---

United StatesSecurities and Exchange CommissionWashington, D.C.
20549

_________________________________________________

FORM 20-F
  AMENDMENT NO. 2

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

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934  For the fiscal year ended May 31, 2007

OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934  n/a

OR

[ ] SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934- n/a

Commission File Number 000-31076

Teryl Resources
Corp.(Exact name of Registrant as specified in its
charter)

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

British Columbia, Canada(Jurisdiction of
incorporation or organization)

240 - 11780 Hammersmith WayRichmond, British
Columbia V7A 5E9, Canada(Address of principal executive offices)

Securities registered or to be registered pursuant to Section
12(b) of the Act:None(Title of Class)

Securities registered or to be registered pursuant to Section
12(g) of the Act:Common Stock, no par value(Title of Class)

Securities for which there is reporting obligation pursuant to
Section 15(d) of the Act:Common Stock, no par value(Title of
Class)

Indicate the number of outstanding shares of each of the
issuers classes of capital or common stock as of the close of the period
covered by the annual report: 40,862,528 shares of common stock

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No
[X]

---

If this report is an annual or transition report, indicate by
check mark if the registrant is not required to file reports pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934.Yes [ ] No [X]

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.Yes [X] No [ ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated filer. See
definition of accelerated filer and large accelerated filer in Rule 12b-2 of
the Exchange Act. (Check one):

Large accelerated filer:[ ] Accelerated filer: [ ]
Non-accelerated filer: [X]

Indicate by check mark which financial statement item the
registrant has elected to follow: Item 17 [X] Item 18 [ ]

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):
Yes[ ] No[X]

Index to Exhibits on Page 74

2

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TABLE OF CONTENTS

|INTRODUCTION                                                        | 5 
|------------------------------------------------------------------- | --
|PART
      I                                                        | 6 
|ITEM
      1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | 6 
|ITEM
      2. OFFER STATISTICS AND EXPECTED TIMETABLE               | 8 
|ITEM
      3. KEY INFORMATION                                       | 8 
|A.
      SELECTED FINANCIAL DATA                                    | 8 
|B.
      CAPITALIZATION AND INDEBTEDNESS                            | 10
|C.
      REASON FOR THE OFFER AND USE OF PROCEEDS                   | 10
|D.
      RISK FACTORS                                               | 11
|ITEM
      4. INFORMATION ON THE COMPANY                            | 17
|A.
      HISTORY AND DEVELOPMENT                                    | 17
|B.
      BUSINESS OVERVIEW                                          | 18
|C.
      ORGANIZATIONAL STRUCTURE                                   | 21
|D.
      PROPERTY, PLANT AND EQUIPMENT                              | 22
|ITEM
      4A. UNRESOLVED STAFF COMMENTS                            | 44
|ITEM
      5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS          | 44
|A.
      OPERATING RESULTS                                          | 45
|B.
      LIQUIDITY AND CAPITAL RESOURCES                            | 47
|C.
      RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.       | 49
|D.
      TREND INFORMATION                                          | 50
|E.
      OFF-BALANCE SHEET ARRANGEMENTS                             | 50
|F.
      TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS              | 50
|G.
      SAFE HARBOR                                                | 51
|ITEM
      6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES            | 51
|A.
      DIRECTORS AND SENIOR MANAGEMENT                            | 51
|B.
      COMPENSATION                                               | 53
|C.
      BOARD PRACTICES                                            | 56
|D.
      EMPLOYEES                                                  | 56
|E.
      SHARE OWNERSHIP                                            | 56
|ITEM
      7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS     | 57
|A.
      MAJOR SHAREHOLDERS.                                        | 57
|B.
      RELATED PARTY TRANSACTIONS                                 | 57
|C.
      INTERESTS OF EXPERTS AND COUNSEL.                          | 58
|ITEM
      8. FINANCIAL INFORMATION                                 | 59
|A.
      CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION    | 59
|B.
      SIGNIFICANT CHANGES                                        | 59
|ITEM
      9. THE OFFER AND LISTING                                 | 59
|A.
      OFFER AND LISTING DETAILS                                  | 59
|B.
      PLAN OF DISTRIBUTION                                       | 61
|C.
      MARKETS                                                    | 61
|D.
      SELLING SHAREHOLDERS                                       | 61
|E.
      DILUTION                                                   | 61
|F.
      EXPENSES OF THE ISSUE                                      | 61
|ITEM
      10. ADDITIONAL INFORMATION                               | 61

3

---

|A. SHARE CAPITAL                                                                            | 61
|------------------------------------------------------------------------------------------- | --
|B. MEMORANDUM AND ARTICLES OF ASSOCIATION                                                   | 66
|C. MATERIAL CONTRACTS                                                                       | 68
|D. EXCHANGE CONTROLS                                                                        | 68
|E. TAXATION.                                                                                | 69
|F. DIVIDENDS AND PAYING AGENTS                                                              | 70
|G. STATEMENT BY EXPERTS                                                                     | 70
|H. DOCUMENTS ON DISPLAY                                                                     | 70
|I. SUBSIDIARY INFORMATION.                                                                  | 70
|ITEM 11.
      QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 70
|ITEM
      12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 71
|PART II                                                                                     | 71
|ITEM
      13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 71
|ITEM 14. MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 71
|A. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY
      HOLDERS                           | 71
|B. USE OF PROCEEDS                                                                          | 71
|ITEM
      15. CONTROLS AND PROCEDURES                                                      | 71
|ITEM 15T. CONTROLS
      AND PROCEDURES                                                     | 72
|ITEM
      16. [Reserved]                                                                   | 72
|ITEM 16A. AUDIT
      COMMITTEE FINANCIAL EXPERT                                            | 72
|ITEM
      16B. CODE OF ETHICS                                                              | 72
|ITEM 16C. PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                      | 72
|ITEM
      16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT  COMMITTEES                 | 72
|ITEM 16E. PURCHASES
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      | 73
|PART III                                                                                    | 74
|ITEM 17. FINANCIAL
      STATEMENTS                                                         | 74
|ITEM
      18. FINANCIAL STATEMENTS                                                         | 74
|ITEM 19. EXHIBITS                                                                           | 74
|GLOSSARY OF MINING TERMS                                                                    | 75
|SIGNATURE PAGE                                                                              | 80

4

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EXPLANATORY NOTE:

We are amending the Registration Statement and Annual Report
  of Teryl Resources Corp., on Form 20-F, that we filed with the Securities and
  Exchange Commission on October 22, 2007 to incorporate comments from the SEC
  reviewers. We have revised Items 3, 4, 5, 6, 7, 10, 11, 15 and 16C, in order
  to reflect the effects of the amendments. We have also amended Note 14. to our
  Financial Statements. This Form 20-F/A has been reproduced in full. Other than
  as expressly set forth above, this Form 20-F/A does not, and does not purport
  to, amend, update or restate the information in any other Item of the Form 20-F
  or reflect any events that have occurred after the Form 20-F was filed. The
  filing of this Form 20-F/A shall not be deemed an admission that the original
  Form 20-F, when filed, included any untrue statement of a material fact or omitted
  to state a material fact necessary to make a statement not misleading.

INTRODUCTION

Teryl Resources Corp. (hereinafter referred to as the
Registrant or the Company or Teryl) was incorporated on May 23, 1980, as
Candy Mountain Gold Corporation under a perpetual charter pursuant to the
Company Act(British Columbia) by the registration of its Memorandum of
Association and Articles of Association. On January 20, 1984, a special
resolution was passed changing its name to Teryl Resources Corp.

In September 1985 we made a public offering of our Common
Shares to residents of British Columbia and, following the completion of the
offering, our shares were listed on the Vancouver Stock Exchange (now the TSX
Venture Exchange) on September 13, 1985. On October 25, 1985 a special
resolution was passed authorizing the creation of 5,000,000 preferred shares
with a par value of $1.00.

On November 30, 1988, a special resolution was passed altering
our Memorandum and adopting new Articles which changed our authorized capital
from 10,000,000 Common Shares without par value to 30,000,000 Common Shares
without par value and 5,000,000 Preferred Shares of non-voting stock with a par
value of $1.00.

On November 20, 2000, a special resolution was passed altering
our Memorandum and adopting new Articles which changed our authorized capital
from 30,000,000 Common Shares without par value to 100,000,000 Common Shares
without par value. Of these, 40,862,528 Common Shares were issued and
outstanding as of May 31, 2007, and 43,577,528 as at October 4, 2007. 5,000,000
Preferred Shares of non-voting stock with a par value of $1.00 have also been
authorized. No Preferred Shares have ever been issued.

At the annual general meeting held January 22, 2003, the board
of directors of the Company was granted approval to apply to have the Company's
named changed to Teryl Gold Inc. The name change was accepted by the Province of
British Columbia on February 4, 2003; however, the Company did not complete the
paperwork for informing the regulatory authorities, and, therefore, continued to
use the name of Teryl Resources Corp. On November 25, 2004, the name was changed
back to Teryl Resources Corp. with the Province of British Columbia.

On March 29, 2004, the new British Columbia Business
Corporations Act (the "BCA") came into force in British Columbia and replaced
the former Company Act (Former Act), which is the statute under which we were
previously governed. Under the BCA, we have two years within which to transition
("Transition") under the new statute. In accordance with the BCA, we cannot
amend our Articles or Notice of Articles until the Transition to the BCA is
completed. We filed a transition application with the Registrar of Companies
British Columbia to transition to the BCA and completed the Transition on
September 13, 2004.

On November 15, 2004, at the Annual General Meeting of
shareholders, our shareholders passed a special resolution to delete and replace
our Articles as they applied to the Former Act in their entirety for new
articles under the BCA. Our Incorporation Number is BC0187279.

BUSINESS OF TERYL RESOURCES CORP.

We make expenditures on acquiring mineral properties and
carrying out exploration work. We also acquire oil and gas property interests
and participate in drilling wells. The recoverability of amounts shown for
investments, mineral

5

---

properties, interest in oil and gas properties and the related
deferred expenditures are dependent upon the existence of economically
recoverable reserves, the ability to obtain the necessary financing to complete
the exploration, the profitability of future production or our ability to
dispose of those assets on a profitable basis. Our ongoing operation is
dependent upon cash flow from successful operations and equity financing (see
Item 3.D. Risk Factors). The Company has incurred a loss of $465,540 in the year
ended May 31, 2007 (2006 - $430,646; 2005- $515,740). These consolidated
financial statements do not include adjustments that would be necessary should
it be determined that we may be unable to continue as a going concern.

FINANCIAL AND OTHER INFORMATION

In this 20-F, unless otherwise specified, all dollar amounts
are expressed in Canadian Dollars (CDN$ or $). The Government of Canada
permits a floating exchange rate to determine the value of the Canadian Dollar
against the U.S. Dollar (US$).

FOREIGN PRIVATE ISSUER STATUS

Teryl Resources Corp. (the "Company), is a Canadian
corporation incorporated under the laws of the Province of British Columbia.
Over 50% of its common stock is held by non-United States citizens and
residents; our business is administered principally outside the United States;
and all our executive officers and directors are Canadian citizens and
residents. As a result, we believe that we qualify as a "foreign private
issuer".

FORWARD-LOOKING STATEMENTS

Certain statements in this document constitute forward-looking
statements. Some, but not all, forward-looking statements can be identified by
the use of words such as anticipate, believe, plan, estimate, expect,
and intend, statements that an action or event may, might, could,
should, or will be taken or occur, or other similar expressions. Although we
have attempted to identify important factors that could cause actual results to
differ materially from expected results, such forward-looking statements involve
known and unknown risks, uncertainties and other factors which may cause our
actual results, performance or achievements, or other future events, to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others, the following risks: the risks associated with outstanding
litigation, if any, risks associated with project development; the need for
additional financing; operational risks associated with mining and mineral
processing; fluctuations in metal prices; title matters; uncertainties and risks
related to carrying on business in foreign countries; environmental liability
claims and insurance; reliance on key personnel; the potential for conflicts of
interest among certain officers, directors or promoters with certain other
projects; the absence of dividends; currency fluctuations; competition;
dilution; the volatility of our common share price and volume; and tax
consequences to U.S. Shareholders. We are obligated to keep our information
current and revise any forward-looking statements because of new information,
future events or otherwise.

PART I

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND
ADVISORS

The following table lists the names of our Directors as of
September 19, 2007.

Name
    Age
    Date First Elected or AppointedJohn Robertson (2)
    66
    October 25, 1985Jennifer Lorette
      (1)(2)
    35
    February 20, 2001Susanne Robertson
      (1)(2)
    61
    September 12, 1990Monique van Oord
      (1)(2)
    46
    October 17, 2002


|(1) | Member of Audit Committee.                                           
|--- | ---------------------------------------------------------------------
|(2) | Suite 240 - 11780 Hammersmith Way, Richmond, BC V7A 5E9,
      Canada

6

---

Senior Management

The following table lists the names of our Senior Management as
of May 31, 2007, and of the date of this 20-F. Our Senior Management serves at
the pleasure of the Board of Directors.

Name
    Age
    Date First Elected or AppointedJohn Robertson , President and Secretary (1)
    66
    October 25, 1985Monique van Oord , Chief Financial Officer (1)
    46
    October 17, 2002


|(1) | Suite 240 - 11780 Hammersmith Way, Richmond, BC V7A 5E9,
      Canada
|--- | ---------------------------------------------------------------------

Mr. Robertsonsbusiness functions, as our President and
principal executive officer, include strategic planning, business development,
operations, financial administration, liaison with
auditors-accountants-lawyers-regulatory authorities-financial community/
shareholders; and preparation /payment/ organization of our expenses/taxes/
activities, and reporting to the Board of Directors. Mr. Robertsons business
functions, as our Secretary, include financial administration; accounting and
financial statements; liaison with auditors, accountants, and financial
community/shareholders; and preparation/payment/organization of our
expenses/taxes/activities. He assists in ensuring our compliance with all
statutory and regulatory compliance. Mr. Robertsons business functions, as our
Corporate Secretary, include attending and acting as the recording secretary of
all meetings of the Board, shareholders and committees of the Board; entering or
causing to be entered in records kept for that purpose minutes of all
proceedings; as and when instructed, causing preparation and dissemination of
all notices to shareholders, Directors, officers, auditors and members of
committees of the Board; is the custodian of the stamp or mechanical device
generally used for affixing our corporate seal and of all books, records and
instruments belonging to us, except when some other officer or agent has been
appointed for that purpose; and in the future can have such other powers and
duties as the Board or the chief executive officer may specify. Mr. Robertson
may delegate all or part of his duties as Corporate Secretary to a nominee from
time to time.

Ms. van Oordsbusiness functions, as our Chief
Financial Officer include financial administration, accounting, liaison with
auditors-accountants, overseeing business and administrative operations of the
Company and preparation /payment/ organization of our expenses/taxes/activities,
and reporting to the Board of Directors.

|Advisors                                
|----------------------------------------
|                                        
|Our Canadian Legal Counsel is:          
|                                        
|Tupper Jonsson & Yeadon                 
|Attn: Carl R. Jonsson                   
|Barristers & Solicitors                 
|1710 - 1177 West Hastings Street        
|Vancouver, B.C. V6E 2L3                 
|Tel: (604) 640-6357; Fax: (604) 681-0139
|                                        
|Our Bank is:                            
|                                        
|Bank of Montreal                        
|6088 No. 3 Road,                        
|Richmond, BC Canada V7A 5H5             
|(604) 668-1575                          

7

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|Auditors                                                            
|--------------------------------------------------------------------
|                                                                    
|Our auditor is:                                                     
|                                                                    
|Morgan & Company, Chartered Accountants                             
|Suite 1488, 700 Georgia Street                                      
|Vancouver, British Columbia Canada V7Y 1A1                          
|Telephone: (604) 687 5841                                           
|Facsimile: (604) 687 0075                                           
|                                                                    
|We changed auditors in September 2004. Our former auditor
      was:
|                                                                    
|June Fitzmartyn, Chartered Accountant                               
|300 1770 West 7th Avenue                                           
|Vancouver, B.C. V6J 4Y6                                             
|Telephone: 604-733-5713                                             
|Facsimile: 604-733-2747                                             

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

This Form 20-F is being filed as an annual report and a
registration statement under the Exchange Act, and accordingly, the information
called for in Item 2 is not required.

ITEM 3. KEY INFORMATION

A. SELECTED FINANCIAL DATA

Our selected financial data for Fiscal 2007, 2006, 2005 and
2004 ended May 31st was derived from our financial statements that have been
audited by Morgan & Company Chartered Accountants, as indicated in their
audit reports. Our selected financial data for Fiscal 2003 ended May 31st was
derived from our financial statements that have been audited by June Fitzmartyn,
Chartered Accountant, as indicated in her audit report. Both Morgan &
Company and June Fitzmartyn are members of the Canadian Institute of Chartered
Accountants.

The selected financial data should be read in conjunction with
the financial statements and other financial information included elsewhere in
the 20-F.

We have not declared any dividends since incorporation and do
not anticipate that we will do so in the foreseeable future. Our present policy
is to retain all available funds for use in our operations and the expansion of
our business.

The information in the following table is derived from our
financial statements, which have been prepared in accordance with Canadian
Generally Accepted Accounting Principles (GAAP) and Canadian/USA Generally
Accepted Auditing Standards (GAAS). All material numerical differences between
Canadian GAAP and US GAAP, are described in Note 14 to our audited financial
statements for the years ended May 31, 2007 and 2006.

The selected financial data set forth in the following table is
expressed in Canadian dollars. Since June 1, 1970, the Government of Canada has
permitted a floating exchange rate to determine the value of the Canadian dollar
as compared to the United States dollar. At September 28, 2007, US$1.00 was
equal to approximately C $0.9959.

The following represents our selected financial data for each
of the past five fiscal years, ending on May 31. The data presented is prepared
in accordance with Canadian generally accepted accounting principles, and
reconciliation of the data to U.S. GAAP:

8

---

Fiscal Years Ended May 31

May
      31, 2007
    May
      31, 2006
    May
      31, 2005
    May
      31, 2004
    May
      31, 2003CANADIAN GAAPRevenue
    $33,714
    $27,154
    $
      28,307
    $21,037
    $24,255Income (Loss) for the Period
    $(465,540)
    $ (430,646)
    $ (515,740)
    $(791,776)
    $(323,812)Basic Income (Loss) Per Share
    $(0.01)
    $(0.01)
    $ (0.01)
    $ (0.03)
    $(0.01)Dividends Per Share
    $Nil
    $Nil
    $Nil
    $Nil
    $NilWeighted Average. Shares
    39,663,029
    36,889,399
    34,436,365
    28,295,934
    23,934,235Period-end Shares (#)
    40,862,528
    39,468,188
    36,777,688
    33,180,688
    25,238,088Working Capital
    $(278,043)
    $123,556
    $138,460
    $3,473
    $(1,395,628)Mineral Properties
    $231,086
    $190,236
    $219,397
    $196,795
    $176,150Long-Term Debt
    $Nil
    $Nil
    $Nil
    $Nil
    $NilCapital Stock
    $10,839,258
    $10,624,107
    $9,944,335
    $9,018,122
    $6,297,375Retained Earnings (Deficit)
    $(7,932,995)
    $(7,467,455)
    $(7,036,809)
    $(6,521,069)
    $(5,729,293)Total Assets
    $3,562,295
    $3,494,763
    $3,409,709
    $3,144,121
    $2,117,591U.S GAAP
      (2)Net Loss (1)
    $(691,055)
    $(749,749)
    $(756,744)
    $(1,444,266)
    $(543,950)Loss Per Share
    $(0.02)
    $(0.02)
    $(0.02)
    $(0.05)
    $(0.02)Mineral Properties (3)
    $231,086
    $190,236
    $219,397
    $196,795
    $176,150Shareholders Equity (Deficiency)
    $(26,832)
    $337,182
    $408,838
    $234,842
    $(1,214,996)Total Assets
    $273,446
    $435,920
    $665,114
    $642,583
    $264,541Mineral Properties
    $231,086
    $190,236
    $219,397
    $196,795
    $176,150Long-Term Debt
    $Nil
    $Nil
    $Nil
    $Nil
    $NilCapital Stock
    $10,839,258
    $10,624,107
    $9,944,335
    $9,018,122
    $6,297,375


(1) Cumulative Net Loss since incorporation through May 31,
2007 under US GAAP was $11,221,844 approximately.

(2) Under US GAAP, options granted to non-employees as
compensation for services provided are fair valued and an expense recorded.

(3) Under SEC interpretation of US GAAP, all costs related to
exploration-stage properties are expensed in the period incurred.

Reference is made to "Item 4. Information on the Company" and
"Item 5. Operating and Financial Review and Prospects for a description of the
initiation and progression of our activities since incorporation.

Currencies and Exchange Rates:

We publish our financial statements in Canadian dollars. Unless
otherwise indicated, monetary amounts referred to in this 20-F are in Canadian
dollars. Unless otherwise indicated, all translations from Canadian dollars to
US dollars have been made at a rate of CDN$ 1.0701 to US$ 1.00, the noon buying
rate as certified for customs purposes by the

9

---

Federal Reserve Bank of New York (the "Noon Buying Rate") on
May 31, 2007. We do not represent that Canadian dollar or US dollar amounts
could be converted into US dollars or Canadian dollars, as the case may be, at
any particular rate, the rates below or at all. On September 28, 2007, the Noon
Buying Rate was CDN$ 0.9959 to US$ 1.00. The following table sets forth noon
buying rate for US dollars in New York City for cable transfers in Canadian
dollars as certified for customs purposes by the Federal Reserve Bank of New
York for the periods indicated:

The following table reflects the monthly high and low exchange
rates for U.S.$1.00 to the Canadian dollar for the following periods.

Month
    Year
    High
      (CAD$)
    Low
      (CAD$)September
    2007
    1.0546
    0.9959August
    2007
    1.0754
    1.0497July
    2007
    1.0689
    1.0372June
    2007
    1.0727
    1.0579May
    2007
    1.1136
    1.0701April
    2007
    1.1583
    1.1068March
    2007
    1.181
    1.153


The following table lists the average exchange rate for US$1.00
to the Canadian dollar for the last five years based on the average month-end
exchange rates.

Year
    Average (CAD $)
    Low/High (CAD$)
    May 31
      (CAD $)2007
    1.1362
    1.1852/1.0701
    1.07012006
    1.1738
    1.0989/1.2578
    1.10272005
    1.2602
    1.1775/1.3772
    1.25122004
    1.3435
    1.2690/1.4114
    1.36662003
    1.5257
    1.3446/1.5963
    1.3712


B. CAPITALIZATION AND INDEBTEDNESS

The following table sets forth our capitalization and
indebtedness as of August 31, 2007:

SHAREHOLDERS EQUITY

43,577,528 shares
      issued and outstanding
    $11,246,508Contributed
      Surplus
    $285,754Retained Earnings
      (deficit)
    $8,013,425Net Stockholders
      Equity
    $3,501,018TOTAL
      CAPITALIZATIONStock Options
      Outstanding
    2,487,500Warrants
      Outstanding
    5,133,340Preference Shares
      Outstanding:
    NilCapital Leases:
    NilGuaranteed Debt
    NilSecured Debt:
    Nil


C. REASON FOR THE OFFER AND USE OF PROCEEDS

This Form 20-F is being filed as an annual report and a
registration statement under the Exchange Act, and accordingly, the information
called for in Item 3.C is not required

10

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D. RISK FACTORS

The occurrence of any of the following risks could hurt our
business, financial condition or results of operations. In such case, the
trading price of our shares could decline and you could lose all or part of your
investment. Other risks and uncertainties not now known to us or that we think
are immaterial may also impair our business.

RISK FACTORS RELATED TO OUR BUSINESS

We may not be able to secure the financing necessary to
explore, develop and produce our mineral properties.

We do not presently have sufficient financial resources or
operating cash-flow to undertake solely all of our planned exploration and
development programs. The development of our properties depends on our ability
to obtain additional required financing or obtaining joint venture partners.

As noted in our audited consolidated financial statements for
the year ended May 31, 2007 we have incurred significant operating losses and
have an accumulated deficit of $ 7,932,995 at May 31, 2007. Furthermore, we had
a working capital deficit of $ 278,043 as at May 31, 2007, which is not
sufficient to achieve our planned business objectives. Our ability to continue
as a going concern is dependent on continued financial support from our
shareholders and other related parties, our ability to raise equity capital
financing, and the attainment of profitable operations, external financings and
further share issuance to meet our liabilities as they become payable and
satisfy working capital and operating needs (see Item 5.B. Liquidity and Capital
Resources).

We expect to incur significant losses for the foreseeable
future.

We expect to incur significant losses for the foreseeable
future and cannot be certain when or if we will achieve profitability. Failure
to become and remain profitable will adversely affect the value of our Common
Shares and our ability to raise capital and continue operations (see Item 5.B.
Liquidity and Capital Resources).

Our business may be affected by such matters as changes
in general economic conditions, changes in laws, regulations, and other
factors.

From time to time, our business may be affected by such matters
as changes in general economic conditions, changes in laws and regulations,
taxes, tax laws, prices and costs, and other factors of a general nature which
may have an adverse effect on our business.

Certain of the Companys directors and officers are also
directors and/or officers and/or shareholders of potential competitors of the
Company, giving rise to potential conflicts of interest.

Several of the Companys directors and officers are also
directors, officers or shareholders of other companies. In particular, Mr.
Robertson, Ms. Lorette, Mrs. Robertson and Ms. van Oord are directors and/or
officers of Linux Gold Corp., a public natural resource exploration company that
shares office space and administrative staff with the Company. We entered into
an agreement with Linux Gold Corp. whereby the Company could earn up to 50% of
the Fish Creek claim (see Item 4.D.). In addition, Mrs. Robertson and Mr.
Robertson are directors and officers of SMR Investments Ltd. which holds
approximately 14.98% of the Common Shares of the Company (see the biographical
sketches of our directors and officers at Item 6.A, and Share Ownership at Item
6.E). Some of our directors and officers are engaged and will continue to be
engaged in the search for additional business opportunities on behalf of other
corporations, and situations may arise where these directors and officers will
be in direct competition with the Company. Such associations may give rise to
conflicts of interest from time to time (see Item 7.B.). Such a conflict poses
the risk that the Company may enter into a transaction on terms which could
place the Company in a worse position than if no conflict existed. Conflicts, if
any, will be dealt with in accordance with the relevant provisions of the BCA.
The Board has resolved that any transaction involving a related party to the
Company is required to be reviewed and approved by the Companys Audit
Committee. The Companys directors are required by law to act honestly and in
good faith with a view to the best interests of the Company and to disclose any
interest which they many have in any project or opportunity in respect of which
the Company is proposing to enter into a transaction.

11

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U.S. investors may not be able to enforce their civil
liabilities against us or our directors, controlling persons and
officers.

We are organized under the laws of the province of British
Columbia, Canada. All of our directors, controlling persons and officers are
residents of Canada and all or a substantial portion of their assets and
substantially all of our assets are located outside of the United States. As a
result, it may be difficult for U.S. holders of our common shares to effect
service of process on these persons within the United States or to realize in
the United States upon judgments rendered against them. In addition, you should
not assume that the courts of Canada (i) would enforce judgments of U.S. courts
obtained in actions against us or such persons predicated upon the civil
liability provisions of the U.S. federal securities laws or other laws of the
United States, or (ii) would enforce, in original actions, liabilities against
us or such persons predicated upon the U.S. federal securities laws or other
laws of the United States. However, U.S. laws would generally be enforced by a
Canadian court provided that those laws are not contrary to Canadian public
policy, are not foreign penal laws or laws that deal with taxation or the taking
of property by a foreign government and provided they are in compliance with
applicable Canadian legislation regarding the limitation of actions. Also, a
judgment obtained in a U.S. court would generally be recognized by a Canadian
court except, for example: where the U.S. court where the judgment was rendered
had no jurisdiction according to applicable Canadian law; the judgment was
subject to ordinary remedy (appeal, judicial review and any other judicial
proceeding which renders the judgment not final, or enforceable under the laws
of the applicable state) or not final, conclusive or enforceable under the laws
of the applicable state; the judgment was obtained by fraud or in any manner
contrary to natural justice or rendered in contravention of fundamental
principles of procedure; a dispute between the same parties, based on the same
subject matter has given rise to a judgment rendered in a Canadian court or has
been decided in a third country and the judgment meets the necessary conditions
for recognition in a Canadian court; the outcome of the judgment of the U.S.
court was inconsistent with Canadian public policy; the judgment enforces
obligations arising from foreign penal laws or laws that deal with taxation or
the taking of property by a foreign government; or there has not been compliance
with applicable Canadian law dealing with the limitation of actions.

Our mineral resources competitors have greater financial
and technical measures and we may not be able to acquire additional attractive
mineral properties on acceptable terms.

Significant and increasing competition exists for mineral
opportunities in Canada and the United States. There are a number of large
established mineral companies with substantial capabilities and greater
financial and technical resources than us. We may be unable to acquire
additional attractive mineral properties on terms we consider acceptable.
Accordingly, our exploration programs may not will yield any new reserves or
result in any commercial mineral operations (see Item 4.B. Competition).

We face strong competition from larger oil and gas
companies, which could harm our business and ability to operate
profitably.

The oil and gas exploration and production business is highly
competitive. Many of our competitors have substantially larger financial
resources, staffs and facilities. Our competitors in the United States include
numerous major oil and gas exploration and production companies, especially
major oil and gas companies such as BP Amoco, Exxon/Mobil, Texaco/Shell and
Conoco/Phillips. These major oil and gas companies are often better positioned
to obtain the rights to exploratory acreage for which we may compete. If we are
unable to adequately address our competition, including, but not limited to,
finding ways to secure profitable oil and gas producing properties, our ability
to earn revenues will suffer (see Item 4.B. Competition).

As a"foreign private issuer,we
are exempt from the Section 14 proxy rules and Section 16 of the Securities Act,
which may result in shareholders having less complete and timely
data.

The submission of proxy and annual meeting of shareholder
information (prepared to Canadian standards) on Form 6-K may result in
shareholders having less complete and timely data. The exemption from Section 16
rules regarding sales of common shares by insiders may result in shareholders
having less data.

12

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RISK FACTORS RELATED TO THE NATURAL RESOURCE
INDUSTRY

The Company faces risks related to the exploration and
potential development of its properties.

The exploration and development of mineral deposits involves
significant risks. It is impossible to ensure that the current and future
exploration programs and/or feasibility studies on the Companys existing
mineral properties will establish reserves, or whether any of the Companys
exploration stage properties can be brought into production. Few properties that
are explored are ultimately developed into producing mines. At present, none of
the our properties have defined ore bodies with reserves and resources, and our
proposed exploration programs are an exploratory search for ore. Whether an ore
body will become commercially viable depends on many factors, including: the
characteristics of the deposit, such as size, grade and proximity to
infrastructure; metal prices, which cannot be predicted and which have been
highly volatile in the past; mining, processing and transportation costs; and
the willingness of lenders and investors to provide project financing; labour
costs and possible labour strikes; and governmental regulations, including,
without limitation, regulations relating to prices, taxes, royalties, land
tenure, land use, importing and exporting materials, foreign exchange,
environmental protection, employment, worker safety, transportation, and
reclamation and closure obligations.

The Company is also subject to the risks normally encountered
in the mining industry, such as: unusual or unexpected geological formations;
natural disasters; power outages and water shortages; cave-ins, land slides, and
other similar mining hazards; inability to obtain suitable or adequate
machinery, equipment, or labour; and other known and unknown risks involved in
the operation of mines and the conduct of exploration.

Substantial expenditures are required to establish reserves
through drilling, to develop metallurgical processes to extract metal from ore
and to develop the mining and processing facilities and infrastructure at any
site chosen for mining. Depending on the price of minerals, the Company may
determine that it is impractical to commence, or, if commenced, continue
exploration into commercial production. Such a decision would negatively affect
the Companys profits and may affect the value of its equity.

We have no current mining operations and if we ever
commence mining operations we face certain risks, any of which could result in
our ceasing operations.

We have no current mining operations and no revenue from mining
operations. If we ever commence actual mining operations, such operations would
face the risk of changing circumstances, including but not limited to: failure
of production to achieve metal recovery levels indicated by pre-production
testing of drill core and bulk samples; estimates of reserves being adversely
affected by encountering unexpected or unusual geological formations; production
costs being adversely affected by unforeseen factors such as substantial adverse
changes in exchange rates or changes in environmental protection requirements,
breakdowns and other technical difficulties, slides, cave-ins or other natural
disasters, work interruptions or labor strikes; the grade of ore actually mined
being lower than that indicated by drilling results; persistently lower market
prices of the products mined than those used to determine the feasibility of
mining a mineral occurrence; adverse changes in interest rates that may apply to
project development debt. In addition, we have no experience in developing
mining properties into production and its ability to do so will be dependent
upon securing the services of appropriately experienced personnel or entering
into agreements with other major mining companies which can provide such
expertise.

Our estimates of any mineral deposits on our properties
may not change.

Our estimates of any mineral deposits on our properties may not
change. We have prepared all figures with respect to the size and grade of
mineralized deposits included herein, or, in some instances have been prepared,
reviewed or verified by independent mining experts, these amounts are estimates
only and any identified mineralized deposit may not ever qualify as a
commercially viable mineable ore body that can be legally and economically
exploited.

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The prices of precious and base minerals and metals
fluctuate widely and may not produce enough revenue to cover the Companys
costs.

Even if commercial quantities of mineral deposits are
discovered, a profitable market may not exist for the sale of the metals
produced. The Companys long-term viability and profitability depend, in large
part, upon the market price of metals which have experienced significant
movement over short periods of time, and are affected by numerous factors beyond
the Companys control, including international economic and political trends,
expectations of inflation, currency exchange fluctuations, interest rates and
global or regional consumption patterns, speculative activities and increased
production due to improved mining and production methods. The supply and demand
for metals is affected by various factors, including political events, economic
conditions and production costs in major producing regions. The price of any
minerals produced from the Companys properties may not be sufficient such that
any such deposits can be mined at a profit.

The seasonality in Alaska can be extreme and can cause
interruptions or delays in our activities.

Certain of our properties are located in Alaska. The weather
during the colder seasons in these areas can be extreme and can cause
interruptions or delays in our activities. As a result, our activities in these
regions are seasonal and the preferred time for work is limited to the spring
and summer when costs are more reasonable and access to the properties is easier
(see Item 4.B.).

The Companys properties may be subject to unregistered
agreements; transfers, or claims and title may be adversely
affected.

Our title opinions do not validate that we have good and
marketable title to all of our properties. We follow the usual industry practice
in obtaining title opinions with respect to our lands. No examination has been
made of the ground to determine if any of our mineral claims have been staked or
assessment work carried out. The Companys properties may be subject to
unregistered agreements, transfers or claims and title may be adversely affected
by such undetected defects. If title is disputed, the Company may have to defend
its ownership through the courts, and the Company cannot guarantee that a
favourable judgment will be obtained. In the event of an adverse judgment with
respect to any of its mineral properties, the Company could lose its property
rights and may be required to cease its exploration and development activities
on that property.

Mineral operations are subject to government and
regulatory approvals.

Our operations require the procurement of numerous permits and
compliance with an extensive number of codes and regulations. Mining,
exploration and exploitation permits are required. Failure to comply with
regulatory requirements could result in permits being withdrawn or suspended
which would adversely affect our operations.

Oil and gas price fluctuations in the market may harm
results of our operations.

As of the date of this 20-F, we do not own any interests in any
properties which are producing more than minimal levels of oil or natural gas.
Revenue from our oil and gas operations is minimal. Oil and gas revenues were:
$33,714 in the year ended May 31, 2007; $27,154 in the fiscal year ended May 31,
2006 and $28,302 in fiscal year ended May 31, 2005 (see Item 5). Should we
acquire an interest in a property producing more than a minimal level of oil and
natural gas, substantially all of our sales of oil and natural gas would likely
be made in the spot market, or pursuant to contracts based on spot market
prices, and not pursuant to long-term, fixed-price contracts. Accordingly, the
prices we might receive for any eventual oil and natural gas production are
dependent upon numerous factors beyond our control. These factors include the
level of consumer product demand, governmental regulations and taxes, weather
trends, the price and availability of alternative fuels, the level of foreign
imports of oil and natural gas and the overall economic environment.

Any oil and gas we may discover or produce may not be
readily marketable at the time of production, delaying our ability to generate
meaningful revenue.

Crude oil, natural gas, condensate and other oil and gas
products are generally sold to other oil and gas companies, government agencies
and other industries. The availability of ready markets for oil and gas that we
might discover

14

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and the prices obtained for such oil and gas depend on many
factors beyond our control, including: the extent of local production and
imports of oil and gas; the proximity and capacity of pipelines and other
transportation facilities; fluctuating demand for oil and gas; the marketing of
competitive fuels; and the effects of governmental regulation of oil and gas
production and sales. Natural gas associated with oil production is often not
marketable due to demand or transportation limitations and is often flared at
the producing well site. Pipeline facilities do not exist in certain areas of
exploration and, therefore, any actual sales of discovered oil and gas might be
delayed for extended periods until such facilities are constructed.

