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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

FORM 20-F

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

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, 2001

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)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

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

Securities registered pursuant to Section 12(b) of the Act:
None

Securities registered pursuant to Section 12(g) 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. 23,033,238 shares of Common Stock as at May 31, 2001.

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]

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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 [   ] No [X]

Indicate by check mark whether the registrant is a shell
company (as defined in Rule 12b-2 of the Exchange Act.): Yes [   ]
No [X]

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 [   ]

Index to Exhibits on Page 63

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TABLE OF CONTENTS

|PART I   |                                                            | 6 
|-------- | ---------------------------------------------------------- | --
|ITEM 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS      | 6 
|ITEM 2.  | OFFER STATISTICS AND EXPECTED TIMETABLE                    | 6 
|ITEM 3.  | KEY INFORMATION                                            | 6 
|A.       | SELECTED FINANCIAL DATA                                    | 6 
|B.       | CAPITALIZATION AND INDEBTEDNESS                            | 8 
|C.       | REASON FOR THE OFFER AND USE OF PROCEEDS                   | 8 
|D.       | RISK FACTORS                                               | 8 
|ITEM 4.  | INFORMATION ON THE COMPANY                                 | 15
|A.       | HISTORY AND DEVELOPMENT OF THE COMPANY                     | 15
|B.       | BUSINESS OVERVIEW                                          | 18
|C.       | ORGANIZATIONAL STRUCTURE                                   | 23
|D.       | PROPERTY, PLANTS AND EQUIPMENT                             | 23
|ITEM 4A. | UNRESOLVED STAFF COMMENTS                                  | 40
|ITEM 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS               | 40
|A.       | OPERATING RESULTS                                          | 41
|B.       | LIQUIDITY AND CAPITAL RESOURCES                            | 41
|C.       | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC        | 43
|D.       | TREND INFORMATION                                          | 43
|E.       | OFF-BALANCE SHEET ARRANGEMENTS                             | 43
|F.       | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS              | 43
|G.       | SAFE HARBOUR                                               | 44
|ITEM 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                 | 45
|A.       | DIRECTORS AND SENIOR MANAGEMENT                            | 45
|B.       | COMPENSATION                                               | 46
|C.       | BOARD PRACTICES                                            | 49
|D.       | EMPLOYEES                                                  | 49
|E.       | SHARE OWNERSHIP                                            | 49
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS          | 50
|A.       | MAJOR SHAREHOLDERS                                         | 50
|B.       | RELATED PARTY TRANSACTIONS.                                | 51
|C.       | INTERESTS OF EXPERTS AND COUNSEL.                          | 51
|ITEM 8.  | FINANCIAL INFORMATION                                      | 52
|A.       | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION    | 52
|B.       | SIGNIFICANT CHANGES                                        | 52
|ITEM 9.  | THE OFFER AND LISTING                                      | 52
|A.       | OFFER AND LISTING DETAILS                                  | 52
|B.       | PLAN OF DISTRIBUTION                                       | 54
|C.       | MARKETS                                                    | 54
|D.       | SELLING SHAREHOLDERS                                       | 54
|E.       | DILUTION                                                   | 54
|F.       | EXPENSES OF THE ISSUE                                      | 54
|ITEM 10. | ADDITIONAL INFORMATION                                     | 55
|A.       | SHARE CAPITAL                                              | 55
|B.       | MEMORANDUM AND ARTICLES OF ASSOCIATION                     | 55
|C.       | MATERIAL CONTRACTS                                         | 56
|D.       | EXCHANGE CONTROLS                                          | 56
|E.       | TAXATION                                                   | 56
|F.       | DIVIDENDS AND PAYING AGENTS                                | 58
|G.       | STATEMENT BY EXPERTS.                                      | 58
|H.       | DOCUMENTS ON DISPLAY.                                      | 58
|I.       | SUBSIDIARY INFORMATION                                     | 58
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | 59
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES     | 60
|PART II  |                                                            | 60
|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES            | 60
|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY           | 60

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|                         | HOLDERS AND USE OF PROCEEDS.                                                   | 60
|------------------------ | ------------------------------------------------------------------------------ | --
|A.                       | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS                       | 60
|B.                       | USE OF PROCEEDS.                                                               | 60
|ITEM 15.                 | CONTROLS AND PROCEDURES                                                        | 60
|ITEM 16.                 | [Reserved]                                                                     | 61
|ITEM 16A.                | Audit Committee Financial Expert                                               | 61
|ITEM 16B.                | Code of Ethics                                                                 | 61
|ITEM 16C.                | Principal Accountant Fees and Services                                         | 61
|ITEM 16D.                | Exemptions from the Listing Standards for Audit Committees                     | 61
|ITEM 16E.                | Purchases of Equity Securities by the Issuer and Affiliated
        Purchasers | 62
|PART III                 |                                                                                | 62
|ITEM 17.                 | FINANCIAL STATEMENTS                                                           | 62
|ITEM 18.                 | FINANCIAL STATEMENTS                                                           | 63
|ITEM 19.                 | EXHIBITS                                                                       | 63
|GLOSSARY OF MINING TERMS | 64                                                                            
|                         |                                                                                |   
|**SIGNATURE PAGE**       | **67**                                                                        

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Introduction

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 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. Under
US GAAP, the Company has incurred a loss of $432,005 in the year ended May 31,
2001 (2000 - $443,741; 1999 - $462,108). 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.

Foreign Private Issuer Status:

Teryl Resources Corp. (hereinafter referred to as us, we,
our the Registrant or the Company or Teryl) is a Canadian corporation
incorporated under the laws of the Province of British Columbia. Over 50% of our
common stock is held by non-United States citizens and residents; our business
is administered principally outside the United States; and more than 50% of our
assets are located outside the United States. As a result, we believe that we
qualify as a "foreign private issuer" for continuing to report regarding the
registration of our common stock using this Form 20-F annual report format.

FINANCIAL AND OTHER INFORMATION

In this Registration Statement, 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$).

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.

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PART I

ITEM 1.        IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

This Form 20-F is being filed as an annual report under the
Exchange Act, and accordingly, the information called for in Item 1 is not
required. Please see Item 6  Directors, Senior Management and Employees 
Directors and Senior Management.

ITEM 2.        OFFER
STATISTICS AND EXPECTED TIMETABLE

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

ITEM 3.        KEY
INFORMATION

A.        SELECTED FINANCIAL
DATA

The summary consolidated financial information set forth below
should be read in conjunction with, and is qualified in its entirety by
reference to, the Consolidated Financial Statements, as of and for the years
ended May 31, 2001 and May 31, 2000, together with the notes thereto, which
appear elsewhere in this annual report. The Consolidated Financial Statements as
of and for the years ended May 31, 2001, 2000 and 1999 have been audited by June
Fitzmartyn Chartered Accountants, as indicated in their audit report. June
Fitzmartyn is a member of the Canadian Institute of Chartered Accountants.

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 May 31, 2001, US$1.00 was equal to
approximately C$1.5461.

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.

The following represents our selected financial data for each
of the past five fiscal years, ending on May 31:

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Fiscal Years Ended May 31

May 31, 2001
    May 31, 2000
    May 31, 1999
    May 31, 1998
    May 31, 1997Canadian GAAPRevenue
    $ 92,911
    $ 54,330
    $ 14,390
    $ 43,107
    $ 34,880Income (Loss) for the Period
    68,843
    (575,669)
    (98,426)
    (211,161)
    (55,920)Basic Income (Loss) Per Share
    (0.00)
    (0.03)
    (0.00)
    (0.01)
    (0.00)Dividends Per Share
    Nil
    Nil
    Nil
    Nil
    NilWeighted Average. Shares
    23,033,238
    22,961,937
    21,420,046
    20,316,777
    18,339,946Period-end Shares (#)
    23,033,238
    23,033,238
    22,958,238
    21,198,238
    19,314,905Working Capital
    (873,430)
    (472,248)
    (180,813)
    (101,142)
    (280,779)Mineral Properties
    156,699
    168,413
    274,781
    247,781
    299,846Long-Term Debt
    Nil
    Nil
    Nil
    Nil
    NilCapital Stock
    6,020,427
    6,020,427
    5,994,927
    5,730,927
    5,443,427Shareholders Equity (Deficit)
    843,350
    774,506
    1,324,675
    1,040,945
    936,719Total Assets
    1,733,434
    1,265,648
    1,880,216
    1,434,679
    1,504,527U.S GAAPNet Loss (1)
    (432,005)
    (443,741)
    (462,108)
    (163,243)
    (131,811Loss Per Share
    (0.02)
    (0.02)
    (0.02)
    (0.01)
    (0.01)Mineral Properties
    156,699
    168,413
    274,781
    274,781
    299,846Shareholders Equity
    (707,579)
    (127,890)
    128,426
    202,534
    62,077Total Assets
    $ 182,505
    $ 363,252
    $ 683,967
    $ 596,268
    $ 629,885


(1) Cumulative Net Loss since incorporation through May 31,
2001 under US GAAP was $6,873,022 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 exploration 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.

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.

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Currencies and Exchange Rates:

We publish our financial statements in Canadian dollars. Unless
otherwise indicated, monetary amounts referred to in this annual report are in
Canadian dollars. Unless otherwise indicated, all translations from Canadian
dollars to US dollars have been made at a rate of CDN$ 1.5461 to US$ 1.00, the
noon buying rate as certified for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") on May 31, 2001. 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. 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 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 $)2001
    1.5153
    1.4639/1.5790
    1.54612000
    1.4729
    1.4350/1.5135
    1.49771999
    1.5112
    1.5459/1.4582
    1.47411998
    1.4110
    1.4459/1.3769
    1.44521997
    1.3667
    1.3807/1.3489
    1.3804


B.        CAPITALIZATION AND
INDEBTEDNESS

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

C.        REASON FOR THE
OFFER AND USE OF PROCEEDS

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

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 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

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- 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.

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 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.

Financing Risks.

There is no assurance that we will 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 may therefore depend on
obtaining a joint venture partners, and on our ability to obtain additional
required financing. There is no assurance we will be successful in obtaining the
required financing, the lack of which could result in the loss or substantial
dilution of our interests (as existing or as proposed to be acquired) in our
properties as disclosed herein. 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.

As noted in our audited consolidated financial statements for
the year ended May 31, 2001 we have incurred significant operating losses and
have an accumulated deficit of $5,323,121 at May 31, 2001. Furthermore, we had
working capital deficiency of $873,430 as at May 31, 2001, 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, the ability of the Registrant to raise
equity financing, and the attainment of profitable operations, external
financings and further share issuances to meet our liabilities as they become
payable.

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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 satisfy working
capital and operating needs.

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.

Volatility of the TSX Venture Exchange may adversely
affect the price of the Common Stock.

Certain stocks listed on the TSX Venture Exchange have
experienced significant price and volume fluctuations and decreases which have
adversely affected the market price of our and other stocks listed on the TSX
Venture Exchange without any regard to the underlying fundamentals of such
stocks. These broad market fluctuations, which may occur in the future, as well
as issues more specifically related to our business activities or prospects, our
financial performance, intellectual property, may continue to adversely affect
the market price of the Common Stock.

We do not expect to pay cash dividends.

We intend to retain any future earnings to finance our business
and operations and any future growth. Therefore, we do not anticipate paying any
cash dividends in the foreseeable future.

Potential lack of attractive investment
targets.

Continued volatility of stock prices on the TSX Venture
Exchange may have a material adverse effect on our ability to raise capital on
the TSX Venture Exchange or by private investment, and the price of our common
stock could fluctuate substantially.

Other Factors.

Our areas of business may be affected from time to time 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.

Conflict of Interest.

Some of our current officers and directors have other unrelated
full-time positions or part-time employment. Some officers and directors will be
available to participate in management decisions on a part-time or as-needed
basis only. Our management may devote its time to other companies or projects
which may compete directly or indirectly with us.

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 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.

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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 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, there can be no assurance that our exploration programmes will
yield any new reserves or result in any commercial mineral operations.

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

The 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.

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As a"foreign private issuer,we
are exempt from the Section 14 proxy rules and Section 16 of the Securities Act
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.

RISK FACTORS RELATED TO THE NATURAL RESOURCE INDUSTRY

Exploration and Development Risks.

There is no assurance given by the Company that our exploration
and development programs and properties will result in the discovery,
development or production of a commercially viable ore body. The business of
exploration for minerals and mining involves a high degree of risk. Few
properties that are explored are ultimately developed into producing mines. At
present, none of the Registrants properties have defined ore bodies with
reserves and resources, and the proposed exploration programs are an exploratory
search for ore. There is no assurance that our mineral exploration and
development activities will result in any discoveries of bodies of commercial
ore. The probability of an individual prospect ever having reserves and being
commercially viable is extremely remote, and, in all probability, our properties
do not contain any reserves, and any funds spent on exploration will probably
not be recovered. Unusual or unexpected geological structures or formations,
fires, power outages, labour disruptions, floods, explosions, cave-ins, land
slides and the inability to obtain suitable or adequate machinery, equipment or
labour are other risks involved in the operation of mines and the conduct of
exploration programs. We have relied and may continue to rely upon consultants
and others for construction and operating expertise. The economics of developing
gold and other mineral properties are affected by many factors including capital
and operating costs, variations of the grade of ore mined, fluctuating mineral
markets, costs of processing equipment and such other factors as government
regulations, including regulations relating to royalties, allowable production,
importing and exporting of minerals and environmental protection. Depending on
the price of gold or other minerals produced, we may determine that it is
impractical to commence or continue commercial production. 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. No
assurance can be given that funds required for development can be obtained on a
timely basis. The marketability of any minerals acquired or discovered may be
affected by numerous factors which are beyond our control and which cannot be
accurately foreseen or predicted, such as market fluctuations, the global
marketing conditions for precious and base metals, the proximity and capacity of
milling facilities, mineral markets and processing equipment, and such other
factors as government regulations, including regulations relating to royalties,
allowable production, importing and exporting minerals and environmental
protection.

Estimates of Mineral Deposits.

There is no assurance that any estimates of mineral deposits
herein will not change. Although all figures with respect to the size and grade
of mineralized deposits included herein have been carefully prepared by the
Company, or, in some instances have been prepared, reviewed or verified by
independent mining experts, these amounts are estimates only and no assurance
can be given that any identified mineralized deposit will ever qualify as a
commercially viable mineable ore body that can be legally and economically
exploited.

Mineral Prices.

There is no assurance that mineral prices will not change. The
mining industry is competitive and mineral prices fluctuate so that there is no
assurance, even if commercial quantities of a mineral resource are discovered,
that a profitable market will exist for the sale of same.

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Title Opinions.

The existence of title opinions should not be construed to
suggest 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.

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. While we believe that all
requirements in this regard have been met, failure to comply with regulatory
requirements could result in permits being withdrawn or suspended. Further,
changes in these regulations or in their application may adversely affect our
operations.

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

The results of our operations are highly dependent upon the
prices received for our anticipated oil and natural gas production. 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. Should we acquire an
interest in an actual producing property, 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. Significant declines in prices for oil and
natural gas could harm our financial condition, results of operations and
quantities of reserves recoverable on an economic basis. Any significant decline
in demand for or prices of oil or gas could harm our financial condition and
results of operations.

Compliance with, or breach of, environmental laws can be
costly and could limit our operations or reduce profitability causing investors
to lose their investment.

Our operations are subject to numerous and frequently changing
laws and regulations governing the discharge of materials into the environment
or otherwise relating to environmental protection. We may now or in the future
own or lease properties that have been used for the exploration and production
of minerals and oil and gas and these properties and the wastes disposed on
these properties may be subject to the Comprehensive Environmental Response,
Compensation and Liability Act, the Oil Pollution Act of 1990, the Resource
Conservation and Recovery Act, the Federal Water Pollution Control Act and
analogous state laws. Under such laws, we could be required to remove or
remediate previously released wastes or property contamination. Laws and
regulations protecting the environment have generally become more stringent and,
may in some cases, impose strict liability for environmental damage. Strict
liability means that we may be held liable for damage without regard to whether
we were negligent or otherwise at fault. Environmental laws and regulations may
expose us to liability for the conduct of or conditions caused by others or for
acts that were in compliance with all applicable laws at the time they were
performed. Failure to comply with these laws and regulations may result in the
imposition of administrative, civil and criminal penalties.

