation’s business is as an active producer, processor, merchant or handler of commodities of like kind (the “active commodities business exclusion”).

The Company has not made a determination as to its PFIC status for the current or any past taxable years. PFIC classification is factual in nature, generally cannot be determined until the close of the taxable year in question, and is determined annually. Thus, there can be no assurance that the Company is not a PFIC for the current taxable year, has not been for any past taxable years or will not be a PFIC for any future taxable years.

The following U.S. federal income tax consequences generally will apply to a U.S. Holder of the Company’s common shares if the Company is treated as a PFIC:

Distributions. Distributions made by the Company with respect to its common shares, to the extent such distributions are treated as “excess distributions” pursuant to Section 1291 of the Code, must be allocated rateably to each day of the U.S. Holder’s holding period for such common shares. The amounts allocated to the taxable year during which the distribution is made, and to any taxable years in such U.S. Holder’s holding period which are prior to the first taxable year in which the Company is treated as a PFIC, are included in such U.S. Holder’s gross income as ordinary income for the taxable year of the distribution. The amount allocated to each other taxable year is taxed as ordinary income in the taxable year of the distribution at the highest tax rate in effect for the U.S. Holder in that other taxable year and is subject to an interest charge at the rate applicable to underpayments of tax. Any distribution made by the Company that does not constitute an excess distribution would be treated in the manner described under “United States Federal Income Tax Considerations — Ownership and Disposition of the Company’s Common Shares — Distributions,” above.

Dispositions. The entire amount of any gain realized upon the U.S. Holder’s disposition of the Company’s common shares generally will be treated as an excess distribution made in the taxable year during which such disposition occurs, with the consequences described above.

Elections. In general, the adverse U.S. federal income tax consequences of holding stock of a PFIC described above may be mitigated if a U.S. shareholder of the PFIC is able to, and timely makes, a valid qualified electing fund (“QEF”) election with respect to the PFIC or a valid mark-to-market election with respect to the stock of the PFIC. U.S. Holders should be aware that there can be no assurance that the Company will supply U.S. Holders with the information and statements that such U.S. Holders require to make a QEF election under Section 1295 of the Code.

Under recently enacted U.S. tax legislation and subject to future guidance, if the Company is a PFIC, U.S. Holders will be required to file an annual information return with the IRS (on IRS Form 8621, which will be required to be filed with income tax or information returns) relating to their ownership of the common shares (the “general filing requirement”). In addition under the current version of the Instructions to IRS Form 8621, if the Company is a PFIC, U.S. Holders generally will be required to file IRS Form 8621 if they receive excess distributions from or dispose of the common shares or in order to make certain tax elections with respect to the common shares (“the reportable transaction filing requirement”). Pursuant to recent IRS guidance, the IRS has temporarily suspended the general filing requirement under the recent legislation until the IRS releases a revised IRS Form 8621 which reflects the recently enacted U.S. tax legislation. However, the reportable transaction filing requirement is not affected by the temporary suspension set forth in the recent IRS guidance and continues to apply to PFIC shareholders under the current version of the Instructions to IRS Form 8621.

U.S. Holders should consult their own tax advisors as to the tax consequences of owning and disposing of stock in a PFIC, including the availability of any elections that may mitigate the adverse U.S. federal income tax consequences of holding stock of a PFIC.

Certain Controlled Foreign Corporation Rules

If more than 50% of the total voting power or the total value of the Company’s outstanding shares is owned, directly or indirectly, by citizens or residents of the U.S., U.S. partnerships or corporations, or U.S. estates or trusts (as defined by Section 7701(a)(30) of the Code), each of which own, directly or indirectly, 10% or more of the total voting power of the Company’s outstanding shares (each a “10% Shareholder”), the Company could be treated as a “Controlled Foreign Corporation” (“CFC”) under Section 957 of the Code.

The Company’s classification as a CFC would bring into effect many complex results, including that under Section 1248 of the Code, gain from the disposition of the Company’s common stock by a U.S. Holder that is or was a 10% Shareholder at any time during the five-year period ending with the disposition will be treated as a dividend to the extent of the Company’s earnings and profits attributable to the common shares sold or exchanged.

If the Company is classified as both a PFIC and a CFC, the Company generally will not be treated as a PFIC with respect to 10% Shareholders.

The Company has made no determination as to whether it currently meets or has met the definition of a CFC, and there can be no assurance that it will not be considered a CFC for the current or any future taxable year.

The CFC rules are very complicated, and U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the CFC rules and how these rules may impact their U.S. federal income tax situation.

Surtax on Unearned Income

For tax years beginning after December 31, 2012, certain U.S. persons, including individuals, estates and trusts, will be subject to an additional 3.8% Medicare tax on “net investment income.” Investment income generally includes passive income such as interest, dividends, annuities, royalties, rents, and capital gains. Net investment income would be reduced by properly allocable deductions to such income.

Information Reporting and Backup Withholding Tax

Dividend payments made with respect to shares of the Company’s stock and proceeds from the sale, exchange or other disposition of common shares may be subject to information reporting requirements, and to possible U.S. backup withholding (currently at a rate of 28%). In general, backup withholding will apply with respect to reportable payments made to a U.S. Holder unless (i) the U.S. Holder is a corporation or other exempt recipient and, if required, demonstrates such exemption, or (ii) the U.S. Holder furnishes the payor with a taxpayer identification number on IRS Form W-9 in the manner required, certifies under penalty of perjury that such U.S. Holder is not currently subject to backup withholding and otherwise complies with the backup withholding requirements.

Backup withholding is not an additional tax. Rather, the amount of any backup withholding imposed on a payment to a holder will be allowed as a refund or a credit against such holder’s U.S. federal income tax liability, provided that the required information is furnished to the IRS.

Additional Reporting Requirements

Recently-enacted U.S. tax legislation generally requires a U.S. individual to report to the IRS certain interests owned by such individual in stock issued by a non-U.S. person (such as the Company’s common shares), if the aggregate value of all such interests exceeds $50,000. This reporting requirement is subject to certain exceptions (including an exception for stock held in custodial accounts maintained by a U.S. financial institution), and applies for tax years beginning after March 18, 2010. Pursuant to recent IRS guidance, this reporting requirement has been suspended until the IRS releases IRS Form 8938. Additional guidance is expected regarding the specific information that will be required to be reported on IRS Form 8938. Prior to filing their annual income tax returns, U.S. Holders should consult their tax advisers regarding whether additional guidance has been issued with respect to this reporting requirement, and if so, how to comply with such guidance.

THE ABOVE SUMMARY IS NOT INTENDED TO CONSTITUTE A COMPLETE ANALYSIS OF ALL TAX CONSIDERATIONS APPLICABLE TO U.S. HOLDERS WITH RESPECT TO THE OWNERSHIP AND DISPOSITION OF THE COMPANY’S COMMON SHARES. U.S. HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE TAX CONSIDERATIONS APPLICABLE TO THEM IN THEIR PARTICULAR CIRCUMSTANCES.

F. Dividends and paying agents.

Not applicable.

G. Statement by experts.

Not applicable.

H. Documents on display.

Documents concerning the Company that are referred to in this annual report on Form 20-F may be inspected at 50 Richmond Street East, Suite 101, Toronto, Ontario M5C 1N7 during regular business hours of the Company.

You may also review a copy of the Company’s filings with the SEC, including exhibits and schedules filed with this annual report on Form 20-F, at the SEC's public reference room 100 F Street, N.E., Room 1580, Washington, D.C. 20549. You may also obtain copies of such materials upon payment of a duplicating fee, by writing to the SEC. You may call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. The SEC maintains a website ( http://www.sec.gov ) that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

You may read and copy any reports, statements or other information that the Company files with the SEC at the addresses indicated above and you may also access some of them electronically at the website set forth above. These SEC filings are also available to the public from commercial document retrieval services.

The Company also files reports, statements and other information with the Canadian Securities Administrators (the “CSA”), and these can be accessed electronically at the CSA's System for Electronic Document Analysis and Retrieval website ( http://www.sedar.com ).

I. Subsidiary Information.

Not applicable.

Item 11. Quantitative and Qualitative Disclosures about Market Risk

The Company's activities expose it to a variety of financial risks including credit risk, liquidity risk and market risk. Risk management is carried out by the Company's management team with guidance from the Audit Committee under policies approved by the Board. The Board also provides regular guidance for overall risk management.

Market risk is the risk of loss that may arise from changes in market factors such as interest rate, foreign exchange rates and commodity and equity prices.

Credit risk. Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash, reclamation bonds and due from related parties. The Company has no significant concentration of credit risk arising from operations. Cash and reclamation bonds are held with reputable financial institutions, from which management believes the risk of loss to be minimal.

Liquidity risk. Liquidity risk refers to the risk that the Company will not be able to meet its financial obligations when they become due, or can only do so at excessive cost. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at January 31, 2012, the Company had a cash balance of $629,553 January 31, 2011 ($102,038) to settle current liabilities of $6,120,109 (January 31, 2011 - $935,688). All of the Company's financial liabilities have contractual maturities of less than 60 days and are subject to normal trade terms. The Company continues to seek sources of additional capital to improve its liquidity position.

Market risk. Market risk is the risk of loss that may arise from changes in market factors such as interest rate, foreign exchange rates and commodity and equity prices.

(a) Interest rate risk

Interest rate risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market interest rates. The Company has cash balances and no interest bearing debt. The Company's current policy is to invest excess cash in guaranteed investment certificates, bankers acceptance and money market deposits, with reputable financial institutions. The Company regularly monitors its cash management policy.

(b) Foreign currency risk

Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the entity's functional currency. The risk is measured using cash flow forecasting. The Company's functional and reporting currency is the United States dollar ("U.S. dollar") and major purchases are transacted in U.S. dollars. An operating account is maintained in Canadian dollars primarily for settlement of general and corporate expenditures.

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatility. The Company closely monitors commodity prices, as it relates to coal and precious metals in the United States, individual equity movements and the stock market in general to determine the appropriate course of action to be taken by the Company.

Sensitivity analysis

As of January 31, 2012, the carrying and fair value amounts of the Company's financial instruments are approximately equivalent.

Based on management's knowledge and experience of the financial markets, the Company believes the following movements are "reasonably possible" over a twelve month period. The sensitivity analysis shown in the notes below may differ materially from actual results.

The Company's marketable securities are subject to fair value fluctuations. As at January 31, 2012, if the fair value of the marketable securities had decreased/increased by 10% with all other variables held constant, comprehensive loss for the twelve months ended January 31, 2012 would have been approximately $15,000 higher/lower. Similarly, as at January 31, 2012, reported shareholders' equity would have been approximately $15,000 lower/higher as a result of a 10% decrease/increase in the fair value of marketable securities.
Cash, sundry receivables, due from and to related parties and accounts payable and accrued liabilities denominated in Canadian dollars are subject to foreign currency risk. As at January 31, 2012, had the US dollar weakened/strengthened by 5% against the Canadian dollar with all other variables held constant, the net loss and comprehensive loss would be affected by approximately $36,000.
Commodity price risk could adversely affect the Company. In particular, the Company's future profitability and viability of development depends upon the world market price of coal and precious metals. Coal and precious metals have fluctuated widely in recent years. There is no assurance that, even as commercial quantities of coal and precious metals may be produced in the future, a profitable market will exist for them. A decline in the market price of coal and precious metals may also require the Company to reduce its mineral properties, which could have a material and adverse effect on the Company's value. As at January 31, 2012, the Company was not a coal or precious metal producer. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings, debt offerings and the exercise of stock options. This may also affect the Company's liquidity and its ability to meet its ongoing obligations.
The fair value of the embedded derivative on long-term debt is determined by the gold price at the repayment dates. When the gold price is over $1,600 per ounce, the embedded derivative would have a value. As at January 31, 2012, had the future gold price increased/decreased $50 per ounce, it would affect net loss and comprehensive loss by approximately $57,000.

Item 12. Description of Securities Other than Equity Securities

Not applicable.

PART II

Item 13. Defaults, Dividend Arrearages and Delinquencies

Not applicable.

Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds

On January 11, 2012, the shareholders of the Company approved the adoption of a shareholder rights plan agreement dated December 23, 2010 (the “Rights Plan”). The following description of the Rights Plan is qualified in its entirety by reference to the Rights Plan, which is filed as Exhibit 2.1 to this annual report on Form 20-F.

Purpose of the Rights Plan

The primary purpose of the Rights Plan is to seek to ensure that, in the context of a bid for control of the Company through an acquisition of shares, all shareholders have an equal opportunity to participate in the bid and are given adequate time to access the bid. The Rights Plan in no way prohibits a change of control of the Company in a transaction that is procedurally fair to shareholders. The Rights Plan does not attempt to discourage bids. It allows a potential bidder to make a "permitted bid" directly to the shareholders of the Company without the prior approval of the Board. Such permitted bid must be made to all shareholders and must remain open for a minimum period of 60 days after the date of the bid and for a further period of 10 business days after the bidder publicly announces that the shares deposited constitute more than 50% of the outstanding Common Shares held by independent shareholders.

Summary of the Rights Plan

The following summary of the Rights Plan does not purport to be complete and is qualified in its entirety by reference to the Rights Plan.

Issuance of Rights

Pursuant to the Rights Plan, one Right has been issued and has attached to each Common Share of the Company outstanding as of 4:00 p.m. (Toronto time) on December 23, 2010, the date of implementation of the Company's Rights Plan, and one Right will continue to be issued in respect of each Common Share issued thereafter prior to the earlier of the Separation Time (as defined below) and the expiration time.

Each Right entitles the holder thereof to purchase from the Company one Common Share at the exercise price equal to five times the market price per Common Shares determined as at the Separation Time, subject to adjustment and certain anti-dilution provisions (the “Exercise Price”). The Rights are not exercisable until the Separation Time. If a Flip-in Event (defined below) occurs, each Right will entitle the registered holder to receive, upon payment of the Exercise Price, that number of Common Shares of the Company, having an aggregate market price on the date of the occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price.

Trading of Rights

Until the occurrence of certain specific events, the Rights will trade with the Common Shares of the Company and not be represented by any certificates for such Common Shares. The Rights will separate and trade separately from the Common Shares to which they are attached and will become exercisable from and after the Separation Time.

Separation Time

The “Separation Time” will occur on the close of business on the tenth trading day after the earliest of: (a) the date of public announcement by the Company or an Acquiring Person (defined below) of facts indicating that a person has become an Acquiring Person, (b) the date that any person commences or announces an intention to commence a take-over bid, and (c) the date on which a Permitted Bid (as defined below) or a Competing Permitted Bid ceases to qualify as such, or such later date as the Board may determine.

Acquiring Person

In general, an “Acquiring Person” is a person who is the beneficial owner of 20% or more of the outstanding voting shares of the Company. Excluded from the definition of “Acquiring Person” are the Company and its subsidiaries, and any person who becomes the beneficial owner of 20% or more of the outstanding voting shares of the Company as a result of one or more or any combination of a Voting Share Reduction, Permitted Bid Acquisitions, Exempt Acquisition, a Pro Rata Acquisition, or a Convertible Security Acquisition. The definitions of “Voting Share Reduction”, “Permitted Bid Acquisitions”, “Exempt Acquisition”, a “Pro Rata Acquisition”, or a “Convertible Security Acquisition” are set out in the Rights Plan. However, in general:

(a) a “Voting Share Reduction” means an acquisition or redemption by the Company or a subsidiary of voting shares which by reducing the number of voting shares outstanding increases the percentage of outstanding voting shares beneficially owned by any person to 20% or more of the voting shares outstanding;

(b) a “Permitted Bid Acquisition” means a voting share acquisition made pursuant to a Permitted Bid or a Competing Permitted Bid;

(c) an “Exempt Acquisition” means an acquisition of voting shares: (i) in respect of which the directors have waived the application of the Flip-in Event provisions of the Rights Plan; (ii) pursuant to a distribution by the Company of voting shares or convertible securities (x) pursuant to a prospectus or similar document (provided that the purchaser does not thereby beneficially own a greater percentage of voting shares or convertible securities so offered than the percentage of voting shares or convertible securities beneficially owned by the purchaser immediately prior to such acquisition) or (y) by private placement provided that in such case, all necessary stock exchange approvals have been obtained and complied with and the purchaser does not become the beneficial owner of more than 25% of the voting shares issued and outstanding immediately prior to the private placement (and in making this determination, the securities to be issued to such purchaser on the private placement will be deemed to be held by such purchaser but shall not be included in the aggregate number of outstanding voting shares immediately prior to the private placement); and (iii) pursuant to an amalgamation, merger or other statutory procedure requiring shareholder approval;

(d) a “Pro Rata Acquisition” means: (i) an acquisition as a result of a stock dividend or a stock split or other event pursuant to which a person receives or acquires voting shares on the same proportionate basis as all other holders of the same class of voting shares; (ii) the acquisition pursuant to a dividend reinvestment plan of the Company or other plan made available by the Company to the holders of voting shares generally; or (iii) the receipt and/or exercise of rights (other than the Rights) issued by the Company to all holders of a class of voting shares to subscribe for or purchase voting shares, provided that such rights are acquired directly from the Company and not from any other person; and

(e) a “Convertible Security Acquisition” means the acquisition of voting shares on the exercise, conversion or exchange of convertible securities acquired by a person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or Pro Rata Acquisition.

Also excluded from the definition of “Acquiring Person” are underwriters or members of a banking or selling group acting in such capacity in connection with a distribution of securities, and a Person (a “Grandfathered Person”) who is the beneficial owner of 20% or more of the outstanding voting shares of the Company as at the record time; provided, however, that this exception ceases to be applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the record time, become the Beneficial Owner of any additional voting shares outstanding at the record time, other than pursuant to one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition.

In addition, for purposes of determining whether a Flip-in Event has occurred, generally, a person (including a trust company) who is engaged in the business of managing investment funds for others and, as part of such person's duties for fully managed accounts, holds or exercises voting or dispositive power over voting shares in the ordinary course of business, would not, by reason thereof, be considered to be the beneficial owner of such voting shares. Exemptions are also provided for Crown agents and statutory or other registered pension plans or funds. In each case, the exemption ceases to apply in the event that the exempt person is making a take-over bid (other than pursuant to a distribution by the Company, pursuant to a Permitted Bid or Competing Permitted Bid or by means of ordinary course market transactions).

Flip-in Event

If a transaction occurs prior to the expiration time pursuant to which any person becomes an Acquiring Person (a “Flip-in Event”), then each Right will constitute within ten trading days of such occurrence that each Right (except for Rights beneficially owned by the Acquiring Person, its affiliates or associates and/or persons acting jointly or in concert with the foregoing) shall thereafter constitute the right to purchase from the Company upon payment of the exercise price that number of Common Shares of the Company having an aggregate market price on the date of the occurrence of such Flip-in Event equal to twice the exercise price for an amount in cash equal to the exercise price (subject to anti-dilution adjustments).

Permitted Bid

A “Permitted Bid” is a take-over bid where the bid is made by way of a take-over bid circular and is a bid that complies with, among other things, the following: (a) the take-over bid must be made to all holders of voting shares other than the bidder; and (b) (i) the take-over bid must not permit the bidder to take up any Common Shares that have been tendered pursuant to the take-over bid prior to the expiry of a period not less than 60 days after the date of the take-over bid, and (ii) then only if at such time more than 50% of the voting shares held by the independent shareholders (which generally includes shareholders other than the bidder, its affiliates or associates and/or persons acting jointly or in concert with the foregoing), have been deposited or tendered pursuant to the take-over bid and not withdrawn.

Competing Permitted Bid

A “Competing Permitted Bid” is a take-over bid that satisfies all the criteria of a permitted bid except that since it is made after a permitted bid or another competing permitted bid (the “prior bid”) the time period for any take up and payment of voting shares tendered under a competing bid is not 60 days, but is instead no earlier than the later of 35 days after the date of the Competing Permitted Bid and the 60 ^th day after the date of the Prior Bid outstanding, and then only if at the close of business on the date voting shares are first taken up or paid for, more than 50% of the outstanding voting shares held by independent shareholders have been deposited or tendered pursuant to such Competing Prior Bid and not withdrawn. The requirements of a Permitted Bid and a Competing Permitted Bid enable shareholders to decide whether the take-over bid or any Competing Permitted Bid is adequate on its own merits, without being influenced by the likelihood that a take-over bid will succeed.

Lock-Up Agreement

The Rights Plan contains an exemption for “Lock-Up Agreements”, where the agreement, among other things: (a) permits the locked-up person to withdraw voting shares from the lock-up bid to tender to another bid that provides greater value, or if another bid is an offer for a greater number of voting shares (where the maximum hurdle rate is 5%), and (b) provides for no break-up fees or similar fees payable to the locked-up person that are greater than: (i) the cash equivalent of 3.5% of the price or value payable to the locked-up person under the lock-up bid; and (ii) one-half of the difference in value payable to the locked-up person between the lock-up bid and the other bid.

Redemption

Until the occurrence of a Flip-In Event as to which the Board has not issued a waiver, the Board, with the prior consent of the shareholders, may elect to redeem all but not less than all of the then outstanding Rights at a redemption price of Cdn$0.00001 per Right (subject to anti-dilution adjustments).

Waiver

Until the occurrence of a Flip-in Event, the Board may waive the application of the Rights Plan to a take-over bid that is not a Permitted Bid and that is made to all holders of voting shares, but if it does so then it will be deemed to have waived the application of the Rights Plan to all similar bids made prior to the expiry of any bid for which such a waiver was granted.

In addition, subject to the prior consent of holders of voting shares, until the occurrence of a Flip-in Event, the Board may waive the application of the Rights Plan if such Flip-in Event would occur by reason of an acquisition of voting shares other than pursuant to a take-over bid.

Term of the Rights Plan

The Rights Plan will expire on the close of business on December 23, 2020 unless extended by the Board.

Amending Power

The Company, without the prior consent of holders of voting shares at any time prior to the Separation Time, may supplement or amend any provisions of the Rights Plan, except that Section 5 thereof, dealing with the rights agent, requires the written consent of the rights agent to such supplement or amendment. Any amendment will be subject to receipt of any requisite approval or consent from any applicable regulatory authority, including necessary approvals of the stock exchange on which the Common Shares may be listed.

Rightsholder not a Shareholder

Until a Right is exercised, the holder thereof, as such, will have no rights as a shareholder of the Company.

Item 15. Controls and Procedures

A. Disclosure Controls and Procedures.

As of January 31, 2012 and based on their evaluations the Company's principal executive officer and principal financial officer have concluded that the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective to ensure that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in SEC rules and forms.

B. Management's Annual Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

All internal control systems, no matter how well designed, have inherent limitations and may not prevent or detect misstatements. Therefore, even those systems determined to be effective can only provide reasonable assurance with respect to financial reporting reliability and financial statement preparation and presentation. In addition, projections of any evaluation of effectiveness to future periods are subject to risk that controls become inadequate because of changes in conditions and that the degree of compliance with the policies or procedures may deteriorate.

Management assessed the effectiveness of the Company's internal control over financial reporting as of January 31, 2012. In making the assessment, management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on its assessment, management concluded that, as of January 31, 2012, the Company's internal control over financial reporting was effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

C. Attestation Report of the Registered Public Accounting Firm.

This annual report on Form 20-F does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only management's report in this annual report.

D. Changes in Internal Control over Financial Reporting.

There were no changes in the Company’s internal controls over financial reporting that occurred during the fiscal year ended January 31, 2012 that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting.

Item 16. [Reserved]

Item 16A. Audit Committee Financial Expert

The Board has determined that Mr. James Clancy, a director and Audit Committee member of the Company is an “audit committee financial expert” as defined in Form 20-F. Mr. Clancy is “independent,” as such term is defined under the Nasdaq Stock Market Rules..

Item 16B. Code of Ethics

The Company is committed to maintaining high standards of integrity and accountability in conducting its business. It is the Company's goal to seek to ensure that its best interests are paramount in all of its dealings with consultants, competitors, existing and potential business partners and other representatives wherever possible, and are conducted in a manner that avoids actual or potential material conflicts of interest. The Board takes steps to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or officer of the Company has a material interest, which include ensuring that directors and officers are familiar with the rules concerning reporting conflicts of interest and obtaining direction from the Company’s President and Chief Executive Officer and/or the Company’s legal counsel, as appropriate, regarding any potential conflicts of interest. The Company has not yet adopted a formal written code of ethics because the Company believes that the fiduciary duties required to be met by the Company’s officers and directors, as set forth above, are sufficient to ensure that the Company operates in an ethical manner at this stage of the Company’s Development.

Item 16C. Principal Accountant Fees and Services

MSCM LLP has served as the Company’s auditing firm since March 26, 2009. Aggregate fees billed to the Company for professional services rendered by MSCM LLP and its affiliates during the fiscal years ended January 31, 2012 and January 31, 2011 are detailed below:

		Year Ended January 31,
		(Cdn$)
		2012		2011
Audit Fees	$	60,000	$	50,000
Audit-Related Fees	$	14,680	$	0
Tax Fees	$	0	$	0
All Other Fees	$	1,200	$	960

The nature of each category of fees is as follows:

Audit Fees:

Audit fees were paid for professional services rendered by the auditors for the audit of the Company’s annual financial statements, reviews of the Company’s condensed consolidated interim financial statements and attestation services provided in connection with statutory and regulatory filings or engagements.

Audit-Related Fees:

Audit-related fees are defined as the aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements and are not reported under the Audit Fees item above. This category comprises fees billed for advisory services associated with the Company’s financial reporting.

Tax Fees:

Tax fees are defined as the aggregate fees billed for professional services rendered by the Company’s external auditor for tax compliance, tax advice and tax planning.

All Other Fees:

All other fees include expenses reimbursed for services rendered to the Company and its subsidiaries, other than the services described above.

Pre-approval Policies and Procedures

All services to be performed by the Company’s auditor must be approved in advance by the Audit Committee. The Audit Committee, in consultation with senior management, reviews annually and recommends for approval by the Board.

the appointment of independent auditors at the annual general meeting of shareholders of the Company;
the remuneration of the auditors; and
pre-approval of all audit and non-audit services to be provided to the Company by the external auditor, other than any de minimis non-audit services allowed by applicable law or regulation.

Since the commencement of the Company's most recently completed financial year, every recommendation of the Audit Committee to nominate or compensate an external auditor was adopted by the Board.

Of the total aggregate fees paid by the Company to its accountants during the fiscal year ended January 31, 2012, $74,680, or 98% of the aggregate fees, were approved by the Audit Committee pursuant to the de minimis exception provided by Section (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

Item 16D. Exemptions from the Listing Standards for Audit Committees

Not applicable.

Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers

Not applicable.

Item 16F. Change in Registrant's Certifying Accountant

Not applicable.

Item 16G. Corporate Governance

Not applicable.

Item 16H. Mine Safety Disclosure

Not applicable.

PART III

Item 17. Financial Statements.

Following is a list of financial statements filed as part of this annual report on Form 20-F.

Auditor's Report for Royal Standard Minerals Inc. for the years ended January 31, 2012 and 2011.
Consolidated Statements of Financial Position of Royal Standard Minerals Inc. as at January 31, 2012, January 31, 2011 and February 1, 2010.
Consolidated Statements of Operations of Royal Standard Minerals Inc. for the years ended January 31, 2012 and 2011.
Consolidated Statements of Cash Flows of Royal Standard Minerals Inc. for the years ended January 31, 2012 and 2011.
Consolidated Statement of Changes in Shareholders’ Equity of Royal Standard Minerals Inc. for the years ended January 31, 2012 and 2011.
Notes to the Consolidated Financial Statements of Royal Standard Minerals Inc.
Management's Discussion and Analysis for the year ending January 31, 2012.

The consolidated financial statements of Royal Standard Minerals Inc. were prepared in accordance with International Financial Reporting Standards and are expressed in United States dollars. For a discussion of the reconciliation of such financial statements to United States generally accepted accounting principles, see note No. 18 of the notes to the consolidated financial statements of Royal Standard Minerals Inc. (Please note, this reconciliation would appear on the statements previously filed under Canadian GAAP only).

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of Royal Standard Minerals Inc.

Report on the Consolidated Financial Statements

We have audited the accompanying consolidated financial statements of Royal Standard Minerals Inc. (the “Company”), which comprise the consolidated statements of financial position as at January 31, 2012, January 31, 2011 and February 1, 2010, and the consolidated statements of operations, changes in shareholders’ equity and cash flows for the years ended January 31, 2012 and 2011 and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

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 comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Royal Standard Minerals Inc. as at January 31, 2012, January 31, 2011 and February 1, 2010, and its financial performance and its cash flows for the years ended January 31, 2012 and 2011 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Emphasis of Matter

Without modifying our opinion, we draw attention to Note 1 to the consolidated financial statements which indicates that the Company has no sources of recurring revenue and has incurred losses amounting to $44,553,494 since its inception. These conditions, along with other matters as set forth in Note 1, indicate the existence of material uncertainties that may cast significant doubt about the Company’s ability to continue as a going concern.

Signed: “MSCM LLP”
Chartered Accountants
Licensed Public Accountants

Toronto, Ontario
May 29, 2012

Royal Standard Minerals Inc.

(Expressed in United States Dollars)

Consolidated Financial Statements

January 31, 2012 and 2011

MANAGEMENT'S RESPONSIBILITY FOR
CONSOLIDATED FINANCIAL REPORTING

The accompanying audited annual financial statements of Royal Standard Minerals Inc. (the "Company") are the responsibility of the Board of Directors.

