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The Company specializes in searching for gold and base metal deposits in almost unexplored territories of Quebec. Most of its activities take place in the central part of Quebec, particularly in the James Bay area, which comprises several Archean greenstone belts known as being very favourable to the presence of economic gold and base metal deposits. This region differentiates from others by its accessibility and by the existence of clear agreements ruling the access to the territory. The Company is among the most active exploration companies in Quebec with a vast portfolio of properties.

Selected Quarterly Financial Information (unaudited)

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Other Information (unaudited)

Since its incorporation, the Company has not paid any cash dividends on its outstanding common shares. Any future dividend payment will depend on the Company’s financial requirements for the financing of its exploration programs and on its future financial growth, and on any other factor that the Board of Directors may deem necessary to consider in the circumstances. It is highly unlikely that any dividends will be paid in the near future.

Exploration Activities from Continuing Operations

Summary of activities

During the quarter ended November 30, 2006, the Company’s exploration costs totalled $1,078,189 in comparison with costs of $4,127,809 for the same period in 2005. The Company’s cumulative exploration costs during the first three quarters of the year totalled $2,929,050 , in comparison with costs of $14,109,957 for the same period in 2005. During the most recent quarter, the Company was mostly active on two projects: the Corvert Est project in partnership with Goldcorp and the Coulon project in partnership with Breakwater Resources Ltd. (“Breakwater”).

On the Corvet Est project, the second phase of a drilling program (17 holes over 4,325 metres) was completed. Most of the drilling aimed at testing the Marco zone, a plurimetric to decametric gold structure comprising several zones of finely disseminated sulphides (up to 10% arsenopyrite-pyrite-pyrrhotite), associated with microcline-tourmaline-garnet-biotite-magnetite alteration within felsic volcanics. Drilling confirmed the extension towards the west of the Marco zone where many economic intersections were obtained by drilling down to a vertical depth of 350 metres . Best results include 10.10 g/t Au over 5.2 metres (CE-05-44), 3.96 g/t Au over 7.75 metres (CE-06-52), 4.78 g/t Au over 5 metres (CE-06-53), 14.73 g/t Au over 1.9 metre (CE-06-54) and 3.17 g/t Au over 2.8 metres (CE-06-47).

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depth of 350 metres and remains open laterally and at depth. The Marco zone produced to date gold values over a lateral distance of more than 1,400 metres. The Company and partner Goldcorp are very much encouraged by these results and will pursue the evaluation of the Marco zone with drilling during the winter of 2007. Goldcorp spent $834,909 in exploration costs on the project during the quarter.

The Company and partner Breakwater Resources Ltd. (“Breakwater”) completed an exploration program on the Coulon project, which included eight diamond drill holes totalling 2,586 metres, heliborne (Emosquito), ground (InfiniTEM) and borehole pulse-EM geophysical surveys, as well as prospecting and geological mapping. This work led to the discovery of two new important polymetallic lenses ( lenses 43 and 44), bringing the total of known lenses to five (5), and confirmed the vertical continuity of lens 9-25 to a depth of 365 metres . Lens 43 was outlined by hole CN-06-43 which intersected a massive sulphide zone grading 4.58% Zn, 1.37% Pb, 57.14 g/t Ag and 0.6% Cu over 3.5 metres. This new discovery is situated at the border of an extensive conductor in a completely unexplored area where no other drilling has taken place over a 1-kilometre radius. Lens 44 was confirmed by hole CN-06-44 with an intersection grading 3.05% Zn, 1.54% Cu, 21.55 g/t Ag, 0.21 g/t Au over 11 metresto a vertical depth of 170 metres. This very encouraging intersection is located 120 metres vertically under hole CN-04-10 that cross-cut a much thinner sulphide zone grading 2.82% Zn, 0.49% Cu and 20 g/t Ag over 3.07 metres at the upper border of the lens. Lens 44 remains completely open to the south and at depth. Hole CN-06-38 confirmed the extension of lens 9-25to a vertical depth of 365 metres with an impressive intersection grading 8.96% Zn, 1.76% Cu, 50.20 g/t Ag, 0.46% Pb and 0.16 g/t Au over 16.14 metres, including 11.09% Zn, 1.76% Cu, 31.52 g/t Ag and 0.09 g/t Au over 11.14 metres. Situated 180 metres vertically under discovery hole CN-04-25, this mineralized interval constitutes the deepest intersection obtained to date in lens 9-25 that remains entirely open to the south and at depth. The exploration program also brought to light several other priority targets on the Coulon property. The Company and partner Breakwater Resources Ltd. intend to conduct a new program of geophysical surveys and diamond drilling during the winter of 2007. Expenses incurred on the project by Breakwater amounted to $848,151 during the third quarter.

During this quarter, the Company was also active on its Poste Lemoyne Extension project where a drill program of approximately 3,000 metres was undertaken. Drilling is aimed mostly at testing in detail the Orfée and Orfée Est gold zones, which are already known. The program is still ongoing and will probably continue in January 2007. The Company’s expenditures on this project amounted to $121,926 for this quarter.

The Company also completed geological reconnaissance, prospecting, and ground geochemical surveys on several new exploration projects in the James Bay region, more precisely in the Opinaca and Fontanges areas. Work on these new projects, acquired in the spoor of the Éléonore discovery, aims mainly at defining new targets for gold and base metal. Results from these work programs will be compiled during the winter of 2007.

During the same period, the Company entered into agreement with Eloro Resources Ltd. (“Eloro”) on the La Grande Nord property. According to this agreement, Eloro has the option to acquire a 50% interest in the property in return for $1 million in exploration costs over a 5-year period and payments totalling $50,000 payable , at Eloro’s sole discretion, either in cash or in common shares of Eloro, who will be the operator during the earn-in option period, with the Company having the right to become operator thereafter.