Although we believe that any current operations are in substantial
  compliance with existing requirements of governmental bodies, our ability to
  conduct continued operations is subject to satisfying applicable regulatory
  and permitting controls. Our current permits and authorizations and ability
  to get future permits and authorizations, particularly in foreign countries,
  may be susceptible, on a going forward basis, to increased scrutiny, greater
  complexity resulting in increased costs, or delays in receiving appropriate
  authorizations.

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We are required to obtain an environmental permit or approval
  from Utah prior to conducting seismic operations, drilling a well or constructing
  a pipeline in that location. Compliance with these laws and regulations may
  increase our costs of operations, as well as further restrict our operations.
  If the costs of such compliance exceeds what we may have budgeted, our ability
  to earn revenues will be harmed.

Third Party Reliance.

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 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.

Our stock is subject to penny stock rules as defined
in Securities and Exchange Act rule 3a51-1. The Commission has adopted
rules that regulate broker-dealer practices in connection with transactions in
penny stocks. Our common shares are subject to these penny stock rules.
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.

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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 the secondary market for our equity
securities in the United States and shareholders may find it more difficult to
sell their shares.

A limited number of shareholders will collectively
continue to own a majority of our common shares.

A limited number of shareholders will collectively continue to
own a majority of our common shares after this offering and may act, or prevent
corporate actions, to the detriment of other shareholders. Our principal
shareholders, including entities affiliated with members of our management team,
will own more than 38% 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 after this
offering. This concentration could also have the effect of delaying or
preventing a change in control that could be otherwise beneficial to our
shareholders.

You should not expect to receive dividends.

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.

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
30,000,000 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
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
  OF THE COMPANY

History

Teryl Resources Corp. 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.

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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 authorising
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.

At the Annual General Meeting of Shareholders held in November,
2000, it was resolved to increase the Common shares to 100,000,000, however by
May 31, 2001, the Company had not yet finalized the increase.

Since our inception and during the five fiscal years ending in
May 31, 2001, we have been involved in oil and gas exploration/production and
mineral property development. We have investigated several mineral properties in
both Canada and the United States and currently retain only the interests
described below. Although testing work has been done on these properties
indicating the presence of gold, there is presently no positive indication that
they contain any economic mineral resources and, as a result, their value has
been written down to $1.

Despite continuing exploration work, it is our position that
none of our mineral property interests currently have any value other than the
value carried on our books, and we will continue to maintain that position, for
business operating purposes, until such time as either a production decision is
made on a property, or such property interest is sold at a value above that
carried on our books.

Our corporate offices and our registered and records offices
are located at Suite 240 - 11780 Hammersmith Way, Richmond, BC V7A 5E9, Canada.
Our telephone number is 604-278-5996.

As at May 31, 2001, we owned interests in three mineral
properties. These include:

- a 10% interest in the Stepovich Lease mining claims located in the Dome
  Creek area of the Fairbanks District of Alaska;
- a 100% interest in the West Ridge mining claims located in the Dome Creek
  area of the Fairbanks District of Alaska carrying a formal agreement between
  us and Fairbanks Gold Mining, Inc., wherein a five year payment and
  expenditure program and an ongoing advance royalty payment program against
  future production by Fairbanks Gold Mining, Inc. to us may subsequently result
  in Fairbanks earning a 70% vested interest in the West Ridge mining claims
  with us retaining a 30% vested interest.
- a 20% participating interest in the Gil Venture mining claims located in
  the Dome Creek area of the Fairbanks District of Alaska, An agreement. with
  Fort Knox Venture required them to pay us a total of $143,500 US, all of which
  was received by May 31, 1995, and to contribute $600,000 US to fund approved
  programs and budgets, which was done, and earned them an 80% participating
  interest in the property.

Through our subsidiary, Teryl, Inc., we own a 4.680% Net
Revenue Interest, after royalties and a carried interest by the operator, in the
Peters No. 1 Well located in Fayette County, Texas, and a 5.79375% Net Revenue
Interest, after 22.75% royalties, in each of the Jancik #1 and Hermann #4 wells
located in Burleson County, Texas.

To May 31, 2001, the mineral development business has produced
  no revenues from operations and the oil and gas business has produced only limited
  revenues.

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The fiscal year end of the Registrant is May 31.

We had no employees at May 31, 2001.

Recent Developments

In 1998 discussions leading to an option joint venture
agreement were successfully concluded on the Westridge claims, located in the
Fairbanks Gold mining district, with Kinross Gold Corporation.

The terms and conditions of the option agreement allowing
Kinross to vest in the joint venture include:

- Kinross Gold is to expend US$1,500,000.00 over a five-year period.
- Kinross Gold is to make payments of US$285,000 over the five-year period
  to Teryl, Inc., our the U.S. subsidiary, thereafter payments of US$200,000
  annually as advance royalty payments.

Upon completion of the expenditure program for US$l,500,000 and
completion of the annual payment schedule for US$285,000, Kinross Gold will earn
a 70% interest and Teryl will retain a 30% interest in the Westridge Claims. The
Westridge Claims consist of 53 units which are 100% owned by Teryl, Inc.

The Gil claims are adjacent to the producing Fort Knox deposit
owned by Kinross Gold Corporation. We own a 20% working interest and Kinross
Gold has an 80% working interest in the Gil joint venture property.

On January 6, 2000 we received a progress report for the 1999
Gil Venture season from Kinross Gold Corporation. All three of the drill holes
which targeted the Main Gil calc-silicate horizon intercepted significant gold
mineralization. Mineralization is in excess of 2,500 feet along strike and drill
tested to a depth of 600 feet. Mineralization is primarily stratabound within a
metamorphic package and is hosted in two or possibly three calc-silicate
horizons. Trench and core assays are consistent with grades indicated by RVC
drilling.

Six out of eleven drill holes in the "North Gil" area
intercepted significant gold mineralization. The North Gil mineralized zone
currently encompasses an area 1,000 feet long by 400 feet wide. Mineralization
is primarily associated with quartz veining within the metamorphic rock and is
open to the north, south, and west.

Soil sampling outlined new areas with anomalous gold values in
the North Gil area and in the eastern portion of the Gil Venture claim block.

Geophysical data revealed previously unknown geologic
structures trending east to west and in northeast directions. This data also
outlined new exploration targets on the east-side of Slippery Creek and in All
Gold Creek.

On February 14, 2000 the initial drilling program on the Gil
Claims has commenced on the joint venture gold prospect near Fairbanks, Alaska.

Kinross Gold Corporation, notified us that approximately 50
holes with an estimated total footage of 27,000 feet will target the northeast
extension of the Main Gil zone, which to date is reported to contain an
estimated mineral resource of 10.7 million tons of 0.04 opt gold. The commenced
2000 core program includes the following parameters:

- First drill holes target the northeast extension of the Main Gil zone.
- Additional drill holes will target the North Gil zone and other
  geochemical and geophysical

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- The exploration plan calls for approximately 15 holes with an estimated
  total footage of 9,000 feet.
- Samples with assay results of greater than 0.01 opt will be submitted for
  cyanide soluble analysis.
- Samples from select drill holes will be submitted for multi-element
  analysis.
- Density measurements of core will be taken at least every 100 feet.
- The 2000 Reverse Circulation program is on schedule for March 1 startup.
- Goals for the program are expansion of Main Zone resource, defining a
  resource at the North Gil, as well as testing other geochemical and
  geophysical targets.
- Exploration plan calls for approximately 35 holes with an estimated total
  footage of 18,000 feet.

B.        BUSINESS OVERVIEW

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.

Equity financing is required to continue exploration work on
our mineral claims. 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.

During the fiscal year ended May 31, 2001 we raised $236,288
through the sale of equity investments. We raised $274,339 through the sale of
equity investments and securities during the fiscal year ended May 31, 2000.

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 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. Under
US GAAP, the Company has incurred a loss of $432,005 in the year ended May 31,
2001 (2000 - $443,741; 1999 - $462,108). 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.

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Mineral Properties

Gil Venture

Pursuant to agreements with NERCO Exploration Company, the
Company and its subsidiary Teryl Inc., entered into a joint venture, whereby
Teryl could earn a 50% interest in 237 claims (approximately 9,000 acres) in the
Gilmore Dome area of the Fairbanks District of Alaska, for $ 30,000 US cash ($
35,517 Cdn), work commitments of $ 1,970,000 US and 250,000 shares. The Company
did $ 368,192 Cdn in work and issued 250,000 shares valued at $ 83,500 under
these agreements before entering into a new agreement. On September 28, 1990,
the Company granted an option to Fort Knox Venture to acquire up to 68% of
Teryl's 50% interest in the Gilmore Project, for $ 187,500 US and $ 1,700,000 US
in work.

During the 1991 year, the Company received $ 150,000 US ($
172,568 Cdn) under this option, before entering in to the agreement described
below.

On May 31, 1991, the Company, its subsidiary Teryl Inc., NERCO
Exploration Company and Fort Knox Venture entered into an agreement, which
terminated the above described agreement and option and released the parties
from all unsatisfied obligations. The agreement granted the Company a 20%
participating interest in the claims, valued at $ 150,000 US ($ 171,720 Cdn).
Under the agreement Fort Knox Venture paid the Company a total of $ 143,500 US
and to contributed $ 600,000 US to fund approved programs and budgets earning
them an 80% participating interest in the property with Teryl, Inc. retaining a
20% participating interest. Fort Knox Venture through its operator Kinross Gold
USA, Inc., has been doing exploration and development work on this property
during the 2000 and 1999 years and expects to go into production in 2001. This
has resulted in Teryl, Inc. being required to pay its 20% share of expenses,
which amounted to $ 126,000 US ($ 189,022 Cdn) in the May, 2000 year-end and
$333,817 US ($ 525,260 Cdn) in the May, 2001 year. Further cash calls are
expected for the 2002 year.

At the commencement of 2000, we announced that we were
reviewing results from our 1999 work programs on the Gil Mineral Claims with our
joint venture partner, Kinross Gold Corporation (Kinross).

The Kinross progress report included a polygonal resource
calculation estimating an indicated resource on the property of 6.5 million tons
of ore with an average grade of 0.042 ounces per ton (opt), for a total of
271,000 ounces of gold and an inferred resource of 4.2 million tones with an
average grade of 0.039 opt totalling 162,000 ounces. The calculation was a
polygonal geologic resource estimate based on drill hole assay results that
Kinross had received up to November 20, 1998. Indicated resource included
portions of polygons within a 100-foot radius of the drill hole. Inferred
resource includes portions of polygons greater than 100 feet from the drill
hole. This resource calculation used a tonnage factor of 11.5 cubic feet per ton
and an arbitrary cutoff grade of 0.01 troy opt. No economic or engineering
parameters were considered for this preliminary calculation.

In 2000, the Company and Kinross focussed on drilling the Mail
  Gil and North Gil mineralized zones located within the Gil property. The exploration
  drill program consisted of 95 reverse circulation drill holes totalling 29,785
  feet and 33 core holes totalling 15,761 feet. In addition to the exploration
  drilling, six water wells were drilled to collect ground water data. Fieldwork
  also included geologic mapping, soil sampling, surveying, trenching, water well
  maintenance and upgrading, environmental monitoring and reclamation. Drilling
  extended the Main Gil calc-silicate layer to the east by 800 feet for a total
  of 3,300 feet in strike length. The mineralised zone was shown to have a true
  thickness of 21 metres dipping between 50 to 70 degrees. Drilling to the north
  with both core and reverse circulation drilling confirmed the continuity and
  grade of gold mineralization to depths in excess of 500 feet.

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Drill data in the eastern portion of the Main Gil zone revealed
  that the calc-silicate layer had a steeper dip, about 70 degrees to the northwest.
  Drill data also indicated that the upper 50 to 100 feet of this layer was displaced
  due to shearing. The North Gil mineralized zone was enlarged to an area about
  1,000 feet long by 500 feet wide and appeared to be open in all directions except
  to the north. Results indicated a general northeast southwest to east-west trend
  to the gold mineralization. Soil sampling taken in 2000 revealed or expanded
  several possible target areas for further exploration.

The 2001 Gil Joint Venture exploration program began January
30th and concluded July 13th. The majority of this years
work was located directly east of the Main Gil Zone, along Sourdough Ridge.
Fieldwork focused on testing and expanding gold-in-soil anomalies. Other areas
of work included the eastern portion of the Main Gil Zone and the central North
Gil Zone. A limited amount of work also occurred in an area located between
these two zones. Petrographic and microprobe analysis was performed on rock
samples to better understand mineralization events and the thermal history of
the area.

During fiscal 2001 and 2002, Fort Knox Venture through its
operator Kinross Gold USA, Inc., has been doing exploration and development work
on this property and expects to go into production in the next few years. This
has resulted in Teryl Inc. being required to pay its 20% share of expenses,
which amount to $82,650 ($53,340 US) in the May 2002 year and $525,260 ($333,817
US) in the May, 2001 year. Further cash calls are expected for the 2003 year.

West Ridge

Pursuant to an agreement dated January 12, 1989, the Company,
through its subsidiary Teryl, Inc., and Mohawk Resources Alaska, Inc. acquired
an option to earn up to 51% interest in the West Ridge (53 claims) mineral
properties (approximately 5,200 acres) located in the Dome Creek area of the
Fairbanks District of Alaska, USA for $ 42,500 cash, payments on an assumed
liability of $ 60,838 US, work commitments of $ 350,000, issuing 250,000 shares
and 50,000 shares as a finder's fee on the acquisition of this property. In
November, 1991, we acquired a 100% interest in the West Ridge claims from Mohawk
by issuing 100,000 shares, paying the annual rent of $ 1,060 US ($ 1,210 Cdn)
and recording the work done on the claims.

On March 19, 1997, the Company and Placer Dome US Inc., entered
into a lease agreement whereby Placer Dome could earn up to a 70% equity
interest in the property. During the 1998 year we received $20,727 before Placer
Dome suspended the agreement on August 1, 1997. During the 1999 year, we
conducted an exploration program on the claims.

Pursuant to a letter agreement, between Kinross Gold
Corporation and Teryl, Inc. dated October 15, 1998 and a formal agreement dated
August 1, 1999, Kinross may earn a 70% interest in the West Ridge claims by
paying $ 285,000 US over five years ($ 25,000 US [$37,388 Cdn] was received
Sept. 23, 1999), expending $ 1,500,000 US on a work program over five years and
paying all property and assessment payments during that time. Beginning with the
fifth anniversary Kinross will pay $ 200,000 US annually as advance royalty
payments against future production from the property. After the five year
payment and expenditure program Kinross will have earned a 70% vested interest
and Teryl, Inc. will retain a 30% vested interest and they will proportionately
share any further expenditures. The above terms are subject to regulatory
approvals. At May 31, 2000, Teryl, Inc. wrote off $ 8,367 in property costs and
$ 17,186 in deferred exploration costs against the option payment received and
at May 31, 2001, wrote off $ 11,714 in property costs and $ 23,033 in deferred
exploration costs against the $ 53,036 ($ 35,000 US) option payment received.

Stepovich Lease

The Company, through our subsidiary Teryl, Inc., entered into
  a mineral lease agreement, effective August 1, 1989, with the Estate of Mike
  Stepovich for a twenty year period, on the seven Stepovich lode claims located
  in the Dome Creek area of the Fairbanks District of Alaska for annual royalty
  payments, work commitments and shares, subject to production royalties of between
  4% and 13% of Net Smelter Returns.

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On September 28, 1990, we granted an option to Fort Knox Venture
  to acquire all of Teryls interest in the Stepovich lease, except for a
  10% Net Profit Interest for Teryl, for US$187,500 (C$217,819 paid) and performing
  3,000 feet of drilling on the property, which was done. Fort Knox Venture assumed
  all of the Companys liabilities and obligations under the Stepovich lease,
  under an assignment dated May 29, 1992. Teryl, Inc. retains the 10% Net Profit
  Interest in the claims. The Companys subsidiary, Teryl, Inc., has written
  down these claims to a nominal value of US$I.

We do not consider the Stepovich Lease to be a material
property.

Oil and Gas Properties

Peters, Jancik, and Herrmann Wells, Fayette County, TexasThe 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.

