UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
20-F



|[  ] |  | REGISTRATION
    STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|---- |  | --------------------------------------------------------------------------------------------------
|     |  |                                                                                                   
|OR   |  |                                                                                                   
|     |  |                                                                                                   
|[X]  |  | ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|     |  |                                                                                                   
|     |  | For
    the fiscal year ended May 31, 2013                                                        
|     |  |                                                                                                   
|OR   |  |                                                                                                   
|     |  |                                                                                                   
|[  ] |  | TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|     |  |                                                                                                   
|OR   |  |                                                                                                   
|     |  |                                                                                                   
|[  ] |  | SHELL
    COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   



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 Way, Richmond, British Columbia V7A 5E9, Canada

(Address
of principal executive offices)



John
Robertson, President, jr@ihiway.com

240-11780
Hammersmith Way, Richmond, British Columbia V7A 5E9, CanadaPhone: 604-278-5996; Fax 604-278-3409

(Name,
Telephone, E-Mail and/or Facsimile number and Address of Company Contact Person)



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



|Title
    of each class |  | Name
    of each exchange on which registered
|----------------------- |  | ---------------------------------------------
|None                    |  | None                                         



Securities
registered or to be registered pursuant to Section 12(g) of the Act. Common Shares, no par value



Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act. None



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



70,545,605
common shares outstanding at May 31, 2013



Indicate
by check mark if the registrant is a well-known seasoned issuer. [  ] Yes [X] No



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



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. [X] Yes [  ] No



Indicate
by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). [  ]
Yes [X] No



Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.



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



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



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



If
“Other” has been checked in response to previous questions, indicate by check mark which financial statement item
the registrant has elected to follow. [  ] Item 17 [  ] Item 18



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



Unless
otherwise indicated, all references herein are expressed in Canadian dollars and United States currency is stated as “US$”



THIS
SUBMISSION SHOULD BE CONSIDERED IN CONJUNCTION WITH PREVIOUSLY FILED FORMS 20-F AND 6-K. THE AUDITED FINANCIAL STATEMENTS AND
NOTES THERETO ATTACHED ARE AN INTEGRAL PART OF THIS SUBMISSION.


















TABLE
OF CONTENTS



|GLOSSARY OF TERMS        | 4
|------------------------ | -
|GLOSSARY OF MINING TERMS | 5
|                         |  
|PART I                   |  
|ITEM
    1.              |  
|ITEM
    2.              |  
|ITEM
    3.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|ITEM
    4.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|ITEM
    4A.             |  
|ITEM
    5.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|E.                       |  
|F.                       |  
|G.                       |  
|ITEM
    6.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|E.                       |  
|ITEM
    7.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|ITEM
    8.              |  
|A.                       |  
|B.                       |  
|ITEM
    9.              |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|E.                       |  
|F.                       |  
|ITEM
    10.             |  
|A.                       |  
|B.                       |  
|C.                       |  
|D.                       |  
|E.                       |  
|F.                       |  
|G.                       |  
|H.                       |  
|I.                       |  
|ITEM
    11.             |  
|ITEM
    12.             |  



2







|PART II       |  |                                                                             |   
|------------- |  | --------------------------------------------------------------------------- | --
|ITEM
    13.  |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                             | 48
|ITEM
    14.  |  | MATERIAL MODIFICATION TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 48
|ITEM
    15.  |  | CONTROLS AND PROCEDURES                                                     | 48
|A.            |  | Disclosure Controls and Procedures                                          | 48
|B.            |  | Management’s Annual Report on Internal Control Over Financial Reporting     | 49
|C.            |  | Attestation Report of the Registered Public Accounting Firm                 | 49
|D.            |  | Changes in Internal Control Over Financial Reporting                        | 49
|ITEM
    16A. |  | AUDIT COMMITTEE FINANCIAL EXPERT                                            | 50
|ITEM
    16B. |  | CODE OF ETHICS                                                              | 50
|ITEM
    16C. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      | 50
|ITEM
    16D. |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  | 51
|ITEM
    16E. |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      | 51
|ITEM
    16F. |  | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT                                | 51
|ITEM
    16G. |  | CORPORATE GOVERNANCE                                                        | 51
|              |  |                                                                             |   
|PART III.     |  |                                                                             |   
|ITEM
    17.  |  | Financial Statements                                                        | 51
|ITEM
    18.  |  | Financial Statements                                                        | 53
|ITEM
    19.  |  | Exhibits                                                                    | 53





3







GLOSSARY
OF TERMS



|BCBCA            | Business
    Corporations Act (British Columbia)        
|---------------- | --------------------------------------------------------
|Board            | Board
    of Directors of our company                   
|Exchange
    Act | Securities
    Exchange Act of 1934                     
|GAAP             | Canadian
    Generally Accepted Accounting Principles   
|IFRS             | International
    Financial Reporting Standards         
|OTC
    BB       | Over-the-Counter
    Bulletin Board in the United States
|SEC              | Securities
    and Exchange Commission                  
|TSX.V            | TSX
    Venture Exchange                                



4







GLOSSARY
OF MINING TERMS



|Alluvial                        | A
    term used to identify particular types of, or minerals found associated with, deposits made by flowing water, such as alluvial
    gold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Amphibolite                     | Crystalloblastic
    rock consisting mainly of amphibole and plagioclase with little or no quartz. As the content of quartz increases, the rock
    grades into hornblende plagioclase gneiss.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Assay                           | A
    precise and accurate analysis of the metal contents in an ore or rock sample.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Au                              | Gold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Dynamothermal
    metamorphism  | A
    form of regional metamorphism that acts on rocks caught between two converging plates and is initially caused by directed
    pressure from the plates, which causes some of the rocks to rise and others to sink, sometimes by tens of kilometers. The
    rocks that fall then experience further dynamothermal metamorphism, this time caused by heat from the Earth’s interior and
    lithostatic pressure from overlying rocks Eclogite: A coarse-grained, deep-seated ultramafic rock, consisting essentially
    of garnet (almandine-pyrope) and pyroxene (omphacite). Rutile, kyanite, and quartz are typically present.                                            
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Felsic                          | A
    mnemonic adjective derived from (fe) for feldspar, (l) for lenad or feldspathoid, and (s) for silica, and applied to light-colored
    rocks containing an abundance of one or all of these constituents.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Fracture                        | The
    general term to include any kind of discontinuity in a body of rock if produced by mechanical process such as shear stress
    or tensile stress.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Gpt                             | Grams
    per metric tonne.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Gold
    deposit                | Means
    a mineral deposit mineralized with gold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Granitic                        | Pertaining
    to or composed of granite.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Greenschis                      | Schistose
    metamorphic rock whose green color is due to the presence of chlorite, epidote, or actinolite.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Intrusive                       | Cuts
    across (is intrusive into).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Limonitically                   | Consisting
    of or resembling limonite.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Lithologies                     | The
    character of a rock described in terms of its structure, color, mineral composition, grain size, and arrangement of its component
    parts; all those visible features that in the aggregate impart individuality to the rock.                                                                                                                                                                                                                                                                                                                                                                                                                                             
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Lithophile                      | Said
    of an element that is concentrated in the silicate rather than in the metal or sulfide phases of meteorites. Such elements
    concentrate in the Earth’s silicate crust in Goldschmidt’s tripartite division of elements in the solid Earth.                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mafic                           | Pertaining
    to or composed dominantly of the ferromagnesian rock-forming silicates; said of some igneous rocks and their constituent minerals.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mineral
    claimormining claim | The
    portion of mining ground held under law by a claimant                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Measured
    resource           | That
    part of a mineral resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established
    that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters,
    to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed
    and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as
    outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Mineralization                  | Implication
    that the rocks contain sulphide minerals and that these could be related to ore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|opt                             | Troy
    ounces per short ton.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|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.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|                                |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|Petrographic                    | Pertaining
    to the study of rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



5







|Placer                            | A
    place where gold is obtained by washing; an alluvial or glacial deposit, as of sand or gravel, containing particles of gold
    or other valuable minerals including gemstones.                                                                                                                                                 
|--------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Pluton                            | A
    body of medium - to coarse-grained igneous rock that formed beneath the surface by crystallization of a magma.                                                                                                                                                                                                                  
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Prospect                          | An
    area prospective for economic minerals based on geological, geophysical, geochemical and other criteria.                                                                                                                                                                                                                       
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Protoliths                        | Refers
    to the precursor rock of a given lithology.                                                                                                                                                                                                                                                                                
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Proven
    reserve                | The
    economically mineable part of a measured resource demonstrated by at least a preliminary feasibility study. This study must
    include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate,
    at the time of reporting, that economic extraction is justified.
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Reserve                           | That
    part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.                                                                                                                                                                                            
|                                  |                                                                                                                                                                                                                                                                                                                                       
|Reverse
    circulationorRC drill | A
    large machine that produces a continuous chip sample of the rock or material being drilled.                                                                                                                                                                                                                                     
|                                  |                                                                                                                                                                                                                                                                                                                                       
|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 tonne     
|---------- | ---------------------- | ---------------------------- | ------------------
|1
    yard | =
    0.9144 meter     | 2,000
    pounds/1 short ton | =
    0.907 tonne 
|1
    acre | =
    0.405 hectare    | 1
    troy ounce             | =
    31.103 grams



6







PART
I



|ITEM
1. |  | IDENTITY
                                                                                            OF DIRECTORS, SENIOR MANAGEMENT AND
                                                                                            ADVISERS
|------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|ITEM
2. |  | OFFER
                                                                                            STATISTICS AND EXPECTED TIMETABLE
|------- |  | -----------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|ITEM
3. |  | KEY
                                                                                            INFORMATION
|------- |  | -----------------------------------------------------------------------------------------------------------



|A. |  | Selected
                                                                                                                                                                                                                                             Financial
                                                                                                                                                                                                                                             Data
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This
data has been derived from our audited financial statements, which have been prepared in accordance with International Financial
Reporting Standards (“IFRS”) for the years ended May 31, 2013, 2012 and 2011, and accounting principles generally
accepted in Canadian GAAP and reconciled for material measurement differences to U.S. GAAP for the years ended May 31, 2010 and
2009. Set forth in the following table are selected financial data with respect to our financial condition and results of operation
for the years ended May 31, 2013, 2012, 2011, 2010, and 2009.



The
selected financial and operating information as at May 31, 2013, 2012, 2011, 2010, and 2009 should be read in conjunction with
the audited consolidated financial statements and notes thereto included elsewhere herein and in conjunction with Item 5 - “Operating
and Financial Review and Prospects”. The selected financial data as at and for these periods have been extracted from,
and are qualified by reference to the audited consolidated financial statements included herein at Item 17.



|Fiscal
    Years ended May 31,                   
|-------------------------------------------------
|                                                 
|Revenues                                         
|Total
    Assets                                 
|Net
    Assets                                   
|Net
    Loss                                     
|Net
    Loss per Share                           
|Share
    capital                                
|Weighted
    average number of shares outstanding



7







|Fiscal
    Years ended May 31,                     
|---------------------------------------------------
|                                                   
|Cash
    used in operating activities              
|Cash
    provided by (used in) financing activities
|Cash
    provided by (used in) investing activities



Exchange
Rates



Unless
otherwise indicated, all monetary references herein are denominated in Canadian Dollars. References to “$” or “Dollars”
are to Canadian Dollars and references to “US$” are to United States Dollars.



The
following table sets forth, for the periods indicated, the exchange rates based on the noon buying rate with the Federal Reserve
Bank of New York for cable transfers in Canadian dollars. Such rates are the number of Canadian dollars per one (1) US dollar.



|Year
    Ended May 31,
|----------------------
|                      
|Average
    for Period



The
high and low exchange rates for each month during the previous six months are as follows:



|                    |  | Month
    Ended |       
|------------------- |  | --------------- | ------
|                    |  | August          |       
|                    |  | 2013            |       
|High
    for Period |  | $               | 1.0534
|Low
    for Period  |  | $               | 1.0298



On
May 31, 2013, the exchange rate was $1.0337 for US$1.00. As of September 27, 2013, the exchange rate was CAD$1.0317 for US$1.00.



|B. |  | Capitalization
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Indebtedness
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|C. |  | Reasons
                                                                                                                                                                                                                                             for
                                                                                                                                                                                                                                             the
                                                                                                                                                                                                                                             Offer
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Use
                                                                                                                                                                                                                                             of
                                                                                                                                                                                                                                             Proceeds
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|D. |  | Risk
                                                                                                                                                                                                                                             Factors
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following risk factors should be carefully considered in evaluating our business because such factors currently may have a significant
impact on our business, operating results and financial condition.



8







Risk
Factors Related to Our Business



An
investment in our securities is highly speculative and involves a high degree of risk and should only be made by investors who
can afford to lose their entire investment.



Prior
to making an investment decision, investors should consider the investment risks set forth below, which are in addition to the
usual risks associated with an investment in a business at an early stage of development. Our directors consider the risks set
forth below to be the most significant to potential investors in our company, but not all of the risks associated with an investment
in securities of our company. If any of these risks materialize into actual events or circumstances or other possible additional
risks and uncertainties of which the directors are currently unaware or which they consider not to be material in connection with
our business, actually occur, our assets, liabilities, financial condition, results of operations (including future results of
operations), business and business prospects, are likely to be materially and adversely affected. In such circumstances, the price
of our securities could decline and investors may lose all or part of their investment.



Additional
Capital Requirements



We
have and may continue to have capital requirements in excess of our currently available resources. In the event our plans change,
our assumptions change or prove inaccurate or our capital resources in addition to projected cash flow, if any, prove to be insufficient
to fund operations, we could be required to seek additional financing sooner than currently anticipated. To the extent that any
such financing involves the sale of our equity securities, the interests of our then existing shareholders could be substantially
diluted. There can be no assurance that such financing will be available to us on terms acceptable to us, if at all.



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



The
development of our properties depends on our ability to obtain additional required financing or obtaining joint venture partners.
As noted in our audited consolidated financial statements for the year ended May 31, 2013, we have incurred operating losses of
$608,659 for the year ended May 31, 2013 and have an accumulated deficit of $12,562,178 at May 31, 2013. Our ability to continue
as a going concern is dependent on the attainment of profitable operations to meet our liabilities as they become payable and
satisfy working capital and operating needs.



Issuance
of additional shares would dilute the interests of existing shareholders.



Effective
June 12, 2013, we amended our Article and increased our authorized common shares from 100,000,000 to unlimited and preferred shares
from 5,000,000 to unlimited. On September 30, 2013, we had 70,251,605 common shares issued and outstanding and no preferred shares
issued. Our Board has the power to issue additional shares and may in the future issue shares to acquire products, equipment or
properties, or for other corporate purposes. Any additional issuance by us from our authorized but unissued share capital would
have the effect of diluting the interest of existing shareholders.



