QZMRF Quartz Mountain Resources (PK)

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

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934

As at OCTOBER 27, 2015

Commission File Number: 000-15490

QUARTZ MOUNTAIN RESOURCES LTD.
(Translation of registrant's name into English)

1500 - 1040 W Georgia Street, Vancouver, BC, V6E 4H1, Canada
(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

[ x ] Form 20-F   [           ] Form 40-F

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [           ]

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [           ]

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SUBMITTED HEREWITH

Exhibits

	99.1	Consolidated Financial Statements for the years ended July 31, 2015 and 2014
	99.2	Management Discussion and Analysis for the year ended July 31, 2015
	99.3	Form 52-109FV1 Certification of Annual Filings Venture Issuer Basic Certificate - CEO
	99.4	Form 52-109FV1 Certification of Annual Filings Venture Issuer Basic Certificate - CFO

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Quartz Mountain Resources Ltd.
	(Registrant)
Date: October 27, 2015	By:	/s/ Michael Lee
		Michael Lee
	Title:	Chief Financial Officer

 

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QUARTZ MOUNTAIN RESOURCES LTD.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED JULY 31, 2015 AND 2014

 

(Expressed in Canadian Dollars, unless otherwise stated)

 

 

 

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INDEPENDENT AUDITORS' REPORT

 

To the Shareholders of
Quartz Mountain Resources Ltd.

We have audited the accompanying consolidated financial statements of Quartz Mountain Resources Ltd., which comprise the consolidated balance sheets as at July 31, 2015 and 2014 and the consolidated statements of loss and comprehensive loss, changes in shareholders’ deficiency and cash flows for the years then ended, 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, and for such internal control as management determines is necessary to enable the preparation of consolidated 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. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation and fair presentation of the consolidated 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 consolidated financial statements.

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

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Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Quartz Mountain Resources Ltd. as at July 31, 2015 and 2014 and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which describes conditions and matters that indicate the existence of a material uncertainty that may cast significant doubt about the ability of Quartz Mountain Resources Ltd. to continue as a going concern.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada

Chartered Professional Accountants

October 22, 2015

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QUARTZ MOUNTAIN RESOURCES LTD.
Consolidated Balance Sheets
(Expressed in Canadian Dollars)

		July 31			July 31
		2015			2014
ASSETS
Current assets
Cash and cash equivalents	$	461,986		$	1,025,320
Amounts receivable and other assets (note 3)		16,419			11,504
		478,405			1,036,824
Restricted cash		–			38,563
Amounts receivable and other assets (note 3)		–			8,295
Mineral property interests (note 4)		2			891,628
Total assets	$	478,407		$	1,975,310
LIABILITIES AND SHAREHOLDERS' DEFICIENCY
Current liabilities
Amounts payable and other liabilities (note 6)	$	4,062		$	6,844
Convertible debenture – current portion (note 7)		50,000			600,000
Due to a related party (note 9(b))		2,973,276			2,957,075
		3,027,338			3,563,919
Convertible debenture (note 7)		450,000			–
Total liabilities		3,477,338			3,563,919
Shareholders' deficiency
Share capital (note 5)		26,050,118			26,050,118
Reserves		592,011			592,011
Accumulated deficit		(29,641,060	)		(28,230,738	)
Total shareholders' deficiency		(2,998,931	)		(1,588,609	)
Total liabilities and shareholders' deficiency	$	478,407		$	1,975,310

Nature and continuance of operations (note 1)

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

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

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QUARTZ MOUNTAIN RESOURCES LTD.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)

		For the year ended July 31
		2015			2014
Expenses
Exploration and evaluation	$	14,067		$	261,971
Assays and analysis		5,147			20,921
Drilling		–			90,773
Geological		8,175			67,687
Graphics		145			3,417
Property payments		–			1,409
Site activities		–			37,549
Sustainability		600			17,257
Transportation		–			4,770
Travel and accommodation		–			18,188
General and administration		472,773			603,998
Conferences and travel		–			8,147
Legal, accounting and audit		34,775			50,321
Office and administration		406,667			505,061
Regulatory, trust and filing		20,209			21,904
Shareholder communications		11,122			18,565
		(486,840	)		(865,969	)
Other items
Flow-through share premium (note 8)		–			35,639
Impairment of mineral property interest (note 4(a))		(891,626	)		–
Interest income		10,750			9,225
Interest expense (note 7)		(42,606	)		(44,087	)
Tax related to flow-through financing (note 8)		–			(235	)
Loss and comprehensive loss for the year	$	(1,410,322	)	$	(865,427	)
Basic and diluted loss per common share	$	(0.05	)	$	(0.03	)
Weighted average number of common shares outstanding		27,299,513			27,299,513

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

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QUARTZ MOUNTAIN RESOURCES LTD.
ConsolidatedStatementof Changesin Shareholders' Deficiency
(Expressed in Canadian Dollars)

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

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QUARTZ MOUNTAIN RESOURCES LTD.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)

		For the year ended July 31
		2015			2014
Cash flows from operating activities:
Loss for the year	$	(1,410,322	)	$	(865,427	)
Adjusted for:
Flow-through share premium		–			(35,639	)
Impairment of mineral property interest (note 4(a))		891,626			–
Interest income		(10,750	)		(9,225	)
Interest expense		42,606			44,087
Changes in non-cash working capital items:
Amounts receivable and other assets - current		(4,915	)		131,990
Amounts receivable and other assets - non-current		8,295			191,705
Amounts payable and other liabilities		(871	)		(122,334	)
Due to a related party (note 9(b))		16,201			491,076
Restricted cash		38,563			119,824
Net cash used in operating activities		(429,567	)		(53,943	)
Cash flows from investing activities:
Disposition of mineral property interest (note 4(a))		–			402,636
Interest received		10,750			9,225
Net cash provided by investing activities		10,750			411,861
Cash flows from financing activities:
Principal payment on convertible debenture (note 7)		(100,000	)		–
Interest paid on convertible debenture (note 7)		(44,517	)		(38,991	)
Net cash used by financing activities		(144,517	)		(38,991	)
Increase (decrease) in cash and cash equivalents		(563,334	)		318,927
Cash and cash equivalents, beginning of year		1,025,320			706,393
Cash and cash equivalents, end of year	$	461,986		$	1,025,320
Supplemental cash flow information:
Components of cash and cash equivalents
Business and savings accounts	$	461,986		$	523,507
Cash held in guaranteed investment certificates		–			501,813
	$	461,986		$	1,025,320
Non cash investing and financing activities:
Extinguishment of receivable from Amarc Resources Ltd. (note 4(a))	$	–		$	(240,000	)

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

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

1.	NATURE AND CONTINUANCE OF OPERATIONS
	Quartz Mountain Resources Ltd. ("Quartz Mountain" or the "Company") is a Canadian public company incorporated in British Columbia on August 3, 1982. The Company's corporate office is located at 1040 West Georgia Street, 15th Floor, Vancouver, British Columbia, Canada. The Company is primarily engaged in the acquisition and exploration of mineral properties.
	These consolidated financial statements (the "Financial Statements") of the Company as at and for the year ended July 31, 2015 include Quartz Mountain Resources Ltd. and its subsidiary (together referred to as the "Company"). Quartz Mountain Resources Ltd. is the ultimate parent entity of the group.
	These Financial Statements have been prepared on a going concern basis which contemplates the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. As at July 31, 2015, the Company had cash and cash equivalents of $ $461,986, a working capital deficit, and negative net assets. The Company's continuing operations are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of these projects, obtaining the necessary permits to mine, on future profitable production of any mine and the proceeds from the disposition of the mineral property interests. General market conditions for junior exploration companies have resulted in depressed equity prices.
	These material uncertainties cast significant doubt on the ability of the Company to continue as a going concern.
	In October 2014, the Company entered into an agreement with the holder of its convertible debenture to restructure the payment terms of the debenture (note 7).
	Of the total current liabilities of $3,027,338 at July 31, 2015, approximately $2,973,276 is payable to Hunter Dickinson Services Inc. ("HDSI"), a related party (note 9(b)).
	Management believes that it is able to maintain its core mineral rights in good standing for the next 12 month period. Additional debt or equity financing will be required to fund exploration or development programs. There can be no assurance that the Company will be able to obtain additional financial resources or achieve positive cash flows. If the Company is unable to obtain adequate additional financing, it will need to curtail its expenditures further, until additional funds can be raised through financing activities.
	These Financial Statements do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

2.	SIGNIFICANT ACCOUNTING POLICIES

(a)	Statement of compliance
	These Financial Statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and the International Financial Reporting Interpretations Committee (“IFRIC”) effective for the Company's fiscal year ended July 31, 2015.
	Issuance of these Financial Statements was authorized by the Company’s Board of Directors on October 22, 2015.
(b)	Basis of presentation
	These Financial Statements have been prepared on a historical cost basis, except for financial instruments measured at fair value. In addition, these Financial Statements have been prepared using the accrual basis of accounting, except for cash flow information.
(c)	Significant accounting estimates and judgments
	The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
	The impact of such estimates is pervasive throughout the 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 management believes are reasonable under the circumstances. Changes in the subjective inputs and assumptions can materially affect fair value estimates.
	Specific areas where significant estimates or judgements exist are:
	Sources of estimation uncertainty:

	•	Estimated fair values of mineral property interests; and
	•	Provisions for income taxes are an estimate of the amount expected to be paid based on a qualitative assessment of all relevant factors. The Company reviews the adequacy of these provisions at the end of each reporting period. However, it is possible that at some future date a change in tax liabilities or taxes recoverable could result from audits by taxation authorities. Where the final outcome of these tax-related matters is different from the amounts that were originally recorded, such differences will affect the tax provisions in the period in which such determination is made.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Critical accounting judgments:

	•	Assessment of the Company's ability to continue as a going concern; and
	•	The recoverability of the carrying value of the exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest. The carrying value of these assets is reviewed by management when events or circumstances indicate that its carrying value may not be recovered. If impairment is determined to exist, an impairment loss is recognized to the extent that the carrying amount exceeds the recoverable amount (note 4(a)).