The audited annual financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the audited annual financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the reporting date. In the opinion of management, the financial statements have been prepared within acceptable limits of materiality and are in compliance with all applicable International Financial Reporting Standards.

Management has established processes, which are in place to provide it sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the audited annual financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of, and for the periods presented by, the audited annual financial statements; and (ii) the audited annual financial statements fairly present in all material respects the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented by the audited annual financial statements.

The Board of Directors is responsible for reviewing and approving the audited annual financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the audited annual financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the audited annual financial statements together with other financial information of the Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

(signed) "Philip Gross"	(signed) "Ike Makrimichalos"

Philip Gross	Ike Makrimichalos
Interim President and Chief Executive Officer	Chief Financial Officer

Toronto, Canada
May 29, 2012

Independent Auditors' Report

To the Shareholders of
Royal Standard Minerals Inc.

Report on the Consolidated Financial Statements

Management's Responsibility for the Consolidated Financial Statements

Auditors' Responsibility

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

Emphasis of Matter

	Signed: “MSCM LLP”

	Chartered Accountants
	Licensed Public Accountants
Toronto, Ontario
May 29, 2012

701 Evans Avenue, 8th Floor, Toronto ON M9C 1A3, Canada T (416) 626-6000 F (416) 626-8650 MSCM.CA

Royal Standard Minerals Inc.

Consolidated Statements of Financial Position

(expressed in United States Dollars)

		As at			As at			As at
		January 31,			January 31,			February 1,
		2012			2011			2010
					(Note 21)			(Note 21)

Assets
Current
Cash	$	629,553		$	102,038		$	745,779
Marketable securities (Note 5)		150,000			52,000			60,500
Sundry receivables and prepaids (Note 6)		156,275			61,277			24,537
		935,828			215,315			830,816

Due from related parties (Note 17)		-			-			121,740
Reclamation bonds (Note 7)		633,034			537,860			534,984
Equipment, net (Note 9)		2,084,336			453,733			725,906
	$	3,653,198		$	1,206,908		$	2,213,446

Liabilities
Current
Accounts payable and accrued liabilities (Note 10)	$	3,033,763		$	578,627		$	301,381
Due to related parties (Note 17)		35,023			357,061			-
Long-term debt - current portion (Note 12)		2,965,962			-			-
Embedded derivative on long-term debt
- current portion (Note 12)		85,361			-			-

		6,120,109			935,688			301,381

Asset retirement obligations (Note 11)		292,315			232,010			232,010
Long-term debt (Note 12)		2,965,961			-			-
Embedded derivative on long-term debt (Note 12)		85,360			-			-
		9,463,745			1,167,698			533,391

Shareholders' (Deficiency) Equity
Share capital (Note 13(b))		28,098,264			28,098,264			28,098,264
Reserves		10,580,808			10,076,866			10,076,866
Accumulated deficit		(44,553,494	)		(38,101,796	)		(36,468,951	)
Accumulated other comprehensive (loss) income		63,875			(34,124	)		(26,124	)
		(5,810,547	)		39,210			1,680,055
	$	3,653,198		$	1,206,908		$	2,213,446

Going Concern (Note 1)
Contingencies (Note 18)
Subsequent events (Note 22)

Approved by the Board :

Paul G. Smith		James B. Clancy
Director		Director

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

Royal Standard Minerals Inc.

Consolidated Statements of Operations

(expressed in United States Dollars)

For the years ended January 31		2012			2011
					(Note 21)

Expenses
Exploration and evaluation expenditures (Note 8)	$	2,954,356		$	1,044,905
General and administrative (Note 19)		2,809,119			741,275
		5,763,475			1,786,180

Other items
Finance income		4,291			3,221
Finance costs (Note 12)		(712,822	)		-
Write down of advances to related Company		-			(132,060	)
Gain on disposal of marketable securities		-			275,194
Foreign currency translation adjustment		20,308			6,980

Net loss for the year	$	(6,451,698	)	$	(1,632,845	)

Basic and diluted loss per share (Note 15)	$	(0.08	)	$	(0.02	)

Consolidated Statements of Comprehensive Loss (expressed in United States Dollars)

For the years ended January 31		2012			2011
					(Note 21)

Net loss for the year	$	(6,451,698	)	$	(1,632,845	)

Other comprehensive income (loss)
Net unrealized income (loss) on available-for-sale marketable securities		97,999			(8,000	)

Comprehensive loss for the year	$	(6,353,699	)	$	(1,640,845	)

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

Royal Standard Minerals Inc.

Consolidated Statements of Changes in Shareholders' Equity

(Expressed in United States Dollars)

									Accumulated
									Other
		Share				Accumulated			Comprehensive
January 31, 2011		Capital		Reserves		Deficit			Income (Loss)			Total

Balance, February 1, 2010	$	28,098,264	$	10,076,866	$	(36,468,951	)	$	(26,124	)	$	1,680,055
Net loss for the year		-		-		(1,632,845	)		-			(1,632,845	)
Net decrease in unrealized losses on available-for-sale marketable securities		-		-		-			(8,000	)		(8,000	)
Balance, January 31, 2011	$	28,098,264	$	10,076,866	$	(38,101,796	)	$	(34,124	)	$	39,210

									Accumulated
									Other
		Share				Accumulated			Comprehensive
January 31, 2012		Capital		Reserves		Deficit			Income (Loss)			Total

Balance, February 1, 2011	$	28,098,264	$	10,076,866	$	(38,101,796	)	$	(34,124	)	$	39,210
Stock-based payments		-		503,942		-			-			503,942
Net loss for the year		-		-		(6,451,698	)		-			(6,451,698	)
Net increase in unrealized gain on available-for-sale marketable securities		-		-		-			97,999			97,999
Balance, January 31, 2012	$	28,098,264	$	10,580,808	$	(44,553,494	)	$	63,875		$	(5,810,547	)

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

Royal Standard Minerals Inc.

Consolidated Statements of Cash Flows

(expressed in United States Dollars)

For the years ended January 31		2012			2011
					(Note 21)

Operating activities
Net loss for the year	$	(6,451,698	)	$	(1,632,845	)
Operating items not involving cash:
Depreciation		137,274			272,172
Increase in asset retirement obligation		60,305			-
Accretion expense		611,108			-
Stock-based payments		503,942			-
Gain on disposal of marketable securities		-			(275,194	)
Write down of advances to related Company		-			132,060
Changes in non-cash working capital:
Sundry receivables and prepaids		(94,998	)		(36,740	)
Accounts payable and accrued liabilities		1,481,098			277,246
Due to related parties		(322,038	)		346,741

Cash used in operating activities		(4,075,007	)		(916,560	)

Financing activities
Increase in long-term debt		5,970,350			-
Finance costs paid on long-term debt		(400,000	)		-

Cash provided by financing activities		5,570,350			-

Investing activities
Increase in reclamation bonds		(95,174	)		(2,876	)
Purchase of equipment		(872,654	)		-
Proceeds on disposal of marketable securities		-			275,695

Cash (used in) provided by investing activities		(967,828	)		272,819

Change in cash		527,515			(643,741	)

Cash, beginning of year		102,038			745,779

Cash, end of year	$	629,553		$	102,038

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

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

1.	The Company and Operations and Going Concern

	Royal Standard Minerals Inc. (the "Company") is a publicly held company, engaged in the acquisition, exploration and development of gold and precious metal properties in the United States of America. The Company is continued under the Canada Business Corporations Act and its common shares are traded in the United States of America on the Over-the-Counter ("OTC") Bulletin Board. Inception has been deemed to be June 26, 1996, the date on which the Company acquired all of the outstanding common shares of Southeastern Resources Inc. ("SRI"), which acquisition was accounted for as a reverse takeover of the Company by SRI. The Company's head office is located at 50 Richmond Street East, Suite 101, Toronto, Ontario, M5C1N7.

	The consolidated financial statements were approved by the Board of Directors on May 29, 2012.

	These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that cast significant doubt upon the entity's ability to continue as a going concern. The Company has incurred a loss in the current and prior periods, with a current net loss of $6,451,698 during the year ended January 31, 2012 (2011 - $1,632,845) and has an accumulated deficit of $44,553,494 (January 31, 2011 - $38,101,796, February 1, 2010 - $36,468,951).

	The underlying value of the resource properties is dependent upon the existence and economic recovery of economic reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability to raise long-term financing to complete the development of the properties and upon future profitable production or, alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis, all of which are uncertain. There is no assurance that any such initiatives will be sufficient and, as a result, there is significant doubt regarding the going concern assumption and, accordingly, the ultimate appropriateness of the use of accounting principles applicable to a going concern. The Company’s ability to continue to meet its obligations and carry out its planned exploration activities is uncertain and dependent upon the continued financial support of its shareholders, its current creditors and securing additional financing. During the year ended January 31, 2012, the Company secured financing of $8,000,000 (see note 12). These financial statements do not reflect the adjustments to the carrying values or classifications of assets and liabilities or to the reported expenses that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations for the foreseeable future. These adjustments could be material.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies

	[a] Statement of compliance and conversion to International Financial Accounting Standards (“IFRS”)

	These consolidated financial statements of the Company have been prepared in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”).

	These consolidated financial statements have been prepared in accordance with IFRS with a changeover date of February 1, 2011 and a transition date of February 1, 2010. Previously, the Company prepared its financial statements in accordance with Canadian Generally Accepted Accounting Principles (“GAAP”). The disclosures required by the provision of IFRS 1, “First-time adoption of International Financial Reporting Standards”, explaining how the transition to IFRS has affected the reported loss and comprehensive loss, cash flows, changes of equity and financial position of the Company, are presented in note 21.

	The policies applied in these consolidated financial statements are presented below and are based on IFRS issued and outstanding as of May 29, 2012, the date the Board of Directors approved the consolidated financial statements.

	[b] Accounting polices

	Principles of consolidation

	These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Kentucky Standard Energy Inc. and Manhattan Mining Co., both United States companies. All intercompany transactions and balances have been eliminated upon consolidation.

	Equipment

	Equipment is recorded at cost less accumulated depreciation. Depreciation is provided using the declining balance method using the following rates:

	Exploration equipment	- 25% to 30%
	Office equipment	- 20%
	Construction in progress	- nil, as not yet in service

At the end of each reporting period, the Company reviews the carrying amounts of its equipment to determine whether there is any indication that the equipment has suffered an impairment loss. Where such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. The recoverable amount is the higher of the the equipment's fair value less cost to sell or its value in use.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Exploration and evaluation expenditures

	The Company expenses exploration and evaluation expenditures as incurred. Exploration and evaluation expenditures include acquisition costs of mineral properties, property option payments and evaluation activity.

	Once a project has been established as commercially viable and technically feasible, related development expenditure is capitalized. This includes costs incurred in preparing the site for mining operations. Capitalization ceases when the mine is capable of commercial production, with the exception of development costs that give rise to a future benefit.

	Restoration, rehabilitation and environmental obligations

	A legal or constructive obligation to incur restoration, rehabilitation and environmental costs may arise when environmental disturbance is caused by the exploration, development or ongoing production of a mineral property interest. Such costs arising from the decommissioning of plant and other site preparation work, discounted to their net present value, are provided for and recorded in the exploration and evaluation expenditures, as soon as the obligation to incur such costs arises. Discount rates using a pretax rate that reflects the time value of money are used to calculate the net present value. These costs are charged against profit or loss over the economic life of the related asset, through amortization using either a unit-of- production or the straight-line method as appropriate. The related liability is adjusted for each period for the unwinding of the discount rate and for changes to the current market-based discount rate, amount or timing of the underlying cash flows needed to settle the obligation.

	Share based payments

	The fair value of the stock options granted to directors, officers and employees is determined using the Black-Scholes option pricing model and management's assumptions as disclosed in Note 14 and recorded as stock-based compensation expense over the vesting period of the stock options, with the offsetting credit recorded as an increase in reserves. The fair value of stock options issued to other than employees are measured at the fair value of the goods or services received unless this cannot be reliably estimated, and are recognized over the period of service.

	If the stock options are exercised, the proceeds are credited to share capital and the fair value at the date of grant is reclassified from reserves to share capital.

	Income taxes

	Tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Income taxes (continued)

	Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

	Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.

	A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.

	Loss per common share

	Basic loss per share is computed by dividing the loss for the year by the weighted average number of common shares outstanding during the year, including contingently issuable shares which are included when the conditions necessary for issuance have been met. Diluted loss per share is calculated in a similar manner, except that the weighted average number of common shares outstanding is increased to include potentially issuable common shares from the assumed exercise of common share purchase options and warrants, if dilutive. The number of additional shares included in the calculation is based on the treasury stock method for options and warrants.

	Foreign currency translation

	The United States dollar is the functional and presentation currency of the Company. Functional currency is also determined for each of the company’s subsidiaries, and items included in the financial statements of the subsidiary are measured using that functional currency.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Foreign currency translation (continued)

	Transactions in currencies other than the functional currency are translated into the functional currency using the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities not denominated in the functional currency are translated at the year end rates of exchange. Foreign exchange gains and losses are recognized in the statement of earnings (loss). Intercompany amounts with foreign operations for which settlement is neither planned nor likely to occur in the foreseeable future are part of the Company’s net investment in the foreign operation. Foreign exchange gains and losses related to these intercompany amounts are included in accumulated other comprehensive income.

	Assets and liabilities of entities with functional currencies other than United States dollars are translated at the year end rates of exchange, and the results of their operations are translated at average rates of exchange for the year. The resulting translation adjustments are included in accumulated other comprehensive income in shareholders' equity.

	Financial instruments

	The Company recognizes financial assets and financial liabilities when the Company becomes a party to a contract. Financial assets and financial liabilities, with the exception of financial assets classified as at fair value through profit or loss, are measured at fair value plus transaction costs on initial recognition. Financial assets at fair value through profit or loss are measured at fair value on initial recognition and transaction costs are expensed when incurred. Securities are accounted for at the trade date.

	Measurement in subsequent periods depends on the classification of the financial instrument.

	i) Financial assets at fair value through profit or loss (FVTPL)

	Financial assets are classified as FVTPL when acquired principally for the purpose of trading, if so designated by management (fair value option), or if they are derivative assets that are not part of an effective and designated hedging relationship. Financial assets classified as FVTPL are measured at fair value, with changes recognized in the consolidated statements of income (loss).

	The Company’s financial assets classified as FVTPL include cash and cash equivalents. The Company does not currently hold any derivative instruments or apply hedge accounting.

	ii) Available-for-sale financial assets

	Financial assets are classified as available-for-sale when so designated by management. Financial assets classified as available-for-sale are measured at fair value, with changes recognized in the other comprehensive income.

	The Company’s financial assets classified as available-for-sale include marketable securities.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Financial instruments (continued)

	iii) Loans and receivables

	Loans and receivables are non-derivative financial assets that have fixed or determinable payments and are not quoted in an active market. Subsequent to initial recognition, loans and receivables are carried at amortized cost using the effective interest method.

	Sundry receivables and due from related parties are classified as loans and receivables.

	iv) Financial liabilities at fair value through profit or loss ("FVTPL")

	This category comprises derivatives, or liabilities acquired or incurred principally for the purpose of being sold or repurchased in the near term. They are carried in the consolidated statements of financial position at fair value with changes in fair value recognized in the consolidated statements of operations.

	Embedded derivative on long-term debt is classified as FVTPL.

	v) Other financial liabilities

	Other financial liabilities are financial liabilities that are not classified as FVTPL. Subsequent to initial recognition, other financial liabilities that are not subject to hedge accounting, are measured at amortized cost using the effective interest method.

	Accounts payable and accrued liabilities, due to related parties, long-term debt, and asset retirement obligations are classified as other financial liabilities. The Company does not currently apply hedge accounting.

	The effective interest method is a method of calculating the amortised cost of an instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument to the net carrying amount on initial recognition.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Financial instruments (continued)

	vi) Financial instruments recorded at fair value:

	Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The fair value hierarchy has the following levels: Level 1 - valuation based on quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 - valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and Level 3 - valuation techniques using inputs for the asset or liability that are not based on observable market data (unobservable inputs). As of January 31, 2012, January 31, 2011 and February 1, 2010, the only financial assets or liability measured at fair value is the Company's cash and cash equivalents, investment in Sharpe Resources Corporation ("Sharpe"), and embedded derivative on long-term debt. As at January 31, 2012, Sharpe's fair market value was determined to be $150,000 (January 31, 2011 - $52,000 and February 1, 2010 - $60,500), and the embedded derivative on long-term debt's fair market value was determined to be $170,721.

	Cash and cash equivalents, Sharpe, and embedded derivative on long-term debt are considered Level 1 for purposes of the fair value hierarchy.

	Significant accounting judgments and estimates

	The preparation of these consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These consolidated financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

	Critical accounting estimates

	Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

management's assumption of material restoration, rehabilitation and environmental obligations, based on the facts and circumstances that existed during the period; and
management's assumption used to determine the fair value of the embedded derivative on long-term debt.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[b] Accounting polices (continued)

	Significant accounting judgments and estimates (continued)

	Critical accounting judgments

	The categorization of financial assets and liabilities is an accounting policy that requires management to make judgments or assessments.

	Long-term debt

	Long-term debt instruments are initially recognized at fair value, net of debt issuance costs incurred. Long- term debt instruments are subsequently valued at amortized cost. Debt issue costs are deducted from the balance of the underlying debt and amortized using the effective interest rate method.

	Embedded derivative on Long-term debt

	The Company may enter into certain financial derivative contracts in order to manage the exposure to market risks from fluctuations in commodity prices. The Company’s policy is not to utilize derivative financial instruments for speculative purposes. All financial derivative contracts are classified as “fair value through profit or loss”.

	Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through the profit or loss. Changes in the fair value of separable embedded derivatives are recognized immediately profit or loss.

	[c] New standards

	IFRS 9 Financial instruments (“IFRS 9”)

	IFRS 9 was issued by the IASB in October 2010 and will replace IAS 39 Financial Instruments: Recognition and Measurement [“IAS 39”]. IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2015. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

2.	Significant Accounting Policies (Continued)

	[c] New standards (continued)

	IFRS 10 Consolidated Financial Statements (“IFRS 10”)

	IFRS 10 provides a single model to be applied in the control analysis for all investees, including entities that currently are SPEs ("Special purpose entities") in the scope of SIC-12. In addition, the consolidation procedures are carried forward substantially unmodified from IAS 27 (2008). IFRS 10 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

	IFRS 11 Joint Arrangements (“IFRS 11”)

	IFRS 11 replaces the guidance in IAS 31 Interests in Joint Ventures and SIC 13 - Joint Controlled Entities - Non-Monetary Contributions by Venturers. IFRS 11 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

	IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”)

	IFRS 12 was issued by the IASB in May 2011. IFRS 12 is a new standard which provides disclosure requirements for entities reporting interests in other entities, including joint arrangements, special purpose vehicles, and off balance sheet vehicles. IFRS 12 is effective for annual periods beginning on or after January 1, 2013. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

	IFRS 13, Fair Value Measurement ("IFRS 13")

	IFRS 13, Fair Value Measurement was issued by the IASB on May 12, 2011. The new standard converges IFRS and US GAAP on how to measure fair value and the related fair value disclosures. The new standard creates a single source of guidance for fair value measurements, where fair value is required or permitted under IFRS, by not changing how fair value is used but how it is measured. The focus will be on an exit price. IFRS 13 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

	IAS 1 Presentation of Financial Statements

	IAS 1 was amended by the IASB in June 2011 in order to align the presentation of items in other comprehensive income with US GAAP standards. Items in other comprehensive income will be required to be presented in two categories: items that will be reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement of comprehensive income as one statement or two separate statements of profit and loss and other comprehensive income remains unchanged. The amendments to IAS 1 are effective for annual periods beginning on or after July 1, 2012.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

2.	Significant Accounting Policies (Continued)

	[c] New standards (continued)

	IAS 28 Investments in Associates and Joint Ventures

	As a consequence of the issue of IFRS 10, IFRS 11 and IFRS 12, IAS 28 has been amended and will further provide the accounting guidance for investments in associates and will set out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. This standard will be applied by the Company when there is joint control, or significant influence over an investee. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not include control or joint control of those policy decisions. When determined that the Company has an interest in a joint venture, the Company will recognize an investment and will account for it using the equity method in accordance with IAS 28. IAS 28 is required to be applied for annual periods beginning on or after January 1, 2013, with earlier adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

3.	Capital Management

	The Company manages its capital with the following objectives:

to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an effort to meet its objectives given the current outlook of the business and industry in general. The Company may manage its capital structure by issuing new shares, repurchasing outstanding shares, adjusting capital spending, or disposing of assets. The capital structure is reviewed by Management and the Board of Directors on an ongoing basis.

The Company considers its capital (deficiency) to be equity, comprising share capital, reserves, accumulated deficit and accumulated other comprehensive loss, which at January 31, 2012, totalled $(5,810,547) (January 31, 2011 - $39,210, February 1, 2010 - $1,680,055). Note that included in the balance presented is a deficit of $44,553,494 as at January 31, 2012 (January 31, 2011 - $38,101,796, February 1, 2010 -$36,468,951).

The Company manages capital through its financial and operational forecasting processes. The Company reviews its working capital and forecasts its future cash flows based on operating expenditures, and other investing and financing activities. The forecast is regularly updated based on activities related to its mineral properties. Selected information is provided to the Board of Directors of the Company. The Company’s capital management objectives, policies and processes have remained unchanged during the year ended January 31, 2012. The Company is not subject to external capital requirements.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

4.	Property and Financial Risk Factors

	(a) Property risk

	The Company's significant mineral property is the Goldwedge Project.

	Unless the Company acquires or develops additional significant resource properties, the Company will be solely dependent upon the Goldwedge Project. If no additional mineral properties are acquired by the Company, any adverse development affecting the Goldwedge Project would have a material adverse effect on the Company's financial condition and results of operations.

	(b) Financial risk factors

	The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk (including interest rate, foreign exchange rate, and commodity price risk).

	Risk management is carried out by the Company's management team with guidance from the Audit Committee under policies approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.

		(i) Credit risk

		Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and reclamation bonds. The Company has no significant concentration of credit risk arising from operations. Cash and reclamation bonds are held with reputable financial institutions, from which management believes the risk of loss to be minimal.

		(ii) Liquidity risk

		The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at January 31, 2012, the Company had a cash balance of $629,553 (January 31, 2011 - $102,038, February 1, 2010 - $745,779) to settle current liabilities of $6,120,109 (January 31, 2011 - $935,688, February 1, 2010 - $301,381). All of the Company's financial liabilities have contractual maturities of less than 60 days and are subject to normal trade terms. The Company continues to seek sources of additional capital to improve its liquidity position. During the year ended January 31, 2012, the Company secured financing of $8,000,000 (see note 12).

		(iii) Market risk

		Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

			Interest rate risk

			The Company has cash balances and interest-bearing debt with a fixed interest rate. The Company's current policy is to invest excess cash in guaranteed investment certificates, bankers acceptance and money market deposits, with reputable financial institutions. The interest rate risk is remote.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

4.	Property and Financial Risk Factors (Continued)

	(b) Financial risk factors (continued)

		(iii) Market risk (continued)

			Foreign currency risk

			The Company's functional and reporting currency is the United States dollar and major purchases are transacted in United States dollars. An operating account is maintained in Canadian dollars primarily for settlement of general and corporate expenditures.

			Commodity price risk

			The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company's earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices, as they relate to gold and precious metals in the United States, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

	(c) Sensitivity analysis

	As of January 31, 2012, the carrying and fair value amounts of the Company's financial instruments are approximately equivalent.

	Based on management's knowledge and experience of the financial markets, the Company believes the following movements are "reasonably possible" over a twelve month period:

The Company's marketable securities are subject to fair value fluctuations. As at January 31, 2012, if the fair value of the marketable securities had decreased/increased by 10% with all other variables held constant, comprehensive loss for the year ended January 31, 2012 would have been approximately $15,000 higher/lower. Similarly, as at January 31, 2012, reported shareholders' equity would have been approximately $15,000 lower/higher as a result of a 10% decrease/increase in the fair value of marketable securities.
Cash, sundry receivables, due from and to related parties, and accounts payable and accrued liabilities denominated in Canadian dollars are subject to foreign currency risk. As at January 31, 2012, had the US dollar weakened/strengthened by 5% against the Canadian dollar with all other variables held constant, it would affect net loss and comprehensive loss by approximately $36,000.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

4.	Property and Financial Risk Factors (Continued)

	(c) Sensitivity analysis (continued)

Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and viability of development depends upon the world market price of gold and precious metals. Gold and precious metals have fluctuated widely in recent years. There is no assurance that, even if commercial quantities of gold and precious metals may be produced in the future, a profitable market will exist for them. A decline in the market price of gold and precious metals may also require the Company to reduce its mineral properties, which could have a material and adverse effect on the Company’s value. As of January 31, 2012, the Company is not a gold or precious metals producer. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants. This may also affect the Company's liquidity and its ability to meet its ongoing obligations.
The fair value of embedded derivatives on long-term debt is determined by the gold price at the repayment dates. When the gold price is over $1,600 per ounce, the embedded derivative would have a value. As at January 31, 2012, had the future gold price increased/decreased $50 dollars per ounce, it would affect net loss and comprehensive loss by approximately $57,000.

5.	Marketable Securities

	Marketable securities consist of 2,000,000 common shares of Sharpe Resources Corporation ("Sharpe"), a publicly held Canadian company engaged in the exploration and development of coal properties in the United States. Sharpe was considered to be related to the Company because of common management prior to the termination of the former CEO's employment in December 2011. The market value of the shares at January 31, 2012 was $150,000 (January 31, 2011 - $52,000, February 1, 2010 - $60,500).

6.	Sundry Receivables and Prepaids

		As at		As at		As at
		January 31,		January 31,		February 1,
		2012		2011		2010

Sales tax receivables	$	71,415	$	18,290	$	1,573
Other receivables		60,094		31,592		12,080
Prepaid expenses		24,766		11,395		10,884

	$	156,275	$	61,277	$	24,537

7.	Reclamation Bonds

	The Company has posted reclamation bonds for its mining projects, as required by the States of Nevada and Kentucky, to secure clean-up costs if the projects are abandoned or closed. $397,676 of the reclamation bonds pertains to the Goldwedge Project, $56,658 to the Piñon Project and $178,700 to the Kentucky Project.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

8.	Exploration and Evaluation Expenditures on Mineral Properties

	(a) Goldwedge Project

	The Goldwedge Project, a property owned by the Company, represents the Company's most advanced project and is located in the Manhattan District in Nye County, Nevada, approximately eight miles south of the Round Mountain mine and has been issued a mine and mill permit by the Nevada Division of Environmental Protection. The Company is completing refurbishment of the on-site processing plant which was used for the test mining and processing that took place between 2007 and 2008. The process includes primary and secondary crushing and grinding facilities that feed a gravity recovery system. In addition, dry stack tailings containment as well as silt and fresh water ponds are in place. Testing of the various mineral processing functions extracted stockpiles of low grade gold feed material, as well as concurrently newly mined material. The feed material was processed into gold dore on site. The Company has recently completed construction of the Rapid Infiltration Basins (RIB), dewatered the previously completed underground development and also commenced phase 2 of the underground development program. This phase of the development includes the exploration of defined mineralized zones concurrently with the second phase of decline development. The previous work had concentrated on the development of a spiral decline as a means to explore the deposit at depth. As part of the program, a series of crosscuts were constructed at specific intervals to effectively assess the potential mineralized zones. Phase 2 of the development is concentrated on developing along the strike of known mineralized zones to assess continuity and grade as well as prepare areas for future test stoping. All material is sampled daily and analyzed for gold onsite at the Company's assay laboratory. In addition, the Company sends samples for analysis to an independent laboratory located offsite.

	Also held under the same option agreement as the Goldwedge Property was the Dixie-Comstock Mining Company option, in Nye County located within the Manhattan District and other unpatented mining claims located in Churchill County, Nevada. In 2010, the Company exercised its option to purchase these unpatented and patented mining claim groups.

	Under the guidance of IAS 37, the Company has recorded an asset retirement obligation ("ARO") of $168,276 on this project, representing the estimated costs, on a discounted basis, of the Company's obligation to restore the site to its original condition.

	Based on the existing level of terrestrial disturbance and water treatment and monitoring requirements, the discounted ARO's for all projects, where applicable, has been estimated by management. The assumptions for the future payments are based on future expenses being incurred between 2017 and 2019 and a discount rate of 10%.

	(b) Piñon Project

	The Piñon Project is a property made up of a number of property leases located in Elko Country, Nevada. Under the guidance of IAS 37, the Company has recorded an ARO of $28,724 on this project, representing the estimated costs, on a discounted basis, of the Company's obligation to restore the site to its original condition.

	(c) Fondaway Canyon Project

	The Fondaway Canyon Project is located in Churchill County, Nevada. During the years ended January 31, 2011 and 2012, the Company did not perform any exploration on this project.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

8.	Exploration and Evaluation Expenditures on Mineral Properties (Continued)

	(d) Kentucky Project

	On December 7, 2011, the Company exercised its option to acquire a 50% interest in certain coal projects in Eastern Kentucky. The option was originally acquired by the Company pursuant to an option and joint venture agreement entered into with Sharpe on November 21, 2008 and amended on September 11, 2009, to jointly pursue the exploration and development of approximately 1,000 acres in Wolfe County, Kentucky.