Competition

Significant and increasing competition exists for the limited
number of gold acquisition opportunities available in North, South and Central
America and elsewhere in the world. As a result of this competition, some of
which is with large established mining companies which have greater financial
and technical resources than the Registrant, the Registrant may be unable to
acquire additional attractive gold mining properties on terms it considers
acceptable. Accordingly, there can be no assurance that the Registrants
exploration and acquisition programs will yield any new reserves or result in
any commercial mining operation.

Oil and gas exploration and acquisition of undeveloped
properties is a highly competitive and speculative business. 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

We can only carry out exploration when weather is favourable.
Typically, we cannot carry out any work during the months of November to March
on our mineral properties.

Availability of Raw Materials

Not applicable.

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.

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Material Effects of Government Regulation

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.

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. The effect of these regulations is to limit the amounts
of oil and gas we may be able to produce from our wells and to limit the number
of wells or the locations at which we may be able to drill.

Our business is affected by numerous laws and regulations,
including energy, environmental, conservation, tax and other laws and
regulations relating to the oil and gas industry.

Failure to comply with any laws and regulations may result in
the assessment of administrative, civil and criminal penalties, the imposition
of injunctive relief or both. Moreover, changes in any of these laws and
regulations could have a material adverse effect on business. In view of the
many uncertainties with respect to current and future laws and regulations,
including their applicability to us, we cannot predict the overall effect of
such laws and regulations on our future operations.

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.

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C.        ORGANIZATIONAL
STRUCTURE

Our wholly-owned subsidiary, Teryl, Inc. was incorporated on
November 17, 1988, in the State of Delaware and registered to do business in the
USA, to hold and operate the Alaska mineral property interests and Texas oil and
gas well interests. Teryl Resources Corp. owns 6,500,500 shares of Teryl, Inc.,
which is 100% of the issued shares at May 31, 2001.

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

D.        PROPERTY, PLANTS
  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 and Arizona. 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 1,000 square foot
space is $500.00. 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

GIL PROPERTY

Project Description and Location

We own 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 Company each contribute to annual exploration
costs on an 80:20 ratio with net profits distributed in that same proportion in
the event of production. We 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 our 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 we fail to contribute our share of the exploration costs or fail to
honour the demand note within 30 days of formal request for payment, we would be
considered in default. In a default situation, our interest would be reduced by
double the amount normally applied by the reduction formula. In the event our
interest is reduced below 10%, our 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,

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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, we have legally surveyed the claims
and has completed a series of six water wells for ground water monitoring
purposes, already underway.

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. While the claim area is
void of any buildings or other infrastructure, it does lie adjacent to the
Kinross Fort Knox open pit gold mine, a 40,000 ton per day operation with 250
permanent employees.

History

In 1989, we 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, we 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 us by incurring exploration 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).

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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.

The Fairbanks district has produced approximately 7,500,000
ounces of placer gold since 1902. Prior to exploitation of the Fort Knox
deposit, district lode production totalled only a few hundred thousand ounces,
primarily from vein deposits within metamorphosed strata. This huge disparity
between placer and lode production in terms of quantity suggests that sizeable
source lode deposits remain to be found. Alternatively, the placer lode sources
may have been largely eroded over the last 100 million years. Lode deposit types
in the area include volcanogenic stratabound sulphides, intrusive hosted gold
and silver, tungsten skarn, metamorphic-hosted gold-quartz-sulphide veins and
stibnite veins.

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.

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.

Significant deposits within the Tintina Gold Belt include the
Fort Knox (4 million ounces in sheeted veins within granodiorite), Brewery Creet
(970,000 ounce disseminations and veins within monzonite dykes and
metasiliciclastics), Dublin Gulch (1.5 million ounces in sheeted veins within
granodiorite), Pogo (5.6 million ounces in high temperature/low level ductile
sub-horizontal quartz veins within gneisses), Donlin Creek (13 million ounces in
high level hypabyssal sedimentary hosted dyke swarms), True North (1.3 million
ounces in a medasediment host, disseminated shear/replacement) and Shotgun
(979,000 ounces in rhyolite porphyry and adjacent sediments).

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.

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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

From 1994 to 1997, Kinross expanded the existing Gil Mineral
Claims soil grid to the southwest by a total of 110,000 linear feet, carried out
a magnetometer survey over the grid expansion totalling 80,500 lineal feet and
conducted three reverse circulation drill programs consisting of 38 holes,
totalling about 11,000 feet. Gold mineralization in these holes was low with the
silicate layer containing moderate gold grades with a northeast strike length of
1,000 feet, dipping to the northwest. True thickness of the layer was shown to
be about 70 feet.

In 1998, the majority of Kinross exploration work was
performed on the eastern portion of the Gil Mineral Claims and included about
64,000 feet of soil grid expansion, the collection of 260 soil samples, a
reverse circulation program consisting of 29 holes totalling 10,004 feet and a
core drill program consisting of four holes totalling 3,238 feet. Eight trenches
were excavated, mapped and sampled. The Main Gil gold bearing horizon was
extended to 2,500 feet in strike length. Trench assays confirmed the nature of
gold distribution indicated by reverse circulation drilling. A new soil anomaly,
designated as the North Gil, was drilled by reverse circulation and core rigs.
Four of five holes encountered significant mineralization at depths less than
425 feet.

In 1999, Kinross exploration program consisted of 14,800 feet
of grid expansion, the collection of 88 soil samples, a geophysical survey
measuring 266 gravity data points and an upgrade of the primary road access.
Drilling consisted of a nine hole, 4,038 foot reverse circulation program and a
five hole, 3,119 foot core drill program. A total of 90 soil samples were
collected in the eastern portion of the property and submitted an assay. The
interpretation of gravity data outlined several possible exploration targets. A
large gravity low at the head of Slippery Creek and in the drainage of All Gold
Creek suggests the presence of an intrusive. A projection derived from gravity
data indicates the continuation of the calc-silicate rocks to the east of
Slippery Creek.

In 2000, the Company and Kinross focussed on drilling the Mail
  Gil and North Gil mineralized zones located within the Gil property. The exploration
  drill program consisted of 95 reverse circulation drill holes totalling 29,785
  feet and 33 core holes totalling 15,761 feet. In addition to the exploration
  drilling, six water wells were drilled to collect ground water data. Fieldwork
  also included geologic mapping, soil sampling, surveying, trenching, water well
  maintenance and upgrading, environmental monitoring and reclamation. Drilling
  extended the Main Gil calc-silicate layer to the east by 800 feet for a total
  of 3,300 feet in strike length.

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The mineralized zone was shown to have a true thickness of 21
  metres between 50 to 70 degrees. Drilling to the north with both core and reverse
  circulation drilling confirmed the continuity and grade of gold mineralization
  to depths in excess of 500 feet.

Drill data in the eastern portion of the Main Gil zone revealed
that the calc-silicate layer had a steeper dip, about 70 degrees to the
northwest. Drill data also indicated that the upper 50 to 100 feet of this layer
was displaced due to shearing. The North Gil mineralized zone was enlarged to an
area about 1,000 feet long by 500 feet wide and appeared to be open in all
directions except to the north. Results indicated a general northeast southwest
to east-west trend to the gold mineralization. Soil sampling taken in 2000
revealed or expanded several possible target areas for further exploration.

At the commencement of 2000, we announced that we were
reviewing results from its 1999 work programs on the Gil Mineral Claims with its
joint venture partner, Kinross Gold Corporation (Kinross). The Issuer owns a
20% interest in the property with Kinross owning the other 80%.

The Kinross progress report included a polygonal resource
calculation estimating an indicated resource on the property of 6.5 million tons
of ore with an average grade of 0.042 ounces per ton (opt), for a total of
271,000 ounces of gold and an inferred resource of 4.2 million tones with an
average grade of 0.039 opt totalling 162,000 ounces. The calculation was a
polygonal geologic resource estimate based on drill hole assay results that
Kinross had received up to November 20, 1998. Indicated resource included
portions of polygons within a 100-foot radius of the drill hole. Inferred
resource includes portions of polygons greater than 100 feet from the drill
hole. This resource calculation used a tonnage factor of 11.5 cubic feet per ton
and an arbitrary cutoff grade of 0.01 troy opt. No economic or engineering
parameters were considered for this preliminary calculation.

In 2000, the Company and Kinross focussed on drilling the Mail
Gil and North Gil mineralized zones located within the Gil property. The
exploration drill program consisted of 95 reverse circulation drill holes
totalling 29,785 feet and 33 core holes totalling 15,761 feet. In addition to
the exploration drilling, six water wells were drilled to collect ground water
data. Fieldwork also included geologic mapping, soil sampling, surveying,
trenching, water well maintenance and upgrading, environmental monitoring and
reclamation. Drilling extended the Main Gil calc-silicate layer to the east by
800 feet for a total of 3,300 feet in strike length. The mineralised zone was
shown to have a true thickness of 21 metres dipping between 50 to 70 degrees.
Drilling to the north with both core and reverse circulation drilling confirmed
the continuity and grade of gold mineralization to depths in excess of 500 feet.

Drill data in the eastern portion of the Main Gil zone revealed
that the calc-silicate layer had a steeper dip, about 70 degrees to the
northwest. Drill data also indicated that the upper 50 to 100 feet of this layer
was displaced due to shearing. The North Gil mineralized zone was enlarged to an
area about 1,000 feet long by 500 feet wide and appeared to be open in all
directions except to the north. Results indicated a general northeast southwest
to east-west trend to the gold mineralization. Soil sampling taken in 2000
revealed or expanded several possible target areas for further exploration.

The Company and Kinross completed an exploration program along
the eastern portion of the Main Gil zone and on the central part of the North
Gil zone in 2001. The exploration program consisted of 11 reverse circulation
drill holes totalling 3,035 feet, one core hole totalling 350 feet, nine
trenches totalling 3,840 feet and 1,484 rock samples. Additional work included
surveying, metallurgical studies, road maintenance and environmental monitoring.

Significant gold mineralization associated with an amphibolite/calc-silicate
  unit was initially discovered by trenching and was followed by outcrops for
  140 feet. Steeply dipping gold bearing quartz veins and quartz-carbonate-amphibole
  veins trending in an east-west orientation were found crosscutting the unit.
  These veins are narrow with a frequency of one to five per five-foot interval.
  One drill hole targeted this unit and encountered significant gold mineralization
  to a depth of 175 feet.

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Additional trenching was completed on the Main Gil and Sourdough
  Ridge. Excavation, sampling and mapping were performed on five trenches totalling
  1,900 feet in the Gil Project area and two additional trenches were excavated
  2,500 feet east of the Main Gil zone. The Sourdough Ridge area has widespread
  gold, bismuth and arsenic soil anomalies. Assay reports indicate strong gold
  mineralization (up to 0.5 opt gold) in east-west striking high angle veins and
  fracture fillings.

The 2001 Gil Joint Venture exploration program began January
30th and concluded July 13th. The majority of this years
work was located directly east of the Main Gil Zone, along Sourdough Ridge.
Fieldwork focused on testing and expanding gold-in-soil anomalies. Other areas
of work included the eastern portion of the Main Gil Zone and the central North
Gil Zone. A limited amount of work also occurred in an area located between
these two zones. Petrographic and microprobe analysis was performed on rock
samples to better understand mineralization events and the thermal history of
the area.

The exploration consisted of 11 reverse-circulation (RVC) drill
holes totalling 3,035 feet, one core hole totalling 350 feet, 9 trenches
totalling 3,840 feet, and 1,485 rock samples collected for assaying. Additional
work included surveying, metallurgical studies, and environmental
monitoring.

Fieldwork along Sourdough Ridge identified two
amphibolite/calc-silicate units with significant gold mineralization that
warrant further testing. Exploration efforts along strike in the eastern margin
of the Main Gil Zone identified discontinuous gold mineralization associated
with quartz veins and shears in quartz-mica schist. Two out of four holes
drilled in the North Gil intercepted significant gold mineralization. Ore zones
located in the central portion of the North Gil appear to show good correlation
with adjacent holes. Trenching between the North Gil and Main Gil Zones outlined
a calc-silicate layer approximately 60 feet wide that warrants additional work.
Geothermometry research shows increasing temperatures of mineral formation
toward upper Slippery Creek. This could indicate the presence of a causative
pluton and represents a good target for the 2002 exploration season.

The proposed 2002 exploration plan includes testing high-grade
intercepts in the North Gil area, exploring for an intrusive hosted gold deposit
in Slippery Creek and continued expansion of gold mineralization associated with
calc-silicate rocks.

During fiscal 2001, Fort Knox Venture through its operator
Kinross Gold USA, Inc., has been doing exploration and development work on this
property and expects to go into production in the next few years. This has
resulted in Teryl Inc. being required to pay its 20% share of expenses, which
amounted to $525,260 ($333,817 US) in the May, 2001 year. Further cash calls are
expected for the 2002 year.

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.

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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)2complex.
  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.

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-carbonate-amphibole 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,
  90thsample, 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 40thsample, 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.

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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

Kinross has cited a drill indicated resource figure for the Gil
Mineral Claims of 10,700,000 short tons averaging 0.04 opt, containing 433,000
ounces of gold. This was calculated by polygonal methods utilizing cross
sections and includes only the Main Gil zone.

Metallurgical testing on the Main Gil zone has proven positive.
Preliminary tests indicate that material from the Main Gil is easier to
beneficiate than the Fort Knox ore. 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. At present, the
numbers indicated would not be viewed as hard mineable reserves. A typical
section is characterised by thin higher grade zones up to 0.6 opt gold
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 characterised 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.

The presence of the currently producing Fort Knox mine facility
six miles to the south-west vastly enhances the economics of any deposit within
trucking distance. The experience of the Fort Knox/Kinross/Fairbanks Gold
management group in successfully procuring mining or millsite permits, as well
as dealing with the mining related environmental issues and public hearings in
the Fairbanks area, suggests that any application tendered by the organization
will receive preferential and expedient treatment.

Mining Operations

Currently, there are no mining operations conducted on the Gil
  Mineral Claims.

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WEST RIDGE PROPERTY

In 2000, Kinross completed an exploration program on the Westridge
  Claims. This was pursuant to the 1999 agreement which granted Kinross the option
  to acquire a 70% undivided interest in the 48 mineral claims located in the
  Dome Creek area of the Fairbanks District, Alaska known as the Westridge Claims.
  In order to earn a 70% interest in the project, Kinross was obligated to make
  cash payments to us totalling US$285,000 over five years, to make five annual
  advanced royalty payments of US$200,000 each and to expend a minimum of $1.5
  million on exploration and development of the claims over five years.

The 2000 exploration program consisted of drill testing the
large altered zone that extends from the Diorite Claims on Pedro Dome, across
the northern part of Kinross Steamboat Creek property and onto the eastern part
of the Westridge Claims. Two main gold-in-soil anomalies were defined on the
Westridge Claims. The western anomaly had the highest gold value in soil samples
of 4.42 parts per million (ppm) and samples from rock chips hap up to 16.45
ppm gold. The east anomaly soil samples had up to 1.64 ppm gold. The drill
program showed that the near surface portion of the altered and mineralised Dome
Fault did not contain economic gold values.

Kinross dropped the option respecting the Westridge Claims at
the end of 2001. Teryl, Inc. retains its 100% interest in the claims.

Description and Location

The West Ridge Au 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 (Figure 1). The West Ridge property consists of 48 state of
Alaska mining claims covering 1750.5 acres, 440 acres of leased Mental Health
Trust (MHT) land and 75 acres of patented mining claims under lease purchase
option in the Livengood quadrangle Township 2 North, Range 1 East (Figure 2).
The state claims are registered with the Alaska Division of Mining, Land, and
Water Management with Teryl Resources Corp. as the 100% owner.

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Mineral rights in this part of Alaska are administered by the
  State of Alaska (for both State mining claims and Mental Health Trust lands).
  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. Two
  open pit gold mines currently operate within 10 miles of the West Ridge project,
  Fort Knox and True North, both operated by Kinross Gold. None of the claims
  or Mental Health Trust lands controlled by the West Ridge project have been
  surveyed by a registered land or mineral surveyor and there are no State or
  federal laws or regulations requiring such surveying. 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. Land telephone lines and a high voltage electrical power
line service Kinross Golds True North mine, less than 2 miles from the
property. 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.