We are subject to extensive and changing environmental
legislation, regulation and actions.

We are subject to extensive and changing environmental
legislation, regulation and actions in connection with our operations and
properties. We cannot predict what environmental legislation, regulation or
policy will be enacted or adopted in the future or how future laws and
regulations will be administered or interpreted. The recent trend in
environmental legislation and regulation, generally, is toward stricter
standards and this trend is likely to continue in the future. This recent trend
includes, without limitation, laws and regulations relating to air and water
quality, mine reclamation, waste handling and disposal, the protection of
certain species and the preservation of certain lands. These regulations may
require the acquisition of permits or other authorizations for certain
activities. These laws and regulations may also limit or prohibit activities on
certain lands. Compliance with more stringent laws and regulations, as well as
potentially more vigorous enforcement policies or stricter interpretation of
existing laws, may necessitate significant capital outlays, may materially
affect the Companys results of operations and business, or may cause material
changes or delays in the Companys intended activities.

Our operations may require additional analysis in the future
including environmental and social impact and other related studies. We may not
be able to obtain or maintain all necessary permits that may be required to
continue our operation or our exploration of our properties or, if feasible, to
commence development, construction or operation of mining facilities at such
properties on terms which enable operations to be conducted at economically
justifiable costs.

We may have no direct contractual relationship in certain
mineral properties that have been granted by third parties.

Our rights to acquire interests in certain mineral properties
have been granted by third parties who themselves hold only an option to acquire
such properties. As a result, we may have no direct contractual relationship
with the underlying property holder.

UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES

There is only a limited public market for our common
shares on the TSX Venture Exchange and that market is extremely
volatile.

There is only a limited public market for our common shares on
the TSX Venture Exchange, and there is a risk that that a broader or more active
public trading market for our common shares will never develop or be sustained,
or that current trading levels will not be sustained. The market price for the
common shares on the TSX Venture Exchange has been and we anticipate will
continue to be extremely volatile and subject to significant price and volume
fluctuations in response to a variety of external and internal factors. This is
especially true with respect to emerging companies such as ours. Examples of
external factors, which can generally be described as factors that are unrelated
to the operating performance or financial condition of any particular company,
include changes in interest rates and worldwide economic and market conditions,
as well as changes in industry conditions, such as changes in oil and natural
gas prices, oil and natural gas inventory levels, regulatory and environment
rules, and announcements of technology innovations or new products by other
companies. Examples of internal factors, which can generally be described as
factors that are directly related to our consolidated financial condition or
results of operations, would include release of reports by securities analysts
and announcements we may make from time-to-time relative to our operating
performance, drilling results, advances in technology or other business
developments. Because we have a limited operating history and no profits to
date, the market price for the common shares is more volatile than that of a
seasoned issuer. Changes in the market price of the common shares, for example,
may have no connection with

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our operating results or prospects. No predictions or
projections can be made as to what the prevailing market price for the common
shares will be at any time, or as to what effect, if any, that the sale of
shares or the availability of common shares for sale at any time will have on
the prevailing market price.

You will be subject to the risks associated with penny
stock classification which could affect the marketability of our equity
securities and shareholders could find it difficult to sell their
stock.

In the event that we begin trading our common shares in the
United States, our common shares shall be subject to penny stock rules
as defined in Securities and Exchange Actrule 3a51-1. The Securities and
Exchange Commission has adopted rules that regulate broker-dealer practices in
connection with transactions in penny stocks. Transaction costs associated with
purchases and sales of penny stocks are likely to be higher than those for other
securities. Penny stocks generally are equity securities with a price of less
than US $5.00 (other than securities registered on certain national securities
exchanges or quoted on the NASDAQ system, provided that current price and volume
information with respect to transactions in such securities is provided by the
exchange or system).

The penny stock rules require a broker-dealer, prior to a
transaction in a penny stock not otherwise exempt from the rules, to deliver a
standardized risk disclosure document that provides information about penny
stocks and the nature and level of risks in the penny stock market. The
broker-dealer must also provide the customer with current bid and offer
quotations for the penny stock, the compensation of the broker-dealer and its
salesperson in the transaction, and monthly account statements showing the
market value of each penny stock held in the customers account. The bid and
offer quotations, and the broker-dealer and salesperson compensation
information, must be given to the customer orally or in writing prior to
effecting the transaction and must be given to the customer in writing before or
with the customers confirmation.

In addition, the penny stock rules require that prior to a
transaction in a penny stock not otherwise exempt from such rules, the
broker-dealer must make a special written determination that the penny stock is
a suitable investment for the purchaser and receive the purchasers written
agreement to the transaction. These disclosure requirements may have the effect
of reducing the level of trading activity in a potential secondary market for
our equity securities in the United States and shareholders may find it more
difficult to sell their shares.

Our directors and officers collectively own a majority of
our common shares.

A limited number of shareholders collectively own a majority of
our common shares and may act, or prevent corporate actions, to the detriment of
other shareholders. These principal shareholders, including members of our board
of directors, officers and entities affiliated with members of our directors and
officers, will own more than 19% of our outstanding common shares. Accordingly,
these shareholders may, if they act together, exercise significant influence
over all matters requiring shareholder approval, including the election of a
majority of the directors and the determination of significant corporate
actions. This concentration could also have the effect of delaying or preventing
a change in control that could be otherwise beneficial to our shareholders (see
Items 6.A. and 7.A.).

We do not anticipate that we will pay any dividends in
the foreseeable future.

We have never paid any cash dividends on shares of our capital
stock, and we do not anticipate that we will pay any dividends in the
foreseeable future. Our current business plan is to retain any future earnings
to finance the expansion of our business. Any future determination to pay cash
dividends will be at the discretion of our board of directors, and will be
dependent upon our consolidated financial condition, results of operations,
capital requirements and other factors as our board of directors may deem
relevant at that time (see Item 3.A).

Our right to issue additional capital stock at any time
could have an adverse effect on your proportionate ownership and voting
rights.

We are authorized under our Articles of Incorporation to issue
100,000,000 common shares. Subject to compliance with applicable corporate and
securities laws, we may issue these shares under such circumstances and in such
manner and at such times, prices, amounts and purposes as our board of directors
may, in their discretion, determine to be necessary and appropriate. Your
proportionate ownership and voting rights as a common shareholder could be

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adversely affected by the issuance of additional common shares,
including a substantial dilution in your net tangible book value per share.

ITEM 4. INFORMATION ON THE COMPANY

A. HISTORY AND DEVELOPMENT

Teryl Resources Corp. (the Issuer) was incorporated on May
23, 1980, as Candy Mountain Gold Corporation under a perpetual charter pursuant
to the Company Act(British Columbia) by the registration of its
Memorandum of Association and Articles of Association. On January 20, 1984, a
special resolution was passed changing its name to Teryl Resources Corp.

On March 29, 2004, the new British Columbia Business
Corporations Act (the "BCA") came into force in British Columbia and replaced
the former Company Act (Former Act), which is the statute under which we were
previously governed. Under the BCA, every company incorporated under the Company
Act must complete a mandatory transition rollover under the BCA to substitute a
Notice of Articles for its Memorandum within two years of March 29, 2004. The
only information contained in the Notice of Articles is the authorized share
structure of the company, the name of the company, the address of the registered
and records office of the company, and the names and addresses of the directors
of the company. We filed a transition application with the Registrar of
Companies British Columbia to transition to the BCA and completed the Transition
on September 13, 2004.

As a pre-existing Corporation under the Company Act, we were
subject to provisions contained in the BCA known as the Pre-Existing Company
Provisions. The Pre-Existing Company Provisions are statutory provisions
intended to preserve certain provisions of the Company Act to companies
incorporated under the Company Act. Under the BCA, we have the option to replace
the Pre-Existing Company Provisions with a new form of Articles to take
advantage of the benefits of the BCBCA, provided the shareholders approve the
change. Accordingly, at the annual meeting held on November 15, 2004, our
shareholders approved a special resolution to alter the Notice of Articles to
remove the application of the Pre-Existing Company Provisions.

In addition to deleting the Pre-Existing Company Provisions,
the Board of Directors were also of the view that it would be in our best
interest to adopt a new set of Articles to replace our Articles. The new
Articles will reflect the flexibility and efficiency permitted under the BCA,
while maintaining a significant portion of the existing governing provisions. As
a result, most of the changes in the new Articles are minor in nature, and are
not substantive changes. On November 15, 2004, the shareholders also approved a
special resolution to replace the articles of the Company.

The Companys corporate offices and its registered and records
offices are located at Suite 240 - 11780 Hammersmith Way, Richmond, BC V7A 5E9,
Canada. Our telephone number is 604-278-5996. Since our inception and during the
three fiscal years ending in May 2007, our principal business has been the
acquisition, exploration and development of natural resource properties, and the
acquisition, drilling and development of oil and gas property interests. We
currently have mineral property interests in Alaska, and Arizona. All of our
mineral properties are in the exploration stage. We are currently in the
exploration stage and equity financing is required to continue exploration work
on our mineral claims and oil and gas interests. As a result of the uncertainty
that is typical in an explorative company there is doubt about our ability to
continue as going concern as ultimate success will be based on securing adequate
equity financing and/or the determination of economically recoverable mineral
reserves on its mineral property claims or recoveries on our oil and gas
interests.

Capital Expenditures

Fiscal Year

Fiscal 2003
    $
      19,452 (1)Fiscal 2004
    $
      32,375 (2)Fiscal 2005
    $
      39,686 (3)Fiscal 2006
    $
      103,045 (4)Fiscal 2007
    $
      249,138 (5)


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(1) This expenditure related to the purchase of mineral
property, of which $16,000 is from issuing 200,000 shares at $ 0.08  see E
above.(2) This expenditure related to the purchase of mineral properties for
$ 20,645 and office equipment for $11,730. (3) This expenditure related to
the purchase of mineral properties for $ 22,602 and automotive and office
equipment for $17,084 (4) This expenditure related to the purchase gas well
interests. For US GAAP this amount is expensed.(5) This expenditure consists
of $34,231 for the purchase of mineral properties; $5,773 for the purchase of
office equipment and $209,134 for the purchase of gas well interests. For US
GAAP the amount for gas well purchases is expensed.

Accumulated expenditures for the Mineral properties to May 31,
2007:

Expense ($)
    Gil Property
    West Ridge Property
    Black Dome (1)
    Fish Creek (2)
    Gold HillGeology
    1,299,592
    246,850
    Nil
    53,113
    15,702Drilling and Trenching
    769,090
    Nil
    Nil
    62,306
    nilGeophysics
    Nil
    351,113
    Nil
    11,798
    NilAdmin.
    Nil
    33,112
    Nil
    14,354
    3,248Tech. Anal.
    7,383
    6,789
    Nil
    20,569
    NilAcquisition Costs
    31,127
    116,189
    Nil
    49,538
    34,231


(1) All expenses for this claim included in West Ridge property
figures.

(2) Shares with a deemed value of $16,000 were issued during
the 2007 year as part of the acquisitions costs.

B. BUSINESS OVERVIEW

Nature of the Companys Operations

Mineral Properties

We are an exploration stage company and there is no assurance
that a commercially viable mineral deposit exists on any of our properties.
Further exploration will be required before a final evaluation as to the
economic and legal feasibility is determined.

If we complete our current exploration programs and if we are
successful in identifying a mineral deposit, we will have to spend substantial
funds on further drilling and engineering studies before we will know if we have
a commercially viable mineral deposit or reserve on any of our properties.

We will seek equity financing to provide working capital and to
meet exploration commitments on all our properties. During the fiscal year ended
May 31, 2007, we raised $199,151 through the sale of equity securities (May 31,
2006 $666,996 ).

Gil Mineral Claims

The Gil Gold Project is located in the Fairbanks Mining
District, Alaska. The Issuer owns a 20% interest in the Gil Mineral Claims with
its joint venture partner, Kinross Gold Corporation (Kinross) with Kinross
owning the other 80% (see Item 4.D. for complete details of exploration and
development of this property).

West Ridge Claims

The West Ridge Prospect is north of Fairbanks, Alaska, a
distance of 22 miles by road. The West Ridge property consists of 48 state of
Alaska mining claims covering 1750.5 acres and 75 acres of patented mining
claims under

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lease purchase option in the Livengood quadrangle Township 2
North, Range 1 East. The state claims are registered with the Alaska Division of
Mining, Land, and Water Management with Teryl Resources Corp. as the 100% owner
(see Item 4.D. for complete details of exploration and development of this
property).

Black Dome

In July, 2003 we announced we had successfully negotiated a
lease of 440 acres in the Fairbanks Mining District, Alaska from the State of
Alaska, Mental Health Trust Land Office (TLO). The Companys directors
terminated the lease with the Alaska Mental Health Trust in July of 2006.

Fish Creek Claims

The Fish Creek project is located 25 miles north of Fairbanks
in a road accessible mining district with excellent land status and
infrastructure. Limited exploration conducted between 1992 and 2003 did not
reveal significant bedrock exposures of mineralization. Wide-spaced placer gold
drilling on a small area of the property conducted in 2003 did not encounter
significant placer gold mineralization however, more extensive and closer spaced
placer gold drilling conducted in 2004 indicated the presence of significant
concentrations of placer gold on the claims.

The Company and Linux Gold Corp. entered into an agreement, on
March, 2002, whereby the Company may earn up to a 50% interest in the Fish Creek
mineral claims, located in the Fairbanks district of Alaska, USA, by expending $
500,000 US within three years and issuing 200,000 common shares (issued December
16, 2002 for a deemed value of $ 16,000 CDN). An additional 100,000 shares were
issued February 14, 2007 for a deemed value of $16,000 CDN in payment of an
extension of the expenditure date to March 5, 2007, which was further extended
to March 5, 2009. Linux will have a 5% net royalty interest until the Company
pays $ 2,000,000 US (see Item 4.D. for complete details of exploration and
development of this property).

Fox Creek

On June 23, 2004, the Company entered into a mineral property
lease to develop the property known as the Upper Fox Creek mining lease. The Fox
Creek Claims consisted of eight contiguous unpatented state of Alaska mining
claims, located 3 miles north of Fox, Alaska. The Company made the first
US$10,000 payment but did not make the 2005 year payment and the lease was
cancelled. During the November 2005 quarter $13,283 in property costs and
$34,769 in exploration costs were written off.

Gold Hill Claims

On June 10, 2006, the Company and Frederic & John Rothermel
(the Vendors) entered into an agreement whereby the Company purchased a 100%
interest in the Gold Hill Patented Claim Group located in the Warren Mining
District, Cochise County, Arizona, USA, subject to a 10% Net Profit royalty to
the vendors, for the following considerations:

- $5,655 ($ 5,000 US) for a 90 day option and $ 11,268 ($ 10,000 US) to
  complete a due diligence within 90 days (paid),
- $7,000 ($ 6,000 US) paid January 5, 2007 to the Vendors, with $ 6,000 US
  payments to be made each quarter, (all required quarterly payments have been
  paid)
- to complete a $ 50,000 US first phase exploration program conducted by the
  Vendors,
- $ 250,000 US per year upon commencement of production.

On August 1, 2006 six additional unpatented lode mining claims
were filed with the Arizona State office of the Bureau of Land Management on
behalf of the Company. On October 16, 2006, we exercised our option and have a
10 year option to purchase up to a 10% net profit interest from the Vendors for
US$1.5 million per 5% net profit interest, therefore, having an option on a 100%
interest in the Bisbee, Arizona patented claims. The Gold Hill Project is
located approximately 4.5 miles southeast of Bisbee Arizona in the Warren Mining
District of Cochise County (Township 23 South, Range 25 East sections 25 30, 31,
and 32). The Gold Hill Project consists of fourteen patented claims comprising
250 acres.

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Additional work is needed to determine the extent of gold and
copper mineralization in this area. We do not consider the Gold Hill property to
be a material property.

Oil and Gas PropertiesJancik, C-S and Herrmann Wells, Fayette County, Texas

The Company owns 6.5% working interest (4.680% net revenue
interest) in the Peters No. 1 Well, in Fayette County, Texas, and a 7.5% working
interest (5.79375% net revenue interest) in each of the C-S #1, Jancik #2 and
Herrmann #4 wells, located in Burleson County, Texas.

Gas Wells, Knox County, Kentucky

On May 18, 2006, the Company entered into an agreement with IAS
Energy, Inc. (formerly and at the time of the agreement, IAS Communications,
Inc.) to purchase a 40% interest (subject to 40% net revenue interests to
others) and drill up to 24 wells in the Ken Lee #1 natural gas well, located in
Knox County, Kentucky, USA, for $103,045 ($92,500 US). The Company will earn a
40% interest in each well drilled by financing 50% of the total cost of drilling
each well subject to a 12.5% revenue interest to the landowner and a 27.5%
interest to Energy Source, Inc., the lessee and operator of the wells.

On June 6, 2006 the Company announced that the Ken Lee#1 well
had been successfully completed as a commercial gas well. On July 6, 2006 the
Company announced that drilling had commenced on the Elvis Farris #2 well and
has been reported to be in production.

Description of the Markets in Which the Company
Competes

The Company does not have a market in which it competes, as it
operates in an extractive industry.

However, the mining industry in which the Company is engaged is
highly competitive due to significant and increasing competition for exploration
opportunities. Many of our oil and gas exploration and production competitors
business have substantially larger financial resources, staffs and facilities
(see Competition below, and Risk Factors, page 12).

Competition

Significant and increasing competition exists for mining
exploration opportunities available in North America and elsewhere in the world.
Competitors include well-capitalized mining companies, independent mining
companies and other companies having financial and other resources far greater
than those of the Company.

We compete with a number of other companies, including major
oil companies and other independent operators which are more experienced and
which have greater financial resources. Such companies may be able to pay more
for prospective oil and gas properties. Additionally, such companies may be able
to evaluate, bid for and purchase a greater number of properties and prospects
than our financial and human resources permit. We do not hold a significant
competitive position in the oil and gas industry.

Seasonality

Due to the northern climate, exploration work is some areas of
Alaska can be limited due to excessive snow cover and cold temperatures. In
general, surface sampling work is limited to May through September and surface
drilling from March through November (see page 14 Risk Factors).

Availability of Raw Materials

The Company does not have a reliance on raw materials, as it
operates in an extractive industry.

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Marketing Strategy

We do not have any plans for a marketing strategy at this
time.

Dependency upon Patents/Licenses/Contracts/Processes

Not applicable. We do not have any material agreements upon
which we are dependent.

Material Effects of Government Regulation

Mineral Exploration

Exploration and development activities, require permits from
various foreign, federal, state and local governmental authorities. To the best
of our knowledge, we are operating in compliance with all applicable
environmental regulations.

Our current and anticipated future operations, including
further exploration activities, require permits from various state and other
governmental. Such operations are subject to various laws governing land use,
the protection of the environment, production, exports, taxes, labor standards,
occupational health, waste disposal, toxic substances, well safety and other
matters. Unfavorable amendments to current laws, regulations and permits
governing operations and activities of oil and gas and resource exploration
companies, or more stringent implementation thereof, could have a materially
adverse impact on us and cause increases in capital expenditures which could
result in our ceasing operations. We have had no material costs related to
compliance and/or permits in recent years, and anticipate no material costs in
the next year.

Oil and Gas Exploration

Our oil and gas operations are or will be subject to various
types of regulation at the federal, state and local levels. Such regulation
includes requiring permits for the drilling of wells; maintaining bonding
requirements in order to drill or operate wells; implementing spill prevention
plans; submitting notification and receiving permits relating to the presence,
use and release of certain materials incidental to oil and gas operations; and
regulating the location of wells, the method of drilling and casing wells, the
use, transportation, storage and disposal of fluids and materials used in
connection with drilling and production activities, surface usage and the
restoration of properties upon which wells have been drilled, the plugging and
abandoning of wells and the transporting of production. Our operations are or
will be also subject to various conservation matters, including the regulation
of the size of drilling and spacing units or pro-ration units, the number of
wells which may be drilled in a unit, and the unitization or pooling of oil and
gas properties. In this regard, some states allow the forced pooling or
integration of tracts to facilitate exploration while other states rely on
voluntary pooling of lands and leases, which may make it more difficult to
develop oil and gas properties. In addition, state conservation laws establish
maximum rates of production from oil and gas wells, generally limit the venting
or flaring of gas, and impose certain requirements regarding the ratable
purchase of production.

We believe that our operations comply in all material respects
with applicable laws and regulations and that the existence and enforcement of
such laws and regulations have no more restrictive an effect on our operations
than on other similar companies in the energy industry. We do not anticipate any
material capital expenditures to comply with federal and state environmental
requirements.

C. ORGANIZATIONAL STRUCTURE

Teryl, Inc., a wholly-owned subsidiary of Teryl Resources
Corp., was incorporated on November 17, 1988, in the State of Delaware and
registered to do business in the USA, holds the Alaska mineral property
interests, the Arizona mineral property interests and Texas and Kentucky oil and
gas well interests.

In 1998, Teryl, Inc. offered a private placement for up to
1,000,000 shares at a price of $0.23 ($0.15 US) and subscriptions of $146,044
($96,750 US) were received by November 19, 1999. Since the offering was not
fully subscribed, the Companies negotiated with the subscribers to replace the
Teryl, Inc. shares with Teryl Resources

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Corp. shares. Six subscribers did not return the agreement and
negotiations ensued. On August 29, 2007, the final six subscribers agreed to a
settlement of $70,000 ($50,250 US).

On October 17, 2006, the authorized capital for Teryl, Inc. was
reduced to 10,000 common shares, which resulted in a rollback to 1 common share
for each 10,000 outstanding. Teryl Resources Corp. owns 1,650 shares of Teryl,
Inc., which is 100% of the issued shares at the date of filing this 20-F.

For a list of our significant subsidiaries, see Item 10 
Additional Information  Subsidiary Information.

D. PROPERTY, PLANT AND EQUIPMENT

Our properties are in the exploration stage and a substantial
amount of capital will have to be spent on each property before we will know if
they contain commercially viable mineral deposits. Our material properties are
located in Alaska. Our properties are without known reserves and the work being
done by us is exploratory in nature.

Our executive offices are located in rented premises in a
commercial business park located in Richmond, British Columbia, Canada, a suburb
of Vancouver. The space is shared with several other companies which share
common management. The monthly rent for its portion of this 2,200 square foot
space is $1,014.00. We have occupied these facilities since November 1, 2006.
These facilities are believed to be adequate for meeting our needs for the
immediate future. If required in the future, we do not anticipate that we will
have any difficulty in obtaining additional space at favorable rates. There are
no current plans to purchase or otherwise acquire any properties in the near
future.

Mineral Properties

The following are descriptions of our material mineral
properties.

GIL PROPERTY

Project Description and Location

The Issuer owns a 20% interest in the Gil Mineral Claims, which
consist of 237 unpatented contiguous state mineral claims encompassing slightly
less than 3,836.4 hectares located 32 kilometers northeast of Fairbanks, Alaska.
Kinross Gold Corporation (Kinross) owns the other 80% of the claims and acts
as operator of the project. Kinross and the Issuer each contribute to annual
exploration costs on an 80:20 ratio with net profits distributed in that same
proportion in the event of production. The Issuer may opt to reduce its interest
in the Gil Mineral Claims by choosing not to contribute its portion of the
annual exploration expenditure. Its interest would then be reduced on a pro-rata
basis utilizing the following formula:

|$150,000                             
|-------------------------------------
|($600,000 + expenditure for the year)

At its sole option, Kinross may choose to carry the Issuers
portion of expenditures in the form of an interest-bearing demand note,
principal and interest to be added in the event of application of the reduction
formula. Should the Issuer fail to contribute its share of the exploration costs
or fail to honour the demand note within 30 days of formal request for payment,
it would be considered in default. In a default situation, the Issuers interest
would be reduced by double the amount normally applied by the reduction formula.
In the event its interest is reduced below 10%, the Issuers interest would be
converted to a 5% net profits interest with no further financial contributions
required.

State mining claims in Alaska require a minimum annual work
expenditure of $100 per claim prior to the first of September of each year.
Unused expenditures may be carried forward and subsequently utilized in
successive years to a total of five years from the year in which they were
incurred. The claims have been maintained annually by Kinross who have
sufficient expenditure reserve to apply for the next five years. Prior to
production, Kinross will likely convert the claims to a mining lease or apply
for a millsite permit, a procedure involving public hearings and an
environmental impact study. In anticipation, the Issuer has legally surveyed the
claims and has completed a series of six water wells for ground water monitoring
purposes, already underway.

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Accessibility, Climate, Local Resources, Infrastructure
and Physiography

The Gil Mineral Claims may be accessed via Fairbanks, Alaska,
  by a combination of paved highway, improved gravel roads and three seasons,
  four-wheel drive dirt road. Road distance is 16 kilometers north of Fairbanks
  to Fox along the Steese highway, east along the Steese highway and the Fort
  Knox access road to the mine site (another 19 kilometers), east through the
  mine property to the water retention dam (18 kilometers) and the start of the
  Gil access road. An additional 9.6 kilometers along the Gil access road brings
  one to the area of drill-indicated resources and the principal site of current
  exploration activity. A number of four-wheeler trails provide additional access
  to this portion of the property.



The claims lie along a moderate northwestern facing slope of a
northeastern ridge rising from the broad Fish Creek valley trending in the same
direction. Vegetation consists of black spruce, birch, poplar, alder and tussock
grass. The slope is broken by a number of short, northwestern flowing streams
which form a series of gullies. Elevations range from 300 to 600 metres.

Snow generally falls on the property in late September or early
October, remaining on the ground until mid to late May. The month of April is
particular productive for drilling and moving heavy equipment over normally soft
or swampy areas which remain frozen. Exploration work involving heavy equipment
is generally suspended during the break up period extending from mid-April
through the end of May and the freeze up interval through mid-October to early
November.

Fairbanks is the main population and service centre in the
area. The hamlet of Fox twenty kilometers west is residence to several dozen
locals and provides a few facilities for food and gas.

History

In 1989, the Issuer acquired an option on the Gil Mineral
Claims from Nerco Exploration Company whose exploration work on the property had
consisted largely of surface magnetometer surveys. In 1991, the Issuer signed a
joint venture and option agreement respecting the property with Fairbanks Gold
Corp., which eventually became Kinross. Kinross earned an 80% interest in the
Gil Mineral Claims from the Issuer by incurring exploration

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expenditures on the property of $600,000. During the past ten
years, Kinross and its predecessors have conducted an integrated exploration
program on the claims incurring total expenditures of between US$3,500,000 and
US$4,000,000.

Geological Setting

Regional Geology

In regional terms, the Gil Mineral Claims are located within
the Yukon-Tanana terrane, popularly labelled the Tintina Gold Belt. The
lithologies are polymetamorphic and are approximately Precambrian to Upper
Paleozoic in age. The protoliths are believed to have been primarily
sedimentary, with lessor volcanic and plutonic origins. The rocks have undergone
dynamothermal metamorphism; an early prograde amphibolite facies event and a
later greenschist facies retrograde event. Using detailed fabric studies, four
phases of penetrative deformation have been described. Radiometric ages of the
Yukon-Tanana terrane indicated that a widespread regional metamorphic event
occurred both in early Jurassic (about 180 Ma) and most recently during
mid-Cretaceous time (105-125 Ma).

The Yukon-Tanana terrane is bound to the north by the Tintina
fault and to the south by the Denali fault. Both faults are large scale right
lateral strike-slip fault systems with numerous sympathetic northeast-southeast
faults. The northeast trending faults display both left lateral strike-slip and
dip-slip movements.

Intrusive rocks in the area are intermediate to felsic in
composition. The Gilmore Dome intrusive rocks and related calc-silicate
mineralization are dated at 86+/-3 Ma to 95+/-5 Ma. It is assumed that the other
intrusive rocks of similar composition in the district have similar age.
Tertiary tholeittic basaltic rocks are present in several localities in the
district. These basalts tend to occur along north-easterly faults.

Local Geology

The Gil property lies within the Tintina Gold Belts or Yukon-Tanana
  terrain, a region situated between Denali and Tintina faults, extending through
  Central Alaska into the Yukon. Extensive exploration within the belt over the
  past decade has increased gold resources by at least 23 million ounces from
  over ten different new deposits. In the Alaskan portion, an additional eight
  million ounces of placer gold has been taken since 1902, primarily from the
  Fairbanks district.



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While Tintina gold deposits occur within a variety of rock
hosts, form, alteration types, depth and temperature ranges, they feature many
common characteristics as well as several unique differences. Though a plutonic
association is common, deposits may be hosted within the plutons, within or
exterior to the contact aureoles or within adjacent schists and sediments.
Associated plutons fall within the 8 to 105 million-year range. They are
granitic to granodioritic in composition, Associated plutons fall within the 85
to 105 million-year range. They are granitic to granodioritic in composition,
I-type intrusives, with lithophile affinities and low magnetic signatures
(absence of magnetite, minor ilmenite). The magnetic fluids emanating from the
plutons are seen to be responsible for the gold mineralization. Prospective
intrusives are small in size, generally less than four square kilometres in
surface area. Termed the Tombstone-Tungsten Magmatic Belt within the Yukon, this
same suite of prospective plutonics extends for a distance of over 700 km across
the Yukon, Alaska and into British Columbia

Property Geology

The Gil Mineral Claims are primarily underlain by the Fairbanks
Schist, a Proterozoic to Lower Cambrian formation derived largely from
sedimentary rocks that have been converted into muscovite-quartz schist and
macaceous quartzite. In certain areas the Fairbanks Schist contains a
metamorphic sub-unit of volcanic provenance called the Cleary Sequence. The
Cleary Sequence is present within the central portion of the claims trending
north-easterly in a narrow band to the Slippery Creek area where it becomes the
host formation for the Main Gil as well as the North Gil zones.

The south-western portion of the Gil Mineral Claims, about
three kilometres south of the Fort Knox pit, in underlain by part of the Gilmore
Dome, a quart monzonitic to granitic pluton which is probably the mother
intrusive to the small stock hosting gold mineralization within the production
pit. The location of additional intrusive rock has become a significant sub-goal
of the Fairbanks Gold exploration programme. Indications of a possible intrusive
rock in the headwater area of Slippery Creek are suggested by the presence of a
gravity high outlined in a previous survey as well as petrographic studies
indicating a causative heat source in that direction.

Within the area of the Gil zones, the Fairbanks Gold geological
staff have subdivided the mixed metamorphic, sedimentary and volcanic package
into at least ten separate units which is not an easy task given the scarcity of
outcrop and the highly faulted, segmented complex nature of the property.

Strata strikes N65E dipping to the northwest variably from 35
to 70 degrees. Faults and shears in the Gil claim block strike predominantly
northwest or northeast, as indicated by trenching, drilling, ground based
magnetometer surveys, and ground based radiometric surveys. A ground based
gravity survey in 1999 exposed east to west and northeast trending structures
that were previously unknown. Faults are often coincident with gold
mineralization and commonly contain duly clay gouge, crushed quartz, calcite
veining and/or quartz veining, and can be intensely limonitically stained.

Exploration and Development during the past 3
years

During fiscal 2005, 2006 and 2007, Fort Knox Venture through
its operator Kinross Gold USA, Inc., completed exploration and development work
on this property. This has resulted in the Company being required to pay its 20%
share of expenses, which amounted to $ 111,127 ($98,916 US) in the May, 2006
year. No expenditures were made during the May, 2007 year-end because, Kinross,
as the operator of the claim, determines whether exploration work will occur
from year to year. No work was done on the property during 2007 as Kinross, the
operator of the claim, did not provide a budget and work program for 2007.
Further cash calls are expected in the 2008 year pending receipt of the 2008
budget report from Kinross.

In April 2005, we received the Gil joint venture progress
report for the 2004 exploration program. The goal of the 2004 Gil Exploration
Program was to identify gold targets that could significantly increase the
potential resource of the claim block. Field work began on June 21, 2004 and
took place in the central and eastern portions of the claim area. This included
the Main Gil Area, Sourdough Ridge, Intrusive Ridge, All Gold Ridge and Too Much
Gold Ridge. Exploration activities consisted of geologic mapping, 1,020 feet of
trenching, 18 reverse circulation drill holes totaling 4,175 feet, and the
collection of over 1000 rock and soil samples for gold assay. Initial fieldwork

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outlined eight gold targets that warranted further exploration.
Drilling in the final portion of the exploration season tested five of the eight
targets.

Also in April, 2005, a program and budget was approved by
Kinross Gold Corp. to move the Gil Joint Venture from the exploration to the
development stage. The approved budget was US$793,800, consisting of the
following estimated costs: Permitting $US520,000, Engineering $US160,000, Data
Folio $US75,000, Airborne Geophysics $US28,800, Reclamation $US10,000, Total
$US793,800. The objective of the 2005 Gil Venture exploration program was to
generate new gold targets by integrating geologic and geochemical information
with newly acquired geophysical data.

Permitting - The Joint Venture planned to initiate the process
of permitting the Gil deposit once sufficient baseline data was collected.
Several state permits and approvals were to be required which would likely
include a Plan of Operations, Solid Waste Disposal Permit, Storm Water Discharge
Multi-Sector General Permit for Industrial Activities or a NPDES Discharge
Permit, 404 Wetlands Permit, a Reclamation and Closure Plan and a Monitoring
Plan. The U.S. Army Corps of Engineers would complete an Environmental
Assessment as required by NEPA.

Baseline studies needed included fugitive emissions,
geochemistry, surface and groundwater hydrology, aquatic biota, wetlands
delineation, cultural resource survey, socioeconomic analysis, and noise and
visual impact studies. The cultural resources survey and wetland delineation
were completed in 2004. Surface and ground water hydrology was initiated in
2000. The Environmental Assessment required under NEPA would drive the timeline,
but permitting was expected to be completed in 2006 provided there was no
significant public opposition.

Engineering projects were to include deposit model, pit design,
mine plan, access road design, geotechnical review for pit slope angles, and
dewatering review of related test work.

Data Folio - Baseline studies for permitting Gil were initiated
in 2005 and will continue in 2006 as will the development of mine plans for the
Gil property. Permitting and engineering activities are significant budgetary
items this year. A properly cleaned, compiled, and interpreted digital database
will be used to identify new targets and develop new target concepts, and will
also have obvious value as Gil transitions from exploration to development.

Airborne Geophysics - A high resolution aeromagnetic and EM
resistivity survey, the draped helicopter survey will be flown along 100 m
spaced lines and at a 30 m ground clearance. Approximately 300 line kms of the
2,310 kms survey will be flown over the Gil Venture property. The purpose of the
survey is to provide resolution of subtle magnetic texture like that associated
with the Fort Knox deposit and to add resistivity as a complimentary data set.
The objective is to produce a more detailed structural and lithologic base map
of the Fort Knox Trend. This base will help focus other targeting activities and
may identify targets for an immediate drill test on the Gil Joint Venture.

In October 2005, we completed a reverse drilling program. The
Gil/Sourdough drilling consisted of 1,560 feet of RC drilling for a total of 9
holes. Work by Fairbanks Gold Mining Inc./Kinross Gold consisted of an update of
the geologic database and a high-resolution electromagnetic (HEM) airborne
geophysical survey.

The database update began in January and continued
intermittently throughout the year. Work focused on revising soil sample
locations using updated GPS coordinates, compiling data for geologic map
production and revising the resource model.

In July, 2006 Fugro Airborne Surveys Inc., under contract to
Fairbanks Gold Mining Inc./Kinross Gold, initiated an HEM airborne geophysical
survey of the area. HydroGeophysics Inc. interpreted the geophysical data and
identified several targets within the Gil Joint Venture claim block. (HGI)
delivered an interpretation map with recommendations for geological and
geophysical follow-up based on the low resolution geophysical data. Two target
areas were identified and recommended for further geologic and geophysical
investigation within the Gil Joint Venture area:

1) Last Chance Creek - This target occurs on a shear zone
approximately 3.1 miles east and 1.2 miles in close proximity to the south end
of an interpreted intrusive.

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2) Too Much Gold Creek  This target lies on a shear located on
the west edge of an intrusive. This target is largely located within the Gil
Joint Venture, although a portion lies in the Fish Creek Claims. The Fish Creek
claims are 50% owned by Linux Gold Corp. and optioned to Teryl Resources Corp.,
but are not part of the Joint Venture.

The final interpretation was completed on December 16th, 2005
and outlined six areas of interest within or partially within the Gil Joint
Venture. Drill holes for three of these target areas were proposed within the
Gil Joint Venture.

The goal of the 2006 Gil Joint Venture exploration program was
recommended to initially focus on completing an overall update of the database.
This included the production of new geologic and geochemical maps. Fieldwork was
recommended to consist of mapping and sampling across interpreted geophysical
and geochemical anomalies. This updated information could then be integrated
with the geophysical data to further define existing exploration targets or
generate new targets in the Gil Joint Venture claim block.