(d)	Basis of consolidation
	These consolidated financial statements include the accounts of the Company and the subsidiaries that it controls. Control is achieved when the Company is exposed to, or has rights to, variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.
	Intercompany balances and transactions, including any unrealized income and expenses arising from intercompany transactions, are eliminated upon consolidation.
	At July 31, 2015 and July 31, 2014 the Company held an ownership interest in the following subsidiary:

(e)	Foreign currency
	The functional and presentation currency of the Company and its subsidiary, as at July 31, 2015, is the Canadian dollar.
	Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on the dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the period end date. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re- translated. Gains and losses arising on translation are included in profit or loss for the period.
(f)	Financial instruments
	Financial assets and liabilities are recognized when the Company becomes party to the contracts that give rise to them. The Company determines the classification of its financial assets and liabilities at initial recognition and, where allowed and appropriate, re-evaluates such classification at each financial year end. The Company does not have any derivative financial instruments.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	Non-derivative financial assets:
	The Company classifies its non-derivative financial assets into the following categories:

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

Loans and receivables comprise amounts receivable, restricted cash and cash and cash equivalents, described as follows:

Cash and cash equivalents

Cash and cash equivalents in the balance sheet consist of cash and highly liquid investments, having maturity dates of three months or less from the date of purchase or redeemable fixed-term deposits which are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. The Company's cash and cash equivalents are invested in business and savings accounts which are available on demand by the Company for its programs.

Non-derivative financial liabilities:

The Company's non-derivative financial liabilities comprise financial liabilities measured at amortized cost. Such financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method. Financial liabilities measured at amortized cost comprise amounts payable and other liabilities, balances due to a related party and a convertible debenture.

Impairment of financial assets:

Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been impacted.

Objective evidence of impairment could include:

	•	significant financial difficulty of the issuer or counterparty; or
	•	default or delinquency in interest or principal payments; or
	•	it becoming probable that the borrower will enter bankruptcy or financial re-organization.

For certain categories of financial assets, such as amounts receivable, assets that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of amounts receivable, where the carrying amount is reduced through the use of an allowance account. When an amount receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.
(g)	Exploration and evaluation expenditures
	Exploration and evaluation expenditures are expenditures incurred by the Company in connection with the exploration for and evaluation of mineral resources before the technical feasibility and commercial viability of extracting a mineral resource are demonstrable.
	Exploration and evaluation expenditures are expensed as incurred, except for initial expenditures associated with the acquisition of exploration and evaluation assets through a business combination or an asset acquisition.
	Exploration and evaluation expenditures include the cash consideration and the estimated fair market value of common shares on the date of issue or as otherwise provided under the relevant agreements. Costs for properties for which the Company does not possess unrestricted ownership and exploration rights, such as option agreements, are expensed in the period incurred or until a feasibility study has determined that the property is capable of commercial production.
	Administrative expenditures related to exploration activities are expensed in the period incurred.
	Mineral property interests
	Expenditures incurred by the Company in connection with a mineral property after the technical feasibility and commercial viability of extracting a mineral resource are demonstrable are capitalized. Such amounts are then amortized over the estimated life of the property following the commencement of commercial production, or are written off if the property is sold, allowed to lapse or abandoned, or when impairment has been determined to have occurred.
	Mineral property interests, if any, are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
	Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, mineral property interests attributable to that area of interest are first tested for impairment and then reclassified to mineral property and development assets within property, plant and equipment.
	Recoverability of the carrying amount of mineral property interests is dependent on successful development and commercial exploitation, or alternatively, a sale of the respective areas of interest.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(h)	Impairment of non-financial assets
	At the end of each reporting period the carrying amounts of the Company's assets are reviewed to determine whether there is any indication that those assets are impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the greater of (i) fair value less costs to sell, and (ii) value in use. Fair value is estimated as the amount that would be obtained from the sale of the asset in an arm's length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current assessments of the Company's cost of capital and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and an impairment loss is recognized in the profit or loss for the period. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

	Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
(i)	Share capital
	Common shares are classified as equity. Transaction costs directly attributable to the issuance of common shares and share purchase options are recognized as a deduction from equity, net of any tax effects.
	Flow–through shares
	Canadian tax legislation permits mining entities to issue flow–through shares to investors. Flow–through shares are securities issued to investors whereby the deductions for tax purposes related to eligible Canadian exploration expenses ("CEE"), as defined in the Income Tax Act (Canada), may be claimed by investors instead of the entity, pursuant to a defined renunciation process.
	Renunciation may occur:

	•	prospectively (namely, the flow–through shares are issued, renunciation occurs and CEE are incurred subsequently); or
	•	retrospectively (namely, the flow–through shares are issued, CEE are then incurred, and renunciation occurs subsequently).

Flow–through shares are recorded in share capital at the fair value of common shares on date of issuance. When flow–through shares are issued, the difference between the fair value of non-flow-through common shares and the amount the investors pay for flow–through shares is recorded as a deferred liability called "flow-through share premium". This deferred liability is credited to profit or loss when the eligible expenses are incurred and renounced to investors.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	Upon eligible expenses being incurred, the Company derecognizes the liability and recognizes a deferred tax liability, if any, for the amount of tax reduction renounced to shareholders. The premium is recognized as other income and the related deferred tax is recognized as a tax provision.
(j)	Loss per share
	The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive.

(k)	Share-based payments
	Share-based payments to employees and others providing similar services are measured at the fair value of the instruments at the grant date. The fair value determined at the grant date is charged to operations over the vesting period, based on the Company's estimate of equity instruments that will eventually vest. The Company revises the estimate on each reporting date and the effect of the change is recognized in profit or loss.
	Share-based payment transactions with other parties are measured at the fair value of the goods or services received, except where the fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
(l)	Rehabilitation provision
	An obligation to incur rehabilitation and site restoration costs arises 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 capitalized at the start of each project, as soon as the obligation to incur such costs arises. These costs are charged against earnings over the life of the operation.
	The Company has no material rehabilitation and site restoration costs, as the disturbance to date has been minimal.
(m)	Income taxes
	Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in shareholders’ deficiency, in which case it is recognized in shareholders’ deficiency.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	Current tax expense is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at year end, adjusted for amendments to tax payable with regards to previous years.
	Deferred tax is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
	The following temporary differences are not provided for:

	•	goodwill not deductible for tax purposes;
	•	the initial recognition of assets or liabilities that affect neither accounting nor taxable profit; and
	•	differences relating to investments in subsidiaries, associates, and joint ventures to the extent that they will probably not reverse in the foreseeable future.

	The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the end of the reporting period applicable to the period of expected realization or settlement.
	A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
(n)	Government assistance
	When the Company is entitled to receive mineral exploration tax credits and other government grants, these amounts are recognized as a cost recovery within exploration and evaluation expenditures when there is reasonable assurance of their recovery.
(o)	Compound financial instruments
	Compound financial instruments issued by the Company comprise a convertible debenture that can be converted into a fixed number of the Company's common shares at the option of the holder.
	The liability component of a compound financial instrument is recognized initially at the fair value of a similar liability that does not have an equity conversion option. The equity component, if any, is recognized initially as the difference between the estimated fair value of the compound financial instrument as a whole and the estimated fair value of the liability component. Directly attributable transaction costs, if material, are allocated to the liability and equity components in proportion to their initial carrying amounts.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(p)	Joint venture activities and joint controlled operations
	Joint control is defined as the contractually agreed sharing of control over an economic activity, and exists only when the strategic, financial and operating decisions essential to the relevant activities require the unanimous consent of the parties sharing control. When the Company enters into agreements that provide for specific percentage interests in exploration properties, a portion of the Company's exploration activities is conducted jointly with others, without establishment of a corporation, partnership or other entity.
	Under IFRS 11 "Joint Arrangements", this type of joint control of mineral assets and joint exploration and/or development activities is considered as a joint operation, which is defined as a joint arrangement whereby the parties that have joint control of the arrangement have rights to the assets, and obligations for the liabilities, relating to the arrangement.
	In its financial statements, the Company recognizes the following in relation to its interest in a joint operation:

	•	its assets, including its share of any assets held jointly;
	•	its liabilities, including its share of any liabilities incurred jointly;

	•	its revenue from the sale of its share of the output of the joint operation; and
	•	its expenses, including its share of any expenses incurred jointly

(q)	Changes in accounting policies and new accounting pronouncements
	Amendments, Interpretations, Revised and New Standards Adopted by the Company
	The following standards and amendments to existing standards have been adopted by the Company effective August 1, 2014: These include IAS 32 (Amendment) Offsetting Financial Assets and Financial Liabilities, IAS 36 (Amendment) Recoverable Amount Disclosures for Non-Financial Assets, and IFRIC 21 Levies. The Company has adopted these policies and they did not have a significant effect on the financial statements. The nature and the impact of each new standard are described below:
	Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32)
	The amendment to IAS 32, Financial Instruments: Presentation, requires that a financial asset and financial liability should only be offset and the net amount reported when an entity has a legal enforceable right to set off the amounts and intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
	Recoverable Amount Disclosures for Non-Financial Assets (Amendments to IAS 36)
	Under the amended IAS 36, Impairment, the recoverable amount of a CGU is required to be disclosed only when an impairment loss has been recognized or reversed.
	IFRIC 21, Levies
	IFRIC 21 clarifies that obligating events giving rise to a liability to pay a levy is the activity described in the relevant legislation that triggers payments of the levy.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	New standards, amendments and interpretations to existing standards not yet effective
	Effective for annual periods beginning on or after January 1, 2016

	•	IAS 1 – Presentation of Financial Statements
	•	IFRS 14, Regulatory Deferral Accruals
	•	Amendments to IFRS 11, Joint Operations
	•	Amendments to IAS 16 and IAS 38, Depreciation and Amortization

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

	•	IFRS 15, Revenue from Contracts with Customers
	•	IFRS 9, Financial Instruments – Classification and Measurement

The Company has not early adopted these new standards, interpretations, or amendments to existing standards, and is currently assessing the impact that these standards will have on the Company's Financial Statements.