	In the prior year, the Company wrote off a promissory note receivable from the optionor in the amount of $133,134. Further, the Company paid for a reclamation bond of $178,700, included in the consolidated statements of financial position under reclamation bonds.

	Under the guidance of IAS 37, the Company has recorded an ARO on its Kentucky Project in the amount of $95,315, representing the estimated costs, on a discounted basis, of the Company's obligation to restore the property to its original condition.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

8.	Exploration and Evaluation Expenditures on Mineral Properties (Continued)

	During the year ended January 31, 2012, the Company's exploration and evaluation expenditures were as follows:

		Years Ended
		January 31,
		2012		2011

Gold Wedge Project
Property acquisition costs	$	10,000	$	40,492
Travel		71,292		65,983
Mine development costs		397,626		42,312
Drilling		40,206		-
Professional fees		113,442		65,550
Consulting, wages and salaries		1,238,299		240,392
Office and general		393,149		84,314
Analysis and assays		7,392		2,225
Supplies, equipment and transportation		353,312		(9,010	)
Depreciation		124,231		254,908
	$	2,748,949	$	787,166

Piñon Project
Property acquisition costs	$	69,571	$	102,706
Consulting, wages and salaries		1,617		(15,711	)
	$	71,188	$	86,995

Fondaway Project
Property acquisition costs	$	35,000	$	58,037
Office and general		2,297		-
	$	37,297	$	58,037

Kentucky Project
Property acquisition costs	$	-	$	(300	)
Travel		12,764		62
Reclamation		-		444
Professional fees		2,400		17,786
Consulting, wages and salaries		46,300		49,150
Office and general		12,794		15,223
Supplies, equipment and transportation		10,552		13,646
Depreciation		12,112		16,696
	$	96,922	$	112,707

Total exploration activities	$	2,954,356	$	1,044,905

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

9.	Equipment

		Construction		Exploration		Office
*COST*		in progress		equipment		equipment		Total
Balance, February 1, 2010	$	-	$	2,977,464	$	21,253	$	2,998,717
Additions		-		-		553		553
Balance, January 31, 2011	$	-	$	2,977,464	$	21,806	$	2,999,270
Additions		1,619,341		148,536		-		1,767,877
Balance, January 31, 2012	$	1,619,341	$	3,126,000	$	21,806	$	4,767,147

		Construction		Exploration		Office
*ACCUMULATED DEPRECIATION*		in progress		equipment		equipment		Total
Balance, February 1, 2010	$	-	$	2,253,811	$	19,000	$	2,272,811
Depreciation for the year		-		271,604		1,122		272,726
Balance, January 31, 2011	$	-	$	2,525,415	$	20,122	$	2,545,537
Depreciation for the year		-		136,343		931		137,274
Balance, January 31, 2012	$	-	$	2,661,758	$	21,053	$	2,682,811

		Construction		Exploration		Office
*CARRYING AMOUNT*		in progress		equipment		equipment		Total
Balance, February 1, 2010	$	-	$	723,653	$	2,253	$	725,906
Balance, January 31, 2011	$	-	$	452,049	$	1,684	$	453,733
Balance, January 31, 2012	$	1,619,341	$	464,242	$	753	$	2,084,336

Construction in progress relates to the refurbishment of the mill at the Company's Goldwedge Project.

Depreciation of exploration equipment is expensed to exploration and evaluation expenditures and depreciation of office equipment is expensed to general and administrative on the consolidated statements of operations.

10.

Accounts Payable and Accrued Liabilities

		As at		As at		As at
		January 31,		January 31,		February 1,
		2012		2011		2010

Trade payables	$	579,664	$	231,432	$	68,002
Accrued liabilities		2,454,099		347,195		233,379
	$	3,033,763	$	578,627	$	301,381

Included in accrued liabilities are accrued finance costs of $78,814 and accrued costs in connection with the

construction in progress, and purchase of exploration equipment, totaling $895,223.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

11.	Asset Retirement Obligations

	The Company is required to recognize a liability for a legal and constructive obligation to perform asset retirement activities, including decommissioning, reclamation and environmental monitoring activities once any of its projects are permanently closed. Although these activities are conditional upon future events, the Company is required to make a reasonable estimate of the fair value of the liability. Based on the existing level of terrestrial disturbance and water treatment and monitoring requirements, the discounted asset retirement obligations ("ARO's") were estimated to be $292,315 as at January 31, 2012, assuming future payments of $484,706 being made over a ten year period from the date of initial assessment of the ARO's and a discount rate of 10%.

	Determination of the undiscounted ARO and the timing of these obligations were based on internal estimates using information currently available, existing regulations, and estimates of closure costs. There was no significant change in the present value of the obligation for the year ended January 31, 2011. Accordingly, no accretion cost has been expensed in the year ended January 31, 2011. During the year ended January 31, 2012, the Company determined an additional $52,165 increase in ARO related to the Company's Goldwedge Project. The following is the reconciliation of the asset retirement obligations:

		Year ended		Year ended		Year ended
		January 31,		January 31,		February 1,
		2012		2011		2010

Balance, beginning of year	$	232,010	$	232,010	$	232,010
Increase in asset retirement obligations		52,165		-		-
Accretion cost		8,140		-		-

Balance, end of year	$	292,315	$	232,010	$	232,010

12.	Long-Term Debt

	On June 29, 2011, the Company's wholly owned subsidiary, Manhattan Mining Co. ("Manhattan") entered into a secured bridge loan agreement (the “Bridge Loan”) with Waterton Global Value, L.P. (“Waterton”) pursuant to which Waterton agreed to provide an $8,000,000 bridge loan (the “Credit Facility”) available to Manhattan. Of the total $8,000,000 Bridge Loan, $4,000,000 was available on closing and the remaining $4,000,000 after the satisfaction of certain covenants. Under the Bridge Loan agreement, the amounts drawn down under the Credit Facility would incur interest at 6% per annum, and the scheduled repayment date of the Credit Facility was 16 months after the initial closing date. In connection with the Credit Facility, Manhattan agreed to pay Waterton a structuring fee, and also provided Waterton with certain royalty interests relating to its Goldwedge Property. Manhattan and Waterton have also entered into a gold purchase agreement pursuant to which Waterton had agreed to purchase Manhattan’s production. The Credit Facility was secured by, amongst other items, the Company’s real property assets in Nevada.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

12.	Long-Term Debt (Continued)

	On August 26, 2011, Manhattan amended its existing Bridge Loan with Waterton such that the Bridge Loan was transitioned into a more permanent senior secured gold stream debt facility (the “Gold Stream Facility”) amongst the parties. Under the Gold Stream Facility, Waterton will make $8,000,000 (the “Principal Amount”) available to Manhattan. The Principal Amount is repayable by Manhattan to Waterton in monthly payments commencing in August 2012 and ending in July 2013. Under the Gold Stream Facility, each monthly repayment of the Principal Amount will be made by the delivery by Manhattan to Waterton of gold bullion ounces where the number of ounces to be delivered shall be based on the spot price of gold on the business day immediately preceding the repayment date less an applicable discount or by the payment of the cash equivalent of such number of ounces. In addition, there is a profit participation formula which is triggered when the spot price of gold is in excess of $1,600 an ounce on the business day immediately preceding the repayment ("Profit Participation"). The Principal Amount will accrue interest at 9.0% per annum. The Gold Stream Facility is secured by, amongst other items, Manhattan's real property assets in Nevada.

	The Company considers Profit Participation as an embedded derivative. As at January 31, 2012, the gross proceeds received under the Gold Stream Facility was $5,970,350, which was allocated to the embedded derivative based on the initial fair values of the embedded derivative determined when proceeds were received ($170,721), and then the residual value was allocated to the liability portion. The Company estimates the future cash flow needs in terms of Profit Participation using the gold future contract prices of repayment periods and discounted to the present value using 9% as annual discount rate. As of January 31, 2012, the Company estimates the gold future price during the repayment period from August 2012 to July 2013 to be $1,750 per ounce.

	As consideration for entering into the Gold Stream Facility, a structuring fee equal to 2% of the aggregate amount of the Gold Stream Facility and an establishment fee of $80,000 was payable by Manhattan to Waterton in cash and Manhattan also granted Waterton certain royalty interests over its exploration stage projects. In addition, Manhattan and Waterton have agreed that Waterton shall have the right to purchase all of the gold produced by Manhattan from its Nevada projects at a price per ounce that will be equal to an agreed discount to the existing spot price of gold at the time of any such purchase. Bayfront Capital Partners Ltd. acted as placement agent in connection with the Gold Stream Facility in consideration for a placement fee equal to 4% of any Principal Amounts actually drawn by Manhattan under the Gold Stream Facility.

	The Gold Stream Facility contains covenants for Manhattan such as, among other things, providing Waterton with updates on its operations, carrying on its business in accordance with prudent mining industry practices, and providing Waterton with certain rights of inspection. Until all amounts outstanding under the Gold Stream Facility have been repaid in full or otherwise satisfied in accordance with the terms of such facility, certain standard restrictive covenants shall apply to Manhattan limiting its ability to (without limitation): incur additional indebtedness, create liens on its assets or dispose of its assets. These negative covenants are subject to certain carve-outs that facilitate Manhattan's ability to operate its business efficiently. The Gold Stream Facility also includes certain event of default provisions pursuant to which, immediately and automatically upon the occurrence of an event of default, all amounts outstanding under the Gold Stream Facility would be automatically accelerated and immediately due and payable to Waterton.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

12.	Long-Term Debt (Continued)

	At any time, without penalty, the Gold Stream Facility provides Manhattan the option to prepay in whole or in part, on 5 business days prior notice. Prepayments may be made in physical gold ounces or cash. The amount of any prepayment shall be calculated using the spot price of gold on the business day immediately preceding the prepayment.

	The following table shows the reconciliation between the gross proceeds received and the carrying value of the Gold Stream Facility.

Gross proceeds	$	5,970,350
Less: Initial fair value of the embedded derivative (i)		(170,721	)
Less: Debt issuance cost (ii)		(478,814	)
Add: Accretion costs		611,108

Long-term debt (iii)	$	5,931,923

(i) There was no significant change in the fair value of the embedded derivative during the year ended January 31, 2012. Accordingly, no such change was recorded in the consolidated statements of operations. The fair value of the embedded derivative is presented as follows:

Current portion	$	85,361
Non-current portion		85,360
	$	170,721

(ii) Debt issuance costs consist of the following:

Structuring and establishment fee	$	240,000
Placement fee		238,814
	$	478,814

(iii) The long-term debt balance is presented as follows:

Current portion	$	2,965,962
Non-current portion		2,965,961
	$	5,931,923

(iv) Minimum long-term debt repayments under the Gold Stream Facility are as follows:

12 months ended January 31, 2013	$	3,980,232
12 months ended January 31, 2014		3,980,233
	$	7,960,465

As of January 31, 2012, the Company had an interest payable balance of $155,930 related to the Gold Stream Facility. The balance was recorded in the accounts payable and accrued liabilities.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

13.	Share Capital

	(a) Authorized

	The authorized capital of the Company consists of an unlimited number of common shares without par value.

	(b) Issued

	Common shares issued		Shares			Amount
	Balance, February 1, 2010, January 31, 2011 and January 31, 2012		83,853,825		$	28,098,264

14.	Stock Options

	Under the Company's stock option plan (the "Option Plan"), the directors of the Company can grant options to acquire common shares of the Company to directors, employees and others who provide ongoing services to the Company. Exercise prices cannot be less than the closing price of the Company's shares on the trading day preceding the grant date and the maximum term of any option cannot exceed ten years.

	The number of common shares under option at any time under the Option Plan or otherwise cannot exceed 5% of the then outstanding common shares of the Company for any optionee. In addition, options granted to insiders of the Company cannot exceed more than 10% of the then outstanding common shares of the Company. The options vest when granted.

	Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable measure of the fair value of the Company's share purchase options.

	The following table reflects the continuity of stock options:

	Number of			Weighted Average
	Stock Options			Exercise Price

Balance, February 1, 2010 and January 31, 2011	7,904,691		$	0.10
Cancelled during the year	(544,500	)	$	0.10
Granted (i)	4,700,000		$	0.30

Balance, January 31, 2012	12,060,191		$	0.17

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

14.	Stock Options (continued)

	The following table reflects the stock options outstanding and exercisable as at January 31, 2012:

	Exercise Price	Options	Options		Fair	Weighted average
Expiry Date	($)	Outstanding	Exercisable		Value	remaining years

June 26, 2014	0.10	7,360,191	7,360,191	$	4,002,581	2.40
January 20, 2017	0.30	4,700,000	1,700,000		1,334,800	4.98

		12,060,191	9,060,191	$	5,337,381	3.36

	(i) On January 20, 2012, 4,700,000 options to purchase common shares of the Company at a price of $0.30 have been granted to consultants, officers and directors of the Company expiring on January 20, 2017. A value of $1,334,800 was assigned using the Black-Scholes option pricing model with the following assumptions: dividend yield of 0%, expected volatility of 206.2% based on historical trends, share price on the date of grant of $0.29, risk-free interest rate of 1.29%, and an expected life of 5 years. 3,750,000 of these options vest as to one third immediately, one third after one year and one third after two years from the date of grant; 500,000 of these options vest one half immediately and one half after one year from the date of grant; 150,000 of these options vest after one year from the date of grant; 100,000 of these options vest after six months from the date of grant; and 200,000 of these options vest immediately. For the year ended January 31, 2012, the impact on salaries and benefits was $503,942.

15.	Basic and Diluted Loss Per Share

	The following table sets forth the computation of basic and diluted loss per share:

		Year Ended
		January 31,
		2012			2011

Numerator:
Loss for the year	$	(6,451,698	)	$	(1,632,845	)

Denominator:
Weighted average number of common shares outstanding for basic and diluted loss per share		83,853,825			83,853,825

Basic and diluted loss per share	$	(0.08	)	$	(0.02	)

The stock options and common share purchase options were not included in the computation of diluted loss

per share on January 31, 2012 and 2011 as their inclusion would be anti-dilutive.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

16.	Income Taxes

	The following table reconciles the expected income tax expense (recovery) at the Canadian statutory income tax rate at 28.08% (2011 - 30.17%) to the amounts recognized in the consolidated statements of operations:

		2012			2011

Net loss before income taxes	$	(6,451,698	)	$	(1,632,845	)
Expected tax recovery at statutory rate		(1,811,637	)		(492,629	)
Permanent differences		141,507			-
Effects of expiration of non-capital losses		-			214,082
Difference between Canadian and foreign tax rates		(270,193	)		(27,000	)
Tax benefits not recognized		1,940,323			305,547
Tax provision	$	-		$	-

The Canadian statutory tax rate changed from 30.17% for the year ended January 31, 2011 to 28.08% for the 2011 taxation year as a result of the enacted reduction of Canadian corporate tax rates.

Deferred Tax Assets and Liabilities

(a) Unrecognized deferred tax assets

Deferred tax assets are recognized for the carry-forward or unused tax losses and unused tax credits to the extent that it is probably that taxable profits will be available against which the unused tax losses/credits can be utilized. The following represents the deductible temporary differences by jurisdiction which have not been recognized in the financial statements.

		2012		2012		2011		2011
		Canada		US		Canada		US

Unclaimed non-capital losses	$	7,487,313	$	24,183,584	$	5,643,790	$	17,731,886
Excess of undepreciated capital cost allowance over carrying value of capital assets		3,093,265		-		2,994,884		-
Excess of unclaimed resources pools over carrying value of exploration properties		1,459,616		-		1,564,552		-
	$	12,040,194	$	24,183,584	$	10,203,226	$	17,731,886

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

16.	Income Taxes (Continued)

	The unclaimed non-capital losses carried forward by expiry date:

			Canada		US
Expires	2015	$	630,952	$	-
	2026		854,554		-
	2027		834,665		5,431,480
	2028		1,029,144		1,175,212
	2029		643,397		872,981
	2030		1,140,900		821,104
	2031		489,264		9,431,109
	2032		1,864,437		6,451,698
		$	7,487,313	$	24,183,584

17.	Related Party Transactions and Balances

	Remuneration of Directors and key management personnel of the Company was as follows:

		Years Ended
		January 31,
		2012		2011

Salaries and benefits paid to directors and officers ⁽¹⁾	$	471,380	$	316,911
Stock-based payments	$	501,799	$	-

	⁽¹⁾ Salaries and benefits include director fees. The board of directors does not have employment or service contracts with the Company. Directors are entitled to director fees and stock options for their services.

	Paul G. Smith, a director and Chairman of the Board, is the President and Chief Executive Officer of Equity Financial Holdings Inc., a company providing financial services to the Company.

	Due to related parties balance at January 31, 2012 consists of $22,607 (January 31, 2011 - $357,061, February 1, 2010 - $nil) owing to the former CEO and $12,416 owed to Sharpe (January 31, 2011 - $nil, February 1, 2010 - $121,740). In addition, included in accounts payable and accrued liabilities is $18,677 (2011 - $nil), owing to the former CEO.

18.	Contingencies

	(a) The Company received documents filed in the District Court, Nye County, Nevada, whereby a optionor of a property acquired by the Company has requested payment for machinery and equipment stored in the vicinity of the acquired property. In the opinion of management, the legal proceedings are without merit and the Company intends to vigorously defend itself against this claim.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

18.	Contingencies (Continued)

	(b) The Company received an action against it whereby the Company was requested by a prior lease holder to take any and all steps necessary to ensure that the prior lease holders bear no responsibilities or liability for the Company’s failure to comply with the rules and regulations of the Kentucky Energy and Environment Cabinet, Division of Mine Enforcement and Reclamation (the “DMER”). Management has responded to the DMER and are rectifying the notice received from the DMER and as a result no penalty will be assessed and the Company will be in compliance with the rules and regulations of the DMER.

	(c) On September 27, 2011 Hale Capital Management, LP and Hale Capital Partners, LP (together, “Hale Capital”) commenced an action in the New York Supreme Court alleging breach of contract in relation to a term sheet entered into between the Company and Hale Capital on December 11, 2010 (the “Term Sheet”), which set out preliminary terms for Hale to provide financing of up to $15 million for the Company’s Goldwedge Project (the “Hale Transaction”). Hale Capital is seeking the “right to participate” in financing the Company on no less favourable terms and conditions as was agreed upon between the Company and Waterton on June 29, 2011 or, in the alternative, damages for breach of the exclusivity provision contained in the Term Sheet. Hale is also seeking expense reimbursement for legal, travel and due diligence fees incurred by Hale Capital, which allegedly totaled $376,170 as of November 21, 2011. On November 23, 2011, Hale Capital amended their complaint to include the Company’s subsidiary Manhattan Mining Co. Management has estimated the expenses at $330,000 and has accrued this amount in the accounts.

19.	General and Administrative

		Years Ended
		January 31,
		2012		2011

Corporate development	$	263,251	$	57,402
Insurance		22,841		24,168
Office and general		1,719		31,786
Professional fees		1,489,989		193,778
Consulting, wages and salaries (Note 17)		526,446		433,019
Share based payments		503,942		-
Depreciation		931		1,122

	$	2,809,119	$	741,275

20.	Segmented Information

	The Company has one reportable business segment consisting of the exploration and development of mining properties. Substantially all of the Company’s assets are located in the United States except for cash totaling $426,596 at January 31, 2012 (January 31, 2011 - $100,065, February 1, 2010 - $678,589) held in Canadian banks. The Company’s operations in Canada consist of general and administrative expenses, totaling $2,459,866 for the year ended January 31, 2012 (2011 - $309,735), including expenses necessary to maintain the Company’s public company status.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS

	(i) Overview

	As stated in Significant Accounting Policies (note 2), these consolidated financial statements are prepared in accordance with IFRS as issued by the IASB.

	The policies set out in the Significant Accounting Policies section have been applied in preparing the financial statements for the years ended January 31, 2012 and 2011 and in the preparation of an opening IFRS balance sheet at February 1, 2010 (the Company’s Transition Date).

	(ii) First-time adoption of IFRS

	The adoption of IFRS requires the application of IFRS 1, which provides guidance for an entity’s initial adoption of IFRS. IFRS 1 generally requires retrospective application of IFRS as effective at the end of its first annual IFRS reporting period. However, IFRS 1 also provides certain optional exemptions and mandatory exceptions to this retrospective treatment.

	The Company has elected to apply the following optional exemptions in its preparation of an opening IFRS statement of financial position as at February 1, 2010.

To apply IFRS 2 Share-based Payments only to equity instruments that were issued after November 7, 2002 and had not vested by the Transition Date.
To apply IFRS 3 Business Combinations prospectively from the Transition Date, therefore not restating business combinations that took place prior to the Transition Date.
To apply IAS 23 Borrowing Costs prospectively from the Transition Date. IAS 23 requires the capitalization of borrowing costs directly attributable to the acquisition, production or construction of certain assets.

IFRS 1 does not permit changes to estimates that have been made previously. Accordingly, estimates used in the preparation of the Company’s opening IFRS statement of financial position as at the Transition Date are consistent with those that were made under Canadian GAAP.

(iii) Changes to accounting policies

The Company has changed certain accounting policies to be consistent with IFRS effective on January 31, 2012 (note 2), the Company's first annual IFRS reporting date. The changes to its accounting policies have resulted in certain changes to the recognition and measurement of assets, liabilities, equity, revenue and expenses within its financial statements.

The following summarizes the significant changes to the Company’s accounting policies on adoption of IFRS.

(a) Impairment of non-financial assets IFRS requires a write down of assets if the higher of the fair value less costs to sell and the value in use of a group of assets is less than its carrying value. Value in use is determined using discounted estimated future cash flows. Previously, Canadian GAAP required a write down to estimated fair value only if the undiscounted estimated future cash flows of a group of assets are less than its carrying value.

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iii) Changes to accounting policies (continued)

	(a) Impairment of non-financial assets (continued)

	The Company's accounting policies related to impairment of non-financial assets have been changed to reflect these differences. There was no impact on the consolidated financial statements.

	(b) Decommissioning Liabilities (Asset Retirement Obligations)

	IFRS requires the recognition of a decommissioning liability for legal or constructive obligations. A constructive obligation exists when an entity has created reasonable expectations that it will take certain actions.

	The Company's accounting policies related to decommissioning liabilities have been changed to reflect these differences. There is no impact on the consolidated financial statements.

	(c) Exploration and evaluation expenditures

	On transition to IFRS, the Company adopted a policy to expense exploration and evaluation expenditures as incurred. Previously, the Company's Canadian GAAP policy was to capitalize exploration and evaluation expenditures as incurred. As a result of this adoption, all previously capitalized mineral property costs were written off against accumulated deficit, and to the extent relating to cost incurred in the current period, against the statement of operations.

	In fiscal 2011, the Company wrote down mineral properties amounting to $8,437,355 in relation to the Goldwedge Project, primarily due to the lack of financing to fund exploration activities at the time. The impairment loss recognized under Canadian GAAP would not have been recognized under IFRS because the expenditures to which it related would not have been recognized as assets.

	Impact on Consolidated Statements of Financial Position

		As at			As at
		January 31			February 1,
		2011			2010
Adjustment to mineral properties	$	(12,009,423	)	$	(19,799,686	)
Adjustment to accumulated deficit	$	(12,009,423	)	$	(19,799,686	)

Impact on Consolidated Statements of Operations

		Year
		ended
		January 31,
		2011
Adjustment to exploration and evaluation expenditures	$	7,790,263
Adjustment to loss	$	7,790,263

100

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iii) Changes to accounting policies (continued)

	(c) Exploration and evaluation expenditures (continued)

	Impact on Consolidated Statements of Cash Flows

		Year
		ended
		January 31,
		2011
Adjustment to loss	$	7,790,263
Depreciation	$	271,050
Mineral resource properties and exploration expenditures	$	8,061,313

(d) Presentation

Certain amounts on the consolidated statements of financial position, statements of operations and comprehensive loss and statements of cash flows have been reclassified to conform to the presentation adopted under IFRS.

101

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iv) Reconciliation between IFRS and Canadian GAAP

	The February 1, 2010 Canadian GAAP statement of financial position has been reconciled to IFRS as follows:

		February 1, 2010
		Canadian			IFRS			IFRS
		GAAP			adjustments			reclassifications			IFRS
Assets

Current
Cash	$	745,779		$	-		$	-		$	745,779
Marketable securities		60,500			-			-			60,500
Sundry receivables and prepaids		24,537			-			-			24,537
		830,816			-			-			830,816

Due from related parties		121,740			-			-			121,740
Reclamation bonds		534,984			-			-			534,984
Mineral properties (Note 21(iii)(c))		19,799,686			(19,799,686	)		-			-
Equipment, net		725,906			-			-			725,906
	$	22,013,132		$	(19,799,686	)	$	-		$	2,213,446

Liabilities
Current
Accounts payable and accrued liabilities	$	301,381		$	-		$	-		$	301,381
		301,381			-			-			301,381

Asset retirement obligations		232,010			-			-			232,010
		533,391			-			-			533,391

Shareholders' equity
Share capital		28,098,264			-			-			28,098,264
Contributed surplus (Note 21(iii)(d))		10,076,866			-			(10,076,866	)		-
Reserves (Note 21(iii)(d))		-			-			10,076,866			10,076,866
Deficit (Note 21(iii)(c))		(16,669,265	)		(19,799,686	)		-			(36,468,951	)
Accumulated other
comprehensive loss		(26,124	)		-			-			(26,124	)

		21,479,741			(19,799,686	)		-			1,680,055

	$	22,013,132		$	(19,799,686	)	$	-		$	2,213,446

102

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iv) Reconciliation between IFRS and Canadian GAAP (continued)

	The January 31, 2011 Canadian GAAP statement of financial position has been reconciled to IFRS as follows:

		January 31, 2011
		Canadian			IFRS			IFRS
		GAAP			adjustments			reclassifications			IFRS

Assets
Current
Cash	$	102,038		$	-		$	-		$	102,038
Marketable securities		52,000			-			-			52,000
Sundry receivables and prepaids		61,277			-			-			61,277
		215,315			-			-			215,315
Due from related parties		-			-			-			-
Reclamation bonds		537,860			-			-			537,860
Mineral properties (Note 21(iii)(c))		12,009,423			(12,009,423	)		-			-
Equipment, net		453,733			-			-			453,733
	$	13,216,331		$	(12,009,423	)	$	-		$	1,206,908


Liabilities

Current
Accounts payable and accrued liabilities	$	578,627		$	-		$	-		$	578,627
Due to related parties		357,061			-			-			357,061
		935,688			-			-			935,688
Asset retirement obligations		232,010			-			-			232,010
		1,167,698			-			-			1,167,698

Shareholders' equity
Share capital		28,098,264			-			-			28,098,264
Contributed surplus (Note 21(iii)(d))		10,076,866			-			(10,076,866	)		-
Reserves (Note 21(iii)(d))		-			-			10,076,866			10,076,866
Deficit (Note 21(iii)(c))		(26,092,373	)		(12,009,423	)		-			(38,101,796	)
Accumulated other comprehensive loss		(34,124	)		-			-			(34,124	)

		12,048,633			(12,009,423	)		-			39,210

	$	13,216,331		$	(12,009,423	)	$	-		$	1,206,908

103

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iv) Reconciliation between IFRS and Canadian GAAP (continued)

	The year ended January 31, 2011 Canadian GAAP statement of loss and comprehensive loss has been reconciled to IFRS as follows:

		Canadian			IFRS			IFRS
		GAAP			adjustments			reclassifications			IFRS

EXPENSES:
Exploration and evaluation expenditures(Note 21(iii)(c))	$	-		$	(7,790,263	)	$	8,835,168		$	1,044,905
General and administrative expenses (Note 21(iii)(d))		674,394			-			66,881			741,275
Consulting, wages and salaries (Note 21(iii)(d))		65,759			-			(65,759	)		-
Depreciation (Note 21(iii)(d))		1,122			-			(1,122	)		-
		(741,275	)		7,790,263			8,835,168			(1,786,180	)

Other
Finance income		3,221			-			-			3,221
Write down of advances to related company		(132,060	)		-			-			(132,060	)
Write-off of exploration properties		(8,835,168	)		-			8,835,168			-
Gain on disposal of marketable securities		275,194			-			-			275,194
Foreign currency translation adjustment (Note 21(iii)(d))		6,980			-			-			6,980

Net loss for the year	$	(9,423,108	)	$	7,790,263		$	8,835,168		$	(1,632,845	)

Net unrealized loss on available-for-sale marketable securities		(8,000	)		-			-			(8,000	)

Comprehensive loss for the year	$	(9,431,108	)	$	7,790,263		$	-		$	(1,640,845	)

104

Royal Standard Minerals Inc.