In September, 2006, the necessary permits were approved, and
drilling commenced on the new gold target. The initial drill program consisted
of three drill holes, which tested the most favorable geophysical targets, and
approximately 2000 of drilling, with a potential for additional drilling
pending the results of the first phase. The new gold target was located by
integrating geologic and geochemical information with the recent geophysical
data. As of the date of this 20-F, we are waiting to receive a 2008 budget from
Kinross, our joint venture partner and the operator of the claim, to fund future
exploration. No work was done on the property during 2007 as Kinross, the
operator of the claim, did not provide a budget and work program for 2007.

Mineralization

Gold mineralization is contained within two distinct zones
designated the Main Gil and the North Gil, the latter situated 366 metres north
of the former. A third zone showing potential, the Sourdough Ridge zone, occurs
some 790 metres further east and is in the early stages of exploration. To date,
the Main Gil zone has been extensively drill tested over a minimal strike
distance of 1,006 metres to 152 metre depths. Gold values occurs within a
calc-silicate horizon approximately 21 metres thick striking N60E, dipping
between 45 and 70 degrees NW. Indicated resource is calculated to be 10,700,000
tons at 0.04 opt gold.

The host calc-silicate horizon is described as a
biotite-pyroxenite-actinolite-quartz-calcite schist derived from finely
laminated mafic volcanic tuff or impure marl of amphibolite metamorphic grade.
While favourable as a gold-bearing host, the presence of secondary quartz
stockworking, veining and/or faulting/fracturing is vital for elevated gold
values. Veining varies in character but falls into two broad gold bearing
categories: a) discrete white quartz veins up to 1 inch in width; and b) later
discrete thinner quartz-carbonate veins with or without actinolite/pyroxenite.
Both sets dip steeply and both are preceded by apparently barren quartz-feldspar
veins and are cut by later calcite veins.

The presence of abundant pyroxenite and secondary iron rich
actinolite are necessary for high gold values. The latter minerals form as dark
green fibrous mats sub-parallel to foliation and are seen as retrograde
replacement products of hornblende and pyroxene. Fine-grained biotite is also
found in close association. The characteristic dark green colour of the
assemblage is frequently used as an exploration guide for elevated gold values.
Gold deposition is not only caused by system cooling of the aqueous siliceous
solutions but also the replacement of pyroxene by Fe-rich ilmenite and ilmenite
by rutile. This process liberates ferrous iron, the oxidation of which
destabilized the Au(HS)2 complex. The released iron is then free to form pyrite
or pyrrhotite, thus lowering the fugacity of sulphur in the fluid, which also
destabilizes the gold complex. Sulphides include pyrrhotite and pyrite while
oxides are ilmenite and rutile. Magnetic, molybdenite and chalcopyrite are
rarely seen.

The North Gil zone exhibits a slightly different character in
that elevated gold values are entirely associated with quartz veining. A lesser
preference is seen for host units as the veins occur within quartz-mica schists,
the felsic schists (slightly favoured) and/or calcareous biotite-chlorite-quartz
schist. Sulphide contents of less than 1% consist of pyrite and/or calcite
veins. Veins are generally less than two inches wide, dip from 45 degrees to
vertically and consist primarily of white quartz or quartz-calcite with or
without actinolite/pyroxenite. Overall zone dimensions are in order of 1,000 by
500 feet and have been tested to 1,000-foot depths where grades remain strong.
The zone remains open along strike, both to the east and the west.

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More persistent gold values are found a) when quartz veining
occurs within the felsic schist or the interlayered felsic schist; b) when
quartz veins occur in or near contacts between lithologies; c) in and around the
margins of shear zones; and d) among areas of increased carbonate rock (calcite
veins and/or marble). A third area receiving increased exploration attention is
the Sourdough Ridge Zone. Four reverse circulation drill holes have returned
values of potentially mineable grade material while an additional two contain
significant values. Two types of gold bearing veins occur within the
calc-silicate units and mica schists, namely quartz-carbonateamphibole and
quartz veins. They tend to be narrow, striking in an east-westerly direction
with near vertical dips. Positive exploration results in this zone imply a
doubling of the previously known mineralized strike length.

Drilling

Kinross had initially utilized an auger drill in its
exploration on the Gil Mineral Claims. Auger drill depths generally range from
two to 60 feet with the average in the eight to 20 foot range. Cuttings are
assayed using a one assay ton fire assay and a 34 element ICP package. The core
from diamond drilling is generally HQ sized with occasional NQ where reduction
is dictated by faulted ground. The core is logged, photographed and a sample
taken for reference approximately every ten feet. The remaining core is
submitted in five-foot intervals for gold assay using a one assay ton fire assay
with AA finish. As reverse circulation drilling is used for grade evaluation in
a low-grade gold environment, great care is employed in the sampling procedure.
Holes are sampled on continuous intervals of five feet with a quarter split
retained as a sample. A Jones splitter mounted directly below the cyclone is
used when drilling dry while a rotary wet splitter is used when drilling
wet.

Sampling, Analysis and Security of Samples

Samples are analysed by one assay ton with an AA finish.
Duplicates of each 10th, 30th, 50th, 70th, 90th sample, and so on, are sent to
the primary lab under different numbers while duplicates of each 20th, 40th,
60th, 80th, 100th, etc., sample are sent to another lab. On every 40th sample,
the primary lab does a recheck at their own facility while every 80th is sent to
an outside lab. A duplicate sample at the end of every logging page, every 100
feet, is taken at the drill and sent to the primary lab. Chemex Labs, and more
recently Bondar-Klegg, have carried out the bulk of Issuers analyses over the
decade. In addition, an experienced gold panner employed at the rig takes a gold
pan full of cuttings at each five foot interval. The cuttings are panned and the
concentrate examined for gold colours, the presence and type of sulphides and,
should suspected tungsten minerals occur, these are placed under an ultraviolet
light for examination. Everything is recorded along with the details of the
lithology. Samplers and loggers are discouraged from wearing jewellery during
work.

Mineral Resources and Mineral Reserve
Estimates

Metallurgical testing on the Main Gil zone has proven positive.
Indicated recoveries are in excess of 90% for the Main Gil and 79% for the North
Gil. The positive recovery aspects of the Gil resource further enhance its
eventual placement into the ore category. In a negative sense, the geometry of
the Main Gil zone suggests a fairly high stripping ratio, possibly in the order
of 6:1, overall to a 500-foot depth.

Drilling at the Main Gil has indicated consistent, somewhat
strataform mineralization over a strike length of 2,500 feet. A typical section
is characterized by thin higher grade zones interspersed with relatively wide,
low grade or barren intervals. The zone has been drilled to depths of 500 feet.
Thickness is an average of 75 feet. At an average dip of 65 degrees and a
specific gravity of 2.5, such a zone would contain a resource of 10,795,500
short tons.

The North Gil is characterized by narrow, relatively high
grades zones with intervening zones of low grade to barren rock. The lacking of
any obvious stratigraphic control adds to the difficulty of a resource
calculation, however, the presence of the Main Gil pit one thousand feet to the
south, means that the cost to exploit the adjoining North Gil zone would be
minimal.

Mining Operations

Currently, there are no mining operations conducted on the Gil
Mineral Claims. Our exploration programs at the Gil property are exploratory in
nature.

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WEST RIDGE PROPERTY

Description and Location

The West Ridge gold property is located approximately 15 miles
north of Fairbanks, Alaska, in the Livengood A-2 1:63,360 quadrangle. The
propertys western margin is crossed by the Elliott Highway, a major paved
artery connecting Fairbanks to the North Slope oil and gas production facilities
at Prudhoe Bay. The West Ridge property consists of 48 state of Alaska mining
claims covering 1750.5 acres. The state claims are registered with the Alaska
Division of Mining, Land, and Water Management with Teryl Resources Corp. as the
100% owner.

Mineral rights in this part of Alaska are administered by the
State of Alaska. Annual mining claim rents vary according to claim size and age
and are due and payable by November 30 of each year for State mining claims.
Claim rentals are paid in addition to annual work commitment on State mining
claims total ($2.50 per acre per year). Amounts spent in excess of these levels
are bankable on State mining claims for up to four years into the future. All
claims on the West Ridge project currently are in good standing. There currently
are no unusual social, political or environmental encumbrances to mining on the
project. Teryl currently holds a valid 3-year Hardrock Exploration Permit on the
project. Additional permits for future work will be acquired from the Alaska
Department of Natural Resources on an as-needed basis.

Accessibility, Climate and Infrastructure

The West Ridge property is approximately 15 road miles north
  of Fairbanks via the paved Elliott Highway. The south side of the property is
  accessible via seasonal dirt roads and the Old Murphy Dome Road while the north
  side of the property is accessible via the Dome Creek Road and seasonal dirt
  roads connecting to it. A cellular phone network already covers the West Ridge
  property. The greater Fairbanks area supports a population of approximately
  75,000 and has excellent labor and services infrastructure, including rail and
  international airport access. Exploration and development costs in the Fairbanks
  area are at or below those common in the western United States.



Snow generally falls on the property in late September or early
October, remaining on the ground until mid to late May. The month of April is
particular productive for drilling and moving heavy equipment over normally soft
or swampy areas which remain frozen. Exploration work involving heavy equipment
is generally suspended during the break up period extending from mid-April
through the end of May and the freeze up interval through mid-October to early
November.

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Elevations on the property range from 800 feet to over 1900
feet. Topography in the area is dominated by low rounded hills dissected by
relatively steep walled valleys. Outcrops are scarce except in man-made
exposures. Vegetation consists of a tundra mat that supports subarctic
vegetation. A variably thick layer of aeolian silt covers valley bottoms on the
property. Permafrost is limited to small discontinuous lenses on steep, poorly
drained north-facing slopes and has posed no hindrance to past exploration.
Average annual precipitation is 13 inches, mostly as snowfall. Mining operations
can be conducted on a year-round basis and heap leach technology has been
profitably employed at two locations in the Fairbanks district since 1985.

History

The Dome Creek basin has been one of the most productive placer
gold drainages in the Fairbanks District with the portion of the drainage from
Seattle Creek (draining the central West Ridge project area) downstream to the
townsite of Olnes producing approximately 114,000 ounces of placer gold between
1903 and 1973. The United States Smelting Refining and Mining Company
(USSR&M) conducted dredging in Dome Creek from Seattle Creek to Moose Creek
from 1955  1959. A small scale underground drift mine was operated by Roberts
Mining started from 1989 to 1993 below the lower limit of U.S.S.R. & M.
dredging. During the summer of 1989 Roberts Mining processed about 14,000 cubic
yards of gravel mined the previous winter that averaged 0.04 ounces per cubic
yard. In 1991, Robert's Mining mined 11,470 cubic meters (15,000 cubic yards) of
placer pay at the drift mine, reworking old drifts and removing side pay left by
the early 20th century hand miners. Although limited evidence exists of small
scale surface placer prospecting exists in Seattle Creek, Moose Creek No. 1 and
Moose Creek No. 2, no information is available to the author regarding these
activities or possible production from them.

Several small lode gold and tungsten occurrences occur with and
adjacent to the West Ridge project. Prior to 1943 a small occurrence of
scheelite was discovered at the Old Glory prospect on the ridge between Seattle
Creek and Moose Creek No. 2. A 3-foot zone of weathered schist containing
disseminated scheelite was found which strikes N44oE and dips 45oSE. The average
tungsten tri-oxide content was estimated at 0.5 to 1%. Channel samples across
4.5 feet of the disseminated scheelite zone contained 0.48% tungsten tri-oxide.
A fine-grained quartz diorite dike was found 8 feet below the surface in the
bottom of a small pit sunk in the same trench where the scheelite was
encountered. No record of production or other exploration is available on this
prospect. Vegetation observed in 2003 that had grown up in the trench suggests
this prospect had not been explored of at least 30 years.

Teryl Resources acquired the property in the early 1990s and
conducted limited ground magnetics surveys and power auger soil sampling on 400
foot spaced northsouth lines. This work outlined two broadly defined gold in
soil anomalies, the East anomaly lies on the divide between Seattle and
Steamboat Creeks on the eastern margin of the property. The Western anomaly is
located on the divide between Moose Creek No. 2 and small unnamed tributaries of
Dome Creek in the central portion of the West Ridge property. Follow-up work on
these anomalies was conducted by Kinross in 1998 and 1999 when Kinross completed
widely spaced Bombardier auger soil sampling and followed up by drilling 4
reverse circulation drill holes (1,650 feet) along the old powerline right or
way within the Western anomaly. Kinross terminated its option on the property in
early 2000.

No further work was conducted on the West Ridge prospect until
July 2003 when Teryl retained Avalon Development Corp. to review past work and
make recommendations for future work on the property. Initial efforts focused on
the Old Glory and the newly discovered Black Dome prospects. During the period
July 2003 through January 2004, Teryl funded hand trenching, rock sampling,
power soil auger sampling, trenching and ground magnetics and VLF surveys over
the Old Glory prospect and limited power soil auger sampling, rock sampling and
prospecting on the Black Dome prospect.

In September 2004, we discovered a new zone of gold
mineralization. Rock and soil sampling was conducted in August approximately
1,600 meters west of the Old Glory prospect where the Company discovered
significant gold mineralization in 2003. Exploration in the newly discovered
area was prompted by past soil sampling conducted by Amax Gold that indicated
anomalous gold and arsenic in soils on the ridgeline between Moose Creek #1 and
Moose Creek #2. Initial sampling consisted of 14 soil samples and 20 rock
samples collected from hand-dug pits.

Of the 175 soil samples collected, 29 returned values greater
than 10 parts per million gold with the maximum value being 98 parts per
million. An additional 32 returned anomalous gold values ranging between 5 and
10 parts per million. Anomalous gold was associated with elevated arsenic,
antimony, lead, bismuth and tungsten. The presence

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of anomalous bismuth (to 15 ppm) and tungsten (to 370 ppm) in
soils suggests that gold mineralization within the sample grid may be intrusive
related, a similarity shared by several other intrusive-related gold systems in
the Fairbanks District.

Anomalous gold and pathfinder elements in the 2004 soil grid
occur in four discrete areas of the grid and all four areas are open to
expansion into lands owned and leased by Teryl.

No field work was conducted on the West Ridge property during
the fiscal years ended 2006 or 2007. The Company has postponed exploration work
on the Westridge property in order to focus its exploration expenditures on its
other properties.

Geological Setting

Bedrock geology of the Fairbanks Mining District is dominated
by a N60-80E trending lithologic and structural trend covering a 30-mile by
15-mile area . The southern two-thirds of the West Ridge project is situated
primarily in lower to middle Paleozoic metavolcanic and metasedimentary rocks of
the Cleary Sequence and Fairbanks Schist. These rocks are in fault contact along
the northeast trending Eldorado Fault which separates Fairbanks Schist on the
south from eclogite and amphibolite facies rocks of the Chatanika Terrane on the
north. Rocks of the Cleary Sequence and Fairbanks Schist are exposed in the
Cleary antiform, the northern of two northeast trending antiformal belts present
in the district.

Lithologies in the Fairbanks Schist include quartz muscovite
schist, micaceous quartzite and biotite quartz mica schist. These lithologies
have been metamorphosed to the lower amphibolite facies. Lithologies within the
Cleary Sequence include quartzite, massive to finely laminated mafic to
intermediate flows and tuffs, calc-schist, black chloritic quartzite,
quartz-sericite schist of hydrothermal origin and impure marble.

Most investigators believe rocks of the Cleary Sequence and
Fairbanks Schist have been over thrust from the northeast by eclogite to
amphibolite facies rocks of the Chatanika terrane. The Chatanika terrane
consists of quartz muscovite schist, carbonaceous quartzite, impure marble,
garnet feldspar muscovite schist, and garnet-pyroxene eclogite that have yielded
Ordovician Ar40/Ar39 age dates. Motion on the Chatanika thrust fault has been
dated at approximately 130 million years, Metamorphic histories of the Chatanika
eclogite and Fairbanks Schist within the Yukon Tanana Terrane, Alaska, as
revealed by electron microprobe geothermometry and 40AR/39AR single grain dating
and resulted in structural preparation of favorable host units in the Chatanika
terrane and adjacent lower plate rocks. Evidence from the district and from
other parts of Interior Alaska with similar geologic histories suggest rocks
classified as part of the Cleary Sequence may in fact be both Fairbanks Schist
and Chatanika terrane rocks separated by multiple low angle structures that
could be either thrust or gravity faults or both.

Intrusives in the Fairbanks district have yielded Ar40/Ar39 and
K-Ar dates of 85-95 million years. These intrusives range in composition from
diorite to granite and possess elevated Rb/Sr ratios indicative of significant
crustal contribution to subduction generated magmas. Several granodiorite to
aplite intrusive bodies are present in the West Ridge project area. The presence
of hypabyssal intrusives and sporadic Au and Au-W mineralization in the West
Ridge project area suggests the area may be underlain by more extensive
intrusive bodies similar to those on Pedro Dome and Gilmore Dome. This
conclusion is supported by airborne geophysical surveys. Mineralization within
the Pedro Dome, Gilmore Dome and Dolphin intrusive complexes suggests plutonic
rocks pre-date or are contemporaneous with mineralization.

Rocks on the West Ridge project are folded about earlier
northwest and northeast trending isoclinal recumbent fold axes followed by an
open folded N60-80E trending system. Upper plate rocks of the Chatanika terrane
have been affected by more intense northwest and northeast trending isoclinal
and recumbent folding followed by folding along the same N60-80E trending axis
which affected lower plate rocks. Lithologic packages in both the upper and
lower plates are cut by steeply dipping, high angle northwest and northeast
trending shear zones, some of which are mineralized. Airborne magnetic data in
this part of the Fairbanks District indicate the presence of district scale
east-west and northeast trending structures which appear to pre-date N60-80E
folding. Although little empirical evidence exists from the West Ridge property
itself, gold mineralization on the West Ridge project probably post-dates
regional and district scale folding and probably is contemporaneous with or
slightly younger than district-scale northeast trending structures and plutonic
activity.

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Deposit Types

Recent discoveries in the Fairbanks District have outlined a
series of distinctive mineral occurrences which appear to be genetically related
to mid-Cretaceous plutonic activity which affected a large area of northwestern
British Columbia, Yukon, Alaska and the Russian Far East. This work, based on
extensive geologic and structural mapping and analytical studies (major and
trace element analysis, fluid inclusion microthermometry, Ar40/Ar39
geochronology, and isotope analysis) has provided new information regarding gold
metallogenesis in the Fairbanks district. A synthesis of this information
suggests an ore deposit model in which gold and high CO2 bearing fluids
fractionate from ilmenite series, I-type mid-Cretaceous intrusions during the
late phases of differentiation. The gold is deposited in anastomosing pegmatite
and/or feldspar selvage quartz veins. Brittle fracturing and continued fluid
convection and concentration lead to concentration of gold bearing fluids in
intrusions and schisthosted brittle quartz-sericite shear zones. Carbonate
and/or calcareous metamafic horizons host W-Au skarns and replacement deposits.
Structurally prepared calcareous and/or carbonaceous horizons may host
bulk-mineable replacement deposits. These occur most distal to the intrusions
within favorable host rock in the Fairbanks Schist and Chatanika Terrane.

Seven different potentially economic gold deposit types have
been identified in Interior Alaska and the Fairbanks district. They are: Gneiss
or high-grade schist-hosted quartz veins or metasomatic replacement zones
proximal to or within causative intrusives. Metals associated include Au, Bi,
and As and possibly Cu and W. Pogo (5.6 Moz) and Gil (433,000 oz) are examples
of such mineralization. There is a strong genetic relationship between the
causative intrusion and gold mineralization but no obvious spatial
relationship.

Stockwork-shear style mineralization hosted in porphyritic
intermediate to felsic intrusives. Mineralization contains Au with anomalous Bi,
Te, W and trace Mo. Examples include Fort Knox (7.2 Moz) and Dublin Gulch (+1
Moz). There is a strong genetic and spatial relationship between host intrusion
and gold mineralization. Porphyritic stockwork with intrusion/schist shear
hosted Au-As-Sb (Ryan Lode, 2.4 Moz) with a strong genetic and spatial
relationship between host intrusion and gold mineralization,

Base metal ± Au, Ag and W intrusion hosted mineralization with
both spatial and genetic relationship between precious metal mineralization and
intrusion. Examples include Dolphin (0.6 Moz) and Silver Fox prospects.
Structurally controlled mineralization hosted by schist-only high angle shear
zones and veins. Associated metals include Au, As, Sb, Ag, Pb and W in low
sulfide quartzcarbonate veins. Alteration adjacent to veins is pervasive
quartz-sericite-sulfide alteration that can extend for up to one mile from the
source structure. Deposits were mined heavily prior to World War II and are
noteworthy because of their exceptional grades (+1 to +5,000 opt Au). Examples
include Cleary Hill (280,000 oz production), Christina, Hi Yu (110,000 oz
production) and Tolovana (500 oz production) veins. There is a strong genetic
relationship between the causative intrusion and gold mineralization but no
obvious spatial relationship. Low angle, disseminated, carbonate-hosted Au-As-Sb
mineralization associated with brittle thrust or detachment zones distal to
generative intrusives. The True North deposit (1.3 Moz) is an example of this
type of mineralization. There is a strong genetic relationship between causative
intrusions and gold mineralization but no obvious spatial relationship.

Shear-hosted monominerallic massive stibnite pods and lenses.
Trace As, Au, Ag and Pb but these prospects are noteworthy because they appear
to represent the most distal end members of the intrusive gold hydrothermal
systems. Examples include Scrafford and Stampede mines. There is a strong
genetic relationship between causative intrusions and gold mineralization but no
obvious spatial relationship.

Mineralization

Little is know of the controls for mineralization on the West
Ridge project however gold mineralization in the Fairbanks District is well
documented and reasonably well understood. The majority of the mineralized
structures in the district trend either N60-80W and dip steeply to the southwest
or N40-60E and dip steeply to the northwest. These shear zone geometries and
their distribution may represent sympathetic structures generated by regional
scale shear couples related to Tertiary (post 55 Ma) motion of the Tintina and
Denali faults.

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Examination of the spatial arrangement of gold occurrences in
the Fairbanks District suggests clusters or swarms of gold-bearing veins,
stockworks and shear zones are controlled by a series of district-scale
northeast-trending structures regularly spaced approximately 8,000 feet (2.4 km)
apart across the district. These structures were first identified as district
scale features evident on public airborne geophysical surveys conducted in the
mid-1990s. Their periodicity with respect to clusters of known gold occurrences
was unrecognized prior to that time. The Eldorado fault, which cuts through the
West Ridge property, is the best documented of these district scale northeast
structures and appears to control mineralization at both the Ryan Lode (2.4
million ounces) and the True North (1.3 million ounces) deposits. Gold
mineralization to the west of the Eldorado Creek fault in the Treasure Creek
area and the Sheep Creek area of Ester Dome may also be controlled by regularly
spaced northeast trending structures.

The other recently recognized feature of gold mineralization in
the West Ridge area is related to the structural relationship between lower
plate rocks of the Fairbanks Schist  Cleary Sequence and upper plate rocks
of the Chatanika Terrane. Published maps of the district indicate that the
contact between the overlying Chatanika Terrane and rocks of the lower plate are
marked by a single north-dipping thrust plane that strikes northeast. This
thrust event was dated at 130 Ma based on data derived from a single core hole
drilled by Placer Dome on Marshall Dome several miles east of the West Ridge
project. The actual contact between upper and lower plate rocks is not exposed
at surface anywhere along its mapped trace so the inferred motion direction
(thrust versus low-angle gravity fault) is unknown. With the exception of gold
and antimony mineralization in the vicinity of the True North deposit, published
geologic maps of the district indicate that all of the historic lode gold,
tungsten and antimony occurrences in the district are hosted in lower plate
rocks. However, geological and geochemical data from the West Ridge property
suggest that lode gold mineralization on the Old Glory prospect on the West
Ridge project is hosted in a zone containing mixed lithologies derived from both
upper and lower plate rocks. This mixed zone appears to may be the result of
multiple en-echelon low angle structures separating upper and lower plate rocks.
If this interpretation is correct, the grade and geometry of gold mineralization
in the West Ridge project area may be controlled in part by district-scale
northeast trending master structures and favorable physio-chemical conditions
in host rocks separated by en-echelon low-angle faults related to emplacement of
the Chatanika Terrane.

Drilling and Exploration and Development

Prior to the work conducted by Teryl in 2003 the only
significant exploration work conducted on the West Ridge project was that
conducted by Teryl (1992-96) and Kinross (1998 and 1999, See History). Teryls
efforts consisted of ground magnetics and soil auger sampling which identified
the East and West anomalies (see History). Except for gold values, details of
these surveys were not available. A total of 718 soil auger samples were
collected by Teryl with gold values ranging from .2 to 99 ppm (Teryl, 1996).
Anomalous gold was clustered in two locations in the central part of the
property on the ridge between Moose Creek and Seattle Creek and on the divide
between upper Dome Creek and Steamboat Creek. A single anomalous soil sample
containing 21 ppm gold was detected near the Old Glory prospect but was not
associated with other anomalous soil samples.

In 1998 Kinross Gold, acquired the West Ridge property and
completed due diligence sampling that confirmed the presence of anomalous gold,
arsenic and antimony on the East and West Anomalies. Additional widely spaced
Bombardier soil auger sampling was completed in 1999 and reverse circulation
drilling was conducted on the West anomaly. This work identified two large gold
in soil anomalies, the East and West anomalies. The West anomaly measures 4,000
feet NW-SE by 3,000 feet NE-SW and contained numerous samples with +10 ppm gold
and +200 ppm arsenic. Limited surface rubble crop returned anomalous gold in
felsic intrusive and quartzite with the values ranging from <5 ppb to 16.45
ppm. The East anomaly, while containing lower overall geochemical values, is
over 7,000 feet long NE-SW and extends off the West Ridge property to the
northeast. Gold in soils on the East anomaly reached a high of 1.64 ppm. A
single sample anomaly containing 96 ppm gold was identified 2,000 feet west of
the Old Glory prospect but the Old Glory prospect was not covered by the Kinross
soil sampling grid.

Kinross conducted follow-up reverse circulation drilling in 5
holes (1,650 feet) on the West anomaly. This drilling failed to intersect
significant mineralization except for a 20 foot interval in hole WR1 with
returned 0.033 opt gold from 115 to 135 feet and a 10 foot interval in hole WR4
with returned 0.040 opt gold from 340 to 350 feet. Gold-bearing intrusive rocks
that were mapped and sampled at the surface were not found to be extensive in
drilling. Anomalous gold in drill cuttings was associated with elevated arsenic
and antimony similar to other gold-bearing systems in the central Fairbanks
Mining District. Kinross terminated its interest in the property prior to the
2000 exploration season.

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In July of 2003 Teryl retained Avalon Development to evaluate
  the West Ridge project and make recommendations for future exploration. This
  evaluation revealed a number of significant gold and pathfinder anomalies where
  no follow-up work had been completed. Initial field exploration efforts in 2003
  focused on the Black Dome area of the property where prospecting revealed the
  presence of a previously undocumented abandoned adit/trench on the north facing
  ridge above the Dome Creek. Chatanika terrain eclogite, black carbonaceous schist
  and quartzite are exposed in the walls of the excavation which appears to date
  back to the 1950s. Samples of the carbon rich, Fe-oxide stained carbonaceous
  schist returned a high of 105 ppb gold. Due to the low gold concentrations and
  lack of quartz stockwork veining characteristic of upper plate mineralization,
  exploration emphasis was shifted to the south to the Old Glory prospect.



Initial efforts at the Old Glory prospect included
hand-trenching in the vicinity of the historic tungsten-bearing trench. Grab
rock sampling conducted in and around this old slit trench produced several
significant gold values with associated with highly anomalous arsenic and
sporadic anomalous lead, bismuth, antimony and tungsten. The presences of
gold-bearing calc-silicate alteration in some rock samples and sporadic
anomalous bismuth (<2 to 144 ppm) suggests the presence of a gold favorable
intrusive system similar to that being drilled currently by Kinross Gold at
their Gil project in the eastern Fairbanks District.

The extent of this type of mineralization and the possible
presence of the causative intrusive were unknown so a small closely spaced (10
meter spacing) soil auger grid was placed over the Old Glory discovery area.
This work revealed a 100 square meter + 5 ppm gold anomaly within which 56 out
of 121 samples contained over 10 ppm Au with a high of 1,15 ppm Au. An expanded
soil sampling program was conducted August-October and consisted of an
additional 405 soil auger samples on 25 meter centers.

Geochemical data from the two integrated grids delineated at
least two prominent structural trends associated with gold mineralization at Old
Glory. The dominant trend for gold in soils is N30E. This trend lies along a
mapped district-scale northeast trending linear defined from airborne
geophysical surveys. A less apparent N45W trending

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gold anomaly can also be interpreted from the soil geochemistry
however the northwest trending anomalies are less continuous and of lower
magnitude than the northeast trending anomalies. There is a strong correlation
in soil geochemistry between Au, As and Sb and to a lesser degree with Bi and W.
Gold, arsenic and antimony are elevated within a northeast trending corridor
measuring 650 meters in length by 375 meters in width. The anomaly remains open
to expansion beyond the limits of the soil auger grid. Gold, arsenic and
antimony also display less obvious northwest trending soil anomalies suggesting
the northwest trending mineralization pre-dates the district-scale northeast
shear system.

Soil geochemistry also delineates a remarkably clear boundary
between schists of the Chatanika Terrane, Fairbanks Schist and Cleary Sequence
on the south and hornblende granodiorite to the north. This intrusive is thought
to be the western limit of the Pedro Dome intrusive. Limited rubble crop of the
Pedro Dome intrusive exists along the old powerline access road on the north end
of the soil grid. These rubble crops are unaltered and unmineralized as are most
of the soil chips collected from soil samples in the northern 1/3 of the soil
grid area. However, more felsic derivatives of the Pedro Dome intrusive are
concentrated along the intrusive  schist contact and intruding into the schist
units south of the main contact. These contact units are strongly sericite
altered and contain variable amounts of gold and pathfinder elements. Soil
geochemistry suggests potassic alteration and Au-As-Sb mineralization are
associated with these marginal phase intrusives. In addition elevated bismuth
values in soils, while generally low (3-5 ppm), are generally located within or
proximal to sericite-altered granodiorite. These findings suggest gold
mineralization may be related to late-stage intrusives which are in turn
controlled by the district scale northeast trending structures.

The preliminary rock sampling and soil auger sampling results
prompted Teryl to approved backhoe trenching over the central portion of the Old
Glory soil anomaly. Three trenches (342 meters total) were excavated, mapped and
sampled in October 2003. In addition, ground based magnetics and VLF-EM surveys
that parallel trenches were completed in late November and a follow-up magnetic
survey was completed in mid January 2004 to expand geophysical coverage to the
south of the trenches.

Two of the three trenches were oriented west-northwest to cross
the main trend of soil anomalies and the predominant structural grain through
the Old Glory area. The other was oriented N30E parallel to and within the heart
of the Old Glory soil anomaly. Overburden thickness ranges from about 3 to 8
feet and consisted of thawed aeolian silt on heavily weathered bedrock. Trench
WR-1 is a total of 155 meters in length, trench WR-2 was 72 meters in length and
trench WR-3 was 115 meters in length. Each trench was mapped and chip channel
samples collected from the floor of the trench. Geochemical sampling was
conducted on 1 meter centers for altered and/or mineralized intervals and 2
meter centers for unaltered rocks. An additional 34 samples were collected as
high-grade material from selected locations.

The dominant lithologies present in the WR trenches include
massive to thinly bedded gray quartzite, massive to fissile brown and buff
micaceous quartzite, and fissile brown to gray quartz mica schist. Less common
lithologies observed include dark gray aphanitic quartz porphyry dikes, eclogite
and biotite diorite to granodiorite. Barren metamorphic sweat quartz lenses
from 1 to 3 centimeters in width are common and normally parallel metamorphic
foliation. Unaltered rocks generally weather rusty brown-orange to rusty
orange-brown.

Folding, faulting and shearing of varying degrees and
orientations were observed in the West Ridge trenches. In general, foliation
(S1) and original bedding (S0) are parallel and dip variably to the south. Small
folds are common with a predominant fold axis orientation of 070o with axes
plunging 14oE. There is no preferred orientation for faults. Dominant trends are
NE, NW, and E-W +/- 20o. with variable but generally steep (+60o) dips. Faulting
and shearing appear to be polyphase and some evidence was observed for foliation
plane or low angle displacement. Shears are characterized by variable sericite
alteration and occasional quartz veins/lenses. Several orientations of vertical
to steeply dipping joints also are present, the most prominent being N20-25oE,
N80oW, N80oE, and N40oW.

Sericite alteration is pervasive in rocks containing
significant anomalous gold and/or pathfinder elements and varies from weak and
patchy in less altered rocks to pervasive and strong in highly altered rocks,
most commonly where host rocks are cut by shear zones or at contacts with
altered granitic rocks. Secondary oxidation products consists of As, Sb, Fe, and
Mn oxides. Relative trace element concentrations help in identification between
and among the

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various rock types at the nearby True North mine and proved
useful in helping distinguish between oxidized, hydrothermally altered and fresh
units within the Chatanika terrane, Cleary Sequence and Fairbanks Schist.

Quartz of hydrothermal origin was observed in all trenches,
most commonly as 1 to 15 cm veins or stockwork veins in shear zones. Although
surface oxidation is nearly complete, small amounts of unoxidized vein material
remains in some of these shears and contain 1-3% sulfide/sulfosalts including
arsenopyrite, pyrite, stibnite and/or boulangerite-jamesonite. The best
exposures of mineralized shear zone was about the 70-meter mark of trench WR-1.
The shear zone at this location is controlled by a steeply south dipping fault
trending 290o. The immediate 10 meters in the hanging wall (south side) of this
mineralized structure contained abundant slickensides. The shear itself consists
of 30 cm of mineralized milky quartz vein and sericite altered schist fragments.
A one-meter chip channel rock sample from this shear returned 60 ppm gold and
2,430 ppm arsenic. Grab samples from this same zone returned 212 ppm gold and
5,280 ppm arsenic.

Trench 2 intercepted variably mineralized rock but failed to
return plus-1 gram per tonne gold values from channel or grab samples. The best
interval in trench 2 was a six-meter zone from 18 to 24 meters that returned
three consecutive 2-meter samples which returned 19, 70 and 14 ppm gold,
respectively. The first of these three samples contained a small dike of dark
greenish gray siliceous sericite-altered intrusive suggesting a genetic
relationship between anomalous gold and intrusive rocks on the prospect. Trench
WRTR0303 was oriented northeast southwest and extended from trench WRTR0302 on
the north through and beyond trench WRTR0301 on the south. The southern 15
meters of trench 3 intercepted a diorite to granodiorite intrusive which had
been noted in soil chips. This intrusive was highly oxidized but was strongly
sericite altered where fresh rock was present. Oxidized sulfide cast suggest the
fresh rock contained 1%-5% total sulfides. This intrusion is also cut by two
white aplite dikes. Geochemistry from channel samples collected in trench 3 show
a dramatic increase in gold and arsenic content within the intrusive. The
14-meter section of the trench which intercepted the intrusive averages 66 ppm
gold and 1,022 ppm arsenic with the highest grade portion of this interval being
a two-meter zone nearest the country rock contact which averaged 205 ppm gold
and 2,527 ppm arsenic. The intrusive mineralization remains open to expansion
beyond the end of trench WRTR0303.

Following return of geochemical results from the 2003 trenching
program, two ground geophysical surveys were conducted over the Old Glory
prospect. The initial survey consisted of magnetics and very low frequency
electromagnetics (VLF-EM) lines which were coincident with the three trenches.
These surveys revealed the presence of several coincident magnetic and VLF-EM
anomalies. Coincident magnetic and VLF-EM anomalies outlined in trenches 1 and 2
suggested that alteration and mineralization are likely controlled by a
northeast striking structural zone which has an apparent dip of 55 degrees to
the west. This interpretation is in agreement with soil geochemistry collected
earlier in the season. In addition, the magnetic response from last 15 meters of
trench WRTR0303 was markedly lower that the surrounding traverses within the
metamorphic country rocks suggesting magnetic surveys could be a useful tool in
tracing the extent of the mineralized intrusive encountered in trench 3.
Magnetic lows are known to be associated with gold-bearing intrusives elsewhere
in the Tintina Gold Belt.

A follow-up magnetic survey was completed over the Old Glory
prospect in January 2004 in an attempt to determine the extent of the intrusive
rocks encountered in trench WRTR0303. This survey consisted of three lines
ranging from 500 to 700 feet in length which extended from the south end of
trench 3 in a fan pattern to the southwest, south and southeast. All three lines
showed a marked decrease in magnetic response to the south suggesting a possible
schist  intrusive contact in that area. Additional exploration will be required
to determine if significant gold mineralization is associated with this probable
contact zone.