We
expect to incur losses for the foreseeable future.



We
expect to incur 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.



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



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



9







Certain
of our directors and officers are also directors and/or officers and/or shareholders of potential competitors, giving rise to
potential conflicts of interest.



Several
of our directors and officers are also directors, officers or shareholders of other companies. In particular, Mr. Robertson, Ms.
El-Khatib, Ms. Robertson and Ms. Jane He are directors and/or officers of Linux Gold Corp., a public natural resource exploration
company that shares office space and administrative staff with our company. We entered into an agreement with Linux Gold Corp.
whereby we purchased 50% of the Fish Creek mineral claims. Some of our directors and officers are engaged and will continue to
be engaged in the search for additional business opportunities on behalf of other corporations, and situations may arise where
these directors and officers will be in direct competition with us. Such associations may give rise to conflicts of interest from
time to time. Such a conflict poses the risk that we may enter into a transaction on terms which could place us in a worse position
than if no conflict existed. Conflicts, if any, will be dealt with in accordance with the relevant provisions of the BCBCA. Our
Board has resolved that any transaction involving a related party is required to be reviewed and approved by our Audit Committee.
Our directors are required by law to act honestly and in good faith with a view to our best interests and to disclose any interest
which they may have in any project or opportunity in respect of which we are proposing to enter into a transaction.



Loss
of any directors or officers.



The
loss of any directors or officers would adversely affect our results. We are wholly dependent at present upon the personal efforts
and abilities of our officers and directors, who exercise control over our day-to-day affairs. The loss of any director or officer
could cause significant delays in our carrying on business or hinder our ability to continue carrying on our business.



Officers
and directors may be indemnified against certain securities liabilities.



Under
the BCBCA we can indemnify any director, officer, agent and/or employee as to those liabilities and on those terms and
conditions as are specified in the BCBCA. Further, we may purchase and maintain insurance on behalf of any such persons
whether or not we have the power to indemnify such person against the liability insured. The foregoing could result in substantial
expenditures by us and prevent any recovery from such officers, directors, agents and employees for losses incurred by us as a
result of their actions. We have been advised that in the opinion of the SEC, indemnification is against public policy as expressed
in the U.S. Securities Act, and is, therefore, unenforceable.



Enforcement
of Civil Liabilities



As
Canadian citizens and residents, our directors and officers may not be subject to U.S. legal proceedings, a result of which is
that recovery on judgments issued by U.S. courts may be difficult or impossible. While reciprocal enforcement of judgment legislation
exists between Canada and the U.S., our insiders may have defenses available to avoid, in Canada, the effect of U.S. judgments
under Canadian law, making enforcement difficult or impossible. Our management may not have any personal assets available in the
U.S. to satisfy judgments of U.S. courts. Therefore, our shareholders in the United States may have to avail themselves of remedies
under Canadian corporate and securities laws for perceived oppression, breach of fiduciary duty and like legal complaints. Canadian
law may not provide for remedies equivalent to those available under U.S. law. A judgment of a U.S. court predicated solely upon
such civil liabilities would probably be enforceable in Canada by a Canadian court if the U.S. court in which the judgment was
obtained had jurisdiction, as determined by the Canadian court, in the matter. There is substantial doubt whether an original
action could be brought successfully in Canada against any of such persons or our company predicated solely upon such civil liabilities
based on U.S. federal securities laws.



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



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



10







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



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



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



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



Recent
Disruptions in International Credit Markets and Other Financial Systems and Deterioration of Global Economic Conditions



Since
2007, the U.S. credit markets experienced serious disruption due to a deterioration in residential property values, defaults and
delinquencies in the residential mortgage market and a decline in the value and credit quality of mortgage-backed securities.
Other adverse events include delinquencies in non-mortgage consumer credit and a general decline in consumer confidence. These
conditions worsened in 2008 and continued in 2009, contributing to reduced confidence in credit and financial markets around the
world and the collapse of, and governmental intervention in, major financial institutions. Asset price volatility and solvency
concerns have increased, and there has been less liquidity, a widening of credit spreads, a lack of price transparency, increased
credit losses and tighter credit conditions. Notwithstanding various government actions, concerns about the general condition
of the capital markets, financial instruments and financial institutions persist, and stock markets have declined substantially.



These
market disruptions have had a significant material adverse impact on companies in many sectors of the economy and have limited
access to capital and credit. These disruptions could, among other things, make it more difficult for us to obtain, or increase
our cost of obtaining, financing for our operations. Failure to raise capital when needed or on reasonable terms may have a material
adverse effect on our business, financial condition and results of operations.



Additionally,
these factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary,
which may result in impairment losses. If these factors continue, our operations could be adversely impacted and the trading price
of our common shares may be adversely affected.



We
are also exposed to liquidity risks in meeting our operating and capital expenditure requirements in instances where cash positions
are unable to be maintained or appropriate financing is unavailable. These factors may impact our ability to obtain loans and
other credit facilities in the future and on favourable terms. If these increased levels of volatility and market turmoil continue,
our operations could be adversely impacted and the trading price of the common shares could be adversely affected.



Risk
Factors Related to the Natural Resource Industry



We
face risks related to the exploration and potential development of our properties.



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



11







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



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



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



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



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



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



The
prices of precious and base minerals and metals fluctuate widely and may not produce enough revenue to cover our costs.



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



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



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



12







Our
properties may be subject to unregistered agreements, transfers, or claims and title may be adversely affected.



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



Mineral
operations are subject to government and regulatory approvals.



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



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



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



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



Uncertainties
and Risks Relating to Our Common Shares



The
Market Price of our Common Shares May Be Subject to Wide Price Fluctuations



The
market price of our common shares may be subject to wide fluctuations in response to many factors, including variations in our
operating results, divergence in financial results from analysts’ expectations, changes in earnings estimates by stock market
analysts, changes in our business prospects, general economic conditions, changes in mineral reserve or resource estimates, results
of exploration, changes in results of mining operations, legislative changes and other events and factors outside of our control.
In addition, stock markets from time to time have experienced extreme price and volume fluctuations, which, as well as general
economic and political conditions, could adversely affect the market price for our common shares.



We
are unable to predict whether substantial amounts of common shares will be sold in the open market. Any sales of substantial amounts
of common shares in the public market or the perception that such sales might occur, could materially and adversely affect the
market price of our common shares.



We
may be a Passive Foreign Investment Company, which may result in material adverse US federal income tax consequences to US investors.



13







Investors
in our common shares that are U.S. taxpayers should be aware that we may be a passive foreign investment company. under Section
1297(a) of the U.S. Internal Revenue Code (a “PFIC”). If we are or become a PFIC, generally any gain recognized
on the sale of our common shares and any excess distributions (as specifically defined) paid on our common shares must be ratably
allocated to each day in a U.S. taxpayer’s holding period for our common shares. The amount of any such gain or excess distribution
allocated to prior years of such U.S. taxpayer’s holding period for our common shares generally will be subject to U.S.
federal income tax at the highest tax applicable to ordinary income in each such prior year, and the U.S. taxpayer will be required
to pay interest on the resulting tax liability for each such prior year, calculated as if such tax liability had been due in each
such prior year.



Alternatively,
a U.S. taxpayer that makes a qualified electing fund (a “QEF”) election with respect to their investment generally
will be subject to U.S. federal income tax on such U.S. taxpayer’s pro rata share of our net capital gain and ordinary earnings,
(as specifically defined and calculated under U.S. federal income tax rules), regardless of whether such amounts are actually
distributed by us. U.S. taxpayers should be aware, however, that there can be no assurance that we will satisfy record keeping
requirements under the QEF rules or that we will supply U.S. taxpayers with required information under the QEF rules, in the event
that we are a PFIC and a U.S. taxpayer wishes to make a QEF election. As a second alternative, a U.S. taxpayer may make a .market-to-market
election. if we are a PFIC and our common shares are .marketable stock (as specifically defined). A U.S. taxpayer that makes a
market-to-market election generally will include in gross income, for each taxable year in which we are a PFIC, an amount equal
to the excess, if any, of (a) the fair market value of our common shares as of the close of such taxable year over (b) such U.S.
taxpayer’s adjusted tax basis in our common shares.



Our
common shares are considered penny stocks and are subject to the Penny Stock Rules



Since
our common shares are not listed on a national stock exchange or quoted on the NASDAQ Market within the United States, trading
in common shares on the OTCBB is subject, to the extent the market price for the common shares is less than $5.00 per share,
to a number of regulations known as the “penny stock rules”. The penny stock rules require a broker-dealer to deliver
a standardized risk disclosure document prepared by the SEC, to provide the customer with additional information including current
bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly
account statements showing the market value of each penny stock held in the customer’s account, and to 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. To the extent these requirements may be applicable they will reduce the level of trading activity in the secondary
market for our common shares and may severely and adversely affect the ability of broker-dealers to sell our common shares.



Our
directors, officers and their related companies collectively own approximately 12.95% of our common shares and, if they
act together, may have the ability to act, or prevent corporate actions, to the detriment of other shareholders.



A
limited number of shareholders collectively own a majority of our common shares and may act, or prevent corporate actions, to
the detriment of other shareholders. These principal shareholders, including members of our board of directors, officers and entities
affiliated with members of our directors and officers, will own more than 11.77% of our outstanding common shares on a diluted
basis. Accordingly, these shareholders may, if they act together, exercise significant influence over all matters requiring shareholder
approval, including the election of a majority of the directors and the determination of significant corporate actions. This concentration
could also have the effect of delaying or preventing a change in control that could be otherwise beneficial to our shareholders.



No
Dividends



The
payment of dividends on our common shares is within the discretion of the Board and will depend upon our future earnings, our
capital requirements, our financial condition, and other relevant factors. We do not currently intend to declare any dividends
on our shares for the foreseeable future.



|ITEM
4. |  | INFORMATION
                                                                                            ON THE COMPANY
|------- |  | ----------------------------------------------------------------------------------------------------------------------



|A. |  | History
                                                                                                                                                         and
                                                                                                                                                         Development
                                                                                                                                                         of
                                                                                                                                                         the
                                                                                                                                                         Company
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our
company was incorporated in British Columbia, Canada, by registration of our memorandum and articles under the British Columbia
Company Act (since replaced by the BCBCA) on May 23, 1980, under the name “Candy Mountain Gold Corporation”.
We changed our name to “Teryl Resources Corp.” effective February 28, 1984.



14







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. Since our inception and during the three fiscal years ending May 31, 2013, our principal
business has been the acquisition, exploration and development of natural resource properties, and the acquisition, drilling and
development of oil and gas property interests. We currently have mineral property interests in Alaska and British Columbia. All
of our mineral properties are in the exploration stage. We are in the exploration stage and equity financing is required to continue
exploration work on our mineral claims and oil and gas interests. As a result of the uncertainty that is typical for an explorative
company there is doubt about our ability to continue as going concern as ultimate success will be based on securing adequate equity
financing and/or the determination of economically recoverable mineral reserves on its mineral property claims or recoveries on
our oil and gas interests.



|B. |  | Business
                                                                                                                                                                                                                                             Overview
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Mineral
and Exploration Properties



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



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



Gil
Venture Claims, Fairbanks Mining District, Alaska



We
owned a 20% interest in 237 claims located in the Gilmore dome area of Fairbanks district of Alaska, known as the Gil Venture
mineral property. Effective December 21, 2011 we executed the Asset Sale and Purchase Agreement to sell all of our 20% interest
in the Gil Venture property to Fairbanks Gold Mining, Inc. (“Fairbanks”). Fairbanks granted to the Company a production
royalty equal to 1% of net smelter returns on all production from the property up to US$15,000,000, after which the royalty is
equal to 0.5% of the net smelter returns on all production from the property. On December 19, 2011 Fairbanks paid the Company
US$2,500,000 as an advance payment of the production royalty. An additional advance payment of royalty of US$1,500,000 will be
paid to the Company upon commencement of commercial production from a mine constructed on the property.



West
Ridge Claims, Fairbanks Mining District, Alaska



We
own a 100% in the West Ridge mineral claims subject to a 1% net smelter return to the State of Alaska.



Fish
Creek Claims, Fairbanks Mining District, Alaska



In
March 2002, we acquired from Linux Gold Corp., a company with common directors, an option to earn a 50% interest in the thirty
Fish Creek claims, located in the Fairbanks Mining District in Alaska, by expending $500,000 US within three years and the issuance
of 200,000 common shares, which shares were issued in December 2002. An additional 100,000 shares were issued in February 2007
in payment for an extension of the date on which expenditures were required to be completed to March 5, 2007, which date was further
extended with amended agreements. On December 1, 2011 the Company and Linux further amended the agreement to include the following
terms:



| | ● | Linux
                                                                                                                                                                                                                         applies
                                                                                                                                                                                                                         $75,000
                                                                                                                                                                                                                         owed
                                                                                                                                                                                                                         by
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         Linux
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         Company
                                                                                                                                                                                                                         towards
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         above
                                                                                                                                                                                                                         stated
                                                                                                                                                                                                                         minimum
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         budget
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         US$500,000;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | The
                                                                                                                                                                                                                         Company
                                                                                                                                                                                                                         has
                                                                                                                                                                                                                         an
                                                                                                                                                                                                                         option
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         pay
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         expenditures
                                                                                                                                                                                                                         for
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         Fish
                                                                                                                                                                                                                         Creek
                                                                                                                                                                                                                         property
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         cash
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         lieu
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         costs
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         Company;
                                                                                                                                                                                                                         and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | The
                                                                                                                                                                                                                         term
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         agreement
                                                                                                                                                                                                                         is
                                                                                                                                                                                                                         extended
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         March
                                                                                                                                                                                                                         5,
                                                                                                                                                                                                                         2013.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Effective
March 5, 2013, we completed the expenditure of $500,000 on exploration on Fish Creek property and cash payments made in lieu of
exploration and the purchase of its interest in the Fish Creek property in accordance with the option agreement.



15







Silverknife
Claims, Liard Mining Division, British Columbia



Pursuant
to agreements between Reg Technologies Inc. (“Reg”), SMR Investments Ltd. (“SMR”), Rapitan Resources Inc.
(“Rapitan”), and Chevron Minerals Ltd. (“Chevron”), the Company acquired a 30% working interest in the
Silverknife mineral claims, situated in the Liard Mining Division in the Province of British Columbia, subject to a 10% Net Profit
Royalty (“NPR”) to Rapitan and a 1% Net Smelter Returns to SMR. On December 21, 2010 the Company purchased the 10%
NPR in the Silverknife property from Rapitan for consideration of 200,000 common shares of the Company issued at a fair value
of $32,000 on January 25, 2011.