Elevations on the property range from 800 feet to over 1900
feet (Figure 2). 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 undergound drift mine was operated by Roberts
Mining started from 1989 to 1993 below the lower limit of U.S.S.R. & M.
dredging. This ground currently is controlled under purchase option by Teryl.
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.

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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 (Figure 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.

In October and November 1996 Placer Dome U.S. (PDUS) conducted
limited diamond drilling on the MHT lands now controlled by Teryl. PDUS
completed core holes FR96-27, FR96-28, FR96-30 with a total footage of 2,420
feet. The cost of this work was approximately $124,000. Following completion of
this drilling it became apparent that holes FR96-28 and FR96-30 were drilled
north of the MHT property line on lands then owned by USSR&M predecessor
Alaska Gold. Data from these two holes was transmitted to MHT but is not
available to Teryl or the author since these data are not owned by MHT.

In early 1997 seven diamond drill core holes (3,271 feet) were
drilled along the basin floor of Moose Creek No. 1 on what is now MHT lands. At
the time these holes were drilled this land consisted of two state mining claims
owned by local prospector John Hannah and leased to PDUS. Shortly afterwards
PDUS terminated its interest in the lease and in 2002 Hannah failed to pay
annual state claim rents thereby terminating the claims. The land formerly
covered by the Hannah claims automatically became fee simple lands owned by MHT
and are now part of the MHT  Teryl lease agreement. Data from the 1997 drilling
is not owned by MHT since the drilling was done prior to their ownership so the
results of the drilling are not available to the author.

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 north-south 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.

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 (Figure 3). 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.

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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 ( Figure 3). 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 (Figure 3). 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/Ar39geochronology, 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 CO2bearing 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 schist-hosted 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:

| | 1. | 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.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | 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.                                                                             
| | 3. | 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,                                                                                                                                                                                                                                    

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| | 4. | 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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | 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 quartz-carbonate 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.
| | 6. | 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.                                                                                                                                                                                                                                                                                                                                                                                                       
| | 7. | 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.

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 (Figure 3), 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. This
8,000-foot periodicity extends to the east where it is associated with the
600,000 ounce Dolphin deposit and several of the districts largest
past-producing lode gold mines (Freeman, 2004). 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.

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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

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 are not available to the author. A total
of 718 soil auger samples were collected by Teryl with gold values ranging from
2 to 990 ppb (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 215 ppb gold was detected near the Old Glory
prospect but was not associated with other anomalous soil samples.

In 1998 Kinross Gold, then operating the Fort Knox project and
conducting district-scale work on a number of other projects 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 +100 ppb 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 960 ppb 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.

Drilling

Past drilling on the West Ridge property was conducted by
Kinrsoss Gold in 1999. This work consisted of 4 reverse circulation drill holes
(1,650 feet).

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

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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 which averaged 596 ppb gold and intersected
a highly oxidized sericite altered diorite to granodiorite intrusive containing
up to 2.98 grams per tonne gold with 3,140 ppm arsenic (Table 1). 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 (+50 ppb) and reach up to 1,000 ppb.
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. This
portion of the grid also grab rock samples which returned up to 10 grams per
tonne gold from quartz-vein float, the highest grades recovered from the
property to date.

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.

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.

Plan of Operations

Source of Funds for Fiscal 2001/2000

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.

- 39 -

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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.

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 deficiency of $873,430 on May 31,
2001.

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/Assets

We have had no revenue during the past five fiscal years from
the sale of assets.

As of May 31, 2001, we had assets valued at $28,235 located in
Canada; and assets valued at $1,705,199 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 Registration Statement.

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,
  2001, May 31, 2000 and May 31, 1999 respectively are included in this Registration
  Statement.

- 40 -

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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 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. Under US GAAP, we have incurred a loss of $432,005 in the year
ended May 31, 2001 (2000 - $443,741; 1999 - $462,108).

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,
2001, May 31, 2000 and May 31, 1999.

Fiscal Year Ended May 31, 2001 compared to Fiscal year Ended
May 31, 2000

Results of Operations

During fiscal 2001, revenue from oil and gas operations was
$39,875 as compared to $16,942 for fiscal 2000. The Company also received
advances from related parties of $19,666 during fiscal 2001.

Administrative expenses in fiscal 2001 totaled $173,873 as
compared to $414,546 in 2000. The expenses decreased from the prior year mainly
due to the loss on write down of investment of $286,085 in fiscal 2000 compared
to $nil in fiscal 2001. The Company incurred $532,521 for mining exploration
work in 2001 as compared to $202,333 in 2000.

Fiscal Year Ended May 31, 2000 compared to Fiscal year Ended
May 31, 1999

Results of Operations

During fiscal 2000, revenue from oil and gas operations was
$16,942 as compared to $14,390 for fiscal 1999. The Company also repaid advances
to related parties of $35,172 during fiscal 2000.

Administrative expenses in fiscal 2000 totaled $414,546 as
compared to $91,248 in 1999. The expenses increased from the prior year mainly
due to the loss on writedown of investments of $286,085 in fiscal 2000 (1999 -
$nil). Mineral property exploration expenses decreased from $378,331 in fiscal
1999 to $202,333 in fiscal 2000, as the Company completed to Phase II
exploration program on the Gil Venture property located in Alaska.

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.

- 41 -

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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.

Liquidity

Fiscal Year Ended May 31, 2001 compared to Fiscal year Ended
May 31, 2000

During the fiscal year ended May 31, 2001, we derived most of
our development and operating capital primarily from the sale of investments.

During the year, we sold 69,900 shares of Linux Gold Corp.
(formerly LinuxWizardry Systems, Inc. as at May 31, 2001) for proceeds of
$236,288. During the year, we received a net $19,666 in advances from related
parties.

At 2001 year end, current assets stood at $16,654, compared to
$18,894 at the end of 2000. Current liabilities increased to $890,094 from
$419,141 in 2000 due mainly to the increase in accounts payable and advances
from related companies. Working capital decreased substantially to a negative
$873,430 from a negative $400,247 at the end of 2000. Shareholders equity
increased to $843,350 from $774,507 at the end of 2000.

Fiscal Year Ended May 31, 2000 compared to Fiscal year Ended
May 31, 1999

During 2000, we financed our operations by the issue of 75,000
common shares for cash proceeds of $25,500, pursuant to the exercise of stock
options. We also sold part of our equity investment in LinuxWizardry Systems,
Inc. for proceeds of $248,839.

We spent $110,967 of these funds on operating activities for
the year ended May 31, 2000 as compared to $83,625 the year ended May 31, 1999.

Our cash position decreased by $74,129 to $11,725 and our
working capital deficiency as at May 31, 2000 was $472,248.

Fiscal Year Ended May 31, 1999 compared to Fiscal year Ended
May 31, 1998

During the fiscal year ended May 31, 1999, we continued to
derive, as in the past, most of our development and operating capital primarily
from the issuance of capital stock.

During the year, we issued a total of 1,760,000 common shares
in a private placement at $0.15 per share which provided $264,000 cash to the
Company. The securities offered pursuant to this placement were sold in Canada.
During the year, we received a net $162,045 in advances from related parties.

At 1999 year end, current assets stood at $374,728, compared to
$292,592 at the end of 1998. Current liabilities increased to $555,541 from
$393,734 in 1988 due mainly to the increase in advances from related companies.
Working capital decreased substantially to a negative $180,813 from a negative
$101,142 at the end of 1998. Shareholders equity increased to $1,324,675 from
$1,040,945 at the end of 1998 as a result of continuing operating losses being
funded by increases in new equity and related party advances.

Capital Resources

Our authorized capital consists of 30,000,000 common shares without
  par value and 5,000,000 Preferred Shares (non-voting) with a par value of $1.00.
  At May 31, 2001 we had 23,033,238 issued and outstanding common shares (May
  31, 2000  23,033,238) issued and outstanding common shares).

- 42 -

---

No Preferred Shares have been issued to date. At the Annual
  General Meeting held in November, 2000, it was resolved to increase the Common
  shares to 100,000,000, however as of May 31, 2001 the Company had not yet finalized
  the increase.

During the year ended May 31, 2001, no stock options were
exercised, expired or were cancelled and no stock options were granted. As at
May 31, 2001 we had 1,625,000 stock options outstanding at exercise prices
ranging from $0.15 per share to $0.24 per share with expiry dates ranging from
February 27, 2002 to March 17, 2004. These stock options vest over a two-year
period from the date of grant. If exercised, the 1,625,000 stock options would
increase our available cash by $338,500.

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, 2001,
2000 and 1999.

We have adopted the intrinsic value based approach to Stock
Based Compensation under the provisions of CICA 3870 and APB No. 25. 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, 1999, May 31, 2000 and May 31, 2001. We do not
hold any patents, trademarks or copyrights.

D.        TREND
INFORMATION

We currently have no active business operations that would be
effected by recent trends in productions, sales, etc. We have no material net
sales or revenues that would be affected by recent trends other than the general
effect of mineral and oil and gas prices on our ability to raise capital and
those other general economic items.

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, 2001.

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.

- 43 -

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Payments due by periodContractual Obligations
      Total
      Less than 
        1 year
      1-3 years
      3-5 
        years
      More 
        than 5 
        yearsMineral Property Obligations
      Nil
      Nil
      Nil
      Nil
      NilLong-term debt obligations
      Nil
      Nil
      Nil
      Nil
      NilCapital (Finance) Lease obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating lease obligations
      Nil
      Nil
      Nil
      Nil
      NilPurchase Obligations
      Nil
      Nil
      Nil
      Nil
      NilOther Long-term liabilities reflected on the Companys
        Balance sheet under US GAAP
      Nil
      Nil
      Nil
      Nil
      NilTotal
      Nil
      Nil
      Nil
      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 British
Columbia and Alaska, 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
    2001
    $ -
    $ -
    -2000
    $ -
    $ -
    -Westridge Property, Alaska
    2001
    $ -
    $ -
    -2000
    $ -
    $ -
    -Stepovich, Alaska
    2001
    $ -
    $ -
    -2000
    $ -
    $ -
    -


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 owns 6.5% Working Interest in the Peters No. 1
Well, situated in Fayette County, Texas, (4.680% Net Revenue Interest, after
royalties and a carried interest by the operator), and a 7.5% Working Interest
(5.79375% Net Revenue Interest after 22.75% royalties) in each of the Jancik #1
and Hermann #4 wells, located in Burleson County, Texas.

Under Canadian GAAP the cost of the wells would be depleted on
the basis of units of production over estimated recoverable reserves. Under U.S.
GAAP the wells would be written down to a nominal value of $1 each. This
difference would result in the assets being reduced by $3,024 and expenses being
reduced by $6,621 regarding amortization charged on the wells during the year.

G.       Safe Harbor

Not applicable.

- 44 -

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ITEM
6.        DIRECTORS, SENIOR MANAGEMENT
AND EMPLOYEES

A.        DIRECTORS AND SENIOR
  MANAGEMENT

As of May 31, 2001, our Board of Directors consisted of three
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 May 31, 2001.

Name
    Position with the Company
    Age
    Date of First Election or
      AppointmentJohn G. Robertson (1)(2)(3)
    President, Director
    61
    October 25 , 1985Jennifer Lorette (1)(2)(3)
    Vice President and Director
    28
    February 20, 2001Susanne Robertson (1)(2)(3)
    Chief Financial Officer and Director
    55
    September 12, 1990


| | (1) | Indicates member of the Issuer's audit
  committee.                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                      
| | (2) | The Senior Management serves at the pleasure of the Board
      of Directors.                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                      
| | (3) | 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 thePresident
and a founder of the Company since 1985; 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 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, Chief
Executive Officer and Chairman of the Board of Linux Gold Corp. since 1979. Mr.
Robertson has been the President and Principal Executive Officer and a Director
of IAS Communications, Inc. since its formation in December 1994, a U.S. public
company which is developing and marketing proprietary antenna technology. 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., 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.,
BlueCrow Internet Co. Ltd., 394754 B.C. Ltd., dba SOVO Computer Centre, Pavlik
Travel Services Ltd., World Tel-Internet (Toronto) Ltd., International Diamond
Syndicate Ltd., and Argon Investment Corporation. Mr. Robertson 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 the development of computer software, since 1984. Ms.
Robertson is a citizen and resident of Canada

Jennifer Lorette.Ms. Lorette has been a director since
June 2001. 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. REGI U.S. is
ultimately controlled by Reg Technologies

- 45 -

---

Inc. Since June 1997 Ms. Lorette has been Secretary/Treasurer,
and a Director of Information Highway.com, Inc., a Florida corporation. Ms.
Lorette is also a director of Linux Gold Corp., a British Columbia company which
trades on the OTC BB. Ms. Lorette is a founder, and has been Secretary/Treasurer
of IAS Communications, Inc. since February 1995. Ms. Lorette is a citizen and
resident of Canada.

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, judgement, 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 misdemeanour 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.

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, 2001, May 31, 2000 and May 31, 1999 for our
directors and members of our administrative, supervisory or management bodies.

Name and  Principal 
        Position
      Year
      Annual Compensation
      Long-Term CompensationAwards
      PayoutsSalary 
        ($)
      Bonus 
        ($)
      Other
        Annual 
        Compensation 
        ($)
      Securities
         Granted under 
        Options(2)/ 
        (1) 
        SARS 
        Granted 
        #
      RestrictedShares orRestrictedShareUnits
        ($)
      LTIP (2) Payouts 
        ($)
      All Other 
        Compensation 
        ($)John G.Robertson,President
        andDirector
      200120001999
      NilNilNil
      NilNilNil
      30,000.00(3)30,000.00(3)30,000.00(3)
      1,000,000 / NilNil
        / NilNil / Nil
      NilNilNil
      NilNilNil
      NilNilNilJenniferLorette, VicePresidentDirector
      200120001999
      NilNilNil
      NilNilNil
      NilNilNil
      Nil / NilNil / NilNil / Nil
      NilNilNil
      NilNilNil
      NilNilNilSusanne Robertson, Director
      2001 2000 1999
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil / Nil Nil / Nil 500,000 / Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil


- 46 -

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|(1) | "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.                                        
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                         
|(2) | "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.
|    |                                                                                                                                                                                                                                                                                                                                                         
|(3) | Management fees paid to SMR Investments Ltd., a company
      for which John Robertson acts as a director.                                                                                                                                                                                                                                              

There are no other management contracts in existence at this
time which the Company is a party to.

Option/SAR Grants

Name
    Number of
      Options Granted
    % of Total
      Options Granted as of May 31, 2001
    Exercise or
      Base Price ($/Security) (1)
    Date of Grant
    Mkt. Value of
      Securities Underlying Options on Date of Grant ($)
    Expiry DateDirectors who are not Named Executive
      Officers
    Nil
    nil% (1)
    $0(1)
    
    $0


| | (1) | During the fiscal year ended May 31, 2001 1,000,000 stock
      options were granted to the President of the Company at a price of $ 0.24
      for a period of five years.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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.

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, 2001 1,025,000 stock
options were granted pursuant to stock option plans. No options were exercised
and no options were cancelled or expired (see Note 12 to our Financial
Statements).

Total options currently exercisable at May 31, 2001 are 1,625,000.
  All exercise prices are CDN dollars as listed in the following tables. See Note
  12 to the financial statements.

- 47 -

---

The following table gives certain information concerning stock
  option exercises during the year ended May 31, 2001 by our Senior Management
  and Directors. It also gives information concerning stock option values.

Aggregated Stock Options Exercises in Fiscal 2001
Fiscal Year End Unexercised Stock Options Fiscal
Year End Stock Option Values Senior
Management/Directors

Value of Unexercised Inthe-Money Options atNumber of
    
    Number of Unexercised
    Fiscal Year-EndShares Acquired
    **Aggregate
      Value**
    Options at Fiscal Year-End
    Exercisable/Name
    on Exercise
    Realized
    Exercisable/Unexercisable
    Unexercisable (1)John G. Robertson, President
      and Director
    N/A
    N/A
    1,000,000 / Nil
    $0.24 / N/AJennifer Lorette, Vice
      President
    N/A
    N/A
    50,000 / Nil
    $0.15 / N/ASusanne Robertson, Director
      and Chief Financial Officer
    N/A
    N/A
    500,000 / Nil
    $0.15 / N/A


|(1) | The options held by the Senior Management/Directors were
      not in the money as of May 31, 2001. The closing price of the Companys
      shares on the Canadian Venture Exchange (formerly the Vancouver Stock
      Exchange, presently the TSX Venture Exchange) was $0.10 Cdn. The prices in
      the table able reflect the per option exercise
price.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

- 48 -

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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
    $0.24
    September 12, 2005Jennifer Lorette
    50,000
    $0.15
    November 16, 2003Susanne Robertson
    500,000
    $0.15
    March 17, 2004TOTAL HELD AS A GROUP:
    1,600,000


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 DateSuzanne Foster
    25,000
    $0.24
    October 11, 2005TOTAL HELD AS A GROUP:
    25,000


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.