3.	AMOUNTS RECEIVABLE AND OTHER ASSETS

			July 31, 2015			July 31, 2014
	Current:
	Sales tax receivable	$	3,300		$	4,834
	Prepaid insurance		6,040			6,670
	Estimated British Columbia Mineral Exploration Tax Credit recoverable		7,079			–
	Total	$	16,419		$	11,504
	Non-current:
	Estimated British Columbia Mineral Exploration Tax Credit recoverable	$	–		$	8,295

4.	MINERAL PROPERTY INTERESTS

			July 31, 2015			July 31,2014
	Galaxie Project (note 4(a))	$	1		$	891,627
	Angel's Camp royalty (note 4(b))		1			1
	Total	$	2		$	891,628

(a)	Galaxie Project
	The Company holds a 100% mineral property interest in the Galaxie Project, which is situated in the Stikine Terrane, a region in northwestern BC, and it includes the Gnat Pass Property and the Hotailuh Slope mineral claims. The Company’s mineral property interest in Gnat Pass Property is subject to a net smelter returns (NSR) royalty agreement which requires the payment to a third party of a 1% NSR royalty – up to a maximum of $7,500,000.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

	The Company also holds a 100% interest in the ZNT property located in central British Columbia. The property was staked by the Company in 2012.
	In November 2012, the Company and Amarc Resources Ltd. (“Amarc”), a publicly traded company with certain directors in common with the Company, entered into an agreement, pursuant to which Amarc could earn up to 50% ownership interest in the Galaxie and ZNT Projects, subject to certain earn-in requirements. In December 2012, the Company and Amarc formed an unincorporated joint arrangement to conduct exploration activities at the combined Galaxie-ZNT Project.
	In June 2013, the Company and Amarc entered into further agreements to exploration programs at the Galaxie and ZNT properties. Amounts received from Amarc totalling $402,636 pursuant to these agreements were recorded as reductions to the carrying amount of mineral property interest.
	On March 31, 2014 the Company and Amarc agreed to terminate the joint arrangements governing exploration activities at both the Galaxie and ZNT properties. Pursuant to the terms of the termination of the joint arrangements, the Company regained a 100% interest in the Galaxie and ZNT properties.

	Impairment
	As of July 31, 2015, the carrying amount of the Company’s mineral property interest in the Galaxie Project exceeded the Company’s market capitalization. During the last two years, in view of a very high level of uncertainty as to the availability of capital resources, the Company has maintained a strategy of conserving its cash resources and, while the Company believes that its mineral assets have exploration potential, curtailed activities relating to the Galaxie project to a minimum level that is necessary to maintain core mineral claims in good standing. The Company believes that, as per IFRS 6, these circumstances require an impairment testing of its mineral property interest in the Galaxie project under IAS 36, Impairment of Assets (“IAS 36”). Due to measurement uncertainties inherent in the valuation of mineral resources and in view of the prevailing uncertainty in the capital markets, the Company has determined that a reliable estimate of the recoverable amount for the mineral property interest in the Galaxie Project cannot be made. Consequently, the Company has written-down the carrying amount of the mineral property interest to a nominal amount. For the purposes of IAS 36, the Company considers the Galaxie Project as a single cash generating unit.
(b)	Angel's Camp Property
	The Company retains a 1% net smelter return royalty payable to the Company on any production from the Angel's Camp property located in Lake County, Oregon. The Angel's Camp property is currently held by Alamos Gold Inc.
	The royalty has been recorded at a nominal amount of $1.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

5.	CAPITAL AND RESERVES

(a)	Authorized share capital
	At July 31, 2015, the authorized share capital of the Company comprised an unlimited number of common shares without par value and an unlimited number of preferred shares without par value.
	No preferred shares have been issued to date. All issued common shares are fully paid.
(b)	Equity-Settled Share-Based Payments

The Company has a share purchase option plan (the “Plan”) approved by the Company's shareholders that allows the Board of Directors to grant share purchase options, subject to regulatory terms and approval, to its officers, directors, employees, and service providers. The Plan is based on the maximum number of eligible shares equaling 10% of the Company's outstanding common shares, calculated from time to time. The exercise price of each share purchase option is set by the Board of Directors at the time of grant but cannot be less than the five day volume weighted average trading price of the Company's shares calculated on the day prior to the grant. Share purchase options may have a maximum term of ten years (although share purchase options have generally been granted with a term of up to five years) and typically terminate 90 days following the termination of the optionee's employment or engagement, except in the case of retirement or death. The vesting period for share purchase options is at the discretion of the Board of Directors at the time the options are granted.

The following summarizes the changes in the Company's share purchase options for the years ended July 31, 2015 and 2014:

	Number of options with an exercise price of $0.45		Year ended July 31
			2015			2014
	Options outstanding at beginning of year		1,587,000			1,705,800
	Forfeited during the year		(36,900	)		(118,800	)
	Expired during the year		(722,100	)		–
	Options outstanding and exercisable at the end of year		828,000			1,587,000

The weighted average contractual remaining life of the share purchase options outstanding and exercisable at July 31, 2015 was 1.47 years (July 31, 2014 – 1.5 years).

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

6.	AMOUNTS PAYABLE AND OTHER LIABILITIES

			Year ended July 31
			2015			2014
	Amounts payable	$	4,062		$	6,438
	Accrued liabilities		–			406
	Total	$	4,062		$	6,844

7.	CONVERTIBLE DEBENTURE

	Balance, July 31, 2013 and July 31, 2014	$	600,000
	Repayment during year		(100,000	)
	Balance, July 31, 2015	$	500,000
	Current portion	$	50,000
	Non-current portion		450,000
		$	500,000

Pursuant to the purchase of the Gnat Pass Property (note 4(a)) in fiscal 2013, the Company issued an unsecured $650,000 convertible debenture (the "Debenture") to the vendor, Bearclaw Capital Corp. (“Bearclaw”), as part of the purchase price. In July 2013, Quartz Mountain and the holder of the Debenture entered into an agreement to amend the Debenture, whereby among other things, a principal payment of $50,000 toward the Debenture was made, reducing the outstanding balance to $600,000. The interest rate applicable on the new balance of $600,000 and for the remaining term of the Debenture was increased to 10% per annum from 8% per annum, and the maturity date was extended to October 31, 2014 from October 31, 2013. Interest on the Debenture was payable quarterly in arrears and the principal sum of Debenture, along with any unpaid interest, was convertible at the option of the debenture holder into the Company's common shares at $0.15 per share (previously $0.40 per share) on or before maturity of the Debenture on October 31, 2014.

Effective October 1, 2014, the Company and Bearclaw amended (the “Amendment”) the terms of the Debenture pursuant to which the Company made a principal payment of $50,000 against the Debenture and the remaining balance of $550,000 (the “Principal Sum”) was to be payable in equal annual installments of $50,000, commencing on January 31, 2015 (completed) and thereafter on or before January 31 of each subsequent year until the Principal Sum is fully repaid. Effective October 1, 2014, the Principal Sum outstanding bears interest at 7.5% per annum, payable quarterly in arrears.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Upon a completion by the Company of an equity financing (the “New Financing”) for a minimum amount of $1,000,000, at least 50% of any outstanding balance of the Principal Sum along with any interest accrued thereon will be automatically converted (the “Automatic Conversion”) into the Company’s common shares. Bearclaw may elect to convert, concurrent to the Automatic Conversion, any portion of the remaining 50% of outstanding balance of the Principal Sum and accrued interest thereon (the “Optional Conversion”). For the purposes of Automatic Conversion and Optional Conversion of any principal sum, subject to the rules and policies of the TSX Venture Exchange, the conversion price will be determined as the greater of (i) the volume-weighted average trading price of common shares of the Company on the Exchange for the 20 consecutive trading days ending on the fifth trading day preceding the date of such conversion and (ii) the price at which the Company issues common shares pursuant to the New Financing. For the purposes of the Automatic Conversion and the Optional Conversion of any accrued interest, the conversion price will be the market price of the Company’s common shares on the date of conversion. Other than pursuant to the Automatic Conversion and Optional Conversion provisions, Bearclaw does not have an option to convert the Debenture into the Company’s common shares.

The Company has determined that, for the purposes of IAS 39 Financial Instruments: Recognition and Measurement, the Amendment resulted in a substantial modification of the terms of the Debenture and it has been accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability; however, no gain or loss was recognized as the fair value of the latter equaled the carrying amount of the former.