Oil
and Gas Properties



Fayette
and Burleson Counties, Texas



We
own a 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.
During the fiscal year ended May 31, 2012, revenues of $24,423 were recorded from the Texas properties compared to revenues of
$32,968 for the fiscal year ended May 31, 2011. The carrying cost of these wells has been completely depleted.



Knox
and Laurel Counties, Kentucky



We
entered into agreements with IAS Energy, Inc., a company with common directors, to purchase 40% interests (subject to 40% net
revenue interests to others), in the Ken Lee #1 natural gas well for $103,045 ($92,500 US), in the Elvis Farris #2 natural gas
well for $104,461 ($92,500 US), and in the Clarence Bright #1 natural gas well for $104,673 ($92,500 US). All three wells are
located in Knox and Laurel Counties, Kentucky. During the year ended May 31, 2009 we wrote off the carrying costs of the wells
to $Nil since the wells have no proven economic reserves.



Description
of the Markets in Which We Compete



We
do not have a market in which we compete, as we operate in an extractive industry. However, the mining industry in which we operate
is highly competitive due to significant and increasing competition for exploration opportunities. Many of our oil and gas exploration
and production competitors business have substantially larger financial resources, staffs and facilities.



Competition



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



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 mining or oil and gas industries.



Seasonality



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



Sources
and Availability of Raw Materials



We
do not have a reliance on raw materials, as we operate in an extractive industry.



Marketing
Strategy



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



16







Dependency
upon Patents/Licenses/Contracts/Processes



Not
applicable.



Material
Effects of Government Regulation



Mineral
Exploration



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



Our
current and anticipated future operations, including further exploration activities, require permits from various state and other
governmental agencies. 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 subject to various types of regulation at the federal, state and local levels. Such regulation includes
the requirement for 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 also subject to various conservation matters, including the regulation of the size of drilling
and spacing units or pro-ration units, the number of wells which may be drilled in a unit, and the unitization or pooling of oil
and gas properties. In this regard, some states allow the forced pooling or integration of tracts to facilitate exploration while
other states rely on voluntary pooling of lands and leases, which may make it more difficult to develop oil and gas properties.
In addition, state conservation laws establish maximum rates of production from oil and gas wells, generally limit the venting
or flaring of gas, and impose certain requirements regarding the ratable purchase of production.



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



Plan
of Operations



Source
of Funds for Fiscal 2014



We
had a working capital of $709,573 at May 31, 2013, compared to working capital of $2,044,468 at May 31, 2012.



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 and through advances from related parties. Although
we intend to continue utilizing these sources, there is no assurance that these sources and methods would continue to be available
in the future.



17







In
accordance with the Asset Purchase and Sale Agreement effective December 21, 2011 the Company sold all of its 20% interest in
the Gil Venture property to Fairbanks. Fairbanks granted to the Company a production royalty equal to 1% of net smelter returns
on all production from the property up to US$15,000,000, after which the royalty is equal to 0.5% of the net smelter returns on
all production from the property. On December 19, 2011 Fairbanks paid the Company US$2,500,000 as an advance payment of the production
royalty. An additional advance payment of royalty of US$1,500,000 will be paid to the Company upon commencement of commercial
production from a mine constructed on the property. The timing and amounts of additional royalty payments are not certain as at
the date of this report.



In
our present circumstances, there exists doubt as to our ability to continue as a going concern, since there is no ongoing source
of revenues and profits capable of sustaining our operating overhead. Over the longer term, we will need to either begin to derive
revenues from our existing resource-based assets, or find and enter into a business which holds the prospects of ensuring that
we 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 our existing resource property obligations and also any new business which may be
entered into or acquired.



Use
of Funds for Fiscal 2014



During
the year ended May 31, 2014 we estimate that we will expend approximately $300,000 on general and administrative expenses and
approximately $350,000 on property exploration and development expenses.



Anticipated
Changes to Facilities/Employees



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



|C. |  | Organizational
                                                                                                                                                                                                                                             Structure
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
hold a 100% interest in Teryl, Inc., a private Delaware corporation, incorporated on November 17, 1988, and registered to do business
in the USA. Teryl, Inc. holds the Alaska mineral property interests and Texas and Kentucky oil and gas well interests.



|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. 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 annual rent and utilities
for our portion of this 2,200 square foot space paid during 2013 was $32,984 (2012 - $16,779). We have occupied these facilities
since November 1, 2006. These facilities are believed to be adequate for meeting our needs for the immediate future. If required
in the future, we do not anticipate that we will have any difficulty in obtaining additional space at favorable rates. There are
no current plans to purchase or otherwise acquire any properties in the near future.



Mineral
Properties



The
following are descriptions of our material mineral properties.



Fish
Creek Claims



The
Fish Creek Claims are 30 mining claims comprising 1,032 acres, known as the Fish Creek Prospect, located 25 miles north of Fairbanks
in the Fairbanks Mining District in Alaska. The claims are legally maintained by recording an affidavit of annual labor for a
minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130
per claim ($3,900 total). All mechanized exploration activity must be permitted by the Alaska Division of Mining, Alaska Department
of Fish and Game, and the U.S. Corps of Engineers. Water can be withdrawn from Fish Creek to support exploration activities with
oversight from the Alaska Department of Conservation. Currently, we are permitted to conduct exploration by drilling. To the best
of our knowledge, we are operating in compliance with all applicable environmental regulations. There currently are no unusual
social, political or environmental encumbrances to mining on the project. We currently hold a valid exploration permit on the
project. Additional permits for future work will be acquired from the Division of Mining, Alaska Department of Fish and Game,
and the U.S. Corps of Engineers on an as-needed basis.



18







The
Fish Creek project is located in an important mining district with permissive land status and excellent road access to the property.
Currently, there are only primitive trails developed within the property to access exploration sites. The project is located within
metamorphic and plutonic host rocks that are similar in composition and age to rock units that contain commercially viable mineralization
elsewhere in the Fairbanks Mining District. The property is also located on a drainage that was mined extensively for alluvial
gold in the past both upstream and downstream of the Fish Creek project. Limited exploration conducted between 1992 and 2003 did
not reveal significant bedrock exposures of mineralization, however, very widely spaced placer drilling over a large area of the
property conducted in 1996 indicated the presence of placer gold in the alluvial deposits. More extensive and closer spaced placer
gold drilling conducted in 2004 confirmed the presence of significant concentrations of placer gold on the claims.



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







There
currently are no resources or reserves on the Fish Creek property that comply with the Canadian Institute of Mining and Metallurgy
(CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by CIM Council on August 20, 2000.



Additional
work on the Fish Creek property will be based on results from the previous drilling programs. Each successive phase of exploration
is dependent on generation of encouraging results from the previous programs and the increasing potential for delineation of commercially
viable resources on the project.



As
we announced on March 6, 2013, we received the budget for a reverse circulation drill program from Metallogeny, Inc., general
contractor in Fairbanks, Alaska, consisting of placer and lode drilling to identify targets, on the Fish Creek property this spring.
On April 10, 2013, we appointed Pete Rutledge, Geologist, as an independent contractor to supervise the drilling on the Fish Creek
property.



On
May 14, 2013, we announced that a contract was signed with Metallogeny, Inc., to drill six holes to test an intrusive target,
on the Fish Creek property. Paul D. Gray, P.Geo., is the qualified person as defined in NI 43-101 and also qualified under the
rules stated by the SEC.



During
the year ended May 31, 2013 we expended $174,826 (2012 - $2,139) on exploration on the Fish Creek Property.



19







West
Ridge Claims



The
West Ridge Property of 48 mineral claims comprises approximately 5,200 acres and is a road accessible gold prospect located in
the Fairbanks Mining District of Alaska. Creeks in the area such as Dome, Fox, Steamboat, and Flume creeks have been mined extensively
for placer gold in the past. Limited past gold exploration in the 1990’s through 2003 indicate shear and intrusive hosted
gold mineralization at the Old Glory Prospect, Black Dome Prospect, East Anomaly, West Anomaly and the Moose Creek Anomaly within
the West Ridge Property. The True North Mine of Fairbanks, a wholly owned subsidiary of Kinross Gold Corporation via a 100% ownership
of the True North Venture, is located approximately 3.5 kilometers (two miles) to the northeast of the West Ridge Property.



The
48 West Ridge mineral claims are located in the Dome Creek area of the Fairbanks district of Alaska. The West Ridge property adjoins
Kinross Gold Corp.’s True North gold deposit and lies approximately eight miles northwest of the producing Fort Knox gold
mine.



As
we announced on March 2, 2012, we applied for an exploration program permit to drill five targets on the Westridge property. The
2012 Westridge Exploration Program was designed to test both the placer and lode targets located within the claim block. Previous
lode exploration has identified 5 targets within the Westridge Area. Lode targets included:



| | 1. | Old
                                                                                                                                                                                                                  Glory
                                                                                                                                                                                                                  Prospect
                                                                                                                                                                                                                  -
                                                                                                                                                                                                                  This
                                                                                                                                                                                                                  prospect
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  shear
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  intrusive
                                                                                                                                                                                                                  hosted
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  located
                                                                                                                                                                                                                  along
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  northeast-southwest
                                                                                                                                                                                                                  fault.
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  >50ppb
                                                                                                                                                                                                                  gold-in-soil
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  90
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  x
                                                                                                                                                                                                                  90
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  punctuated
                                                                                                                                                                                                                  by
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  1,155
                                                                                                                                                                                                                  ppb
                                                                                                                                                                                                                  gold-in-soil
                                                                                                                                                                                                                  sample.
                                                                                                                                                                                                                  Three
                                                                                                                                                                                                                  trenches
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  two
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes
                                                                                                                                                                                                                  have
                                                                                                                                                                                                                  tested
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  prospect.
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  best
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  intercept
                                                                                                                                                                                                                  consisted
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  10
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  1.6
                                                                                                                                                                                                                  g/t
                                                                                                                                                                                                                  Au
                                                                                                                                                                                                                  from
                                                                                                                                                                                                                  121
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  131
                                                                                                                                                                                                                  meters.
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  remains
                                                                                                                                                                                                                  open
                                                                                                                                                                                                                  in
                                                                                                                                                                                                                  all
                                                                                                                                                                                                                  directions
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  had
                                                                                                                                                                                                                  not
                                                                                                                                                                                                                  been
                                                                                                                                                                                                                  thoroughly
                                                                                                                                                                                                                  tested.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Black
                                                                                                                                                                                                                  Dome
                                                                                                                                                                                                                  Prospect
                                                                                                                                                                                                                  -
                                                                                                                                                                                                                  This
                                                                                                                                                                                                                  prospect
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  located
                                                                                                                                                                                                                  along
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  same
                                                                                                                                                                                                                  fault
                                                                                                                                                                                                                  that
                                                                                                                                                                                                                  forms
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  southern
                                                                                                                                                                                                                  boundary
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  True
                                                                                                                                                                                                                  North
                                                                                                                                                                                                                  Deposit.
                                                                                                                                                                                                                  Gold
                                                                                                                                                                                                                  mineralization
                                                                                                                                                                                                                  consists
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  carbon-rich,
                                                                                                                                                                                                                  Fe-stained
                                                                                                                                                                                                                  schist
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  eclogite
                                                                                                                                                                                                                  similar
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  True
                                                                                                                                                                                                                  North
                                                                                                                                                                                                                  Deposit.
                                                                                                                                                                                                                  Past
                                                                                                                                                                                                                  exploration
                                                                                                                                                                                                                  was
                                                                                                                                                                                                                  limited.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | West
                                                                                                                                                                                                                  Anomaly
                                                                                                                                                                                                                  -
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  West
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  covers
                                                                                                                                                                                                                  an
                                                                                                                                                                                                                  area
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  approximately
                                                                                                                                                                                                                  1,220
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  (4,000
                                                                                                                                                                                                                  feet)
                                                                                                                                                                                                                  NW-SE
                                                                                                                                                                                                                  by
                                                                                                                                                                                                                  914
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  (3,000
                                                                                                                                                                                                                  feet)
                                                                                                                                                                                                                  NE–SW
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  defined
                                                                                                                                                                                                                  by
                                                                                                                                                                                                                  coincident
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  arsenic-in-soils
                                                                                                                                                                                                                  results.
                                                                                                                                                                                                                  Drilling
                                                                                                                                                                                                                  consisted
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  5
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes
                                                                                                                                                                                                                  totaling
                                                                                                                                                                                                                  1,650
                                                                                                                                                                                                                  feet
                                                                                                                                                                                                                  with
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  intersections
                                                                                                                                                                                                                  reported
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  values
                                                                                                                                                                                                                  up
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  6
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  (20
                                                                                                                                                                                                                  feet)
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  grading
                                                                                                                                                                                                                  0.93
                                                                                                                                                                                                                  g/t
                                                                                                                                                                                                                  Au.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4. | East
                                                                                                                                                                                                                  Anomaly
                                                                                                                                                                                                                  -
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  East
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  extends
                                                                                                                                                                                                                  along
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  general
                                                                                                                                                                                                                  northeast
                                                                                                                                                                                                                  trend
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  2,230
                                                                                                                                                                                                                  meters
                                                                                                                                                                                                                  (7,000
                                                                                                                                                                                                                  feet)
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  represents
                                                                                                                                                                                                                  values
                                                                                                                                                                                                                  from
                                                                                                                                                                                                                  trace
                                                                                                                                                                                                                  up
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  1.64
                                                                                                                                                                                                                  ppm
                                                                                                                                                                                                                  Au
                                                                                                                                                                                                                  in
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  Drill
                                                                                                                                                                                                                  results
                                                                                                                                                                                                                  from
                                                                                                                                                                                                                  5
                                                                                                                                                                                                                  holes
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  not
                                                                                                                                                                                                                  currently
                                                                                                                                                                                                                  available.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Moose
                                                                                                                                                                                                                  Creek
                                                                                                                                                                                                                  Anomaly
                                                                                                                                                                                                                  -
                                                                                                                                                                                                                  This
                                                                                                                                                                                                                  anomaly
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  on
                                                                                                                                                                                                                  trend
                                                                                                                                                                                                                  with
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  West
                                                                                                                                                                                                                  Anomaly
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  has
                                                                                                                                                                                                                  not
                                                                                                                                                                                                                  been
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  tested.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



20











Mineral
exploration consisted of up to 610 meters (2,000 feet) of shallow core drilling utilizing a narrow diameter AQ core drill to initially
test lode targets on the Old Glory Prospect and Moose Creek Anomaly. On positive results, a larger scale reverse circulation drill
program will be conducted.