Notes to Consolidated Financial Statements

(Expressed in United States Dollars)

January 31, 2012

21.	Conversion to IFRS (Continued)

	(iv) Reconciliation between IFRS and Canadian GAAP (continued)

	The year ended January 31, 2011 Canadian GAAP statement of cash flows has been reconciled to IFRS as follows:

		Canadian			IFRS			IFRS
		GAAP			adjustments			reclassifications		IFRS

Operating activities
Net loss for the period	$	(9,423,108	)	$	7,790,263		$	-	$	(1,632,845	)
Operating items not involving cash:
Depreciation		1,122			271,050			-		272,172
Write-off of exploration properties		8,835,168			(8,835,168	)		-		-
Gain on disposal of marketable securities		(275,194	)		-			-		(275,194	)
Write down of advances to related company		132,060			-			-		132,060
Changes in non-cash working capital:
Sundry receivables and prepaids		(36,740	)		-			-		(36,740	)
Accounts payable and accrued liabilities		277,246			-			-		277,246
Due from (due to) related parties		346,741			-			-		346,741

Cash used in operating activities		(142,705	)		(773,855	)		-		(916,560	)

Investing activities
Purchase of reclamation bonds		(2,876	)		-			-		(2,876	)
Additions to mineral properties (Note 21(iii)(c))		(773,855	)		773,855			-		-
Proceeds on disposal of marketable securities		275,695			-			-		275,695

Cash used in investing activities		(501,036	)		773,855			-		272,819

Change in cash and cash equivalents		(643,741	)		-			-		(643,741	)

Cash and cash equivalents, beginning of year		745,779			-			-		745,779

Cash and cash equivalents, end of year	$	102,038		$	-		$	-	$	102,038

22.	Subsequent Events

	(a)	On May 8, 2012, the Company announced that it had secured an additional $2,000,000 loan extension from Waterton. As consideration for the loan extension, the Company will provide Waterton with additional net smelter return royalties on several of its property including Piñon and Fondaway Canyon.

	(b)	On April 17, 2012, the Company announced the commissioning of its mill at its Goldwedge Project.

	(c)	On April 16, 2012, the Company announced that 6,560,191 stock options granted to past directors, having an expiry date of June 26, 2014 had expired.

105

ROYAL STANDARD MINERALS INC.

MANAGEMENT’S DISCUSSION
AND ANALYSIS

YEAR ENDED JANUARY 31, 2012

106

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

This Management Discussion and Analysis (“MD&A”) is dated May 29, 2012 and unlessotherwise noted, should be read in conjunction with the Company’s consolidated financial statements for the year ended January 31, 2012 and the comparable year ended January 31, 2011 and the related notes thereto. This MD&A was written to comply with the requirements of National Instrument 51-102-Continuous Disclosure Obligations. Unless otherwise noted, all amounts reported herein are in United States dollars. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results presented for the year ended January 31, 2012 are not necessarily indicative of the results that may be expected for any future period.

The consolidated financial statements for the years ended January 31, 2012 and 2011 include the Company’s wholly owned subsidiaries, Kentucky Standard Energy Company, Inc. and Manhattan Mining Co., both United States Companies.

As of February 1, 2011, the Company adopted International Financial Reporting Standards (“IFRS”), with an opening transition date of February 1, 2010. The consolidated financial statements for the year ended January 31, 2012 are the first annual statements that have been prepared in accordance with IFRS. Readers of this MD&A should refer to “Changes in Accounting Policies” below, for a discussion of IFRS and its effect on the Company’s financial presentation.

In this MD&A and the financial statements, the term “CGAAP” refers to Canadian Generally Accepted Accounting Principles before the adoption of IFRS. For more information regarding the implementation of IFRS, please refer to note 21 of the consolidated financial statements for the years ended January 31, 2012 and 2011 and this MD&A on Conversion to IFRS.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if (1) such information is a change or a fact that has or would reasonably be expected to have, a significant effect on the market price or value of the Company’s common shares; or (2) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (3) if it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

Additional information relating to the Company can be found on SEDAR at www.sedar.com.

The Company’s common shares are listed in the United States of America on the Over the Counter Bulletin Board “OTC:BB”, under the symbol RYSMF.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements, including in respect of the timing of project development. These forward-looking statements entail various risks and uncertainties that could cause actual results to differ materially from those reflected in these forward-looking statements. Such statements are based on current expectations, are subject to a number of uncertainties and risks, and actual results may differ materially from those contained in such statements. These uncertainties and risks include, but are not limited to, the strength of the Canadian and US economies; the price of gold; operational, funding and liquidity risks; the degree to which mineral resource estimates are reflective of actual mineral resources; the degree to which factors which would make a mineral deposit commercially viable are present; the risks and hazards associated with underground operations. Risks and uncertainties about the Company’s business are more fully discussed under “Risk Factors” contained elsewhere in this MD&A. The Company assumes no obligation to update any forward-looking statement or to update the reasons why actual results could differ from such statements unless required by law.

107

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

HIGHLIGHTS

On May 8, 2012, the Company announced that it had secured an additional $2,000,000 loan extension from Waterton Global Value, L.P. (“Waterton”). This now brings the total funds provided by Waterton to $10,000,000. As consideration for this loan extension, the Company will provide Waterton with additional net smelter return royalties (“NSR”), on several of its properties, including Piñon and Fondaway Canyon.

On April 16, 2012, the Company announced the commissioning of its mill at its flagship Goldwedge Project in Manhattan, Nevada. The gravity process has been commissioned and is permitted to process four hundred metric tons of gold bearing ore per day. The commissioning of the mill was the most important milestone met to date, under the Company’s new management team. This positive development provides further evidence of management’s commitment and dedication to maximize the Company’s growth and build value for its shareholders.

On January 11, 2012, at its annual and special meeting of its shareholders, the Company announced the following persons elected as directors of the Company: Paul G. Smith (Chairman), James B. Clancy, John Fitzgerald, Riyaz Lalani and Ken Strobbe.

On December 6, 2011, Roland M. Larsen was terminated as President and Chief Executive Officer of the Company. Philip Gross, a director of the Company at the time, was appointed Interim President and Chief Executive Officer of the Company.

On August 26, 2011, the Company’s wholly-owned subsidiary, Manhattan Mining Co. (“Manhattan”), amended its existing senior secured bridge loan (the “Bridge Loan”) with Waterton such that the Bridge Loan was transitioned into a more permanent senior secured gold stream debt facility (the “Gold Stream Facility”) guaranteed by the Company. Under the Gold Stream Facility, Waterton will make up to $8,000,000 (the “Principal Amount”) available to Manhattan. The Principal Amount will be repayable in monthly installments commencing August 2012 through to July 2013. Under the Gold Stream Facility, each monthly repayment will be made by the delivery of gold bullion ounces to Waterton, whereby the number of ounces to be delivered shall be based on the then current spot price of gold less an applicable discount or by the payment of the cash equivalent of such number of ounces. Any principal amounts drawn under the facility will accrue interest at 9% per annum. In addition, Manhattan will owe Waterton a “profit participation” fee, dependent on the spot price of gold. As at January 31, 2012, $5,970,350 was outstanding under the Gold Stream Facility. There are additional financing costs associated with the Gold Stream Facility, including a profit participation component which has been accounted for as an embedded derivative, a structuring and placement fee paid to Waterton, a placement fee based on 4% of the amount drawn under the Gold Stream Facility paid to the agent and a premium of 33% paid during the monthly repayment period, beginning August 2012. Total finance costs of $712,822 have been expensed in the consolidated financial statements for the year ended January 31, 2012.

108

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

OVERVIEW

The Company is a mineral exploration and mine development company engaged in locating, acquiring, exploring and developing gold and precious metal deposits in Nevada. The Company's flagship Goldwedge Project is located southeast of the Round Mountain gold mine in central Nevada. The Goldwedge Project continues to be the primary focus of the Company. This project is considered to be an advanced exploration development project that is fully permitted by the Nevada Division of Environmental Protection (“NDEP”) for a mine and mill. The Company’s portfolio of gold exploration projects also includes Fondaway Canyon, Piñon and Dixie-Comstock. The Company intends to evaluate, explore and develop its Nevada gold projects and, if appropriate, acquire additional prospective gold properties, to create a development pipeline that can fuel further growth.

GOING CONCERN

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. Management is aware, in making its assessment, of material uncertainties related to events or conditions that cast significant doubt upon the entity's ability to continue as a going concern. The Company has incurred a loss in the current and prior years, with a current net loss of $6,451,698 (2011– net loss of $1,632,845) and has an accumulated deficit of $44,553,494 (January 31, 2011 – $38,101,796, February 1, 2010-$36,468,951).

The underlying value of the resource properties is dependent upon the existence and economic recovery of economic reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability to continue to raise long-term financing to complete the development of the properties and upon future profitable production or, alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis, all of which are uncertain. There is no assurance that any such initiatives will be sufficient and, as a result, there is significant doubt regarding the going concern assumption and, accordingly, the ultimate appropriateness of the use of accounting principles applicable to a going concern. The Company’s ability to continue to meet its obligations and carry out its planned exploration activities is uncertain and dependent upon the continued financial support of its shareholders, its current creditors and securing additional financing. During the year ended January 31, 2012, the Company secured financing of $8,000,000. These financial statements do not reflect the adjustments to the carrying values or classifications of assets and liabilities or to the reported expenses that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations for the foreseeable future. These adjustments could be material.

109

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

MINERAL PROPERTIES

Goldwedge Project

The Goldwedge Project, represents the Company’s most advanced project and is located in theManhattan district of Nye County, approximately eight miles south of the Round Mountain mine and has been issued a mine and mill permit by the NDEP. The Company has been completing the refurbishment of the on-site processing plant which was used for the test mining and processing that took place between 2007 and 2008. As noted above, the mill was commissioned this past April. The process includes primary and secondary crushing and grinding facilities that feed a gravity recovery system. In addition, dry stack tailings containment as well as silt and fresh water ponds are in place. Testing of the various mineral processing functions commenced during April 2007, and continued throughout 2008, using previously extracted stockpiles of low grade gold feed material, as well as concurrently newly mined material. The plant feed material was processed into gold doré on site. The Company had recently completed construction of the Rapid Infiltration Basins (RIB), dewatered the previously completed underground development and also commenced phase 2 of the underground development program. This phase of the development includes the exploration of defined mineralized zones concurrently with the second phase of decline development. The previous work has concentrated on the development of a spiral decline as a means to explore the deposit at depth. As part of the program, a series of crosscuts were constructed at specific intervals to effectively assess the potential mineralized zones. Phase 2 of the development is concentrated on developing along the strike of known mineralized zones to assess continuity and grade as well as prepare areas for future test stoping. Currently, all material is sampled daily and analyzed for gold onsite at the Company’s assay laboratory. The assay laboratory was also recently refurbished and has now been approved by the NDEP.

On June 29, 2005, the Company entered into a five year Purchase Option Agreement with a private individual for all of his patented and unpatented mining claims in the Manhattan Mining District located in Nye County, Nevada. The land package totals approximately 1,600 acres (four patented and 70 unpatented claims). The property’s position adjoins the Company's Goldwedge Mine. The land package includes a number of exploration targets which are of interest to the Company. In addition, the Company's option included the Dixie-Comstock claim group located in Churchill County, Nevada. Dixie-Comstock is a 1,500 acre property containing a gold system that has been explored by a number of major mining companies over the past 20 years. Annual option payments of $48,000 were to be applied to a total purchase price of $600,000. This option was exercised prior to August 31, 2009 and as a result, this property is now 100% owned by the Company.

110

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

The Company has recorded an asset retirement obligation (“ARO”) on its Goldwedge Project in the amount of $168,276, representing the net present value of management’s estimated costs to restore the property site to its original condition. In determining these estimated costs, management also reviews calculations prepared by and provided by the state of Nevada, using the Nevada Standardized Reclamation Cost Estimator (“SRCE”). The SRCE is used by the state in calculating the reclamation bond being requested from the Company.

Based on the existing level of terrestrial disturbance and water treatment and monitoring requirements, the discounted ARO for all projects, where applicable, has been estimated by management assuming that the future payments will be made over a ten year period from the date of initial assessment of the ARO’s using a discount rate of 10%.

Project Expenditures

During the year ended January 31, 2012, the Company's exploration and evaluation expenditures on the Goldwedge Project were $2,748,949 (2011 - $787,166).

Future Programs

Management anticipates advancing the production potential on the Goldwedge Project by incurring further exploration and evaluation expenditures and continuing to upgrade the processing plant. The Company will maintain its ongoing claim renewal fees and will maintain and complete various operational permits with regulatory bodies.

Other Properties

The Piñon property is made up of certain lease agreements to lease certain properties in Elko County, Nevada. During the year ended January 31 2012 the Company's exploration and evaluation expenditures on the Piñon property were $71,188 (2011 - $86,995).

The Fondaway Canyon property is located in Churchill County, Nevada. During the year ended January 31, 2012, the Company's exploration and evaluation expenditures on the Fondaway Canyon Project were $37,297 (2011 - $58,037).

The Kentucky Project is located in Wolfe County, Kentucky. During the year ended January 31, 2012, the Company’s exploration and evaluation expenditures on the Kentucky Project were $96,922 (2011-$112,707). See “Related Party Transactions”. The Kentucky Project represents the Company’s sole venture in coal exploration. The Company is currently reviewing all options with this project.

111

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Under the guidance of IAS 37, the Company has recorded an ARO on the Piñon Project in the amount of $28,724 and on the Kentucky Project $95,315 as at January 31, 2012, representing the net present value of the estimated costs to restore each property to its original condition.

ENVIRONMENTAL LIABILITIES

The Company’s projects in Nevada are subject to regulation and permitting by the NDEP. The Company is not aware of any other environmental liabilities or obligations associated with its mining interests in Nevada. The Company is conducting its operations in a manner that is consistent with governing environmental legislation.

OVERALL PERFORMANCE

During the year ended January 31, 2012, the continuing global economic uncertainty weighed heavily on the equity markets and the junior mining industry. Notwithstanding these challenges, the Company was able to secure financing with Waterton, finalizing an $8,000,000 Gold Stream Facility during the third quarter. The Gold Stream Facility has allowed the Company to focus on its Goldwedge Project and its primary objective of completing the processing plant (mill). During the fourth quarter, management hired two main contractors to carry out the completion of the mill, which was recently commissioned. The Company continues to prepare the mill for production and during the fourth quarter, primarily, incurred $1,619,341 in construction costs associated with the mill, including significant electrical upgrades and new installations. During the construction, the Company encountered many challenges with the existing equipment, due to mechanical failure requiring repeated repairs and replacement. These costs will be depreciated, once the mill is in production.

The Company’s net loss for the year ended January 31, 2012 was $6,451,698 ($0.08 per share) compared to $1,632,845 ($0.02 per share) for the year ended January 31, 2011, an increase of $4,818,853. The increase in the loss is mainly attributable to the increased exploration and evaluation expenditures of $1,909,451, the result of the increased mine staff and the hiring of consultants to carry out the exploration and development of the mine, made possible by the Gold Stream Facility. In addition, general and administrative expenses increased by $ 2,067,844, mainly attributable to increased professional fees of $1,296,211, representing primarily, legal expenses incurred in addressing the company’s outstanding claims, providing for estimated expenses in connection with an outstanding claim, preparing for the recent annual general meeting on January 11, 2012 and a more focused effort on corporate governance with an increase in corporate development of $205,849, the majority of which was in connection with activities around the recent annual general meeting. In addition, the Company granted stock options on January 20, 2012 to directors, officers, an employee and a consultant. The impact of these options resulted in an increase to the loss during the year of $503,942. There were no stock options granted in 2011. Also contributing to the increased loss was the financing costs associated with the Gold Stream Facility, a total of $ 712,822 for the year.

112

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

The Company’s future financial condition and operations is dependent on many factors including, the underlying value of the resource properties which is dependent on the underlying mineral claims, the ability to raise additional long-term financing or other forms of financing to enable it to complete the development of the properties and upon future profitable production or, alternatively, upon the Company’s ability to dispose of its interest on an advantageous basis, all of which are uncertain.

SELECTED ANNUAL FINANCIAL INFORMATION

For the financial information for 2010, the results and balances have been prepared in accordance with CGAAP.

	2012	2011	2010
	(IFRS)	(IFRS)	(CGAAP)
	$	$	$

Total revenues	nil	nil	nil
Net loss for the year	6,451,698	1,632,845	961,104
Basic and diluted loss per share	0.08	0.02	0.01
Total issued share capital	83,853,825	83,853,825	83,853,825
Total equipment	2,084,336	453,733	725,906
Total assets (including equipment)	3,653,198	1,206,908	2,213,446
Total liabilities (excluding long- term debt and related embedded derivative)	3,361,101	1,167,698	533,391
Total long-term debt and related embedded derivative	6,102,644	nil	nil

SUMMARY OF QUARTERLY RESULTS

The following is a summary of selected financial information of the Company for the quarterly periods indicated. For the four quarters ending after February 1, 2010, the quarterly results have been restated to reflect accounting policies consistent with IFRS.

113

	Ended Jan-31 2012	Ended Oct-31 2011	Ended July-31 2011	Ended Apr-30 2011	Ended Jan-31 2011	Ended Oct-31 2010	Ended July-31 2010	Ended Apr-30 2010
Finance Income	(2,285)	(801)	(708)	(497)	(1,149)	(130)	(919)	(1,023)
Exploration	996,551	999,865	783,052	174,888	304,872	250,733	242,022	247,278
General & administrative	2,338,423	202,442	197,530	70,724	346,144	84,864	111,313	198,954
Write-off of advances	-	-	-	-	132,060	-	-	-
Gain on disposal of marketable securities	-	-	-	-	(275,194)	-	-	-
Other expenses (income)	(608,991)	1,280,855	12,481	8,169	(12,980)	7,503	1,751	(3,254)
Net loss	2,723,698	2,482,361	992,355	253,284	493,753	342,970	354,167	441,955
Basic & diluted loss per share	0.03	0.03	0.01	0.00	0.01	0.00	0.00	0.01
Weighted average number of shares	83,853,825	83,853,825	83,853,825	83,853,825	83,853,825	83,853,825	83,853,825	83,853,825

FINANCIAL PERFORMANCE

Revenue

The Company’s Goldwedge Project is the property of main focus. It is still in the exploration and development stage. Until sufficient work has been completed to confirm the technical feasibility and commercial viability of this project, no material revenue will be earned. No revenues have been earned during the years ended January 31, 2012 and 2011.

Expenses

As previously noted, the Company’s loss for the year ended January 31, 2012 was $6,451,698 ($0.08 per share) compared to $1,632,845 ($0.02 per share) for the year ended January 31, 2011, an increase of $4,818,853. The financing provided by the Gold Stream Facility allowed the Company to increase employee levels in all areas, underground mining, underground drilling, engineering staff, a mill superintendent, a new safety officer, assay laboratory expertise and an experienced underground superintendent, working as an independent contractor. As of the date hereof, the Company has continued to hire new miners, surface drillers, assay laboratory samplers, an engineer/surveyor and a geological consultant. Also, during the fourth quarter and as of the date hereof, management continued to assess the performance of its workforce, making changes where necessary. Management is continually challenged with recruiting quality employees who are willing to accept the challenges of working in this remote location. These efforts have resulted in the increase in consulting, wages and salaries during the year, an increase of $1,012,385 on the Goldwedge Project. During the fourth quarter, the Company carried out extensive mine development efforts with expenditures increasing $355,314. The major contributing factors to this increase were in connection with the completion of the secondary escape/ventilation raise.

114

During the third quarter, the Company completed the construction of the Rapid Infiltration Basins (RIB), dewatered the previously completed underground development and also commenced phase 2 of the underground development program. With the increased activity towards the last two quarters of the year, the Company also incurred a higher level of costs for supplies, transportation and small tools and equipment, an increase of $359,228.

During the fourth quarter, the Company encountered issues not previously anticipated, including electrical improvements and upgrades required for its underground operations which led to a shutdown of the underground mine in the early part of the first quarter of fiscal 2013.

As previously noted, general and administrative expenses increased by $2,067,844, mainly attributable to increased professional fees of $1,296,211, increased corporate development of $205,849 and the increase from the granting of stock options of $503,942. The professional fees related to continuing costs in connection with outstanding claims, a provision for estimated expenses of $ 330,000 in connection with the Company’s action with Hale Capital Management,LP and Hale Capital Partners, LP and professional fees related to continuous disclosure requirements.

During the fourth quarter, management revised its estimates for its financing costs in connection with the Gold Stream Facility. As a result, finance costs for the year ended January 31, 2012 totaled $712,822. Included in these finance costs, is an estimate of the impact of the embedded derivative, which is a component of the Gold Stream Facility and is triggered when the spot price of gold is in excess of $1,600 an ounce on the business day immediately preceding the repayment, which begins August 2012. The embedded derivative will be re-evaluated at the end of each quarter and adjusted to its estimated fair value.

LIQUIDITY AND CAPITAL RESOURCES

The Company currently has no operating cash flow and has to date, financed its mineral exploration activities and its ongoing expenditures, primarily through equity transactions such as equity offerings, the exercise of warrants and its recent financing arrangement with Waterton. The Company’s financial success will be dependent on the economic viability of its mineral exploration properties to the extent that it can establish economic reserves and its ability to secure ongoing financing and the support of its shareholders and creditor.

As at January 31, 2012, the Company had cash of $629,553. Cash used in operating activities was $4,075,007 for the year ended January 31, 2012. During the year, the Company experienced a net increase in non-cash working capital items of $1,064,062, which was primarily due to increases in accounts payable and accrued liabilities of $1,481,098, offset by a repayment of amounts due to related parties of $322,038 and an increase in sundry receivables and prepaids of $94,998.

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

As at January 31, 2012 and the date hereof, the Company had met its capital commitment obligations to keep its property agreements in good standing.

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at January 31, 2012, the Company had cash of $629,553 compared to $102,038 as at January 31, 2011, to settle current liabilities of $6,120,109 compared to $935,688 as at January 31, 2011. Included in current liabilities are amounts owing on the long-term debt, including the embedded derivative totaling $3,051,323. All of the Company's financial liabilities, excluding those related to the long term debt (including the embedded derivative) have contractual maturities of less than 60 days and are subject to normal trade terms. The Company regularly evaluates its cash position to ensure maintenance of liquidity.

As of the date hereof, the Company had drawn $10,000,000 against the Gold Stream Facility. See “Recent Developments”.

There is no assurance that future sales or equity or debt capital will be available to the Company in the amounts or at the times desired, or on terms that are acceptable to the Company, if at all. See “Risk Factors” below.

CONTRACTUAL OBLIGATIONS

(a) Under the terms of the option agreement with Sharpe Resources Corporation (“Sharpe”), the Company was required to incur expenditures of $2,000,000 in total by December 9, 2011 to exercise its option. As noted previously, the Company exercised the option on December 7, 2011. Pursuant to the terms of the option agreement, the Company requested Sharpe to provide additional cash to the Kentucky Project, to match that of the Company, which had exceeded $2,000,000. As of the date hereof, Sharpe had not responded.

(b) Includes optional payments and expenditures required in order to maintain its various mining interests in good standing. In order to maintain its property on the Goldwedge Project, the Company has to pay claim renewal fees to the BLM of approximately $15,000.

(c) The Company had an employment contract dated January 1, 2011 with the former Chief Executive Officer. The contract was for a term of five years, allowing for a base salary of $250,000 per year and also providing for an additional annual bonus payment at the discretion of the Board of Directors. The contract also contained termination provisions entitling the former Chief Executive Officer to receive the greater of three years basic compensation and the amount outstanding for the remainder of the term of the employment agreement only if he is terminated other than for cause or if he terminated his employment for “good reason” which includes material failure by the Company to substantially comply with the terms of the employment agreement. Management has determined that the former Chief Executive Officer is not entitled to any additional compensation since he was terminated with cause.

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Management has undertaken a review of all contractual obligations and other payables in relation to the Company’s properties and operations. The Company has no operating revenues and therefore it must utilize its current cash reserves, funds obtained from the exercise of stock options and other financing transactions to maintain its capacity to meet ongoing discretionary exploration and operating activities. Although the Company has obtained financing, the Company does not have sufficient funds on hand to meet its current operating and capital requirements; therefore, the Company will continue to seek additional equity or debt financing to generate funds.

As at January 31, 2012 and as of the date hereof, the Company had 83,853,825 common shares issued and outstanding, and stock options outstanding as at January 31, 2012, to acquire 12,060,191 common shares of the Company. As at January 31, 2012, 9,060,191 options were exercisable. During the year ended January 31, 2012 and as of the date hereof, the Company granted 4,700,000 stock options to directors, officers, an employee and a consultant. 1,700,000 of these stock options were exercisable as at January 31, 2012. During the year and as of the date hereof, no common shares had been issued and no stock options were exercised. In December of 2011, the Company amended and restated its stock option plan. Subsequent to the year-end, 6,560,191 stock options granted to past directors, having an expiry date of June 26, 2014, had expired. As of the date hereof, the Company had 5,350,000 stock options outstanding that would raise $ 1,475,000, if exercised in full.

The Company’s liquidity risk with financial instruments is minimal as any excess cash is invested in highly liquid bank-backed guaranteed investment certificates.

The market value of the Company’s investment in Sharpe, a Canadian held public company as at January 31, 2012, was $150,000. The Company can sell the securities to raise funds to settle its obligations as they arise. The investment is considered an available for sale investment and the Company has recorded other comprehensive income on this investment of $ 97,999, for the year ended January 31, 2012.

RELATED PARTY TRANSACTIONS

Remuneration of Directors and key management personnel of the Company was as follows:

		Years Ended		January 31,
		2012		2011
Salaries and benefits paid to directors and officers ⁽¹⁾	$	471,380	$	316,911
Stock-based payments	$	501,799	$	-

⁽¹⁾ Salaries and benefits include director fees. The board of directors does not have employment or service contracts with the Company. Directors are entitled to directorfees and stock options for their services. Paul G. Smith, a director and Chairman of the Board, is the President and Chief Executive Officer of Equity Financial Holdings Inc., a company providing financial services to the Company.

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Due to related parties balance as at January 31, 2012 consists of $22,607 (January 31, 2011 - $357,061, February 1, 2010 - $nil) owing to the former CEO and $12,416 owed to Sharpe (January 31, 2011 - $nil, February 1, 2010 - $121,740). In addition, included in accounts payable and accrued liabilities is $18,677 (2011 - $nil), owing to the former CEO.

SHARE CAPITAL

The Company is authorized to issue an unlimited number of common shares and special shares. As at January 31, 2012 and the date hereof, the Company has 83,853,825 common shares outstanding.

As at January 31, 2012, the Company had 12,060,191 stock options outstanding, as follows:

Number of Options	Exercise Price	Expiry Date
7,360,191	$0.10	June 26, 2014
4,700,000	$0.30	January 20, 2017

As of the date hereof, the Company had 5,350,000 stock options outstanding, after the expiration of 6,560,191 stock options to former directors, which was announced on April 16, 2012 and 150,000 to a former employee. And, of the remaining 5,350,000 stock options outstanding, 2,350,000 are exercisable.

CONTINGENCIES

	(a)	The Company received documents filed in the District Court, Nye County, Nevada, whereby an optionor of a property acquired by the Company has requested payment for machinery and equipment stored in the vicinity of the acquired property. The Company intends to vigorously defend itself against this claim.

	(b)	The Company received an action against it whereby the Company was requested, by a prior lease holder, to take any and all steps necessary to ensure that the prior lease holders bear no responsibilities or liability for the Company’s failure to comply with the rules and regulations of the Kentucky Energy and Environment Cabinet, Division of Mine Enforcement and Reclamation (the “DMER”). Management had responded to the DMER and is rectifying the notice received from the DMER. The Company believes that no penalty will be assessed.

	(c)	On September 27, 2011, Hale Capital Management, LP and Hale Capital Partners, LP(together, “Hale Capital”) commenced an action in the New York Supreme Court alleging breach of contract in relation to a term sheet entered into between the Company and Hale Capital on December 11, 2010 (the “Term Sheet”), which set out preliminary terms for Hale to provide financing of up to $15 million for the Company’s Goldwedge project (the “Hale Transaction”). Hale Capital is seeking the “right to participate” in financing the Company on no less favorable terms and conditions as was agreed upon between the Company and Waterton on June 29, 2011 or, in the alternative, damages for breach of the exclusivity provision contained in the Term Sheet. Hale is also seeking expense reimbursement for legal, travel and due diligence fees incurred by Hale Capital, which allegedly totaled approximately $376,179, as of November 21, 2011. On November 23, 2011, Hale Capital amended their complaint to include the Company’s subsidiary Manhattan Mining Co. Management has estimated these expenses at $330,000 and has accrued this amount in the accounts.

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OFF BALANCE SHEET ARRANGEMENTS

As of the date hereof, management believes the Company does not have any off balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, and without limitation, such considerations as liquidity and capital resources.

PROPOSED TRANSACTIONS

There are no proposed transactions of a material nature being considered by the Company. However, the Company continues to evaluate either debt or equity financings and evaluate properties that may be sold in the future.

CONVERSION TO IFRS

Overview

As stated in Significant Accounting Policies (note 2), of the Consolidated Financial Statements for the years ended January 31, 2012 and 2011, they have been prepared in accordance with IFRS as issued by the IASB.

The policies set out in the Significant Accounting Policies section have been applied in preparing the financial statements for the years ended January 31, 2012 and 2011 and in the preparation of an opening IFRS balance sheet at February 1, 2010 (the Company’s Transition Date).

First Time adoption of IFRS

The adoption of IFRS requires the application of IFRS 1, which provides guidance for an entity’s initial adoption of IFRS. IFRS 1 generally requires retrospective application of IFRS as effective at the end of its first annual IFRS reporting period. However, IFRS 1 also provides certain optional exemptions and mandatory exceptions to this retrospective treatment.