Drilling

We conducted a magnetic survey January 26th, 2004. The survey
was a southern extension to the earlier work based on prior trenching and soil
sampling, and is an attempt to define the southern limits of the intrusive -
hosted schist.

In September 2004, we announced the discovery of a new zone of
gold mineralization. Rock and soil sampling was conducted in August
approximately 1,600 meters west of the Old Glory prospect where the Company
discovered significant gold mineralization in 2003. Initial sampling consisted
of 14 soil samples and 20 rock samples collected from hand-dug pits.

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One of two areas selected for this work returned gold, arsenic
and antimony values which were consistently higher in soil samples collected
over granodiorite intrusive host rocks suggesting a possible genetic association
between the intrusive rocks and gold mineralization. The extent of the
mineralization is open to expansion beyond the areas sampled to date in
2004.

In November 2004, a total of 161 power auger soil samples were
collected on a small grid over the southern part of the West Ridge claims. In
addition to the 161 auger samples, 14 shovel soil samples were collected in the
same area as previous rock sampling. The grid was extended to the south onto the
northwestern edge of the Fox Creek claims in an attempt to see if mineralization
on the two properties could be linked via soil samples.

Anomalous gold was associated with elevated arsenic, antimony,
lead, bismuth and tungsten. The presence of anomalous bismuth and tungsten in
soils suggests that gold mineralization within the sample grid may be intrusive
related, a similarity shared by several other intrusive-related gold systems the
Fairbanks District.

Anomalous gold and pathfinder elements in the 2004 soil grid
occur in four discrete areas of the grid and all four areas are open to
expansion into lands owned and leased by Teryl.

No field work was conducted on the West Ridge property during
the fiscal years ended 2006 or 2007. The Company has postponed exploration work
on the Westridge property in order to focus its exploration expenditures on its
other properties.

Trenching

Geochemical results from the three West Ridge trenches indicate
the presence of widespread elevated gold, arsenic and antimony with sporadic but
lower level anomalous lead, molybdenum, bismuth and tungsten . Host rocks
consist of quartz mica schist, quartzite, felsic intrusives and breccia zones
containing one or more of these rock types and clearly show a strong shear zone
at about 70 meters in Trench 1 which separates quartzite and quartz mica schists
of the Fairbanks Schist with low level gold and pathfinder levels on the west
from more elevated gold and pathfinder levels to the east. Host rocks east of
this structure contain elevated levels of Mg, K, Ba, Ca, Ba, Sr, and V and
appear to be composed of host rocks with compositions similar to eclogitic rocks
of the Chatanika Terrane, an allochthonous terrane which hosts the True North
deposit to the northwest but which has never been identified as being present on
the West Ridge claims. The shear at the 70 meter mark returned grab samples with
values up to 2.12 grams per tonne gold and 5,280 ppm arsenic and strikes to the
northeast. This shear probably is responsible for the northeast-trending
gold-in-soil anomaly outlined previously by auger sampling. The extension of
this shear into Trench 2 did not yield significant gold mineralization but did
correspond to a 10-meter section of the trench with anomalous gold, arsenic and
antimony mineralization.

The most significant intervals encountered in trenching came
from the last 15 meters of trench 3 and intersected a highly oxidized sericite
altered diorite to granodiorite intrusive. This intrusive did not contain
anomalous Pd, Ag, Sb, Bi or W. Alteration associated with the intrusive included
strong sericitic alteration and a marked increase in aluminum and sodium values.
This sort of silicate alteration is normally associated with albitization in and
adjacent to gold-bearing intrusives in the Tintina Gold Belt of Alaska and the
Yukon. This intrusive mass remains open to expansion to the west and south into
an area of the previously completed soil auger grid where gold soil values are
consistently anomalous. This portion of the soil grid, measuring at least 100
meters north-south by 150 meters east-west, is defined by an amorphous
gold-in-soil pattern similar to that seen in intrusive hosted gold occurrences
elsewhere in the district.

Sampling Method and Approach

All rock samples collected during the 2003 field programs were
marked in the field using Garmin 48XL and Garmin Etrex hand-held GPS units. Each
grab rock sample collected for geochemical analysis was accompanied by a
separate hand sample retained for reference purposes. Each soil sample collected
for analysis was accompanied by a separate lithology sample that was washed,
logged and added to the digital database. Samples collected were placed in
double nylon shipping sacks and picked up at a secured warehouse by
representatives of ALS Chemex of Fairbanks.

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Soil sampling completed in 2003 consisted of power auger soil
sampling using 3-inch wide auger flights powered by man-portable gas powerheads.
Sampling protocols in place for the program dictated that only top of bedrock
soil samples would be collected. Samples were not collected at sample stations
where overburden was deeper than the 12 feet of auger flight on hand or where
discontinuous permafrost prevented sampling at the soil  bedrock interface.
Trench channel sampling conducted in October was conducted with geologic pick
and chisel.

Sample Preparation, Analyses and Security

All samples collected in 2003 were prepared by ALS Chemex at
their Fairbanks preparation facility and analyzed by ALS Chemex at their North
Vancouver laboratory. The entirety of each grab and channel rock sample was
crushed to 85% passing 75 microns (200 mesh). The entirety of each soil sample
collected in 2003 was dried, sieved through a 180 micron (80 mesh) screen and
pulverized to +85% passing 75 microns (200 mesh). All soil and rock samples were
analyzed for Au by 30 gram lead collection fire assay techniques with an atomic
emission spectrographic finish. In addition each sample was analyzed for a suite
of 27 trace elements using a four acid digestion procedure followed by
inductively coupled plasma (ICP) finish. Pulps and rejects from the 2003 program
were returned to Avalon Developments Fairbanks warehouse for permanent
storage.

Data Verification

Sample blanks composed of Browns Hill Quarry basalt from the
Fairbanks Mining District, Alaska were inserted as the first sample in a
submittal and thereafter in the same submittal on a minimum 1 for 25 basis. A
total of 82 sample blanks were inserted into the sampling sequence for the 2003
program. Extensive previous analysis of this same blank rock type has given
Avalon a large geochemical database for use on a comparative basis. Analyses
performed by ALS Chemex on the blanks from the West Ridge project indicate no
unusual or spurious sample results in the blanks submitted. No standards were
included in analytical sample shipments.

Mineral Processing and Metallurgical Testing

There has been no mineral processing or metallurgical testing
on mineralized material from the West Ridge property.

Mineral Resource and Mineral Reserve
Estimates

There are currently no mineral resources or mineral reserve
estimates on the West Ridge property.

Mining Operations

Currently, there are no mining operations conducted on the West
Ridge Mineral Claims. Our exploration programs at the West Ridge property are
exploratory in nature.

Fish Creek Claims

The Fish Creek project is located 25 miles north of Fairbanks
in a road accessible mining district with excellent land status and
infrastructure. The project is located within host rocks that contain
commercially viable mineralization elsewhere in the Fairbanks Mining District
and is located on streams that were mined extensively for alluvial gold in the
past both upstream and downstream of the Fish Creek project. Limited exploration
conducted between 1992 and 2003 did not reveal significant bedrock exposures of
mineralization. Wide-spaced placer gold drilling on a small area of the property
conducted in 2003 did not encounter significant placer gold mineralization
however, more extensive and closer spaced placer gold drilling conducted in 2004
indicated the presence of significant concentrations of placer gold on the
claims.

On March 5, 2002, the Company and Linux Gold Corp. entered into
an agreement whereby we could earn up to a 50% interest in the Fish Creek
mineral claims located in the Fairbanks district of Alaska, USA, by expending
$550,750 ($500,000 US) within three years and issuing 200,000 common shares
(issued December 16, 2002 at $0.08 per share). Linux will have a 5% net royalty
interest until we pay $2,203,000 ($2,000,000 US). The agreement was extended to
expire on March 5, 2007, and subsequently extended again to expire on March 5,
2009. The Company issued 100,000 common shares to Linux as consideration for the
2007 extension (see Item 10.C.).

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The following map shows the location of and access to our property.



A ground magnetic survey was completed on the Fish Creek
property on November 20, 2003 on the right limit (southeast) side of Fish Creek
Valley, approximately 600  700 feet down-valley from the toe of the Fort Knox
mine fresh water supply dam. This program was an orientation survey to test the
right limit bench of Fish Creek for a suspected buried placer gold-bearing
channel. Magnetic surveys of this type have been successful in locating elevated
magnetic field intensities associated with the heavy, magnetic mineral
concentrations often associated with placer gold accumulations. The field survey
consisted of two lines with 200-foot line spacing and 10-foot station spacing,
which appears to provide sufficient detail to extrapolate magnetic data between
lines. Total field and vertical gradient magnetic data have a good correlation,
suggestive of adequate base station data. Signatures from the two traverses are
interpreted to cross five features, of which three have the possibility of being
associated with alluvial concentrations of various characteristics.

The two anomalies recommended for physical testing were those
indicative of alluvial heavy magnetic mineral concentration encountered on the
west side of Lines 100N and 300N, just east of Fish Creek, and the strong
anomaly on the eastern extent of Line 300N. Depth estimates for these targets,
are generally 8 to 12 feet. A program of additional ground magnetics followed by
trenching and/or large-diameter auger drilling to evaluate the two most
promising alluvial gold targets was recommended for early 2004.

In March, 2003 our geologist consultant, Avalon Development
Corp., completed the Fish Creek reverse circulation drilling program. A total of
five holes were drilled to test several magnetic anomalies for potential placer
and lode gold mineralization. However, assays on the first phase of drilling on
the Fish Creek claims, did not reveal economic values on four out of the five
hole reverse drilling program. Hole number five, however, intercepted 5 feet of
2.33 ppm gold between 45  50 feet from surface. The five-hole reverse
circulation drill program was completed to test several magnetic anomalies for
placer and lode gold values.

A ground magnetic survey was completed on the Fish Creek
property on November 20, 2003 on the right limit (east) side of Fish Creek
Valley. A two-person crew, consisting of James Munsell, from Avalon Development
and equipment operator, Kerry Adler from On-Line Exploration Services, Inc.
conducted the survey. This was an orientation survey to test the right limit
bench for a suspected buried placer gold-bearing channel east of Fish Creek.

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Surveys of this type have been successful in locating elevated
magnetic field intensities associated with the heavy, magnetic mineral
concentrations often associated with placer gold accumulations.

The field survey consisted of two lines with 200-foot line
spacing and 10-foot station spacing, which provided sufficient detail to
extrapolate magnetic data between lines. Total field and vertical gradient
magnetic data have a good correlation, suggestive of adequate base station data.
Signatures from the two traverses are interpreted to cross five features, of
which three have the possibility of being associated with alluvial
concentrations of various characteristics.

The two anomalies recommended for physical testing were those
indicative of alluvial heavy magnetic mineral concentration encountered on the
west side of Lines 100N and 300N, just east of Fish Creek, and the strong
anomaly on the eastern extent of Line 300N. Depth estimates for these targets,
are generally 8 to 12 feet.

In May, 2004 we commenced a closely spaced magnetic survey over
the previous magnetic targets that were discovered in 2003. The magnetic survey
located two anomalies indicative of a potential buried placer gold bearing
channel.

In July, 2004, the drilling permit was approved by the State of
Alaska exploration division to drill up to 25 vertical eight inch diameter
holes, on two lines. Each line will be composed of 10 to 15 drill holes spaced
50 to 200 feet apart, and from 45 to 75 feet deep, to test two anomalies located
by a magnetic survey.

A total of 20 soil samples were collected near Odden Creek with
a hand held power auger to depths from 2 to 7.5 feet. These holes were placed on
a grid pattern with hole spacings of 200 feet to test for metal anomalies and to
examine bedrock chips in proximity to intrusive colluvium found on the surface.
Several groupings of holes were weakly anomalous in gold pathfinder elements and
identified as prospective lode gold targets. Total cost of this program was
$1,800.

In September and October 2004 a 22 hole (1,506 feet) reverse
circulation drilling program was completed on the property. Twenty holes were
drilled on two widely spaced lines to test the placer gold potential while two
deeper holes were drilled to test an intrusive-related lode gold target. Six of
the twenty placer holes returned intervals with encouraging gold values. Total
cost of the combined placer and lode drilling program was approximately
$54,000.

After completing the placer drilling, two lode gold exploration
holes totaling 405 feet of drilling were completed on the south side of Odden
Creek. Samples were collected every five feet, but did not result in any
significant concentrations of metals or other pathfinder elements.

In December 2004, a total of twenty 8-inch diameter RC placer
holes  from 40 to 70 feet deep - were completed and two 5.5 -inch diameter RC
lode holes 200 and 205 feet deep were drilled to test an intrusive target.
Alluvial placer gravels were generally sampled on intervals of five feet and
concentrated with a Denver Goldsaver. Drill cuttings were directed from the
drill string through the swivel-head into the Goldsaver via slurry hose for
immediate concentration. Placer concentrates were carefully panned and all
visible gold particles were extracted, dried, weighed, and saved for further
analysis. Other heavy minerals found in each sample interval were also dried,
weighed and saved for later analysis. The drill-concentrator system employed in
this program does not permit accurate measurements of the sample volumes,
therefore, sample grades are derived by dividing the recovered mass of placer
gold by the volume of an ideal cylinder. Sample grades also incorporate a purity
of 900 fine, which is based on historical production documented at placer mines
upstream from the 2004 drilling program.

For 2005, to elevate the upper part of the paystreak, the
partners planned to drill four lines of closely spaced holes 50 to 100 feet
apart on lines spaced 500 to 1,000 feet apart.

In August 2005, we commenced an extensive auger drilling
program All Gold Creek geophysical anomaly. In October 2006, six new geophysical
targets were located. An interpretive report titled Proposed Drill Sites, Fish
Creek Gold Property, Fairbanks Mining District, Alaska. Fugro Airborne Survey,
Inc., under contract to Fairbanks Gold Mining, Inc./Kinross Gold, initiated an
HEM Airborne geophysical area and identified six main targets on the Fish Creek
property.

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Together with Linux Gold Corp., we planned to implement an
exploration program during the 2006/7winter on the Fish Creek gold property.
Linux Gold Corp. has received permits to conduct exploration drilling on the
Fish Creek property. However, due to increased exploration activities in the
State of Alaska, and due to the Company being a junior mining company requiring
small-scale work competing for equipment with many larger companies, we have had
difficulty obtaining equipment to conduct the exploration drilling. It is our
intent to complete the drilling as soon as a drill is available and the weather
permits.

Additional work on the Fish Creek property will be based on
results from the previous drilling programs. Each successive phase of
exploration is dependent on generation of encouraging results from the previous
programs and the increasing potential for delineation of commercially viable
resources on the project. A two phase program has been recommended as
follows:

-Infill Reverse Circulation Drilling: Infill drilling using
large diameter reverse circulation methods is warranted on the property to
better define the placer gold mineralization outlined in 2004. Previous
experience by other operators within the Fish Creek drainage has shown that
drilling is an effective method of sampling and valuating the placer deposit and
provides predictable estimates of subsequent production. Previous work suggests
that drilling to obtain samples with volumes of 0.05 cubic yards each are
adequate to estimate the volume and value of the placer gold deposit. Sampling
procedures similar to those utilized in 2004 should be followed except that the
volume of each sample should be measured to provide a more accurate estimate of
the gold grades and to evaluate the recovery of the drilling system.
Additionally, all holes should be continued into bedrock for at least 25 feet to
test for the presence of lode gold mineralization. The primary goal of this
program would be to enable industry acceptable mineral resources to be
calculated between the two lines of drilling completed in 2004. A secondary goal
would be to determine if significant lode gold mineralization exists in the area
drilled. Recommended future work on the Fish Creek property should include
drilling 20 reverse circulation drill holes (8 diameter) for a total of 1,600
feet of drilling.

-Construction of an all-weather creek crossing for off-road
vehicles, near the mouth of Odden Creek, will facilitate this work. The
estimated cost of such work is $50,000. Fieldwork will take about one to two
weeks, whereas sample analysis and reporting will take an additional two to four
weeks.

-Step-out Reverse Circulation Drilling: if results of the phase
1 infill drilling are encouraging, step-out drilling using large diameter
reverse circulation methods is warranted on the property to expand on the placer
gold mineralization outlined in 2004. Sampling procedures similar to those
utilized in 2004 should be followed except that the volume of each sample should
be measured to provide a more accurate estimate of the gold grades and to
evaluate the recovery of the drilling system. Additionally, all holes should be
continued into bedrock for at least 25 feet to test for the presence of lode
gold mineralization. The primary goal of this program would be to enable
industry compliant mineral resources to be calculated for areas of the property
that lie up and downstream from the 2004 drill lines. A secondary goal would be
to determine if significant lode gold mineralization exists in the area
drilled.

Recommended future work on the Fish Creek property should
include drilling 55 reverse circulation drill holes (8 diameter) for a total of
4,400 feet of drilling. Construction of an all-weather creek crossing for
off-road vehicles, near the mouth of Odden Creek, will facilitate this work. The
estimated cost of such work is $150,000. Fieldwork will take about two to three
weeks, whereas sample analysis and reporting will take an additional four to six
weeks.

Sampling Method and Approach; Sample Preparation,
Analyses and Security

All drill holes collared during the 2003 field programs were
marked in the field using Garmin Etrex hand-held GPS units. Drill samples were
collected on 5 foot centers using a down-hole hammer with standard interchange.
Each drill sample was accompanied by a sieved and wash composite sample that was
retained for detailed logging. These lithology samples have been retained for
future use and are stored in Avalons Fairbanks warehouse facility. Each
lithology sample was washed, logged and added to the digital database by Avalon.
Samples collected were placed in double nylon shipping sacks and picked up at
Avalons secured warehouse by representatives of ALS Chemex of Fairbanks.

The soil sample sites in 2004 were collected by brushing the C
soils of the auger flights into a small sample bag with a capacity of 1 kilogram
of soil. If the targeted C soil horizon was not intersected, the B soil horizon
was collected.

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Samples were drained at NordWand Enterprizes office over a 24
hour period without allowing the drained water to contaminate other samples.
Samples were then boxed and shipped to ACME Analytical Laboratory in Vancouver
for analysis. Field notes were made on lithology and corresponding depths and
sample locations were logged with a Garmin ETrex GPS unit. This data was entered
into a digital file along with the sample results.

During the placer drilling program conducted in 2004 all
drilled materials, including the muck section, were directed into a Denver
Goldsaver, where it was classified with a trommel and concentrated with a
stepped sluice (Keener, 2005a). The muck section, composed of ice-rich, decaying
organic material, silt and sand, was drilled through without stopping until
gravel was encountered. The muck section was bulked over the entire interval and
treated as a single sample. Placer gravel and the underlying bedrock were
sampled every five feet until reasonably tight and hard bedrock was found. The
sluice concentrates were panned in the field to further reduce the samples and
to visually inspect for particles of placer gold and other heavy minerals. The
pan concentrates were then carefully panned later, in the office of NordWand
Enterprize, where the particles of visible gold were extracted, rinsed with
99.8% ethanol, dried and weighed with a Haigis pocket balance, sensitive to 1
milligram. The remaining heavy minerals were also dried, weighed with an Ohaus
electronic balance and saved for later examination. Tailings from the final
pannings were combined for each line, dried and saved in the event that
fire-assay and further metallurgical analysis is required. Placer gold particles
found in the muck section of each hole were attributed to the previously drilled
hole in order to mitigate the carries of heavy minerals within the reverse
circulation system and Goldsaver concentrator. The drill concentrator system
employed in this program did not permit accurate measurements of the sample
volumes, therefore, the sample grades were calculated by dividing the recovered
mass of placer gold by the volume of an ideal cylinder over the width of the
sample interval. Sample grades were modified to reflect an estimated placer gold
purity of 900 fine, which is conservatively based on historical production
documented at placer mines upstream of the 2004 drilling program. Hole locations
were logged with a Garmin ETrex GPS unit and relative collar elevations were
measured with a hand level. Placer field logs were recopied into digital logs,
on which raw data were reduced to final representations, sample grades and
paygrades. Interpretations of the drill lines were drawn to scale showing
stratigraphy, relative elevations of the ground surface and bedrock surface, and
other economic data.

The same drill used for the 2004 placer drilling program was
used to drill two lode holes, however, the drill pipe was switched out for five
inch pipe driving a 5-1/4 inch down-hole hammer bit. The hammer bit was later
switched for a 5-1/2 inch tri-cone bit when problems occurred in actuating the
hammer. Lode drilling near Odden Creek was completed in mid October. Both holes
were drilled dry without water injection. Samples were collected every five feet
down the hole by placing buckets below the underflow of the cyclone. The first
hole was split in the field using a vibrating splitter and a one-quarter split
was saved and bagged (pre-labeled) for each interval. Buckets were rinsed out
and the splitter was brushed off after each sample. The remaining three-quarter
splits were discarded next to the splitter and reserved to backfill the hole.
The vibrating splitter failed at the end of the first hole and was not used for
the second hole. Samples were collected from the second hole without splitting
by placing pre-labeled bags inserted in buckets and placed below the underflow
of the cyclone. The entire five foot interval was collected for each sample and
split by the analytical lab. At the end of each day, the samples were
transported to the Fairbanks Gold Mining core storage building and placed in
bulk bags. Representative lithologic samples were collected for each of the five
foot intervals and stored for later logging in plastic chip trays. Both holes
were plugged with commercial hole sealant and a peeled, labeled spruce hole
marking the exact locations. Hole locations were logged with a Garmin ETrex GPS
unit.

Data Verification

No blank or standard samples were inserted into the sample
stream during the 2003 drilling program on Fish Creek. Due to the nature of the
sampling conducted during the 2004 placer drilling program, no blanks or
standards were inserted into the sample stream.

Blank and standard samples obtained from Fairbanks Gold Mining,
Inc., operator of the adjacent Fort Knox gold mine, were inserted into the Odden
Creek lode hole sample stream. Analytical results of the blanks and standards
indicate that the preparatory and analytical techniques used by Alaska Assay
Laboratories and Nevada Assay Laboratories were consistent with the known
concentrations of indicator elements of the inserted samples. Duplicates of two
samples in each lode hole were satisfactorily replicated.

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Mineral Resources and Mineral Reserve
Estimates

There currently are no resources or reserves on the Fish Creek
property that comply with the Canadian Institute of Mining and Metallurgy (CIM)
Standards on Mineral Resources and Reserves Definitions and Guidelines adopted
by CIM Council on August 20, 2000. While encouraging in its results, the drill
hole density of the 2004 placer drilling campaign at Fish Creek was not
sufficient to allow estimation of CIM compatible resources or reserves.

Mining Operations

Currently, there are no mining operations conducted on the Fish
Creek property. Our exploration programs at the Fish Creek property are
exploratory in nature.

OIL AND GAS WELL INTERESTS

The Company owns 6.5% working interest (4.680% net revenue
interest) in the Peters No. 1 Well, in Fayette County, Texas, and a 7.5% working
interest (5.79375% net revenue interest) in each of the C-S #1, Jancik #2 and
Herrmann #4 wells, located in Burleson County, Texas.

On May 18, 2006, the Company entered into an agreement with IAS
Energy, Inc. (formerly and at the time of the agreement, IAS Communications,
Inc.) to purchase a 40% interest (subject to 40% net revenue interests to
others) in the Ken Lee #1 natural gas well, located in Knox County, Kentucky,
USA, for $103,045 ($92,500 US). The Company has first refusal rights to
participate in up to 23 future wells.

On June 6, 2006, we were advised by Energy Source, Inc., the
operator, that the Ken Lee #1 well has been successfully completed as a
commercial gas well. The initial open flow tested 1.22 MCF of high BTU gas. The
well was completed to a depth of 1410 in the Big Lime formation.

On July 6, 2006, we commenced drilling the Elvis Farris #2
well, located on the Farris Lease, in Laurel County, Kentucky, which is under
lease by Energy Source, Inc.

Although we have successfully drilled and are producing oil and
gas from the wells in which we have an interest, the revenue from the extraction
of oil and gas is not a material amount. Accordingly, we do not consider our oil
and gas wells to be material to our business operations or financial position.
For further information on how we account for the expenses and sales of our oil
and gas interests, please refer to the Notes to our financial statements.

Plan of OperationsSource of Funds for Fiscal
2006/2007

Our primary source of funds since incorporation has been
through the issuance of equity securities.

We have been successful in the past in acquiring capital
through the issuance of shares of our common stock, sales of options on mineral
properties and through advances from related parties. Although we intend to
continue utilizing these sources, there has been no assurance in the past that
these sources and methods would continue to be available in the future.

On February 14, 2000, John G. Robertson, our President, issued
a "Commitment to Provide Financing to Teryl Resources Corp. as Required for
Ongoing Operations". The substance of the Commitment states that, if the Company
is not able to obtain funds required for maintaining its ongoing operations and
status as a publicly traded company, from other sources, Mr. Robertson agrees
and commits to provide, and/or arrange for any such funds for the Company on
either a loan, equity, or combination basis, on mutually agreeable terms, and
which comply with any regulatory rules and regulations applicable to such
transactions. Mr. Robertson further states that such maintenance funding
requirements are estimated at approximately C$100,000 per year and that he is
capable of and willing to provide and/or arrange for such funding until the
Company is able to obtain adequate funding from other sources, and/or is able to
generate net earnings from revenues which will sustain its ongoing
operations.

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In the event that Mr. Robertson were not able to meet his
commitments, and no other sources of capital were available to the Company in
the future, on a reasonable financial basis, it would face the same obstacles as
many small, undercapitalized companies do, and, in the worst case, could be
forced to reorganize or liquidate, either of which consequence would likely have
an adverse financial effect upon the Company's shareholders.

At the present time, and in its present circumstances, there
exists substantial doubt as to the ability of the Company to continue as a going
concern, since there is no ongoing source of revenues and profits capable of
sustaining the Company's operating overhead, although Mr. Robertson has
committed to ensuring that the Company is able to survive on an interim basis,
over the longer term, the Company will need to either begin to derive revenues
from its existing resource-based assets, or find and enter into a business which
holds the prospects of ensuring that it can continue as a going concern.
Management is aware of such need and is both researching new business
opportunities and assessing potential financing possibilities for funding its
existing resource property obligations and also any new business which may be
entered into or acquired.

We had a working capital deficit of $278,043 on May 31, 2007
compared to a surplus of $123,556 at May 31, 2006. Subsequent to May 31, 2007,
we raised an additional $6,420 from Oil & Gas operations and $407,250
through the sale of common shares.

Use of Funds for Fiscal 2007/2008

During Fiscal 2007/2008, we estimate that we will expend
approximately $365,000 on general and administrative expenses. During Fiscal
2007/2008 we estimate that we will expend approximately $190,000 on property
exploration and development expenses.

Anticipated Changes to Facilities/Employees

We anticipate there will not be any changes to either
facilities or employees in the near future.

United States vs. Foreign Sales/AssetsWe have had no
revenue during the past five fiscal years from the sale of assets. As of May 31,
2007, we had assets valued at $ 42,970 located in Canada; and assets valued at $
3,519,325 located in the United States.

ITEM 4A. UNRESOLVED STAFF COMMENTS

This section is not applicable as we are not an accelerated
filer or a large accelerated filer, as defined in Rule 12b-2 of the Exchange
Act, or a well-known seasoned issuer as defined in Rule 405 of the Securities
Act.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following contains forward-looking statements relating to
revenues, expenditures and sufficiency of capital resources. Actual results may
differ from those projected in the forward-looking statements for a number of
reasons, including those described in this 20-F.

Our financial statements have been prepared in accordance with
Canadian Generally Accepted Accounting Principles (GAAP) and Canadian/USA
Generally Accepted Auditing Standards (GAAS). All material numerical differences
between Canadian GAAP and US GAAP, are described in footnotes to the financial
statements. We are a Canadian company and therefore our financial statements
have been prepared in Canadian dollars.

Audited financial statements for the fiscal years ended May 31,
2007, May 31, 2006 and May 31, 2005 respectively are included in this 20-F.

Overview

We are an oil, gas, and mineral exploration company engaged in
the acquisition and exploration of oil and gas, and mineral properties. Our
expenditures are made acquiring mineral properties and carrying out exploration
work. We do not have any producing mineral properties at this time. We also
acquire oil and gas property interests and

44

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participate in drilling wells. The recoverability of amounts
shown for investments, mineral properties, interests in oil and gas properties
and the related deferred expenditures is dependent upon the existence of
economically recoverable reserves, the ability to obtain the necessary financing
to complete the exploration, the profitability of future production or our
ability to dispose of those assets on a profitable basis. Our ongoing operation
is dependent upon cash flow from successful operations and equity financing. We
have incurred a loss of $465,540 in the year ended May 31, 2007 (2006 -
$430,646; 2005 - $ 515,740). Revenue from our oil and gas operations are
minimal. Oil and gas revenues were: $33,714 in the year ended May 31, 2007;
$27,154 in the fiscal year ended May 31, 2006 and $28,302 in fiscal year ended
May 31, 2005 (see Item 3.D., Risk Factors, page 14).

A. OPERATING RESULTS

This review of the results of operations should be read in
conjunction with our audited financial statements for the years ended May 31,
2007, May 31, 2006 and May 31, 2005.

Fiscal Year Ended May 31, 2007 compared to Fiscal year Ended
May 31, 2006

Results of Operations

The Company realized a net loss of $465,540 in fiscal 2007,
compared to a net loss of $430,646 in fiscal 2006. This was mainly due to an
expense for the depletion of gas wells of $24,243 ($nil - 2006), an increase in
stock based compensation expense of $60,058 over the previous year, an increase
in professional fees of $47,587 over 2006, and an increase in aggregate general
office expenses including rent, secretarial and benefits, sundry and telephone
of $17,645 representing in increase of $125,290 over fiscal 2006. Despite these
increases noted above, the Company was able to offset these increases by
decreasing its expenses for filing and regulatory fees, transfer agent fees, oil
and gas production, royalties and other fees, shareholder and meeting costs,
travel, auto and entertainment and interest expense totaling $47,457.

Administrative expenses in fiscal 2007 totaled $488,745 as
compared to $378,474 in 2006. Office, rent and telephone totaled $10,171
compared to $5,737 in 2006 due to the Company moving its offices to larger
premises. Professional fees were $87,395 compared to $39,808 in 2006. This
increase was due to legal, audit and accounting fees required to bring the
Company current in its SEC filings which involved the preparation of historical
Forms 20-F beginning 2000 to date. Secretarial fees and employee benefits
increased to $38,083 in 2007 from $33,578 in 2006 due to increased
administrative expenses associated with the filing of the historical 20-Fs. We
had a small foreign exchange gain of $74 in 2007, as compared to a loss of
$4,687 in 2006, due to a lower U.S. exchange rate on U.S revenues. Filing and
regulatory fees decreased to $18,961 in 2007 from $24,353 in 2006, due to
reduction in taxes in the State of Delaware as a result of the reduction in
authorized capital of the subsidiary, Teryl Inc. Management and directors fees
remained stable at $75,396 as compared with $74,440 in 2006. Publicity,
promotion and investor relations expenditure increased minimally to $110,413 in
fiscal 2007 compared to expenditures of $110,076 in fiscal 2006. The Company
paid $41,624 for mining exploration work in 2007 as compared to $163,320 in
2006. This decrease was mainly due to no exploration activity during 2007 on the
Fish Creek property. The Company paid $50,231 for mining acquisitions in 2007 as
compared to $nil in 2006. No debenture payment or accrued interest was paid to
Keltic Bryce Enterprises during 2007, compared to $161,749 paid in 2006.
Corporation capital taxes decreased to $4,494 in fiscal 2007 compared to $11,549
in fiscal 2006 due to reduction in taxes in the State of Delaware as a result of
the reduction in authorized capital of the subsidiary, Teryl Inc. An allowance
for depletion of gas wells was expensed in 2007 in the amount of $24,243
compared to $nil in 2006 due to the acquisition of these three new wells. Stock
based compensation costs of $66,300 were expensed in 2007, due to new stock
option issuances, for those which expired during the year, compared to $6,242 in
2006.

At May 31, 2007, the Companys Oil and Gas operations had an
income of $33,714 compared to an income of $27,154 for the year ended May 31,
2006, due to the three new wells noted above. The Company also received advances
from related parties of $95,765 during fiscal 2007, compared to $26,956 in
fiscal 2006, as the Company did not raise enough working capital through stock
issuances.

45

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Fiscal Year Ended May 31, 2006 compared to Fiscal year Ended
  May 31, 2005 
  Results of Operations

The Company realized a net loss of $430,646 in fiscal 2006,
compared to a net loss of $515,740 in fiscal 2005. The largest single decrease
for the period was a reduction in publicity, promotion and investor relations
expenses, representing a decrease of $119,602 from the period ended May 31,
2005. Other notable decreases in expenses from the previous period included a
reduction of $18,332 in oil and gas production and royalties, a decrease of
$10,910 in professional fees, and a reduction in secretarial and employee
benefits of $11,554 compared to the period ended May 31, 2005, totaling $40,796.
The only notable increases were shareholder and meeting costs increasing by
$4,607, an increase in filing and regulatory fees of $7,666 and a foreign
exchange loss in 2006 compared to a gain in 2005 representing a difference of
$6,629 over the period ended May 31, 2005.

Administrative expenses in fiscal 2006 totaled $378,474 as
compared to $528,086 in 2005. Office, rent and telephone increased slightly to
$5,737 compared to $5,560 in 2005 due to higher rates being charged by most
suppliers. Professional fees decreased in 2006 to $39,808 compared to $50,718 in
2005, as the Company did not require any external legal assistance during the
year. Secretarial fees and benefits decreased to $33,578 in 2006 from $45,132 in
2005 due to less administrative requirements with fewer news releases. We had a
foreign exchange loss of $4,687 in 2006 compared to a gain of $1,942 in 2005,
due to a lower U.S. exchange rate on U.S revenues. Shareholder expenses
increased in 2006 to $7,180 compared to $2,573 in 2005, due to higher mailing
costs and an increase in our annual shareholder meeting costs. Filing and
regulatory fees increased to $24,353 in 2006 from $16,687, due to higher
Delaware annual franchise fees for our subsidiary. Management and directors
fees decreased nominally to $74,440 in 2006 from $78,319 in 2005. As noted
above, the largest single decrease from the prior year was a reduction in
publicity, promotion and investor relations expenses, which was $110,076 in
fiscal 2006 (2005 -$229,678) as the Company did not issue as many news releases
during the year, did not use external investor relations contractors and the
corresponding investor relations expenses, such as brochures and other
materials, were reduced. The Company paid $163,320 for mining exploration work
in 2006 as compared to $243,023 in 2005. This decrease was due to reduced
exploration activities on the Fox Creek and West Ridge properties. The Company
paid $nil for mining acquisitions in 2006 as compared to $20,602 in 2005. Keltic
Bryce Enterprises was paid $ 161,749 regarding their outstanding debenture and
accrued interest, with $nil being paid in 2005. Corporation capital taxes
increased to $11,549 in fiscal 2006 compared to $3,029 in fiscal 2005 in the
State of Delaware, due to a change from annual to quarterly reporting. Oil and
gas production and royalties expenses decreased to $12,605 in fiscal 2006,
compared to $30,937 in 2005 as there were no major reworks done on the
wells.

During fiscal 2006, revenue from oil and gas operations was $
27,154 as compared to $ 28,307 for fiscal 2005. The Company also received
advances from related parties of $26,956 during fiscal 2006, compared to $75,058
in fiscal 2005, due to working capital being raised in 2006 through stock
issuances.

Fiscal Year Ended May 31, 2005 compared to Fiscal year Ended
  May 31, 2004 
  Results of Operations

The Company realized a net loss of $515,740 in fiscal 2005,
compared to a net loss of $791,776 in fiscal 2004. The largest single decrease
for the period was a reduction in management fees, representing a decrease of
$139,978, followed by decrease in investor relations expenses of $97,624, and a
decrease in travel, auto and entertainment. The only notable increase was to oil
and gas production and royalties of $23,819, and increased professional fees of
$21,283.