The
total cost to complete all two phases of exploration (610 meters lode and 180 meters placer) was estimated to be $200,000.



On
October 1, 2012 we announced that five holes were completed on the Westridge property for a total of 760 meters (2,500 feet).



We
announced on March 11, 2013 that the additional exploration and drilling on the Westridge property was recommended as follows:



| | 1. | Drilling:
                                                                                                                                                                                                                  Additional
                                                                                                                                                                                                                  drilling
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  recommended
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  Old
                                                                                                                                                                                                                  Glory
                                                                                                                                                                                                                  Prospect
                                                                                                                                                                                                                  area.
                                                                                                                                                                                                                  The
                                                                                                                                                                                                                  drilling
                                                                                                                                                                                                                  should
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  designed
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  intersect
                                                                                                                                                                                                                  northeast-trending,
                                                                                                                                                                                                                  northwest-dipping
                                                                                                                                                                                                                  intrusive
                                                                                                                                                                                                                  dikes
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  structural
                                                                                                                                                                                                                  zones
                                                                                                                                                                                                                  by
                                                                                                                                                                                                                  completing
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  series
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes
                                                                                                                                                                                                                  along
                                                                                                                                                                                                                  northeast
                                                                                                                                                                                                                  fences,
                                                                                                                                                                                                                  with
                                                                                                                                                                                                                  each
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  hole
                                                                                                                                                                                                                  drilled
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  depth
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  approximately
                                                                                                                                                                                                                  500ft.
                                                                                                                                                                                                                  Angle
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes,
                                                                                                                                                                                                                  dipping
                                                                                                                                                                                                                  -60
                                                                                                                                                                                                                  degrees
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  oriented
                                                                                                                                                                                                                  towards
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  southeast,
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  suggested
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  each
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  proposed
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  collar
                                                                                                                                                                                                                  locations.
                                                                                                                                                                                                                  In
                                                                                                                                                                                                                  addition
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  these
                                                                                                                                                                                                                  proposed
                                                                                                                                                                                                                  angle
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes,
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  fan
                                                                                                                                                                                                                  consisting
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  both
                                                                                                                                                                                                                  angle
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  vertical
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  holes
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  suggested
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  several
                                                                                                                                                                                                                  key
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  sites
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  help
                                                                                                                                                                                                                  delineate
                                                                                                                                                                                                                  strike
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  dip
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  mineralized
                                                                                                                                                                                                                  zones
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  other
                                                                                                                                                                                                                  geological
                                                                                                                                                                                                                  features.
                                                                                                                                                                                                                  In
                                                                                                                                                                                                                  addition
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  these
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  fences,
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  least
                                                                                                                                                                                                                  one
                                                                                                                                                                                                                  deep
                                                                                                                                                                                                                  vertical
                                                                                                                                                                                                                  hole
                                                                                                                                                                                                                  (approximately
                                                                                                                                                                                                                  2,000ft)
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  suggested
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  test
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  possibility
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  deeply
                                                                                                                                                                                                                  buried
                                                                                                                                                                                                                  mineralized
                                                                                                                                                                                                                  stock
                                                                                                                                                                                                                  similar
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  Dolphin
                                                                                                                                                                                                                  stock.
                                                                                                                                                                                                                  Although
                                                                                                                                                                                                                  diamond
                                                                                                                                                                                                                  core
                                                                                                                                                                                                                  drilling
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  preferred,
                                                                                                                                                                                                                  RVC
                                                                                                                                                                                                                  drilling,
                                                                                                                                                                                                                  or
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  combination
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  both,
                                                                                                                                                                                                                  could
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  used
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  drill
                                                                                                                                                                                                                  fences,
                                                                                                                                                                                                                  however,
                                                                                                                                                                                                                  diamond
                                                                                                                                                                                                                  core
                                                                                                                                                                                                                  drilling
                                                                                                                                                                                                                  would
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  required
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  deep
                                                                                                                                                                                                                  drilling.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 2. | Auger
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  sampling:
                                                                                                                                                                                                                  Additional
                                                                                                                                                                                                                  auger
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  recommended
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  expand
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  existing
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  grid
                                                                                                                                                                                                                  centered
                                                                                                                                                                                                                  on
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  Old
                                                                                                                                                                                                                  Glory
                                                                                                                                                                                                                  Prospect.
                                                                                                                                                                                                                  Specifically,
                                                                                                                                                                                                                  additional
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  should
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  completed
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  west,
                                                                                                                                                                                                                  east
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  north
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  existing
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  grid.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | Trenching:
                                                                                                                                                                                                                  Additional
                                                                                                                                                                                                                  trenches
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  recommended
                                                                                                                                                                                                                  in
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  Old
                                                                                                                                                                                                                  Glory
                                                                                                                                                                                                                  Prospect.
                                                                                                                                                                                                                  These
                                                                                                                                                                                                                  trenches
                                                                                                                                                                                                                  will
                                                                                                                                                                                                                  help
                                                                                                                                                                                                                  delineate
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  postulated
                                                                                                                                                                                                                  northeast-trending
                                                                                                                                                                                                                  dike
                                                                                                                                                                                                                  complex
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  associated
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  mineralization.
                                                                                                                                                                                                                  Detailed
                                                                                                                                                                                                                  mapping
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  trench
                                                                                                                                                                                                                  floors
                                                                                                                                                                                                                  will
                                                                                                                                                                                                                  help
                                                                                                                                                                                                                  identify
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  project
                                                                                                                                                                                                                  structural
                                                                                                                                                                                                                  zones
                                                                                                                                                                                                                  which
                                                                                                                                                                                                                  possibly
                                                                                                                                                                                                                  influence
                                                                                                                                                                                                                  structurally
                                                                                                                                                                                                                  controlled
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  mineralization
                                                                                                                                                                                                                  in
                                                                                                                                                                                                                  this
                                                                                                                                                                                                                  area.
                                                                                                                                                                                                                  Several
                                                                                                                                                                                                                  short
                                                                                                                                                                                                                  “scoop”
                                                                                                                                                                                                                  trenches
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  recommended
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  some
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  significant
                                                                                                                                                                                                                  gold-anomalous
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  sample
                                                                                                                                                                                                                  sites
                                                                                                                                                                                                                  on
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  west
                                                                                                                                                                                                                  side
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  soil
                                                                                                                                                                                                                  grid.
                                                                                                                                                                                                                  Chip
                                                                                                                                                                                                                  channel
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  trench
                                                                                                                                                                                                                  floors
                                                                                                                                                                                                                  should
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  completed
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  five
                                                                                                                                                                                                                  foot
                                                                                                                                                                                                                  intervals,
                                                                                                                                                                                                                  as
                                                                                                                                                                                                                  well
                                                                                                                                                                                                                  as
                                                                                                                                                                                                                  select
                                                                                                                                                                                                                  rock
                                                                                                                                                                                                                  grab
                                                                                                                                                                                                                  sampling,
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  all
                                                                                                                                                                                                                  trench
                                                                                                                                                                                                                  excavations.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



21







| | 4. | Reconnaissance
                                                                                                                                                                                                                  rock
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  geologic
                                                                                                                                                                                                                  mapping:
                                                                                                                                                                                                                  Additional
                                                                                                                                                                                                                  rock
                                                                                                                                                                                                                  grab
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  geologic
                                                                                                                                                                                                                  mapping
                                                                                                                                                                                                                  traverses
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  recommended
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  entire
                                                                                                                                                                                                                  property.
                                                                                                                                                                                                                  This
                                                                                                                                                                                                                  work
                                                                                                                                                                                                                  should
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  designed
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  fulfill
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  need
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  basic
                                                                                                                                                                                                                  prospecting
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  creating
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  basic
                                                                                                                                                                                                                  geologic
                                                                                                                                                                                                                  map
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  property,
                                                                                                                                                                                                                  which
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  an
                                                                                                                                                                                                                  essential
                                                                                                                                                                                                                  component
                                                                                                                                                                                                                  of
                                                                                                                                                                                                                  creating
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  predictive
                                                                                                                                                                                                                  model
                                                                                                                                                                                                                  for
                                                                                                                                                                                                                  gold
                                                                                                                                                                                                                  mineralization
                                                                                                                                                                                                                  on
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  property.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5. | Geophysical
                                                                                                                                                                                                                  surveys:
                                                                                                                                                                                                                  Geophysical
                                                                                                                                                                                                                  surveys
                                                                                                                                                                                                                  could
                                                                                                                                                                                                                  potentially
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  used
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  map
                                                                                                                                                                                                                  structural
                                                                                                                                                                                                                  features
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  magnetic
                                                                                                                                                                                                                  rocks,
                                                                                                                                                                                                                  but
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  considered
                                                                                                                                                                                                                  a
                                                                                                                                                                                                                  lower
                                                                                                                                                                                                                  priory
                                                                                                                                                                                                                  at
                                                                                                                                                                                                                  this
                                                                                                                                                                                                                  time.
                                                                                                                                                                                                                  Induced
                                                                                                                                                                                                                  polarization
                                                                                                                                                                                                                  methods
                                                                                                                                                                                                                  could
                                                                                                                                                                                                                  be
                                                                                                                                                                                                                  used
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  identify
                                                                                                                                                                                                                  water-saturated
                                                                                                                                                                                                                  fault
                                                                                                                                                                                                                  zones
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  zones
                                                                                                                                                                                                                  containing
                                                                                                                                                                                                                  fine
                                                                                                                                                                                                                  grained
                                                                                                                                                                                                                  disseminated
                                                                                                                                                                                                                  sulfides.
                                                                                                                                                                                                                  These
                                                                                                                                                                                                                  methods
                                                                                                                                                                                                                  are
                                                                                                                                                                                                                  relatively
                                                                                                                                                                                                                  expensive,
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  thus
                                                                                                                                                                                                                  additional
                                                                                                                                                                                                                  surface
                                                                                                                                                                                                                  sampling
                                                                                                                                                                                                                  and
                                                                                                                                                                                                                  mapping
                                                                                                                                                                                                                  is
                                                                                                                                                                                                                  needed
                                                                                                                                                                                                                  beforehand
                                                                                                                                                                                                                  to
                                                                                                                                                                                                                  better
                                                                                                                                                                                                                  target
                                                                                                                                                                                                                  the
                                                                                                                                                                                                                  geophysical
                                                                                                                                                                                                                  surveys.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On
April 10, 2013, we appointed Pete Rutledge, Geologist, as an independent contractor to evaluate the Westridge claims.



During
the year ended May 31, 2013 we expended $267,237 (2012 - $21,066) on exploration on the West Ridge Property.



The
Silverknife Property



The
Silverknife Property lies in a well mineralized and historically important precious and base metals exploration intensive region.
The Silverknife Property hosts a known historic prospect (the Silverknife Prospect) with defined Ag-Pb-Zn mineralization within
2km of Silvercorp’s active Silvertip Ag-Pb-Zn deposit. The Silverknife Property represents a prospective target for precious
and base metals mineralization genetically related to the Silvertip deposit.



The
silver-zinc-lead mineralization defined to date on the Silverknife Property is interpreted to be a distal, stratigrpahically lower
zone than the Silvertip deposit and more proximate to the Cassiar Batholith (heatsource). The most relevant targets for mineral
exploration on the Property are associated chimney-type feeder systems and mantos related to the Silvertip mineralizing event.



On
March 22, 2012 we announced that a one year exploration extension had been submitted to the Ministry of Energy and Mines of BC.
The original permit was granted on June 21, 2011.



On
April 20, 2012 the Company and Minewest Silver and Gold Inc. (“Minewest”), a former 100% owned subsidiary of Reg Tech
to which Reg Tech spun off 100% of its interest in the Silverknife claims, entered into an Exploration, Development and Mine Operating
Agreement (the “Exploration Agreement”) until the completion of mining and environmental restoration on the Property
with initial participation interests of 70% and 30% for Minewest and the Company respectively. The Exploration Agreement was approved
by the TSX.V on September 7, 2012.



Under
the terms of the Exploration Agreement, the initial participating interest (a “Participating Interest”) of each of Minewest
and the Company in the Joint Venture will be equal to their respective current interests. The operations of the Joint Venture
will be managed by a manager (the “Manager”) with Minewest acting as the initial Manager of the Joint Venture and remaining
as such for as long as its Participating Interest is 50% or more. The Exploration Agreement also provides for a management committee
(the “Management Committee”) comprised of one member from the minority interest, currently Teryl, and two members from
the majority interest holder, currently Minewest, the purpose of which will be to determine the overall policies, objectives,
procedures, methods and actions under the Agreement.



The
Exploration Agreement provides for an initial 2012 exploration program in the amount of approximately $360,000. Future exploration
programs are subject to approval by the Management Committee. Participants of the Joint Venture must fund all exploration programs
in amounts proportionate with their Participating Interest and failure to do so will decrease a participant’s Participating Interest
on a pro-rata basis. If a Participating Interest decreases to less than 10%, the relevant participant will be deemed to have assigned
and conveyed its Participating Interest to the other participant.



22







The
Agreement also contains a customary pre-emptive right pursuant to which a participant intending to transfer all or part of its
Participating Interest must provide the other participant with notice and the option to purchase such interest.



On
October 3, 2012, the Company and Minewest announced that the first phase of exploration on the silver, lead, zinc prospect in
the Liard Mining District in B.C. had been completed.



The
exploration crew re-boxed the core from the diamond drilling completed in 1985 through 1987. 101 core samples were collected,
split and/or quartered (where applicable) and submitted for chemical analysis by Multielemt ICP.



The
critical high grade silver/lead/zinc sections were re-logged and submitted for assays. Where practicable and possible, additional
core on either side of the mineralized zones were sent for analysis to determine if Ag-Zn-Pb mineralization extends beyond original
sampling boundaries.



A
detailed on-the-ground survey of all locatable historic drill collars was completed which will greatly aid a modern 3D geological
modeling the Company intends to conduct after all 2012 confirmation analyses are received. Such studies will be utilized by the
management to target potential mineralization extensions on the Silverknife Property for testing by diamond drilling in 2013.



The
Property boundary between Silverknife property and Silvercorp Metals Inc. immediately adjacent Silvertip Property was located,
surveyed and flagged in.



The
1,000 metre drilling program initially planned for summer 2012 was delayed due to a washout of the Silvertip Mine access road
(and the Silverknife Property) in early June, 2012.