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

The Company has elected to apply the following optional exemptions in its preparation of an opening IFRS statement of financial position as at February 1, 2010.

To apply IFRS 2 Share-based Payments only to equity instruments that were issued after November 7, 2002 and had not vested by the Transition Date.
To apply IFRS 3 Business Combinations prospectively from the Transition Date, therefore not restating business combinations that took place prior to the Transition Date.
To apply IAS 23 Borrowing Costs prospectively from the Transition Date. IAS 23 requires the capitalization of borrowing costs directly attributable to the acquisition, production or construction of certain assets.

Changes to Accounting Policies

The following summarizes the significant changes to the Company’s accounting policies on adoption of IFRS.

(a) Impairment of non-financial assets

IFRS requires a write down of assets if the higher of the fair value less costs to sell and the value in use of a group of assets is less than its carrying value. Value in use is determined using discounted estimated future cash flows. Previously, Canadian GAAP required a write down to estimated fair value only if the undiscounted estimated future cash flows of a group of assets are less than its carrying value.

The Company's accounting policies related to impairment of non-financial assets have been changed to reflect these differences. There was no impact on the consolidated financial statements.

(b) Decommissioning Liabilities (Asset Retirement Obligations)

IFRS requires the recognition of a decommissioning liability for legal or constructive obligations. A constructive obligation exists when an entity has created reasonable expectations that it will take certain actions.

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The Company's accounting policies related to decommissioning liabilities have been changed to reflect these differences. There is no impact on the consolidated financial statements.

On transition to IFRS, the Company adopted a policy to expense exploration and evaluation expenditures as incurred. Previously, the Company's Canadian GAAP policy was to capitalize exploration and evaluation expenditures as incurred. As a result of this adoption, all previously capitalized mineral property costs were written off against accumulated deficit, and to the extent relating to cost incurred in the current period, against the statement of operations.

In fiscal 2011, the Company wrote down mineral properties amounting to $8,437,355 in relation to the Goldwedge Project, primarily due to the lack of financing to fund exploration activities at the time. The impairment loss recognized under Canadian GAAP would not have been recognized under IFRS because the expenditures to which it related would not have been recognized as assets.

Impact on Consolidated Statements of Financial Position

		As at			As at
		January 31,			February 1,
		2011			2010

Adjustment to mineral properties	$	(12,009,423	)	$	(19,799,686	)
Adjustment to accumulated deficit	$	(12,009,423	)	$	(19,799,686	)

Impact on Consolidated Statements of Operations

		Year ended
		January 31, 2011

Adjustment to exploration and evaluation expenditures	$	7,790,263
Adjustment to loss	$	7,790,263

Impact on Consolidated Statements of Cash Flows

		Year ended
		January 31, 2011

Adjustment to loss	$	7,790,263
Depreciation	$	271,050
Mineral resource properties and exploration expenditures	$	8,061,313

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(d) Presentation

NEW SIGNIFICANT ACCOUNTING POLICIES

In addition to the changes to significant accounting policies on the conversion to IFRS, the Company followed the following two new accounting policies as noted in Note 2 of the consolidated financial statements for the years ended January 31, 2012 and 2011:

Long-term debt

Long-term debt instruments are initially recognized at fair value, net of debt issuance costs incurred. Long-term debt instruments are subsequently valued at amortized cost. Debt issue costs are deducted from the balance of the underlying debt and amortized using the effective interest rate method.

Embedded derivative on Long-term debt

The Company may enter into certain financial derivative contracts in order to manage the exposure to market risks from fluctuations in commodity prices. The Company’s policy is not to utilize derivative financial instruments for speculative purposes. All financial derivative contracts are classified as “fair value through profit or loss”.

Embedded derivatives are separated from the host contract and accounted for separately if the economic characteristics and risks of the host contract and the embedded derivative are not closely related, a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative, and the combined instrument is not measured at fair value through the profit or loss. Changes in the fair value of separable embedded derivatives are recognized immediately profit or loss

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company’s consolidated financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from those estimates. The consolidated financial statements for the year ended January 31, 2012 and 2011 include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements for the years ended January 31, 2012 and 2011 and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

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Significant assumptions about the future that management has made that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following and are explained in detail in Note 2 of the consolidated financial statements for the years ended January 31, 2012 and 2011:

		Management’s assumption of material restoration, rehabilitation and environmental obligations, based on the facts and circumstances that existed during the period; and
		Management’s assumption used to determine the fair value of the embedded derivative on long-term debt

NEW ACCOUNTING PRONOUNCEMENTS

IFRS 9 Financial Instruments (“IFRS 9”)

IFRS 9 was issued by the International Accounting Standards Board (“IASB”) in October 2010 and will replace IAS 39 Financial Instruments Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2013. The IASB has proposed amending the effective date to January 1, 2015. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

IFRS 10 Consolidated Financial Statements (“IFRS 10”)

IFRS 11 Joint Arrangements (“IFRS 11”)

IFRS 11 replaces the guidance in IAS 31 Interests in Joint Ventures and SIC 13 - Joint Controlled Entities - Non-Monetary Contributions by Venturers. IFRS 11 is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

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IFRS 12 Disclosure of Interests in Other Entities (“IFRS 12”)

IFRS 13 Fair V alue Measurement (“IFRS 13”)

IAS 1 Presentation of Financial Statements

IAS 28 Investments in Associates and Joint Ventures

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Future Accounting Changes

The IASB is expected to publish new IFRSs on the following topics in early 2012. The Company will assess the impact of these new standards on the Company’s operations as they are published.

Hedge accounting
Leases
Revenue recognition and
Financial instruments

MANAGEMENT OF CAPITAL

The Company manages its capital with the following objectives:

to ensure sufficient financial flexibility to achieve the ongoing business objectives including funding of future growth opportunities, and pursuit of accretive acquisitions; and
to maximize shareholder return through enhancing the share value.

The Company considers its capital to be equity, comprising share capital, reserves, accumulated deficit and accumulated other comprehensive loss which at January 31, 2012 totaled $(5,810,547) (January 31, 2011 - $39,210 and February 1, 2010 - $1,680,055). Included in the consolidated statements of financial position is an accumulated deficit of $44,553,494 as at January 31, 2012 (January 31, 2011 – $38,101,796 and February 1, 2010-$36,468,951).

The Company has cash balances and interest-bearing debt. The Company's current policy is to invest excess cash in guaranteed investment certificates, banker’s acceptance and money market deposits, with reputable financial institutions. The Company regularly monitors its cash management policy. The Company’s interest bearing debt is its Gold Stream Facility which bears interest at the rate of 9% per annum. The Company is also obligated to pay a profit participation amount, on each repayment date, when the spot price of gold is in excess of $1,600 an ounce on the business day immediately preceding the repayment. In addition, the Company is obligated to pay an amount in excess of the scheduled repayment amount, equal to approximately 33%.

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

The Company’s functional and reporting currency is the US dollar and major purchases are transacted in US dollars. An operating account is maintained in Canadian dollars primarily for settlement of general corporate expenditures.

Sensitivity analysis

The Company’s marketable securities are subject to fair value fluctuations. As at January 31, 2012, if the fair value of the marketable securities had decreased/increased by 10% with all other variables held constant, comprehensive loss for the year ended January 31, 2012 would have been approximately $15,000 higher/lower. Similarly, as at January 31, 2012, reported shareholders’ equity would have been approximately $15,000 lower/higher as a result of a 10% decrease/increase in the fair value of marketable securities.
Cash, sundry receivables, due to related parties and accounts payable and accrued liabilities denominated in Canadian dollars are subject to foreign currency risk. As at January 31, 2012, had the US dollar weakened/strengthened by 5% against the Canadian dollar with all other variables held constant, the net loss and comprehensive loss would be affected by approximately $36,000.
Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and viability of development depends upon the world market price of coal and precious metals. Coal and precious metals have fluctuated widely in recent years. There is no assurance that, even as commercial quantities of coal and precious metals may be produced in the future, a profitable market will exist for them. A decline in the market price of coal and precious metals may also require the Company to reduce its mineral properties, which could have a material and adverse effect on the Company’s value. As at January 31, 2012 and the date hereof, the Company is not a coal or precious metal producer. As a result, commodity price risk may affect the completion of future equity transactions such as equity offerings, debt offerings and the exercise of stock options. This may also affect the Company’s liquidity and its ability to meet its ongoing obligations. See “Risk Factors”.

RISK FACTORS

An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. Prospective investors should carefully consider the risk factors below.

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Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Exploration Stage Company and Exploration Risks

The Company is a junior resource company focused primarily on the acquisition and exploration of mineral properties located in the United States and, as such, is engaged in a highly speculative business. The properties of the Company have no established reserves. There is no assurance that any of the projects can be mined profitably. Accordingly, it is not assured that the Company will realize any profits in the short to medium term, if at all, from its mineral properties. Any profitability in the future from the business of exploration will be dependent upon developing and commercially mining an economic deposit of minerals, which in itself is subject to numerous risk factors. The exploration and development of mineral deposits involve a high degree of financial risk over a significant period of time that even a combination of management’s careful evaluation, experience and knowledge may not eliminate. There are a number of uncertainties inherent in any exploration and development program, including the location of economic ore bodies, the development of appropriate metallurgical processes, the receipt of necessary governmental permits, and the construction of mining and processing facilities.

While discovery of ore-bearing structures may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a particular site. It is impossible to ensure that the current exploration, development and production programs of the Company will result in profitable commercial mining operations. The profitability of the Company’s operations will be, in part, directly related to the cost and success of its exploration and development programs, which may be affected by a number of factors. Substantial expenditures are required to establish reserves that are sufficient to commercially mine some of the Company’s properties and construct, complete and install mining and processing facilities on those properties that are actually mined and developed.

No History of Profitability from Mineral Exploration

The Company is a development stage company with no history of profitability from mineral exploration. There can be no assurance that the operations of the Company will be profitable in the future. The Company has limited financial resources and will require additional financing to further explore, develop, acquire, retain and engage in commercial production on its property interests and, if financing is unavailable for any reason, the Company may become unable to acquire and retain its mineral concessions and carry out its business plan.

Market Fluctuations and Commercial Quantities

The market for minerals is influenced by many factors beyond the control of the Company such as changing production costs, the supply and demand for minerals, the rate of inflation, the inventory of mineral producing companies, the international economic and political environment, changes in international investment patterns, global or regional consumption patterns, costs of substitutes, currency availability and exchange rates, interest rates, speculative activities in connection with minerals, and increased production due to improved mining and production methods. The metals industry in general is intensely competitive and there is no assurance that, even if commercial quantities and qualities of metals are discovered, a market will exist for the profitable sale of such metals. Commercial viability of precious and base metals and other mineral deposits may be affected by other factors that are beyond the Company’s control including particular attributes of the deposit such as its size, quantity and quality, the cost of mining and processing, proximity to infrastructure and the availability of transportation and sources of energy, financing, government legislation and regulations including those relating to prices, taxes, royalties, land tenure, land use, import and export restrictions, exchange controls, restrictions on production, as well as environmental protection. It is impossible to assess with certainty the impact of various factors that may affect commercial viability so that any adverse combination of such factors may result in the Company not receiving an adequate return on invested capital.

127

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Mining Risks and Insurance

The Company is subject to risks normally encountered in the mining industry, such as unusual or unexpected geological formations, cave-ins or flooding. The Company may become subject to liability for pollution, damage to life or property and other hazards if mineral exploration against which it or the operator of its exploration programs cannot insure or against which it or such operator may elect not to insure because of high premium costs or other reasons. In addition, insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon the Company’s financial condition and results of operations.

Environmental Risk

The mining and mineral processing industries are subject to extensive governmental regulations for the protection of the environment, including regulations relating to air and water quality, mine reclamation, solid and hazardous waste handling and disposal and the promotion of occupational health and safety, which may adversely affect the Company or require it to expend significant funds.

Title Risk

The validity of unpatented mining claims on public lands, which constitute most of the Company’s property holdings, is often uncertain and may be contested and subject to title defects.

Property Interests

The Company's gold and coal interests being the Goldwedge Project (including the Dixie-Comstock Mining Company claims), Piñon Project, Fondaway Canyon Project, and Kentucky Project (collectively “Property Interests”) are the only projects that are currently material to the Company. Unless the Company acquires or develops additional material Property Interests, the Company will be solely dependent upon its current Property Interests. There is significant competition for the acquisition of properties producing or capable of producing gold and precious minerals. The Company may be at a competitive disadvantage in acquiring additional mining properties since it must compete with other parties, many of whom have greater financial and technical resources than the Company. As a result, the Company may be unable to acquire attractive mining properties on terms it considers acceptable. If no additional Property Interests are acquired by the Company, any adverse development affecting the Company's existing Property Interests would have a material adverse effect on the Company’s financial condition and results of its operations.

128

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Credit Risk

Credit risk is the risk of loss associated with counterparty’s inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to cash and reclamation bonds. The Company has no significant concentration of credit risk arising from operations. While cash and reclamation bonds are held with reputable financial institutions from which management believes the risk of loss to be minimal, there can be no assurances that such institutions will not encounter economic difficulties, which may, in turn, have a material adverse effect on the Company.

Liquidity Risk

There is a risk that the Company will not be able to meet its financial obligations when they become due, or can only do so at excessive cost. The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. However, since the Company does not have any revenue, there is a risk that the Company will not have sufficient cash resources to meet liabilities as they come due.

Commodity Prices

The value and price of the Company’s securities, its financial results, and its exploration, development and mining activities may be significantly adversely affected by declines in the price of gold, other precious metals and coal. Gold prices fluctuate widely and are affected by numerous factors beyond the Company’s control, such as interest rates, exchange rates, inflation or deflation, fluctuation in the value of the U.S. dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of gold producing countries throughout the world.

Government Regulation

The Company’s mineral exploration and development activities, if any, are subject to various laws governing prospecting, mining, development, production, taxes, labor standards and occupational health, mine safety, toxic substances, land use, water use, land claims of local people and other matters. The Company can provide no assurance that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail the Company’s exploration, production or development activities. There is no guarantee that the Company’s exploration licenses will be extended or that new exploration licenses will be approved. In addition, such exploration licenses could be changed and there can be no assurances that any application to renew any existing licenses will be approved. Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Government approvals and permits are currently, and may in the future be, required in connection with the Company’s operations, if any. There can be no assurance that the Company will be able to obtain these permits in a timely manner.

129

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

Capital Investment

The ability of the Company to continue exploration and development of its property interests will be dependent upon its ability to raise significant additional financing hereafter. There is no assurance that adequate financing will be available to the Company or that the terms of such financing will be favorable. Should the Company not be able to obtain such financing, its properties may be lost entirely.

Conflicts of Interest

Certain of the directors and officers of the Company may also serve as directors and officers of other companies involved in base and precious metal exploration and development and consequently, the possibility of conflict exists. Any decisions made by such directors involving the Company will be made in accordance with the duties and obligations of directors to deal fairly and in good faith with the Company and such other companies. In addition, such directors declare, and refrain from voting on, any matters in which such directors may have a conflict of interest.

Dependence on Key Employees

The Company’s business is dependent on retaining the services of a small number of key employees. The success of the Company is, and will continue to be, to a significant extent, dependent on the expertise and experience of these employees. The loss of one or more of these employees could have a materially adverse effect on the Company.

RISK MANAGEMENT

Risk management is carried out by the Company's management team with guidance from the Audit Committee under policies approved by the Board of Directors. The Board of Directors provides regular guidance for overall risk management.

130

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

DISCLOSURE OF INTERNAL CONTROLS

Management has established processes, which are in place to provide them sufficient knowledge to support management representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial statements, and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the consolidated financial statements.

In contrast to the certificate required under National Instrument 52-109 Certification of Disclosure in Issuers' Annual and Interim Filings (NI 52-109), the Company utilizes the Venture Issuer Basic Certificate, which does not include representations relating to the establishment and maintenance of disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as defined in NI 52-109. In particular, the certifying officers filing the Certificate are not making any representations relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The Company’s certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in this certificate.

Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

131

Royal Standard Minerals Inc.

Management’s Discussion and Analysis

Year Ended January 31, 2012

Discussion Dated May 29, 2012

ADDITIONAL DISCLOSURE FOR VENTURE CORPORATIONS

The following table sets forth a breakdown of the components of general and administrative expenditures for the Company, for the year ended January 31, 2012 and 2011.

	Years Ended January 31,
	2012 $	2011 $
Detail
Corporate development	263,251	57,402
Insurance	22,841	24,168
Office and general	1,719	31,786
Professional fees	1,489,989	193,778
Consulting, wages and salaries	526,446	433,019
Share based payments	503,942	-
Depreciation	931	1,122
Total	2,809,119	741,275

132

Item 18. Financial Statements

Not applicable.

133

Item 19. Exhibits.

Exhibit No.	Description of Exhibit

1.1	Certificate of Incorporation of the Company, as amended.*

1.2.1	By-law No. 1 of the Company (incorporated by reference to Schedule “E” to the Company’s Form 6-K filed with the SEC on June 21, 2007).

1.2.2	By-law No. 2 of the Company (incorporated by reference to Exhibit 99.1 to Form 6-K filed with the SEC on January 12, 2012).

2.1	Shareholder Rights Plan dated December 23, 2010.*

4.1	2011 Amended and Restated Stock Option Plan (incorporated by reference to Schedule B to Exhibit 99.1 to the Company’s Form 6-K/A filed with the SEC on December 22, 2011).

4.2.1#	Senior Secured Gold Stream Credit Agreement by and between Manhattan Mining Co., certain guarantors and Waterton Global Value, L.P., by the general partner of its general partner, Cortleigh Limited, dated August 26, 2011 (incorporated by reference to Exhibit 99.2 to the Company’s Form 6-K/A filed with the SEC on June 7, 2012).

4.2.2	First Amendment to Credit Agreement by and between Manhattan Mining Co. and Waterton Global Value, L.P., by the general partner of its general partner, Cortleigh Limited, dated May 2, 2012 (incorporated by reference to Exhibit 99.3 to the Company’s Form 6-K filed with the SEC on May 14, 2012).

4.3.1#	Royalty Agreement by and between Manhattan Mining Co. and Waterton Global Value, L.P., dated August 26, 2011 (incorporated by reference to Exhibit 99.4 to the Company’s Form 6- K/A filed with the SEC on June 7, 2012).

4.3.2	Amendment to Royalty Agreement by and between Manhattan Mining Co. and Waterton Global Value, L.P., dated May 2, 2012 (incorporated by reference to Exhibit 99.5 to the Company’s Form 6-K/A filed with the SEC on June 7, 2012).

8.1	List of Subsidiaries of the Company.*

12.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).*

12.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a).*

13.1	Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the United States Sarbanes Oxley Act of 2002.*

13.2	Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the United States Sarbanes Oxley Act of 2002.*

15.1	Consent of MSCM LLP.*

134

15.2	Consent of Donald G. Strachan, M.Sc. CPG, Timothy D. Master, M.Sc. CPC, James W. Ashton, Consulting Engineer P.E., and Roger C. Steininger*

*	Filed herewith.

#	Confidential treatment has been requested for the redacted portions of this agreement. A complete copy of the agreement, including the redacted portions, has been filed separately with the SEC.

135

SIGNATURES

The registrant hereby 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.

ROYAL STANDARD MINERALS INC.
(Registrant)

/s/ Philip Gross
Name: Phillip Gross
Title: Interim President and Chief Executive Officer

Dated effective: May 31, 2012

136

Exhibit 99.1

Exhibit 2.1

SHAREHOLDER RIGHTS PLAN AGREEMENT

ROYAL STANDARD MINERALS INC.

and

EQUITY FINANCIAL TRUST COMPANY

as Rights Agent

Dated as of December 23, 2010

TABLE OF CONTENTS

		Page

ARTICLE 1 INTERPRETATION		1
1.1	Certain Definitions	1
1.2	Currency	12
1.3	Descriptive Headings	12
1.4	References to Agreement	12
1.5	Calculation of Number and Percentage of Beneficial Ownership of Outstanding Voting Shares	13
1.6	Acting Jointly or in Concert	13
ARTICLE 2 THE RIGHTS		13
2.1	Legend on Certificates	13
2.2	Execution, Authentication, Delivery and Dating of Rights Certificates	14
2.3	Registration, Registration of Transfer and Exchange	14
2.4	Mutilated, Destroyed, Lost and Stolen Rights Certificates	15
2.5	Persons Deemed Owners of Rights	15
2.6	Delivery and Cancellation of Certificates	16
2.7	Agreement of Rights Holders	16
2.8	Rights Certificate Holder Not Deemed a Shareholder	17
ARTICLE 3 EXERCISE OF THE RIGHTS		17
3.1	Initial Exercise Price: Exercise of Rights; Detachment of Rights	17
3.2	Adjustments to Exercise Price: Number of Rights	19
3.3	Date on Which Exercise Is Effective	24
ARTICLE 4 ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS		24
4.1	Flip-in Event	24
ARTICLE 5 THE RIGHTS AGENT		25
5.1	General	25
5.2	Merger or Amalgamation or Change of Name of Rights Agent	26
5.3	Duties of Rights Agent	27
5.4	Change of Rights Agent	28
ARTICLE 6 MISCELLANEOUS		29
6.1	Redemption and Waiver	29
6.2	Expiration	31
6.3	Issuance of New Rights Certificates	31
6.4	Fractional Rights and Fractional Shares	31
6.5	Supplements and Amendments	32
6.6	Rights of Action	32
6.7	Notice of Proposed Actions	32
6.8	Notices	32
6.9	Costs of Enforcement	34
6.10	Successors	34
6.11	Benefits of this Agreement	34
6.12	Governing Law	34
6.13	Counterparts	34

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6.14	Severability	34
6.15	Effective Date	34
6.16	Determinations and Actions by the Board of Directors	34
6.17	Time of the Essence	35
6.18	Regulatory Approvals	35
6.19	Declaration as to Non-Canadian and Non-United States Holders	35
6.20	Fiduciary Duties of the Board of Directors	35
6.21	Language	35

Exhibit A –	Form of Rights Certificate
	Form of Election to Exercise
	Form of Assignment
	Notice

SHAREHOLDER RIGHTS PLAN AGREEMENT

This agreement, dated as of December 23, 2010, is between Royal Standard Minerals Inc., a corporation existing under the federal laws of Canada (the " Corporation "), and Equity Financial Trust Company, a company incorporated under the federal laws of Canada, as rights agent (the " Rights Agent ", which includes any successor Rights Agent).

WHEREAS:

A.	The Board of Directors of the Corporation has determined that it is advisable for and in the best interests of the Corporation to adopt a shareholder rights plan (the " Rights Plan ").

B.	In order to implement the Rights Plan, the Board of Directors of the Corporation has authorized:

	(i)	the issuance, effective at 4:00 p.m. (Toronto time) on December 23, 2010, of one right (a " Right ") in respect of each Common Share of the Corporation outstanding at 4:00 p.m. (Toronto time) on December 23, 2010 (the " Record Time "); and

	(ii)	the issuance of one Right in respect of each Common Share issued after the Record Time and prior to the earlier of the Separation Time and the Expiration Time.

C.	Each Right entitles the holder thereof, after the Separation Time, to purchase securities of the Corporation pursuant to the terms and subject to the conditions set forth in this agreement.

D.	The Corporation wishes to appoint the Rights Agent to act on behalf of the Corporation and holders of Rights, and the Rights Agent is willing to so act, in connection with the issuance, transfer, exchange and replacement of Rights Certificates, the exercise of Rights and other matters referred to in this agreement.

NOW THEREFORE, in consideration of the premises and the respective covenants and agreements set forth in this agreement, the parties agree as follows.

ARTICLE 1
INTERPRETATION

1.1	Certain Definitions

	For the purpose of this agreement:

(a)

" Acquiring Person " means any Person who is or becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares; provided, however, that the term "Acquiring Person" will not include:

	(i)	the Corporation or any Subsidiary of the Corporation;

	(ii)	any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares of the Corporation as a result of any one or any combination of:

(A)

a Voting Share Reduction;

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	(B)	a Permitted Bid Acquisition;

	(C)	an Exempt Acquisition;

	(D)	a Pro Rata Acquisition; or

	(E)	a Convertible Security Acquisition;

		provided, however, that if a Person becomes the Beneficial Owner of 20% or more of the Voting Shares then outstanding by reason of one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition and thereafter such Person, while such Person is the Beneficial Owner of 20% or more of the Voting Shares then outstanding, increases the number of Voting Shares beneficially owned by such Person by more than 1.0% of the number of Voting Shares outstanding (other than pursuant to one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition, a Pro Rata Acquisition or a Convertible Security Acquisition) then, as of the date such Person becomes the Beneficial Owner of such additional outstanding Voting Shares, such Person will be an "Acquiring Person";

	(iii)	for a period of ten days after the Disqualification Date (as defined below), any Person who becomes the Beneficial Owner of 20% or more of the outstanding Voting Shares as a result of such Person becoming disqualified from relying on Clause 1.1(d)(viii) solely because such Person or the Beneficial Owner of such Voting Shares is making or has announced an intention to make a Take-over Bid, either alone or by acting jointly or in concert with any other Person. For the purposes of this definition, " Disqualification Date " means the first date of public announcement that any Person is making or has announced an intention to make a Take-over Bid, either alone, through such Person’s Affiliates or Associates or by acting jointly or in concert with any other Person, and includes, without limitation, a report filed pursuant to Section 102 of the Securities Act or Section 13(d) of the U.S. Exchange Act;

	(iv)	an underwriter or member of a banking or selling group acting in such capacity that becomes the Beneficial Owner of 20% or more of the Voting Shares in connection with a distribution of securities of the Corporation; or

	(v)	a Person (a " Grandfathered Person ") who is the Beneficial Owner of 20% or more of the outstanding Voting Shares of the Corporation determined as at the Record Time, provided, however, that this exception shall not be, and shall cease to be, applicable to a Grandfathered Person in the event that such Grandfathered Person shall, after the Record Time, become the Beneficial Owner of any additional Voting Shares of the Corporation outstanding as at the Record Time, other than pursuant to one or any combination of a Voting Share Reduction, a Permitted Bid Acquisition, an Exempt Acquisition or a Pro Rata Acquisition;

	(b)	" Affiliate ", when used to indicate a relationship with a specified corporation, means a Person who directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified corporation;

	(c)	" Associate ", where used to indicate a relationship with any Person, means a spouse of that Person, any Person who resides in the same home as that Person and to whom that

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		Person is married or with whom that Person is living in a conjugal relationship outside marriage, a child of that Person or a relative of that Person if the relative has the same home as that Person;

	(d)	a Person will be deemed the " Beneficial Owner " of, and to have " Beneficial Ownership " of, and to " Beneficially Own ":

	(i)	any securities as to which such Person or any of such Person's Affiliates or Associates is the owner at law or in equity;

	(ii)	any securities as to which such Person or any of such Person's Affiliates or Associates has the right to acquire (if such right is exercisable immediately or within a period of 60 days thereafter and whether or not upon the occurrence of a contingency) pursuant to any agreement, arrangement, pledge or understanding, whether or not in writing, (other than customary agreements with and between underwriters or banking group or selling group members with respect to a distribution of securities and other than pledges of securities in the ordinary course of the pledgee's business) or upon the exercise of any conversion right, exchange right, share purchase right (other than a Right), warrant or option; and

	(iii)	any securities which are Beneficially Owned within the meaning of clauses (i) or (ii) by any other Person with whom such Person is acting jointly or in concert;

provided, however, that a Person will not be deemed the " Beneficial Owner " of, or to have " Beneficial Ownership " of, or to " Beneficially Own ", any security because:

	(iv)	such security has been or agreed to be deposited or tendered pursuant to a Lock- up Agreement or is otherwise deposited or tendered pursuant to any Take-over Bid made by such Person, any Affiliate or Associate of such Person or any Person acting jointly or in concert with such Person until such deposited security has been taken up or paid for, whichever occurs first;

	(v)	such Person or any Affiliate or Associate of such Person or any other Person acting jointly or in concert with such Person holds such security and:

	(A)	the ordinary business of any such Person (the " Fund Manager ") includes the management of investment funds for others and such security is held by the Fund Manager in the ordinary course of such business in the performance of the Fund Manager's duties for the account of any other Person (a " Client "), including a nondiscretionary account held on behalf of a Client by a broker or dealer registered under applicable laws;

	(B)	such Person (the " Trust Company ") is licensed to carry on the business of a trust company under applicable laws and, as such, acts as trustee or administrator or in a similar capacity in relation to the estates of deceased or incompetent Persons (each, an " Estate Account ") or in relation to other accounts (each, an " Other Account ") and holds such security in the ordinary course of such duties for Estate Accounts or Other Accounts;

	(C)	such Person (the " Plan Administrator ") is the administrator or the trustee of one or more pension funds or plans (a " Plan ") registered under the laws of Canada or any province thereof or the laws of the United States of America or any state thereof and such security is held by the Plan Administrator or the Plan in the ordinary course of the Plan Administrator's or Plan's activities;

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	(D)	such Person (the " Statutory Body ") is established by statute for purposes that include, and the ordinary business or activity of such Person includes, the management of investment funds for employee benefit plans, pension plans and insurance plans of various public bodies and such security is held by the Statutory Body in the ordinary course of the management of such investment funds;

	(E)	such Person is a Crown Agent or agency (a " Crown Agent "); or

	(F)	such Person is a Plan;

		provided, however, that in any of the foregoing cases, the Fund Manager, the Trust Company, the Plan Administrator, the Statutory Body, the Crown Agent or the Plan, as the case may be, is not then making a Take-over Bid, has not then announced an intention to make a Take-over Bid and is not then acting jointly or in concert with any other Person who is making a Take-over Bid or who has announced a current intention to make a Take-over Bid, other than an Offer to Acquire Voting Shares or other securities (1) pursuant to a distribution by the Corporation, (2) by means of a Permitted Bid or a Competing Permitted Bid or (3) by means of market transactions made in the ordinary course of business of such Person (including pre-arranged trades entered into in the ordinary course of business of such Person) executed through the facilities of a stock exchange or organized over-the-counter market;

	(vi)	such Person is (A) a Client of the same Fund Manager as another Person on whose account the Fund Manager holds such security, (B) an Estate Account or Other Account of the same Trust Company as another Person on whose account the Trust Company holds such security or (C) a Plan with the same Plan Administrator as another Plan on whose account the Plan Administrator holds such security;

	(vii)	such Person is (A) a Client of a Fund Manager and such security is owned at law or in equity by the Fund Manager, (B) an Estate Account or Other Account of a Trust Company and such security is owned at law or in equity by the Trust Company or (C) a Plan and such security is owned at law or in equity by the Plan Administrator; or

	(viii)	because such Person is the registered holder of securities as a result of carrying on the business of or acting as a nominee of a securities depositary.