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 Brian Cherry
and Susanne Robertson.

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,
2001, May 31, 2000 and May 31, 1999. 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 May 31, 2001:

- 49 -

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Shareholder
    Number of shares issued and outstanding
    Percentage ownership (1)John G. Robertson
    4,607,064 (2)
    20.00 %Jennifer Lorette
    128,500 (3)
    * %Susanne Robertson
    5,882,783 (4)
    25.54 %


| | (1) | as at May 31, 2001, there were 23,033,238 issued and
      outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 1,747,564 common shares held directly, 1,859,500
      common shares held by Access Information Services Inc., a private company
      wholly-owned by The Robertson Family Trust and no nil 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 50,000 options that are currently exercisable.
      Ms. Lorette's address is the same as our address.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (4) | Includes 581,500 common shares held directly, 4,801,283
      common shares held by SMR Investments Ltd., a private company wholly-owned
      by Susanne M. Robertson, and 500,000 options which are currently
      exercisable. Mrs. Robertson does not have any different voting rights. 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.

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, 2001, 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 M. Robertson
    5,382,783(1)
    23.37%John G. Robertson
    3,607,064(2)
    15.66%


(1) Of the 5,382,783 common shares owned by Susanne Robertson,
581,500 common shares are held directly and the balance of 4,801,283 common
shares are held by SMR Investments Ltd., a private company wholly-owned by
Susanne M. Robertson.

(2) Of the 3,607,064 common shares owned by John G. Robertson,
1,747,564 common shares are held directly and the balance of 1,859,500 common
shares are held by Access Information Services Inc., a private company
wholly-owned by The Robertson Family Trust.

Over the past three years, there has not been a significant
change in the percentage ownership held by any major shareholder.

- 50 -

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Control of the Company

We are a publicly owned Canadian corporation, with shareholders
in Canada, the United States and other foreign jurisdictions. We are not
controlled by any foreign government or other person.

We do not know of any arrangements which could result in a
change in control of the Company.

B.****
RELATED PARTY TRANSACTIONS.

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 paid no directors fees in fiscal 2001 ($12,000  2000; and
$12,000  1999).

We had related party advances outstanding of $302,717 at the
May 31, 2001 year-end, compared to $283,672 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,
2001 are as follows:

- SMR Investments Ltd. is a private company which is controlled by an officer
  of the Company who has significant influence on the affairs of the companies.
  Under a management contract with SMR Investments Ltd. the Company agreed to
  pay $ 2,500 per month for management services. The Company paid to SMR
  management fees totaling $ 30,000 and $ 18,000 for secretarial services and
  rent during the current year (2000 - $ 30,000 and $ 18,000 respectively).
- The Company holds 15,880 shares (2000 -85,780 shares) of Linux Gold Corp.
  (LinuxWizardry System Inc. as of May 31, 2001 and formerly Flame
  Petro-Minerals Corp.), a public company controlled by an officer of the
  Company.
- Consulting and legal services fees amounting to $ 1,965 (2000 - $ 3,634)
  were paid to Nodanis Consulting, operated by D. Moroney, the former Secretary
  of the company. Administration consulting fees of $ 3,015 (2000 - $ Nil) were
  paid to J. Lorette, Vice-President of the company.

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.

- 51 -

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ITEM 8. ****FINANCIAL INFORMATION

A. ****CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION

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.

See our audited consolidated financial statements for the
fiscal years ended May 31, 2001, May 31, 2000 and May 31, 1999.

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 solely on the TSX Venture Exchange (the
"TSXV") (the Canadian Venture Exchange as at May 31, 2001) under the symbol
TRC-V. There are currently no restrictions on the transferability of these
shares under Canadian securities laws. There has been no U.S. market in our
shares.

We believe that our common stock falls under the classification
of a penny stock, as that term is defined by Rule 3a51-1 of the Securities
Exchange Act of 1934. 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.

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

Year
    High ($CDN)
    Low ($CDN)
    Close ($ CDN)2001
    0.47
    0.08
    0.102000
    0.52
    0.10
    0.251999
    0.25
    0.10
    0.161998
    0.21
    0.08
    0.141997
    0.29
    0.13
    0.15


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

Period
    High
    Low
    Close
    Volume2001 Q4 5/31/01
    0.15
    0.08
    0.10
    239,109Q3 2/28/01
    0.20
    0.10
    0.11
    401,955Q2 11/30/00
    0.35
    0.15
    0.15
    346,920Q1 8/31/00
    0.47
    0.25
    0.36
    788,5002000 Q4 5/31/00
    0.52
    0.25
    0.25
    2,112,799Q3 2/28/00
    0.38
    0.10
    0.32
    1,968,500Q2 11/30/99
    0.20
    0.10
    0.12
    453,800Q1 8/31/99
    0.17
    0.12
    0.13
    158,000


(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.)

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.

Common Share Description

Our authorized share capital consists of 30,000,000 common
shares without par value and 5,000,000 preferred shares with a par value of
$1.00. At the Annual General Meeting held in November, 2000, it was resolved to
increase the Common shares to 100,000,000, however by May 31, 2001, the Company
had not yet finalized the increase.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 therefor 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.

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Upon our liquidation, dissolution or winding up, holders of common
  shares are entitled to receive pro rata our assets, if any, remaining
  after payments of all debts and liabilities.

No shares have been issued subject to call or assessment. There
are no pre-emptive 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 Company 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

The following table lists, as of May 31, 2001, the share
purchase warrants outstanding. As of May 31, 2001, we had no share purchase
warrants issued. The 1,760,000 share purchase warrants which were issued in
fiscal 1999 expired on April 15, 2001.

Effective Date
      Number of
      Number of
      Year 1
      Year 2
      Expiration Date of Shareof Issuance
      Share Purchase
      Share Purchase
      
      
      Purchase WarrantsWarrants
      Warrants StillOriginally
      OutstandingIssuedN/a
      N/a
      N/a
      N/a
      N/a
      N/a


B. ****PLAN OF DISTRIBUTION

Not applicable.

C. ****MARKETS

Our shares trade solely on the Canadian Venture Exchange
(formerly the Vancouver Stock Exchange) [as of the filing date, the TSX Venture
Exchange (the "TSXV")] under the symbol TRC. There are currently no
restrictions on the transferability of these shares under Canadian securities
laws.

D. ****SELLING SHAREHOLDERS

Not applicable.

E. ****DILUTION

Not applicable.

F. ****EXPENSES
  OF THE ISSUE

Not applicable.

- 54 -

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ITEM 10. ****ADDITIONAL INFORMATION

A. ****SHARE CAPITAL

Not applicable.

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.

We have two classes of shares. We have 30,000,000 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. At the Annual General Meeting held in November,
2000, it was resolved to increase the Common shares to 100,000,000, however by
May 31, 2001, the Company had not yet finalized the increase.

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 Company 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.

- 55 -

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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.

C. ****MATERIAL CONTRACTS

There were no material agreements entered into during the years
ended May 31, 2001 and May 31, 2000.

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 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).

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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.

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.

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F. ****DIVIDENDS AND PAYING AGENTS

Not applicable.

G. ****STATEMENT BY EXPERTS.

Our financial statements included in this annual report for the
years ended May 31, 2001, 2000 and 1999 were audited by June Fitzmartyn,
Chartered Accountant [ with the U.S. GAAP note audited by Morgan and Company,
Chartered Accountants] as stated in their report 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.

We filed a registration statement on Form 20-F with the
Securities and Exchange Commission in Washington, D.C. (Registration No.
000-30624) on December 29, 2000, which became effective February 27, 2001. The
Registration Statement contains exhibits and schedules. Any statement in this
annual report about any of our contracts or other documents is not necessarily
complete. If the contract or document is filed as an exhibit to the Registration
Statement, the contract or document is deemed to modify the description
contained in this annual report. You must review the exhibits themselves for a
complete description of the contract or documents.

Our registration statement and this annual report may be
inspected and copied, including exhibits and schedules, and the reports and
other information as filed with the Securities and Exchange Commission in
accordance with the Securities Exchange Act of 1934 at the public
reference facilities maintained by the Securities and Exchange Commission at
Judiciary Plaza, 450 Fifth Street, Room 1024, N.W., Washington, D.C. 20549.
Copies of such material may also be obtained from the Public Reference Section
of the Securities and Exchange Commission at 100F Street, NE, Room 1580,
Washington, D.C. 20549, at prescribed rates. Information may be obtained
regarding the Washington D.C. Public Reference Room by calling the Securities
and Exchange Commission at 1-800-SEC-0330 or by contacting the Securities and
Exchange Commission over the Internet at its website at
http://www.sec.gov.

I. ****SUBSIDIARY INFORMATION.

We own interests in the following companies:

|1. | a 100% interest in Argon Investment Corporation, a
      British Columbia company. Argon Investment Corporation holds 773 shares in
      the capital of KRS (1987) Financial Limited. Otherwise, the subsidiary is
      inactive;
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                    
|2. | a 100% interest in Teryl, Inc., a Delaware company that
      owns and operates the Issuers Alaska mineral property interests and its
      interests in three oil and gas wells located in Texas; and                            
|   |                                                                                                                                                                                                                                    
|3. | a 40% interest in International Diamond Syndicate Ltd., a
      private company that owns a 16% interest in diamond claims covering 71,600
      acres located in the Misty Lake area of the Northwest
  Territories.              

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ITEM
11.**** QUANTITATIVE AND
QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In June 2006, the Financial Accounting Standards Board (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 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.

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.

In September 2006, the FASB issued SFAS No. 157, Fair Value
Measurements. The objective of SFAS 157 is to increase consistency and
comparability in fair value measurements and to expand disclosures about fair
value measurements. SFAS 157 defines fair value, establishes a framework for
measuring fair value in generally accepted accounting principles, and expands
disclosures about fair value measurements. SFAS 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 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.

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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 is not expected to have
  a material effect on the Company's future reported financial position or results
  of operations.

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

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

Based upon the evaluation of the effectiveness of the
disclosure controls and procedures as of the end of the period covered by this
registration statement, our Chief Executive Officer and Chief Financial Officer
have concluded that, as of such date, the disclosure controls and procedures
were effective to ensure that material information relating to the Company was
made known to others within the company particularly during the period in which
this registration statement and accounts were being prepared, and such controls
and procedures were effective to ensure that information required to be
disclosed by the Company in the reports that it files or submits under
regulatory rules and securities laws is recorded, processed, summarized and
reported, within the time periods specified. Management recognizes that any
controls and procedures can only provide reasonable assurance, and not absolute
assurance, of achieving the desired control objectives, and management
necessarily was required to apply its judgment in evaluating the cost-benefit
relationship of possible controls and procedures.

Changes in Internal Controls over Financial Reporting.

There were no changes in our internal controls over financial
reporting that occurred during the period covered by the registration statement
that has materially affected, or is reasonably likely to materially affect our
internal control over financial reporting.

- 60 -

---

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 2001, 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 June Fitzmartyn, 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 2001.

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)

2001
    2000Type of Services Rendered
    Fiscal Year
    Fiscal Year


(a) Audit Fees
    $3,269
    $2,975(b) Audit-Related Fees
    $5,767
    $8,000(c) Tax Fees
    $nil
    $nil(d) All Other Fees
    $4,200
    $7,934


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

Not applicable.

- 61 -

---

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

Not applicable.

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 October 15, 2001                                                                              
|---------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                 
|Consolidated Balance Sheets at May 31, 2001 and 2000                                                                             
|                                                                                                                                 
|Consolidated Statement of Income and Expenses for the years
      ended May 31, 2001, 2000 and 1999                              
|                                                                                                                                 
|Consolidated Statement of Deficit for the years ended May
      31, 2001, 2000 and 1999                                          
|                                                                                                                                 
|Consolidated Statement
      of Administrative Expenditures for the years ended May 31, 2001, 2000 and
      1999                
|                                                                                                                                 
|Consolidated Statement of Deferred Exploration and Development
      Expenditures for the years ended May 31, 2001, 2000 and 1999
|                                                                                                                                 
|Consolidated Statements of Cash Flows for the years ended
      May 31, 2001, 2000 and 1999                                      
|                                                                                                                                 
|Notes to the Consolidated Financial Statements for the
      years ended May 31, 2001, 2000 and 1999                             

- 62 -

---



TERYL RESOURCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS

AS AT MAY 31, 2001



---

JUNE FITZMARTYN 
  CHARTERED ACCOUNTANT 
  #300 - 2600 GRANVILLE STREET 
  VANCOUVER, BC V6H 3V3



AUDITOR'S REPORT



To the Shareholders of Teryl Resources Corp., Richmond, B.C.,

I
  have audited the consolidated balance sheet of Teryl Resources Corp. as at May
  31, 2001 and May 31, 2000 and the consolidated statements of deficit, income
  and expenses, deferred exploration and development expenditures, and cash flows
  for the years then ended. These financial statements are the responsibility
  of the company's management. My responsibility is to express an opinion on these
  financial statements based on my audit.

I
  conducted my audit in accordance with generally accepted auditing standards.
  Those standards require that I 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
  my opinion, these consolidated financial statements present fairly, in all material
  respects, the financial position of the company as at May 31, 2001 and May 31,
  2000 and the results of its operations and its cash flows for the years then
  ended in accordance with generally accepted accounting principles. As required
  by the British Columbia Company Act, I report that, in my opinion, the principles
  have been applied on a basis consistent with that of the preceding year.

|Vancouver, B.C.  | June Fitzmartyn   
|---------------- | --------------------
|October 15, 2001 | CHARTERED ACCOUNTANT

---

TERYL RESOURCES CORP.