Administrative expenses in fiscal 2005 totaled $528,086 as
compared to $769,158 in 2004. Office, rent and telephone increased slightly to
$5,560 compared to $5,200 in 2004 due to increased office rent. Professional
fees increased to $50,718 compared to $29,435 in 2004 due to increased
accounting and audit fees as the company changed its auditors. Our former
auditor resigned due to new requirements from the Canadian Public Accountability
Board. Secretarial fees and benefits increased to $45,132 in 2005 from $25,141
in 2004 due to the centralization of administration and payroll amongst several
companies which share office space with the Company, such expenses were
previously paid as management fees. We had a foreign exchange gain of $1,942 in
2005 compared to a loss of $153 in 2004, due to a higher U.S. exchange rate on
U.S revenues. Shareholder expenses decreased in 2005 to $2,573 compared to
$4,324 in 2004. Filing and regulatory fees increased to $24,353 in 2006 from
$16,687, due to higher Delaware annual franchise fees for our subsidiary.
Management and directors fees decreased to $84,899 in

46

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2005 from $224,877 in fiscal 2004 due to the centralization of
administration and payroll amongst several companies which share office space
with the Company, previously paid as management fees. The largest decrease from
the prior year was the decreased activity in publicity, promotion and investor
relations, which was $229,678 in fiscal 2005 (2004 - $327,302) as 2004 included
stock based compensation for stock options for investor relations personnel. The
Company paid $253,967 for mining exploration work in 2005 as compared to
$654,642 in 2004. This decrease was mainly due to reduced exploration work on
the West Ridge and Gil properties. The Company paid $22,602 for mining
acquisitions in 2005 as compared to $20,645 in 2004. State of Delaware
corporation capital taxes decreased in 2005 to $3,024 from $4,528 in fiscal 2004
due to a change in Delawares franchise tax fee structure.

During fiscal 2005, revenue from oil and gas operations was $
28,307 as compared to $ 21,037 for fiscal 2004 due to a major well reworking
resulting in increased production. The Company also received advances from
related parties of $75,058 during fiscal 2005 (2004 - $53,563) due to repayment
of a related party advance to SMR Investments Ltd.

B. LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources

In the past, we have derived most of our development and
operating capital primarily from the issuance of capital stock. Minor amounts
were derived from interest.

We have been successful in the past in acquiring capital
through the issuance of shares of our Common Stock, and through advances from
related parties. Although we intend to continue utilizing these sources, there
has been no assurance in the past that these sources and methods would continue
to be available in the future.

We received funding in 2007 from our affiliated companies
(common officers and directors). The total amount owing to related parties is
$172,180 or 57% of total current liabilities as at May 31, 2007. The balances
owing to related parties are non-interest bearing, unsecured and repayable on
demand. Our affiliated companies have indicated that they will not be demanding
repayment of these funds during the next fiscal year and will advance, or pay
expenses on behalf of the Company if further funds are needed.

The audited financial statements have been prepared assuming
that the Company will continue as a going-concern. As discussed in note 1 to the
financial statements, the Company has minimal revenues and limited capital,
which together raise substantial doubt about its ability to continue as a
going-concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.

Subsequent to the fiscal year ended May 31, 2007, we received
subscriptions pursuant to a private placement for cash proceeds of $407,250.

We anticipate that our cash requirements for the fiscal year
ending May 31, 2008 will remain consistent with those for the fiscal year ended
May 31, 2007 for operational expenses. Expenditures for future exploration
during fiscal 2008 work cannot be confirmed as of the date of this 20-F, as our
requisite cash requirements for exploration work are dependent upon receipt of
the 2008 program and budget summary on the Gil Gold Property from Kinross Gold
Corporation, and the Companys determination of the economic validity of the
Gold Hill property in Arizona.

In the event that no other sources of capital were available to
us in the future, on a reasonable financial basis, it would face the same
obstacles as many small, undercapitalized companies do, and, in the worst case,
we could be forced to reorganize or liquidate, either of which consequence would
likely have an adverse financial effect upon our shareholders.

47

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Liquidity

Fiscal Year Ended May 31, 2007 compared to Fiscal year Ended
May 31, 2006

During 2007, we financed our operations by the issuance of
1,294,340 common shares for cash proceeds of $199,151, which consisted of the
issuance of 1,194,340 common shares pursuant to a private placement offerings
completed during the year to raise cash proceeds of $179,151 after issue costs
(compared to $671,250 in 2006), and the issuance of 100,000 shares pursuant to
the exercise of share purchase warrants for cash proceeds of $20,000 (compared
to $1,750 in 2006). We received $95,765 as advances from related parties
(compared to $26,956 in 2006); $33,714 from oil and gas revenues (compared to
$27,343 in 2006). Our opening cash surplus at the beginning of our 2007 fiscal
year was of $209,636. Our opening cash surplus was $209,636 at May 31, 2006.

During 2007, we spent $210,843 of these funds on operating
activities as discussed above under Results of Operation for the year ended May
31, 2007 as compared to $390,492 during the year ended May 31, 2006.

Our cash position decreased by $206,689 to $2,947 and our
working capital deficiency as at May 31, 2007 was $278,043.

Fiscal Year Ended May 31, 2006 compared to Fiscal year Ended
May 31, 2005

During 2006, we financed our operations through the issuance of
2,690,500 common shares for cash proceeds of $671,250, which consisted of the
issuance of 2,648,000 common shares pursuant to private placement offerings
completed during the year to raise cash proceeds of $657,746 after issue costs
(compared to $593,363 in 2005), the issuance of 37,500 common shares pursuant to
the exercise of stock options for cash proceeds of $7,500, and the issuance of
5,000 shares pursuant to the exercise of share purchase warrants for cash
proceeds of $1,750 (compared to $332,850 in 2005). We received $27,343 as
advances from related parties (compared $75,058 in 2005); $27,154 from oil and
gas revenues (compared to $28,307 in 2005); and an opening cash surplus of
$318,287 at May 31, 2005.

During 2006, we spent $390,492 of these funds on operating
activities as discussed above under Results of Operation for the year ended May
31, 2006 as compared to $529,428 the year ended May 31, 2005.

Our cash position decreased by $108,651 to $209,636 from May
31, 2005 and our working capital as at May 31, 2006 was $123,556.

Fiscal Year Ended May 31, 2005 compared to Fiscal year Ended
May 31, 2004

During 2005, we financed our operations by the issue of
3,597,000 common shares for cash proceeds of $926,213, which consisted of the
issuance of 2,000,000 common shares pursuant to private placement offerings
completed during the year to raise cash proceeds of $593,363 after issue costs
(2004 - $2,575,573) and the issue of 1,597,000 shares pursuant to the exercise
of share purchase warrants for cash proceeds of $332,850 (compared to $88,050 in
2004). We received $75,058 during fiscal 2005 (2004 - $53,563) as advances from
related parties; we received $28,307 from oil and gas revenues ($21,037 for
fiscal 2004); and an opening cash surplus of $370,558 at May 31, 2004.

During 2005, we spent $529,428 of these funds on operating
activities as discussed above under Results of Operation for the year ended May
31, 2005 as compared to $1,167,809 the year ended May 31, 2004.

Our cash position decreased by $52,271 to $318,287 and our
working capital at May 31, 2005 was $164,059.

Capital Resources

Our authorized capital consists of 100,000,000 common shares
without par value and 5,000,000 Preferred Shares (non-voting) with a par value
of $1.00. At May 31, 2007 we had 40,862,528 issued and outstanding common shares
(May 31, 2006  39,468,188) issued and outstanding common shares), and at
October 4, 2007 we had 43,577,528 issued and outstanding common shares. No
Preferred Shares have been issued to date. The directors of the Company

48

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adopted the Teryl Resources Corp. 2002 Stock Option Plan (the
Plan or the 2002 Plan), and received shareholder approval of same on January
22, 2003. The Company has adopted a type of plan under which options may be
granted for a number of shares up to 10% of the issued and outstanding shares of
the Company from time to time. As the number of shares reserved for issuance
under the Plan increases with the issue of additional shares by the Company, the
Plan is considered to be a rolling stock option plan. This rolling plan
requires Shareholder approval annually.

During the year ended May 31, 2007 no stock options were
exercised, 1,590,000 stock options expired or were cancelled and 1,900,000 stock
options were granted. As at May 31, 2007 we had 2,487,500 stock options
outstanding at exercise prices ranging from $0.15 per share to $0.45 per share
with expiry dates ranging from March 4, 2008 to April 24, 2012. These stock
options vest over a two-year period from the date of grant. Subsequent to May
31, 2007, no stock options have been exercised, nor granted. If exercised, the
remaining 2,487,500 stock options would increase our available cash by
$522,000.

During the year ended May 31, 2006, 37,500 stock options were
exercised, 375,000 stock options expired or were cancelled and no stock options
were granted. As at May 31, 2006 we had 2,177,500 stock options outstanding at
exercise prices ranging from $0.15 per share to $0.45 per share with expiry
dates ranging from October 7, 2006 to March 5, 2009.

As at May 31, 2007 we had 2,418,340 warrants outstanding
exercisable. 1,094,340 were exercisable at a price of $0.20 per share before
April 11, 2008, and 1,324,000 were exercisable at a price of $0.35 per share
before May 17, 2008. If exercised, the outstanding 2,418,340 warrants would
increase our available cash by $682,268 at an average price of $0.28.

As at May 31, 2006 we had 1,324,000 warrants outstanding
exercisable at a price of $0.30 per share before May 17, 2007 and $0.35 per
share before May 17, 2008. If exercised, the outstanding 1,324,000 warrants
would increase our available cash by $430,300 at an average price of $0.325.

Contributed surplus was $285,754 as at May 31, 2007 (2006 -
$169,401). The increase of $116,353 represents the difference between the fair
value of 1,900,000 stock options granted in the fiscal year ended May 31, 2007,
being recorded in the Companys books at the fair value of the outstanding
options calculated using the Black-Scholes method of valuation.

US GAAP Reconciliation

Under Canadian GAAP, it is acceptable to defer mineral property
acquisition and exploration costs until a decision to abandon the property is
made, it is determined that the property does not have economically recoverable
reserves or that a company is unlikely to pursue exploration activities on the
property. Under U.S. GAAP, mineral exploration costs are expensed until it can
be proven that economically viable reserves are present on the property and a
company has the ability and intention to pursue exploitation of these
reserves.

Under Canadian GAAP, cash flows relating to mineral property
exploration costs are reported as investing activities. For U.S. GAAP, these
costs would be characterized as operating activities.

Under Canadian GAAP, future income taxes are calculated based
on enacted or substantially enacted tax rates applicable to future years. Under
U.S. GAAP, only enacted rates are used in the calculation of future income
taxes. This GAAP difference did not result in a difference in our financial
position, results of operations or cash flows for the years ended May 31, 2007,
2006 and 2005.

We have adopted the fair value based approach to Stock Based
Compensation under the provisions of CICA 3870 and SFAS No. 148. The method of
adoption applied by us is permissible under both Canadian and US standards.

C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.

There were no expenditures on research and development over the
past three years ended May 31, 2005, May 31, 2006 and May 31, 2007. We do not
hold any patents, trademarks or copyrights.

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D. TREND INFORMATION

As the Company is a mineral exploration company with no
currently producing properties, the information required by this section is not
applicable.

E. OFF-BALANCE SHEET ARRANGEMENTS

There are no known off-balance sheet arrangements other than
those disclosed in this Form 20-F and in our audited consolidated financial
statements for the year ended May 31, 2007.

F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS

The following table provides information as of the latest
fiscal year end balance sheet date with respect to the Companys known
contractual obligations specified below.

Payments due by period

Contractual Obligations
    Total
    Less than 1 year
    1-3 years
    3-5 years
    More than 5 yearsMineral Property Obligations
    US$500,500
    US$428,500
    US$72,000
    Nil
    NilLong-term debt obligations
    Nil - -
    Nil - -
    Nil - -
    Nil - -
    Nil - -Capital (Finance) Lease obligations
    Nil - -
    Nil - -
    Nil - -
    Nil - -
    Nil - -Operating lease obligations
    Nil - -
    Nil - -
    Nil - -
    Nil - -
    Nil - -Purchase Obligations
    Nil - -
    Nil - -
    Nil - -
    Nil - -
    Nil - -Other Long-term liabilities reflected on the
      Companys Balance sheet under Canadian GAAP
    Nil - -
    Nil - -
    Nil - -
    Nil - -
    Nil - -Total
    US$500,500
    US$428,500
    US$72,000
    Nil
    Nil


As we explore our properties, we decide which ones to proceed
with and which ones to abandon. To fully exercise the options under various
agreements for the acquisition of interests in properties located in Alaska and
Arizona, we must incur exploration expenditures on the properties and make
payments to the optionors as follows:

Property
    Calendar Year
    Option/Advance Royalty Payment
    Expenditure Commitment
    Number of SharesGil Property,
      Alaska
    2008
    $ -
    $ -
    -2009
    $ -
    $ -
    -West Ridge Property, Alaska
    2008
    $ -
    $ -
    -2009
    $ -
    $ -
    -Fish Creek, Alaska
    2008
    $ -
    US$
      185,375
    100,0002009
    $ -
    US$
      185,375
    -Black Dome, Alaska
    2008
    $ -
    $ -
    -2009
    $ -
    $ -
    -Gold Hill, Arizona
    2008
    US$
      24,000
    US$
      15,000
    -2009
    US$
      24,000
    US$
      15,000
    -


50

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These amounts may be reduced in the future as we determine
which properties are of merit and abandon those with which we do not intend to
proceed.

Oil and Gas Wells:

The Company has no commitment to participate in the drilling of
gas wells in Knox & Laurel Counties located in Kentucky, USA, however it has
first right of refusal to participate in up to 23 future wells to be
drilled.

G. SAFE HARBOR

This annual report includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements may include conclusions of prefeasibility and
feasibility studies, estimates of future production, capital and operating
costs, prices of silver and gold and other known and unknown risks. These and
other factors and uncertainties may cause material differences from future
results as expressed or implied by these forward looking statements. These
risks, uncertainties and other factors include but are not limited to the risks
involved in the exploration and development of a mining and oil and gas
business.

All statements, other than statements of historical facts,
included in this annual report that address activities, events or developments
which we expect or anticipate will or may occur in the future are
forward-looking statements. The words "believe", "intend", "expect",
"anticipate", "project", "estimate", "predict" and similar expressions are also
intended to identify forward-looking statements.

Our estimated or anticipated future results or other
non-historical facts are forward-looking and reflect our current perspective of
existing trends and information. These statements involve risks and
uncertainties that cannot be predicted or quantified, and consequently actual
results may differ materially from those expressed or implied by such
forward-looking statements. Such risks and uncertainties include, among others,
the success of our exploration and development activities, environmental and
other regulatory requirements, foreign exchange issues, mineral deposit
estimates and mineral prices, competition by other mining or oil and gas
companies, financing risks, mineral title issues, insider conflicts of interest,
political stability issues, and other risks and uncertainties detailed in this
report and from time to time in our other Securities and Exchange Commission
(SEC) filings.

Consequently, all of the forward-looking statements made in
this annual report are qualified by these cautionary statements. We cannot
assure you that the actual results or developments anticipated by us will be
realized or, even if substantially realized, that they will have the expected
effect on us or our business or operations.

Forward-looking statements are subject to a variety of risks
and uncertainties in addition to the risks referred to in Risk Factors under
Item 3.D above.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. DIRECTORS AND SENIOR MANAGEMENT

As of May 31, 2007, our Board of Directors consisted of four
Directors, two of whom are independent (or outside) non-executive Directors.
The following table provides certain information about the members of our Board
of Directors as of October 4, 2007.

Name
    Position with the Company
    Age
    Date of First Election or AppointmentJohn G. Robertson
      (2)(3)
    President, Director
    66
    October 25 , 1982Jennifer Lorette
      (1)(3)
    Director
    35
    February 20, 2004Susanne Robertson
      (1)(3)
    Director
    61
    September 12 , 1990Monique van Oord (1)(2)(3)
    Chief Financial Officer, Secretary,
      Director
    46
    October 17, 2002


Indicates member of the Issuer's audit committee.

The Senior Management serves at the pleasure of the Board of
Directors.

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Each director of the Issuer holds office until the next Annual
General Meeting unless his or her office is earlier vacated in accordance with
the Articles of the Company and the Business Corporations Act(British
Columbia), or unless he or she becomes disqualified to act as a director.

John Robertson.Mr. Robertson is the President and a
founder of the Company since 1982; Since March 1979, Mr. Robertson is also
President, CEO, Chairman of the Board, Secretary and a director of Linux Gold
Corp., a British Columbia mineral exploration company which trades its shares on
the OTC Bulletin Board. Mr. Robertson has been the Chairman, President and Chief
Executive Officer of REGI U.S., Inc., an Oregon corporation traded on the OTC
Bulletin Board, since July 1992, a U.S. public company engaged in the
development of a rotary engine/ compressor (Rand Cam Engine). Since October
1984 Mr. Robertson has been President and a Director of Reg Technologies Inc., a
British Columbia corporation listed on the TSX Venture Exchange, and trading on
the OTC Bulletin Board, that has financed the research on the Rand Cam Engine
since 1986. REGI U.S. is ultimately controlled by Reg Technologies Inc. Mr.
Robertson has been the President and Principal Executive Officer and a Director
of IAS Energy, Inc. since its formation in December 1994, a U.S. public company
engaged in the acquisition and exploration of oil and gas interests in North
America. Since June 1997 Mr. Robertson has been President, Principal Executive
Officer and a Director of Information Highway.com, Inc., an inactive reporting
Florida corporation. Since May 1977 Mr. Robertson has been President and a
member of the Board of Directors of SMR Investments Ltd. since 1979, a private
British Columbia corporation engaged in management of public companies. Mr.
Robertson is also the President and Director of the following private companies:
JGR Petroleum, Inc. (since July 1991), Access Information Services, Ltd. (since
September 1993), 394754 B.C. Ltd., dba SOVO Computer Centre (since October
1990), Pavlik Travel Services Ltd. (since November 2000), International Diamond
Syndicate Ltd. (since May 1993), KLR Enterprises Inc. (since 1999), Rainbow
Networks Inc. (since 2000), Rand Energy Group Inc. (since 1993), 540330 B.C Ltd.
(since April 1997), and Airstream Communications, Inc. (since June 2000) Mr.
Robertson is a citizen and resident of Canada (see Item 7.B.  Related Party
Transactions) .

A minimum of 20 percent of Mr. Robertsons time is allocated to
the ongoing operations of the Company. On a project related basis, Mr. Robertson
may allocate up to 80 percent of his time to the Company as required.

Jennifer Lorette.Ms. Lorette has been a director since
June 2001. Ms. Lorette has held several positions with Linux Gold Corp. since
June 1994, and is presently a director of Linux; Since June 1994 Ms. Lorette,
has been Vice President of REGI U.S., Inc., an Oregon corporation traded on the
OTC bulletin board. Since April 1994 she has also been Vice President of
Administration for Reg Technologies, Inc., a British Columbia corporation listed
on the TSX Venture Exchange, and trading on the OTC bulletin board . REGI U.S.
is ultimately controlled by Reg Technologies Inc. Since June 1997 Ms. Lorette
has been Secretary/Treasurer, and a Director of Information Highway.com, Inc., a
Florida corporation. Ms. Lorette is a founder, and has been Secretary/Treasurer
of IAS Energy, Inc. since February 1995. Ms. Lorette is a citizen and resident
of Canada.

Susanne Robertson.Director of the Company since 1990;
Principal of SMR Investments, Ltd., a private business and financial consulting
company, since 1979; Director of Linux Gold Corp, a BC company reporting in the
US and Canada involved in mining and oil and gas exploration, since 2001, and a
director of Reg Technologies Inc., a British Columbia corporation listed on the
TSX Venture Exchange and trading on the OTC bulletin board, since 1984. Ms.
Robertson is a citizen and resident of Canada.

Monique van Oord.Director of the Company and Chief
Financial Officer since January 2003. Ms. van Oord is also Chief Financial
Officer (since August 2004), and a Director (since February 2004) of Linux Gold
Corp., a British Columbia mineral exploration company which trades its shares on
the OTC Bulletin Board. Ms. van Oord has also acted as an Administrator for
several public and private companies from 2002 to date. Ms. van Oord is a
citizen and resident of Canada (Item 7.B.  Related Party Transactions).

A minimum of 40 percent of Ms. van Oords time is allocated to
the ongoing operations of the Company. On a project related basis, Ms. van Oord
may allocate up to 80 percent of hers time to the Company as required.

52

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The Directors have served in their respective capacities since
their election and/or appointment and will serve until the next Annual General
Meeting or until a successor is duly elected, unless the office is vacated in
accordance with our Articles.

The Board of Directors appoints Senior Management who serve at
the discretion of the Board of Directors.

No Director and/or Senior Management had been the subject of
any order, judgment, or decree of any governmental agency or administrator or of
any court or competent jurisdiction, revoking or suspending for cause any
license, permit or other authority of such person or of any corporation of which
he is a Director and/or Senior Management, to engage in the securities business
or in the sale of a particular security or temporarily or permanently
restraining or enjoining any such person or any corporation of which he is an
officer or director from engaging in or continuing any
conduct/practice/employment in connection with the purchase or sale of
securities, or convicting such person of any felony or misdemeanor involving a
security or any aspect of the securities business or of theft or of any
felony.

There is a family relationship between two of the Directors or
Senior Management. John Robertson and Susanne Robertson are husband wife. Please
refer to Item 7.B.  Related Party Transactions.

There are no arrangements or understandings with major
shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a Director or member of senior management.

B. COMPENSATION

The following table sets out the compensation information for
the fiscal years ended May 31, 2007, May 31, 2006 and May 31, 2005 for our
directors and members of our administrative, supervisory or management
bodies.

Name
        and 
        Principal 
        Position
      Year
      Annual
        Compensation
      Long-Term CompensationSalary 
        ($)
      Bonus 
        ($)
      Other Annual 
        Compensation 
        ($)
      Awards
      Payouts
      All Other 
        Compensation 
        ($)Securities 
        Granted under Options(2)/ (3) SARS Granted #
      Restricted 
        Shares or 
        Restricted 
        Share Units 
        ($)
      LTIP (4)
        Payouts 
        ($)John G. Robertson,
      President
    2007 2006
      2005
      12,000(1)12,000(1)12,000(1)
      NilNilNil
      30,000(5)30,000(5)30,000(5)
      1,000,000 / Nil990,000 / Nil990,000 / Nil
      NilNilNil
      NilNilNil
      NilNilNilJennifer Lorette,
      Director
      2007 2006 2005
      24,000(6) 19,000(6)
      25,750(6)
      NilNilNil
      NilNilNil
      100,000 / Nil100,000 / Nil100,000 / Nil
      NilNilNil
      NilNilNil
      NilNilNilSusanne Robertson,
      Director
      200620052004
      NilNilNil
      NilNilNil
      NilNilNil
      500,000 / Nil500,000 / Nil500,000 / Nil
      NilNilNil
      NilNilNil
      NilNilNilMonique van Oord, Chief
      20072006
      15,000(7)19,550(7)
      NilNil
      NilNil
      50,000 / Nil50,000 / Nil
      NilNil
      NilNil
      NilNil


53

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Financial Officer, Secretary,
      Director
    2005
    23,500(7)
    Nil
    Nil
    50,000 / Nil
    Nil
    Nil
    Nil


|(1) | John Robertson received $12,000 in Directors
  Fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(2) | During fiscal 2007, Mr. Robertson, President, Secretary
      and a Director, held 990,000 options exercisable at $0.15, which expired
      on April 24, 2007. On April 24, 2007, Mr. Robertson was granted 1,000,000
      options at $0.15, expiring on April 24, 2012. Jennifer Lorette, a
      Director, held 100,000 options exercisable at $0.15 per share. These
      options expired on April 24, 2007. Ms. Lorette was granted 100,000 options
      at $0.15 expiring April 24, 2012. Susanne Robertson, a Director, held
      500,000 options exercisable at $0.15, which expired on April 24, 2007. On
      April 24, 2007, Ms. Robertson was granted 500,000 options at $0.15,
      expiring on April 24, 2012. During fiscal 2007, Monique van Oord, an
      Officer and Director, held 50,000 options exercisable at $0.35. On April
      24, 2007, Ms. van Oords options were repriced to $0.15, but require
      disinterested shareholder approval, at the Companys annual shareholder
      meeting scheduled for October 30, 2007, to effect the repricing.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(3) | "SARS"or "stock appreciation right"means
      a right granted by the Company, as compensation for services rendered, to
      receive a payment of cash or an issue or transfer of securities based
      wholly or in part on changes in the trading price of publicly traded
      securities of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(4) | "LTIP"or "long term incentive plan"means
      any plan which provides compensation intended to serve as incentive for
      performance to occur over a period longer than one financial year, but
      does not include option or stock appreciation right plans or plans for
      compensation through restricted shares or restricted share
units.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(5) | Management fees paid to SMR Investments Ltd., a company
      for which John Robertson acts as a director.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(6) | Jennifer Lorette, a Vice President, received consulting
      fees directly and wages were paid through KLR Petroleum Ltd. which
      administers the payroll for the Company and related parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|(7) | Monique van Oord, Chief Financial Officer, received
      consulting fees directly and wages were paid through KLR Petroleum Ltd.
      which administers the payroll for the Company and related
  parties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

Compensation of Executive Officers and
Directors

The Company entered into a Management Agreement with SMR
Investments Ltd. for the provision of management and administrative services.
Pursuant to the Management Agreement, SMR Investments Ltd. provides management
and administrative services to the Company, and is in a unique position to
service the promotion, marketing, investment and business management needs of
the Company, for which the Company pays up to $2,500 per month. The Management
Agreement also provides that the manager will be reimbursed for all reasonable
out-of-pocket expenses. Susanne Robertson, a director of the Company, is the
sole shareholder of SMR Investments Ltd. and John Robertson, President and a
director of the Company is a director of SMR Investments Ltd During the last
fiscal year of the Company, the sum of $30,000 was paid as a management fee to
SMR Investments Ltd.

The aggregate cash compensation (including salaries, fees,
directors fees, commissions, bonuses paid/accrued for services rendered during
the fiscal year ended May 31, 2007, and any compensation other than bonuses
earned during the fiscal year ended May 31, 2006 the payment of which was
deferred) paid to the directors and executive officers by the Company and its
subsidiaries for services rendered during the fiscal year ended May 31, 2007 was
$90,396 ($87,320 in 2006). Included in this amount is $30,000 paid as a
management fee to SMR Investments Ltd., (see SMR Management Agreement above)
Other than as herein set forth, the Company did not pay any additional
compensation to its directors and executive officers (including personal
benefits and securities or properties paid or distributed which compensation was
not offered on the same terms to all full time employees).

No cash or non-cash compensation was paid or distributed to the
executive officers of the Company under any pension or other plans nor is there
any plan for such payments or distributions during the following fiscal year
contributed to the directors and officers.

During the fiscal year ended May 31, 2007 1,900,000 stock
options were granted pursuant to stock option plans. No employee options were
exercised and 1,590,000 options were cancelled or expired (see Note 10 to our
Financial Statements).

54

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Total options currently exercisable at the date of this 20-F
are 2,487,500. All exercise prices are CDN dollars as listed in the following
tables. See Note 10 to the financial statements.

Option/SAR Grants

Name
    Number of Options Granted
    % of Total Options Granted as of
      May 31, 2007
    Exercise or Base Price ($/Security)
    Date of Grant
    Mkt. Value of Securities Underlying
      Options on Date of Grant ($) (3)
    Expiry DateDirectors who are not Named
      Executive Officers (1)
    600,000
    24.1% (2)
    $0.15
    April 24, 2007
    $93,000
    April 24, 2012


(1) Jennifer Lorette, a Director, was granted 100,000 options
at $0.15 expiring April 24, 2012. Susanne Robertson, a Director, was granted
500,000 options at $0.15, expiring on April 24, 2012.(2) Total options
granted during fiscal 2007 were 1,900,000.(3) The closing price of the
Companys shares on the TSX Venture Exchange on May 31, 2007 was $0.155.

Options to Purchase Registrant's Common Shares Held by
Officers and Directors of Registrant

NAME OF OPTIONEE
    NUMBER OF OPTIONS
    EXERCISE PRICE (CDN $)
    EXPIRY DATEJohn G. Robertson
    1,000,000
    $0.15
    April
      24, 2012Jennifer Lorette
    100,000
    $0.15
    April
      24, 2012Monique van Oord
    50,000
    $0.35
    April
      24, 2012Susanne Robertson
    500,000
    $0.15
    April
      24, 2012TOTAL HELD AS A GROUP:
    1,650,000


Options to Purchase Registrants Common Shares Held by
Persons Other than Officers and Directors of the Registrant

Name of Optionee
    No. of
      Optioned Shares
    Exercise Price Per Share
    Expiry
      DateArnie Winrob
    50,000
    $0.15
    April
      24, 2012Cheryl Derbyshire
    25,000
    $0.18
    November 2, 2011James Kerr
    75,000
    $040
    March
      4, 2008Peter Zihlmann
    112,500
    $0.20
    October 20,2008George Duggan
    300,000
    $0.45
    November 13, 2008Agoracom Investor Relations Corp.
    250,000
    $0.285
    June 1, 2009Barbara West
    25,000
    $0.15
    June
      11, 2011TOTAL HELD AS A GROUP:
    837,500


INDEBTEDNESS OF DIRECTORS AND OFFICERS

None of the directors and senior officers of the Company,
proposed nominees for election or associates of such persons is or has been
indebted to the Company or its subsidiaries, other than routine indebtedness, at
any time since the beginning of the last completed financial year of the
Company.

55

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C. BOARD PRACTICES

Under section 224 of the Business Corporations Act,S.B.C. 2002, c. 57, the directors of a company must, at their first meeting
on or after each annual reference date, elect an audit committee, to hold office
until the next annual reference date. The audit committee must be composed of at
least 3 directors, and a majority of the members of the committee must not be
officers or employees of the company or of an affiliate of the company. The
members must elect a chair from among their number and determine their own
procedures. The auditor of a company must be given reasonable notice of, and has
the right to appear before and to be heard at each meeting of the companys
audit committee and must appear before the audit committee when request to do so
by the committee and after being given reasonable notice to do so. Our Board of
Directors established an Audit Committee which members consist of Monique van
Oord, Susanne Robertson and Jennifer Lorette.

The Directors are elected by the shareholders to hold office
for a term of one year or until re-elected at the next annual general
meeting.

D. EMPLOYEES

We employed no employees during any of the years ended May 31,
2007, May 31, 2006 and May 31, 2005. Our legal, accounting, marketing and
administrative functions are, and have been during the last three fiscal years,
contracted out to consultants.

We have no employees; as such, no directors or officers belong
to any labor unions. We have not been subject to any strikes or other labor
disturbances that have interfered with our operations.

E. SHARE OWNERSHIP

The following table sets forth the ownership of our common
shares by our Directors and Officers as at October 4, 2007:

Shareholder
    Number of shares issued and outstanding
    Percentage ownership (1)John G. Robertson
    3,196,014 (2)
    7.33%Jennifer Lorette
    212,800 (3)
    *Monique van Oord
    85,000
      (4)
    *Susanne Robertson
    6,529,983 (5)
    14.98%


(1) as at October 4, 2007, there were 43,577,528 issued and
outstanding common shares.

(2) includes 395,450 shares registered in the name of Access
Information Services, a corporation controlled by the Robertson Family Trust;
50,000 shares registered in the name of KLR Petroleum, a corporation controlled
by John Robertson, and 1,000,000 options registered in the name of Mr. Robertson
that are currently exercisable. [Mr. Robertson is one of three trustees of the
Robertson Family Trust, which acts by the majority vote of the three trustees.
Mr. Robertson disclaims beneficial ownership of the shares owned or controlled
by the Robertson Family Trust]. Mr. Robertson's address is the same as our
address].

(3) Includes 100,000 options that are currently exercisable.
Ms. Lorette's address is the same as our address.

(4) Includes 50,000 options that are currently exercisable. Ms.
van Oords address is the same as the Companys.

(5) includes 5,338,883 shares registered in the name of SMR
Investments Ltd., and 500,000 options that are currently exercisable, . Ms.
Robertson's address is the same as the Companys.

*Beneficially owns less than one percent of our common
shares.

For information regarding the ownership of stock options to
acquire our common shares which are held by our Directors and Officers, and also
by our employees, please refer to Item 6.B above  Stock Options Granted to
Employees, Directors and Senior Managers.

56

---

As a foreign private issuer, our officers, directors and ten
percent beneficial owners we will not be subject to the reporting obligations of
the proxy rules of the Section 14 of the Securities Exchange Act of 1934 or the
insider short-swing profit rules of Section 16 of the Securities Exchange Act of
1934.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. MAJOR SHAREHOLDERS.

To the best of our knowledge, we are not indirectly owned or
controlled by any other corporation, foreign government or by any other natural
or legal person, except as set out below.

At May 31, 2007, we are aware of the following shareholders who
owns 5% or greater of the voting shares of the Company:

Name of Shareholder
    No. of Common Shares Owned
    Percentage of Outstanding
      Common SharesSusanne Robertson
    6,029,983 (5)
    14.98%John G. Robertson
    2,196,014 (2)
    7.33%


| | (1) | Of the 6,029,983 common shares owned by Susanne
      Robertson, 691,600 common shares are held directly and the balance of
      5,338,883 common shares are held by SMR Investments Ltd., a private
      company wholly-owned by Susanne M. Robertson..                                                                                                         
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Of the 2,196,014 common shares owned by John G.
      Robertson, 1,750,564common shares are held directly, 395,450,000 common
      shares are held by Access Information Services Inc., a private company
      wholly-owned by The Robertson Family Trust, and 50,000 common shares are
      held by KLR Petroleum, a corporation controlled by Mr.
  Robertson.

Over the past three years, there has not been a significant
change in the percentage ownership held by any major shareholder. The Companys
major shareholders do not have different voting rights from any other holder of
common shares.

Canadian Share Ownership.

On August 31, 2007, our shareholders list showed 43,577,528
common shares outstanding with registered and indirect holding by depository
institutions and other financial institutions estimated as 102 holders of record
resident in Canada, holding an aggregate of 34,898,625 common shares; 140
holders of record resident in the United States, holding an aggregate of
6,943,653 common shares; and 6 holders of record resident elsewhere holding an
aggregate of 1,735,250 common shares.

Control of the Company

We are a publicly owned, widely-held Canadian corporation, with
shareholders in Canada, the United States and other foreign jurisdictions. We
are not controlled by another corporation, by any foreign government, or other
natural or legal person, other than John Robertson and Susanne Robertson listed
above. We do not know of any arrangements which could result in a change in
control of the Company.

B. RELATED PARTY TRANSACTIONS.

The Company shares office facilities, staff and directors with
other related parties. Reg Technologies Inc. is a public company involved in the
development of a rotary engine. Linux Gold Corp. is a public company involved in
the acquisition and exploration of mineral properties. The Company has entered
into an agreement with Linux Gold Corp. whereby the Company could earn up to 50%
of the Fish Creek claims (see Item 4.D.).

57

---

Mr. Robertson is President and a director of Reg Technologies
Inc. and President and a director of Linux Gold Corp. A minimum of 20 percent of
Mr. Robertsons time is allocated to the ongoing operations of the Company. On a
project related basis, Mr. Robertson may allocate up to 80 percent of his time
to the Company as required. Ms. van Oord is the Chief Financial Officer and a
director of Linux Gold Corp. A minimum of 40 percent of Ms. van Oords time is
allocated to the ongoing operations of the Company. On a project related basis,
Ms. van Oord may allocate up to 80 percent of hers time to the Company as
required (see also Item 6.A. Directors and Senior Management; and Item 3.D. Risk
Factors).

The Company entered into a Management Agreement with SMR
Investments Ltd. for the provision of management and administrative services.
Pursuant to the Management Agreement, SMR Investments Ltd. provides management
and administrative services to the Company, and is in a unique position to
service the promotion, marketing, investment and business management needs of
the Company, for which the Company pays up to $2,500 per month. The Management
Agreement also provides that the manager will be reimbursed for all reasonable
out-of-pocket expenses. Susanne Robertson, a director of the Company, is the
sole shareholder of SMR Investments Ltd. and John Robertson, President and a
director of the Company is a director of SMR Investments Ltd. During the last
fiscal year of the Company, the sum of $30,000 was paid as a management fee to
SMR Investments Ltd.

We had related party advances owing of $172,180 at the May 31,
2007 year-end, compared to $ 76,415 at the end of our previous fiscal year.
These were unsecured, non-interest bearing and with no fixed terms of repayment.
These transactions with related parties during the year ended May 31, 2007 are
as follows:

1.      Reg Technologies Inc. is a
public company, which shares office facilities, staff, and several directors.
REGI US, Inc. is another company with common directors, staff and office
facilities.

2.      Office rent amounted to
$15,018 (2006 - $17,040; 2005 - $16,680) for the year ended May 31, 2007 of
which $4,847 (2006 - $11,360; 2005 - $11,120) has been shared with Reg
Technologies Inc. and REGI US, Inc. As of May 31, 2007, $2,856 (2006 - $Nil;
2005 - $Nil) was receivable from REGI US, Inc. to the Company.

3.      SMR Investments Ltd. is a
private company controlled by an officer of the Company. Under a management
contract with SMR Investments Ltd., the Company agreed to pay up to $2,500 per
month for management services. The Company was charged management fees of
$30,000 (2006 - $30,000; 2005 - $30,000) by SMR during the current year.