On
November 14, 2012 the Company and Minewest announced that analytical results from the 2012 Silverknife Ag-Zn-Pb core re-sampling
project in north central B.C. have been received and compiled by the Company and confirmed historically reported mineralization.
Additionally, the 2012 program had defined high priority drill targets for a fully permitted 2013 diamond drilling program targeting
extension to the known Ag-Zn-Pb mineralization.



During
the course of the 2012 Silverknife program, the Project was accessed and the 25+ year old core storage site was re-established
with all recoverable core re-boxed, re-logged, and where practicable mineralized intervals and proximal area were re-sampled.
It is estimated that 85% of the historic core was resurrected and restored. Specific representative intervals of Ag-Zn-Pb mineralization
were selected for detailed Inspection and any germane previously sampled intersections of core were quartered and previously un-sampled
core intervals were halved. Due to core loss and degradation over the intervening years, exact duplication of previously sampled
intervals was not always possible, where practicable however, the 2012 sampling was conducted on systematic 1 metre intervals.



The
2012 core re-Iogging and re-sampling program confirmed the grade and tenor of mineralization previously identified on the Silverknife
Project with grades from trace to 21.19 ounces/ton (726.8 ppm) Ag with an average of 1.79 ounces/ton (61.36 ppm) Ag; trace to
16.48% Zn with an average of 1.99% Zn; trace to 10.98% Pb with an average of 0.87% Pb; and from trace to 1.1 ppm Au. A comparison
of the historic analytical results to the 2012 analytical results do not show an exact 1:1 ration, however owing to the style
of mineralization (coarse grained sphalerite and galena) and the disparate analytical techniques and sampling intervals, this
variation Is expected.



It
was noticed by Company geologists during the re-Iogging of the core that where visible Ag-Zn-Pb mineralization was identified,
a corresponding drop in core recovery was common. This observation is exceedingly valuable, as this rack of core recovery within
mineralized sections is indicative of a potential understatement of grade. The Company is confident that armed with this information,
more care can be taken when drill testing these areas, and potentially with such care reported grades will increase.



23







In
total 101 core samples were collected and submitted for assay to Inspectorate Exploration and Mining Services Inc., of Richmond.
BC, an ISO 9001:2008 certified laboratory. Samples were shipped by Company consultants to Inspectorate’s Whitehorse, YT preparation
facility where samples were sorted and crushed to appropriate particle size (pulp) and representatively split to a smaller size
for shipment to Inspectorate’s, Richmond, B.C. analysis facility. Assay procedures consisted of 30 element Inductively Coupled
Spectrophotometry (ICP) following multi-acid digestion as well as standard fire assay for gold, with atomic adsorption (AA.) finish.
When overlimits were reported, Inspectorate’s Ore-Grade analyses for Ag, Pb, and Zn; respectively, was utilized. Assay standards
were inserted into the sample stream as part of the Silverknife OA/OC program.



A
detailed GPS survey of the historic Silverknife “Discovery” drill out was conducted during the 2012 program coincident
with an updated Silverknife mineral claim Boundary survey. With the data collected and compiled from the 2012 program, the Company
will now intends to digitize the historic drilling data and model the Silverknife mineralization with the help of 3D geological
modeling software. This work will allow the Company to define the extent of the defined mineralization, target 2013 drill holes
and focus exploration efforts on extending and expanding the Silverknife Ag-Zn-Pb mineralization through diamond drilling.



An
updated 43-101 report on Silverknife property is currently being prepared by Paul Gray our qualified geologist.



During
the year ended May 31, 2013 we expended $31,278 (2012 - $4,604) on exploration on the Silverknife Property.



|ITEM
4A. |  | UNRESOLVED
                                                                                             STAFF COMMENTS
|-------- |  | ----------------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
5. |  | OPERATING
                                                                                            AND FINANCIAL REVIEW AND PROSPECTS
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------



The
following discussion of our financial condition, changes in financial condition and results of operations as at May 31, 2013,
2012 and 2011 should be read in conjunction with our audited consolidated financial statements and related notes included herein.
Unless expressly stated otherwise, all references to dollar amounts in this section are Canadian dollars.



|A. |  | Operating
                                                                                                                                                                                                                                             Results
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A
comparison of the results of operations for the fiscal years ended May 31, 2013, 2012 and 2011 are as follows:



Year
Ended May 31, 2013 as compared to Year Ended May 31, 2012



We
incurred a net loss of $608,659 during the year ended May 31, 2013, compared to a net loss of $766,330 during the year ended May
31, 2012. The decrease in loss from 2012 was due to loss on sale of mineral property of $376,928 recorded in 2012.



Operating
expenses that significantly changed from 2012 to 2013 are as follows:



| | ● | In
                                                                                                                                                                                                                         2013,
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         incurred
                                                                                                                                                                                                                         geological
                                                                                                                                                                                                                         consulting
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         $5,212
                                                                                                                                                                                                                         that
                                                                                                                                                                                                                         were
                                                                                                                                                                                                                         not
                                                                                                                                                                                                                         applicable
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         any
                                                                                                                                                                                                                         specific
                                                                                                                                                                                                                         property;
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         did
                                                                                                                                                                                                                         not
                                                                                                                                                                                                                         incur
                                                                                                                                                                                                                         such
                                                                                                                                                                                                                         geological
                                                                                                                                                                                                                         consulting
                                                                                                                                                                                                                         fees;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Consulting,
                                                                                                                                                                                                                         management
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         directors’
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         were
                                                                                                                                                                                                                         recorded
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         $220,706
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013
                                                                                                                                                                                                                         compared
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $139,899
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012,
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         our
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         activities
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         related
                                                                                                                                                                                                                         administrative
                                                                                                                                                                                                                         support.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Professional
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         decreased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $52,908
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $42,729
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013,
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         incurred
                                                                                                                                                                                                                         higher
                                                                                                                                                                                                                         legal
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         mineral
                                                                                                                                                                                                                         property
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         contracts
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012;
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Secretarial
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         employee
                                                                                                                                                                                                                         benefits
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $33,852
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $60,223
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013
                                                                                                                                                                                                                         due
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         our
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         administrative
                                                                                                                                                                                                                         support
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Publicity,
                                                                                                                                                                                                                         promotion
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         investor
                                                                                                                                                                                                                         relations
                                                                                                                                                                                                                         costs
                                                                                                                                                                                                                         decreased
                                                                                                                                                                                                                         significantly
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $127,511
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $104,023
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         continue
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         utilize
                                                                                                                                                                                                                         more
                                                                                                                                                                                                                         cost
                                                                                                                                                                                                                         effective
                                                                                                                                                                                                                         communication
                                                                                                                                                                                                                         services;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Travel,
                                                                                                                                                                                                                         auto
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         entertainment
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $8,789
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $17,674
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013,
                                                                                                                                                                                                                         due
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         our
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         activities
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         related
                                                                                                                                                                                                                         support.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Stock-based
                                                                                                                                                                                                                         compensation
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         significantly
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $1,897
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $47,757
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         granted
                                                                                                                                                                                                                         more
                                                                                                                                                                                                                         stock
                                                                                                                                                                                                                         options
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2013.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During
2013 we recorded interest income of $17,133 compared to $3,286 in 2012, and net proceeds from the oil and gas well production
of $8,976 compared to $19,232 in 2012.



24







Year
Ended May 31, 2012 as compared to Year Ended May 31, 2011



We
incurred a net loss of $766,330 during the year ended May 31, 2012, compared to a net loss of $534,184 during the year ended May
31, 2011.



The
significant increase in loss was due to loss on sale of mineral property of $376,928 recorded in 2012, compared to $Nil in 2011.



During
2011, we wrote off mineral property acquisition cost of $7,500 on our Kahiltna Terrane claims, exploration costs of $11,554 on
our Gold Hill claims and $34,261 on our Kahiltna Terrane claims. During 2012 we did no record any property impairment.



During
2012 we recorded interest income of $3,286 compared to $Nil in 2011.



Other
expenses that changed from 2011 to 2012 are as follows:



| | ● | In
                                                                                                                                                                                                                         2011,
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         recorded
                                                                                                                                                                                                                         interest
                                                                                                                                                                                                                         expense
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         $18,582
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         two
                                                                                                                                                                                                                         convertible
                                                                                                                                                                                                                         debentures
                                                                                                                                                                                                                         issued
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2010;
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         did
                                                                                                                                                                                                                         not
                                                                                                                                                                                                                         record
                                                                                                                                                                                                                         such
                                                                                                                                                                                                                         interest
                                                                                                                                                                                                                         expense
                                                                                                                                                                                                                         during
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         because
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         convertible
                                                                                                                                                                                                                         debentures
                                                                                                                                                                                                                         were
                                                                                                                                                                                                                         repaid
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         first
                                                                                                                                                                                                                         day
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         year;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | In
                                                                                                                                                                                                                       2011,
                                                                                                                                                                                                                       we
                                                                                                                                                                                                                       incurred
                                                                                                                                                                                                                       geological
                                                                                                                                                                                                                       consulting
                                                                                                                                                                                                                       fees
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       $1,172
                                                                                                                                                                                                                       that
                                                                                                                                                                                                                       were
                                                                                                                                                                                                                       not
                                                                                                                                                                                                                       applicable
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       any
                                                                                                                                                                                                                       specific
                                                                                                                                                                                                                       property;
                                                                                                                                                                                                                       in
                                                                                                                                                                                                                       2012
                                                                                                                                                                                                                       we
                                                                                                                                                                                                                       did
                                                                                                                                                                                                                       not
                                                                                                                                                                                                                       incur
                                                                                                                                                                                                                       such
                                                                                                                                                                                                                       geological
                                                                                                                                                                                                                       consulting
                                                                                                                                                                                                                       fees;
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Consulting,
                                                                                                                                                                                                                         management
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         directors’
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         were
                                                                                                                                                                                                                         recorded
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         $139,344
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         $139,899
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012,
                                                                                                                                                                                                                         consistent
                                                                                                                                                                                                                         between
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         two
                                                                                                                                                                                                                         years.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Professional
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $44,489
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $52,908
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012,
                                                                                                                                                                                                                         largely
                                                                                                                                                                                                                         due
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         legal
                                                                                                                                                                                                                         fees
                                                                                                                                                                                                                         incurred
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         mineral
                                                                                                                                                                                                                         property
                                                                                                                                                                                                                         exploration
                                                                                                                                                                                                                         contracts;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Secretarial
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         employee
                                                                                                                                                                                                                         benefits
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $29,467
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $33,852
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         due
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         our
                                                                                                                                                                                                                         expanded
                                                                                                                                                                                                                         operations
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Publicity,
                                                                                                                                                                                                                         promotion
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         investor
                                                                                                                                                                                                                         relations
                                                                                                                                                                                                                         costs
                                                                                                                                                                                                                         increased
                                                                                                                                                                                                                         slightly
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $126,119
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $127,511
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         had
                                                                                                                                                                                                                         more
                                                                                                                                                                                                                         current
                                                                                                                                                                                                                         report
                                                                                                                                                                                                                         disseminations
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Travel,
                                                                                                                                                                                                                         auto
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         entertainment
                                                                                                                                                                                                                         decreased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $19,551
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $8,789
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012,
                                                                                                                                                                                                                         due
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         our
                                                                                                                                                                                                                         continuing
                                                                                                                                                                                                                         effort
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         utilize
                                                                                                                                                                                                                         more
                                                                                                                                                                                                                         efficient
                                                                                                                                                                                                                         communication
                                                                                                                                                                                                                         channels.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ● | Stock-based
                                                                                                                                                                                                                         compensation
                                                                                                                                                                                                                         decreased
                                                                                                                                                                                                                         from
                                                                                                                                                                                                                         $63,775
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         $1,897
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2012
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         we
                                                                                                                                                                                                                         granted
                                                                                                                                                                                                                         more
                                                                                                                                                                                                                         stock
                                                                                                                                                                                                                         options
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         2011.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|B. |  | Liquidity
                                                                                                                                                         and
                                                                                                                                                         Capital
                                                                                                                                                         Resources
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
of May 31, 2013, we had a cash position of $822,119, compared to $2,059,482 as at May 31, 2012, representing a decrease of $1,237,363.
As of May 31, 2013, we had a working capital of $709,573, compared to a working capital of $2,044,468 as at May 31, 2012.



During
the year ended May 31, 2013 we used $587,482 in operations compared to $426,696 during the year ended May 31, 2012.



During
the year ended May 31, 2013 we used $507,706 in our investing activities compared to $2,468,924 generated in investing activities.



On
July 4, 2012 we received the approval from the TSX-V on a normal course issuer bid (“NCIB”) to purchase up to 10%
of the issued and outstanding common shares of the Company on the open market. During the year ended May 31, 2013 we used $145,065
to purchase 2,427,000 common shares.



During
the year ended May 31, 2012, we raised $57,500 from issuance of 575,000 units of capital stock pursuant to a private placement
at $0.10 per unit.



All
of our mineral properties are at the early exploration stages. We do not expect to generate significant revenues in the near future
and may continue to rely upon the sale of equity securities to raise capital at reasonable share prices. Fluctuations in our share
price may affect our ability to obtain future financing and the rate of dilution to existing shareholders.



25







We
have no funding commitments or arrangements for additional financing at this time and there is no assurance that we will be able
to obtain any additional financing on terms acceptable to us, if at all. Any additional funds raised will be used for general
and administrative expenses, to carry out exploration programs on our mineral properties, and for the acquisition of a property
or properties, as applicable. The quantity of funds to be raised and the terms of any equity financing that may be undertaken
will be negotiated by management as opportunities to raise funds arise.



|C. |  | Research
                                                                                                                                                           and
                                                                                                                                                           Development,
                                                                                                                                                           Patents
                                                                                                                                                           and
                                                                                                                                                           Licenses,
                                                                                                                                                           Etc.
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|D. |  | Trend
                                                                                                                                                           Information
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|E. |  | Off
                                                                                                                                                           Balance
                                                                                                                                                           Sheet
                                                                                                                                                           Arrangements
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
do not utilize off-balance sheet arrangements.



|F. |  | Tabular
                                                                                                                                                           Disclosure
                                                                                                                                                           of
                                                                                                                                                           Contractual
                                                                                                                                                           Obligations
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
did not enter into material contractual  obligations during the year ended May 31, 2013.



|G. |  | Safe
                                                                                                                                                           Harbor
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



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



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



Forward-looking
statements are based on expectations, estimates and projections at the time the statements are made that involve a number of risks
and uncertainties which could cause actual results or events to differ materially from those presently anticipated



Forward-looking
statements are subject to a variety of risks and uncertainties in addition to the risks referred to in “Risk Factors”
above.