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

	Fiscal year								Payments
			Payments			Payments			(principal and
			(principal)			(interest)			interest)
	2016	$	50,000		$	36,051		$	86,051
	2017		50,000			32,209			82,209
	2018		50,000			28,459			78,459
	2019		50,000			24,709			74,709
	2020		50,000			21,010			71,010
	Remaining term		250,000			48,555			298,555
	Total	$	500,000		$	190,993		$	690,993

8.	FLOW-THROUGH SHARE PREMIUM LIABILITY
	Pursuant to the private placement of flow-through shares during calendar 2013, the Company was obligated to spend the proceeds on eligible Canadian Exploration Expenses ("CEE") (as defined in the Income Tax Act) prior to December 31, 2013 and to renounce them to the investors. Accordingly, a flow- through share premium liability was recognized and drawn down to $nil as these CEE expenditures were incurred. During the year ended July 31, 2014, the Company recognized $35,639 in the consolidated statements of loss and comprehensive loss as de-recognition of flow-through share premium liability.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

9.	RELATED PARTY BALANCES AND TRANSACTIONS

(a)	Transactions with Key Management Personnel
	Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling the activities of the Company, directly and indirectly, and by definition include the directors of the Company.
	The Company compensated key management personnel as follows:

			Year ended July 31
			2015			2014
	Short-term employee benefits, including salaries and directors fees	$	159,918		$	169,096

	Short-term employee benefits include salaries, director’s fees and amounts paid to HDSI (note 9(b)) for services provided to the Company by certain HDSI personnel who serve as directors or officers of the Company.
(b)	Entities with Significant Influence over the Company
	The Company's management believes that Hunter Dickinson Services Inc. ("HDSI"), a private entity, has the power to participate in the financial or operating policies of the Company. Scott Cousens, Robert Dickinson, and Ronald Thiessen, are directors of both the Company and HDSI. Michael Lee and Trevor Thomas are officers of the Company and are employees of HDSI.
	Pursuant to a management agreement between the Company and HDSI, dated July 2, 2010, the Company receives geological, engineering, corporate development, administrative, management and shareholder communication services from HDSI. These services are provided based on annually set rates. HDSI also incurs third party costs on behalf of the Company on full-cost recovery basis.
	Transactions with HDSI parties were as follows:

			Year ended July 31
			2015			2014
	Services received based on management services agreement	$	252,253		$	511,241
	Reimbursement of third party expenses paid		69,810			24,151

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Outstanding balances were as follows:

			July 31, 2015			July 31, 2014
	Balance payable to HDSI	$	2,973,276		$	2,957,075

10.	EMPLOYEES BENEFIT EXPENSES
	The amount of employees' salaries and benefits during the year ended July 31, 2015 was $327,135 (2014 – $528,801).
11.	OPERATING SEGMENTS
	The Company operates in a single reportable operating segment – the acquisition, exploration and evaluation of mineral property interests. The Company is currently focused on the acquisition and exploration of mineral property interests in Canada.
12.	TAXATION

(a)	Provision for current tax
	No provision has been made for current income taxes, as the Company has no taxable income.
(b)	Provision for deferred tax
	As future taxable profits of the Company are uncertain, no deferred tax asset has been recognized.
	As at July 31, 2015, the Company had unused non-capital loss carry forwards of approximately $5,279,000 (2014 – $4,459,000) in Canada and $48,000 (2014 – $40,000) in the United States.
	The Company had approximately $4,347,000 (2014 – $4,343,000) of resource tax pools available, which may be used to shelter certain resource income.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

Reconciliation of effective tax rate:

			Year ended July 31
			2015			2014
	Loss for the year	$	(1,410,322	)	$	(865,427	)
	Income tax expense		–			–
	Loss excluding income tax	$	(1,410,322	)	$	(865,427	)
	Income tax recovery using the Company's domestic tax rate	$	(367,000	)	$	(225,000	)
	Non-deductible expenses and other		31,000			147,000
	Change in deferred tax rates		(2,000	)		–
	Differences in statutory tax rates		(1,000	)		(2,000	)
	Changes in unrecognized temporary differences		339,000			80,000
		$	–		$	–

The Company's domestic tax rate during the year ended July 31, 2015 was 26% (2014 – 26%) and the effective tax rate was nil (2014 – nil).

As at July 31, 2015, the Company had the following balances in respect of which no deferred tax assets had been recognized:

									Equipment and
	Expiry:		Tax losses			Resource pools			other
	Within one year	$	137,000		$	–		$	–
	One to five years		10,000			–			42,000
	After five years		5,180,000			–			82,000
	No expiry date		–			4,347,000			114,000
		$	5,327,000		$	4,347,000		$	238,000

13.	FINANCIAL RISK MANAGEMENT
	The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(a)	Credit Risk
	Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and cash equivalents and amounts receivable. The Company limits its exposure to credit risk on liquid financial assets by only investing its cash and cash equivalents with high-credit quality financial institutions in business and savings accounts.
	The carrying value of the Company's cash and cash equivalents and amounts receivable represent the maximum exposure to credit risk.
(b)	Liquidity Risk
	Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operation, if any, and the Company's holdings of cash and cash equivalents.
	The following obligations existed at July 31, 2015:

						Payments due by period
						Less than 1
			Total			year			1-5 years			After 5 years
	Amounts payable and other liabilities (note 6)	$	4,062		$	4,062		$	–		$	–
	Convertible debenture (note 7)		500,000			50,000			450,000			–
	Due to related parties (note 9)		2,973,276			2,973,276			–			–
	Total	$	3,477,338		$	3,027,338		$	450,000		$	–

The following obligations existed at July 31, 2014:

						Payments due by period
						Less than 1
			Total			year			1-5 years			After 5 years
	Amounts payable and other liabilities (note 6)	$	6,844		$	6,844		$	–		$	–
	Convertible debenture (note 7)		600,000			600,000			–			–
	Due to related HDSI (note 9)		2,957,075			–			2,957,075			–
	Total	$	3,563,919		$	606,844		$	2,957,075		$	–

(c)	Market Risk
	Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The Company is not subject to significant market risk.

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Quartz Mountain Resources Ltd.

Notes to the Consolidated Financial Statements

For the years ended July 31, 2015 and 2014

(Expressed in Canadian Dollars, unless otherwise stated)

(d)	Capital management objectives
	The Company's primary objectives when managing capital are to safeguard the Company's ability to continue as a going concern, so that it can continue to potentially provide returns for shareholders, and to have sufficient liquidity available to fund ongoing expenditures and suitable business opportunities as they arise.
	The Company considers the components of shareholders' deficiency as capital. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue equity, sell assets, or return capital to shareholders as well as issue or repay debt.
	The Company's investment policy is to invest its cash in highly liquid short–term interest–bearing investments having maturity dates of three months or less from the date of acquisition and that are readily convertible to known amounts of cash.
	There were no changes to the Company's approach to capital management during the year ended July 31, 2015.
	The Company is not subject to any externally imposed equity requirements.
(e)	Fair Value
	The fair value of the Company's financial assets and liabilities approximate their carrying amounts.

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Quartz Mountain Resources Ltd.

 

 

MANAGEMENT'S DISCUSSION AND ANALYSIS

YEAR ENDED JULY 31, 2015

 

 

 

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

T A B L E   O F   C O N T E N T S

1.1	Date	3
1.2	Overview	3
1.3	Selected Annual Information	3
1.4	Summary of Quarterly Results	10
1.5	Results of Operations and Financial Condition	11
1.6	Liquidity	12
1.7	Capital Resources	13
1.8	Off-Balance Sheet Arrangements	13
1.9	Transactions with Related Parties	13
1.10	Fourth Quarter	15
1.11	Proposed Transactions	15
1.12	Critical Accounting Estimates	15
1.13	Changes in Accounting Policies including Initial Adoption	15
1.14	Financial Instruments and Other Instruments	15
1.15	Other MD&A Requirements	16
1.16	Risk Factors	18

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.1      DATE

This Management's Discussion and Analysis ("MD&A") should be read in conjunction with the audited consolidated financial statements of Quartz Mountain Resources Ltd. ("Quartz Mountain" or the "Company") for the year ended July 31, 2015 as publicly filed on SEDAR at www.sedar.com. All dollar amounts herein are expressed in Canadian dollars unless stated otherwise.

The Company reports in accordance with International Financial Reporting Standards ("IFRS") and the following disclosure, and associated financial statements, are presented in accordance with IFRS. All comparative information provided is in accordance with IFRS.

For the purposes of the discussion below, date references refer to calendar year and not the Company's fiscal reporting period.

This MD&A is prepared as of October 22, 2015.

 

Cautionary Note to Investors Concerning Forward-looking Statements

This discussion includes certain statements that may be deemed "forward-looking statements". All statements in this disclosure, other than statements of historical facts, that address permitting, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Assumptions used by the Company to develop forward-looking statements include the following: the Company’s projects will obtain all required environmental and other permits and all land use and other licenses, and no geological or technical problems will occur. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploration and exploitation successes, continuity of mineralization, potential environmental issues and liabilities associated with exploration, development and mining activities, uncertainties related to the ability to obtain necessary permits, licenses and title and delays due to third party opposition or litigation, exploration and development of properties located within First Nations treaty and asserted territories may affect or be perceived to affect treaty and asserted aboriginal rights and title, which may cause permitting delays or opposition by First Nation communities, changes in laws and government policies regarding mining and natural resource exploration and exploitation, continued ability of the Company to raise necessary capital, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. The Company reviews its forward looking statements on an on-going basis and updates this information when circumstances require it.