	(e)	" Board of Directors " means the board of directors of the Corporation or, if duly constituted and whenever duly empowered, any committee of the board of directors of the Corporation;

	(f)	" Business Day " means any day other than a Saturday, a Sunday or a day on which banking institutions in Toronto, Ontario are authorized or obligated by law to close;

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	(g)	" Canadian Dollar Equivalent " of any amount, which is expressed in United States dollars means, on any date, the Canadian dollar equivalent of such amount determined by multiplying such amount by the U.S. - Canadian Exchange Rate in effect on such date;

	(a)	" Canadian - U.S. Exchange Rate " means, on any date, the inverse of the U.S. - Canadian Exchange Rate in effect on such date;

	(h)	" CBCA " means the Canada Business Corporations Act , as amended, and the regulations made thereunder, and any successor laws or regulations thereto;

	(i)	" close of business " on any given date means the time on such date (or, if such date is not a Business Day, the time on the next Business Day) at which the principal office in Toronto, Ontario of the transfer agent for the Common Shares (or, after the Separation Time, the office of the Rights Agent) is closed to the public;

	(j)	" Common Share " means the common shares of the Corporation and any other shares of the Corporation into which such shares may be subdivided, consolidated, reclassified or changed;

	(k)	" common shares ", when used with reference to any Person other than the Corporation, means the class or classes of shares (or similar equity interest) with the greatest per share (or similar interest) voting power entitled to vote generally in the election of all directors of such other Person;

	(l)	" Competing Permitted Bid " means a Take-over Bid that:

	(i)	is made after a Permitted Bid or another Competing Permitted Bid has been made and prior to the expiry of that Permitted Bid or Competing Permitted Bid (in this definition, the " Prior Bid ");

	(ii)	satisfies all components of the definition of Permitted Bid other than the requirement set out in clause (ii) of that definition; and

	(iii)	contains, and the take up and payment for securities tendered or deposited under the Take-over Bid is subject to, irrevocable and unqualified conditions that:

	(A)	no Voting Shares will be taken up or paid for pursuant to the Take-over Bid (1) prior to the close of business on a date that is no earlier than the later of the date which is 35 days (or such other minimum deposit period for a take-over bid as is provided in the Securities Act ) after the date the Take-over Bid is made and the 60th day after the date of the Prior Bid that is then outstanding and (2) then only if, at the close of business on the date Voting Shares are first taken up or paid for, more than 50% of the then outstanding Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to such Take-over Bid and not withdrawn; and

	(B)	if the requirement in clause (iii) (A) (2) is satisfied, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for a period of at least 10 Business Days after the date of the announcement;

- 6 -

(m)

" controlled ": a corporation is controlled by another Person or two or more Persons acting jointly or in concert if:

	(i)	securities entitled to vote in the election of directors carrying more than 50% of the votes for the election of the directors are held, directly or indirectly, by or for the benefit of the other Person or two or more Persons acting jointly or in concert; and

	(ii)	the votes carried by such securities are entitled, if exercised, to elect a majority of the board of directors of such corporation;

		and " controls ", " controlling " and " under common control with " will be interpreted accordingly;

	(n)	" Convertible Securities " means any securities issued by the Corporation (including rights, warrants and options, but excluding the Rights) carrying any purchase, exercise, conversion or exchange rights, pursuant to which the holder of Convertible Securities may acquire Voting Shares or other securities convertible into or exercisable or exchangeable for Voting Shares (in each case, whether such right is exercisable immediately or after a specified period and whether or not on condition or the happening of any contingency);

	(o)	" Convertible Security Acquisition " means the acquisition of Voting Shares on the exercise, conversion or exchange of Convertible Securities acquired by any Person pursuant to a Permitted Bid Acquisition, Exempt Acquisition or Pro Rata Acquisition;

	(p)	" Co-Rights Agent " has the meaning ascribed to it in subsection 5.1 (a);

	(q)	" dividends paid in the ordinary course " means cash dividends paid in any financial year of the Corporation to the extent that such cash dividends do not exceed, in the aggregate, the greatest of:

	(i)	200% of the aggregate amount of cash dividends declared payable by the Corporation on the Common Shares in its immediately preceding financial year;

	(ii)	300% of the arithmetic average of the aggregate amounts of cash dividends declared payable by the Corporation on the Common Shares in its three immediately preceding financial years; and

	(iii)	100% of the aggregate consolidated net income of the Corporation, before extraordinary items, for its immediately preceding financial year;

	(r)	" Election to Exercise " has the meaning ascribed to it in clause 3.1(e) (ii);

	(s)	" Exempt Acquisition " means an acquisition of Voting Shares:

	(i)	in respect of which the Board of Directors has waived the application of section 4.1 pursuant to section 6.1;

	(ii)	pursuant to a distribution by the Corporation of Voting Shares or Convertible Securities (and the conversion or exchange of such securities) pursuant to a prospectus or similar document (provided that the purchaser does not thereby Beneficially Own a greater percentage of the Voting Shares or Convertible Securities so offered than the percentage of Voting Shares or Convertible Securities beneficially owned by the purchaser immediately prior to that distribution) or by way of private placement provided that, in the case of a private placement, all necessary stock exchange approvals for the private placement have been obtained and the private placement complies with the terms and conditions of those approvals and the purchaser does not become the Beneficial Owner of more than 25% of the Voting Shares outstanding immediately prior to the private placement (and in making this determination, the securities to be issued to that purchaser pursuant to the private placement will be deemed to be held by that purchaser but will not be included in the aggregate number of outstanding Voting Shares immediately prior to the private placement); and

- 7 -

(iii)

pursuant to an amalgamation, merger or other statutory procedure requiring shareholder approval;

	(t)	" Exercise Price " means, as of any date from and after the Separation Time, the price at which a holder of a Right may purchase the securities issuable upon exercise of such Right and, subject to adjustment thereof in accordance with the terms hereof, the Exercise Price will be an amount equal to five times the Market Price per Common Share determined as at the Separation Time;

	(u)	" Expansion Factor " has the meaning ascribed to it in subsection 3.2(a);

	(v)	" Expiration Time " means the earlier of:

	(i)	the Termination Time; and

	(ii)	the close of business on the tenth anniversary of the date hereof, unless extended by the Board of Directors.;

	(w)	" Flip-in Event " means a transaction in or pursuant to which any Person becomes an Acquiring Person;

	(x)	" holder " has the meaning ascribed to it in section 2.5;

	(y)	" Independent Shareholders " means holders of Voting Shares other than Voting Shares Beneficially Owned by:

	(i)	an Acquiring Person;

	(ii)	an Offeror, other than a Person described in any one or more of paragraphs (A) through (E) of clause 1.1(d)(v);

	(iii)	any Associate or Affiliate of such Acquiring Person or Offeror;

	(iv)	any Person acting jointly or in concert with such Acquiring Person or Offeror; and

	(v)	any employee benefit plan, stock purchase plan, deferred profit sharing plan and any other similar plan or trust for the benefit of employees of the Corporation or a Subsidiary of the Corporation, unless the beneficiaries of the plan or trust direct the manner in which the Voting Shares are to be voted or direct whether the Voting Shares are to be tendered to a Take-over Bid;

- 8 -

(z)

" Lock up Agreement " means an agreement between an Offeror, any Affiliate or Associate of the Offeror or any other Person acting jointly or in concert with the Offeror and a Person (the " Locked-up Person ") who is not an Affiliate or Associate of the Offeror or a Person acting jointly or in concert with the Offeror whereby the Locked-up Person agrees to deposit or tender Voting Shares held by the Locked-up Person to the Offeror's Take-over Bid or to any Take-over Bid made by an Affiliate or Associate of the Offeror or made by any other Person acting jointly or in concert with the Offeror (the " Lock-up Bid "), where the agreement:

(i)	(A)	permits the Locked-up Person to withdraw the Voting Shares in order to tender or deposit the Voting Shares to another Take-over Bid or to support another transaction that contains an offering price for each Voting Share that exceeds, or provides a value for each Voting Share that is greater than, the offering price contained or proposed to be contained in the Lock-up Bid; or

	(B)	permits the Locked-up Person to withdraw the Voting Shares in order to tender or deposit the Voting Shares to another Take-over Bid or to support another transaction that contains an offering price for each Voting Share that exceeds, or provides a value for each Voting Share that is greater than, the offering price contained in or proposed to be contained in the Lock-up Bid by as much or more than a specified amount (the " Specified Amount ") where the Specified Amount is not greater than 5% of the offering price that is contained or proposed to be contained in the Lock-up Bid; and

(ii)

does not provide for any "break-up fees", "top-up fees", "termination fees", penalties, expenses or other amounts that exceed in the aggregate the greater of (A) the cash equivalent of 3.5% of the price or value payable to the Locked-up Person under the Take-over Bid and (B) one-half of the increased price or value that is paid pursuant to another Take-over Bid or transaction, if the Locked-up Person fails to tender Voting Shares pursuant thereto or withdraws Voting Shares previously tendered in order to accept the other Take-over Bid or support the other transaction;

		and for greater clarity, the agreement may contain a right of first refusal or require a period of delay to give the Person who made the Lock-up Bid an opportunity to match a higher price in another Take-over Bid or other similar limitation on a Locked-up Person's right to withdraw Voting Shares from the agreement, so long as the limitation does not preclude the exercise by the Locked-up Person of the right to withdraw Voting Shares during the period for acceptance of the other Take-over Bid or transaction;

	(aa)	" Market Price " per share of any securities on any date of determination means the average of the weighted average sale price per share of such securities (determined as described below) for the 20 consecutive Trading Days through and including the Trading Day immediately preceding such date; provided, however, that if an event of a type analogous to any of the events described in section 3.2 have caused the sale prices in respect of any Trading Day used to determine the Market Price not to be fully comparable with the sale prices on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day, each such sale price so used will be appropriately adjusted in a manner analogous to the applicable adjustment provided for in section 3.2 in order to make it fully comparable with the sale price on such date of determination or, if the date of determination is not a Trading Day, on the immediately preceding Trading Day. The weighted average sale price per share of any securities on any date will be determined by dividing the aggregate sale price of all securities sold on the principal stock exchange in Canada on which such securities are listed and posted for trading divided by the total number of securities so sold except that:

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	(i)	if for any reason such prices are not available on such day or the securities are not listed and posted for trading on any stock exchange in Canada, the Market Price will be calculated using the sale prices for such securities as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange in the United States on which such securities are listed or admitted to trading;

	(ii)	if for any reason such prices are not available on such day or the securities are not listed and posted for trading on a stock exchange in Canada or a national securities exchange in the United States, the Market Price will be calculated using the sale prices for such securities in the over-the-counter market, or such other comparable system then in use; or

	(iii)	if on any such date the securities are not quoted by any such organization, the Market Price will be calculated using the average of the closing bid and asked prices as furnished by a professional market maker making a market in the securities;

		provided, however, that if on any such date the securities are not traded on any exchange or in the over-the-counter market and the price referred to in clause (iii) is not available, the weighted average trading price per share of such securities on such date will mean the fair value per share of such securities on such date as determined by a nationally or internationally recognized investment dealer or investment banker chosen by the Board of Directors. The Market Price shall be expressed in Canadian dollars and, if initially determined in respect of any day forming part of the 20 consecutive Trading Day period in question in United States dollars, such amount shall be translated into Canadian dollars on such date at the Canadian Dollar Equivalent thereof;

	(bb)	" Nominee " has the meaning attributed to it in subsection 3.1(d);

	(cc)	" Offer to Acquire " includes:

	(i)	an offer to purchase, or a solicitation of an offer to sell; and

	(ii)	an acceptance of an offer to sell, whether or not such offer to sell has been solicited,

		or any combination thereof, and the Person accepting an offer to sell will be deemed to be making an offer to acquire to the Person who made the offer to sell;

	(dd)	" Offeror " means a Person who has announced a current intention to make or who is making a Take-over Bid;

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	(ee)	" Offeror's Securities " means Voting Shares Beneficially Owned by an Offeror on the date of a Take-over Bid;

	(ff)	" Permitted Bid " means a Take-over Bid which is made by means of a take-over bid circular and which also complies with the following additional provisions:

	(i)	the Take-over Bid is made to all holders of Voting Shares other than the Offeror;

	(ii)	the Take-over Bid contains, and the take-up and payment for securities tendered or deposited thereunder is subject to, an irrevocable and unqualified condition that no Voting Shares will be taken-up or paid for pursuant to the Take-over Bid prior to the close of business on the date which is not less than 60 days after the date of the Take-over Bid and only if at such date more than 50% of the Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to the Take-over Bid and not withdrawn;

	(iii)	the Take-over Bid contains an irrevocable and unqualified provision that, unless the Take-over Bid is withdrawn, Voting Shares may be deposited pursuant to such Take-over Bid at any time during the period of time between the date of the Take-over Bid and the date on which the Voting Shares subject to the Take-over Bid may be taken-up and paid for and that any Voting Shares deposited pursuant to the Take-over Bid may be withdrawn until taken-up and paid for; and

	(iv)	the Take-over Bid contains an irrevocable and unqualified provision that, if on the date on which Voting Shares may be taken up and paid for more than 50% of the Voting Shares held by Independent Shareholders have been deposited or tendered pursuant to the Take-over Bid and not withdrawn, the Offeror will make a public announcement of that fact and the Take-over Bid will remain open for deposits and tenders of Voting Shares for not less than 10 Business Days from the date of such public announcement;

	(gg)	" Permitted Bid Acquisition " means an acquisition of Voting Shares made pursuant to a Permitted Bid or a Competing Permitted Bid;

	(hh)	" Person " includes any individual, body corporate, firm, partnership, association, trust, trustee, executor, administrator, legal personal representative, group, unincorporated organization, syndicate, government or governmental agency or instrumentality or other entity;

	(ii)	" Pro Rata Acquisition " means:

	(i)	the acquisition of Voting Shares as a result of a stock dividend, a stock split or other event pursuant to which a Person receives or acquires Voting Shares on the same proportionate basis as all other holders of the same class of Voting Shares;

	(ii)	the acquisition of Voting Shares pursuant to any dividend reinvestment plan or other plan made available by the Corporation to holders of all its Voting Shares (other than holders resident in any jurisdiction where participation in such plan is restricted or impractical to the Corporation as a result of applicable law); or

	(iii)	the receipt and/or exercise of rights (other than the Rights) issued by the Corporation to all the holders of a class of Voting Shares to subscribe for or purchase Voting Shares (other than holders resident in any jurisdiction where the distribution or exercise of such rights is restricted or impractical as a result of applicable law), provided that such rights are acquired directly from the Corporation and not from any other Person.

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	(jj)	" Record Time " has the meaning ascribed to it in the recitals;

	(kk)	" Redemption Price " has the meaning ascribed to it in subsection 6.1(a);

	(ll)	" Right " has the meaning ascribed to it in the recitals;

	(mm)	" Rights Certificates " means the certificates representing the Rights after the Separation Time, which are to be substantially in the form attached as Exhibit A;

	(nn)	" Rights Plan " has the meaning ascribed to it in the recitals;

	(oo)	" Rights Register " and " Rights Registrar " have the respective meanings ascribed to them in subsection 2.3(a);

	(pp)	" Securities Act " means the Securities Act (Ontario), as amended, and the regulations and rules thereunder, and any comparable or successor laws or regulations thereto;

	(qq)	" Separation Time " means, subject to subsection 6.1(d), the close of business on the tenth Trading Day after the earlier of:

	(i)	the Stock Acquisition Date;

	(ii)	the date of the commencement of, or first public announcement of the intent of any Person (other than the Corporation or any Subsidiary of the Corporation) to commence, a Take-over Bid (other than a Permitted Bid or a Competing Permitted Bid); and

	(iii)	the date on which a Permitted Bid or a Competing Permitted Bid ceases to qualify as such;

		or such later time as may be determined by the Board of Directors; provided that (i) if the foregoing results in the Separation Time being prior to the Record Time, the Separation Time will be the Record Time, (ii) if any Take-over Bid referred to in clause (ii) expires or is cancelled, terminated or otherwise withdrawn prior to the Separation Time, such Take-over Bid will be deemed, for the purposes of this definition, never to have been made (iii) if the Board of Directors determines pursuant to section 6.1 to waive the application of section 4.1 to a Flip-in Event, the Separation Time in respect of that Flip-in Event will be deemed never to have occurred;

	(rr)	" Stock Acquisition Date " means the date of the first public announcement (which, for purposes of this definition, includes the filing of a report of acquisition pursuant to the Securities Act or the U.S. Exchange Act) by the Corporation or an Acquiring Person of facts indicating that a Person has become an Acquiring Person;

	(ss)	" Subsidiary " of a Person has the meaning ascribed to it in the Securities Act,

	(tt)	" Take-over Bid " means an Offer to Acquire Voting Shares or securities convertible into or exchangeable for Voting Shares, where the Voting Shares subject to the Offer to Acquire, together with the Voting Shares into which the securities subject to the Offer to Acquire are convertible or exchangeable, together with the Offeror's Securities, constitute, in the aggregate, 20% or more of the Voting Shares outstanding on the date of the Offer to Acquire;

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	(uu)	" Termination Time " means the time at which the right to exercise Rights will terminate pursuant to subsection 6.1(g);

	(vv)	" Trading Day ", when used with respect to any securities, means a day on which the principal Canadian securities exchange on which such securities are listed or admitted to trading is open for the transaction of business or, if the securities are not listed or admitted to trading on any Canadian securities exchange, a Business Day;

	(ww)	" U.S. Exchange Act " means the United States Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder as from time to time in effect;

	(xx)	" U.S. - Canadian Exchange Rate " means, on any date:

	(i)	if on such date the Bank of Canada sets an average noon spot rate of exchange for the conversion of one United States dollar into Canadian dollars, such rate; and

	(ii)	in any other case, the rate for such date for the conversion of one United States dollar into Canadian dollars calculated in such manner as may be determined by the Board of Directors from time to time acting in good faith;

	(yy)	" U.S. Dollar Equivalent " of any amount, which is expressed in Canadian dollars means, on any date, the United States dollar equivalent of such amount determined by multiplying such amount by the Canadian-U.S. Exchange Rate in effect on such date;

	(zz)	" Voting Shares " means the Common Shares and any other shares in the capital of the Corporation to which are attached a right to vote for the election of directors generally; and

	(aaa)	" Voting Share Reduction " means an acquisition or redemption by the Corporation or a Subsidiary of the Corporation of Voting Shares which, by reducing the number of Voting Shares outstanding, increases the percentage of outstanding Voting Shares Beneficially Owned by any Person to 20% or more of the Voting Shares outstanding.

1.2

Currency

All sums of money which are referred to in this agreement are expressed in lawful money of Canada, unless otherwise specified.

1.3

Descriptive Headings

Descriptive headings are for convenience only and are not to affect the meaning or construction of any of the provisions of this agreement.

1.4

References to Agreement

References to " this agreement ", " hereto ", " herein ", " hereby ", " hereunder ", " hereof " and similar expressions refer to this agreement, as amended or supplemented from time to time, and not to any particular Article, section, subsection, clause or other portion hereof and include any and every instrument supplemental or ancillary hereto.

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1.5

Calculation of Number and Percentage of
Beneficial Ownership of Outstanding Voting Shares

	(i)	For the purposes of this agreement, in determining the percentage of the outstanding Voting Shares of the Corporation with respect to which a Person is or is deemed to be the Beneficial Owner, all unissued Voting Shares of the Corporation of which such Person is deemed to be the Beneficial Owner will be deemed to be outstanding.

	(ii)	The percentage of outstanding Voting Shares of the Corporation Beneficially Owned by any Person, for the purposes of this agreement, will be and be deemed to be the product determined by the formula:

100	x	A
		B

where:

A	=	the number of votes for the election of all directors generally attaching to the outstanding Voting Shares Beneficially Owned by such Person; and

B	=	the number of votes for the election of all directors generally attaching to all outstanding Voting Shares.

1.6

Acting Jointly or in Concert

For purpose of this agreement, a Person is acting jointly or in concert with every other Person who has any agreement, arrangement, commitment or understanding (whether formal or informal and whether or not in writing) with the first Person, or with any other Person acting jointly or in concert with the first Person, to acquire or Offer to Acquire any Voting Shares or securities convertible into or exchangeable for Voting Shares (other than customary agreements with and between underwriters or banking group or selling group members with respect to a distribution of securities or pledges of securities in the ordinary course of the pledgee's business).

ARTICLE 2
THE RIGHTS

2.1

Legend on Certificate s

Certificates for Common Shares issued after the Record Time but prior to the earlier of the Separation Time and the Expiration Time will evidence, in addition to the Common Shares, but subject to section 3.2, one Right for each Common Share evidenced thereby and will have impressed, printed or written on or otherwise affixed to them substantially the following legend:

UNTIL THE SEPARATION TIME (AS DEFINED IN THE RIGHTS AGREEMENT REFERRED TO BELOW), THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER OF THIS CERTIFICATE TO CERTAIN RIGHTS AS SET FORTH IN A SHAREHOLDER RIGHTS PLAN AGREEMENT DATED AS OF DECEMBER 23, 2010 (AS THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME IN ACCORDANCE WITH THE TERMS THEREOF, THE "RIGHTS AGREEMENT") BETWEEN ROYAL STANDARD MINERALS INC. (THE "CORPORATION") AND EQUITY FINANCIAL TRUST COMPANY, AS RIGHTS AGENT, THE TERMS OF WHICH ARE INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH MAY BE INSPECTED DURING NORMAL BUSINESS HOURS AT THE PRINCIPAL EXECUTIVE OFFICES OF THE CORPORATION. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS MAY BE AMENDED, REDEEMED OR TERMINATED, MAY EXPIRE, MAY BECOME VOID (IF, IN CERTAIN CASES, THEY ARE "BENEFICIALLY OWNED" BY AN "ACQUIRING PERSON", WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR ANY SUBSEQUENT HOLDER) OR MAY BE EVIDENCED BY SEPARATE CERTIFICATES AND MAY NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE CORPORATION WILL MAIL OR ARRANGE FOR THE MAILING OF A COPY OF THE RIGHTS AGREEMENT TO THE HOLDER OF THIS CERTIFICATE WITHOUT CHARGE AS SOON AS IS PRACTICABLE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR.

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Certificates representing Common Shares that are issued and outstanding at the Record Time will evidence one Right for each Common Share evidenced thereby, despite the absence of the foregoing legend until the earlier of the Separation Time and the Expiration Time.

2.2

Execution, Authentication, Delivery and Dating of Rights Certificates

	(a)	The Rights Certificates will be executed on behalf of the Corporation by the Chairman of the Board, the President or any Vice-President and by any other Vice President or the Secretary. The signatures of such officers may be mechanically reproduced in facsimile on the Rights Certificates, and when so reproduced will be valid and binding on the Corporation even though that the Persons whose signatures are so reproduced may not hold office at the time the Rights Certificates are issued.

	(b)	Promptly after the Corporation learns of the Separation Time, the Corporation will notify the Rights Agent of the Separation Time and will deliver Rights Certificates executed by the Corporation to the Rights Agent for countersignature and a disclosure statement describing the Rights, and the Rights Agent will manually countersign such Rights Certificates and deliver such Rights Certificates and disclosure statement to the holders of the Rights pursuant to subsection 3.1(d). No Rights Certificate will be valid for any purpose until countersigned by the Rights Agent.

	(c)	Each Rights Certificate will be dated the date it is countersigned.

2.3

Registration, Registration of Transfer and Exchange

(a)

After the Separation Time, the Corporation will cause to be kept a register (the " Rights Register ") in which, subject to such reasonable regulations as it may prescribe, the Corporation will provide for the registration and transfer of Rights. The Rights Agent is hereby appointed the " Rights Registrar " for the purpose of maintaining the Rights Register for the Corporation and registering Rights and transfers of Rights as provided in this agreement. If the Rights Agent ceases to be the Rights Registrar, the Rights Agent will have the right to examine the Rights Register at all reasonable times. After the Separation Time and prior to the Expiration Time, upon surrender for registration of transfer or exchange of any Rights Certificate, but subject to subsection (c) and subsection 4.1(b), the Corporation will execute, and the Rights Agent will manually countersign and deliver, in the name of the holder or the designated transferee or transferees, as required pursuant to the holder's instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as did the Rights Certificates so surrendered.

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	(b)	All Rights issued upon any registration of transfer or exchange of Rights Certificates will be valid obligations of the Corporation, and such Rights will be entitled to the same benefits under this agreement as the Rights surrendered upon such registration of transfer or exchange.

	(c)	Every Rights Certificate surrendered for registration of transfer or exchange will be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Corporation or the Rights Agent, as the case may be, duly executed by the holder thereof or such holder's attorney duly authorized in writing. As a condition to the issuance of any new Rights Certificate under this section 2.3, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

2.4

Mutilated, Destroyed, Lost and Stolen Rights Certificates

	(a)	If any mutilated Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, the Corporation will execute and the Rights Agent will manually countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of Rights as the Rights Certificate so surrendered.

	(b)	If there will be delivered to the Corporation and the Rights Agent prior to the Expiration Time (i) evidence to their satisfaction of the destruction, loss or theft of any Rights Certificate and (ii) such surety bond and indemnity as may be required by them to indemnify them and any of their agents, then, in the absence of notice to the Corporation or the Rights Agent that such Rights Certificate has been acquired by a bona fide purchaser, the Corporation will execute, and upon the request of the Corporation, the Rights Agent will countersign and deliver, in lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same number of Rights as did the Rights Certificate so destroyed, lost or stolen.

	(c)	As a condition to the issuance of any new Rights Certificate under this section, the Corporation may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Rights Agent) in connection therewith.

	(d)	Every new Rights Certificate issued pursuant to this section in lieu of any destroyed, lost or stolen Rights Certificate will evidence a contractual obligation of the Corporation, whether or not the destroyed, lost or stolen Rights Certificate is at any time enforceable by anyone, and will be entitled to all the benefits of this agreement equally and proportionately with any and all other Rights duly issued by the Corporation under this agreement.

2.5

Persons Deemed Owners of Rights

The Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby for all purposes. As used in this agreement, unless the context otherwise requires, the term " holder " of any Rights will mean the registered holder of such Rights (or, prior to the Separation Time, of the associated Common Shares).

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2.6

Delivery and Cancellation of Certificates

All Rights Certificates surrendered upon exercise or for redemption, registration of transfer or exchange, if surrendered to any Person other than the Rights Agent, will be delivered to the Rights Agent and, in any case, will be promptly cancelled by the Rights Agent. The Corporation may deliver at any time to the Rights Agent for cancellation any Rights Certificates previously countersigned and delivered hereunder which the Corporation may have acquired in any manner whatsoever, and all Rights Certificates so delivered will be promptly cancelled by the Rights Agent. No Rights Certificate will be countersigned in lieu of or in exchange for any Rights Certificate cancelled as provided for in this section, except as expressly permitted by this agreement. The Rights Agent will destroy all cancelled Rights Certificates and, upon written request, deliver a certificate of destruction to the Corporation.

2.7

Agreement of Rights Holders

Every holder of Rights, by accepting Rights, consents and agrees with the Corporation and the Rights Agent and with every other holder of Rights that:

	(a)	it will be bound by and subject to the provisions of this agreement, as amended from time to time in accordance with the terms hereof, in respect of the Rights held;

	(b)	prior to the Separation Time, each Right will be transferable only together with, and will be transferred by a transfer of, the associated Common Share certificate representing such Right;

	(c)	after the Separation Time, the Rights Certificates will be transferable only upon registration of the transfer on the Rights Register as provided in this agreement;

	(d)	prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) for registration of transfer, the Corporation, the Rights Agent and any agent of the Corporation or the Rights Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the Separation Time, the associated Common Share certificate) is registered as the absolute owner thereof and of the Rights evidenced thereby (despite any notations of ownership or writing on such Rights Certificate or the associated Common Share certificate made by anyone other than the Corporation or the Rights Agent) for all purposes, and neither the Corporation nor the Rights Agent will be affected by any notice to the contrary;

	(e)	it has waived any right and is not entitled to receive any fractional Rights or any fractional Common Shares upon exercise of a Right (except as provided herein);

	(f)	subject to section 6.5, without the approval of the holders of Voting Shares or Rights and on the sole authority of the Board of Directors, this agreement may be amended or supplemented from time to time as provided in this agreement; and

	(g)	notwithstanding anything in this agreement to the contrary, neither the Corporation nor the Rights Agent will have any liability to any holder of a Right or any other Person as a result of its inability to perform any of its obligations under this agreement by reason of any preliminary or permanent injunction or other order, decree or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or executive order promulgated or enacted by a governmental authority, prohibiting or otherwise restraining performance of such obligations.