Results of Operations from Continuing Operations

Revenues for the quarter ended November 30, 2006 were $986,255 compared to $422,982 for the same period in 2005. Revenues for the nine-month period ended November 30, 2006 stood at $4,997,268 compared to $1,864,069 for the same period in 2005. Interest income and dividends for the three-month and nine-month periods ended November 30, 2006 increased following the increase in short-term investments.

The Company also receives fees for its role as the operator of projects in its various partnerships. The Company received fees from Goldcorp on the Corvet Est project during the first three quarters of 2006 and from Breakwater on the Coulon project during the second and third quarters of 2006. The Company received fees mostly from Noranda Inc. on the Coulon project during the first quarter of 2005 and from Placer Dome Inc. on the Corvet Est project during the second quarter and third quarters of 2005. Option payments received as financial instruments in excess of cost of mining property and the gain on sale of mining properties have been recognized in earnings following agreements with partners.

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Expenses decreased to $548,886 during the quarter ended November, 2006, compared to $591,245 for the same period in 2005. For the nine-month period ended November 30, 2006, expenses were $4,837,391 compared to $2,685,571 for the same period in 2005. The increase in professional and maintenance fees mainly results from expenses related to the granting of stock options on April 6 and July 19, 2006 and their gradual freeing for a total of $100,230 during the third quarter of 2006 and for a total of $2,132,423 for the nine-month period ended November 30, 2006. There were no management fees during the quarter ended November 30, 2005, as the maximum of permitted invoicing was reached during the second quarter. However, management fees related to discontinued operations amounted to $246,188 during the first two quarters ended November 30, 2005. The increase in rent and administrative expenses mainly results, during the first current quarter, from expenses inherent to administrative and professional services, from expenses related to the exercise of stock options and from the transaction-related bonus of $370,000 allocated to directors, officers and employees in connection with the transaction involving Goldcorp. The Company decreased its advertising budget for the current periods, leading to a decrease in advertising, exhibitions and travelling expenses. The variation in general exploration costs is mainly explained by the granting of stock options on April 6 and July 19, 2006, as well as by the decrease in on-site work expenses. During the first three quarters ended November 30, 2006, the Company wrote off 25 % of the Triestre property, 22 % of the Éléonore Regional property and 43% of the Wahemen property for a total of $40,873.

During the first two quarters, a writedown of short-term investments has been recognized in order that certain investments be accounted for at the lower of cost and market value.

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Quarterly Information

The information presented below details the total revenues, overall net earnings (net loss), and net earnings (net loss) per participating share from continuing operations of the last eight quarters.

The information presented below details the total revenues, overall net earnings (net loss), and net earnings (net loss) per participating share from discontinued operations of the last eight quarters.

Liquidity and Capital Resources from Continuing Operations

During the three-month period ended November 30, 2006, cash flows used for operating activities amounted to $702,974 compared to $1,730,658 during the corresponding three-month period ended November 30, 2005. During the nine-month period ended November 30, 2006, cash flows provided from operating activities amounted to $1,441,167 compared to $717,447 for the same period in 2005. These variations for the three quarters are primarily due to the variation in accounts receivable and accrued liabilities.

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Cash flows from financing activities include the issuance of shares under private placements and the exercise of stock options and warrants. For the three-month period ended November 30, 2006, 342,826 shares were issued upon the exercise of warrants for a cash consideration of $407,288. For the quarter ended August 31, 2006, 600,000 shares were issued to Billiton Resources Canada in consideration of the latter's 50% interest in the Lac Gayot property and for the three-month period ended May 31, 2006, 1,210,406 shares were issued to Goldcorp for a cash consideration of $5,047,393. For the corresponding period in 2005, issuances in connection with private placements stood at $15.6 M.

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These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

Carrying Value of Mining Properties

At the end of each quarter, exploration work carried out on mining properties is reviewed to evaluate the potential of each property. Following this analysis, writeoffs are made, if required.

Summary of significant accounting policies

The significant accounting policies are summarized in the annual management’s discussion and analysis joined with the annual financial statements of Virginia Gold Mines as at February 28, 2006. The accounting policies used for the three-month and nine-month periods ended November 30, 2006 are in accordance with those used in the audited annual financial statements of Virginia Gold Mines.

Financial Instruments

Fair value

Cash and cash equivalents, amounts receivable and accounts payable and accrued liabilities are financial instruments whose fair value approximates their carrying value due to their short-term maturity or to current market rates.

The fair value of short-term investments, determined based on quoted market value, amounts to $29,110,247 and $22,711,829 as at November 30, 2006 and February 28, 2006 respectively.

Disclosure of Outstanding Share Data

The Company may issue an unlimited number of common shares, without par value. As at January 8, 2007, 26,373,198 common shares are outstanding.

The Company maintains a stock option plan under which stock options may be granted up to a maximum of 10% of the number of shares outstanding. As at January 8, 2007, 1,018,000 stock options are outstanding. Their weighted average exercise price is $4.16 and the expiry date varies from August 6, 2011 to July 19, 2016.

As at January 8, 2007, 484,162 purchase warrants are outstanding.

On May 18, 2006, 484,162 purchase warrants with an exercise price of $5.84 were granted in connection with private placements. These warrants expire in November 2007.

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Risk Factors and Uncertainties

There have been no significant changes in the risk factors and uncertainties facing the Company, as described in February 28, 2006 Management's Discussion and Analysis of Virginia Gold Mines.

Additional Information and Continuous Disclosure

This Management’s Discussion and Analysis is dated January 8, 2007. Additional information on the Company is available through regular filings of press releases, financial statements and its annual information form on SEDAR (www.sedar.com).

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