1.2      OVERVIEW

The information comprised in this MD&A relates to Quartz Mountain Resources Ltd. and its subsidiary (together referred to as the "Company"). Quartz Mountain Resources Ltd. is the ultimate parent entity of the group.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Quartz Mountain is an exploration and development company focused on acquiring and exploring mineral prospects in British Columbia ("BC").

The Company holds a 100% interest in the Galaxie Project, which is situated in the Stikine Terrane, a prospective region in northwestern BC that hosts a number of important copper and gold deposits. There is potential for the discovery of bulk tonnage copper-gold and/or molybdenum and vein-type precious and base metal deposits at the Galaxie Project. Historical exploration identified several mineral occurrences in the project-area, including the Gnat porphyry copper deposit.

In 2012, Quartz Mountain completed ground surveys in the vicinity of the Gnat deposit and in a number of other prospective areas on the property. Several new targets were identified by the surveys. Two holes were drilled at the Gnat deposit to follow up on the ground surveys. These holes encountered intervals of 55.7 metres grading 0.44% copper and 91.0 metres grading 0.37% copper and confirmed the presence of porphyry mineralization in the Gnat deposit. The 2013 technical report suggests that the potential at the Gnat deposit and in its vicinity has not been fully tested.

Additional ground exploration was carried out in several of the other prospective areas on the property in 2013. A series of alkali intrusions - known to be the principal hosts for porphyry copper-gold deposits elsewhere in the Stikine-Iskut porphyry belt - were observed in an area known as the Hu target. The potential for mineralization associated with the intrusions at Hu warrants further exploration.

Market conditions, which have made financing for exploration projects very difficult over the past several years. In 2015, the Company has continued to seek partners to advance exploration through joint venture or by farming out Galaxie and its other exploration project but has had no success to date.

1.2.1 Agreements – Galaxie Project

Sale Agreement with Finsbury Exploration Ltd.

Quartz Mountain acquired a 100% interest in the Galaxie Project from Finsbury Exploration Ltd. ("Finsbury") through a sale agreement (the "Sale Agreement") dated July 27, 2012. The Galaxie Project acquired from Finsbury included an area of 1,488 square kilometres, comprised of three mineral claims totalling approximately 1,294 hectares (the "Gnat Pass Property") and surrounding mineral claims staked by Finsbury to that time.

Pursuant to the terms of the Sale Agreement, Quartz Mountain issued 2,038,111 shares to Finsbury and also assumed the rights and obligations of Finsbury under a mineral property purchase agreement (the "Bearclaw Agreement") between Finsbury and Bearclaw Capital Corp. ("Bearclaw") relating to the Gnat Pass Property. Quartz Mountain also assumed the rights and obligations under a net smelter returns ("NSR") royalty agreement which requires the payment to Bearclaw of a 1% NSR royalty on the Gnat Pass Property up to a maximum of $7,500,000.

The remaining payment obligations to Bearclaw for the Gnat Pass Property under the Bearclaw Agreement assumed by Quartz Mountain consisted of:

• a payment of $50,000 to Bearclaw (paid);

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

• the issuance of a convertible debenture (the “Debenture”) to Bearclaw in the amount of $650,000, bearing an interest rate of 8% per annum and with a maturity date of October 31, 2014 (issued; however, the interest rate and maturity date were later amended – see below); and

• the issuance to Bearclaw of 1,000,000 shares in the capital of Quartz Mountain (issued).

July 2013 Amendment to the Debenture

In July 2013, Quartz Mountain and the holder of the Debenture entered into an agreement to amend the Debenture, whereby the Galaxie Joint Venture made a $50,000 principal payment toward the Debenture, reducing the outstanding balance to $600,000. The interest rate was increased to 10% per annum, and the maturity date was extended to October 31, 2014.

October 2014 Amendment to the Debenture

Effective October 1, 2014, Quartz Mountain and Bearclaw further amended the terms of the Debenture (hereafter referred to as the “Amended Debenture”), pursuant to which:

• the Company made a principal payment of $50,000 to Bearclaw against the Debenture (completed October 8, 2014);

• the remaining balance (the “Principal Sum”) of $550,000 is repayable in equal annual installments of $50,000, commencing on January 31, 2015; and

• effective October 1, 2014, the principal amount outstanding bears interest at 7.5% per annum, payable quarterly in arrears.

Upon a completion by the Company of an equity financing (the “New Financing”) for a minimum amount of $1,000,000, at least 50% of any outstanding balance of the then-outstanding Principal Sum along with any interest accrued thereon will be automatically converted (the “Automatic Conversion”) into the Company’s common shares. Bearclaw may elect to convert, concurrent with the Automatic Conversion, any portion of the remaining 50% of the then-outstanding Principal Sum and accrued interest thereon (the “Optional Conversion”) into Quartz Mountain common shares. For the purposes of Automatic Conversion and Optional Conversion, subject to the rules and policies of the TSX Venture Exchange (“TSX-V”), the conversion price will be the greater of (i) the volume-weighted average trading price of common shares of the Company on the TSX-V for the 20 consecutive trading days ending on the fifth trading day preceding the date of such conversion, and (ii) the price at which the Company issues common shares pursuant to the New Financing. For the purposes of Automatic Conversion and Optional Conversion of any accrued interest, the conversion price will be the market price of the Company’s common shares on the date of conversion. Bearclaw does not have an option to convert the Amended Debenture into the Company’s common shares except pursuant to these Automatic Conversion and Optional Conversion provisions.

1.2.2 Technical Programs – Galaxie Project

Exploration of the Galaxie Project was summarized in a technical report (the “2013 technical report”) entitled “Technical Report on the Galaxie Project, Liard Mining Division, British Columbia” effective date April 30, 2013 by B.K. (Barney) Bowen, PEng, and the disclosure here has been updated with information on the 2013 program from Company files. No programs were carried out on the Galaxie Project in 2014 and 2015 and none are currently planned for 2016.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

The Galaxie Project is located on Highway 37, approximately 24 kilometres south of Dease Lake, BC. The Project-area currently consists of 158 mineral claims covering an area of 57,618.2 hectares.

Paved Highway 37 passes through the center of the Galaxie Project and provides year-round direct access to the adjacent project-area, including the Gnat Pass Property. Other parts of the Galaxie Project can be accessed by helicopter.

The operating season for surface exploration is from early June through to early October. Because of its close proximity to Highway 37, diamond drilling activities at the Gnat deposit, which is within the Gnat Pass Property, can be carried out throughout the year.

Dease Lake (population of about 600) offers an array of services, including motel accommodations, food, fuel, a variety of small equipment operators, post office, health clinic and government services. Mining and exploration make up the most substantial industry. Regional Power manages the off-grid Dease Lake Generating Station, located about 30 km west of Dease Lake. The facility supplies the entire energy load for the community of Dease Lake. A 287-kilovolt transmission line, extending 344 kilometres from the existing Skeena substation south of Terrace to a new substation near Bob Quinn Lake (located about 180 kilometres by road south of Dease Lake) was completed in 2014. It supplies the new mine development at Imperial Metals Corporation’s Red Chris Project by way of a spur line from Bob Quinn Lake.

Geology and Mineralization

The Galaxie Project is underlain mainly by volcanic, intrusive and lesser sedimentary rocks of the Middle Triassic to Lower Jurassic Stikine Terrane which, elsewhere in northern British Columbia is known to host the large Red Chris, Schaft Creek, Galore and KSM and Snowfield porphyry deposits. Upper Triassic Stuhini Group volcanic rocks and a quartz feldspar porphyry dike complex host the Gnat copper deposit. The Gnat deposit is located near the northern contact of the Late Triassic to Middle Jurassic, multiphase Hotailuh Batholith-Three Sisters Pluton intrusive complex, which occupies most of the remainder of the Galaxie project-area and hosts a number of base and/or precious metals prospects and showings.

History

The first record of exploration in the Gnat Pass Property area was in 1960 when prospecting work by Cassiar Asbestos Corporation discovered copper mineralization in the vicinity of Lower Gnat Lake. Since that time, at least nine companies have explored the property completing geological mapping, rock, soil and stream sediment geochemical sampling, magnetic and induced polarization (“IP”) geophysical surveys and diamond drilling during the periods of 1960-1971, 1990-1996 and in 2005. Most of the historical work focused on the Gnat deposit and occurrences in the vicinity.

During the period 1965-1969, previous operators completed 18,390 metres of diamond drilling in 110 holes in this area. Most of this historical drilling focused on the Gnat deposit and carried out over an area measuring about 600 metres by 600 metres, down to a maximum depth of about 300 metres below surface.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

A historical estimate of "indicated reserves" of about 30 million tonnes grading 0.389% Cu for the Gnat deposit was reported by Lytton Minerals Ltd, in 1972. The estimate uses categories that are not recognized by National Instrument 43-101 Standards of Disclosure for Mineral Projects. The qualified person for the 2013 technical report has not done sufficient work to classify the historical estimate as a current mineral resource or mineral reserve. Quartz Mountain is not treating the historical estimate as current.

Past work on other mineral occurrences in the Galaxie Project area includes:

• At Hu, during the period 1969 to 2007, several mining companies carried out: silt, soil and rock geochemical sampling; geological mapping; Induced Polarization ("IP") and ground magnetic surveys; and 22 bulldozer trenches.

• At Disco, Stikine Moly and Stikine, during the period 1970-79, two companies carried out: silt, soil and rock geochemical sampling; geological mapping; IP, ground magnetic and VLF surveys; and limited hand trenching and test-pitting.