4.      The Company holds 15,880
shares of Linux Gold Corp, a British Columbia public company with common
directors.

5.      Directors fees of $12,000
(2006 - $12,000; 2005 - $12,000) were paid to J. Robertson, President of the
Company; administration consulting fees of $24,000 (2006 - $19,000; 2005 -
$25,750) were paid to J. Lorette, a director of the Company and secretarial fees
of $15,000 (2006 - $19,550; 2005 - $23,500) were paid to M. van Oord, a director
of the Company.

6.      Fees of $9,396 (2006 - $6,770;
2005 - $9,019) were paid to KLR Petroleum Ltd. (which is controlled by an
officer of the Company) for administration of the Company payroll and benefit
plan.

We believe that the terms of these transactions were incurred
in the normal course of operations and are equivalent or more favorable than
terms we would be able to negotiate in arms-length transactions with
unaffiliated parties.

C. INTERESTS OF EXPERTS AND COUNSEL.

Not applicable.

58

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ITEM 8. FINANCIAL INFORMATION

A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

Our financial statements are stated in Canadian Dollars (CDN$)
and are prepared in accordance with Canadian Generally Accepted Accounting
Principles (GAAP), the application of which conforms in all material respects
for the periods presented with United States GAAP, except as discussed in
footnotes to the financial statements.

Our audited consolidated financial statements for the fiscal
years ended May 31, 2007, May 31, 2006 and May 31, 2005 are attached hereto.

Legal Proceedings

We are not a party to any material legal proceedings.

Dividend Distribution Policy

We have not paid any cash dividends to date and we do not
intend to pay cash dividends in the foreseeable future.

B. SIGNIFICANT CHANGES

None.

ITEM 9. THE OFFER AND LISTING

A. OFFER AND LISTING DETAILS

Our shares trade on the TSX Venture Exchange (the "TSXV"),
since July 1985, under the symbol TRC-V. There are currently no restrictions on
the transferability of these shares under Canadian securities laws. In addition,
there has been a very limited U.S. market in our shares on the "Pink Sheets" for
the past several years, under the symbol TRYLF. We are not specifically aware
of prices and other trading details for any shares which have or may have traded
on the "Pink Sheets".

The following table shows the annual high and low closing
prices of our stock traded on the TSXV during the last five fiscal years as
follows:

Year
    High
      ($CDN)
    Low
      ($CDN)
    Close
      ($ CDN)2007
    0.37
    0.145
    0.1552006
    0.41
    0.185
    0.2752005
    0.56
    0.265
    0.272004
    0.85
    0.24
    0.372003
    0.53
    0.08
    0.352002
    0.27
    0.05
    0.22


The following table shows the quarterly high and low closing
prices of our stock traded on the TSXV during the last two fiscal years, for
each quarter as follows:

59

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Period
    High
    Low
    Close
    Volume2007Q4 5/31/07
    0.185
    0.15
    0.155
    1,137,110Q3 2/28/07
    0.185
    0.145
    0.155
    1,923,679Q2 11/30/06
    0.26
    0.17
    0.18
    2,322,170Q1 8/31/06
    0.37
    0.26
    0.26
    1,539,3322006Q4 5/31/06
    0.41
    0.255
    0.275
    2,370,397Q3 2/28/06
    0.39
    0.20
    0.355
    2,176,794Q2 11/30/05
    0.28
    0.185
    0.235
    1,250,975Q1 8/31/05
    0.33
    0.23
    0.235
    739,925


(Information provided by the TSX Venture Exchange. The
quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

The following table shows the high and low closing prices of
our stock traded on the TSX Venture Exchange during the most recent six months,
for each month as follows:

Month
    High*
    Low*2007, September
    0.26
    0.192007, August
    0.35
    0.252007, July
    0.375
    0.272007, June
    0.31
    0.272007, May
    0.37
    0.262007, April
    0.17
    0.155


(*Information provided by the TSX Venture Exchange. The
quotations reflect inter-dealer prices, without retail mark-up, markdown, or
commission and may not represent actual transactions.)

Common Share Description

Our authorized share capital consists of 100,000,000 common
shares without par value and 5,000,000 preferred shares with a par value of
$1.00. All of our authorized common shares are of the same class and, once
issued, rank equally as to dividends, voting powers, and participation in
assets. The Preferred Shares have attached thereto a right to receive dividends
as determined by the Directors. The Preferred Shares may be issued in series,
with special rights and restrictions therefore being determined by the
Directors, subject to regulatory approval. No Preferred Shares have been issued
to the date of this 20-F.

Holders of common shares are entitled to one vote for each
share held of record on all matters to be acted upon by the shareholders.
Holders of common shares are entitled to receive such dividends as may be
declared from time to time by the Board of Directors, in its discretion, out of
funds legally available therefore. Upon our liquidation, dissolution or winding
up, holders of common shares are entitled to receive pro rataour assets,
if any, remaining after payments of all debts and liabilities. No shares have
been issued subject to call or assessment. There are no preemptive or conversion
rights and no provisions for redemption or purchase for cancellation, surrender,
or sinking or purchase funds.

Provisions as to the modification, amendment or variation of
such shareholder rights or provisions are contained in the Business
Corporations Act(British Columbia). Unless the Act or our Articles
otherwise provide, any action to be taken by a resolution of the shareholders
may be taken by an ordinary resolution, being approved by a vote of a majority
of the votes cast in respect of the matter at the shareholders meeting.

There are no restrictions on the repurchase or redemption of
our common shares while there is any arrearage in the payment of dividends or
sinking fund installments. Convertible Securities / Warrants

60

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The following table lists, as of May 31, 2007, the share
purchase warrants outstanding. As of May 31, 2007, we were aware of 6 holders of
our 2,418,340 share purchase warrants, 5 of whom were resident in Canada, 1
holder was offshore and no holders were resident in the United States. These
warrants were issued in conjunction with two private placements for the purchase
of a total of 3,842,340 units (consisting of common shares with warrants).

Effective Date of Issuance
    Number of Share Purchase Warrants
      Originally Issued
    Number of Share Purchase Warrants Still
      Outstanding
    Year 1
    Year 2
    Expiration Date of Share Purchase
      WarrantsMay 17, 2006
    1,324,000
    1,324,000
    0.30
    0.35
    May
      17, 2008April 7, 2007
    1,194,340
    1,094,340
    0.20
    -
    April
      11, 2008


B. PLAN OF DISTRIBUTION

Not applicable.

C. MARKETS

Our shares trade on the TSX Venture Exchange (the "TSXV"),
since July 1985, under the symbol TRC-V. There are currently no restrictions on
the transferability of these shares under Canadian securities laws. In addition,
there has been a very limited U.S. market in our shares on the "Pink Sheets" for
the past several years, under the symbol TRYLF. We are not specifically aware
of prices and other trading details for any shares which have or may have traded
on the "Pink Sheets".

We are working with our sponsor Market Maker, Westminster
Securities, Inc., to apply to quote our common shares on the OTC Bulletin Board
quotation service upon reaching effectiveness and the no-comment stage of this
20-F.

D. SELLING SHAREHOLDERS

Not applicable.

E. DILUTION

Not applicable.

F. EXPENSES OF THE ISSUE

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. SHARE CAPITAL

A.1.      Authorized and Issued Share
Capital

The authorized and issued share capital as of May 31, 2007:

Authorized Share Capital: 100,000,000 common shares without par
value.

As of May 31, 2007, a total of 40,862,528 common shares have
been issued and fully paid for a total of $10,839,258. As of August 31, 2007, a
total of 43,577,528 common shares have been issued and fully paid for a total of
$11,246,508.

61

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Below is a summary of the Companys outstanding shares during
the year ended May 31, 2007, and the three months ended August 31, 2007:

| |                                                  |  | NUMBER     |  |   |            | 
| | ------------------------------------------------ |  | ---------- |  | - | ---------- | 
| |                                                  |  | OF         |  |   |            | 
| |                                                  |  | SHARES     |  |   | AMOUNT     | 
| |                                                  |  |            |  |   |            | 
| | Balance, May 31, 2006                            |  | 39,468,188 |  | $ | 10,624,107 | 
| |                                                  |  |            |  |   |            | 
| | Shares issued for mineral
      properties (i)   |  | 100,000    |  |   | 16,000     | 
| | Private placement (ii)                           |  | 1,194,340  |  |   | 179,151    | 
| | Private placement warrants
      exercised (iii) |  | 100,000    |  |   | 20,000     | 
| |                                                  |  | 1,394,340  |  |   | 215,151    | 
| | Balance, May 31, 2007                            |  | 40,862,528 |  | $ | 10,839,258 | 
| |                                                  |  |            |  |   |            | 
| | Private placement (iv)                           |  | 2,175,000  |  |   | 407,250    | 
| |                                                  |  |            |  |   |            | 
| | Balance, August 31, 2007                         |  | 43,575,528 |  | $ | 11,246,508 | 

(i) On February 14, 2007, 100,000
common shares were issued at $0.16 per share to Linux Gold Corp. under the terms
of the Fish Creek mineral property agreement.

(ii) On April 7, 2007, the Company
issued 1,194,340 units of capital stock pursuant to a Private Placement with 4
placees at a price of $0.15 per unit. Each unit consists of one share and one
share purchase warrant exercisable within one year for $0.20 per share.

(iii) On May 23, 2007, an individual
exercised warrants for 100,000 shares at a price of $0.20 per share

(iv) The Company completed a private
placement on August 30, 2007 for 2,175,000 units at $0.15 per unit. Each unit
consists of one common share and one share purchase warrant exercisable for
$0.20 per share in the first year and $0.25 per share in the second year.

|A.2 | Shares not representing capital  Not applicable
|--- | ------------------------------------------------
|    |                                                 
|A.3 | Shares held by Company  Not applicable.        
|    |                                                 
|A.4 | Share Purchase Warrants                         

The Company has the following share purchase warrants
outstanding as at May 31, 2007. Each whole share purchase warrant entitles the
holder to purchase one common share of the Company:

| |                   |  | Number of |  |  | Resulting  |  |   | Exercise Price Per |  |  | Expiry Date    | 
| | ----------------- |  | --------- |  |  | ---------- |  | - | ------------------ |  |  | -------------- | 
| |                   |  | Warrants  |  |  | Number     |  |   | Share              |  |  |                | 
| |                   |  |           |  |  | of         |  |   | (CDN $)            |  |  |                | 
| |                   |  |           |  |  | **Common** |  |   |                    |  |  |                | 
| |                   |  |           |  |  | Shares     |  |   |                    |  |  |                | 
| |                   |  |           |  |  |            |  |   |                    |  |  |                | 
| | Private placement |  | 1,094,340 |  |  | 1,094,340  |  | $ | 0.20               |  |  | April 11, 2008 | 
| | warrants (i)      |  |           |  |  |            |  |   |                    |  |  |                | 
| | Private placement |  | 1,324,000 |  |  | 1,324,000  |  | $ | 0.35               |  |  | May 17, 2008   | 
| | warrants (ii)     |  |           |  |  |            |  |   |                    |  |  |                | 

62

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(i) On May 17, 2006, the Company issued
2,648,000 units of capital stock pursuant to a Private Placement with 3 placees
at a price of $0.25 per unit. Each unit consists of one share and one-half share
purchase warrant exercisable within one year for $0.30 per share (or for $0.35
within the second year).

(ii) On April 7, 2007, the Company
issued 1,194,340 units of capital stock pursuant to a Private Placement with 4
placees at a price of $0.15 per unit. Each unit consists of one share and one
share purchase warrant exercisable within one year for $0.20 per share. On May
23, 2007, an individual exercised warrants for 100,000 shares at a price of
$0.20 per share.

The Company has the following share purchase warrants
outstanding as at August 31, 2007. Each whole share purchase warrant entitles
the holder to purchase one common share of the Company:

| |                   |  | Number of |  |  | Resulting  |  |   | Exercise Price Per |  |  | Expiry Date     | 
| | ----------------- |  | --------- |  |  | ---------- |  | - | ------------------ |  |  | --------------- | 
| |                   |  | Warrants  |  |  | Number     |  |   | Share              |  |  |                 | 
| |                   |  |           |  |  | of         |  |   | (CDN $)            |  |  |                 | 
| |                   |  |           |  |  | **Common** |  |   |                    |  |  |                 | 
| |                   |  |           |  |  | **Shares** |  |   |                    |  |  |                 | 
| |                   |  |           |  |  |            |  |   |                    |  |  |                 | 
| | Private placement |  | 1,094,340 |  |  | 1,094,340  |  | $ | 0.20               |  |  | April 11, 2008  | 
| | warrants (i)      |  |           |  |  |            |  |   |                    |  |  |                 | 
| | Private placement |  | 1,324,000 |  |  | 1,324,000  |  | $ | 0.35               |  |  | May 17, 2008    | 
| | warrants (ii)     |  |           |  |  |            |  |   |                    |  |  |                 | 
| | Private placement |  | 2,175,000 |  |  | 2,175,000  |  | $ | 0.20               |  |  | August 30, 2008 | 
| | warrants (iii)    |  |           |  |  |            |  | $ | 0.25               |  |  | August 30, 2009 | 

(i) On May 17, 2006, the Company issued
2,648,000 units of capital stock pursuant to a Private Placement with 3 placees
at a price of $0.25 per unit. Each unit consists of one share and one-half share
purchase warrant exercisable within one year for $0.30 per share (or for $0.35
within the second year).

(ii) On April 7, 2007, the Company
issued 1,194,340 units of capital stock pursuant to a Private Placement with 4
placees at a price of $0.15 per unit. Each unit consists of one share and one
share purchase warrant exercisable within one year for $0.20 per share. On May
23, 2007, an individual exercised warrants for 100,000 shares at a price of
$0.20 per share.

(iii) On August 31, 2007, the Company
issued 2,715,000 units of capital stock pursuant to a Private Placement with 36
placees at a price of $0.15 per unit. Each unit consists of one share and one
share purchase warrant. Each Warrant enables the investor to purchase one
additional share of Common Stock at $0.20 in the first year or $0.25 in the
second year from the date the units are issued.

|A.5 | Stock Options
|--- | -------------

The following table summarizes the stock options outstanding
and exercisable at May 31, 2007 and August 31, 2007:

| |                      |  | Number of Options |  |   | Price |  |  | Expiry Date             | 
| | -------------------- |  | ----------------- |  | - | ----- |  |  | ----------------------- | 
| | Consultants options |  | 75,000            |  | $ | 0.40  |  |  | March 4, 2008           | 
| | Consultants options |  | 112,500           |  | $ | 0.20  |  |  | October 20, 2008        | 
| | Consultants options |  | 300,000           |  | $ | 0.45  |  |  | November 13,
      2008 | 
| | Directors options   |  | 50,000            |  | $ | 0.15  |  |  | March 5, 2009           | 
| | Consultants options |  | 250,000           |  | $ | 0.285 |  |  | June 1, 2009            | 
| | Consultants options |  | 25,000            |  | $ | 0.15  |  |  | June 11, 2011           | 
| | Employees options   |  | 25,000            |  | $ | 0.18  |  |  | November 2, 2011        | 
| | Directors options   |  | 1,600,000         |  | $ | 0.15  |  |  | April 24, 2012          | 
| | Employees options   |  | 50,000            |  | $ | 0.15  |  |  | April 24, 2012          | 
| |                      |  | 2,487,500         |  |   |       |  |  |                         | 

63

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|A.6 | History of Share Capital
|--- | ------------------------

The following table sets out the history of the Companys share
capital for the past five fiscal years:

Fiscal Year
    Nature of Share Issuance
    Number of Shares
    Amount (Cdn $)Fiscal 2003
    Private placement
    A
    1,500,000
    150,000Employee stock option exercised
    B
    12,500
    1,875Private placement warrants
      exercised
    C
    275,000
    33,000Private placement
    D
    217,350
    76,073Issued for Mineral Property Fish Creek
      mineral property
    E
    200,000
    16,000Fiscal 2004
    Stock options exercised
    F
    247,500
    37,125Private placement
    G
    2,000,000
    495,887Private placement warrants
      exercised
    H
    250,000
    30,000Stock option exercised
    I
    50,000
    20,000Private placement
    J
    3,000,000
    1,026,375Private placement warrants
      exercised
    K
    193,500
    58,050Private placement
    L
    2,000,000
    982,750Debt
      settlement
    M
    201,600
    70,560Fiscal 2005
    Private placement warrants
      exercised
    N
    622,000
    186,600Private placement warrants
      exercised
    O
    975,000
    146,250Private placement
    P
    2,000,000
    593,363Fiscal 2006
    Stock option exercised
    Q
    37,500
    7,500Private
    R
    2,648,000
    662,000


64

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placementStock option exercised
    S
    5,000
    1,750Fiscal 2007
    Mineral property shares issued
    T
    100,000
    16,000Private placement
    U
    1,194,340
    179,151Private placement warrants
      exercised
    V
    100,000
    20,000


A. On December 11, 2002, the Company issued 1,500,000 units of
capital stock at a price of $ 0.10 per unit, pursuant to a Private Purchase
agreement, to net the treasury $ 150,000. Each unit consists of one common share
and one share purchase warrant exercisable within the first year for $ 0.12 and
$ 0.15 within the second year per common share.

B. On December 20, 2002, an employee, exercised an Employee
Stock Option for 12,500 shares at $0.15per share to net the treasury $
1,875.

C. On January 15 and 23, 2003, two individuals exercised
Private placement warrants for a total of 275,000 shares at $ 0.12 per share to
net the treasury $ 33,000.

D. On May 23, 2003, the Company issued 217,350 shares of
capital stock at a price of $ 0.35 per unit, pursuant to a Private Purchase
agreement, to net the treasury $ 76,073. These shares were issued in regards to
a subscription received by its subsidiary, Teryl, Inc.

E. On December 16, 2002, the Company issued 200,000 common
shares, at a price of $ 0.08 each, to Linux Gold Corp. pursuant to the Fish
Creek mineral claims agreement.

F. On June 23, 2003, the president of the Company, exercised a
Stock Option for 10,000 shares and on November 28, December 4, 2003 and February
24, 2004 three employees exercised Stock Options for 237,500 shares, at $ 0.15
per share to net the treasury $ 37,125.

G. On August 26, 2003, the Company issued 2,000,000 units of
capital stock pursuant to a Private Placement with 27 placees at a price of $
0.25 per unit ($ 500,000 less issue costs of $ 4,113) to net the treasury $
495,887. Each unit consists of one common share and one-half share purchase
warrant exercisable in the first year for $ 0.30 and $ 0.40 in the second year,
per common share.

H. On October 20, 2003, one individual exercised Private
placement warrants for a total of 250,000 shares at $ 0.12 per share to net the
treasury $ 30,000.

I. On November 21, 2003, 50,000 shares at $ 0.40 per share were
issued on the exercise of stock options.

J. On November 24, 2003, the Company issued 3,000,000 units of
capital stock pursuant to a Private Placement with 50 placees at a price of $
0.35 per unit ($ 1,050,000 less issue costs of $ 23,625) to net the treasury $
1,026,375. Each unit consists of one common share and one-half share purchase
warrant exercisable within one year for $ 0.50 per common share.

K. In December, 2003 and January, March and April, 2004,
private placement warrants totalling 193,500 shares at $ 0.30 per share were
exercised.

L. On April 26, 2004, the Company issued a Private Placement
with 27 placees for 2,000,000 units at $ 0.50 per unit to net the treasury $
982,750 ($ 1,000,000 less issue costs of $ 17,250). Each unit consists of one
common share and one share purchase warrant for one additional common share
exercisable within eighteen months for a price of $0.60 per share.

65

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M. On March 9, 2004, the Company issued 201,600 common shares
at $0.35 per share for settlement of debt totalling $ 70,560.

N. During the August 31, 2004 quarter, 10 individuals exercised
private placement warrants totalling 622,000 shares at a price of $ 0.30 per
share to net the treasury $ 186,600.

O. During the November 30, 2004 quarter, 3 individuals
exercised private placement warrants totalling 975,000 shares at a price of $
0.15 per share to net the treasury $ 146,250.P. On May 18, 2005, the Company
issued 2,000,000 units of capital stock pursuant to a Private Placement with 42
placees at a price of $ 0.30 per unit ($ 600,000 less issue costs of $ 6,637) to
net the treasury $ 593,363. Each unit consists of one share and one-half share
purchase warrant exercisable within one year for $ 0.35 per share.

Q. On February 23, 2006, a consultant exercised a portion of
his stock option for 37,500 common shares at a price of $ 0.20 to net the
treasury $ 7,500.

R. On May 17, 2006, the Company issued 2,648,000 units of
capital stock pursuant to a Private Placement with 3 placees at a price of $0.25
per unit. Each unit consists of one share and one-half share purchase warrant
exercisable within one year for $0.30 per share (or for $0.35 within the second
year).

S. On May 18, 2006, one individual exercised warrants for 5,000
shares at a price of $0.35 per share.

T. On February 14, 2007, 100,000 common shares at a deemed
value of $0.16 each were issued to Linux Gold Corp. under the terms of the Fish
Creek mineral property agreement.

U. On April 7, 2007, the Company issued 1,194,340 units of
capital stock pursuant to a Private Placement with 3 placees at a price of $
0.15 per unit to net the treasury $ 179,151. Each unit consists of one share and
one share purchase warrant which may be exercised within one year for $ 0.20 per
share.

V. On May 23, 2007, an individual exercised warrants for
100,000 shares at a price of $ 0.20, to net the treasury $ 20,000.

B. MEMORANDUM AND ARTICLES OF ASSOCIATION

We were incorporated on May 23, 1980, as Candy Mountain Gold
Corporation under a perpetual charter pursuant to the Company Act(British Columbia) by the registration of its Memorandum of Association and
Articles of Association. On January 20, 1984, a special resolution was passed
changing its name to Teryl Resources Corp.

On March 29, 2004, the new British Columbia Business
Corporations Act (the "BCA") came into force in British Columbia and replaced
the former Company Act (Former Act), which is the statute under which we were
previously governed. Under the BCA, we have two years within which to transition
("Transition") under the new statute. In accordance with the BCA, we cannot
amend our Articles or Notice of Articles until the Transition to the BCA is
completed. We filed a transition application with the Registrar of Companies
British Columbia to transition to the BCA and completed the Transition on
September 13, 2004.

On November 15, 2004, at the Annual General Meeting of
shareholders, our shareholders passed a special resolution to delete and replace
our Articles as they applied to the Former Act in their entirety for new
articles under the BCA. Under the Business Corporations Act(British
Columbia) we are permitted to conduct any lawful business that we are not
restricted from conducting by our memorandum and articles, neither of which
contain any restriction on the business we may conduct. Our Incorporation Number
is BC0187279.

A director who, in any way, directly or indirectly, is
interested in a proposed contract or transaction with us must disclose in
writing the nature and extent of the director's interest at a meeting of
directors and abstain from voting on approval of the matter. Our Articles permit
an interested director to be counted in the quorum and the Business
Corporations Act(British Columbia) provides that a director of a company is
not deemed to be interested in a

66

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proposed contract or transaction merely because the proposed
contract or transaction relates, among other things, to an indemnity, liability
insurance or the remuneration of a director in that capacity. Hence, directors
can vote compensation to themselves or any of their members. The board of
directors has an unlimited power to borrow, issue debt obligations and to charge
our assets, provided only that such power is exercised bona fide and in our best
interests. There is no mandatory retirement age for directors. A director is not
required to have any share qualification.

We have two classes of shares. We have 100,000,000 authorized
common shares, voting, without par value; and authorized 5,000,000 non-voting
preferred shares with a par value of $1.00. Our common shares are without any
special rights or restrictions.

The Preferred Shares have attached thereto a right to receive
dividends as determined by the Directors. The Preferred Shares may be issued in
series, with special rights and restrictions therefor being determined by the
Directors, subject to regulatory approval. No Preferred Shares have been issued
to the date of this 20-F.

The dividend entitlement of a common shareholder of record is
fixed at the time of declaration by the board of directors. A vested dividend
entitlement does not lapse, but unclaimed dividends are subject to a statutory
six year contract debts limitation. Each common share is entitled to one vote on
the election of each director. There are no cumulative voting rights, in
consequence of which a simple majority of votes at the annual meeting can elect
all of our directors. Each common share carries with it the right to share
equally with every other common share in dividends declared and in any
distribution of our surplus assets after payment to creditors on any winding up,
liquidation or dissolution. There are no sinking fund provisions. All common
shares must be fully paid prior to issue and are thereafter subject to no
further capital calls by us. There exists no discriminatory provision affecting
any existing or prospective holder of common shares as a result of such
shareholder owning a substantial number of shares.

Under the Business Corporations Act(British Columbia),
the rights of shareholders may be changed only by the shareholders passing a
special resolution approved by 2/3 of the votes cast at a general meeting of
shareholders, the notice of which is accompanied by an information circular
describing the proposed action and its effect on the shareholders. Shareholders
representing 10% of our common shares who vote against such a resolution may
apply to the Court to set aside the resolution and the Court may set aside,
affirm or affirm and order us to purchase the shares of any shareholder at a
price determined by the Court.

The Board of Directors must call an annual general meeting once
in each calendar year and not later than 15 months after the last such meeting.
The Board may call an extraordinary general meeting at any time. Notice of such
meetings must be accompanied by an information circular describing the proposed
business to be dealt with and making disclosures as prescribed by statute. A
shareholder or shareholders having in the aggregate 5% of our issued shares may
requisition a meeting and the Board is required to hold such meeting within four
months of such requisition. Admission to such meetings is open to registered
shareholders and their duly appointed proxies. Others may be admitted subject to
the pleasure of the meeting.

Our memorandum and articles contain no limitations on the
rights of non-resident or foreign shareholders to hold or exercise rights on our
shares. There is no limitation at law upon the right of a non-resident to hold
shares in a Canadian company. There are no provisions in our memorandum and
articles that would have an effect of delaying, deferring or preventing a change
in control and that would operate only with respect to a merger, acquisition or
corporate restructuring involving us or any of our subsidiaries.

There is no provision in our articles setting a threshold or
requiring or governing disclosure of shareholder ownership above any level.
Securities Acts, regulations and the policies and rules thereunder in the
Provinces of Alberta and British Columbia, where we are a reporting company,
require any person holding or having control of more than 10% of our issued
shares to file insider returns disclosing such share holdings.

67

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C. MATERIAL CONTRACTS

During the years ended May 31, 2007 and May 31, 2006, we
entered into the following material contracts.

Fish Creek Joint Venture Agreement

On March 5, 2002 we announced that a joint venture has been
completed for a 50% interest in 30 Fish Creek claims in Alaska based on the
following terms and conditions. The Company would issue 200,000 treasury shares
of its common shares, which shares were issued on December 16, 2002, and will
give to Linux Gold Corp. a 5% royalty interest until $2,000,000 U.S. has been
received from the royalty payments. We may purchase the 5% net royalty for
$500,000 U.S. within 1 year after production. We also agree to expend a minimum
of $500,000 U.S. after three years from the date of the agreement.

On November 4, 2002, we amended the March 5, 2002 agreement
with Linux Gold Corp. We agreed that in consideration for receiving a mining
license which was not disclosed to us at the time of the March 5, 2002
agreement, both parties agreed to grant Linux a back in working interest for a
25% interest in the mining lease after Teryl completes the US$500,000
expenditures.

In March 2007, the joint venture agreement was extended until
March 5, 2009. Other than the extension, all other terms remain the same.

Gold Hill Property Purchase and Net Profits Royalty
Agreement

On June 10, 2006, the Company and Frederic & John Rothermel
(the Vendors) entered into an agreement whereby the Company purchased a 100%
interest in the Gold Hill Patented Claim Group located in the Warren Mining
District, Cochise County, Arizona, USA, subject to a 10% Net Profit royalty to
the vendors, for the following considerations:

- $5,655 ($ 5,000 US) for a 90 day option and $ 11,268 ($ 10,000 US) to
  complete a due diligence within 90 days (paid),
- $7,000 ($ 6,000 US) paid January 5, 2007 to the Vendors, with $ 6,000 US
  payments to be made each quarter, (all required quarterly payments have been
  paid)
- to complete a $ 50,000 US first phase exploration program conducted by the
  Vendors,
- $250,000 US per year upon commencement of production.

Kentucky Gas Wells

The Company entered into agreements with IAS Energy, Inc.
(formerly IAS Communications, Inc.), a company with common directors, to
purchase 40% interests (subject to 40% net revenue interests to others) on May
18, 2006, in the Ken Lee #1 natural gas well for $103,045 ($92,500 US); on June
8, 2006, in the Elvis Farris #2 natural gas well for $104,461 ($92,500 US); and
on July 31, 2006, in the Clarence Bright #1 natural gas well for $104,673
($92,500 US). All the wells are located in Knox or Laurel Counties, Kentucky,
USA. The Company has first refusal rights to participate in up to 21 future
wells, which expires in October, 2007. The Ken Lee well commenced production in
June, 2006; the Elvis Farrell well commenced production in August, 2006; and the
Clarence Bright well commenced production in December, 2006.

D. EXCHANGE CONTROLS.

There are no governmental laws, decrees or regulations in
Canada relating to restrictions on the export of capital affecting the
remittance of interest, dividends or other payments to nonresident holders of
the Registrant's shares. Any such remittances, however, are subject to
withholding tax. See Item 10.E, "Taxation". There are no limitations under the
laws of Canada, the Province of British Columbia or in the charter or any other
constituent documents of the Company on the right of foreigners to hold or vote
the shares of the Company. However, under the provisions of the Investment
Canada Act, when control of a Canadian business is acquired by a non- Canadian,
the transaction may be reviewable in certain circumstances by Investment Canada,
an agency of the federal government of Canada. Reviewable transactions are those
in which a non-Canadian acquires the assets of a Canadian business or the voting

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shares of a Canadian corporation the value of which assets or
shares exceeds $5 million (Canadian). Also, certain transactions are
specifically exempted from review.

E. TAXATION.

Certain Canadian Federal Income Tax
Consequences

The discussion under this heading summarizes the principal Canadian
  federal income tax consequences of acquiring, holding and disposing of shares
  of our common stock for a shareholder of ours who is not a resident of Canada
  but is a resident of the U.S. and who will acquire and hold our common shares
  as capital property for the purposes of the Income Tax Act(Canada) (the
  Canadian Tax Act). This summary does not apply to a shareholder
  who carries on business in Canada through a permanent establishment
  situated in Canada or performs independent personal services in Canada through
  a fixed base in Canada if the shareholders holding in Teryl Resources
  Corp. is effectively connected with such permanent establishment or fixed base.
  This summary is based on the provisions of the Canadian Tax Act and the regulations
  thereunder and on an understanding of the administrative practices of Canada
  Customs & Revenue Agency, and takes into account all specific proposals
  to amend the Canadian Tax Act or regulations made by the Minister of Finance
  of Canada as of the date hereof. It has been assumed that there will be no other
  relevant amendment of any governing law although no assurance can be given in
  this respect. This discussion is general only and is not, nor is it intended
  to provide a detailed analysis of the income tax implications of any particular
  shareholders interest. Investors are advised to obtain independent advice
  from a shareholders own Canadian and U.S. tax advisors with respect to
  income tax implications pertinent to their particular circumstances. The provisions
  of the Canadian Tax Act are subject to income tax treaties to which Canada is
  a party, including the Canada-United States Income Tax Convention(1980),
  as amended (the Convention).

Dividends on Common Shares and Other Income

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

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

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

Dispositions of Common Shares

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

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

The Convention relieves U.S. residents from liability for Canadian
  tax on capital gains derived on a disposition of shares unless:
  (a) the value of the shares is derived principally from real property
  in Canada, including the right to explore for or exploit natural resources and
  rights to amounts computed by reference to production; 
  (b) the shareholder was resident in Canada for 120 months during any period
  of 20 consecutive years preceding, and at any time during the 10 years immediately
  preceding, the disposition and the shares were owned by him when he or she ceased
  to be resident in Canada; or 
  (c) the shares formed part of the business property of a permanent
  establishment that the holder has or had in Canada within the 12 months
  preceding the disposition.

F. DIVIDENDS AND PAYING AGENTS

Not applicable.

G. STATEMENT BY EXPERTS.

Our financial statements included in this 20-F for the years
ended May 31, 2007, 2006, and 2005 were audited by Morgan & Company,
Chartered Accountant as stated in their reports appearing herein (which reports
express an unqualified opinion), and are included in reliance upon the reports
of such firm given upon their authority as experts in accounting and
auditing.

H. DOCUMENTS ON DISPLAY.

Material contracts and publicly available corporate records may
be viewed at our registered and records office located at Suite 240, 11780
Hammersmith Way, Richmond, British Columbia.

The Company files annual reports and furnishes other
information with the SEC. You may read and copy any document that we file at the
SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or by
accessing the Commissions website (http://www.sec.gov). The Company also files
its annual reports and other information with the Canadian Securities
Administrators via SEDAR (www.sedar.com).

I. SUBSIDIARY INFORMATION.

We hold a 100% interest Teryl, Inc., a private Delaware
corporation. Teryl, Inc., a wholly-owned subsidiary of Teryl Resources Corp.,
was incorporated on November 17, 1988, in the State of Delaware and registered
to do business in the USA, which holds the Alaska mineral property interests,
the Arizona mineral property interests and Texas and Kentucky oil and gas well
interests.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK

The Company is a small business issuer as defined in Rule 405
of the Securities Act of 1933, as amended, and Rule 12b-2 of the Securities
Exchange Act of 1934, as amended, and therefore need not provide the information
requested by this item.

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ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY
SECURITIES

Not applicable.

PART II

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

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

A. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

None.

B. USE OF PROCEEDS.

Not applicable.

ITEM 15. CONTROLS AND PROCEDURES

We carried out an evaluation, under the supervision and with
the participation of our management, including the President (our principal
executive officer), and the Chief Financial Officer, of the effectiveness of the
design and operation of our disclosure controls and procedures [as defined in
the Exchange Act Rule 13a-15(e)] as of the end of the period covered by this
report. Based upon the evaluation of the effectiveness of the disclosure
controls and procedures as of the end of the period covered by this 20-F, our
President and Chief Financial Officer have concluded that, as of such date, the
disclosure controls and procedures were effective at the reasonable assurance
level with respect to such disclosure controls and procedures being designed to
ensure that information relating to the Company required to be disclosed by the
Company in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in the
rules and forms of the SEC.

In addition, the Companys President and our Chief Financial
Officer have determined that the disclosure controls and procedures are
effective to ensure that information required to be disclosed in the reports
that are filed under the Exchange Act is accumulated and communicated to
management, including the President and Chief Financial Officer, to allow timely
decisions regarding required disclosure.

There are inherent limitations to the effectiveness of any
system of disclosure controls and procedures, including the possibility of human
error and the circumvention or overriding of the controls and procedures.
Accordingly, even effective disclosure controls and procedures can only provide
reasonable, and not absolute assurance, of achieving the desired control
objectives, and management necessarily was required to apply its judgement in
evaluating the cost-benefit relationship of possible controls and
procedures.

There was no changes in our internal control over financial
reporting that occurred during our most recently completed fiscal year ended May
31, 2007 that have materially affected, or are reasonably likely to materially
affect, our internal control over financial reporting. Nor were there any
deficiencies or material weaknesses in our internal controls requiring
corrective actions.

Extension of Compliance Date for Managements Report on
Internal Control Over Financial Reporting

The Company is currently considered a non-accelerated filer
pursuant to Rule 12b-2 of the Exchange Act. Therefore, the Company is not
currently required to make statements regarding the effectiveness of internal
control over financial reporting under Section 404 of the Sarbanes-Oxley Act.
However, the Company and its management, including its President and Chief
Financial Officer, recognize that the Company, as a small business issuer, will

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likely be required to comply with disclosure report
requirements of Section 404 beginning with the fiscal year ending May 31,
2008.

ITEM 15T. CONTROLS AND PROCEDURES

Not applicable.

ITEM 16. [Reserved]

ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT

We do not currently have a financial expert in our audit
committee due to our relatively small size. In 2006, we had no employees and we
relied upon the services of a chartered accounting firm in Vancouver, BC,
Canada, to prepare our interim unaudited quarterly consolidated financial
statements. Also, we retained the audit services of Morgan & Company,
Chartered Accountants to perform the audit on our year-end consolidated
financial statements.

Moreover, the audit committee is comprised of seasoned business
professionals, whereby the members have over 25 years of experience in the
investment business and are board members of several corporations.

On these bases, we believe that the audit committee has
adequate resources available to it when financial expertise and advice are
necessary.

ITEM 16B. CODE OF ETHICS

We have not adopted a formal written code of ethics given our
relatively small size, whereby we had no employees in 2006.