26







|Item
6. |  | DIRECTORS,
                                                                                            SENIOR MANAGEMENT AND EMPLOYEES
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------



|A. |  | Directors
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Senior
                                                                                                                                                                                                                                             Management
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
of May 31, 2013 and the date of this report, our Board consisted of five directors, of whom two are independent non-executive
directors.



The
following table provides certain information about the members of our Board and our executive officers as of September 30, 2013.



|Name                  |  | Position
    with the Company             |  | Date
    of First Election orAppointment
|--------------------- |  | ----------------------------------------- |  | ----------------------------------------
|John
    G. Robertson |  | President,
    CEO, Chairman and Director |  | October
    25, 1982                    
|Suzan
    El-Khatib   |  | Director                                  |  | April
    29, 2011                      
|Susanne
    Robertson |  | Director                                  |  | September
    12, 1990                  
|Thomas
    Robertson  |  | Director                                  |  | January
    4, 2010                     
|Thomas
    Parkhill   |  | Director                                  |  | January
    9, 2013                     
|Jane
    He           |  | CFO
    and Corporate Secretary           |  | February
    25, 2011                   



Senior
management serve at the pleasure of the Board. Each director holds office until the next annual meeting of shareholders unless
his or her office is earlier vacated in accordance with the Articles and/or the BCBCA, or unless he or she becomes disqualified
to act as a director.



John
Robertsonhas been President, CEO, Chairman of the Board, Corporate Secretary and a director of Linux Gold Corp. (“Linux”)
since March 1979. Linux is a British Columbia mineral exploration company quoted on the OTC BB. He has been the Chairman, President
and Chief Executive Officer of REGI U.S., Inc. (“REGI”), an Oregon corporation since July 1992. REGI is an Oregon
corporation engaged in the development of a rotary engine/ compressor (“Rand Cam Engine”) and is quoted on the OTC
BB. Since October 1984, Mr. Robertson has been President and a director of Reg Technologies Inc. (“Reg”), a British
Columbia corporation listed on the TSX.V, and quoted on the OTC BC, that has financed the research on the Rand Cam Engine since
1986. He has been the President, CEO and a director of IAS Energy, Inc. (“IAS”) since its formation in December 1994.
IAS is a U.S. public company engaged in the acquisition and exploration of oil and gas interests in North America. Since June
1997, Mr. Robertson has been President, CEO and a director of Information Highway.com, Inc., an inactive reporting Florida corporation.
Since May 1977, Mr. Robertson has been President and a director of SMR Investments Ltd. (“SMR”), a private British
Columbia corporation engaged in management of public companies. Mr. Robertson is also the President and a director of the following
private companies: JGR Petroleum, Inc. (since July 1991), Access Information Services, Ltd. (since September 1993), 394754 B.C.
Ltd., dba SOVO Computer Centre (since October 1990), Pavlik Travel Services Ltd. (since November 2000), International Diamond
Syndicate Ltd. (since May 1993), KLR Enterprises Inc. (since 1999), Rainbow Networks Inc. (since 2000), Rand Energy Group Inc.
(since 1993), 540330 B.C Ltd. (since April 1997), Airstream Communications, Inc. (since June 2000) and Minewest Silver and Gold
Inc., a reporting issuer in BC (since 2010). Mr. Robertson is a citizen and resident of Canada. Mr. Robertson allocates a minimum
of 30% of his time to our ongoing operations. On a project related basis, he may allocate up to 70% of his time to our business
as required.



Susanne
Robertsonhas been a principal of SMR Investments, Ltd. since 1979. She has been a director of Linux since 2001, and a director
of Reg since 1984. Ms. Robertson is a citizen and resident of Canada.



Thomas
Robertsonhas been an investor relations consultant with Molycor Gold Corp., a TSX.V issuer, since January 2005; previously
he was a corporate development and investor relations consultant with several TSX.V issuers Strike Zone Minerals (2004), Auterra
Ventures Inc. (2004) and Toba Industries (2003/2004). He was also an investor relations consultant with two OTC BB companies Tital
Consolidated Inc. (2003/2004) and Timber Resources International Inc. (2003).



Suzan
El-Khatib -Ms. El-Khatib has been a director since April, 2011. Ms. El-Khatib began her career at Bull, Housser Tupper LLP
and moved on to a boutique firm before joining Wiebe Douvelos Wittmann LLP. She advises and acts for both individual and corporate
clients on a broad variety of matters including corporate governance and commercial litigation. Ms. El-Khatib has experience as
a corporate solicitor and as a litigator, appearing at all levels of court. She is a current member of the Law Society of British
Columbia, the Canadian Bar Association, and the Trial Lawyers Association of British Columbia. Ms. El-Khatib has been a director
of Linux Gold Corp. since April, 2011 and a director of Reg Technologies Inc. since April, 2011.



27







Jane
Hehas been the CFO since February 25, 2011. She has more than ten years’ experience in fund accounting in the financial
industry. Ms. He has been the CFO of Minewest Silver and Gold Inc. since October, 2010 and the CFO
of Teryl Resources Corp. since February, 2011.She is in charge of daily business transactions and accounting for the company.



Thomas
Parkhillhas been a director of the Company since January 9, 2013. Mr. Parkhill is a licensed professional geologist with
the State of Minnesota. He has recently participated in field work for copper, precious metals, coal, humate, uranium and diamonds
in Arizona, New Mexico, Nevada, Colorado, Utah, Namibia, South Africa and Indonesia. His work included literature research, petrographic
work, mineral identification, mineral property evaluations, prospect generation and detailed geologic field mapping.

.

There
are no family relationships between the directors and senior officers, other than John Robertson and Susanne Robertson, who are
married, and Thomas Robertson who is the son of John Robertson.



|B. |  | Compensation
|-- |  | ------------



Compensation
Discussion & Analysis



Given
our current size and stage of development, our Board has not appointed a formal compensation committee, however it is board policy
that management directors are required to abstain from voting in respect of their own compensation thereby providing the independent
members of the Board with considerable input as to executive compensation. The Board’s compensation philosophy is aimed
at attracting and retaining quality and experienced people with established records in managing and maintaining public companies
which is critical to our success. These key persons create the framework for future success and later will share in any success
of our company. Such a reward system supports our commitment to delivering strong performance for our shareholders. At the present
time we do not have a compensation program in place for our executive officers or directors, as is evidenced by the Summary Compensation
Table below.



The
Board reviews on an annual basis the corporate goals and objectives relevant to executive compensation, and determines if a compensation
package should be implemented. The Board also takes into consideration our overall performance, shareholder returns, the value
of similar incentive awards to executive officers at comparable companies and the awards given to executive officers in past years.
There are currently no plans to implement a compensation package for fiscal 2014.



Summary
Compensation Table



The
following table sets out certain information respecting the compensation paid to the CEO and CFO and the three most highly compensated
executive officers, other than the CEO and CFO, for the year ended May 31, 2013 whose total compensation was more than $150,000.
These individuals are referred to collectively as the “NEOs”.





|                                                                                                                                                      |  |                       |  |                          |  |                           |  |                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Non-equity
    incentive plan compensation |  |                                 |  |                      |  |                               
|----------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- |  | ------------------------ |  | ------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ |  | ------------------------------- |  | -------------------- |  | ------------------------------
|Name
    and Principal Position                                                                                                                       |  | Year
    ended May 31 |  | Salary
    ($)           |  | Shared
    awards ($)     |  | Option
                                                                                                                                                                                            based
                                                                                                                                                                                            awards(2)
        ($) |  | Annual
    incentive plan($)               |  | Long-term
    incentive plan($) |  | Pension
    value($) |  | All
    other compensation ($)
|John
                                                                                       G. Robertson, (1)
        Chief
        Executive Officer |  | 2013
    2012 2011    |  | 36,000
    19,000 12,000 |  | Nil
    
    Nil 
    Nil |  | 20,603
    Nil
    Nil                                                                                                                                                                                                                                                                                                                                                                                                     |  | Nil
    Nil
    Nil                        |  | Nil
    Nil
    Nil             |  | Nil
    Nil
    Nil  |  | 30,000
    30,000
    30,000  
|Jane
                                                                                       He,
        Chief
        Financial Officer               |  | 2013
    2012 2011    |  | Nil
    Nil
    Nil      |  | Nil
    Nil
    Nil       |  | 2,060
    
    Nil
    Nil                                                                                                                                                                                                                                                                                                                                                                                                 |  | Nil
    Nil
    Nil                        |  | Nil
    Nil
    Nil             |  | Nil
    Nil
    Nil  |  | Nil
    Nil
    Nil           



| | (1) | Mr.
                                                                                                                                                                                                                                                                                         Robertson
                                                                                                                                                                                                                                                                                         received
                                                                                                                                                                                                                                                                                         $36,000
                                                                                                                                                                                                                                                                                         as
                                                                                                                                                                                                                                                                                         the
                                                                                                                                                                                                                                                                                         chief
                                                                                                                                                                                                                                                                                         executive
                                                                                                                                                                                                                                                                                         officer
                                                                                                                                                                                                                                                                                         and
                                                                                                                                                                                                                                                                                         a
                                                                                                                                                                                                                                                                                         director
                                                                                                                                                                                                                                                                                         of
                                                                                                                                                                                                                                                                                         the
                                                                                                                                                                                                                                                                                         Company
                                                                                                                                                                                                                                                                                         and
                                                                                                                                                                                                                                                                                         SMR
                                                                                                                                                                                                                                                                                         Investments
                                                                                                                                                                                                                                                                                         Ltd,
                                                                                                                                                                                                                                                                                         a
                                                                                                                                                                                                                                                                                         private
                                                                                                                                                                                                                                                                                         company
                                                                                                                                                                                                                                                                                         controlled
                                                                                                                                                                                                                                                                                         by
                                                                                                                                                                                                                                                                                         Mr.
                                                                                                                                                                                                                                                                                         Robertson
                                                                                                                                                                                                                                                                                         was
                                                                                                                                                                                                                                                                                         paid
                                                                                                                                                                                                                                                                                         $30,000
                                                                                                                                                                                                                                                                                         during
                                                                                                                                                                                                                                                                                         the
                                                                                                                                                                                                                                                                                         year
                                                                                                                                                                                                                                                                                         ended
                                                                                                                                                                                                                                                                                         May
                                                                                                                                                                                                                                                                                         31,
                                                                                                                                                                                                                                                                                         2013
                                                                                                                                                                                                                                                                                         for
                                                                                                                                                                                                                                                                                         management
                                                                                                                                                                                                                                                                                         services.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | The
                                                                                                                                                                                                                   valuation
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   fair
                                                                                                                                                                                                                   value
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   options
                                                                                                                                                                                                                   at
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   time
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   grant
                                                                                                                                                                                                                   is
                                                                                                                                                                                                                   based
                                                                                                                                                                                                                   on
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Black
                                                                                                                                                                                                                   Scholes
                                                                                                                                                                                                                   model
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   includes
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   following
                                                                                                                                                                                                                   assumptions;
                                                                                                                                                                                                                   weighted
                                                                                                                                                                                                                   average
                                                                                                                                                                                                                   risk
                                                                                                                                                                                                                   free
                                                                                                                                                                                                                   rate,
                                                                                                                                                                                                                   weighted
                                                                                                                                                                                                                   average
                                                                                                                                                                                                                   expected
                                                                                                                                                                                                                   life,
                                                                                                                                                                                                                   expected
                                                                                                                                                                                                                   volatility
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   dividend
                                                                                                                                                                                                                   yield.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



28







Option-based
Awards



Our
executive officers, as well as directors, employees and consultants, are eligible to participate in our stock option plan to receive
grants of stock options. Individual stock options are granted by the Board as a whole and the size of the options is dependent
on, among other things, each officer’s level of responsibility, authority and importance to our company and the degree to
which such officer’s long term contribution to our company will be crucial to our long-term success.



Stock
options are normally granted by the Board when an executive officer first joins our company based on his or her level of responsibility
within our company. Additional grants may be made periodically to ensure that the number of options granted to any particular
officer is commensurate with the officer’s level of ongoing responsibility within our company. The Board also evaluates
the number of options an officer has been granted, the exercise price of the options and the term remaining on those options when
considering further grants. Options are usually priced at the closing trading price of our shares on the business day immediately
preceding the date of grant and the current policy of the Board is that options expire five years from the date of grant.



We
have a formalized stock option plan for the granting of incentive stock options to the officers, employees, consultants and directors.



Option/SAR
Grants during the Most Recently Completed Financial Year



The
following table sets out all stock option-based awards granted to the executive officers and outstanding as of May 31, 2013.





|                   |  | Option-based
    Awards                                |  | Stock-based
    Awards
|------------------ |  | ------------------------------------------------------ |  | ----------------------
|Name               |  | Number
    ofsecuritiesunderlyingunexercisedoptions(#) |  | Optionexerciseprice($)
|John
    Robertson |  | 1,000,000
    1,000,000                                |  | 0.10
    0.10         
|Jane
    He        |  | 100,000
    
    100,000                               |  | 0.10
    0.10         



*
Calculation using Black Scholes model upon grant



Pension
Plan Benefits



We
do not have any pension, retirement or deferred compensation plans, including defined contribution plans.



Termination
and Change of Control Benefits



We
have not entered into any compensatory plans, contracts or arrangements with any of our NEOs whereby such officers are entitled
to receive compensation as a result of the resignation, retirement or any other termination of employment of the NEO or from a
change in control or a change in the NEO’s responsibilities following a change in control.



Employment
Contracts



Pursuant
to a management agreement dated May 1, 1996, we engaged SMR Investments Ltd. to provide general management services at a monthly
compensation of $2,500. SMR is a private company which is controlled by Susanne Robertson, a director and the spouse of John Robertson,
our President. Mr. Robertson is also a director and officer of SMR. The agreement may be terminated at any time by the mutual
consent of the parties.



29







Compensation
of Directors



The
following table sets forth all compensation provided to the directors during the year ended May 31, 2013, in their capacity as
directors.



We
do not pay our directors a fee for their services as such. Directors are entitled to be reimbursed for reasonable expenditures
incurred in performing their duties as directors, and we may, from time to time, grant incentive stock options to purchase common
shares to our directors.