• At Nup, during the period 1970 to 2008, nine mining companies and one individual carried out: silt, soil and rock geochemical sampling; geological mapping; IP and ground magnetic surveys; and limited hand trenching and test-pitting. Three diamond drilling programs (14 holes) tested porphyry molybdenum+/-copper showings and soil geochemical anomalies.

• At Pat, during the period 1971-76, two companies carried out: grid soil surveys; IP and ground magnetic surveys; and a refraction seismic survey.

Current Target Areas

Gnat Deposit

In 2012, Quartz Mountain relogged historical drill holes and carried out geological mapping in the Gnat deposit-area. Two deep diamond drill holes totaling 1,164 metres were also drilled to test for continuation of copper mineralization beneath the historical reserve estimate. Hole GT12001 intersected two intervals of significant copper mineralization, including 56 metres grading 0.44% Cu, well below the extent of the historical estimate, demonstrating that porphyry-style copper mineralization in the Gnat deposit extends over a known vertical range of about 500 metres. In their lower portions, both holes encountered a major thrust fault which has structurally superimposed older deposit host rocks over younger Hazelton Group sedimentary rocks.

Geological mapping in the Gnat deposit area identified porphyry-style hydrothermal alteration characterized by occurrences of k-feldspar veining and flooding, tourmaline in veins or breccia bodies and chalcopyrite mineralization over a west-northwest trending zone measuring about 3.5 kilometres long by 700 metres to 1,000 metres wide. Contained within this large 'hydrothermal footprint' are the Creek Zone and Moss copper prospects, the two main known mineralized zones outside of the Gnat deposit area (see figure below).

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

There is considerable room to explore for new zones of copper mineralization at moderate to greater depths in portions of the Gnat deposit, in the Creek Zone and Moss prospect areas, and elsewhere along the 3.5 kilometre-long zone of porphyry-style hydrothermal alteration. Mineralization may include porphyry-type deposits or more constrained, but possibly higher grade, mineralized breccia bodies.

Other Targets

Preliminary prospecting of two gossans in the Dalvenie East area in 2012 located encouraging copper mineralization, occurring in chalcopyrite +/- bornite veins up to 10 cm wide, hosted in chlorite-altered diorite to monzodiorite wall rocks. Narrow k-feldspar alteration envelopes surrounding the veins also contain chalcopyrite and bornite. Magnetic signatures at Dalvenie East suggest that regional-scale faults, or subsidiary faults related to them, could control vein-type or fault-controlled copper-gold mineralization similar to that seen at the nearby Dalvenie prospect. This target was not followed up in 2013.

In 2013, an associated company completed ground exploration programs at some of the priority areas that Quartz Mountain had identified in 2012. At Hu, a series of alkali intrusions which are known to be the principal hosts in the Stikine-Iskut porphyry belt for porphyry copper-gold deposits were observed. The potential of the intrusions at Hu warrants assessment through further exploration.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.2.3 Other Properties

ZNT Project

The Company holds a 100% interest in the ZNT property, which consists of 21 claims covering an area of 10,171.6 hectares located in central British Columbia, some 15 kilometres southeast of the town of Smithers, BC. The property was staked by Quartz Mountain in 2012. Target definition was carried out in 2012 and 2013, and an initial drilling program was done but no economic mineralization was encountered. No further work is planned.

Angel's Camp Property

The Company retains a 1% net smelter return royalty payable to the Company on any production from the Angel's Camp property located in Lake County, Oregon. The Angel's Camp property is currently held by Alamos Gold Inc.

1.2.4 Market Trends

The discussion in this section references calendar years and dollar amounts are stated in United States dollars.

Copper prices have been variable since late 2011 and averaged lower in each of the past three years. Prices continue to be variable in 2015.

The gold price was on an uptrend to 2012. Prices decreased in 2013. In 2014 and so far in 2015, gold prices have been variable, with a decrease in the average price.

An upward trend in silver prices began in 2010, and continued to late September 2011, with prices reaching as high as $43/oz. Prices ranged from $26/oz and $35/oz between October 2011 and the end of 2012, then trended downward in 2013. Although prices have been more variable in 2014 and 2015, there has been an overall decrease in the average price.

Average annual prices for the past five years as well as the average prices of copper (Cu), gold (Au) and silver (Ag) so far during the 2015 calendar year are shown in the table below:

Source: www.metalprices.com

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.3      SELECTED ANNUAL INFORMATION

The following selected annual information is from the Company's annual financial statements which have been prepared in accordance with IFRS as issued by the International Accounting Standards Board ("IASB") and interpretations of the IFRS Interpretations Committee ("IFRIC") effective for the respective reporting years of the Company and are expressed in Canadian Dollars. The Company's audited financial statements are publicly available on SEDAR at www.sedar.com.

Amounts are expressed in thousands of Canadian dollars (except per share amounts).

		Fiscal year			Fiscal year			Fiscal year
		2015			2014			2013
		$			$			$
Total revenue for the year		–			–			–
Total loss for the year		1,410			865			3,459
Loss per share		0.05			0.03			0.13
Total assets at the end of the fiscal year		478			1,975			2,470
Total non-current liabilities at the end of the fiscal year		450			–			600

The Company does not currently generate revenue from its operations and the variation in its total loss was due in large part to the changes in its exploration and evaluation activities. The increase in loss during the fiscal year 2015 was due to impairment of mineral property interest triggered primarily by suppressed prices of the Company’s shares as the capital markets for junior resource companies continued to deteriorate and the Company curtailed its exploration and evaluation activities to conserve its cash resources. The impairment of mineral property interest has also contributed to the decrease in the Company’s total assets. The Company’s cash and cash equivalents decreased by 563,334 during the current fiscal year, due primarily to cash used in operations and for servicing of the convertible debenture.

Non-current liabilities increased during the current year as the convertible debenture was restructured and is now payable in equal annual instatements of $50,000.

1.4      SUMMARY OF QUARTERLY RESULTS

These amounts are expressed in thousands of Canadian Dollars, except per share amounts and the weighted average number of common shares outstanding. Minor differences are due to rounding.

The trend in quarterly net loss presented herein are in line with the discussions included in 1.3 Selected Annual Information above.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.5       RESULTS OF OPERATIONS AND FINANCIAL CONDITION

The following financial data has been prepared in accordance with IFRS and are expressed in Canadian dollars unless otherwise stated.

1.5.1 Loss for the year ended July 31, 2015 vs. 2014

Further to the discussions in 1.3 Selected Annual Information above, the following tables provide breakdown of exploration costs incurred during the year ended July 31, 2015 and 2014:

Recorded under geological expenses are cost recoveries pertaining to Mineral Exploration Tax Credits from the provincial government of British Columbia.

During the current fiscal year, administrative salaries and benefits decreased in line with the decrease in the exploration activities as the Company continued its focus on conserving cash resources. The following table provides a breakdown of general and administrative expenses incurred during the year ended July 31, 2015 and 2014:

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

		Year ended			Year ended
		July 31, 2015			July 31, 2014
Conferences and travel	$	–		$	8,147
Legal, accounting and audit		34,775			50,321
Office and administration		406,667			505,061
Regulatory, trust and filing		20,209			21,904
Shareholder communications		11,122			18,565
	$	472,773		$	603,998

1.6      LIQUIDITY

Historically, the Company's primary source of funding has been the issuance of equity securities for cash through private placements to sophisticated investors and institutions. The Company is in the process of acquiring and exploring mineral property interests. The Company's continuing operations are entirely dependent upon the ability of the Company to obtain the necessary financing to complete the exploration and development of its projects, the existence of economically recoverable mineral reserves at its projects, the ability of the Company to obtain the necessary permits to mine, on future profitable production of any mine and the proceeds from the disposition of its mineral property interests.

At July 31, 2015, the Company had cash and cash equivalents of $0.47 million and a working capital deficit of $2.6 million. Substantially all of the total short-term liabilities of $3.0 million at July 31, 2015 were payable to Hunter Dickinson Services Inc. ("HDSI"). In October 2014, the Company entered into an agreement with the holder of its convertible debenture to restructure the payment terms of the debenture (1.2 Overview).

The Company believes that its liquid assets at July 31, 2015 are sufficient to meet its known obligations, other than the amount payment to HDSI, it expects to pay over the next 12 months and to maintain its core mineral rights in good standing for this next 12 month period. The Company is actively managing its cash reserves, and curtailing activities as necessary in order to ensure its ability to meet payments as they come due.

Additional debt or equity financing will be required to fund additional exploration or development programs. However, there can be no assurance that the Company will continue to obtain additional financial resources or that it will be able to achieve positive cash flows.

Financial market conditions for junior exploration companies have resulted in very depressed equity prices. A further and continued deterioration in market conditions will increase the cost of obtaining capital and significantly limit the availability of funds to the Company in the future. Accordingly, management is actively monitoring the effects of the current economic and financing conditions on the Company’s business and reviewing discretionary spending, capital projects and operating expenditures, and implementing cash and cash management strategies.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Table of Obligations and Commitments

The following obligations existed at July 31, 2015:

		Payments due by period
					Less than 1
		Total			year			1-5 years			After 5 years
Amounts payable and other liabilities	$	4,062		$	4,062		$	–		$	–
Convertible debenture		500,000			50,000			450,000			–
Due to a related party		2,973,276			2,973,276			–			–
Total	$	3,477,338		$	3,027,338		$	450,000		$	–

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

1.7      CAPITAL RESOURCES

The Company had no material commitments for capital expenditures as at July 31, 2015.

The Company has no lines of credit or other sources of financing which have been arranged but are as of yet, unused.

At July 31, 2015, there were no externally imposed capital requirements to which the Company is subject and with which the Company has not complied.