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2.8

Rights Certificate Holder Not Deemed a Shareholder

No holder, as such, of any Right or Rights Certificate will be entitled to vote or receive dividends as, or be deemed for any purpose to be, a holder of any Common Share which may at any time be issuable on the exercise of such Right, nor will anything contained herein or in any Rights Certificate be construed or deemed to confer on the holder of any Right or Rights Certificate, as such, any of the rights, titles, benefits or privileges of a shareholder of the Corporation or any right to vote at any meeting of shareholders of the Corporation whether for the election of directors or otherwise or on any matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold consent to any action of the Corporation, or to receive notice of any meeting or other action affecting any shareholder of the Corporation except as expressly provided herein, or to receive dividends, distributions or subscription rights, or otherwise, until the Right or Rights evidenced by any Rights Certificate will have been duly exercised in accordance with the terms and provisions hereof.

ARTICLE 3
EXERCISE OF THE RIGHTS

3.1

Initial Exercise Price: Exercise of Rights; Detachment of Rights

	(a)	Subject to adjustment as set forth in this agreement, from and after the Separation Time and prior to the Expiration Time, each Right will entitle the holder thereof to purchase one Common Share for the Exercise Price (which Exercise Price and number of Common Shares are subject to adjustment as set forth below).

	(b)	Until the Separation Time:

	(i)	the Rights are not exercisable and may not be exercised; and

	(ii)	each Right will be evidenced by the certificate for the associated Common Share registered in the name of the holder thereof (which certificate will also be deemed to be a Rights Certificate) and will be transferable only together with, and will be transferred by a transfer of, such associated Common Share.

(c)

From and after the Separation Time and prior to the Expiration Time:

	(i)	the Rights will be exercisable; and

	(ii)	the registration and transfer of the Rights will be separate from and independent of the Common Shares.

(d)

Promptly following the Separation Time, the Rights Agent will mail to each holder of record of Common Shares as of the Separation Time (other than an Acquiring Person and other than, in respect of any Rights Beneficially Owned by such Acquiring Person which are not held of record by such Acquiring Person, the holder of record of such Rights (a " Nominee ")), at such holder's address as shown by the records of the Corporation (and the Corporation will furnish copies of such records to the Rights Agent for this purpose):

(i)

a Rights Certificate representing the number of Rights held by such holder at the Separation Time in substantially the form of Exhibit A, appropriately completed, and having such marks of identification or designation and such legends, summaries or endorsements printed thereon as the Corporation may deem appropriate and as are not inconsistent with the provisions of this agreement, or as may be required to comply with any law, rule, regulation or judicial or administrative order or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange or quotation system on which the Rights may be listed or traded from time to time, or to conform to usage; and

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(ii)

a disclosure statement prepared by the Corporation describing the Rights;

		provided that a Nominee will be sent the materials provided for in clauses (i) and (ii) only in respect of all Common Shares held of record by it which are not Beneficially Owned by an Acquiring Person. In order for the Corporation to determine whether any Person is holding Common Shares which are Beneficially Owned by another Person, the Corporation may require the first-mentioned Person to furnish any information and documentation as the Corporation deems necessary or appropriate to make that determination.

	(e)	Rights may be exercised in whole or in part on any Business Day after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent at its principal office in the City of Toronto or any other office of the Rights Agent designated for that purpose from time to time by the Corporation:

	(i)	the Rights Certificate evidencing such Rights;

	(ii)	an election to exercise such Rights (an " Election to Exercise ") substantially in the form attached to the Rights Certificate duly completed and executed by the holder or his or her executors or administrators or other personal representatives or his, her or their legal attorney duly appointed by an instrument in writing in form and executed in a manner satisfactory to the Rights Agent; and

	(iii)	a certified cheque, banker's draft or money order payable to the order of the Corporation, of a sum equal to the applicable Exercise Price multiplied by the number of Rights being exercised and an amount sufficient to cover any tax or other governmental charge which may be payable in respect of any transfer or delivery of Rights Certificates or the issuance or delivery of certificates for the relevant Common Shares in a name other than that of the holder of the Rights being exercised.

(f)

Upon receipt of the Rights Certificate which is accompanied by a completed Election to Exercise that does not indicate that such Right is null and void as provided by subsection 4.1(b) and payment as set forth in subsection 3.1(e), the Rights Agent (unless otherwise instructed by the Corporation if the Corporation is of the opinion that the Rights cannot be exercised in accordance with this agreement) will promptly:

	(i)	requisition from the transfer agent of the Common Shares, certificates representing the number of such Common Shares to be purchased (the Corporation hereby irrevocably authorizing its transfer agents to comply with all such requisitions);

	(ii)	after receipt of the Common Share certificates, deliver them to or to the order of the registered holder of such Rights Certificate, registered in such name or names as may be designated by such holder; and

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(iii)

tender to the Corporation all payments received on exercise of the Rights.

	(g)	In case the holder of any Rights exercises less than all the Rights evidenced by such holder's Rights Certificate, a new Rights Certificate evidencing the Rights remaining unexercised will be issued by the Rights Agent to such holder or to such holder's duly authorized assigns.

	(h)	The Corporation covenants and agrees that it will:

	(i)	take all such action as may be necessary and within its power to ensure that all Common Shares delivered upon exercise of Rights, at the time of delivery of the certificates representing such Common Shares (subject to payment of the Exercise Price), will be duly and validly authorized, issued and delivered as fully paid and non-assessable;

	(ii)	take all such action as may be necessary and within its power to comply with any applicable requirements of the CBCA, the Securities Act and the securities legislation of each of the other Provinces of Canada and any other applicable law, rule or regulation in connection with the issuance and delivery of the Rights Certificates and the issuance of any Common Shares upon exercise of Rights;

	(iii)	use reasonable efforts to cause all Common Shares issued on exercise of Rights to be listed on the principal exchanges or over-the-counter markets on which the Common Shares are then listed or traded;

	(iv)	cause to be reserved and kept available out of its authorized and unissued Common Shares the number of Common Shares that, as provided in this agreement, will be sufficient from time to time to permit the exercise in full of all outstanding Rights; and

	(v)	pay when due and payable any Canadian and United States federal and provincial and state transfer taxes and charges (for greater certainty, not in the nature of income or withholding taxes) which may be payable in respect of the original issuance or delivery of the Rights Certificates, provided that the Corporation will not be required to pay any tax or other governmental charge which may be payable in respect of any transfer or delivery of Rights Certificates or the issuance or delivery of certificates for Common Shares in a name other than that of the holder of the Rights being transferred or exercised.

3.2

Adjustments to Exercise Price: Number of Right s

The Exercise Price, the number of Common Shares or other securities subject to purchase on the exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this section.

(a)

If the Corporation at any time after the Record Time and prior to the Expiration Time:

(i)

declares or pays a dividend on the Common Shares payable in Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares) other than pursuant to any dividend reinvestment program and other than a dividend payable in Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares) in lieu of (and having a value no greater than) a dividend paid in the ordinary course;

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	(ii)	subdivides or changes the outstanding Common Shares into a greater number of Common Shares;

	(iii)	combines or changes the outstanding Common Shares into a smaller number of Common Shares; or

	(iv)	issues any Common Shares (or other securities exchangeable for or convertible into or giving a right to acquire Common Shares) in respect of, in lieu of or in exchange for existing Common Shares;

		the Exercise Price and the number of Rights outstanding (or, if the payment or effective date therefor occurs after the Separation Time, the securities purchasable on exercise of Rights) will be adjusted in the following manner.

		If the Exercise Price and number of Rights are to be adjusted (i) the Exercise Price in effect after such adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment divided by the number of Common Shares (or other securities of the Corporation) (the " Expansion Factor ") that a holder of one Common Share immediately prior to such dividend, subdivision, combination, change or issuance would hold thereafter as a result thereof and (ii) each Right held prior to such adjustment will become that number of Rights equal to the Expansion Factor, and the adjusted number of Rights will be deemed to be allocated among the Common Shares with respect to which the original Rights were associated (if they remain outstanding) and the securities of the Corporation issued in respect of such dividend, subdivision, consolidation, change or issuance, so that each such Common Share (or other security of the Corporation) will have exactly one Right associated with it.

		For greater certainty, if the securities purchasable upon exercise of Rights are to be adjusted, the securities purchasable on exercise of each Right after such adjustment will be the securities that a holder of the securities purchasable on exercise of one Right immediately prior to such dividend, subdivision, consolidation, change or issuance would hold thereafter as a result thereof.

		Adjustments pursuant to this subsection will be made successively whenever an event referred to in this subsection occurs.

	(b)	If the Corporation at any time after the Record Time and prior to the Expiration Time fixes a record date for the issuance of rights, options or warrants to all or substantially all holders of Common Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Common Shares (or securities convertible into or exchangeable for or carrying a right to acquire Common Shares) at a price per Common Share (or, if a security convertible into or exchangeable for or carrying a right to acquire Common Shares, having a conversion, exchange or exercise price, including the price required to be paid to purchase such convertible or exchangeable security or right, per share) less than 95% of the Market Price per Common Share on the second Trading Day immediately preceding such record date, the Exercise Price in respect of the Rights to be in effect after such record date will be determined by multiplying the Exercise Price in respect of the Rights in effect immediately prior to such record date by a fraction (i) the numerator of which will be the number of Common Shares outstanding on such record date, plus the number of Common Shares that the aggregate offering price of the total number of Common Shares so to be offered (and/or the aggregate initial conversion, exchange or exercise price of the convertible or exchangeable securities or rights so to be offered (including the price required to be paid to purchase such convertible or exchangeable securities or rights)) would purchase at such Market Price per Common Share and (ii) the denominator of which will be the number of Common Shares outstanding on such record date, plus the number of additional Common Shares to be offered for subscription or purchase (or into which the convertible or exchangeable securities or rights so to be offered are initially convertible, exchangeable or exercisable). In case such subscription price may be paid by delivery of consideration, part or all of which is in a form other than cash, the value of such consideration will be as determined in good faith by the Board of Directors, whose determination will be described in a statement filed with the Rights Agent and will be binding on the Rights Agent and the holders of the Rights. Such adjustment will be made successively whenever such a record date is fixed. To the extent that such rights, options or warrants are not exercised prior to the expiration thereof, the Exercise Price will be readjusted to the Exercise Price which would then be in effect based on the number of Common Shares (or securities convertible into or exchangeable for Common Shares) actually issued on exercise of such rights, options or warrants.

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	(c)	For purpose of this agreement, the granting of the right to purchase Common Shares (whether from treasury or otherwise) pursuant to a dividend reinvestment plan or any employee benefit, stock option or similar plans will be deemed not to constitute an issue of rights, options or warrants by the Corporation; provided, however, that, in all such cases, the right to purchase Common Shares is at a price per share of not less than 90% of the then current market price per share (determined as provided in such plans) of the Common Shares.

	(d)	If the Corporation at any time after the Record Time and prior to the Expiration Time fixes a record date for a distribution to all or substantially all holders of Common Shares (including any such distribution made in connection with a merger in which the Corporation is the continuing corporation) of (i) evidences of indebtedness or assets, including cash (other than a dividend paid in the ordinary course or a dividend paid in Common Shares, but including any dividend payable in securities other than Common Shares), (ii) rights, options or warrants entitling them to subscribe for or purchase Common Shares (or securities convertible into or exchangeable for or carrying a right to acquire Common Shares) (excluding those referred to in subsection 3.2 (b)) at a price per Common Share (or, if a security convertible into or exchangeable for or carrying a right to acquire Common Shares, having a conversion, exchange or exercise price, including the price required to be paid to purchase such convertible or exchangeable security or right, per share) that is less than 95% of the Market Price per Common Share on the second Trading Day immediately preceding such record date or (iii) other securities of the Corporation, the Exercise Price will be adjusted as follows. The Exercise Price in effect after such record date will equal the Exercise Price in effect immediately prior to such record date less the fair market value (as determined in good faith by the Board of Directors) of the portion of the evidences of indebtedness, assets, rights, options or warrants or other securities so to be distributed applicable to the securities purchasable on exercise of one Right. Such adjustments will be made successively whenever such a record date is fixed and, if such distribution is not so made, the Exercise Price in respect of the Rights will be adjusted to be the Exercise Price in respect of the Rights which would have been in effect if such record date had not been fixed.

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	(e)	Notwithstanding anything in this agreement to the contrary, no adjustment of the Exercise Price will be required unless such adjustment would require an increase or decrease of at least 1% in the Exercise Price; provided, however, that any adjustments which by reason of this subsection are not required to be made will be carried forward and taken into account in any subsequent adjustment. All calculations under section 3.2 will be made to the nearest cent or to the nearest ten-thousandth of a Common Share or other share, as the case may be.

	(f)	If as a result of an adjustment made pursuant to section 4.1, the holder of any Right thereafter exercised will become entitled to receive any shares other than Common Shares, thereafter the number of such other shares so receivable upon exercise of any Right and the applicable Exercise Price thereof will be subject to adjustment from time to time in a manner and on terms as nearly equivalent as is practicable to the provisions with respect to the Common Shares contained in this section 3.2, and the provisions of this agreement with respect to the Common Shares will apply on like terms to any such other shares.

	(g)	All Rights originally issued by the Corporation subsequent to any adjustment made to the Exercise Price will evidence the right to purchase, at the adjusted Exercise Price, the number of Common Shares purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.

	(h)	Unless the Corporation has exercised its election as provided in subsection (i), upon each adjustment of an Exercise Price as a result of the calculations made in subsections (b) and (d), each Right outstanding immediately prior to the making of such adjustment will thereafter evidence the right to purchase, at the adjusted Exercise Price, that number of Common Shares obtained by:

	(i)	multiplying (A) the number of Common Shares covered by a Right immediately prior to such adjustment by (B) the Exercise Price in effect immediately prior to such adjustment; and

	(ii)	dividing the product so obtained by the Exercise Price in effect immediately after such adjustment.

(i)

The Corporation may elect on or after the date of any adjustment of an Exercise Price to adjust the number of Rights, in lieu of any adjustment in the number of Common Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after the adjustment in the number of Rights will be exercisable for the number of Common Shares for which such a Right was exercisable immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights will become that number of Rights (calculated to the nearest one ten-thousandth) obtained by dividing the relevant Exercise Price in effect immediately prior to adjustment of the relevant Exercise Price by the relevant Exercise Price in effect immediately after adjustment of the relevant Exercise Price. The Corporation will make a public announcement of its election to adjust the number of Rights, indicating the record date for the adjustment, and, if known at the time, the amount of the adjustment to be made. This record date may be the date on which the relevant Exercise Price is adjusted or any day thereafter, but, if the Rights Certificates have been issued, will be at least 10 days later than the date of the public announcement. If Rights Certificates have been issued, upon each adjustment of the number of Rights pursuant to this subsection, the Corporation, as promptly as is practicable, will cause to be distributed to holders of record of Rights Certificates on such record date, Rights Certificates evidencing, subject to section 6.4, the additional Rights to which such holders will be entitled as a result of such adjustment, or, at the option of the Corporation, will cause to be distributed to such holders of record in substitution and replacement for the Rights Certificates held by such holders prior to the date of adjustment, and upon surrender thereof, if required by the Corporation, new Rights Certificates evidencing all the Rights to which such holders will be entitled after such adjustment. Rights Certificates to be so distributed will be issued, executed and countersigned in the manner provided for herein and may bear, at the option of the Corporation, the relevant adjusted Exercise Price and will be registered in the names of holders of record of Rights Certificates on the record date specified in the public announcement.

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	(j)	Irrespective of any adjustment or change in an Exercise Price or the number of Common Shares issuable upon the exercise of the Rights, the Rights Certificates previously and thereafter issued may continue to express the relevant Exercise Price per Common Share and the number of Common Shares which were expressed in the initial Rights Certificates issued hereunder.

	(k)	In any case in which this section requires that an adjustment in an Exercise Price be made effective as of a record date for a specified event, the Corporation may elect to defer, until the occurrence of such event, the issuance to the holder of any Right exercised after such record date of the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise over and above the number of Common Shares and other securities of the Corporation, if any, issuable upon such exercise on the basis of the relevant Exercise Price in effect prior to such adjustment; provided, however, that the Corporation delivers to such holder a due bill or other appropriate instrument evidencing such holder's right to receive such additional Common Shares (fractional or otherwise) or other securities upon the occurrence of the event requiring such adjustment.

	(l)	Notwithstanding anything in this section to the contrary, the Corporation will be entitled to make such reductions in the Exercise Price, in addition to those adjustments expressly required by this section, as and to the extent that in its good faith judgment the Board of Directors determines to be advisable in order that any (i) consolidation or subdivision of Common Shares, (ii) issuance wholly for cash of any Common Share or securities that by their terms are convertible into or exchangeable for Common Shares, (iii) stock dividends or (iv) issuance of rights, options or warrants referred to in this section, hereafter made by the Corporation to holders of its Common Shares, will not be taxable to such shareholders.

	(m)	The Corporation covenants and agrees that, after the Separation Time, except as permitted by section 6.1 or 6.5, it will not take (or permit any Subsidiary of the Corporation to take) any action if at the time such action is taken it is reasonably foreseeable that such action would diminish substantially or otherwise eliminate the benefits intended to be afforded by the Rights.

	(n)	Whenever an adjustment to the Exercise Price or a change in the securities purchasable upon exercise of the Rights is made pursuant to this section, the Corporation will promptly:

(i)

file with the Rights Agent and with the transfer agent for the Common Shares a certificate specifying the particulars of such adjustment or change; and

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(ii)

cause notice of the particulars of such adjustment or change to be given to the holders of the Rights.

The failure to file such certificate or cause such notice to be given as aforesaid, or any defect therein, will not affect the validity of any such adjustment or change.

3.3

Date on Which Exercise Is Effectiv e

Each Person in whose name any certificate for Common Shares is issued upon the exercise of Rights will be deemed for all purposes to have become the holder of record of the Common Share represented thereby on, and such certificate will be dated, the date upon which the Rights Certificate evidencing such Rights was duly surrendered (together with a duly completed Election to Exercise) and payment of the relevant Exercise Price for such Rights (and any applicable transfer taxes and other governmental charges payable by the exercising holder hereunder) was made; provided, however, that if the date of such surrender and payment is a date upon which the relevant Common Share transfer books of the Corporation are closed, such Person will be deemed to have become the holder of record of such Common Shares on, and such certificate will be dated, the next succeeding Business Day on which the relevant Common Share transfer books of the Corporation are open.

ARTICLE 4
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS

4.1

Flip-in Even t

	(a)	Subject to subsection 4.1(b) and section 6.1, if prior to the Expiration Time a Flip-in Event occurs, each Right will constitute, effective on and after the later of its date of issue and the close of business on the tenth Trading Day following the Stock Acquisition Date, the right to purchase from the Corporation, upon payment of the relevant Exercise Price and otherwise exercising such Right in accordance with the terms hereof, that number of Common Shares having an aggregate Market Price on the date of occurrence of such Flip-in Event equal to twice the Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately adjusted in a manner analogous to the applicable adjustments provided for in section 3.2 if, after such date of occurrence, an event of a type analogous to any of the events described in section 3.2 has occurred with respect to the Common Share).

	(b)	Notwithstanding anything in this agreement to the contrary, upon the occurrence of any Flip-in Event, any Rights that are or were Beneficially Owned on or after the earlier of the Separation Time and the Stock Acquisition Date by (i) an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person); or (ii) a transferee or other successor in title, directly or indirectly, (a " Transferee ") of Rights held by an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person) in a transfer that the Board of Directors has determined is part of a plan, arrangement or scheme of an Acquiring Person (or any Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or any Affiliate or Associate of an Acquiring Person) that has the purpose or effect of avoiding clause (i), will become null and void without any further action, and any holder of such Rights (including any Transferee) will not have any right whatsoever to exercise such Rights and will not have thereafter any other rights whatsoever with respect to such Rights, whether under any provision of this agreement or otherwise. The holder of any Rights represented by a Rights Certificate which is submitted to the Rights Agent on exercise or for registration of transfer or exchange which does not contain the necessary certifications set forth in the Rights Certificate establishing that such Rights are not void under this subsection will be deemed to be an Acquiring Person for the purpose of this section and such Rights will be null and void.

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(c)

Any Rights Certificate that represents Rights Beneficially Owned by a Person described in clause (b) (i) or (ii) or transferred to any nominee of any such person, and any Rights Certificate issued on transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, will contain the following legend:

THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON OR A PERSON ACTING JOINTLY OR IN CONCERT WITH ANY OF THEM (AS SUCH TERMS ARE DEFINED IN THE SHAREHOLDER RIGHTS PLAN AGREEMENT). THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID IN THE CIRCUMSTANCES SPECIFIED IN SUBSECTION 4.1(b) OF THE SHAREHOLDER RIGHTS PLAN AGREEMENT.

		The Rights Agent will not be under any responsibility to ascertain the existence of facts that would require the inclusion of that legend, but will be required to include the legend only if instructed to do so by the Corporation or if a holder fails to certify on transfer or exchange in the space provided on the Rights Certificate that it is not an Acquiring Person or other Person referred to in the legend. The issuance of a Rights Certificate without the legend referred to in this subsection will not affect the application of subsection (b).

	(d)	From and after the Separation Time, the Corporation will do all such acts and things as will be necessary and within its power to ensure compliance with the provisions of this section, including all such acts and things as may be required to satisfy the requirements of the CBCA and the Securities Act or comparable legislation of any other applicable jurisdiction and the rules of any stock exchange where the Common Shares may then be listed or traded in respect of the issuance of Common Shares upon the exercise of Rights in accordance with this agreement.

	(e)	Notwithstanding any other provision of this agreement, any Rights held by the Corporation or any of its Subsidiaries will be void.

ARTICLE 5
THE RIGHTS AGENT

5.1

Genera l

(a)

The Corporation hereby appoints the Rights Agent to act as agent for the Corporation and the holders of Rights in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts such appointment. The Corporation may from time to time appoint one or more co-rights agents (each, a " Co-Rights Agent ") as it may deem necessary or desirable, subject to the approval of the Rights Agent. In the event the Corporation appoints one or more Co-Rights Agents, the respective duties of the Rights Agents and Co-Rights Agents will be as the Corporation may determine with the approval of the Rights Agent. The Corporation agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable expenses and counsel fees and other disbursements incurred in the administration and execution of this agreement and the exercise and performance of its duties hereunder (including the fees and disbursements of any expert or advisor retained by the Rights Agent with the approval of the Corporation, acting reasonably). The Corporation also agrees to indemnify the Rights Agent, its officers, directors and employees for, and to hold it and them harmless against, any loss, liability cost, claim, action, damage, suit or expense, incurred without gross negligence, bad faith or wilful misconduct on the part of the Rights Agent, for anything done or omitted by the Rights Agent in connection with the acceptance and administration of this agreement, including the costs and expenses of defending against any claim of liability, which right to indemnification will survive the termination of this agreement and/or the resignation or removal of the Rights Agent.

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	(b)	In no event will the Rights Agent be liable for special, indirect, consequential or punitive loss or damages of any kind whatsoever (including, but not limited to, lost profits), even if the Rights Agent has been advised of the possibility of such damages.

	(c)	The Corporation will inform the Rights Agent in a reasonably timely manner of events which may materially affect the administration of this agreement by the Rights Agent and at any time, upon request, will provide to the Rights Agent an incumbency certificate with respect to the then current directors of the Corporation, provided that failure to inform the Rights Agent of any such events, or any defect therein, will not affect the validity of any action taken hereunder in relation to such events.

	(d)	The Rights Agent will be protected and will incur no liability for or in respect of any action taken, suffered or omitted by it in connection with its administration of this agreement in reliance upon any certificate for Common Shares, Rights Certificate, certificate for other securities of the Corporation, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, direction, consent, certificate, statement or other paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the proper Person or Persons.

	(e)	In the event of any disagreement arising regarding the terms of this agreement, the Rights Agent shall be entitled, at its option, to refuse to comply with any and all demands whatsoever until the dispute is settled either by written agreement amongst the parties of this agreement or by a court of competent jurisdiction.

5.2

Merger or Amalgamation or Change of Name of Rights Agen t

(a)

Any corporation into which the Rights Agent or any successor Rights Agent may be merged or amalgamated or with which it may be consolidated, or any corporation resulting from any merger, amalgamation or consolidation to which the Rights Agent or any successor Rights Agent is a party, or any corporation succeeding to the shareholder or stockholder services business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights Agent under this agreement without the execution or filing of any paper or any further act on the part of any of the parties, provided that such corporation would be eligible for appointment as a successor Rights Agent under the provisions of section 5.4. In case at the time such successor Rights Agent succeeds to the agency created by this agreement any of the Rights Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have not been countersigned, any successor Rights Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this agreement.

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(b)

In case at any time the name of the Rights Agent is changed and at such time any of the Rights Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Rights Certificates so countersigned; and in case at that time any of the Rights Certificates have not been countersigned, the Rights Agent may countersign such Rights Certificates either in its prior name or in its changed name; and in all such cases such Rights Certificates will have the full force provided in the Rights Certificates and in this agreement.

5.3

Duties of Rights Agen t

The Rights Agent undertakes the duties and obligations imposed by this agreement upon the following terms and conditions, by all of which the Corporation and the holders of Rights Certificates, by their acceptance thereof, will be bound:

	(a)	the Rights Agent may consult with legal counsel (who may be legal counsel for the Corporation), at the Corporation's expense, and the opinion of such counsel will be full and complete authorization and protection to the Rights Agent as to any action taken or omitted by it in good faith and in accordance with such opinion; the Rights Agent may also, with the approval of the Corporation (where such approval may reasonably be obtained and such approval not to be unreasonably withheld), consult with such other experts as the Rights Agent considers necessary or appropriate to properly carry out the duties and obligations imposed under the agreement and the Rights Agent will be entitled to rely in good faith on the advice of any such expert;

	(b)	whenever in the performance of its duties under this agreement the Rights Agent deems it necessary or desirable that any fact or matter be proved or established by the Corporation prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof is specifically prescribed in this agreement) may be deemed to be conclusively proved and established by a certificate signed by a Person believed by the Rights Agent to be a senior officer of the Corporation and delivered to the Rights Agent; and such certificate will be full authorization to the Rights Agent for any action taken or suffered in good faith by it under the provisions of this agreement in reliance upon such certificate;

	(c)	the Rights Agent will not be liable for any loss or damages hereunder unless caused by its own gross negligence, bad faith or wilful misconduct;

	(d)	the Rights Agent will not be liable for or by reason of any of the statements of fact or recitals contained in this agreement or in the certificates for Common Shares or the Rights Certificates (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and will be deemed to have been made by the Corporation only;

	(e)	the Rights Agent will not be under any responsibility in respect of the validity of this agreement or the execution and delivery hereof (except the due authorization, execution and delivery hereof by the Rights Agent) or in respect of the validity or execution of any Common Share certificate or Rights Certificate (except its countersignature thereof); nor will it be responsible for any breach by the Corporation of any covenant or condition contained in this agreement or in any Rights Certificate; nor will it be responsible for any change in the exercisability of the Rights (including the Rights becoming void pursuant to subsection 4.1(b)) or any adjustment required under the provisions of section 3.2 or responsible for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights after receipt of the certificate contemplated by section 3.2 describing any such adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as to the authorization of any Common Shares to be issued pursuant to this agreement or any Rights or as to whether any Common Shares will, when issued, be duly and validly authorized, executed, issued and delivered as fully paid and non-assessable;

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	(f)	the Corporation will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this agreement;

	(g)	the Rights Agent is hereby authorized and directed to accept instructions with respect to the performance of its duties hereunder from any Person designated in writing by the Corporation, and to apply to such Persons for advice or instructions in connection with its duties, and it will not be liable for any action taken or suffered by it in good faith in accordance with the instructions of any such Person. It is understood that instructions to the Rights Agent shall, except where circumstances make it impractical or the Rights Agent otherwise agrees, be given in writing and, where not in writing, such instructions shall be confirmed in writing as soon as reasonably practicable after the giving of such instructions;

	(h)	the Rights Agent and any shareholder, director, officer or employee of the Rights Agent may buy, sell or deal in Common Shares, Rights or other securities of the Corporation or become pecuniarily interested in any transaction in which the Corporation may be interested, or contract with or lend money to the Corporation or otherwise act as fully and freely as though it were not the Rights Agent under this agreement. Nothing herein will preclude the Rights Agent from acting in any other capacity for the Corporation or for any other legal entity; and

	(i)	the Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any act, default, neglect or misconduct of any such attorneys or agents or for any loss to the Corporation resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof.