The
following disclosure excludes John G. Robertson’s compensation in his capacity as a director, as he is an executive officer
whose compensation is disclosed above under “Summary Compensation Table”.



|Name                  |  | Fees
    Earned ($) |  | Share-Based
    Awards ($) |  | Option-BasedAwards ($)(2) |  | Non-Equity
    Incentive Plan
    Compensation ($) |  | Pension
    Value ($) |  | All
    Other
    Compensation ($) |  | Total
    ($)
|--------------------- |  | ------------------- |  | -------------------------- |  | ------------------------- |  | -------------------------------------------------- |  | --------------------- |  | ---------------------------------- |  | -------------
|Susanne
    Robertson |  | Nil                 |  | Nil                        |  | 10,301                    |  | Nil                                                |  | Nil                   |  | Nil
    (1)                        |  | 10,301       
|Thomas
    Parkhill   |  | Nil                 |  | Nil                        |  | 919                       |  | Nil                                                |  | Nil                   |  | Nil                                |  | 919          
|Suzan
    El-Khatib   |  | Nil                 |  | Nil                        |  | 3,090                     |  | Nil                                                |  | Nil                   |  | Nil                                |  | 3,090        
|Thomas
    Robertson  |  | Nil                 |  | Nil                        |  | 919                       |  | Nil                                                |  | Nil                   |  | Nil                                |  | 919          



|(1) | Mrs.
                                                                                                                                                 Robertson
                                                                                                                                                 is
                                                                                                                                                 a
                                                                                                                                                 shareholder
                                                                                                                                                 of
                                                                                                                                                 SMR
                                                                                                                                                 Investments
                                                                                                                                                 Ltd.,
                                                                                                                                                 which
                                                                                                                                                 is
                                                                                                                                                 paid
                                                                                                                                                 $2,500
                                                                                                                                                 per
                                                                                                                                                 month
                                                                                                                                                 for
                                                                                                                                                 management
                                                                                                                                                 services
                                                                                                                                                 provided
                                                                                                                                                 for
                                                                                                                                                 the
                                                                                                                                                 Company
                                                                                                                                                 by
                                                                                                                                                 Mr.
                                                                                                                                                 John
                                                                                                                                                 Robertson,
                                                                                                                                                 who
                                                                                                                                                 is
                                                                                                                                                 also
                                                                                                                                                 a
                                                                                                                                                 shareholder
                                                                                                                                                 of
                                                                                                                                                 SMR
                                                                                                                                                 Investment
                                                                                                                                                 Ltd.
                                                                                                                                                 No
                                                                                                                                                 fees
                                                                                                                                                 were
                                                                                                                                                 paid
                                                                                                                                                 to
                                                                                                                                                 Mrs.
                                                                                                                                                 Robertson.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | The
                                                                                                                                                 valuation
                                                                                                                                                 of
                                                                                                                                                 the
                                                                                                                                                 fair
                                                                                                                                                 value
                                                                                                                                                 of
                                                                                                                                                 the
                                                                                                                                                 options
                                                                                                                                                 at
                                                                                                                                                 the
                                                                                                                                                 time
                                                                                                                                                 of
                                                                                                                                                 the
                                                                                                                                                 grant
                                                                                                                                                 is
                                                                                                                                                 based
                                                                                                                                                 on
                                                                                                                                                 the
                                                                                                                                                 Black
                                                                                                                                                 Scholes
                                                                                                                                                 model
                                                                                                                                                 and
                                                                                                                                                 includes
                                                                                                                                                 the
                                                                                                                                                 following
                                                                                                                                                 assumptions;
                                                                                                                                                 weighted
                                                                                                                                                 average
                                                                                                                                                 risk
                                                                                                                                                 free
                                                                                                                                                 rate,
                                                                                                                                                 weighted
                                                                                                                                                 average
                                                                                                                                                 expected
                                                                                                                                                 life,
                                                                                                                                                 expected
                                                                                                                                                 volatility
                                                                                                                                                 and
                                                                                                                                                 dividend
                                                                                                                                                 yield.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Other
than John Robertson, the directors are not compensated for their services in their capacity as directors, although directors are
reimbursed for their expenses incurred in connection with their services as directors.



Directors
are also entitled to participate in our stock option plan, which is designed to give each option holder an interest in preserving
and maximizing shareholder value in the longer term. Individual grants are determined by an assessment of each individual Director’s
current and expected future performance, level of responsibilities and the importance of his/her position and contribution to
our company.



|C. |  | Board
                                                                                                                                                                                                                                             Practices
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our
Board consists of five members, the terms of which expire at the general meeting of shareholders to be held in each year. The
information regarding the term each director has served in office in “Item 6.A – Directors and Senior Management”
is hereby incorporated by reference in response to this Item 6.C. Directors are elected by a majority of the votes of our common
shares present in person or represented by proxy at our annual meeting of shareholders and entitled to vote at such election.
Each director will hold office until his or her term expires or until he or she resigns. Executive officers serve at the discretion
of the Board. Officers are elected at the annual meeting of the directors held immediately after the annual meeting of shareholders.
The directors hold regularly scheduled meetings at which members of management are not in attendance.



None
of our directors have entered into service contracts with us or any of our subsidiaries that provide for benefits upon their termination
as a director.



We
have granted and intend to continue to grant stock options to employees, directors, officers and consultants on terms and conditions
established by the Board at the time of the grant and in accordance with our stock option plan and prevailing TSX.V policy. Except
as disclosed above under “Compensation of Directors”, our directors do not receive any monies for serving in
their capacity as Directors and there is currently no arrangement for the payment of any compensation in the future.



30







We
have the following committees of the Board:



Audit
Committee



The
Board of directors has determined that it does not have a member that qualifies as an “audit committee financial expert”
as defined in Form 20-F of the SEC.



We
have been unable to retain the services of a person who qualifies as an “audit committee financial expert”. Until
we appoint such a person, we believe that the members of our Board of Directors are collectively capable of analyzing and evaluating
our financial statements and understanding internal controls and procedures for financial reporting.



|D. |  | Employees
|-- |  | ---------



We
do not presently have any employees.



|E. |  | Share
                                                                                                                                                                                                                                             Ownership
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following table sets forth the common share ownership of each of our officers and directors as at September 30, 2013. Each person
has sole voting and investment power with respect to the shares of common stock shown, and all ownership is of record and beneficial.



|Name                                                         |  | Number
    of Common Shares Owned |           |  | Positions |                                 | Percentage
    of Outstanding Common Shares (1) | 
|------------------------------------------------------------ |  | --------------------------------- | --------- |  | --------- | ------------------------------- | ----------------------------------------------- | 
|John
    G. Robertson (2)                                    |  |                                   | 6,162,347 |  |           | President,
    CEO and Director |                                                 | 
|Suzan El-Khatib                                              |  |                                   | Nil       |  |           | Director                        |                                                 | 
|Susanne
    Robertson (3)                                    |  |                                   | 2,937,750 |  |           | Director                        |                                                 | 
|Thomas
    Parkhill                                          |  |                                   | Nil       |  |           | Director                        |                                                 | 
|Thomas
    Robertson                                         |  |                                   | Nil       |  |           | Director                        |                                                 | 
|Jane
    He                                                  |  |                                   | Nil       |  |           | CFO                             |                                                 | 
|ALL
    DIRECTORS AND SENIOR OFFICERS AS A GROUP (6 persons) |  |                                   | 9,100,097 |  |           |                                 |                                                 | 



|(1) | Based
                                                                                                                                                on
                                                                                                                                                issued
                                                                                                                                                and
                                                                                                                                                outstanding
                                                                                                                                                share
                                                                                                                                                capital
                                                                                                                                                of
                                                                                                                                                70,251,605
                                                                                                                                                common
                                                                                                                                                shares
                                                                                                                                                as
                                                                                                                                                of
                                                                                                                                                September
                                                                                                                                                30,
                                                                                                                                                2013.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Included
                                                                                                                                                in
                                                                                                                                                John
                                                                                                                                                Robertson’s
                                                                                                                                                shareholdings
                                                                                                                                                are:
                                                                                                                                                (i)
                                                                                                                                                445,450
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                Access
                                                                                                                                                Information
                                                                                                                                                Services,
                                                                                                                                                a
                                                                                                                                                private
                                                                                                                                                British
                                                                                                                                                Columbia
                                                                                                                                                corporation
                                                                                                                                                controlled
                                                                                                                                                by
                                                                                                                                                the
                                                                                                                                                Robertson
                                                                                                                                                Family
                                                                                                                                                Trust;
                                                                                                                                                (ii)
                                                                                                                                                50,000
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                KLR
                                                                                                                                                Petroleum
                                                                                                                                                Inc.,
                                                                                                                                                a
                                                                                                                                                private
                                                                                                                                                British
                                                                                                                                                Columbia
                                                                                                                                                corporation
                                                                                                                                                controlled
                                                                                                                                                by
                                                                                                                                                John
                                                                                                                                                Robertson.
                                                                                                                                                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;
                                                                                                                                                (iii)
                                                                                                                                                1,308,000
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                JGR
                                                                                                                                                Petroleum
                                                                                                                                                Inc.,
                                                                                                                                                a
                                                                                                                                                corporation
                                                                                                                                                controlled
                                                                                                                                                by
                                                                                                                                                the
                                                                                                                                                Robertson
                                                                                                                                                Family
                                                                                                                                                Trust;
                                                                                                                                                (iv)
                                                                                                                                                260,000
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                Imaging
                                                                                                                                                Technology
                                                                                                                                                Inc.;
                                                                                                                                                (v)
                                                                                                                                                1,766,833
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                540330
                                                                                                                                                BC
                                                                                                                                                Ltd.
                                                                                                                                                and
                                                                                                                                                (vi)
                                                                                                                                                2,332,064
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                John
                                                                                                                                                Robertson.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Included
                                                                                                                                                in
                                                                                                                                                Ms.
                                                                                                                                                Robertson’s
                                                                                                                                                shareholdings
                                                                                                                                                are:
                                                                                                                                                2,005,150
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                SMR
                                                                                                                                                Investments
                                                                                                                                                Ltd.,
                                                                                                                                                a
                                                                                                                                                private
                                                                                                                                                British
                                                                                                                                                Columbia
                                                                                                                                                corporation
                                                                                                                                                controlled
                                                                                                                                                by
                                                                                                                                                Ms.
                                                                                                                                                Robertson
                                                                                                                                                and
                                                                                                                                                932,600
                                                                                                                                                shares
                                                                                                                                                registered
                                                                                                                                                in
                                                                                                                                                the
                                                                                                                                                name
                                                                                                                                                of
                                                                                                                                                Susanne
                                                                                                                                                Robertson.
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



31







The
following table sets forth the stock purchase option ownership of each of our officers and directors as at September 30, 2013.
Each person has sole voting and investment power with respect to the shares of common stock shown, and all ownership is of record
and beneficial.



|Name                                                         |  | Number
    of
 Options 
Owned |           |  | Number
    of
 Options 
Vested |  |         | Percentage
    of
 Outstanding
 Common Shares (1) | 
|------------------------------------------------------------ |  | ----------------------------- | --------- |  | ------------------------------ |  | ------- | ------------------------------------------------- | 
|John
    G. Robertson                                        |  |                               | 2,000,000 |  |                                |  | 500,000 |                                                   | 
|Suzan
    El-Khatib                                          |  |                               | 300,000   |  |                                |  | 75,000  |                                                   | 
|Thomas
    Parkhill                                          |  |                               | 100,000   |  |                                |  | 25,000  |                                                   | 
|Susanne
    Robertson                                        |  |                               | 1,000,000 |  |                                |  | 250,000 |                                                   | 
|Thomas
    Robertson                                         |  |                               | 150,000   |  |                                |  | 37,500  |                                                   | 
|Jane
    He                                                  |  |                               | 200,000   |  |                                |  | 50,000  |                                                   | 
|ALL
    DIRECTORS AND SENIOR OFFICERS AS A GROUP (6 persons) |  |                               | 3,750,000 |  |                                |  | 937,500 |                                                   | 



|(1) | Based
                                                                                                                                                on
                                                                                                                                                70,251,605
                                                                                                                                                common
                                                                                                                                                shares
                                                                                                                                                and
                                                                                                                                                4,800,000
                                                                                                                                                stock
                                                                                                                                                purchase
                                                                                                                                                options
                                                                                                                                                outstanding
                                                                                                                                                on
                                                                                                                                                September
                                                                                                                                                30,
                                                                                                                                                2013.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock
Option Plan



Our
Stock Option Plan (the “Plan”) was approved by our shareholders at our annual meeting held on April 29, 2011.
Pursuant to the Plan we may grant up to 10% of our issued and outstanding shares for issuance to directors, officers, employees
and consultants at prices set in accordance with the policies of the TSX.V. As of the date of this registration statement, there
are 4,800,000 options outstanding, at exercise prices ranging between $0.10 and $0.185 per share which expire on dates ranging
between October 30, 2014 and May 28, 2018.



The
purpose of the Plan is to provide incentive to employees, officers, directors, management company employee and consultants who
provide services to us and reduce the cash compensation we would otherwise have to pay.



The
Plan is administered by the Board or, if the Board so elects, by a committee appointed by the Board. The Plan provides that options
will be issued pursuant to option agreements (“Option Agreements”). No optionee under the Plan shall be granted
an option which exceeds the maximum number permitted by the TSX.V. Options issued pursuant to the Plan will have an exercise price
determined by the Board provided that it is not less than the price permitted by the TSX.V, or, if our shares are no longer listed
on the TSX.V, then such other exchange or quotation system on which our shares are listed or quoted for trading.



Options
granted under the plan shall, unless sooner terminated, expire on a date to be determined by the Board which will not be later
than 5 years from the day the option is granted or 90 days from the date the optionee ceases to be a director, officer, consultant,
employee or a management company employee, unless such optionee was engaged in investor relations activities in which case, only
within 30 days after the cessation of his services to us.