As the Company continues to incur losses in support of exploration activities on its projects, Shareholders’ equity has come to be in a deficit position.

1.8      OFF-BALANCE SHEET ARRANGEMENTS

None.

1.9      TRANSACTIONS WITH RELATED PARTIES

Key management personnel

The required disclosure for the remuneration of the Company’s key management personnel is provided in note 9(a) of the accompanying audited consolidated financial statements for the years ended July 31, 2015 and 2014. These are also available at www.sedar.com.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Hunter Dickinson Inc.

Description of the relationship

Hunter Dickinson Inc. (“HDI”) and its wholly owned subsidiary Hunter Dickinson Services Inc. ("HDSI") are private companies established by a group of mining professionals engaged in advancing mineral properties for a number of publicly-listed exploration companies, one of which is the Company.

The following directors or officers of the Company also have a role within HDSI.

The business purpose of the related party transactions

HDSI provides technical, geological, corporate communications, regulatory compliance, and administrative and management services to the Company, on an as-needed and as-requested basis from the Company.

HDSI also incurs third party costs on behalf of the Company. Such third party costs include, for example, directors and officers insurance, travel, conferences, and technology services.

As a result of this relationship, the Company has access to a range of diverse and specialized expertise on a regular basis, without having to engage or hire full-time experts. The Company benefits from the economies of scale created by HDSI which itself serves several clients. The Company is also able to eliminate many of its fixed costs, including rent, technology, and other infrastructure which would otherwise be incurred for maintaining its corporate offices.

The measurement basis used

The Company procures services from HDSI pursuant to an agreement dated July 2, 2010. Services from HDSI are provided on a non-exclusive basis as required and as requested by the Company. The Company is not obligated to acquire any minimum amount of services from HDSI. The fees for services from HDSI are determined based on a charge-out rate for each employee performing the service and for the time spent by the employee. Such charge-out rates are agreed and set annually in advance.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Third party costs are billed at cost, without markup.

Ongoing contractual or other commitments resulting from the related party relationship

There are no ongoing contractual or other commitments resulting from the Company's transactions with HDSI, other than the payment for services already rendered and billed. The agreement may be terminated upon 60 days' notice by either of the Company or HDSI.

Transactions and balances

The required disclosure for the transactions and balances with HDSI is provided in note 9(b) of the accompanying audited consolidated financial statements for the years ended July 31, 2015 and 2014. These are also available at www.sedar.com.

1.10    FOURTH QUARTER

The Company recorded a net loss of $993,000 for the quarter ended July 31, 2015, compared to a net loss of $117,000 during the same quarter of fiscal 2014. This increase on net loss in the current quarter was mainly due to impairment of mineral property interest. During the current quarter, the Company did not incur significant exploration expenses and the Company’s administrative expenses decreased by $21,000, in line with the current depressed state of the Company business discussed herein.

1.11    PROPOSED TRANSACTIONS

There are no proposed material assets or business acquisitions or dispositions before the Board of Directors for consideration.

1.12    CRITICAL ACCOUNTING ESTIMATES

Not required. The Company is a Venture Issuer.

1.13    CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

The required disclosure is provided in Notes 2 of the accompanying audited consolidated financial statements as at and for the year ended July 31, 2015, publicly available on SEDAR at www.sedar.com.

1.14    FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The carrying amounts of cash and cash equivalents, amounts receivable, accounts payable and accrued liabilities, and balances due to related parties, approximate their fair values due to their short-term nature. The required disclosure is provided in Note 13 of the accompanying audited consolidated financial statements as at and for the year ended July 31, 2015, publicly available on SEDAR at www.sedar.com.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.15	OTHER MD&A REQUIREMENTS
1.15.1	Additional Disclosure for Venture Issuers Without Significant Revenue

(a)	exploration and evaluation assets or expenditures		The required disclosure is presented in Section 1.5 of this MD&A.
(b)	expensed research and development costs		Not applicable
(c)	intangible assets arising from development		Not applicable
(d)	general and administration expenses		The required disclosure is presented in Section 1.5 of this MD&A.
(e)	any material costs, whether expensed or recognized as assets, not referred to in paragraphs (a) through (d)		None

1.15.2 Disclosure of Outstanding Share Data

The following details the share capital structure as at the date of this MD&A:

		Number
Common shares		27,299,513
Share options		828,000

The Debenture is subject to mandatory and optional conversion provisions that trigger upon a completion by the Company of an equity financing for a minimum amount of $1,000,000 (see Section 1.2 Overview).

1.15.3 Internal Controls over Financial Reporting Procedures

The Company's management, including the Chief Executive Officer and the Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over financial reporting. Under the supervision of the Chief Executive Officer and Chief Financial Officer, the Company's internal control over financial reporting is a process designed 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 internal control over financial reporting includes those policies and procedures that:

• pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
   
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the company; and

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

• provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.

There has been no change in the design of the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting during the period covered by this Management's Discussion and Analysis.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of July 31, 2015. In making the assessment, it used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on their assessment, management has concluded that, as July 31, 2015, the Company's internal control over financial reporting was effective based on those criteria.

1.15.4 Disclosure Controls and Procedures

The Company's management, with the participation of its Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures. Based on that evaluation, the Company's Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported within the appropriate time periods and is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

1.15.5 Limitations of Controls and Procedures

The Company's management, including its Chief Executive Officer and Chief Financial Officer, believe that any system of disclosure controls and procedures or internal control over financial reporting, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Furthermore, the design of a control system must reflect the fact that there are resource constraints and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, they cannot provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been prevented or detected. These inherent limitations include the realities that judgments in decision-making can be faulty and breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by unauthorized override of controls. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Accordingly, because of the inherent limitations in a cost effective control system, misstatements due to error or fraud may occur and not be detected.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

1.16    RISK FACTORS

The risk factors associated with the principal business of the Company are discussed below. Due to the nature of the Company's business and the present stage of exploration and development of its projects in British Columbia, an investment in the securities of Quartz Mountain is highly speculative and subject to a number of risks. Briefly, these include the highly speculative nature of the resources industry characterized by the requirement for large capital investments from an early stage and a very small probability of finding economic mineral deposits. In addition to the general risks of mining, there are country-specific risks, including currency, political, social, permitting and legal risk. An investor should carefully consider the risks described below and the other information that Quartz Mountain furnishes to, or files with, the Securities and Exchange Commission and with Canadian securities regulators before investing in Quartz Mountain's common shares, and should not consider an investment in Quartz Mountain unless the investor is capable of sustaining an economic loss of the entire investment. The Company's actual exploration and operating results may be very different from those expected as at the date of this MD&A.

Going Concern Assumption

The Company's financial statements have been prepared assuming the Company will continue on a going concern basis. However, unless additional funding is obtained, this assumption will have to change. The Company has a negative working capital position, and has incurred losses since inception. Failure to continue as a going concern would require that Quartz Mountain's assets and liabilities be restated on a liquidation basis, which could differ significantly from the going concern basis.

Additional Funding Requirements

Further development of the Company's properties and continued operations will require additional capital. The Company currently does not have sufficient funds to explore the properties it holds. It is possible that the financing required by the Company will not be available, or, if available, will not be available on acceptable terms. If the Company does issue treasury shares to finance its operations or expansion plans, shareholders will suffer dilution of their investment and control of the Company may change. If adequate funds are not available, or are not available on acceptable terms, the Company will not be able to remain in business. In addition, a positive production decision at any of the Company's current projects or any other development projects acquired in the future will require significant resources and funding for project engineering and construction. Accordingly, the any development of the Company's properties depends upon the Company's ability to obtain financing through debt financing, equity financing, the joint venturing or disposition of its current projects, or other means. There is no assurance that the Company will be successful in obtaining financing for these or other purposes, including for general working capital.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Future Profits/Losses and Production Revenues/Expenses

The Company has no history of operations or earnings, and expects that its losses and negative cash flow will continue for the foreseeable future. The Company currently has a limited number of mineral properties and there can be no assurance that the Company will, if needed, be able to acquire additional properties of sufficient technical merit to represent a compelling investment opportunity. If the Company is unable to acquire additional properties, its entire prospects will rest solely with its current projects and accordingly, the risk of being unable to identify a mineral deposit will be higher than if the Company had additional properties to explore. There can be no assurance that the Company will ever be profitable in the future. The Company's operating expenses and capital expenditures may increase in subsequent years as needed consultants, personnel and equipment associated with advancing exploration, development and commercial production of its current properties and any other properties that the Company may acquire are added. The amounts and timing of expenditures will depend on the progress of on-going exploration, the results of consultants' analyses and recommendations, the rate at which operating losses are incurred, the execution of any joint venture agreements with strategic partners, and the Company's acquisition of additional properties and other factors, many of which are beyond the Company's control. The Company does not expect to receive revenues from operations in the foreseeable future, and expects to incur losses unless and until such time as its current properties, or any other properties the Company may acquire, commence commercial production and generate sufficient revenues to fund its continuing operations. The development of the Company's current properties and any other properties the Company may acquire will require the commitment of substantial resources to conduct the time-consuming exploration and development of properties. The Company anticipates that it would retain any cash resources and potential future earnings for the future operation and development of the Company's business. The Company has not paid dividends since incorporation and the Company does not anticipate paying any dividends in the foreseeable future. There can be no assurance that the Company will generate any revenues or achieve profitability. There can be no assurance that the underlying assumed levels of expenses will prove to be accurate. To the extent that such expenses do not result in the creation of appropriate revenues, the Company's business will be materially adversely affected. It is not possible to forecast how the business of the Company will develop.