CONSOLIDATED BALANCE SHEET

AS AT MAY 31, 2001

|                                                                |  | 2001       |   |  | 2000       |  
|--------------------------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                                |  | $          |   |  | $          |  
|                                                                |  |            |   |  |            |  
|**ASSETS**                                                      | 
|Current Assets:                                                 |  |            |   |  |            |  
|Cash                                                            |  | 897        |   |  | 11,725     |  
|Prepaids, accounts
      and accrued receivables                |  | 14,865     |   |  | 5,656      |  
|Advances
      to related companies (Note 3)                    |  | 892        |   |  | 1,513      |  
|                                                                |  | 16,654     |   |  | 18,894     |  
|Investments(Note 4)                                             |  | 4,026      |   |  | 21,742     |  
|Office Equipment(Note 5)                                        |  | 6,154      |   |  | 7,546      |  
|Oil and Gas Well Interests (Note 6)                             |  | 3,027      |   |  | 9,648      |  
|Mineral Property Interests (Note 7)                             |  | 156,699    |   |  | 168,413    |  
|Deferred Expenditures:                                          |  |            |   |  |            |  
|Exploration and development
      (Note 7)                      |  | 1,545,495  |   |  | 1,038,026  |  
|Incorporation                                                   |  | 1,379      |   |  | 1,379      |  
|                                                                |  | 1,546,874  |   |  | 1,039,405  |  
|                                                                |  | 1,733,434  |   |  | 1,265,648  |  
|                                                                |  |            |   |  |            |  
|LIABILITIES                                                     | 
|Current Liabilities:                                            |  |            |   |  |            |  
|Accounts payable                                                |  | 409,689    |   |  | 15,880     |  
|Accrued liabilities                                             |  | 26,816     |   |  | 40,769     |  
|Estimated
      liability for income and capital taxes (Note 8) |  | 862        |   |  | 820        |  
|Debenture payable
      (Note 9)                                |  | 150,000    |   |  | 150,000    |  
|Advances
      from related companies (Note 10)                 |  | 302,717    |   |  | 283,672    |  
|                                                                |  | 890,084    |   |  | 419,141    |  
|Contingencies and Commitments(Note
      11)                    |  |            |   |  |            |  
|SHAREHOLDERS' EQUITY                                            | 
|Share Capital: (Note 12)                                        |  |            |   |  |            |  
|Issued                                                          |  | 6,020,427  |   |  | 6,020,427  |  
|Subscriptions Received(Note 15)                                 |  | 146,044    |   |  | 146,044    |  
|Deficit                                                         |  | (5,323,121 | ) |  | (5,391,964 | )
|                                                                |  | 843,350    |   |  | 774,507    |  
|                                                                |  | 1,733,434  |   |  | 1,265,648  |  

Approved by the Directors:

J. ROBERTSON  
  J. Robertson

J. LORETTE  
  J. Lorette

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENT OF INCOME AND EXPENSES

FOR THE YEAR ENDED MAY 31, 2001

|                                                                 |  | 2001    |  |  | 2000     |   |  | 1999    |  
|---------------------------------------------------------------- |  | ------- |  |  | -------- | - |  | ------- | -
|                                                                 |  | $       |  |  | $        |   |  | $       |  
|Mineral Claim Operations:                                        |  |         |  |  |          |   |  |         |  
|Revenue:                                                         |  |         |  |  |          |   |  |         |  
|Proceeds
      from option agreements (Note 7C)                  |  | 53,036  |  |  | 37,388   |   |  | -       |  
|Expenses:                                                        |  |         |  |  |          |   |  |         |  
|Exploration
      and development written off re optioned claims |  | 23,033  |  |  | 17,186   |   |  | -       |  
|Exploration and development written off re inactive claims       |  | 2,019   |  |  | 309,542  |   |  | -       |  
|Property
      costs written off re lapsed claims                |  | -       |  |  | 22,001   |   |  | -       |  
|Property costs written off re inactive claims                    |  | -       |  |  | 75,999   |   |  | -       |  
|Property
      costs written off re optioned claims              |  | 11,714  |  |  | 8,367    |   |  | -       |  
|                                                                 |  | 36,766  |  |  | 433,095  |   |  | -       |  
|                                                                 |  |         |  |  |          |   |  |         |  
|Net
      Income (Loss) from Mineral Claim Operations            |  | 16,270  |  |  | (395,707 | ) |  | -       |  
|Oil and Gas Operations:                                          |  |         |  |  |          |   |  |         |  
|Revenue                                                          |  | 39,875  |  |  | 16,942   |   |  | 14,390  |  
|Expenses:                                                        |  |         |  |  |          |   |  |         |  
|Operating expenses                                               |  | 25,380  |  |  | 8,710    |   |  | 6,919   |  
|Amortization on wells (Note 6)                                   |  | 6,621   |  |  | 7,533    |   |  | 14,649  |  
|                                                                 |  | 32,001  |  |  | 16,242   |   |  | 21,568  |  
|                                                                 |  |         |  |  |          |   |  |         |  
|Net
      Income (Loss) from Oil and Gas Operations              |  | 7,874   |  |  | 699      |   |  | (7,178  | )
|                                                                 |  |         |  |  |          |   |  |         |  
|Net
      Operating Income (Loss)                                |  | 24,144  |  |  | (395,008 | ) |  | (7,178  | )
|Other Income:                                                    |  |         |  |  |          |   |  |         |  
|Gain
      on disposal of investments (Note 4)                   |  | 218,572 |  |  | 233,885  |   |  | -       |  
|                                                                 |  |         |  |  |          |   |  |         |  
|Net
      Income (Loss) before other Expenses                    |  | 242,716 |  |  | (161,123 | ) |  | (7,178  | )
|Other Expenses:                                                  |  |         |  |  |          |   |  |         |  
|Administration
      expenditures (Schedule A)                   |  | 173,873 |  |  | 414,546  |   |  | 91,248  |  
|                                                                 |  |         |  |  |          |   |  |         |  
|Net
      Income (Loss) for the Year                             |  | 68,843  |  |  | (575,669 | ) |  | 98,426  |  
|                                                                 |  |         |  |  |          |   |  |         |  
|EARNINGS
      (LOSS) PER SHARE(Note 8)                          |  | 0.0030  |  |  | (0.0251  | ) |  | (0.0046 | )

CONSOLIDATED STATEMENT OF DEFICIT

|Deficit at Beginning of Year        |  | (5,391,964 | ) |  | (4,816,295 | ) |  | (4,717,869 | )
|----------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                    |  |            |   |  |            |   |  |            |  
|Add: Net Income (Loss) for the Year |  | 68,843     |   |  | (575,669   | ) |  | (98,426    | )
|                                    |  |            |   |  |            |   |  |            |  
|Deficit at End of Year              |  | (5,323,121 | ) |  | (5,391,964 | ) |  | 4,816,295  |  

---

Schedule A

TERYL RESOURCES CORP.

CONSOLIDATED SCHEDULE OF ADMINISTRATION EXPENDITURES

FOR THE YEAR ENDED MAY 31, 2001

|                                               |  | 2001    |   |  | 2000    |  |  | 1999   | 
|---------------------------------------------- |  | ------- | - |  | ------- |  |  | ------ | 
|                                               |  | $       |   |  | $       |  |  | $      | 
|                                               |  |         |   |  |         |  |  |        | 
|Management and director's fees (Note 13)       |  | 30,000  |   |  | 30,000  |  |  | 4,060  | 
|Telephone and telecopier                       |  | 26,318  |   |  | 213     |  |  | 7,725  | 
|Office rent and utilities (Note 13)            |  | 23,442  |   |  | 18,111  |  |  | 3,600  | 
|Audit, accounting and consulting (Note 13)     |  | 21,256  |   |  | 18,909  |  |  | 14,750 | 
|Financing fees (Note 11)                       |  | 16,000  |   |  | -       |  |  | -      | 
|Office, stationery and delivery                |  | 15,490  |   |  | 6,156   |  |  | 1,094  | 
|Interest on debenture (Note 9)                 |  | 14,697  |   |  | 14,737  |  |  | 14,697 | 
|Publicity, promotion and investor relations    |  | 9,920   |   |  | 11,520  |  |  | 5,740  | 
|Secretarial costs                              |  | 9,177   |   |  | -       |  |  | 4,987  | 
|Filing fees                                    |  | 4,324   |   |  | 7,252   |  |  | 5,065  | 
|Bank charges and interest                      |  | 3,637   |   |  | 4,787   |  |  | 3,764  | 
|Transfer agent fees                            |  | 3,524   |   |  | 5,573   |  |  | 5,513  | 
|Legal                                          |  | 2,549   |   |  | 9,235   |  |  | 16,490 | 
|Shareholders and meeting costs                 |  | 98      |   |  | 252     |  |  | 4,162  | 
|Foreign exchange loss (gain)                   |  | (5,326  | ) |  | 315     |  |  | 4,221  | 
|Loss on write down of investment (Notes 3 & 4) |  | -       |   |  | 286,085 |  |  | -      | 
|Amortization                                   |  | 1,509   |   |  | 1,886   |  |  | 2,127  | 
|                                               |  | 176,615 |   |  | 415,031 |  |  | 97,995 | 
|Less: Interest income                          |  | 2,742   |   |  | 485     |  |  | 609    | 
|Write off of accounts payable                  |  | -       |   |  | -       |  |  | 6,138  | 
|                                               |  |         |   |  |         |  |  |        | 
|Administration Expenditures for the Year       |  | 173,873 |   |  | 414,546 |  |  | 91,248 | 

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENT OF DEFERRED EXPLORATION

AND DEVELOPMENT EXPENDITURES

FOR THE YEAR ENDED MAY 31, 2001

|                                                 |  | 2001      |  |  | 2000      |  |  | 1999      | 
|------------------------------------------------ |  | --------- |  |  | --------- |  |  | --------- | 
|                                                 |  | $         |  |  | $         |  |  | $         | 
|West Ridge Claims: (Note 7C)                     |  |           |  |  |           |  |  |           | 
|Geophysical survey                               |  | 5,242     |  |  | -         |  |  | 25,277    | 
|Legal
      and registry                         |  | -         |  |  | -         |  |  | 2,949     | 
|Assays, maps and title
      perfection          |  | -         |  |  | 11,293    |  |  | -         | 
|                                                 |  | 5,242     |  |  | 11,293    |  |  | 28,226    | 
|Silverknife Claims: (Joint Venture) (Note 7A)    |  |           |  |  |           |  |  |           | 
|Work
      assessment                            |  | 2,019     |  |  | 2,018     |  |  | -         | 
|                                                 |  |           |  |  |           |  |  |           | 
|Gil Venture: (Joint Venture) (Note 7D)           |  |           |  |  |           |  |  |           | 
|Phase II exploration                             |  | 525,260   |  |  | 189,022   |  |  | 350,105   | 
|Exploration
      and Development for the Year   |  | 532,521   |  |  | 202,333   |  |  | 378,331   | 
|Exploration and Development at Beginning of Year |  | 1,038,026 |  |  | 1,162,421 |  |  | 784,090   | 
|                                                 |  | 1,570,547 |  |  | 1,364,754 |  |  | 1,162,421 | 
|Less: Exploration and development written off:   |  |           |  |  |           |  |  |           | 
|Re inactive claims                               |  | 2,019     |  |  | 309,542   |  |  | -         | 
|Re optioned claims                               |  | 23,033    |  |  | 17,186    |  |  | -         | 
|                                                 |  | 25,052    |  |  | 326,728   |  |  | -         | 
|                                                 |  |           |  |  |           |  |  |           | 
|Exploration and Development at End of Year       |  | 1,545,495 |  |  | 1,038,026 |  |  | 1,162,421 | 

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED MAY 31, 2001

|                                                          |  | 2001     |   |  | 2000     |   |  | 1999     |  
|--------------------------------------------------------- |  | -------- | - |  | -------- | - |  | -------- | -
|                                                          |  | $        |   |  | $        |   |  | $        |  
|                                                          |  |          |   |  |          |   |  |          |  
|Operating Activities:                                     |  |          |   |  |          |   |  |          |  
|Revenue receipts for
      the year                       |  | 81,432   |   |  | 53,550   |   |  | 16,407   |  
|Receipt
      of interest income                          |  | 2,742    |   |  | 485      |   |  | 606      |  
|Refunds of goods and
      services sale taxes            |  | 10,846   |   |  | 3,082    |   |  | 4,268    |  
|Increase
      in estimated liability for taxes           |  | 42       |   |  | 22       |   |  | -        |  
|Payment of interest
      on debenture                    |  | (15,000  | ) |  | (17,800  | ) |  | (22,323  | )
|Payments
      to suppliers for goods and services        |  | (200,587 | ) |  | (150,302 | ) |  | (82,583  | )
|                                                          |  |          |   |  |          |   |  |          |  
|Cash Flows Provided (Used) by Operating Activities        |  | (120,525 | ) |  | (110,963 | ) |  | (83,625  | )
|                                                          |  |          |   |  |          |   |  |          |  
|Financing Activities:                                     |  |          |   |  |          |   |  |          |  
|Share Capital Issued
      (Note 12)                      |  | -        |   |  | 25,500   |   |  | 264,000  |  
|Subscriptions
      received                              |  | -        |   |  | -        |   |  | 118,157  |  
|Advances from (to)
      related companies (Notes 3 & 10) |  | 19,666   |   |  | (35,172  | ) |  | 162,045  |  
|                                                          |  |          |   |  |          |   |  |          |  
|Cash Flows Provided by Financing Activities               |  | 19,666   |   |  | (9,672   | ) |  | 544,202  |  
|                                                          |  |          |   |  |          |   |  |          |  
|Investing Activities:                                     |  |          |   |  |          |   |  |          |  
|Proceeds
      on sale of investments (Note 4)            |  | 236,288  |   |  | 248,839  |   |  | -        |  
|Acquisition of office
      equipment                     |  | (118     | ) |  | -        |   |  | (1,849   | )
|Current
      exploration and development payments        |  | (146,139 | ) |  | (202,333 | ) |  | (378,331 | )
|                                                          |  |          |   |  |          |   |  |          |  
|Cash Flows Provided (Used) by Investing Activities        |  | 90,031   |   |  | 46,506   |   |  | (380,177 | )
|                                                          |  |          |   |  |          |   |  |          |  
|Increase
      (Decrease) in Cash for the Year            |  | (10,828  | ) |  | (74,129  | ) |  | 80,400   |  
|                                                          |  |          |   |  |          |   |  |          |  
|Cash (Deficiency) at Beginning of Year                    |  | 11,725   |   |  | 85,854   |   |  | (17,016  | )
|                                                          |  |          |   |  |          |   |  |          |  
|Cash
      (Deficiency) at End of Year                    |  | 897      |   |  | 11,725   |   |  | 85,854   |  

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AS AT MAY
  31, 2001

|1. | SIGNIFICANT ACCOUNTING POLICIES:
|-- | --------------------------------
|   |                                 
|   | [a]                             
|   |                                 
|   |                                 
|   |                                 
|   | [b]                             
|   |                                 
|   |                                 
|   |                                 
|   | [c]                             
|   |                                 
|   |                                 
|   |                                 
|   | [d]                             
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   | [e]                             
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 
|   |                                 

. . . 2

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 2
|As At May 31, 2001                         |       

|1. | SIGNIFICANT ACCOUNTING POLICIES (Continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
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|   | [j]                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|2. | CONSOLIDATION INFORMATION:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | These consolidated financial statements include
        the accounts of the Company and its wholly-owned subsidiaries, Argon Investment
        Corporation and Teryl, Inc. Argon Investment Corporation, acquired by
        Teryl on January 19, 1988, is inactive other than to hold 773 shares of
        KRS (1987) Financial Limited. Teryl, Inc. was incorporated on November
        17, 1988, in the State of Delaware and registered to do business in the
        USA, to hold and operate the Alaska mineral property interests and Texas
        oil and gas well interests. In April, 1998, Teryl, Inc. reorganized and
        increased its authorized share capital from 1,000 common shares to 100,000,000
        common shares, in preparation for taking the company public. Teryl Resources
        Corp. was issued 6,500,000 shares of Teryl, Inc. and held 100% of the
        shares at May 31, 2001. If Teryl, Inc. issues shares to others, Teryl
        Resources Corp.s percentage holdings will decrease. See Note 15
        re Teryl, Inc. transactions.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|3. | ADVANCES TO RELATED COMPANIESconsist
        of the following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| |                                                         |  | 2001 |  |  | 2000  | 
| | ------------------------------------------------------- |  | ---- |  |  | ----- | 
| | LinuxWizardry Systems, Inc. (See Note 4)                |  | 891  |  |  | 891   | 
| | Blue Crow Internet Co. Ltd.                             |  | -    |  |  | 621   | 
| | International Diamond Syndicate Ltd. (See Note
      4) |  | 1    |  |  | 1     | 
| |                                                         |  | 892  |  |  | 1,513 | 

The advances to related companies bear
  no interest and have no fixed repayment terms.