5.4

Change of Rights Agen t

The Rights Agent may resign and be discharged from its duties under this agreement upon 60 days' notice in writing (or such lesser notice as is acceptable to the Corporation) mailed to the Corporation and to each transfer agent of Common Shares by registered or certified mail. The Corporation may remove the Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent and to each transfer agent of the Common Shares by registered or certified mail. If the Rights Agent should resign or be removed or otherwise become incapable of acting, the Corporation will appoint a successor to the Rights Agent. If the Corporation fails to make such appointment within a period of 60 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent or by the holder of any Rights (which holder, with such notice, must submit such holder's Rights Certificate for inspection by the Corporation), then the holder of any Rights may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Corporation or by such a court, must be a corporation incorporated under the laws of Canada or a province thereof authorized to carry on the business of a transfer agent in the Province of Ontario. After appointment, the successor Rights Agent will be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed; but the predecessor Rights Agent, upon payment by the Corporation to the predecessor Rights Agent of all outstanding fees and expenses owing by the Corporation to the predecessor Rights Agent pursuant to this agreement, will deliver and transfer to the successor Rights Agent any property at the time held by it hereunder and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Corporation will file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares, and mail a notice thereof in writing to the holders of the Rights. Failure to give any notice provided for in this section 5.4, however, or any defect therein, will not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.

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ARTICLE 6
MISCELLANEOUS

6.1

Redemption and Waive r

	(a)	Until the occurrence of a Flip-in Event as to which the application of section 4.1 has not been waived pursuant to this section, the Board of Directors, with the prior consent of the holders of Voting Shares or the holders of Rights given in accordance with subsection (i) or (j), as the case may be, may elect to redeem all but not less than all of the then outstanding Rights at a redemption price of $0.00001 per Right, appropriately adjusted in a manner analogous to the applicable adjustment provided for in section 3.2, if an event of the type analogous to any of the events described in section 3.2 have occurred (such redemption price being herein referred to as the " Redemption Price ").

	(b)	Until the occurrence of a Flip-in Event as to which the application of section 4.1 has not been waived pursuant to this section, upon written notice to the Rights Agent, the Board of Directors, with the prior consent of the holders of Voting Shares given in accordance with subsection (i), may determine, if such Flip-in Event would occur by reason of an acquisition of Voting Shares otherwise than pursuant to a Take-over Bid made by means of a take-over bid circular to all holders of Voting Shares and otherwise than in the circumstances set forth in subsection (d), to waive the application of section 4.1 to such Flip-in Event. If the Board of Directors proposes such a waiver, the Board of Directors will extend the Separation Time to a date subsequent to and not more than ten Business Days following the meeting of shareholders called to approve such waiver.

	(c)	Until the occurrence of a Flip-in Event as to which the application of section 4.1 has not been waived pursuant to this section, upon written notice delivered to the Rights Agent, the Board of Directors may determine to waive the application of section 4.1 to any Flip- in Event provided that the Flip-in Event would occur by reason of a Take-over Bid made by take-over bid circular sent to all holders of Voting Shares and provided further that if the Board of Directors waives the application of section 4.1 to such Flip-in Event, the Board of Directors will be deemed to have waived the application of section 4.1 to any other Flip-in Event occurring by reason of any Take-over Bid made by take-over bid circular to all holders of Voting Shares which is made prior to the expiry of any Take-over Bid (as the same may be extended from time to time) made by take-over bid circular in respect of which a waiver is, or is deemed to have been, granted under this subsection.

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(d)

Notwithstanding subsections (b) and (c), upon written notice to the Rights Agent, the Board of Directors may waive the application of section 4.1 in respect of any Flip-in Event, provided that both of the following conditions are satisfied:

	(i)	the Board of Directors has determined that the Person became an Acquiring Person by inadvertence and without any intention to become, or knowledge that it would become, an Acquiring Person; and

	(ii)	such Person has reduced its Beneficial Ownership of Voting Shares such that at the time of the granting of a waiver pursuant to this subsection, such Person is no longer an Acquiring Person;

		In the event of any such waiver, for the purposes of this agreement, such Flip-in Event will be deemed not to have occurred and the Separation Time will be deemed not to have occurred as a result of such Person having inadvertently become an Acquiring Person.

	(e)	The Board of Directors will be deemed to have elected to redeem, without further formality, the Rights at the Redemption Price on the date that a Person who has made a Permitted Bid, a Competing Permitted Bid or Take-over Bid in respect of which the Board of Directors has waived, or is deemed to have waived, pursuant to this section the application of section 4.1, takes up and pays for Voting Shares pursuant to the terms and conditions of such Permitted Bid, Competing Permitted Bid or Take-over Bid, as the case may be.

	(f)	Where a Take-over Bid that is not a Permitted Bid is withdrawn or otherwise terminated after the Separation Time has occurred and prior to the occurrence of a Flip-in Event, the Board of Directors may elect to redeem all the then outstanding Rights without the consent of the holders of Voting Shares or the holders of Rights, as the case may be, at the Redemption Price and may reissue Rights under this agreement to holders of record of Common Shares immediately following the time of such redemption and, thereafter, all of the provisions of this agreement will continue in full force and effect and such Rights, without any further formality, will be attached to the outstanding Common Shares in the same manner as prior to the occurrence of such Separation Time.

	(g)	If the Board of Directors elects or is deemed to have elected to redeem the Rights and, in circumstances in which subsection (a) is applicable, such redemption is approved by the holders of Voting Shares or the holders of Rights in accordance with subsection (i) or (j), as the case may be, the right to exercise the Rights will thereupon, without further action and without notice, terminate, and the only right thereafter of the holders of Rights will be to receive the Redemption Price.

	(h)	Within 10 days after the Board of Directors electing or having been deemed to have elected to redeem the Rights or, if subsection (a) applies, within 10 Business Days after the holders of Voting Shares or the holders of Rights have approved the redemption of Rights in accordance with subsection (i) or (j), as the case may be, the Corporation will give notice of redemption to the holders of the then outstanding Rights by mailing such notice to each such holder at such holder's last address as it appears upon the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the transfer agent for the Common Shares. Any notice which is mailed in the manner herein provided will be deemed given, whether or not the holder receives the notice. Each such notice of redemption will state the method by which the payment of the Redemption Price will be made. The Corporation may not redeem, acquire or purchase for value any Rights at any time in any manner other than that specifically set forth in this section, and other than in connection with the purchase of Common Shares prior to the Separation Time.

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	(i)	If a redemption of Rights pursuant to subsection (a) or a waiver of a Flip-in Event pursuant to subsection (b) is proposed at any time prior to the Separation Time, such redemption or waiver must be submitted for approval to the holders of Voting Shares. Such approval will be deemed to have been given if the redemption or waiver is approved by the affirmative vote of a majority of the votes cast by Independent Shareholders represented in person or by proxy at a meeting of such holders duly held in accordance with applicable laws and the Corporation's by-laws.

	(j)	If a redemption of Rights pursuant to subsection (a) is proposed at any time after the Separation Time, such redemption must be submitted for approval to the holders of Rights. Such approval will be deemed to have been given if the redemption is approved by holders of Rights by a majority of the votes cast by the holders of Rights represented in person or by proxy at and entitled to vote at a meeting of such holders. For the purposes hereof, each outstanding Right (other than Rights which are Beneficially Owned by any Person referred to in clauses (i) to (v) inclusive of the definition of Independent Shareholders) will be entitled to one vote, and the procedures for the calling, holding and conduct of the meeting will be those, as nearly as may be, which are provided in the Corporation's by-laws and the CBCA with respect to meetings of shareholders of the Corporation.

6.2

Expiratio n

No Person will have any rights pursuant to this agreement or in respect of any Right after the Expiration Time, except the Rights Agent as specified in section 5.1.

6.3

Issuance of New Rights Certificate s

Notwithstanding any of the provisions of this agreement or of the Rights to the contrary, the Corporation, at its option, may issue new Rights Certificates evidencing Rights in such form as may be approved by the Board of Directors to reflect any adjustment or change in the number or kind or class of securities purchasable upon exercise of Rights made in accordance with the provisions of this agreement.

6.4

Fractional Rights and Fractional Share s

	(a)	The Corporation will not be required to issue fractions of Rights or to distribute Rights Certificates which evidence fractional Rights and the Corporation shall not be required to pay any amount to any holder of record of Rights Certificates in lieu of such fractional Rights.

	(b)	The Corporation will not be required to issue fractions of Common Shares upon exercise of the Rights or to distribute certificates which evidence fractional Common Shares and the Corporation shall not be required to pay any amount in lieu of such fractional Common Shares.

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6.5

Supplements and Amendment s

	(a)	The Corporation, without the prior consent of the holders of Voting Shares, at any time prior to the Separation Time, may supplement or amend any of the provisions of this agreement and the Rights (whether or not such action would materially adversely affect the interests of the holders of Rights generally) including, to correct any clerical or typographical error or which are required to maintain the validity of this agreement as a result of any change in any applicable legislation, rules or regulations or decision of a court or regulatory authority, including a stock exchange on which the Common Shares are traded. Notwithstanding anything in this section to the contrary, no such supplement or amendment may be made to the provisions of Article 5 except with the written concurrence of the Rights Agent to such supplement or amendment.

	(b)	The Corporation will give notice in writing to the Rights Agent of any amendment or supplement to this agreement pursuant to this section within five Business Days of the date of any such amendment or supplement, provided that failure to give such notice, or any defect therein, will not affect the validity of any such supplement or amendment.

	(c)	For greater certainty, neither the exercise by the Board of Directors of any power or discretion conferred on it under this agreement nor the making by the Board of Directors of any determination or the granting of any waiver it is permitted to make or give under this agreement will constitute an amendment, variation or rescission of the provisions of this agreement or Rights for purposes of this section or otherwise.

6.6

Rights of Actio n

Subject to the terms of this agreement, all rights of action in respect of this agreement, other than rights of action vested solely in the Rights Agent, are vested in the respective holders of the Rights; and any holder of any Rights, without the consent of the Rights Agent or of the holder of any other Rights, on such holder's own behalf and for such holder's own benefit and the benefit of other holders of Rights, may enforce, and may institute and maintain, any suit, action or proceeding against the Corporation to enforce, or otherwise act in respect of, such holder's right to exercise such holder's Rights in the manner provided in such holder's Rights Certificate and in this agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this agreement and will be entitled to specific performance of the obligations under, and injunctive relief against, actual or threatened violations of the obligations of any Person subject to, this agreement.

6.7

Notice of Proposed Action s

If the Corporation proposes after the Separation Time and prior to the Expiration Time to effect the liquidation, dissolution or winding-up of the Corporation or the sale of all or substantially all of the Corporation's assets, then, in each such case, the Corporation will give to each holder of a Right, in accordance with section 6.8, a notice of such proposed action. The notice must specify the date on which such liquidation, dissolution, winding-up or sale is to take place, and such notice must be so given at least 20 Business Days prior to the date of taking such proposed action.

6.8

Notice s

(a)

Notices or demands authorized or required by this agreement to be given or made by the Rights Agent or by the holder of any Rights to or on the Corporation will be sufficiently given or made if delivered or sent by facsimile or by first-class mail, postage prepaid, addressed (until another facsimile number or address is filed in writing with the Rights Agent) as follows:

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Royal Standard Minerals Inc.
360 Bay Street, Suite 500
Toronto, Ontario M5H 2V6

Attention: President
Facsimile: (804) 580-4132

	(b)	Notices or demands authorized or required by this agreement to be given or made by the Corporation or by the holder of any Rights to or on the Rights Agent will be sufficiently given or made if delivered or sent by facsimile or by first-class mail, postage prepaid, addressed (until another facsimile number or address is filed in writing with the Corporation) as follows:

		Equity Financial Trust Company 200 University Avenue, Suite 400 Toronto, Ontario M5H 4H1

Attention: Corporate Trust Services
Facsimile: (416) 361-0470

	(c)	Notices or demands authorized or required by this agreement to be given or made by the Corporation or the Rights Agent to or on the holder of any Rights will be sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed to such holder at the address of such holder as it appears upon the registry books of the Rights Agent or, prior to the Separation Time, on the registry books of the Corporation for the Common Shares. Any notice which is mailed in the manner herein provided will be deemed given, whether or not the holder receives the notice.

	(d)	Notices will be deemed to have been received as follows:

	(i)	in the case of personal delivery, on the day of delivery, unless delivered on a day that is not a Business Day or after 4:00 p.m. on the day of delivery, in which case notice will be deemed to have been received on the next Business Day;

	(ii)	in the case of facsimile, on the Business Day of transmission if transmitted before 4:00 p.m. on that Business Day or, otherwise, on the next Business Day following the day of transmission; and

	(iii)	in the case of first class mail, on the third Business Day following mailing.

	(e)	Any accidental error, omission or failure in giving or delivering or mailing any such notice will not invalidate or otherwise prejudicially affect any action or proceeding founded thereon.

	(f)	Each of the Corporation and the Rights Agent may from time to time change its address for notice by notice to the other given in the manner put forth herein.

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6.9

Costs of Enforcemen t

The Corporation agrees that, if it or any other Person the securities of which are purchasable upon exercise of Rights fails to fulfil any of its obligations pursuant to this agreement, then the Corporation or such Person will reimburse the holder of any Rights for the costs and expenses (including reasonable legal fees) incurred by such holder in actions to enforce the holder's rights pursuant to any Rights or this agreement.

6.10

Successor s

All the covenants and provisions of this agreement by or for the benefit of the Corporation or the Rights Agent bind and enure to the benefit of their respective successors and assigns hereunder.

6.11

Benefits of this Agreement

Nothing in this agreement will be construed to give to any Person other than the Corporation, the Rights Agent and the holders of the Rights any legal or equitable right, remedy or claim under this agreement; but this agreement will be for the sole and exclusive benefit of the Corporation, the Rights Agent and the holders of the Rights.

6.12

Governing Law

This agreement and each Right issued hereunder will be deemed to be a contract made under the laws of the Province of Ontario and for all purposes will be governed by and construed in accordance with the laws of such province applicable to contracts to be made and performed entirely within such province.

6.13

Counterparts

This agreement may be executed in any number of counterparts and each of such counterparts for all purposes will be deemed to be an original, and all such counterparts together will constitute one and the same instrument.

6.14

Severability

If any term or provision hereof or the application thereof to any circumstance is, in any jurisdiction and to any extent, invalid or unenforceable, such term or provision will be ineffective as to such jurisdiction to the extent of such invalidity or unenforceability without invalidating or rendering unenforceable the remaining terms and provisions hereof or the application of such term or provision to circumstances other than those as to which it is held invalid or unenforceable.

6.15

Effective Date

This agreement is in force in accordance with its terms from and after the date of this agreement.

6.16

Determinations and Actions by the Board of Directors

Upon the advice of outside legal counsel, the Board of Directors shall have the exclusive power and authority to administer this agreement and to exercise all rights and powers specifically granted to the Board of Directors as may be necessary or advisable in the administration of this agreement, including, without limitation, the right and power to, make all determinations deemed necessary or advisable for the administration of this agreement.

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All actions, calculations and determinations (including all omissions with respect to the foregoing) which are done or made by the Board of Directors in good faith in connection with this agreement will not subject the Board of Directors or any director of the Corporation to any liability to the holders of the Rights.

6.17

Time of the Essence

Time will be of the essence of this agreement.

6.18

Regulatory Approvals

Any obligation of the Corporation or action contemplated by this agreement, including any amendment hereto, will be subject to the receipt of any requisite approval or consent from any applicable regulatory authority, including any necessary approvals of the stock exchange on which the Common Shares are listed or any other stock exchange.

6.19

Declaration as to Non-Canadian and Non-United States Holders

If in the opinion of the Board of Directors (who may rely on the advice of legal counsel) any action or event contemplated by this agreement would require compliance by the Corporation with the securities laws or comparable legislation of a jurisdiction outside Canada or the United States, the Board of Directors acting in good faith may take such actions as it may deem appropriate to ensure that such compliance is not required, including establishing procedures for the issuance to a Canadian resident fiduciary of Rights or securities issuable on exercise of Rights, the holding thereof in trust for the Persons entitled thereto and the sale thereof and remittance of the proceeds of such sale (if any) to the Persons entitled thereto. In no event will the Corporation or the Rights Agent be required to issue or deliver Rights or securities issuable on exercise of Rights to Persons who are citizens, residents or nationals of any jurisdiction other than Canada and the United States of America in which such issue or delivery would be unlawful without registration of the relevant Persons or securities for such purposes.

6.20

Fiduciary Duties of the Board of Directors

For greater certainty, this agreement will not be construed to suggest or imply that the Board of Directors is not entitled to recommend that holders of Voting Shares reject or accept any Take-over Bid (whether or not such Take-over Bid is a Permitted Bid or a Competing Permitted Bid) or take any other action (including the commencement, prosecution, defence or settlement of any litigation) with respect to any Take-over Bid or otherwise that the Board of Directors believes is necessary or appropriate in the exercise of its fiduciary duties.

6.21

Language

Les parties aux présentes ont exigé que la présente convention ainsi que tous les documents et avis qui s'y rattachent et/ou qui en découleront soient rédigés en langue anglaise. The parties hereto have required that this agreement and all documents and notices related thereto and/or resulting therefrom be drawn up in the English language.

IN WITNESS WHEREOF, the parties have caused this agreement to be duly executed as of the date first above written.

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ROYAL STANDARD MINERALS INC.

Per:	(signed) "Roland M.Larsen"
	Name: Roland M. Larsen
	Title: CEO

Per:	(sigend) "J. Allan Ringler"
	Name: J. Allan Ringler
	Title: Director


EQUITY FINANCIAL TRUST COMPANY

Per:	(signed) "Carol Mikos"
	Authorized Signatory
Per:	(signed) "Shelley Martin"
	Authorized Signatory

EXHIBIT A

FORM OF RIGHTS CERTIFICATE

Certificate No. ______

______ Rights

RIGHTS CERTIFICATE

This certifies that __________________ is the registered holder of the number of Rights set forth above, each of which entitles the registered holder thereof, subject to the terms, provisions and conditions of the Shareholder Rights Plan Agreement dated as of December 23, 2010, as the same may be amended, restated or supplemented from time to time (the " Rights Agreement ") between Royal Standard Minerals Inc., a corporation existing under the federal laws of Canada (the " Corporation "), and Equity Financial Trust Company, a company existing under the federal laws of Canada, as rights agent (the " Rights Agent ", which term includes any successor Rights Agent under the Rights Agreement), to purchase from the Corporation at any time after the Separation Time and prior to the Expiration Time (as such terms are defined in the Rights Agreement), one fully paid Common Share of the Corporation (a " Common Share ") at the Exercise Price referred to below, upon presentation and surrender of this Rights Certificate together with the duly executed Form of Election to Exercise (in the form provided hereafter) together with payment of the Exercise Price by certified cheque, bank draft or money order payable to the Corporation and submitted to the Rights Agent at its principal office in the City of Toronto or any other office of the Rights Agent designated for that purpose from time to time by the Rights Agent. The Exercise Price shall be an amount expressed in Canadian dollars equal to five times the Market Price (as such term is defined in the Rights Agreement) per Common Share at the Separation Time, subject to adjustment in certain events as provided in the Rights Agreement.

In certain circumstances described in the Rights Agreement, each Right evidenced hereby may entitle the registered holder thereof to purchase or receive assets, debt securities or shares in the capital of the Corporation other than Common Shares, or more or less than one Common Share, all as provided in the Rights Agreement.

This Rights Certificate is subject to all of the terms and conditions of the Rights Agreement which terms and conditions are incorporated herein by reference and made a part hereof and to which Rights Agreement reference is hereby made for a full description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Rights Agent, the Corporation and the holders of the Rights Certificates. Copies of the Rights Agreement are on file at the registered office of the Corporation and are available upon written request.

This Rights Certificate, with or without other Rights Certificates, upon surrender at any of the offices of the Rights Agent designated for such purpose, may be exchanged for another Rights Certificate or Rights Certificates of like tenor and date evidencing an aggregate number of Rights equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights Certificates surrendered. If this Rights Certificate is exercised in part, the registered holder will be entitled to receive, upon surrender hereof, another Rights Certificate or Rights Certificates for the number of whole Rights not exercised.

Subject to the provisions of the Rights Agreement, the Rights evidenced by this Rights Certificate may be, and under certain circumstances are required to be, redeemed by the Corporation at a redemption price of $0.00001 per Right, subject to adjustment in certain events.

No fractional Common Shares will be issued upon the exercise of any Right or Rights evidenced hereby.

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No holder of this Rights Certificate, as such, will be entitled to vote or receive dividends or be deemed for any purpose the holder of Common Shares or of any other shares of the Corporation which may at any time be issuable upon the exercise hereof, nor will anything contained in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of the rights of a shareholder of the Corporation or any right to vote for the election of directors or upon any matter submitted to shareholders of the Corporation at any meeting thereof, or to give or withhold consent to any corporate action, or to receive notice of meetings or other actions affecting shareholders of the Corporation (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate have been exercised as provided in the Rights Agreement.

This Rights Certificate will not be valid or obligatory for any purpose until it will have been manually countersigned by the Rights Agent.

WITNESS the facsimile signature of the proper officers of the Corporation and its corporate seal.

Date:

	ROYAL STANDARD MINERALS INC.

	By: _______________________________

	By: _______________________________
Countersigned:
	EQUITY FINANCIAL TRUST COMPANY

	By: _______________________________
	Authorized Signature

FORM OF ELECTION TO EXERCISE
(to be attached to each Rights Certificate)

TO:

ROYAL STANDARD MINERALS INC.

The undersigned hereby irrevocably elects to exercise ________ whole Rights represented by the attached Rights Certificate to purchase the Common Shares issuable upon the exercise of such Rights and requests that certificates for such Common Shares be issued to:

	Name
	Address
	City and Province
	Social Insurance Number or other taxpayer identification number

If such number of Rights are not all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:

	Name
	Address
	City and Province
	Social Insurance Number or other taxpayer identification number

Dated : ______________________	________________________________________
	Signature

Signature Guaranteed:

(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)

Signature must be guaranteed by a Canadian Schedule I chartered bank or a member of an approved signature guarantee medallion program.

(To be completed if true)

The undersigned hereby represents, for the benefit of the Corporation and all holders of Rights and Common Shares, that the Rights evidenced by this Rights Certificate are not, and, to the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person, an Affiliate or Associate of an Acquiring Person or any Person acting jointly or in concert with an Acquiring Person or with an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement).

_______________________________________
Signature

FORM OF ASSIGNMENT

FOR VALUE RECEIVED ____________________________________________ hereby sells, assigns and transfers unto ____________________________________________ (please print name and address of transferee) the Rights represented by this Rights Certificate, together with all right, title and interest therein and herby irrevocably appoints the attorney of the undersigned to transfer the said Rights on the books of the Corporation with full power of substitution in the premises.

Dated: ___________________________

Signature Guaranteed:

_______________________________________
Signature
(Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever.)

Signature must be guaranteed by a Canadian Schedule I chartered bank or a member of an approved signature guarantee medallion program.

(To be completed if true)

_______________________________________
Signature

NOTICE

If the certification set forth above in the Form of Election to Exercise or the Form of Assignment is not completed, the Corporation reserves the right to treat the Beneficial Owner of the Rights evidenced by this Rights Certificate to be an Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights Agreement) and accordingly such Rights will be null and void.

Exhibit 8.1

List of Subsidiaries

Manhattan Mining Co., a Nevada company (wholly-owned subsidiary).

Kentucky Standard Energy Company, Inc., a Kentucky company (wholly-owned subsidiary).

Exhibit 12.1

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Philip Gross, certify that:

1. I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;

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 officer(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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 internal control over financial reporting, to the Company’s auditors and the audit committee of the 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.

Dated effective: May 31, 2012

/s/ Philip Gross
Philip Gross
Interim President and Chief Executive Officer

Exhibit 12.2

CERTIFICATION
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ike Makrimichalos, certify that:

1. I have reviewed this annual report on Form 20-F of Royal Standard Minerals Inc.;

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.

Dated effective: May 31, 2012

/s/ Ike Makrimichalos
Ike Makrimichalos
Chief Financial Officer

Exhibit 13.1

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, as the Interim President and Chief Executive Officer of Royal Standard Minerals Inc., certifies that, to the best of his knowledge and belief, the annual report on Form 20-F for the fiscal year ended January 31, 2012, which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Royal Standard Minerals Inc. at the dates and for the periods indicated. The foregoing certification is made pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and shall not be relied upon for any other purpose. The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

Dated effective: May 31, 2012

/s/ Philip Gross
Philip Gross
Interim President and Chief Executive Officer

Exhibit 13.2

CERTIFICATION
PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, as the Chief Financial Officer of Royal Standard Minerals Inc., certifies that, to the best of his knowledge and belief, the annual report on Form 20-F for the fiscal year ended January 31, 2012, which accompanies this certification, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and the information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of Royal Standard Minerals Inc. at the dates and for the periods indicated. The foregoing certification is made pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350) and shall not be relied upon for any other purpose. The undersigned expressly disclaims any obligation to update the foregoing certification except as required by law.

Dated effective: May 31, 2012

/s/ Ike Makrimichalos
Ike Makrimichalos
Chief Financial Officer

Exhibit 15.1

Consent of Independent Auditors

The Board of Directors
Royal Standard Minerals Inc.

We consent to the inclusion in this annual report on Form 20-F of our Independent Auditors’ Report dated May 29, 2012 on the consolidated balance sheets of Royal Standard Minerals Inc. as of January 31, 2012 and 2011, and the related consolidated statements of mineral properties, operations, changes in shareholders’ equity and cash flows for each of the years in the two-year period ended January 31, 2012.

We also consent to the incorporation by reference of such report in the registration statement on Form S-8 (File No. 333-161518) of Royal Standard Minerals Inc.

/s/ MSCM LLP
Chartered Accountants
Licensed Public Accountants

Toronto, Ontario
June 12, 2012

Exhibit 15.2

CONSENT OF AUTHOR

The Board of Directors of Royal Standard Minerals Inc.

Reference is made to the technical reports (the “Technical Reports”) entitled “ Proposals to upgrade SouthPit, Deep Dive, Half Moon, Paperweight, and Hamburger Hill to a measured gold resource, Amended 43-101 Technical Report” (September 30 ^th , 2003) and “ Proposals to upgrade SouthPit, Deep Dive, Half Moon, Paperweight, and Hamburger Hill to a measured gold resource, 43-101 Technical Report” (August 2003) each of which the undersigned has prepared for Royal Standard Minerals Inc.

I hereby consent to the written disclosure of extracts from the Technical Reports in the public filing of the Annual Report on Form 20-F for the fiscal year ended January 31, 2012 of Royal Standard Minerals Inc. with the U.S. Securities and Exchange Commission.

Dated as of May 31st, 2012

_________________________________
Donald G. Strachan

Exhibit 15.2

CONSENT OF AUTHOR

The Board of Directors of Royal Standard Minerals Inc.

Reference is made to the technical report (the "Technical Report") entitled " Update and Revision of the Gold Wedge Project Development Nye County, Nevada" (March 2005), of which the undersigned has prepared for Royal Standard Minerals Inc.

I have reviewed and approved the summaries of and extracts from the Technical Report prepared to be filed with the Annual Report on Form 20-F for the fiscal year ended January 31,2012 of Royal Standard Minerals Inc. and confirm that the summaries and extracts fairly and accurately represent the information in the Technical Report. I hereby consent to the written disclosure of extracts from the Technical Report in the public filing of the Annual Report on Form 20-F for the fiscal year ended January 31, 2012 of Royal Standard Minerals Inc. with the U.S. Securities and Exchange Commission.

Exhibit 15.2

CONSENT OF AUTHOR

The Board of Directors of Royal Standard Minerals Inc.

Reference is made to the technical report (the "Technical Report") entitled "Update and Revision of the Gold Wedge Project Development Nye County, Nevada" (March 2005), of which the undersigned has prepared for Royal Standard Minerals Inc.

I have reviewed and approved the extracts from the Technical Report prepared to be filed with the Annual Report on Form 20-F for the fiscal year ended January 31, 2012 of Royal Standard Minerals Inc. and confirm that the extracts fairly and accurately represent the information in the Technical Report as at the date thereof. I hereby consent to the written disclosure of extracts from the Technical Report in the public filing of the Annual Report on Form 20-F for the fiscal year ended January 31, 2012 of Royal Standard Minerals Inc. with the U.S. Securities and Exchange Commission.

Dated as of May 31st, 2012

Exhibit 15.2

CONSENT OF AUTHOR

The Board of Directors of Royal Standard Minerals Inc.

Reference is made to the technical report (the "Technical Report") entitled " History, Geology, Gold Resources, Discovery Potential and Proposed Exploration Drilling Program for the Pinion-Railroad Project, Elko County, Nevada " (August 23, 2003) each of which the undersigned has prepared for Royal Standard Minerals Inc.

I have reviewed and approved the extracts from the Technical Report prepared to be filed with the Annual Report on Form 20-F for the fiscal year ended January 31, 2012 of Royal Standard Minerals Inc. and confirm that the extracts fairly and accurately represent the information in the Technical Report as at the date thereof. I hereby consent to the written disclosure of extracts from the Technical Report in the public filing of the Annual Report on Form 20-F for the fiscal year ended January 31,2012 of Royal Standard Minerals Inc. with the U.S. Securities and Exchange Commission.