Exploration, Development and Mining Risks

Resource exploration, development, and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not reduce, including among other things, unsuccessful efforts resulting not only from the failure to discover mineral deposits but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. Few properties that are explored are ultimately developed into producing mines. Unusual or unexpected formations, formation pressures, fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks involved in the operation of mines and the conduct of exploration programs. The Company will rely upon consultants and others for exploration, development, construction and operating expertise. Substantial expenditures are required to establish mineral resources and mineral reserves through drilling, to develop metallurgical processes to extract the metal from mineral resources, and in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

No assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices, which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection. The exact effect of these factors cannot accurately be predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

Permits and Licenses

The operations of the Company require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits which may be required to carry out exploration and development for the Company’s Projects.

Infrastructure Risk

The operations of the Company are carried out in geographical areas which lack adequate infrastructure and are subject to various other risk factors. Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants which affect capital and operating costs. Lack of such infrastructure or unusual or infrequent weather phenomena, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, financial condition and results of operations.

Changes in Local Legislation or Regulation

The Company's mining and processing operations and exploration activities are subject to extensive laws and regulations governing the protection of the environment, exploration, development, production, exports, taxes, labour standards, occupational health, waste disposal, toxic substances, mine and worker safety, protection of endangered and other special status species and other matters. The Company's ability to obtain permits and approvals and to successfully operate in particular communities may be adversely impacted by real or perceived detrimental events associated with the Company's activities or those of other mining companies affecting the environment, human health and safety of the surrounding communities. Delays in obtaining or failure to obtain government permits and approvals may adversely affect the Company's operations, including its ability to explore or develop properties, commence production or continue operations. Failure to comply with applicable environmental and health and safety laws and regulations may result in injunctions, fines, suspension or revocation of permits and other penalties. The costs and delays associated with compliance with these laws, regulations and permits could prevent the Company from proceeding with the development of a project or the operation or further development of a mine or increase the costs of development or production and may materially adversely affect the Company's business, results of operations or financial condition. The Company may also be held responsible for the costs of addressing contamination at the site of current or former activities or at third party sites. The Company could also be held liable for exposure to hazardous substances.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Environmental Matters

All of the Company's operations are and will be subject to environmental regulations, which can make operations expensive or prohibit them altogether. The Company may be subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products that could occur as a result of its mineral exploration, development and production. In addition, environmental hazards may exist on a property in which the Company directly or indirectly holds an interest, which are unknown to the Company at present and have been caused by previous or existing owners or operators of the Company's projects. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties, or the requirement to remedy environmental pollution, which would reduce funds otherwise available to the Company and could have a material adverse effect on the Company. If the Company is unable to fully remedy an environmental problem, it could be required to suspend operations or undertake interim compliance measures pending completion of the required remedy, which could have a material adverse effect on the Company.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations. There is also a risk that the environmental laws and regulations may become more onerous, making the Company's operations more expensive. Many of the environmental laws and regulations will require the Company to obtain permits for its activities. The Company will be required to update and review its permits from time to time, and may be subject to environmental impact analyses and public review processes prior to approval of the additional activities. It is possible that future changes in applicable laws, regulations and permits or changes in their enforcement or regulatory interpretation could have a significant impact on some portion of the Company's business, causing those activities to be economically re-evaluated at that time.

Groups Opposed to Mining May Interfere with the Company's Efforts to Explore and Develop its Properties

Organizations opposed to mining may be active in the regions in which the Company conducts its exploration activities. Although the Company intends to comply with all environmental laws and maintain good relations with local communities, there is still the possibility that those opposed to mining will attempt to interfere with the development of the Company's properties. Such interference could have an impact on the Company's ability to explore and develop its properties in a manner that is most efficient or appropriate, or at all, and any such impact could have a material adverse effect on the Company's financial condition and the results of its operations.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Market for Securities and Volatility of Share Price

There can be no assurance that active trading market in the Company's securities will be established or sustained. The market price for the Company's securities is subject to wide fluctuations. Factors such as announcements of exploration results, as well as market conditions in the industry or the economy as a whole, may have a significant adverse impact on the market price of the securities of the Company.

The stock market has from time to time experienced extreme price and volume fluctuations that have often been unrelated to the operating performance of particular companies.

Conflicts of Interest

The Company's directors and officers may serve as directors or officers of other companies, joint venture partners, or companies providing services to the Company or they may have significant shareholdings in other companies. Situations may arise where the directors and/or officers of the Company may be in competition with the Company. Any conflicts of interest will be subject to and governed by the law applicable to directors' and officers' conflicts of interest. In the event that such a conflict of interest arises at a meeting of the Company's directors, a director who has such a conflict will abstain from voting for or against the approval of such participation or such terms. In accordance with applicable laws, the directors of the Company are required to act honestly, in good faith and in the best interests of the Company.

General Economic Conditions

Global financial markets have experienced a sharp increase in volatility during the last few years. Market conditions and unexpected volatility or illiquidity in financial markets may adversely affect the prospects of the Company and the value of the Company's shares.

Reliance on Key Personnel

The Company is dependent on the continued services of its senior management team, and its ability to retain other key personnel. The loss of such key personnel could have a material adverse effect on the Company. There can be no assurance that any of the Company's employees will remain with the Company or that, in the future, the employees will not organize competitive businesses or accept employment with companies competitive with the Company.

There can be no assurance that the Company will be able to attract, train or retain qualified personnel in the future, which would adversely affect its business.

Competition

The resources industry is highly competitive in all its phases, and the Company will compete with other mining companies, many of which have greater financial, technical and other resources. Competition in the mining industry is primarily for: attractive mineral rich properties capable of being developed and producing economically; the technical expertise to find, develop and operate such properties; the labour to operate the properties; and the capital for the purpose of funding such properties. Many competitors not only explore for and mine certain minerals, but also conduct production and marketing operations on a worldwide basis. Such competition may result in the Company being unable to acquire desired properties, to recruit or retain qualified employees or to acquire the capital necessary to fund its operations and develop its properties. The Company's inability to compete with other mining companies for these resources could have a materially adverse effect on the Company's results of operation and its business.

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QUARTZ MOUNTAIN RESOURCES LTD.

FOR THE YEAR ENDED JULY 31, 2015

MANAGEMENT’S DISCUSSION AND ANALYSIS

Uninsurable Risks

In the course of exploration, development and production of mineral properties, certain risks, and in particular, unexpected or unusual geological operating conditions including rock bursts, cave ins, fires, flooding and earthquakes may occur. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons.

Land Claims

In Canada, aboriginal interests, rights (including treaty rights), claims and title may exist notwithstanding that they may be unregistered or overlap with other tenures and interests granted to third parties. Generally speaking, the scope and content of such rights are not well defined and may be the subject of litigation or negotiation with the government. The government has a legal obligation to consult First Nations on proposed activities that may have an impact on asserted or proven aboriginal interests, claims, rights or title. All of the mineral claims in the Company's projects are identified by the Province of British Columbia as overlapping with areas in which certain aboriginal groups have asserted aboriginal interests, rights, claims or, title or undefined rights under historic treaties. Nevertheless, potential overlaps between the Company's properties and existing or asserted aboriginal interests, rights, claims or, title, or undefined rights under historic treaties, may exist notwithstanding whether the Province of British Columbia has identified such interests, rights, claims or, title, or undefined rights under historic treaties.

Property Title

The acquisition of title to resource properties is a very detailed and time consuming process. Title to, and the area of, resource claims may be disputed. Although the Company believes it has taken reasonable measures to ensure that title to the mineral claims comprising part of its projects are held as described, there is no guarantee that title to any of those claims will not be challenged or impaired. There may be valid challenges to the title of any of the mineral claims comprising the Company's projects that, if successful, could impair development or operations or both.

The Mineral Property Underlying the Company's Net Smelter Return Royalty Interest Contains no Known Ore

The Company holds a 1% net smelter return ("NSR") royalty interest on the Quartz Mountain Property (recently renamed "Angel's Camp"), an exploration stage prospect in Oregon. The Company's interest in the property will be limited to any future NSR that would be forthcoming only if or when any mining commences on the property. There is currently no known body of ore on the property. Extensive additional exploration work will be required to ascertain if any mineralization may be economic.

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Form 52-109FV1
Certification of Annual Filings
Venture Issuer Basic Certificate

I, Ronald W. Thiessen, Chief Executive Officer of Quartz Mountain Resources Ltd., certify the following:

1.	Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Quartz Mountain Resources Ltd. (the “issuer”) for the financial year ended July 31, 2015.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a 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 was made, for the period covered by the annual filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

Date: October 27, 2015

/s/ Ronald W. Thiessen
_______________________
Ronald W. Thiessen
Chief Executive Officer

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Form 52-109FV1
Certification of Annual Filings
Venture Issuer Basic Certificate

I, Michael Lee, Chief Financial Officer of Quartz Mountain Resources Ltd., certify the following:

1.	Review: I have reviewed the AIF, if any, annual financial statements and annual MD&A, including, for greater certainty, all documents and information that are incorporated by reference in the AIF (together, the “annual filings”) of Quartz Mountain Resources Ltd. (the “issuer”) for the financial year ended July 31, 2015.
2.	No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the annual filings do not contain any untrue statement of a 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 was made, for the period covered by the annual filings.
3.	Fair presentation: Based on my knowledge, having exercised reasonable diligence, the annual financial statements together with the other financial information included in the annual filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the annual filings.

Date: October 27, 2015

/s/ Michael Lee
_______________________
Michael Lee
Chief Financial Officer

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