. . . 3

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 3
|As At May 31, 2001                         |       

|4. | INVESTMENTSconsist of:                                                                                                                                                                                                                                                                                                                                                                                                                 
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | International Diamond Syndicate Ltd. (IDS) is a private
        company having no quoted market, in which Teryl Resources owns 40% of
        the issued shares. At May 31, 2000, the investment and advances to IDS
        were written down to $ 1 each as IDSs property has no proven economic
        reserves, so there is little expectation of recovery. See Subsequent Events
        Note 14 re BHP Diamonds Inc. agreement.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   | LinuxWizardry Systems, Inc. is a public company listed
        on US Stock Exchanges having a market value of $ 2,998 Cdn. at May 31,
        2001 (2000 - $ 168,399). In February, 2000, 59,000 shares of LinuxWizardry
        were sold for $ 248,839 resulting in a gain on disposal of $ 233,885 and
        in June, 2000, 69,900 shares were sold for $ 236,288 resulting in a gain
        on disposal of $ 218,572.           

| |                                            |  | 2001    |   |  | 2000    |  
| | ------------------------------------------ |  | ------- | - |  | ------- | -
| | International Diamond Syndicate Ltd.:      |  |         |   |  |         |  
| | 40 shares acquired
      June 24, 1993     |  | 1       |   |  | 1       |  
| | LinuxWizardry Systems Inc.:                |  |         |   |  |         |  
| | 120,000 shares acquired March 4, 1986      |  | 30,500  |   |  | 30,500  |  
| | 24,780 shares acquired February 28, 1993   |  | 6,195   |   |  | 6,195   |  
| | (59,000) shares sold February
      , 2000 |  | (14,954 | ) |  | (14,954 | )
| | 85,780                                     |  | 21,741  |   |  | 21,741  |  
| | (69,900) shares sold June,
      2000      |  | (17,716 | ) |  | -       |  
| | 15,880                                     |  | 4,025   |   |  | 21,741  |  
| |                                            |  | 4,026   |   |  | 21,742  |  

|5. | OFFICE FURNITUREconsists of:     |  |        |  |  |        | 
|-- | -------------------------------- |  | ------ |  |  | ------ | 
|   | Furniture and fixtures - at cost |  | 34,932 |  |  | 34,815 | 
|   | Less: Accumulated amortization   |  | 28,778 |  |  | 27,269 | 
|   |                                  |  | 6,154  |  |  | 7,546  | 

|6. | OIL AND GAS WELL INTERESTS:                                                                                                                                                                                                                                                                                                                            
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                        
|   | The Company, through its subsidiary Teryl, Inc., 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 Jancik #1 and Herrmann #4 wells,
        located in Burleson County, Texas as follows:

| |             |  | 2001    |  |  | 2000         | 
| | ----------- |  | ------- |  |  | ------------ | 
| |             |  |         |  |  | Accumulated  | 
| |             |  | Cost    |  |  | Amortization | 
| | Peters #1   |  | 54,103  |  |  | 54,103       | 
| | Herrmann #4 |  | 67,141  |  |  | 67,141       | 
| | Jancik #1   |  | 107,693 |  |  | 104,664      | 
| |             |  | 228,937 |  |  | 219,288      | 

The amortization charged on the wells
  is not in conformity with generally accepted accounting principles, which require
  that the cost of the wells be depleted on the basis of units of production over
  estimated recoverable reserves. The property operators do not provide reserve
  estimates, so the Company is unable to calculate depletion, and has chosen amortization
  of successful wells over seven years as the logical alternative to depletion.
  However, since the net oil and gas interests represent less than 1% of total
  assets, it is unlikely the difference would represent a material difference.

. . . 4

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 4
|As At May 31, 2001                         |       

|7. | MINERAL PROPERTY INTERESTSconsist of the following:
|-- | ---------------------------------------------------

Teryl's
      
      Acquisition CostClaim Group
      Region
      Interest
      Ref.
      2001
      
      2000Silverknife
      Liard, BC
      26.7 %
      A
      1
      
      1Amad
      Lac de Gras, NWT
      49 %
      B
      1
      
      1West Ridge
      Dome Creek, Alaska
      100 %
      C
      116,189
      
      127,903Gil Venture
      Dome Creek, Alaska
      20 %
      D
      31,127
      
      31,127Stepovich Lease
      Dome Creek, Alaska
      10 %
      E
      9,381
      
      9,381156,699
      
      168,413


| | A. | SILVERKNIFE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Pursuant to agreements between Reg Technologies Inc.,
        SMR Investments Ltd., Rapitan Resources Inc., and Chevron Minerals Ltd.,
        Teryl acquired a 30% working interest in the Silverknife mineral claims,
        situate 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. The Company has written down their acquisition costs to $ 1 and
        has written off their exploration and development expenditures entirely,
        since the claims are not currently being explored and have no proven economic
        reserves.                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | B. | AMAD:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | On May 30, 1992, the Company and Calco Resources Inc.
        entered into an agreement, whereby Teryl earned a 50% interest (subject
        to a 2% Net Royalty Interest to Calco) in the Amad mineral claims (2,530.85
        acres), located in the Lac de Gras area of the Northwest Territories,
        by paying $ 40,000 cash, expending $ 250,000 on the property in 1995 and
        issuing 150,000 shares. At May 31, 2000, Company wrote down their acquisition
        costs to $ 1 and wrote off their exploration and development expenditures
        entirely ($ 307,524), since the claims are not currently being explored
        and have no proven economic reserves.                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| | C. | WEST RIDGE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Pursuant to various agreements the Company, through
        its subsidiary Teryl, Inc., earned a 100% interest in the West Ridge (48
        claims) mineral properties (approximately 5,200 acres) located in the
        Dome Creek area of the Fairbanks District of Alaska, USA.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |    | Pursuant to a letter agreement, between Kinross Gold
        Corporation and Teryl, Inc. dated October 15, 1998 and a formal agreement
        dated August 1, 1999, Kinross may earn a 70% interest in the West Ridge
        claims by paying $ 285,000 US over five years, expending $ 1,500,000 US
        on a work program over five years and paying all property and assessment
        payments during that time. Teryl, Inc. will retain a 30% vested interest
        and proportionately share any further expenditures after the five years.
        Beginning with the fifth anniversary Kinross will pay $ 200,000 US annually
        as advance royalty payments against future production from the property.
        At May 31, 2000, Teryl, Inc. wrote off $ 8,367 in property costs and $
        17,186 in deferred exploration costs against the $ 37,388 ($ 25,000 US)
        option payment received and at May 31, 2001, wrote off $ 11,714 in property
        costs and $ 23,033 in deferred exploration costs against the $ 53,036
        ($ 35,000 US) option payment received.

. . . 5

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 5
|As At May 31, 2001                         |       

|7. | MINERAL PROPERTY INTERESTS (Continued):
|-- | ---------------------------------------

| | D. | GIL VENTURE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | Pursuant to various agreements the Company, through
        its subsidiary, Teryl, Inc., acquired a 50% interest in 237 claims located
        in the Gilmore Dome area of Fairbanks District of Alaska. On May 31, 1991,
        the Company, its subsidiary Teryl Inc., NERCO Exploration Company and
        Fort Knox Venture entered into an agreement which granted the Company
        a 20% participating interest in the claims, valued at $ 150,000 US ($
        171,720 Cdn). Under the agreement Fort Knox Venture paid the Company a
        total of $ 143,500 US and to contributed $ 600,000 US to fund approved
        programs and budgets earning them an 80% participating interest in the
        property with Teryl, Inc. retaining a 20% participating interest. Fort
        Knox Venture through its operator Kinross Gold USA, Inc., has been doing
        exploration and development work on this property during the 2000 and
        2001 years and expects to go into production in the next few years. This
        has resulted in Teryl, Inc. being required to pay its 20% share of expenses,
        which amounted to $ 189,022 ($ 126,000 US) in the May, 2000 year and $
        525,260 ($ 333,817 US) in the May, 2001 year. Further cash calls are expected
        for the 2002 year.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | E. | STEPOVICH LEASE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| |    | The Company, through its subsidiary Teryl, Inc., entered
        into a mineral lease agreement, effective August 1, 1989, with the Estate
        of Mike Stepovich for a twenty year period, on the seven Stepovich lode
        claims located in the Dome Creek area of the Fairbanks District of Alaska
        for annual royalty payments, work commitments and shares, subject to production
        royalties of between 4% and 13% of Net Smelter Returns. On September 28,
        1990, the Company granted an option to Fort Knox Venture to acquire all
        of Teryl's interest in the Stepovich lease, except for a 10% Net Profit
        Interest for Teryl, for $ 187,500 US ($ 217,819 Cdn) and performing 3,000
        feet of drilling on the property, which was done. Fort Knox Venture assumed
        all of the Company's liabilities and obligations under the Stepovich lease,
        under an assignment dated May 29, 1992. In the 1992 and 1991 years, the
        Company wrote down its property costs and exploration and development
        expenditures to 10% against option proceeds received. Teryl, Inc. retains
        a 10% Net Profit Interest in the claims.                                                                                                                    

| | F. | ROB:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | Pursuant to agreements with Iskut Gold Syndicate, on
        March 6, 1990, Teryl acquired a 100% interest in the Rob 15 and Rob 16
        claims (26 units), situate in the Liard Mining Division of the Province
        of British Columbia. Teryl retained a 100% interest in the claims, but,
        in the 1993 year wrote down their acquisi- tion cost to $ 1 and wrote
        off their exploration and development expenditures entirely, since the
        claims had no proven economic reserves. The claims subsequently lapsed
        and were written off entirely at May 31, 2000.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | G. | ROCKY MOUNTAIN HOUSE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    | Pursuant to a mineral property agreement dated April
        8, 1998, between Dave Hodge and Teryl, the Company acquired a 50% interest
        in an application for 25 explorations permits, in the Rocky Mountain House
        claims (approximately 525,000 acres), which are located in West Central
        Alberta, by paying $ 22,000. These claims lapsed in the 2000 year resulting
        in $ 22,000 in property costs being written off a May 31, 2000.                                                                                                                                

. . . 6

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 6
|As At May 31, 2001                         |       

|7. | MINERAL PROPERTY INTERESTS (Continued):
      SUMMARY OF MINING PROPERTIES:
|-- | ---------------------------------------------------------------------------

Balance
      
      
      Changes
      
      
      Balance
      
      
      Changes
      
      
      BalancePROPERTY COSTS:
      
      May 31/99
      
      
      2000
      
      
      May 31/00
      
      
      2001
      
      
      May 31/01Rob - lapsed
      
      1
      
      
      (1
      )
      
      -
      
      
      
      
      
      -Silverknife
      
      1
      
      
      
      
      
      1
      
      
      
      
      
      1West Ridge - optioned
      
      136,271
      
      
      (8,367
      )
      
      127,903
      
      
      (11,714
      )
      
      116,189Gil Venture
      
      31,127
      
      
      
      
      
      31,127
      
      
      
      
      
      31,127Stepovich Lease
      
      9,381
      
      
      
      
      
      9,381
      
      
      
      
      
      9,381Amad - inactive
      
      76,000
      
      
      (75,999
      )
      
      1
      
      
      
      
      
      1Rocky Mtn. House - lapsed
      
      22,000
      
      
      (22,000
      )
      
      -
      
      
      -
      
      
      -274,781
      
      
      (106,367
      )
      
      168,413
      
      
      (11,714
      )
      
      156,699


DEFERRED EXPLORATION AND DEVELOPMENT:

West Ridge - optioned
      
      268,586
      
      
      11,293
      
      
      
      
      
      5,242West Ridge - optioned
      
      
      
      
      (17,186
      )
      
      262,693
      
      
      (23,033
      )
      
      244,902Gil Venture
      
      585,310
      
      
      189,022
      
      
      774,332
      
      
      525,260
      
      
      1,299,592Stepovich Lease
      
      1,001
      
      
      
      
      
      1,001
      
      
      
      
      
      1,001Silverknife - inactive
      
      
      
      
      2,018
      
      
      
      
      
      2,019Silverknife - inactive
      
      
      
      
      (2,018
      )
      
      -
      
      
      (2,019
      )
      
      -Amad - inactive
      
      307,524
      
      
      (307,524
      )
      
      -
      
      
      -
      
      
      -1,162,421
      
      
      (124,395
      )
      
      1,038,026
      
      
      507,469
      
      
      1,545,495


|8. | INCOME TAXES AND EARNINGS PER SHARE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Since the Company has Canadian income tax losses of
        approximately $ 1,023,460 available to reduce future taxable income until
        the year 2008, no figures have been presented for deferred income taxes.
        The Company has Canadian exploration and development expenditures of $
        1,411,125 available to reduce future taxable income from mineral properties.
        The Company estimates it will be liable for approximately $ 862 ($ 548
        US) income and capital taxes to the State of Texas, USA, in respect to
        its oil and gas well income.                                                                                                                                                                                                                                                              
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Under "flow-through" issuances, the Company entered
        into agreements with contributors to expend certain proceeds from the
        issuances of its shares on exploration and development work on its mineral
        property interests. The amounts so expended would "flow-through" to the
        contributors as Canadian Exploration Expenditures, which are deductible
        for income tax purposes. In prior years., the Company received $ 533,801
        of "flow-through" funds, which were expended on "eligible work" on its
        mineral property interests and renounced eligible expenditures incurred
        by it in respect thereto. Since the tax deductibility of these expenditures
        has been renounced to the contributors, the expenditures are not available
        to the Company for income tax purposes.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   | Basic earnings (loss) per share are calculated using
        the weighted daily average number of common shares outstanding for the
        year, which amount to 23,033,238 shares (2000 - 22,961,937 shares).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

. . . 7

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 7
|As At May 31, 2001                         |       

| | DEBENTURE PAYABLE:            |  | 2001    |  |  | 2000    | 
| | ----------------------------- |  | ------- |  |  | ------- | 
| | Keltic Bryce Enterprises Inc. |  | 150,000 |  |  | 150,000 | 

|    | Pursuant to various agreements the Company agreed to
        issue a convertible debenture for $ 150,000 to Keltic Bryce Enterprises
        Inc., subject to regulatory approval. The original agreement dated September
        1, 1991 was approved. However, an amendment requested by Keltic Bryce,
        which resulted in the withdrawal of the original agreement, increasing
        the number of units and decreasing the share and warrant prices, did not
        subsequently receive approval and the debenture is not convertible under
        existing regulatory policy. Interest of $ 14,433 was accrued to May 31,
        2001 (2000 - $ 14,736). Teryl paid Keltic Bryce $ 15,000 interest on April
        24, 2001.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | After various disputes Teryl Resources Corp., Teryl,
        Inc. and Keltic Bryce Enterprises Inc. were negotiating a Settlement Agreement
        to repay Keltic Bryce the $ 150,000 loan and all accrued interest as full
        settlement of the Debenture.                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|10. | ADVANCES FROM RELATED COMPANIESconsist of:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| | Access Information Systems Inc. |  | 24,979  |   |  | 24,495  | 
| | ------------------------------- |  | ------- | - |  | ------- | 
| | IAS Communications Inc.         |  | -       |   |  | 621     | 
| | JGR Petroleum Inc.              |  | 64,722  |   |  | 47,937  | 
| | Rainbow Network                 |  | 43,172  |   |  | 43,046  | 
| | Reg Technologies Inc.           |  | (1,979  | ) |  | 12,406  | 
| | REGI US, Inc.                   |  | 800     |   |  | -       | 
| | SMR Investments Ltd.            |  | 171,023 |   |  | 155,167 | 
| |                                 |  | 302,717 |   |  | 283,672 | 

|    | The advances from related companies bear no interest
        and have no fixed repayment terms.                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                    
|11. | CONTINGENCIES AND COMMITMENTS:                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                    
|    | See Note 12 below for "Outstanding Commitments to Issue
        Shares".                                                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                    
|    | In March, 2001, the Company completed an agreement with
        IBK Capital Corp. to endeavour to raise up to $ 1,000,000 on terms and
        conditions acceptable to the Company. IBK was paid $ 16,000 during the
        year for work and out of pocket fees.
|    |                                                                                                                                                                                                                                                                    
|12. | SHARE CAPITAL:                                                                                                                                                                                                                                                     
|    |                                                                                                                                                                                                                                                                    
|    | Authorized Share Capitalconsists of:                                                                                                                                                                                                                               

| | Common Shares - voting No Par Value         |  | 30,000,000 | 
| | ------------------------------------------- |  | ---------- | 
| |                                             |  |            | 
| | Preferred Shares - non-voting $ 1 Par Value |  | 5,000,000  | 
| |                                             |  |            | 
| |                                             |  | 35,000,000 | 

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 these financial statements. At the Annual General
  Meeting held in November, 2000, it was resolved to increase the Common shares
  to 100,000,000, however by the balance sheet date the Company had not yet finalized
  the increase.