Directors are subject to the laws of the Province of British
Columbia, Canada, whereby they are required to act honestly, in good faith and
in the best interests of the Company.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table discloses accounting fees and services of
the Registrant:

(Stated in terms of Canadian dollars)

Type of Services Rendered
    2007 Fiscal Year
    2006 Fiscal Year(a) Audit Fees
    $30,500
    $25,000(b) Audit-related
      Fees
    $Nil
    $3,500(c) Tax Fees
    $Nil
    $Nil(d) All Other Fees
    $Nil
    $Nil


Our Audit Committee assists the Board in fulfilling its
responsibilities relating to the Companys corporate accounting and reporting
practices. The Audit Committee is responsible for ensuring that management has
established appropriate processes for monitoring the Companys systems and
procedures for financial reporting and controls, reviewing all financial
information in disclosure documents; monitoring the performance and fees and
expenses of the Companys external auditors and recommending external auditors
for appointment by shareholders.

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The Audit Committee is also responsible for reviewing the
Companys annual financial statements prior to approval by the Board and release
to the public. Currently the members are Jennifer Lorette, Monique van Oord and
Susanne Robertson. Upon recommendation of our Audit Committee, our board of
directors appointed Morgan and Company, Chartered Accountants as our principal
accountant to audit our consolidated financial statements for the fiscal year
ended May 31, 2007, which was ratified by our shareholders on October 30,
2007.

Subject to the requirements in Canada under Multilateral
Instrument 52-110 (Audit Committees) (MI 52-110), the Audit Committee has not
adopted specific policies and procedures for the engagement of non-audit
services, however, as provided for under MI 52-110, the Audit Committee must
pre-approve all non-audit services to be provided to the Company or its
subsidiaries, unless otherwise permitted by MI 52-110.

Our Audit Committee pre-approved all non-audit services
(audit-related services, tax services, and all other services) provided to the
Company prior to the commencement of the services.

In the table above, and the disclosure below, audit fees are
fees billed by the Companys external auditor for services provided in auditing
the Companys annual financial statements for the subject year. Audit-related
fees are fees not included in audit fees that are billed by the auditor for
assurance and related services that are reasonably related to the performance of
the audit or review of the Companys financial statements. Tax fees are fees
billed by the auditor for professional services rendered for tax compliance, tax
advice and tax planning. All other fees are fees billed by the auditor for
products and services not included in the foregoing categories.

Audit Fees

The aggregate fees billed by Morgan and Company, Chartered
Accountants for professional services rendered for the audit of our annual
consolidated financial statements for the fiscal years ended May 31, 2007 and
2006 were $30,500 and $25,000, respectively. The percentage of Audit Fees
pre-approved by our Audit Committee during fiscal 2007 and 2006 was 100%.

Audit Related Fees

The aggregate fees billed for assurance and related services by
Morgan and Company, Chartered Accountants, as applicable, relating to the
performance of the audit of our consolidated financial statements for the fiscal
years ended May 31, 2007 and 2006, which are not reported under the heading
"Audit Fees" above, were $Nil and $3,500, respectively. Had there been any Audit
Related Fees incurred during fiscal 2007, it is our policy for our Audit
Committee to pre-approve 100% of these fees prior to commencement of the
services. The percentage of Audit Related Fees pre-approved by our Audit
Committee during fiscal 2006 was 100%.

Tax Fees

For the fiscal years ended May 31, 2007 and 2006, the aggregate
fees billed for tax compliance, tax advice and tax planning by Morgan and
Company, Chartered Accountants, as applicable, were $Nil and $Nil, respectively.
Had there been any Tax Fees incurred during fiscal 2007 and 2006, it is our
policy for our Audit Committee to pre-approve 100% of these fees prior to
commencement of the services.

All Other Fees

For the fiscal years ended May 31, 2007 and 2006, the aggregate
fees billed by Morgan and Company, Chartered Accountants, as applicable, for
products and services other than the services set out above, were $Nil and $Nil,
respectively. Had there been any Other Fees incurred during fiscal 2007 and
2006, it is our policy for our Audit Committee to pre-approve 100% of these fees
prior to commencement of the services.

ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
COMMITTEES

Not applicable.

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND
AFFILIATED PURCHASERS

This item is not applicable as the Companys common shares have
not yet completed registration pursuant to section 12 of the Exchange Act.

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PART III

ITEM 17. FINANCIAL STATEMENTS

Our financial statements are stated in Canadian Dollars and are
prepared in accordance with Canadian Generally Accepted Accounting Principles
(GAAP), the application of which, in our case, conforms in all material respects
for the periods presented with United States GAAP, except as discussed in
footnotes to the financial statements.

Independent Auditors Report dated September 24, 2007
Consolidated Balance Sheets at May 31, 2007 and 2006Consolidated
Statements of Operations and Deficit for the years ended May 31, 2007, 2006 and
2005 Consolidated Statements of Cash Flows for the years ended May 31, 2007,
2006 and 2005 Notes to the Consolidated Financial Statements for the years
ended May 31, 2007 and 2006

ITEM 18. FINANCIAL STATEMENTS

Not applicable.

ITEM 19. EXHIBITS

Documents filed as exhibits to this annual report:

Number
    Description1.1
    Certificate of Incorporation  Candy Mountain Gold
      Corporation May 23, 1980
    (1)1.2
    Certificate of Name Change, Special Resolution and
      Altered Memorandum to change name from Candy Mountain Resources to Teryl
      Resources Corp. dated January 20, 1984
    (1)1.3
    Special resolutions and Altered memorandum dated October
      25, 1985 increasing the authorized capital to 15,000,000 by creating
      5,000,000 Preferred Shares with a par value of $1.00, and amending the
      Articles of the Company by adding Special Rights and Restrictions Attached
      to the Preferred Shares as a Class
    (1)1.4
    Altered memorandum and special resolution dated November
      30, 1988 increasing the number of authorized common shares to 30,000,000
      common shares from 10,000,000 common shares
    (1)1.5
    Altered memorandum and special resolution dated November
      30, 1988 canceling the then existing Articles of the Company and replacing
      the Articles in their entirety with new Articles of the Company
    (1)1.6
    Altered memorandum and special resolution dated November
      20, 2000 increasing the authorized capital to 100,000,000 common shares
      from 30,000,000, effective December 4, 2002
    (4)1.7
    Altered Memorandum and special resolution, certificate of
      name change dated February 4, 2003 changing the name from Teryl Resources
      Corp. to Teryl Gold Corp.
    (4)1.8
    Transition Application and Notice of Articles
      transitioning from the former Company Act (British Columbia) to the
      Business Corporations Act (British Columbia) dated September 15, 2004
    (6)1.9
    Notice of Alteration effective November 25, 2004 changing
      the name of the Company back to Teryl Resources Corp.
    (6)1.10
    Notice of Articles dated November 25, 2004 reflecting the
      Altered memorandum and special resolution dated November 15, 2004
      canceling the then existing Articles of the Company and replacing the
      Articles in their entirety with new Articles of the Company
    (6)2.1
    Specimen copy of Registrants common share certificate
    (1)4.1
    Commitment to provide financing to Teryl Resources Corp.
      as required for ongoing operations dated February 14, 2000 from John
      Robertson
    (2)4.2
    Mining Joint Venture Agreement between Fairbanks Gold
      Mining, Inc. and Teryl, Inc. dated September 23, 1999
    (1)


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4.3
      Management Agreement dated
          December 1, 1994 between Teryl Resources Corp. and SMR Investments Ltd.
      (1)4.4
      Joint Venture Agreement between
          Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2002 
          Fish Creek Mineral Claims
      (3)4.5
      Amendment to Joint Venture
          Agreement between Linux Gold Corp. and Teryl Resources Corp. dated November
          4, 2002
      (4)4.6
      Anderson Group Property Purchase Agreement  August
          18, 2003
      (5)4.7
      West Ridge Property Lease Agreement dated July 2003
      (5)4.8
      Extension to Joint Venture
          Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March
          5, 2005
      (6)4.9
      Upper Fox Creek Development
          Agreement dated June 23, 2004 between the Company, Jean Turner and Ron
          Way
      (6)4.10
      Natural Gas Well Interest
          Agreement between Teryl Resources Corp. and IAS Energy, Inc. dated May
          18, 2006
      (8)4.11
      Mineral Property Agreement
          between Teryl Resources Corp. and Frederic & John Rothermel - Gold
          Hill Property  June 10, 2006
      (8)8.1
      List of Subsidiaries  Teryl, Inc. (a Delaware corporation)
      (8)12.1
      Section 302 Certification - Chief Executive Officer
      (9)12.2
      Section 302 Certification - Chief Financial Officer
      (9)13.1
      Section 906 Certification - Chief Executive Officer
      (9)13.2
      Section 906 Certification - Chief Financial Officer
      (9)14.1
      Consent of Morgan & Company
      (9)


|(1) | incorporated by reference to the Registrants Registration
        Statement on Form 20-F filed on December 29, 2000 with the US Securities
        and Exchange Commission          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2000.                                                             
|(3) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2002                                                              
|(4) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2003                                                              
|(5) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2004                                                              
|(6) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2005                                                              
|(7) | incorporated by reference to the Registrants Annual
        Report on Form 20-F for the fiscal year-ended May 31, 2006                                                              
|(8) | incorporated by reference to the Registrants Registration
        Statement and Annual Report on Form 20-F for the fiscal year-ended May
        31, 2007 filed on October 22, 2007.
|(9) | filed herewith                                                                                                                                                                       

GLOSSARY OF MINING TERMS

The following is a glossary of some of the terms used in the
mining industry and referenced herein:

Adits: A horizontal or nearly horizontal passage driven
from the surface for the working or dewatering of a mine.

Allochthonous terrane: a series of rocks; used in the
description of rocks in a general, formed or produced elsewhere than in its
present place

Alluvial: A term used to identify particular types of,
or minerals found associated with, deposits made by flowing water, such as
alluvial gold

Amphibolite: crystalloblastic rock consisting mainly of
amphibole and plagioclase with little or no quartz. As the content of quartz
increases, the rock grades into hornblende plagioclase gneiss

Arsenopyrite:A major ore of arsenic, Arsenopyite can
contain a small amount of gold as an impurity

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Assay:a precise and accurate analysis of the metal
contents in an ore or rock sample

Au:gold.

Auger drill:a handheld machine that produces small,
continuous core samples in unconsolidated materials

Breccia: A fragmental rock; any rock formation
essentially composed of uncemented, or loosely consolidated, small angular

Colluvium:mixture of rock fragments

Contained gold: total measurable gold in grams or ounces
estimated to be contained within a mineral deposit. Makes no allowance for
economic criteria, mining dilution or recovery losses.

Diamond drill:a large machine that produces a more or
less continuous core sample of the rock or material being drilled.

Dynamothermal metamorphism:A form of regional
metamorphism that acts on rocks caught between two converging plates and is
initially caused by directed pressure from the plates, which causes some of the
rocks to rise and others to sink, sometimes by tens of kilometers. The rocks
that fall then experience further dynamothermal metamorphism, this time caused
by heat from the Earth's interior and lithostatic pressure from overlying rocks
Eclogite: A coarse-grained, deep-seated ultramafic rock, consisting essentially
of garnet (almandine-pyrope) and pyroxene (omphacite). Rutile, kyanite, and
quartz are typically present.

Feasibility study: a detailed report assessing the
feasibility, economics and engineering of placing a mineral deposit into
commercial production

Felsic: A mnemonic adjective derived from (fe) for
feldspar, (l) for lenad or feldspathoid, and (s) for silica, and applied to
light-colored rocks containing an abundance of one or all of these
constituents.

Fracture: The general term to include any kind of
discontinuity in a body of rock if produced by mechanical process such as shear
stress or tensile stress

Gm/mtor gpt: grams per metric tonne.

Gold deposit:means a mineral deposit mineralized with
gold.

Grams per cubic meter:alluvial mineralization measured
by grams of gold contained per cubic meter of material, a measure of gold
content by volume not by weight.

Granitic: Pertaining to or composed of granite.Granodioritic:

Graphite: A allotropic form of carbon found in
nature

Greenschis: schistose metamorphic rock whose green color
is due to the presence of chlorite, epidote, or actinolite.

Hypabyssal: Pertaining to an igneous intrusion, or to
the rock of that intrusion, whose depth is intermediate between that of abyssal
or plutonic and the surface.

Ilmenite: The mineral group geikielite, ilmenite, and
pyrophanite. Also called menaccanite; titanic iron ore.

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Inferred mineral resource:That part of a mineral
resource for which quantity and grade or quality can be estimated on the basis
of geological evidence and limited sampling and reasonably assumed, but not
verified, geological and grade continuity. The estimate is based on limited
information and sampling gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes

Indicated mineral resource: That part of a mineral
resource for which quantity and grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence sufficient to allow
the appropriate application of technical and economic parameters, to support
mine planning and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration and testing information
gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely enough for
geological and grade continuity to be reasonably assumed

Intrusive:cuts across (is intrusive into)

Limonitically: Consisting of or resembling limonite

Listwanite: (carbonate altered serpentinite) is
associated with gold mineralization.

Lithologies: The character of a rock described in terms
of its structure, color, mineral composition, grain size, and arrangement of its
component parts; all those visible features that in the aggregate impart
individuality to the rock.

Lithophile: Said of an element that is concentrated in
the silicate rather than in the metal or sulfide phases of meteorites. Such
elements concentrate in the Earth's silicate crust in Goldschmidt's tripartite
division of elements in the solid Earth

Lode mining:mining of gold bearing rocks, typically in
the form of veins or stockworks

Mafic: Pertaining to or composed dominantly of the
ferromagnesian rock-forming silicates; said of some igneous rocks and their
constituent minerals

Measured resource:that part of a mineral resource for
which quantity, grade or quality, densities, shape, physical characteristics are
so well established that they can be estimated with confidence sufficient to
allow the appropriate application of technical and economic parameters, to
support production planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques from locations
such as outcrops, trenches, pits, workings and drill holes that are spaced
closely enough to confirm both geological and grade continuity.

Mineral claim or mining claim: The portion of
mining ground held under law by a claimant.

Mineralization: Implication that the rocks contain
sulphide minerals and that these could be related to ore.

Monzonite:granular plutonic rock containing approx.
equal amounts of orthoclase and plagioclase, and thus intermediate between
syenite and diorite. Quartz is minor or absent. Either hornblende or diopside,
or both, are present and biotite is a common constituent. Accessories are
apatite, zircon, sphene, and opaque oxides. The intrusive equivalent of
latite.

Net profit interest (NPI):effectively a royalty based
on the net profits generated after recovery of all csts

Net smelter royalty or NSR:a royalty based on
the gross proceeds received from the sale of minerals less the cost of smelting,
refining, freight and other related costs.

Ore:a naturally occurring rock or material from which
economic minerals can be extracted at a profit

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Ounce or oz.: a troy ounce or 20 pennyweights or 480
grains or 31.103 grams.

opt :troy ounces per short ton

Petrographic: Pertaining to the study of rocks

Placer: A place where gold is obtained by washing; an
alluvial or glacial deposit, as of sand or gravel, containing particles of gold
or other valuable minerals including gemstones.

Pluton: A body of medium- to coarse-grained igneous rock
that formed beneath the surface by crystallization of a magma

Ppm:parts per million

Probable reserve- the economically mineable part of an
indicated, and in some circumstances a measured resource demonstrated by at
least a preliminary feasibility study. This study must include adequate
information on mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic extraction can
be justified.

Prospect: an area prospective for economic minerals
based on geological, geophysical, geochemical and other criteria.

Protoliths: refers to the precursor rock of a given
lithology

Proven reserve:the economically mineable part of a
measured resource demonstrated by at least a preliminary feasibility study. This
study must include adequate information on mining, processing, metallurgical,
economic, and other relevant factors that demonstrate, at the time of reporting,
that economic extraction is justified.

Reserve: That part of a mineral deposit which could be
economically and legally extracted or produced at the time of the reserve
determination.

Reverse circulation drill:a large machine that produces
a continuous chip sample of the rock or material being drilled

Scheelite: varicolored, fluoresces bright blue mineral;
in limestone and pneumatolitic veins near granite contacts, granite pegmatites;
a source of tungsten

Skarn:a fine-grained metamorphic rock that is usually
coloured green or red, occasionally gray, black, brown or white. It forms
through thermal metamorphism as the mineralogical, chemical and crystallographic
changes in a solid-state rock, i.e. without melting, in response to new
conditions of pressure and/or temperature, and/or introduction of fluids.

Stockwork: Small veins of mineralization that have so
penetrated a rock mass that the whole rock mass can be considered mineralized

Stratiform: occurring as a bed or beds; arranged in
strata

Terrane: A region considered in relation to its fitness
for some purpose; an extent of ground or territory

Tholeiitic: Any of a series of igneous rocks that are
similar in composition to basalt, but are richer in silica and iron and poorer
in aluminum than basalt is.

78

---

Ton:short ton (2,000 pounds).

Tonne:metric tonne (2,204.6 pounds).

Trenching:the surface excavation of a linear trench to
expose mineralization for sampling

Vein:a tabular body of rock typically of narrow
thickness and often mineralized occupying a fault, shear, fissure or fracture
crosscutting another pre-existing rock

For ease of reference, the following conversion factors are
provided:

1 mile
    =
      1.609 kilometers
    2,204
      pounds
    = 1
      tonne1 yard
    =
      0.9144 meter
    2,000
      pounds/1 short ton
    =
      0.907 tonne1 acre
    =
      0.405 hectare
    1 troy
      ounce
    =
      31.103 grams


79

---







TERYL RESOURCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS



AS AT MAY 31, 2007(Stated in Canadian Dollars)

---



INDEPENDENT AUDITORS REPORT

To the Shareholders of 
  Teryl Resources Corp.

We have audited the consolidated balance sheets of Teryl Resources
  Corp. as at May 31, 2007 and 2006, and the consolidated statements of operations,
  deficit, and cash flows for each of the years in the three-year period ended
  May 31, 2007. These financial statements are the responsibility of the Companys
  management. Our responsibility is to express an opinion on these financial statements
  based on our audits.

We conducted our audits in accordance with Canadian generally
  accepted auditing standards and the standards of the Public Company Accounting
  Oversight Board (United States). Those standards require that we plan and perform
  an audit to obtain reasonable assurance whether the financial statements are
  free of material misstatement. An audit includes examining, on a test basis,
  evidence supporting the amounts and disclosures in the financial statements.
  An audit also includes assessing the accounting principles used and significant
  estimates made by management, as well as evaluating the overall financial statement
  presentation.

In our opinion, these consolidated financial statements present
  fairly, in all material respects, the financial position of the Company as at
  May 31, 2007 and 2006, and the results of its operations and its cash flows
  for each of the years in the three-year period ended May 31, 2007 in accordance
  with Canadian generally accepted accounting principles.

|Vancouver, Canada  | Morgan & Company   
|------------------ | ---------------------
|                   |                      
|September 24, 2007 | Chartered Accountants

COMMENTS BY AUDITORS FOR U.S. READERS ON CANADA-U.S.
  REPORTING DIFFERENCES

The reporting standards of the Public Company Accounting Oversight
  Board (United States) for auditors require the addition of an explanatory paragraph
  (following the opinion paragraph) when the financial statements are affected
  by conditions and events that cast substantial doubt on the Companys ability
  to continue as a going concern, such as those described in Note 1 to the consolidated
  financial statements. Our report to the shareholders, dated September 24, 2007,
  is expressed in accordance with Canadian reporting standards which do not permit
  a reference to such events and conditions in the auditors report when
  these are adequately disclosed in the consolidated financial statements.

|Vancouver, Canada  | Morgan & Company   
|------------------ | ---------------------
|                   |                      
|September 24, 2007 | Chartered Accountants



---

TERYL RESOURCES CORP.

CONSOLIDATED BALANCE SHEETS(Stated in Canadian Dollars)

|                                                     |   | MAY
      31 |  
|---------------------------------------------------- | - | ------------ | -
|                                                     |   | 2007         |  
|                                                     |   |              |  
|ASSETS                                               |   |              |  
|Current                                              |   |              |  
|Cash                                                 | $ | 2,947        |  
|Amounts receivable                                   |   | 12,515       |  
|Prepaid expenses                                     |   | 6,773        |  
|                                                     |   | 22,235       |  
|Investments(Note 3)                                  |   | 4,026        |  
|Equipment(Note 4)                                    |   | 17,269       |  
|Oil And Gas Well Interests(Note 5)                   |   | 287,936      |  
|Mineral Property Interests(Note 6)                   |   | 231,086      |  
|Deferred Exploration Expenditures(Note
      6)      |   | 2,999,743    |  
|                                                     |   |              |  
|                                                     | $ | 3,562,295    |  
|                                                     |   |              |  
|LIABILITIES                                          |   |              |  
|Current                                              |   |              |  
|Accounts
      payable and accrued liabilities       | $ | 128,098      |  
|Advances from related companies
      (Note 9)       |   | 172,180      |  
|                                                     |   | 300,278      |  
|                                                     |   |              |  
|SHAREHOLDERS EQUITY                                 |   |              |  
|                                                     |   |              |  
|Share Capital(Note 10)                               |   |              |  
|Authorized:                                          |   |              |  
|100,000,000 common shares, voting, no par value      |   |              |  
|5,000,000 preferred shares, non-voting, $1 par value |   |              |  
|Issued and
      outstanding:                        |   |              |  
|40,862,528 (2006  39,468,188) common shares         |   | 10,839,258   |  
|                                                     |   |              |  
|Subscriptions Received(Note 13)                      |   | 70,000       |  
|Contributed Surplus                                  |   | 285,754      |  
|Deficit                                              |   | (7,932,995   | )
|                                                     |   | 3,262,017    |  
|                                                     |   |              |  
|                                                     | $ | 3,562,295    |  
|                                                     |   |              |  
|Contingencies And Commitments(Note
      10)         |   |              |  

Approved on behalf of the Board of Directors:

|J. Robertson |  | J.
      Lorette
|-------------- |  | ------------------
|Director       |  | Director          

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

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS(Stated in Canadian Dollars)

|                                                  |   | YEARS
      ENDED MAY 31 |  
|------------------------------------------------- | - | ------------------------ | -
|                                                  |   | 2007                     |  
|                                                  |   |                          |  
|Revenue                                           |   |                          |  
|Oil and gas
      income                          | $ | 33,714                   |  
|                                                  |   |                          |  
|Expenses                                          |   |                          |  
|Amortization                                      |   | 4,547                    |  
|Depletion of
      gas wells                      |   | 24,243                   |  
|Filing
      and regulatory fees                  |   | 18,961                   |  
|Foreign exchange
      (gain) loss                |   | (74                      | )
|Management
      and directors fees              |   | 75,396                   |  
|Office and
      sundry                           |   | 21,252                   |  
|Office
      rent and utilities                   |   | 10,171                   |  
|Oil and gas
      production, royalties and other |   | 6,442                    |  
|Professional
      fees                           |   | 87,395                   |  
|Publicity,
      promotion and investor relations |   | 110,413                  |  
|Secretarial
      and employee benefits           |   | 38,083                   |  
|Shareholder
      and meeting costs               |   | 112                      |  
|Stock
      based compensation                    |   | 66,300                   |  
|Telephone                                         |   | 8,417                    |  
|Transfer
      agent fees                         |   | 5,894                    |  
|Travel, auto
      and entertainment              |   | 11,193                   |  
|                                                  |   | 488,745                  |  
|                                                  |   |                          |  
|Operating Loss                                    |   | (455,031                 | )
|                                                  |   |                          |  
|Other Income (Expenses)                           |   |                          |  
|Interest income                                   |   | 613                      |  
|Interest
      expense                            |   | (741                     | )
|Mineral properties
      written off              |   | (9,381                   | )
|Exploration
      expenditures written off        |   | (1,000                   | )
|                                                  |   | (10,509                  | )
|                                                  |   |                          |  
|Net Loss For The
      Year                       | $ | (465,540                 | )
|                                                  |   |                          |  
|Loss Per Share Basic and diluted                 | $ | (0.01                    | )
|                                                  |   |                          |  
|Weighted Average Number Of Common                 |   |                          |  
|Shares
      Outstanding Basic and diluted       |   | 39,663,029               |  

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

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENTS OF DEFICIT(Stated in Canadian Dollars)

|                           |   | YEARS
      ENDED MAY 31 |  
|-------------------------- | - | ------------------------ | -
|                           |   | 2007                     |  
|Deficit, Beginning Of Year | $ | (7,467,455               | )
|                           |   |                          |  
|Net Loss For The Year      |   | (465,540                 | )
|                           |   |                          |  
|Deficit, End Of Year       | $ | (7,932,995               | )

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

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS(Stated in Canadian Dollars)

|                                             |   | YEARS
      ENDED MAY 31 |  
|-------------------------------------------- | - | ------------------------ | -
|                                             |   | 2007                     |  
|                                             |   |                          |  
|Cash Flows From Operating Activities         |   |                          |  
|Revenue receipts for
      the year          | $ | 30,495                   |  
|Receipt
      of interest income             |   | 613                      |  
|Refunds of Goods and
      Services Tax      |   | 13,614                   |  
|Payment
      of interest on debenture       |   | -                        |  
|Payments to suppliers
      for goods and    |   |                          |  
|services                                     |   | (255,565                 | )
|                                             |   | (210,843                 | )
|Cash Flows From Financing Activities         |   |                          |  
|Share capital
      issued for cash          |   | 199,151                  |  
|Repayment
      of debenture                 |   | -                        |  
|Related party
      advances (repayments)    |   | 95,765                   |  
|                                             |   | 294,916                  |  
|Cash Flows From Investing Activities         |   |                          |  
|Purchase
      of mineral property interests |   | (34,231                  | )
|Purchase of
      equipment                  |   | (5,773                   | )
|Purchase
      of oil and gas well interests |   | (209,134                 | )
|Exploration
      expenditures               |   | (41,624                  | )
|                                             |   | (290,762                 | )
|                                             |   |                          |  
|Decrease In Cash For The Year                |   | (206,689                 | )
|                                             |   |                          |  
|Cash, Beginning Of Year                      |   | 209,636                  |  
|                                             |   |                          |  
|Cash, End Of Year                            | $ | 2,947                    |  
|                                             |   |                          |  
|Supplemental Disclosure Of Cash Flow         |   |                          |  
|Information                                  |   |                          |  
|Interest
      paid                          | $ | -                        |  
|                                             |   |                          |  
|Non-Cash Financing And Investing Activities  |   |                          |  
|Shares issued for mineral properties         | $ | 16,000                   |  

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

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|1. | NATURE OF OPERATIONS AND GOING CONCERN                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | Teryl Resources Corp. is a public company
        incorporated under the British Columbia Business Corporations Act on July
        16, 1985. Its shares are listed on the TSX Venture Exchange.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | The Company makes expenditures on acquiring
        mineral properties and carries out exploration on the properties. It also
        acquires oil and gas property interests and participates in drilling wells.
        The recoverability of the amounts shown for investments, mineral properties,
        interest in oil and gas properties and the related deferred expenditures
        is dependent upon the existence of economically recoverable reserves,
        the ability to obtain the necessary financing to complete the exploration,
        the profitability of future production or the ability of the Company to
        dispose of those assets on a profitable basis. The Company's ongoing operation
        is dependent upon cash flow from successful operations and equity financing.
        The Company has incurred a loss of $465,540 in the year ended May 31,
        2007 (2006 - $430,646; 2005 - $515,740). These consolidated financial
        statements do not include adjustments that would be necessary should it
        be determined that the Company may be unable to continue as a going concern.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|2. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

Office equipment
      20% per annumAutomotive equipment
      30% per annum


| | c) | Accounting for Oil and Gas Well Interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    | The Company follows the successful efforts method of
        accounting for its oil and gas properties, and related equipment. Costs
        of exploratory wells are initially capitalized pending determination of
        proved reserves. Costs of wells which are assigned proved reserves remain
        capitalized, while costs of unsuccessful wells are charged to operations.
        All other exploration costs, including geological and geophysical costs,
        are charged to operations as incurred. Development costs, including the
        cost of all wells, are capitalized.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|2. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES(Continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | c)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   | d)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|2. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES(Continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | e)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | f)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   | g)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   |                                                    
|   | h)                                                 
|   |                                                    
|   |                                                    

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|2. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES(Continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | i)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | j)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | k)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | l)                                                 
|   |                                                    
|   |                                                    

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|2. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES(Continued)
|-- | ---------------------------------------------------
|   |                                                    
|   | m)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | n)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | o)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|   | p)                                                 
|   |                                                    
|   |                                                    
|   |                                                    
|3. | INVESTMENTS                                        

| |                       |   | 2007  |  |   | 2006  | 
| | --------------------- | - | ----- |  | - | ----- | 
| | Linux Gold Corp.      |   |       |  |   |       | 
| | 15,880 shares at cost | $ | 4,026 |  | $ | 4,026 | 

Linux Gold Corp. is a public company
  listed on US Stock Exchanges having a market value of $2,856 at May 31, 2007
  (2006 - $7,347).

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|4. | EQUIPMENT
|-- | ---------

| |                                  |   | 2007    |   |   | 2006    |  
| | -------------------------------- | - | ------- | - | - | ------- | -
| |                                  |   |         |   |   |         |  
| | Furniture and fixtures  at cost | $ | 27,010  |   | $ | 21,237  |  
| | Less: Accumulated amortization   |   | (15,068 | ) |   | (12,804 | )
| |                                  |   | 11,942  |   |   | 8,433   |  
| |                                  |   |         |   |   |         |  
| | Automotive equipment  at cost   |   | 15,531  |   |   | 15,531  |  
| | Less: Accumulated amortization   |   | (10,204 | ) |   | (7,921  | )
| |                                  |   | 5,327   |   |   | 7,610   |  
| |                                  |   |         |   |   |         |  
| |                                  | $ | 17,269  |   | $ | 16,043  |  

|5. | OIL AND GAS WELL INTERESTS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company owns 6.5% working interest (4.680% net revenue
        interest) in the Peters No. 1 Well, in Fayette County, Texas, and a 7.5%
        working interest (5.79375% net revenue interest) in each of the C-S #1,
        Jancik #2 and Herrmann #4 wells, located in Burleson County, Texas. The
        carried cost of these wells has been completely depleted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | The Company entered into agreements with IAS Energy,
        Inc. (formerly IAS Communications, Inc.), a company with common directors,
        to purchase 40% interests (subject to 40% net revenue interests to others)
        on May 18, 2006, in the Ken Lee #1 natural gas well for $103,045 ($92,500
        US); on June 8, 2006, in the Elvis Farris #2 natural gas well for $104,461
        ($92,500 US); and on July 31, 2006, in the Clarence Bright #1 natural
        gas well for $104,673 ($92,500 US). All the wells are located in Knox
        or Laurel Counties, Kentucky, USA. The Company has first refusal rights
        to participate in up to 21 future wells, which expires in October, 2007.
        The Ken Lee well commenced production in June, 2006; the Elvis Farrell
        well commenced production in August, 2006; and the Clarence Bright well
        commenced production in December, 2006. As there has been no determination
        as to the gas reserves done on any of the wells, the wells are being depleted
        straight-line over 10 years, which is their estimated pay-out term.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|5. | OIL AND GAS WELL INTERESTS(Continued)
|-- | -------------------------------------

| |                              |   | 2007    |   |   | 2006    | 
| | ---------------------------- | - | ------- | - | - | ------- | 
| |                              |   |         |   |   |         | 
| | Ken Lee #1  at cost         | $ | 103,045 |   | $ | 103,045 | 
| | Less: Accumulated depletion  |   | (10,305 | ) |   | -       | 
| |                              |   | 92,740  |   |   | 103,045 | 
| |                              |   |         |   |   |         | 
| | Elvis Farris #2  at cost    |   | 104,461 |   |   | -       | 
| | Less: Accumulated depletion  |   | (8,705  | ) |   | -       | 
| |                              |   | 95,756  |   |   | -       | 
| |                              |   |         |   |   |         | 
| | Clarence Bright #1  at cost |   | 104,673 |   |   | -       | 
| | Less: Accumulated depletion  |   | (5,233  | ) |   | -       | 
| |                              |   | 99,440  |   |   | -       | 
| |                              |   |         |   |   |         | 
| |                              | $ | 287,936 |   | $ | 103,045 | 

|6. | MINERAL PROPERTY INTERESTS
|-- | --------------------------

| |                            |   | BALANCE |  |   |           |  |   |            |   |   | BALANCE | 
| | -------------------------- | - | ------- |  | - | --------- |  | - | ---------- | - | - | ------- | 
| |                            |   | MAY 31  |  |   |           |  |   |            |   |   | MAY 31  | 
| |                            |   | 2006    |  |   | ADDITIONS |  |   | WRITE-OFFS |   |   | 2007    | 
| |                            |   |         |  |   |           |  |   |            |   |   |         | 
| | Property acquisition costs |   |         |  |   |           |  |   |            |   |   |         | 
| | Silverknife                | $ | 1       |  | $ | -         |  | $ | -          |   | $ | 1       | 
| | Fish Creek                 |   | 33,538  |  |   | 16,000    |  |   | -          |   |   | 49,538  | 
| | Gold Hill                  |   | -       |  |   | 34,231    |  |   | -          |   |   | 34,231  | 
| | West Ridge                 |   | 116,189 |  |   | -         |  |   | -          |   |   | 116,189 | 
| | Gil Venture                |   | 31,127  |  |   | -         |  |   | -          |   |   | 31,127  | 
| | Stepovich
      Lease      |   | 9,381   |  |   | -         |  |   | (9,381     | ) |   | -       | 
| |                            |   |         |  |   |           |  |   |            |   |   |         | 
| |                            | $ | 190,236 |  | $ | 50,231    |  | $ | (9,381     | ) | $ | 231,086 | 

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|6. | MINERAL PROPERTY INTERESTS(Continued)
|-- | -------------------------------------

| |                            |   | BALANCE |  |   |           |  |   |            |   |   | BALANCE | 
| | -------------------------- | - | ------- |  | - | --------- |  | - | ---------- | - | - | ------- | 
| |                            |   | MAY 31  |  |   |           |  |   |            |   |   | MAY 31  | 
| |                            |   | 2005    |  |   | ADDITIONS |  |   | WRITE-OFFS |   |   | 2006    | 
| |                            |   |         |  |   |           |  |   |            |   |   |         | 
| | Property acquisition costs |   |         |  |   |           |  |   |            |   |   |         | 
| | Silverknife                | $ | 1       |  | $ | -         |  | $ | -          |   | $ | 1       | 
| | Fish Creek                 |   | 33,538  |  |   | -         |  |   | -          |   |   | 33,538  | 
| | Anderson Group  2nd       |   | 15,878  |  |   | -         |  |   | (15,878    | ) |   | -       | 
| | Upper Fox
      Creek      |   | 13,283  |  |   | -         |  |   | (13,283    | ) |   | -       | 
| | West Ridge                 |   | 116,189 |  |   | -         |  |   | -          |   |   | 116,189 | 
| | Gil Venture                |   | 31,127  |  |   | -         |  |   | -          |   |   | 31,127  | 
| | Stepovich Lease            |   | 9,381   |  |   | -         |  |   | -          |   |   | 9,381   | 
| |                            |   |         |  |   |           |  |   |            |   |   |         | 
| |                            | $ | 219,397 |  | $ | -         |  | $ | (29,161    | ) | $ | 190,236 | 

| | a) | SILVERKNIFE, Laird, BC, Canada                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | Pursuant to agreements with Reg Technologies Inc. (Reg),
        SMR Investments Ltd. (SMR), Rapitan Resources Inc. (Rapitan),
        and Chevron Minerals Ltd. (Chevron), the Company acquired
        a 30% working interest in the Silverknife mineral claims, situated in
        the Liard Mining Division in the Province of British Columbia, subject
        to a 10% Net Profit Royalty to Rapitan and a 1% Net Smelter Returns to
        SMR. Acquisition costs have been written down to $1 and exploration expenditures
        have been written off entirely, since the claims are not currently being
        explored and have no proven economic reserves.                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | b) | FISH CREEK, Fairbanks, Alaska, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | On March 5, 2002, the Company and Linux Gold Corp. (Linux)
        entered into an agreement whereby the Company may earn up to a 50% interest
        in the Fish Creek mineral claims located in the Fairbanks district of
        Alaska, USA, by expending $550,750 ($500,000 US) within three years and
        issuing 200,000 common shares (issued December 16, 2002 at $0.08 per share).
        An additional 100,000 shares were issued on February 14, 2007 at $0.16
        per share in payment of an extension of the expenditure date to March
        5, 2007, which was further extended to March 5, 2009. Linux will have
        a 5% Net Royalty Interest until the Company pays $2,139,200 ($2,000,000
        US).
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | c) | ANDERSON GROUP, Fairbanks, Alaska, USA                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    | Pursuant to a purchase agreement dated August 18, 2003,
        the Company paid Michael D. Roberts $15,878 ($12,500 US), with an additional
        $148,703 ($135,000 US) owing in the next two years, for a 100% interest
        (subject to a 5% net profit interest) for 70.785 acres located in the
        Fairbanks Mining district of Alaska, USA, known as Anderson Group 2nd
        Tier. During the 2006 year, $15,878 in mineral property costs were written
        off as management decided not to maintain this option.                                                                                                                                                                                                 