. . . 8

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 8
|As At May 31, 2001                         |       

|12. | SHARE CAPITAL (Continued):                                      
|--- | ----------------------------------------------------------------
|    |                                                                 
|    | Issued Share Capital- Common-
        consists of the following:

No. ofFOR CASH:
      Ref.
      Shares
      Price
      AmountTotal Issued for Cash at May 31, 1999
      
      18,558,174
      
      5,036,788Year Ended May 31, 2000:Stock option exercised
      A
      75,000
      0.34
      25,500Total Issued for Cash at May 31, 2000and
        May 31, 2001
      
      18,633,174
      
      5,062,288FOR MINERAL PROPERTY INTERESTS:Total Issued for Mineral Propertyto May 31, 2000
        and May 31, 2001
      
      2,497,359
      
      604,659FOR DEBT, EXTENSIONS AND SUBSIDIARY:Total Issued for Debt, Extensions and Subsidiaryto
        May 31, 2000 and May 31, 2001
      
      1,902,705
      
      353,480TOTAL SHARES ISSUED AT MAY 31, 2000and
        MAY 31, 2001
      
      23,033,238
      
      6,020,427


| | A. | On May 13, 2000, Brian Cherry, a former Director, exercised
        a Stock Option for 75,000 shares at $ 0.34 per share to net the treasury
        $ 25,500.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------

Outstanding Commitments to Issue Shares:

At May 31, 2001, the following commitments
  to issue shares were outstanding:

| |                         | No. of    |       | Expiry     
| | ----------------------- | --------- | ----- | -----------
| | Type of Commitment      | Shares    | Price | Date       
| | Senior Officer's Option | 50,000    | 0.20  | Feb. 27/02 
| | Senior Officer's Option | 50,000    | 0.15  | Nov. 16/03 
| | Director's Option       | 500,000   | 0.15  | Mar. 17/04 
| | Director's Option       | 1,000,000 | 0.24  | Sept. 12/05
| | Employee's Option       | 25,000    | 0.24  | Oct. 11/05 
| |                         | 1,625,000 |       |            

On September 12, 2000, the Company granted
  a Directors stock option to J. Robertson for 1,000,000 shares at a price
  of $ 0.24 for a period of five years.

On October 11, 2000, the Company granted
  a Employees stock option to S. Foster for 25,000 shares at a price of
  $ 0.24 for a period of five years.

. . . 9

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 9
|As At May 31, 2001                         |       

|13. | RELATED PARTY TRANSACTIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | International Diamond Syndicate Ltd. (IDS) is a 40%
        subsidiary of Teryl, formed to conduct joint mineral property exploration
        and development with Berkshire International Mining Ltd. and Geodex Minerals
        Ltd. See Notes 3 and 4 above re advances to and investment in IDS written
        down in 2000.                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Reg Technologies Inc. is a public company which shares
        office facilities and staff, several directors and participates in Joint
        Ventures with the Company. See Note 7A in respect to the property that
        is operated as a Joint Venture with Reg. See Note 10 re advances to or
        from Reg.                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | SMR Investments Ltd. is a private company which is controlled
        by an officer of the Company who has significant influence on the affairs
        of the companies. Under a management contract with SMR Investments Ltd.
        the Company agreed to pay $ 2,500 per month for management services. The
        Company paid to SMR management fees totalling $ 30,000 and $ 18,000 for
        secretarial services and rent during the current year (2000 - $ 30,000
        and $ 18,000 respectively). See Note 7A regarding mineral properties transactions
        with SMR. See Note 10 re advances from SMR.                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | The Company holds 15,880 shares (2000 -85,780 shares)
        of LinuxWizardry System Inc. (formerly Flame Petro-Minerals Corp.), a
        public company controlled by an officer of the Company, as described in
        Note 4. See Note 3 re advances to LinuxWizardry.                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | Consulting and legal services fees amounting to $ 1,965
        (2000 - $ 3,634) were paid to Nodanis Consulting, operated by D. Moroney,
        the former Secretary of the company. Administration consulting fees of
        $ 3,015 (2000 - $ Nil) were paid to J. Lorette, Vice-President of the
        company.                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|14. | SUBSEQUENT EVENTS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | See the "Outstanding Commitments to Issue Shares" section
        at the end of Note 12 for information on commitments to issue shares after
        the balance sheet date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    | On September 5, 2001, the Companys 40% Subsidiary,
        International Diamond Syndicate Ltd. along with Major General Resources
        Ltd. and Southern Era Resources Ltd. (MIS Group), entered into an mineral
        property option agreement with BHP Diamonds Inc. on the MIS Groups
        Misty Lake claims located in the Northwest Territories. BHP will perform
        specific exploration work on the property and if a new discovery of kimberlite
        is detected, BHP will be immediately vested with a 35% interest in the
        property. BHP may increase its interest up to 51% by completing a 200
        tonne mini-bulk sample test on any one kimberlite for diamond content
        and valuation.

|15. | TERYL, INC. TRANSACTIONS (100% US Subsidiary):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In April, 1998, Teryl, Inc.reorganized and increased
        its authorized share capital from 1,000 common shares to 100,000,000 common
        shares, in preparation for taking the company public on US exchanges.
        Teryl Resources Corp. was issued 6,500,000 shares of Teryl, Inc. and held
        100% of the shares at May 31, 2001.                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | In 1998, Teryl, Inc. offered a private placement for
        up to 1,000,000 shares at a price of $ 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 have decided to have Teryl Resources
        Corp. apply for eligibility to trade on US exchanges rather than Teryl,
        Inc. The subscribers have indicated willingness to accept shares of Teryl
        Resources Corp. in replacement, subject to regulatory approvals.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    | See Note 2 re consolidation of Teryl, Inc. within these
        statements and see Notes 7C & 7D regarding mineral claim exploration
        and development and option agreements.                                                                                                                                                                                                                                                                                                                                                                    

. . . 10



---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 10
|As At May 31, 2001                         |        

|16. | 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 financial statements from
        measurement principles, practices and methods accepted in the United States
        (US GAAP) are described and quantified below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | 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 exploration costs are expensed as
        incurred. Once a final feasibility study has been completed, additional
        costs incurred to bring the mine into production are capitalized as development
        costs. Costs incurred to access ore bodies identified in the current mining
        plan after production has commenced are considered production costs and
        are expensed as incurred. Costs incurred to extend production beyond those
        areas identified in the mining plan where additional reserves have been
        established are deferred as development costs until the incremental reserves
        are produced. Capitalized costs are amortized using the unit-of-production
        method over the estimated life of the ore body based on proven and probable
        reserves. Accordingly, there were material differences between Canadian
        GAAP and US GAAP for the years ended May 31, 2001, 2000 and 1999.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | 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, 2001, 2000 and 1999.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Under US GAAP, Statement of Financial Accounting Standard
        No. 123, Accounting for Stock-Based Compensation (SFAS
        123) encourages companies to establish a fair market value based
        method of accounting for stock-based compensation plans. Accounting Principles
        Board Opinion No. 25 (APB 25) permits the measurement of compensation
        cost for stock options as the excess, if any, of the quoted market price
        of the Companys stock at the date of grant over the option price.
        The Company has chosen to account for stock-based compensation under APB
        25.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company accounts for stock-based compensation, including
        stock options and warrants, using the intrinsic 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 outside consultants. Under this method, the intrinsic value
        of the stock options and warrants at the date of grant is recorded as
        an expense, 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, 2001, 2000 and 1999.                                                                                                                                                                                                                                                                                                                                                                       

. . . 11

---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 11
|As At May 31, 2001                         |        

|16. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | 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 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 SFAS 115, for the
        years ended May 31, 2001, 2000 and 1999 there were material differences
        between the Canadian GAAP and US GAAP in the Companys investment
        in marketable securities.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | The impact of the differences between Canadian GAAP
        and US GAAP on the consolidated balance sheets would be as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| |                            |  |           |  |  | May
      31, 2001 |   |  |          |  
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | -------- | -
| |                            |  | Balance   |  |  |                    |   |  | Balance  |  
| |                            |  | Canadian  |  |  |                    |   |  | US       |  
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP     |  
| |                            |  | $         |  |  | $                  |   |  | $        |  
| | Current assets             |  | 16,654    |  |  |                   |   |  | 16,654   |  
| | Investments                |  | 4,026     |  |  | (1,028             | ) |  | 2,998    |  
| | Office Equipment           |  | 6,154     |  |  |                   |   |  | 6,154    |  
| | Oil and Gas Well Interests |  | 3,027     |  |  | (3,027             | ) |  |         |  
| | Mineral Property Interests |  | 156,699   |  |  |                   |   |  | 156,699  |  
| | Deferred Expenditures      |  | 1,546,874 |  |  | (1,546,874         | ) |  |         |  
| |                            |  | 1,733,434 |  |  | (1,550,929         | ) |  | 182,505  |  
| |                            |  |           |  |  |                    |   |  |          |  
| | Current liabilities        |  | 890,084   |  |  |                   |   |  | 890,084  |  
| | Shareholders Equity       |  | 843,350   |  |  | (1,550,929         | ) |  | (707,579 | )
| |                            |  | 1,733,434 |  |  | (1,550,929         | ) |  | 182,505  |  

| |                            |  |           |  |  | May
      31, 2000 |   |  |          |  
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | -------- | -
| |                            |  | Balance   |  |  |                    |   |  | Balance  |  
| |                            |  | Canadian  |  |  |                    |   |  | US       |  
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP     |  
| |                            |  | $         |  |  | $                  |   |  | $        |  
| | Current assets             |  | 18,894    |  |  |                   |   |  | 18,894   |  
| | Investments                |  | 21,742    |  |  | 146,657            |   |  | 168,399  |  
| | Office Equipment           |  | 7,546     |  |  |                   |   |  | 7,546    |  
| | Oil and Gas Well Interests |  | 9,648     |  |  | (9,648             | ) |  |         |  
| | Mineral Property Interests |  | 168,413   |  |  |                   |   |  | 168,413  |  
| | Deferred Expenditures      |  | 1,039,405 |  |  | (1,039,405         | ) |  |         |  
| |                            |  | 1,265,648 |  |  | (902,396           | ) |  | 363,252  |  
| |                            |  |           |  |  |                    |   |  |          |  
| | Current liabilities        |  | 491,142   |  |  |                    |   |  | 491,142  |  
| | Shareholders Equity       |  | 774,506   |  |  | (902,396           | ) |  | (127,890 | )
| |                            |  | 1,265,648 |  |  | (902,396           | ) |  | 363,252  |  

. . . 12



---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 12
|As At May 31, 2001                         |        

|16. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Continued)
|--- | -----------------------------------------------------------------------------------------------------------

| |                            |  |           |  |  | May
      31, 1999 |   |  |         | 
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | ------- | 
| |                            |  | Balance   |  |  |                    |   |  | Balance | 
| |                            |  | Canadian  |  |  |                    |   |  | US      | 
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP    | 
| |                            |  | $         |  |  | $                  |   |  | $       | 
| | Current assets             |  | 374,728   |  |  |                   |   |  | 374,728 | 
| | Investments                |  | 40,295    |  |  | (15,269            | ) |  | 25,026  | 
| | Office Equipment           |  | 9,432     |  |  |                   |   |  | 9,432   | 
| | Oil and Gas Well Interests |  | 17,180    |  |  | (17,180            | ) |  | -       | 
| | Mineral Property Interests |  | 274,781   |  |  |                   |   |  | 274,781 | 
| | Deferred Expenditures      |  | 1,163,800 |  |  | (1,163,800         | ) |  | -       | 
| |                            |  | 1,880,216 |  |  | (1,196,249         | ) |  | 683,967 | 
| |                            |  |           |  |  |                    |   |  |         | 
| | Current liabilities        |  | 555,541   |  |  |                    |   |  | 555,541 | 
| | Shareholders Equity       |  | 1,324,675 |  |  | (1,196,249         | ) |  | 128,426 | 
| |                            |  | 1,880,216 |  |  | (1,196,249         | ) |  | 683,967 | 

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

| |                                               |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | --------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                               |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                               |  | 2001       |   |  | 2000       |   |  | 1999       |  
| |                                               |  | $          |   |  | $          |   |  | $          |  
| | Net income (loss) for the year, Canadian GAAP |  | 68,843     |   |  | (575,669   | ) |  | (98,426    | )
| | Adjustments                                   |  |            |   |  |            |   |  |            |  
| | Amortization of natural
      gas well        |  | 6,621      |   |  | 7,533      |   |  | 14,649     |  
| | Deferred exploration costs                    |  | (507,469   | ) |  | 124,395    |   |  | (378,331   | )
| | Net loss for the year, US GAAP                |  | (432,005   | ) |  | (443,741   | ) |  | (462,108   | )
| |                                               |  |            |   |  |            |   |  |            |  
| | Basic and diluted loss per share, US GAAP     |  | (0.02      | ) |  | (0.02      | ) |  | (0.02      | )
| |                                               |  |            |   |  |            |   |  |            |  
| | Weighted average number of common shares      |  |            |   |  |            |   |  |            |  
| | outstanding, basic and diluted                |  | 23,033,238 |   |  | 22,961,937 |   |  | 21,420,046 |  

The Companys comprehensive loss
  is comprised as follows:

| |                                                               |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | ------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                               |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                                               |  | 2001       |   |  | 2000       |   |  | 1999       |  
| |                                                               |  | $          |   |  | $          |   |  | $          |  
| | Net loss for the year, US GAAP                                |  | (432,005   | ) |  | (443,741   | ) |  | (462,108   | )
| | Change in net unrealized gains (losses) on available-for-sale |  |            |   |  |            |   |  |            |  
| | investments                                                   |  | (147,685   | ) |  | 161,926    |   |  | 5,844      |  
| | Comprehensive income (loss)                                   |  | (579,690   | ) |  | (281,815   | ) |  | (456,264   | )

. . . 13

---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 13
|As At May 31, 2001                         |        

|16. | 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:

| |                                                                      |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | -------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                                      |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                                                      |  | 2001       |   |  | 2000       |   |  | 1999       |  
| |                                                                      |  | $          |   |  | $          |   |  | $          |  
| | Cash flows used in operating activities, Canadian
      GAAP         |  | (120,525   | ) |  | (110,963   | ) |  | (83,625    | )
| | Deferred exploration costs                                           |  | (507,469   | ) |  | (202,333   | ) |  | (378,331   | )
| | Cash flows used in operating activities, US
      GAAP               |  | (627,994   | ) |  | (313,296   | ) |  | (461,956   | )
| | Cash flows (used in) provided by financing activities, Canadian      |  |            |   |  |            |   |  |            |  
| | GAAP and US GAAP                                                     |  | 19,666     |   |  | (9,672     | ) |  | 544,202    |  
| | Cash flows provided by (used in) investing activities, Canadian      |  |            |   |  |            |   |  |            |  
| | GAAP                                                                 |  | 90,031     |   |  | 46,506     |   |  | (380,177   | )
| | Deferred exploration costs                                           |  | 507,469    |   |  | 202,333    |   |  | 378,331    |  
| | Cash flows provided by (used in) investing
      activities, US GAAP |  | 597,500    |   |  | 248,839    |   |  | (1,846     | )
| | (Decrease) Increase in cash for the year                             |  | (10,828    | ) |  | (74,129    | ) |  | 80,400     |  
| | Cash, beginning of the year                                          |  | 11,725     |   |  | 85,854     |   |  | 5,454      |  
| | Cash, end of the year                                                |  | 897        |   |  | 11,725     |   |  | 85,854     |  

. . . 14

---

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)


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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)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)4.3
      Management Agreement dated December 1, 1994 between
        Teryl Resources Corp. and SMR Investments Ltd.
      (1)8.1
      List of Subsidiaries
      (3)12.1
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 
        (John G. Robertson)
      (3)12.2
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        302 of the Sarbanes-Oxley Act of 2002 
        (Susanne Robertson)
      (3)13.1
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 
        (John G. Robertson)
      (3)13.2
      Certification pursuant
        to Title 18, United States Code, Section 1350 as adopted pursuant to Section
        906 of the Sarbanes-Oxley Act of 2002 
        (Susanne Robertson)
      (3)14.1
      Consent of June Fitzmartyn
      (3)


| | (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) | attached hereto.                                                                                                                                                       

GLOSSARY OF MINING TERMS

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

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

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

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

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.

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

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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.

Gold resource  see geological or mineral resource

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.

Graphite: A allotropic form of carbon found in nature

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)

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

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

Measured resourcemeans 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.

net profit interest (NPI)  effectively a royalty based
on the net profits generated after recovery of all costs

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

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

opt troy ounces per short ton

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.

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

proven reservemeans 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.

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

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

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


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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 this transitional report on its behalf.

TERYL RESOURCES CORP. REGISTRANT

|Dated: July 31, 2007 | By: | /s/
      John G. Robertson   
|-------------------- | --- | ------------------------------
|                     |     | John G. Robertson             
|                     |     | Chairman of the Board/Director

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