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|6. | MINERAL PROPERTY INTERESTS(Continued)
|-- | -------------------------------------
|   |                                      
|   | d)                                   
|   |                                      
|   |                                      
|   |                                      
|   | e)                                   
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   |                                      
|   | f)                                   
|   |                                      
|   |                                      
|   |                                      
|   | g)                                   
|   |                                      
|   |                                      

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|6. | MINERAL PROPERTY INTERESTS(Continued)
|-- | -------------------------------------
|   |                                      
|   | h)                                   
|   |                                      
|   |                                      
|   |                                      
|   |                                      

| |                                                     |   | 2007      |   |   | 2006      |  
| | --------------------------------------------------- | - | --------- | - | - | --------- | -
| | Silverknife Claims                                  |   |           |   |   |           |  
| | Work assessment                                     | $ | -         |   | $ | 2,163     |  
| |                                                     |   |           |   |   |           |  
| | Fish Creek Claims                                   |   |           |   |   |           |  
| | Geophysical survey                                  |   | 11,041    |   |   | 756       |  
| | Placer sampling and drilling                        |   | -         |   |   | 26,967    |  
| | Insurance, lease, property
      tax and assays     |   | 2,405     |   |   | 11,949    |  
| |                                                     |   | 13,446    |   |   | 39,672    |  
| | Upper Fox Creek Claims                              |   |           |   |   |           |  
| | Geophysical survey                                  |   | -         |   |   | 1,564     |  
| |                                                     |   |           |   |   |           |  
| | Gold Hill Claims                                    |   |           |   |   |           |  
| | Geophysical and geological
      survey             |   | 15,702    |   |   | -         |  
| | Travel, maps and reports                            |   | 3,248     |   |   | -         |  
| |                                                     |   | 18,950    |   |   | -         |  
| | West Ridge Claims                                   |   |           |   |   |           |  
| | Geophysical survey                                  |   | 1,948     |   |   | 8,794     |  
| | Rent assessment                                     |   | 7,280     |   |   | -         |  
| |                                                     |   | 9,228     |   |   | 8,794     |  
| | Gil Venture                                         |   |           |   |   |           |  
| | Exploration advances                                |   | -         |   |   | 91,278    |  
| | Phase II exploration  trenching and
      drilling |   | -         |   |   | 111,127   |  
| |                                                     |   | -         |   |   | 202,405   |  
| |                                                     |   |           |   |   |           |  
| | Exploration expenditures for the year               |   | 41,624    |   |   | 254,598   |  
| |                                                     |   |           |   |   |           |  
| | Exploration expenditures written off                |   |           |   |   |           |  
| | Abandoned and inactive claims                       |   | (1,000    | ) |   | (38,540   | )
| |                                                     |   | 40,624    |   |   | 216,058   |  
| | Exploration expenditures, beginning of year         |   | 2,959,119 |   |   | 2,743,061 |  
| |                                                     |   |           |   |   |           |  
| | Exploration expenditures, end of year               | $ | 2,999,743 |   | $ | 2,959,119 |  

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|7. | INCOME TAXES                                                                                                                                                                                                                                                                                                                                      
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                   
|   | Future income taxes reflect the net tax effects of the
        temporary differences between the carrying amounts of assets and liabilities
        for financial reporting purposes and the amounts used for income tax purposes.
        Significant components of the Companys Canadian future tax assets
        as of May 31 are as follows:

| |                                   |   | 2007       |   |   | 2006       |  
| | --------------------------------- | - | ---------- | - | - | ---------- | -
| |                                   |   |            |   |   |            |  
| | Non-capital losses carry forwards | $ | 838,000    |   | $ | 804,000    |  
| | Equipment                         |   | 17,000     |   |   | 16,000     |  
| | Resource deductions               |   | 482,000    |   |   | 474,000    |  
| |                                   |   | 1,337,000  |   |   | 1,294,000  |  
| | Valuation allowance               |   | (1,337,000 | ) |   | (1,294,000 | )
| |                                   |   |            |   |   |            |  
| | Future income tax asset           | $ | -          |   | $ | -          |  

A reconciliation of the combined Canadian
  federal and provincial income taxes at statutory rates and the Companys
  effective income tax expense is as follows:

| |                                       |   | 2007     |   |   | 2006     |  
| | ------------------------------------- | - | -------- | - | - | -------- | -
| |                                       |   |          |   |   |          |  
| | Statutory tax rate                    |   | 34%      |   |   | 34%      |  
| |                                       |   |          |   |   |          |  
| | Income tax recovery at statutory rate | $ | (157,700 | ) | $ | (148,300 | )
| | Temporary differences                 |   | 9,800    |   |   | 25,400   |  
| | Permanent differences                 |   | 36,100   |   |   | 2,900    |  
| | Effect of change in tax rate          |   | -        |   |   | 51,700   |  
| | Tax benefits not recognized           |   | 111,800  |   |   | 68,300   |  
| |                                       |   |          |   |   |          |  
| |                                       | $ | -        |   | $ | -        |  

|   | The Company has Canadian non-capital losses of approximately
        $2,456,000 (2006 - $2,356,000), which expire over the years 2008 to 2027.
        The Company also has cumulative exploration expenses in the amount of
        $1,926,000 (2006 - $1,688,000) in Canada, which can be carried forward
        indefinitely.                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|8. | DEBENTURE PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   | Pursuant to various agreements, the Company agreed to
        issue a convertible debenture for $150,000 to Keltic Bryce Enterprises
        Inc. (Keltic Bryce), which did not receive approval and was
        not convertible under existing regulatory policy. The Company paid Keltic
        Bryce $15,000 interest on November 15, 2005. On May 1, 2006, the $150,000
        debenture was repaid along with $11,749 accrued interest.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|9. | ADVANCES FROM RELATED COMPANIES
|-- | -------------------------------

| |                                                            |   | 2007    |   |   | 2006   |  
| | ---------------------------------------------------------- | - | ------- | - | - | ------ | -
| |                                                            |   |         |   |   |        |  
| | IAS Energy, Inc. (formerly IAS Communications,
      Inc.) | $ | 11,268  |   | $ | -      |  
| | International Diamond Syndicate Ltd.                       |   | (1      | ) |   | (1     | )
| | JGR Petroleum Inc.                                         |   | 44,564  |   |   | 22,584 |  
| | KLR Petroleum Inc.                                         |   | -       |   |   | 485    |  
| | Linux Gold, Inc.                                           |   | 52,580  |   |   | 20,936 |  
| | Rainbow Network                                            |   | 25,464  |   |   | 22,569 |  
| | Reg Technologies Inc.                                      |   | 3,285   |   |   | (5,419 | )
| | REGI US, Inc.                                              |   | -       |   |   | (1,420 | )
| | SMR Investments Ltd.                                       |   | 35,020  |   |   | 16,681 |  
| |                                                            |   |         |   |   |        |  
| |                                                            | $ | 172,180 |   | $ | 76,415 |  

|    | The advances from (to) related companies bear no interest
        and have no fixed repayment terms.                                                                                                                                                                                                                                                                                   
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|10. | SHARE CAPITAL                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | Authorized share capital consists of:                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | 100,000,000 voting common shares with no par value 
            5,000,000 non-voting preferred shares with $1 par value                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                        
|    | The Preferred Shares have attached thereto a right to
        receive dividends as determined by the Directors. The Preferred Shares
        may be issued in series, with special rights and restrictions therefore
        being determined by the Directors, subject to regulatory approval. No
        Preferred Shares have been issued to the date of these financial statements.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|10. | SHARE CAPITAL(Continued)
|--- | ------------------------

| |                                                |  | NUMBER OF  |  |   |            |   |   | CONTRIBUTED |  
| | ---------------------------------------------- |  | ---------- |  | - | ---------- | - | - | ----------- | -
| |                                                |  | SHARES     |  |   | AMOUNT     |   |   | SURPLUS     |  
| |                                                |  |            |  |   |            |   |   |             |  
| | Balance, May 31, 2005                          |  | 36,777,688 |  | $ | 9,944,335  |   | $ | 175,935     |  
| |                                                |  |            |  |   |            |   |   |             |  
| | Stock options exercised (a)                    |  | 37,500     |  |   | 7,500      |   |   | -           |  
| | Fair value of stock options exercised          |  | -          |  |   | 12,776     |   |   | (12,776     | )
| | Private placement (b)                          |  | 2,648,000  |  |   | 662,000    |   |   | -           |  
| | Private placement warrants exercised (c)       |  | 5,000      |  |   | 1,750      |   |   | -           |  
| | Share issue costs                              |  | -          |  |   | (4,254     | ) |   | -           |  
| | Stock based compensation                       |  | -          |  |   | -          |   |   | 6,242       |  
| |                                                |  | 2,690,500  |  |   | 679,772    |   |   | (6,534      | )
| |                                                |  |            |  |   |            |   |   |             |  
| | Balance, May 31, 2006                          |  | 39,468,188 |  |   | 10,624,107 |   |   | 169,401     |  
| |                                                |  |            |  |   |            |   |   |             |  
| | Shares issued for mineral properties
      (d) |  | 100,000    |  |   | 16,000     |   |   | -           |  
| | Private placement (e)                          |  | 1,194,340  |  |   | 179,151    |   |   | -           |  
| | Private placement warrants exercised
      (f) |  | 100,000    |  |   | 20,000     |   |   | -           |  
| | Stock based compensation                       |  | -          |  |   | -          |   |   | 116,353     |  
| |                                                |  | 1,394,340  |  |   | 215,151    |   |   | 116,353     |  
| |                                                |  |            |  |   |            |   |   |             |  
| | Balance, May 31, 2007                          |  | 40,862,528 |  | $ | 10,839,258 |   | $ | 285,754     |  

| | a) | On February 23, 2006, a consultant exercised a portion
        of his stock options for 37,500 common shares at a price of $0.20 per
        share.                                                                                                                                                                                         
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                             
| | b) | On May 17, 2006, the Company issued 2,648,000 units
        of capital stock pursuant to a Private Placement with 3 placees at a price
        of $0.25 per unit. Each unit consists of one share and one-half share
        purchase warrant exercisable within one year for $0.30 per share (or for
        $0.35 within the second year).
| |    |                                                                                                                                                                                                                                                                                                                                             
| | c) | On May 18, 2006, one individual exercised warrants for
        5,000 shares at a price of $0.35 per share.                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                             
| | d) | On February 14, 2007, 100,000 common shares were issued
        at $0.16 per share to Linux Gold Corp. under the terms of the Fish Creek
        mineral property agreement.                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                             
| | e) | On April 7, 2007, the Company issued 1,194,340 units
        of capital stock pursuant to a Private Placement with 4 placees at a price
        of $0.15 per unit. Each unit consists of one share and one share purchase
        warrant exercisable within one year for $0.20 per share.                                                  

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|10. | SHARE CAPITAL(Continued)
|--- | ------------------------
|    |                         
|    | f)                      

On October 7, 2005, one employees
  options for 150,000 common shares were repriced from $0.40 to $0.20 and extended
  to expire on October 20, 2008; on November 17, 2005, one employees options
  for 25,000 common shares at $0.45 were cancelled; and on February 19, 2006,
  a consultants options for 350,000 common shares at a price of $0.40 expired
  unexercised.

Pursuant to an agreement dated May 24,
  2006, the Company granted stock options to Agoracom Investor Relations Corp.
  to purchase up to 250,000 common shares in four equal installments of 62,500
  shares, vesting each quarter starting September 1, 2006, and exercisable June
  1, 2007 at a price of $0.285 per share for a two-year period.

On June 29, 2006, a consultant was granted
  stock options to purchase up to 25,000 common shares at a price of $0.30 per
  share for five years, which were repriced on May 8, 2007 to $0.15. On November
  2, 2006, an employee was granted stock options to purchase up to 25,000 common
  shares at a price of $0.18 per share for five years. On April 22, 2007, 1,590,000
  stock options expired unexercised. On April 24, 2007, 1,600,000 directors
  stock options were granted at a price of $0.15 per share expiring April 24,
  2012. On May 8, 2007, approval was granted to reprice 50,000 employees
  stock options from $0.40 to $0.15 and extend the exercise date from December
  16, 2007 to April 24, 2012; and 50,000 directors stock options were repriced
  from $0.35 to $0.15 with the exercise date unchanged, subject to shareholder
  approval.

Outstanding Commitments to Issue Shares

At May 31, 2007, the following commitments
  to issue shares were outstanding:

NUMBER OF
      
      EXPIRYTYPE OF COMMITMENT
      SHARES
      PRICE
      DATEPrivate placement warrants
      1,094,340
      $ 0.20
      April 11, 2008Private placement warrants
      1,324,000
      $ 0.35
      May 17, 2008Consultants options
      75,000
      $ 0.40
      March 4, 2008Consultants options
      112,500
      $ 0.20
      October 20, 2008Consultants options
      300,000
      $ 0.45
      November 13, 2008Directors options
      50,000
      $ 0.15
      March 5, 2009Consultants options
      250,000
      $ 0.285
      June 1, 2009Consultants options
      25,000
      $ 0.15
      June 11, 2011Employees options
      25,000
      $ 0.18
      November 2, 2011Directors options
      1,600,000
      $ 0.15
      April 24, 2012Employees options
      50,000
      $ 0.15
      April 24, 20124,905,840


---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|10. | SHARE CAPITAL(Continued)                                                                               
|--- | -------------------------------------------------------------------------------------------------------
|    |                                                                                                        
|    | During the years ended May 31, 2007 and 2006, the Company
        had the following warrant activities:

| |                       |  |            |   |   | WEIGHTED | 
| | --------------------- |  | ---------- | - | - | -------- | 
| |                       |  | NUMBER     |   |   | AVERAGE  | 
| |                       |  | OF         |   |   | EXERCISE | 
| |                       |  | OPTIONS    |   |   | PRICE    | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2005 |  | 3,184,500  |   | $ | 0.51     | 
| |                       |  |            |   |   |          | 
| | Issued                |  | 1,324,000  |   |   | 0.30     | 
| | Exercised             |  | (5,000     | ) |   | 0.35     | 
| | Expired               |  | (3,179,500 | ) |   | 0.51     | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2006 |  | 1,324,000  |   |   | 0.30     | 
| |                       |  |            |   |   |          | 
| | Issued                |  | 1,194,340  |   |   | 0.20     | 
| | Exercised             |  | (100,000   | ) |   | 0.20     | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2007 |  | 2,418,340  |   | $ | 0.28     | 

During the years ended May 31, 2007 and
  2006, the Company had the following stock option activities:

| |                       |  |            |   |   | WEIGHTED | 
| | --------------------- |  | ---------- | - | - | -------- | 
| |                       |  | NUMBER     |   |   | AVERAGE  | 
| |                       |  | OF         |   |   | EXERCISE | 
| |                       |  | OPTIONS    |   |   | PRICE    | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2005 |  | 2,590,000  |   | $ | 0.27     | 
| |                       |  |            |   |   |          | 
| | Exercised             |  | (37,500    | ) |   | 0.20     | 
| | Expired               |  | (350,000   | ) |   | 0.40     | 
| | Cancelled             |  | (25,000    | ) |   | 0.45     | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2006 |  | 2,177,500  |   |   | 0.21     | 
| |                       |  |            |   |   |          | 
| | Granted               |  | 1,900,000  |   |   | 0.17     | 
| | Expired               |  | (1,590,000 | ) |   | 0.15     | 
| |                       |  |            |   |   |          | 
| | Balance, May 31, 2007 |  | 2,487,500  |   | $ | 0.21     | 

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|10. | SHARE CAPITAL(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                              
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | Stock Based Compensation Expense                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The fair value of each option granted is estimated on
        the grant date using the Black-Scholes option-pricing model assuming no
        dividend yield and the following weighted average assumption for options
        granted: expected volatility of 130% (2006 - 52%; 2005  158%), weighted
        average risk free interest rate of 4.11% (2006  3.40%; 2005 
        4.56%) and expected life of 4.73 years (2006  1 year; 2005 
        2 years).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    | The following table summarizes information about stock
        options outstanding at May 31, 2007:                                                                                                                                                                                                                                                                                                                                                                   

WEIGHTEDNUMBER
      AVERAGE
      NUMBEROF
      REMAINING
      OFEXERCISE
      OPTIONS
      CONTRACTUAL
      OPTIONSPRICE
      OUTSTANDING
      LIFE (YEARS)
      EXERCISABLE$ 0.15
      1,725,000
      4.80
      525,0000.18
      25,000
      4.43
      18,7500.20
      112,500
      1.39
      112,5000.285
      250,000
      2.01
      250,0000.40
      75,000
      0.76
      75,0000.45
      300,000
      1.46
      300,000$ 0.21
      2,487,500
      3.84
      1,281,250


|11. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Related party transactions are in the normal course
        of operations and are measured at the exchange amount, which is the amount
        of consideration established and agreed to by the related parties. Related
        party transactions not disclosed elsewhere in these financial statements
        are as follows:                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | Reg Technologies Inc. is a public company, which shares
        office facilities and staff, and several directors with the Company. REGI
        US, Inc. is another company with common directors, staff and office facilities.                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | SMR Investments Ltd. (SMR) is a private
        company controlled by an officer of the Company who has significant influence
        on its affairs. Under a management contract with SMR, the Company agreed
        to pay up to $2,500 per month for management services. SMR charged the
        Company management fees of $30,000 (2006 - $30,000; 2005 - $30,000) during
        the current year. As of May 31, 2007, $30,000 (2006 - $Nil; 2005 - $Nil)
        was payable to SMR by the Company.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

MAY 31, 2007 AND 2006(Stated in Canadian Dollars)

|11. | RELATED PARTY TRANSACTIONS(Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company holds 15,880 shares of Linux Gold Corp.,
        a BC public company with common directors.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | During the year, directors fees of $12,000
        (2006 - $12,000; 2005 - $12,000) were paid to J. Robertson, President
        of the Company. As of May 31, 2007, $4,019 (2006 - $Nil; 2005
        - $Nil) was receivable from J. Robertson to the Company. Administrative
        consulting fees of $24,000 (2006 - $19,000; 2005 - $25,750)
        were paid to J. Lorette, a director of the Company and secretarial fees
        of $15,000 (2006 - $19,550; 2005 - $23,500) were paid to M.
        van Oord, a director of the Company.                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Fees of $9,396 (2006 - $6,770; 2005 - $9,019)
        were paid to KLR Petroleum Ltd. (which is controlled by an officer of
        the Company who has significant influence on its affairs) for administration
        of the Companys payroll and benefit plan.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Office rent amounted to $15,018 (2006 - $17,040;
        2005 - $16,680) for the year ended May 31, 2007 of which $4,847
        (2006 - $11,360; 2005 - $11,120) has been shared with Reg Technologies
        Inc. and REGI US, Inc. As of May 31, 2007, $2,856 (2006 - $Nil;
        2005 - $Nil) was receivable from REGI US, Inc. to the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|12. | SUBSEQUENT EVENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company completed a private placement on August
        30, 2007 for 2,175,000 units at $0.15 per unit. Each unit consists
        of one common share and one share purchase warrant exercisable for $0.20
        per share in the first year and $0.25 per share in the second year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|13. | TERYL, INC. TRANSACTIONS(100% US Subsidiary)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | In 1998, Teryl, Inc. offered a private placement for
        up to 1,000,000 shares at a price of $0.23 ($0.15 US) and subscriptions
        of $146,044 ($96,750 US) were received by November 19, 1999. Since
        the offering was not fully subscribed, the Companies negotiated with the
        subscribers to replace the Teryl, Inc. shares with Teryl Resources Corp.
        shares. Six subscribers did not return the agreement and negotiations
        are proceeding to resolve this. On October 17, 2006, the authorized capital
        for Teryl, Inc. was reduced to 10,000 common shares, which resulted in
        a rollback to 1 common share for each 10,000 outstanding. On August 29,
        2007, the final six subscribers agreed to a settlement of $70,000
        ($50,250 US).

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES
|--- | -----------------------------------------------------------------------------------------------

These consolidated financial statements
  have been prepared in accordance with Canadian generally accepted accounting
  principles (Canadian GAAP). Material variations in the accounting
  measurement principles, practices and methods used in preparing these consolidated
  financial statements from measurement principles, practices and methods accepted
  in the United States (US GAAP) are described and quantified below.

a) Mineral Properties and Deferred Exploration
  Costs

Under Canadian GAAP, mineral property
  interests and deferred exploration costs, including acquisition and exploration
  costs, are carried at cost and written down if the properties are abandoned,
  sold or if management determines there to be an impairment in value. Under United
  States GAAP, mineral property interests are carried at cost and deferred exploration
  costs are expensed as incurred.

b) Asset Retirement Obligations

Under US GAAP, Statement of Financial
  Accounting Standards No. 143, Accounting for Asset Retirement Obligations
  (SFAS 143) requires companies to record the fair value of the liability
  for closure and removal costs associated with legal obligations upon the retirement
  or removal of any tangible long-lived assets effective June 1, 2003. Under this
  standard, the initial recognition of the liability is capitalized as part of
  the asset cost and amortized over its estimated useful life. For Canadian GAAP
  purposes, effective June 1, 2004, the Company adopted the provisions of CICA
  HB 3110 Asset Retirement Obligations which are substantially similar
  to those of SFAS 143.

The Company has determined that there
  were no material differences in the measurement and presentation of asset retirement
  obligations between Canadian GAAP and US GAAP as at May 31, 2007, 2006 and 2005.

c) Stock-Based Compensation

Under US GAAP, Statement of Financial
  Accounting Standard 123(R), Share-Based Payments, which requires
  the measurement and recognition of compensation expense, based on estimated
  fair values, for all share-based awards made to employees and directors, including
  stock options. In March 2005, the Securities and Exchange Commission issued
  SAB 107 relating to SFAS 123(R). The Company applied the provisions of SAB 107
  in its adoption of SFAS 123(R).

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

| | c) | Stock-Based Compensation (Continued)
| | -- | ------------------------------------

SFAS 123(R) requires companies to estimate
  the fair value of share-based awards on the date of grant using an option-pricing
  model. The Company uses the Black-Scholes option-pricing model as its method
  of determining fair value. The value of the portion of the award that is ultimately
  expected to vest is recognized as an expense in the consolidated statements
  of operations over the requisite service period.

The Company has a stock-based compensation
  plan which is described in note 10. The Company accounts for stock-based compensation,
  including stock options and warrants, using the fair value based method, as
  prescribed by CICA HB 3870 Stock-based Compensation and Other Stock-Based
  Payments, to account for stock based transactions with officers, directors
  and consultants. Under this method, the fair value of the stock options and
  warrants at the date of grant is amortized over the vesting period, with an
  offsetting credit recorded as an increase in contributed surplus. If the stock
  options or warrants are exercised, the proceeds are credited to share capital
  and the fair value at the date of the grant is reclassified from contributed
  surplus to share capital. Accordingly, there were no material differences between
  Canadian GAAP and US GAAP for the years ended May 31, 2007, 2006 and 2005.

| | d) | Marketable Securities
| | -- | ---------------------

Under Canadian GAAP, short-term marketable
  securities are carried at the lower of aggregate cost or current market value,
  with any unrealized loss included in the consolidated statements of operations.
  Long-term investments are carried on the cost or equity basis and are only written
  down when there is evidence of a decline in value that is other than temporary.

Under US GAAP, Statement of Financial
  Accounting Standard No. 115, Accounting for Certain Investments in Debt
  and Equity Securities (SFAS 115) requires that certain equity
  investments must be classified into available-for-sale securities and carried
  at fair market value. Any unrealized holding gains or losses are reported as
  a separate component of shareholders equity until realized for available-for-sale
  securities, and included in earnings for trading securities. Under US GAAP,
  the Companys investments are classified as available-for-sale securities.

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

| | e) | Recent Accounting Pronouncements
| | -- | --------------------------------

In February 2007, the Financial Accounting
  Standards Board (FASB) issued SFAS No. 159, The Fair Value
  Option for Financial Assets and Financial Liabilities  Including an Amendment
  of FASB Statement No. 115. This statement permits entities to choose to
  measure many financial instruments and certain other items at fair value. Most
  of the provisions of SFAS No. 159 apply only to entities that elect the fair
  value option. However, the amendment to SFAS No. 115 Accounting for Certain
  Investments in Debt and Equity Securities applies to all entities with
  available-for-sale and trading securities. SFAS No. 159 is effective as of the
  beginning of an entitys first fiscal year that begins after November 15,
  2007. Early adoption is permitted as of the beginning of a fiscal year that
  begins on or before November 15, 2007, provided the entity also elects to apply
  the provision of SFAS No. 157, Fair Value Measurements. The adoption
  of this statement is not expected to have a material effect on the Company's
  financial statements.

In September 2006, the SEC issued Staff
  Accounting Bulletin (SAB) No. 108, Considering the Effects
  of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial
  Statements. SAB No. 108 addresses how the effects of prior year uncorrected
  misstatements should be considered when quantifying misstatements in current
  year financial statements. SAB No. 108 requires companies to quantify misstatements
  using a balance sheet and income statement approach and to evaluate whether
  either approach results in quantifying an error that is material in light of
  relevant quantitative and qualitative factors. SAB No. 108 is effective for
  fiscal years ending after November 15, 2006. The adoption of SAB No. 108 did
  not have a material effect on the Companys reported financial position
  or results of operations.

In September 2006, the FASB issued SFAS
  No. 158, Employers Accounting for Defined Benefit Pension and Other
  Postretirement Plans  an amendment of FASB Statements No. 87, 88, 106,
  and 132(R). This statement requires employers to recognize the overfunded
  or underfunded status of a defined benefit postretirement plan (other than a
  multiemployer plan) as an asset or liability in its statement of financial position
  and to recognize changes in that funded status in the year in which the changes
  occur through comprehensive income of a business entity or changes in unrestricted
  net assets of a not-for-profit organization. This statement also requires an
  employer to measure the funded status of a plan as of the date of its year-end
  statement of financial position, with limited exceptions. The provisions of
  SFAS No. 158 are effective for employers with publicly traded equity securities
  as of the end of the fiscal year ending after December 15, 2006. The adoption
  of this statement did not have a material effect on the Company's reported financial
  position or results of operations.

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

| | e) | Recent Accounting Pronouncements (Continued)
| | -- | --------------------------------------------

In September 2006, the FASB issued SFAS
  No. 157, Fair Value Measurements. The objective of SFAS No. 157
  is to increase consistency and comparability in fair value measurements and
  to expand disclosures about fair value measurements. SFAS No. 157 defines fair
  value, establishes a framework for measuring fair value in generally accepted
  accounting principles, and expands disclosures about fair value measurements.
  SFAS No. 157 applies under other accounting pronouncements that require or permit
  fair value measurements and does not require any new fair value measurements.
  The provisions of SFAS No. 157 are effective for fair value measurements made
  in fiscal years beginning after November 15, 2007. The adoption of this statement
  is not expected to have a material effect on the Company's future reported financial
  position or results of operations.

In June 2006, the FASB issued FASB Interpretation
  No. 48, Accounting for Uncertainty in Income Taxes, an interpretation
  of FASB Statements No. 109. FIN 48 clarifies the accounting for uncertainty
  in income taxes by prescribing a two-step method of first evaluating whether
  a tax position has met a more likely than not recognition threshold and second,
  measuring that tax position to determine the amount of benefit to be recognized
  in the financial statements. FIN 48 provides guidance on the presentation of
  such positions within a classified statement of financial position as well as
  on derecognition, interest and penalties, accounting in interim periods, disclosure,
  and transition. FIN 48 is effective for fiscal years beginning after December
  15, 2006. The adoption of this statement is not expected to have a material
  effect on the Company's future reported financial position or results of operations.

In March 2006, the FASB issued SFAS
  No. 156, "Accounting for Servicing of Financial Assets, an amendment of FASB
  Statement No. 140, Accounting for Transfers and Servicing of Financial Assets
  and Extinguishments of Liabilities". This statement requires all separately
  recognized servicing assets and servicing liabilities be initially measured
  at fair value, if practicable, and permits for subsequent measurement using
  either fair value measurement with changes in fair value reflected in earnings
  or the amortization and impairment requirements of Statement No. 140. The subsequent
  measurement of separately recognized servicing assets and servicing liabilities
  at fair value eliminates the necessity for entities that manage the risks inherent
  in servicing assets and servicing liabilities with derivatives to qualify for
  hedge accounting treatment and eliminates the characterization of declines in
  fair value as impairments or direct write-downs. SFAS No. 156 is effective for
  an entity's first fiscal year beginning after September 15, 2006. The adoption
  of this statement is not expected to have a material effect on the Company's
  future reported financial position or results of operations.

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

| | e) | Recent Accounting Pronouncements (Continued)
| | -- | --------------------------------------------

In February 2006, the FASB issued SFAS
  No. 155, "Accounting for Certain Hybrid Financial Instruments, an amendment
  of FASB Statements No. 133 and 140", to simplify and make more consistent the
  accounting for certain financial instruments. SFAS No. 155 amends SFAS No. 133,
  "Accounting for Derivative Instruments and Hedging Activities", to permit fair
  value re-measurement for any hybrid financial instrument with an embedded derivative
  that otherwise would require bifurcation, provided that the whole instrument
  is accounted for on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting
  for the Impairment or Disposal of Long-Lived Assets", to allow a qualifying
  special-purpose entity to hold a derivative financial instrument that pertains
  to a beneficial interest other than another derivative financial instrument.
  SFAS No. 155 applies to all financial instruments acquired or issued after the
  beginning of an entity's first fiscal year that begins after September 15, 2006,
  with earlier application allowed. The adoption of this statement is not expected
  to have a material effect on the Company's future reported financial position
  or results of operations.

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

Recent Accounting Pronouncements (Continued)

The impact of the differences between Canadian GAAP and US GAAP
  on the consolidated balance sheets would be as follows:

|                                  |   |           |  |   | 2007        |   |   |         | 
|--------------------------------- | - | --------- |  | - | ----------- | - | - | ------- | 
|                                  |   | BALANCE   |  |   |             |   |   | BALANCE | 
|                                  |   | CANADIAN  |  |   |             |   |   | US      | 
|                                  |   | GAAP      |  |   | ADJUSTMENTS |   |   | GAAP    | 
|                                  |   |           |  |   |             |   |   |         | 
|Current assets                    | $ | 22,235    |  | $ | -           |   | $ | 22,235  | 
|Investments (Note 14(d))          |   | 4,026     |  |   | (1,170      | ) |   | 2,856   | 
|Equipment                         |   | 17,269    |  |   | -           |   |   | 17,269  | 
|Oil and gas well interests        |   | 287,936   |  |   | -           |   |   | 287,936 | 
|Mineral property interests        |   | 231,086   |  |   | -           |   |   | 231,086 | 
|Deferred exploration expenditures |   |           |  |   |             |   |   |         | 
|(Note 14(a))                      |   | 2,999,743 |  |   | (2,999,743  | ) |   | -       | 
|                                  |   |           |  |   |             |   |   |         | 
|                                  | $ | 3,562,295 |  | $ | (3,000,913  | ) | $ | 561,382 | 
|                                  |   |           |  |   |             |   |   |         | 
|Current liabilities               | $ | 300,278   |  | $ | -           |   | $ | 300,278 | 
|Shareholders equity              |   | 3,262,017 |  |   | (3,000,913  | ) |   | 261,104 | 
|                                  |   |           |  |   |             |   |   |         | 
|                                  | $ | 3,562,295 |  | $ | (3,000,913  | ) | $ | 561,382 | 

|                                  |   | 2006     
|--------------------------------- | - | ---------
|                                  |   | BALANCE  
|                                  |   | CANADIAN 
|                                  |   | GAAP     
|                                  |   |          
|Current assets                    | $ | 222,294  
|Investments (Note 14(d))          |   | 4,026    
|Equipment                         |   | 16,043   
|Oil and gas well interests        |   | 103,045  
|Mineral property interests        |   | 190,236  
|Deferred exploration expenditures |   |          
|(Note 14(a))                      |   | 2,959,119
|                                  |   |          
|                                  | $ | 3,494,763
|                                  |   |          
|Current liabilities               | $ | 98,738   
|Shareholders equity              |   | 3,396,025
|                                  |   |          
|                                  | $ | 3,494,763

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

The impact of the differences between
  Canadian GAAP and US GAAP on the consolidated statements of operations and deficit
  would be as follows:

|                                  |   | 2007       |   |   | 2006       |   |   | 2005       |  
|--------------------------------- | - | ---------- | - | - | ---------- | - | - | ---------- | -
|                                  |   |            |   |   |            |   |   |            |  
|Net loss for the year, Canadian   |   |            |   |   |            |   |   |            |  
|GAAP                              | $ | (465,540   | ) | $ | (430,646   | ) | $ | (515,740   | )
|                                  |   |            |   |   |            |   |   |            |  
|Adjustment:                       |   |            |   |   |            |   |   |            |  
|Deferred exploration costs        |   |            |   |   |            |   |   |            |  
|(Note
      14(a))                |   | (40,624    | ) |   | (216,058   | ) |   | (241,004   | )
|                                  |   |            |   |   |            |   |   |            |  
|Net loss for the year, US GAAP    | $ | (506,164   | ) | $ | (646,704   | ) | $ | (756,744   | )
|                                  |   |            |   |   |            |   |   |            |  
|Basic and diluted loss per share, |   |            |   |   |            |   |   |            |  
|US GAAP                           | $ | (0.01      | ) | $ | (0.02      | ) | $ | (0.02      | )
|                                  |   |            |   |   |            |   |   |            |  
|Weighted average number of        |   |            |   |   |            |   |   |            |  
|common shares outstanding,        |   |            |   |   |            |   |   |            |  
|basic and diluted                 |   | 39,663,029 |   |   | 36,889,399 |   |   | 34,436,365 |  

The Companys comprehensive loss is comprised as follows:

|                                                  |   | 2007     |   |   | 2006     |   |   | 2005     |  
|------------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|Net loss for the year, US GAAP                    | $ | (506,164 | ) | $ | (646,704 | ) | $ | (756,744 | )
|Change in net unrealized (loss) gain on           |   |          |   |   |          |   |   |          |  
|available-for-sale investments (Note
      14(d)) |   | (1,170   | ) |   | 3,321    |   |   | (1,534   | )
|Comprehensive loss                                | $ | (507,334 | ) | $ | (643,383 | ) | $ | (758,278 | )

---

|TERYL RESOURCES CORP.                     
|------------------------------------------
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|MAY 31, 2007 AND 2006                     
|(Stated in Canadian Dollars)              

|14. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES(Continued)
|--- | ----------------------------------------------------------------------------------------------------------

The impact of the differences between
  Canadian GAAP and US GAAP on the consolidated statements of cash flows would
  be as follows:

|                                             |   | 2007     |   |   | 2006     |   |   | 2005     |  
|-------------------------------------------- | - | -------- | - | - | -------- | - | - | -------- | -
|Cash flows used in operating activities,     |   |          |   |   |          |   |   |          |  
|Canadian GAAP                                | $ | (210,843 | ) | $ | (390,492 | ) | $ | (529,428 | )
|Adjustment:                                  |   |          |   |   |          |   |   |          |  
|Exploration
      expenditures (Note 14(a))  |   | (41,624  | ) |   | (163,320 | ) |   | (253,967 | )
|Cash flows used in operating activities, US  |   |          |   |   |          |   |   |          |  
|GAAP                                         |   | (252,467 | ) |   | (553,812 | ) |   | (783,395 | )
|Cash flows provided by financing activities, |   |          |   |   |          |   |   |          |  
|Canadian and US GAAP                         |   | 294,916  |   |   | 548,206  |   |   | 770,810  |  
|Cash flows used in investing activities,     |   |          |   |   |          |   |   |          |  
|Canadian GAAP                                |   | (290,762 | ) |   | (266,365 | ) |   | (293,653 | )
|Adjustment:                                  |   |          |   |   |          |   |   |          |  
|Exploration
      expenditures (Note 14(a))  |   | 41,624   |   |   | 163,320  |   |   | 253,967  |  
|Cash flows used in investing activities, US  |   |          |   |   |          |   |   |          |  
|GAAP                                         |   | (249,138 | ) |   | (103,045 | ) |   | (39,686  | )
|Decrease in cash                             |   | (206,689 | ) |   | (108,651 | ) |   | (52,271  | )
|Cash, beginning of year                      |   | 209,636  |   |   | 318,287  |   |   | 370,558  |  
|Cash, end of year                            | $ | 2,947    |   | $ | 209,636  |   | $ | 318,287  |  

---

SIGNATURE PAGE

The Registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign the registration statement and annual report on its
behalf.

TERYL RESOURCES CORP.REGISTRANT

|Dated: December 12, 2007 | By: | /s/
      John G. Robertson
|------------------------ | --- | ---------------------------
|                         |     | John G. Robertson          
|                         |     | President/Director         



---