In
the event of death of an optionee, options held by such optionee will expire the earlier of 5 years from the date of grant or
one year from the date of such death.



|Item
7. |  | Major
                                                                                                                        SHAREHOLDERS
                                                                                                                        AND RELATED
                                                                                                                        PARTY
                                                                                                                        TRANSACTIONS
|------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|A. |  | Major
                                                                                                                                                                                                                                             Shareholders
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Holdings
by Major Shareholders



The
following table sets forth the shareholdings of those persons who own of record or are known to us to own beneficially, directly
or indirectly, or exercise control or direction over, more than 5% of our issued and outstanding common shares as at the date
of this annual report:



|Identity
    of Person or Group |  | Type
    of 
    Ownership |  | Amount
    Owned |           |  | Percent
    ofClass(1) | 
|------------------------------- |  | -------------------------- |  | ---------------- | --------- |  | ---------------------- | 
|John
    Robertson              |  | Direct/Indirect            |  |                  | 6,162,347 |  |                        | 



| | (1) | Based
                                                                                                                                                                                                                     on
                                                                                                                                                                                                                     diluted
                                                                                                                                                                                                                     issued
                                                                                                                                                                                                                     and
                                                                                                                                                                                                                     outstanding
                                                                                                                                                                                                                     share
                                                                                                                                                                                                                     capital
                                                                                                                                                                                                                     of
                                                                                                                                                                                                                     70,251,605
                                                                                                                                                                                                                     common
                                                                                                                                                                                                                     shares
                                                                                                                                                                                                                     at
                                                                                                                                                                                                                     September
                                                                                                                                                                                                                     30,
                                                                                                                                                                                                                     2013.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



32







Canadian
Share Ownership



The
following table indicates the approximate number of Canadian record holders of common shares and the portion and percentage of
common shares held in Canada as at September 27, 2013:



|Total
    Number of 
    Holders |     |  | Number
    of 
    Canadian Holders |  |    | Number
    of Common
    Shares Held in Canada |  |  | Percentage
    of 
    Common Shares Held 
    in Canada | 
|-------------------------------- | --- |  | ----------------------------------- |  | -- | ---------------------------------------------- |  |  | -------------------------------------------------------- | 
|                                 | 220 |  |                                     |  | 73 |                                                |  |  | 58,636,550                                               | 



|(1) | Based
                                                                                                                                                                     on
                                                                                                                                                                     issued
                                                                                                                                                                     and
                                                                                                                                                                     outstanding
                                                                                                                                                                     share
                                                                                                                                                                     capital
                                                                                                                                                                     of
                                                                                                                                                                     70,251,605
                                                                                                                                                                     common
                                                                                                                                                                     shares
                                                                                                                                                                     as
                                                                                                                                                                     of
                                                                                                                                                                     September
                                                                                                                                                                     30,
                                                                                                                                                                     2013.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



U.S.
share Ownership



The
following table indicates the approximate number of record holders of common shares with United States addresses and the portion
and percentage of common shares held in the United States as at September 27, 2013:



|Total
    Number of 
    Holders |     |  | Number
    of U.S. 
    Holders |  |     | Number
    of Common 
    Shares Held in the U.S. |  |  | Percentage
    of Common
    Shares Held in the U.S. | 
|-------------------------------- | --- |  | ------------------------------- |  | --- | ------------------------------------------------- |  |  | ---------------------------------------------------- | 
|                                 | 220 |  |                                 |  | 145 |                                                   |  |  | 11,604,805                                           | 



|(2) | Based
                                                                                                                                                                     on
                                                                                                                                                                     issued
                                                                                                                                                                     and
                                                                                                                                                                     outstanding
                                                                                                                                                                     share
                                                                                                                                                                     capital
                                                                                                                                                                     of
                                                                                                                                                                     70,251,605
                                                                                                                                                                     common
                                                                                                                                                                     shares
                                                                                                                                                                     as
                                                                                                                                                                     of
                                                                                                                                                                     September
                                                                                                                                                                     30,
                                                                                                                                                                     2013.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
computation of the number and percentage of common shares held in the United States is based upon the number of common shares
held by record holders with United States addresses and by trusts, estates or accounts with United States addresses as disclosed
to us following inquiry to all record holders known to us to be trustees, executors, guardians, custodians or other fiduciaries
holding common shares for one or more trusts, estates or accounts. United States residents may beneficially own common shares
held of record by non-United States residents.



Control
of the Corporation



We
are a publicly owned Canadian company, the shares of which are owned by Canadian residents, U.S. residents and other foreign residents.
To the best of our knowledge, we are not directly or indirectly owned or controlled by another corporation, any foreign governments
or any other natural or legal person, jointly or severally.



Change
in Control Arrangements



We
are not aware of any arrangements the operation of which may at a subsequent date result in a change of control of our company.



|B. |  | Related
                                                                                                                                                                                                                                             Party
                                                                                                                                                                                                                                             Transactions
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Other
than as disclosed in Item 6.B – “Directors, Senior Management and Employees – Compensation” and
the transactions set forth below, there are no related party transactions or proposed transactions involving any insider, or associate
or affiliate of an insider, that have occurred during our two most recently completed fiscal.



During
the year ended May 31, 2013 and May 31, 2012, we entered into the following transactions with related parties:



| | ● | SMR
                                                                                                                                                                                                                        Investments
                                                                                                                                                                                                                        Ltd.
                                                                                                                                                                                                                        (“SMR”)
                                                                                                                                                                                                                        is
                                                                                                                                                                                                                        a
                                                                                                                                                                                                                        private
                                                                                                                                                                                                                        company
                                                                                                                                                                                                                        controlled
                                                                                                                                                                                                                        by
                                                                                                                                                                                                                        an
                                                                                                                                                                                                                        officer.
                                                                                                                                                                                                                        Under
                                                                                                                                                                                                                        a
                                                                                                                                                                                                                        management
                                                                                                                                                                                                                        contract
                                                                                                                                                                                                                        with
                                                                                                                                                                                                                        SMR,
                                                                                                                                                                                                                        we
                                                                                                                                                                                                                        agreed
                                                                                                                                                                                                                        to
                                                                                                                                                                                                                        pay
                                                                                                                                                                                                                        $2,500
                                                                                                                                                                                                                        per
                                                                                                                                                                                                                        month
                                                                                                                                                                                                                        for
                                                                                                                                                                                                                        management
                                                                                                                                                                                                                        services.
                                                                                                                                                                                                                        We
                                                                                                                                                                                                                        were
                                                                                                                                                                                                                        charged
                                                                                                                                                                                                                        management
                                                                                                                                                                                                                        fees
                                                                                                                                                                                                                        by
                                                                                                                                                                                                                        SMR
                                                                                                                                                                                                                        of
                                                                                                                                                                                                                        $30,000
                                                                                                                                                                                                                        during
                                                                                                                                                                                                                        the
                                                                                                                                                                                                                        year
                                                                                                                                                                                                                        ended
                                                                                                                                                                                                                        May
                                                                                                                                                                                                                        31,
                                                                                                                                                                                                                        2013
                                                                                                                                                                                                                        (2012
                                                                                                                                                                                                                        -
                                                                                                                                                                                                                        $30,000).
                                                                                                                                                                                                                        As
                                                                                                                                                                                                                        of
                                                                                                                                                                                                                        May
                                                                                                                                                                                                                        31,
                                                                                                                                                                                                                        2013,
                                                                                                                                                                                                                        $357
                                                                                                                                                                                                                        (May
                                                                                                                                                                                                                        31,
                                                                                                                                                                                                                        2012
                                                                                                                                                                                                                        -
                                                                                                                                                                                                                        $Nil)
                                                                                                                                                                                                                        was
                                                                                                                                                                                                                        payable
                                                                                                                                                                                                                        to
                                                                                                                                                                                                                        SMR.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | During
                                                                                                                                                                                                                        the
                                                                                                                                                                                                                        year
                                                                                                                                                                                                                        ended
                                                                                                                                                                                                                        May
                                                                                                                                                                                                                        31,
                                                                                                                                                                                                                        2013,
                                                                                                                                                                                                                        management
                                                                                                                                                                                                                        and
                                                                                                                                                                                                                        director’s
                                                                                                                                                                                                                        fees
                                                                                                                                                                                                                        of
                                                                                                                                                                                                                        $36,000
                                                                                                                                                                                                                        (2012
                                                                                                                                                                                                                        -
                                                                                                                                                                                                                        $19,000)
                                                                                                                                                                                                                        were
                                                                                                                                                                                                                        paid
                                                                                                                                                                                                                        to
                                                                                                                                                                                                                        our
                                                                                                                                                                                                                        President.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Fees
                                                                                                                                                                                                                        of
                                                                                                                                                                                                                        $8,342
                                                                                                                                                                                                                        (2012
                                                                                                                                                                                                                        -
                                                                                                                                                                                                                        $11,495)
                                                                                                                                                                                                                        were
                                                                                                                                                                                                                        paid
                                                                                                                                                                                                                        to
                                                                                                                                                                                                                        KLR
                                                                                                                                                                                                                        Petroleum
                                                                                                                                                                                                                        Ltd.
                                                                                                                                                                                                                        (which
                                                                                                                                                                                                                        is
                                                                                                                                                                                                                        controlled
                                                                                                                                                                                                                        by
                                                                                                                                                                                                                        our
                                                                                                                                                                                                                        President)
                                                                                                                                                                                                                        for
                                                                                                                                                                                                                        administration
                                                                                                                                                                                                                        of
                                                                                                                                                                                                                        our
                                                                                                                                                                                                                        payroll
                                                                                                                                                                                                                        and
                                                                                                                                                                                                                        benefit
                                                                                                                                                                                                                        plan.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



33







Related
party transactions occurred in the normal course of operations and are measured at agreed to amounts, which is the amount of consideration
established and agreed to by the parties.



At
May 31, 2013, the following advances to/from related parties, other than the note receivable from REGI US, Inc. are unsecured,
non-interest bearing and have no fixed terms of repayment. Unless otherwise indicated, the companies are controlled by the President
and CEO or are companies where he is the President and CEO:



Advances
to related parties:



|                      |  | May
    31, 2013 $ |        |  | May
    31, 2012 $ | 
|--------------------- |  | ------------------ | ------ |  | ------------------ | 
|REGI
    US, Inc. (1) |  |                    | 26,704 |  |                    | 
|                      |  |                    | 26,704 |  |                    | 



Advances
from related parties:



|                                   |  | May
    31, 2013 $ |       |  | May
    31, 2012 $ | 
|---------------------------------- |  | ------------------ | ----- |  | ------------------ | 
|Minewest
    Silver and Gold Corp. |  |                    | 3,717 |  |                    | 
|Linux
    Gold Corp. (2)           |  |                    | 2,642 |  |                    | 
|SMR
    Investments Ltd.           |  |                    | 357   |  |                    | 
|                                   |  |                    | 6,716 |  |                    | 



| | (a) | During
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   year
                                                                                                                                                                                                                   ended
                                                                                                                                                                                                                   May
                                                                                                                                                                                                                   31,
                                                                                                                                                                                                                   2012
                                                                                                                                                                                                                   REGI
                                                                                                                                                                                                                   US,
                                                                                                                                                                                                                   Inc.
                                                                                                                                                                                                                   repaid
                                                                                                                                                                                                                   $3,916
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   converted
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   balance
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   $24,684
                                                                                                                                                                                                                   into
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   promissory
                                                                                                                                                                                                                   note
                                                                                                                                                                                                                   owed
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                   at
                                                                                                                                                                                                                   annual
                                                                                                                                                                                                                   interest
                                                                                                                                                                                                                   rate
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   $6%,
                                                                                                                                                                                                                   for
                                                                                                                                                                                                                   which
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                   recorded
                                                                                                                                                                                                                   interest
                                                                                                                                                                                                                   income
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   $1,480
                                                                                                                                                                                                                   (2012
                                                                                                                                                                                                                   -
                                                                                                                                                                                                                   $540)
                                                                                                                                                                                                                   on
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   promissory
                                                                                                                                                                                                                   note
                                                                                                                                                                                                                   during
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   year
                                                                                                                                                                                                                   ended
                                                                                                                                                                                                                   May
                                                                                                                                                                                                                   31,
                                                                                                                                                                                                                   2013.
                                                                                                                                                                                                                   The
                                                                                                                                                                                                                   note
                                                                                                                                                                                                                   initially
                                                                                                                                                                                                                   matured
                                                                                                                                                                                                                   on
                                                                                                                                                                                                                   April
                                                                                                                                                                                                                   18,
                                                                                                                                                                                                                   2012
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   was
                                                                                                                                                                                                                   extended
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   expiry
                                                                                                                                                                                                                   date
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   June
                                                                                                                                                                                                                   30,
                                                                                                                                                                                                                   2013
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   then
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   June
                                                                                                                                                                                                                   30,
                                                                                                                                                                                                                   2014.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | During
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   year
                                                                                                                                                                                                                   ended
                                                                                                                                                                                                                   May
                                                                                                                                                                                                                   31,
                                                                                                                                                                                                                   2013,
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Company
                                                                                                                                                                                                                   completed
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   expenditure
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   $500,000
                                                                                                                                                                                                                   on
                                                                                                                                                                                                                   exploration
                                                                                                                                                                                                                   on
                                                                                                                                                                                                                   Fish
                                                                                                                                                                                                                   Creek
                                                                                                                                                                                                                   property
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   cash
                                                                                                                                                                                                                   payments
                                                                                                                                                                                                                   made
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   lieu
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   exploration
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   purchase
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   its
                                                                                                                                                                                                                   50%
                                                                                                                                                                                                                   interest
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   Fish
                                                                                                                                                                                                                   Creek
                                                                                                                                                                                                                   property
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   accordance
                                                                                                                                                                                                                   with
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   option
                                                                                                                                                                                                                   agreement
                                                                                                                                                                                                                   with
                                                                                                                                                                                                                   Linux
                                                                                                                                                                                                                   Gold.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|C. |  | Interests
                                                                                                                                                           of
                                                                                                                                                           Experts
                                                                                                                                                           and
                                                                                                                                                           Counsel
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
8. |  | FINANCIAL
                                                                                            INFORMATION
|------- |  | -----------------------------------------------------------------------------------------------------------------



|A. |  | Consolidated
                                                                                                                                                                                                                                             Statements
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Other
                                                                                                                                                                                                                                             Financial
                                                                                                                                                                                                                                             Information
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Included
are our audited financial statements, consisting of consolidated statements of financial position as at May 31, 2013 and 2012,
consolidated statements of operations and comprehensive income (loss), consolidated statements of cash flows and consolidated
statements of changes in equity for each of the years ended May 31, 2013 and 2012 along with related notes and Auditor’s
Report. See Item 17 – “Financial Statements”.



Legal
Proceedings



There
are no material legal or arbitration proceedings to which we were a party or in respect of which our property is subject. Our
management has no knowledge of any legal proceedings in which we may be involved or that are contemplated by governmental authorities
or otherwise.



Dividend
Policy



No
dividends have been paid on any class of our shares since the date of our incorporation and we are not contemplating that any
dividends will be paid in the immediate or foreseeable future.



34







|B. |  | Significant
                                                                                                                                                                                                                                             Changes
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following events occurred subsequent to May 31, 2013:



| | ● | On
                                                                                                                                                                                                                       July
                                                                                                                                                                                                                       9,
                                                                                                                                                                                                                       2013
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       Company
                                                                                                                                                                                                                       cancelled
                                                                                                                                                                                                                       and
                                                                                                                                                                                                                       returned
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       treasury
                                                                                                                                                                                                                       294,000
                                                                                                                                                                                                                       common
                                                                                                                                                                                                                       shares
                                                                                                                                                                                                                       purchased
                                                                                                                                                                                                                       by
                                                                                                                                                                                                                       May
                                                                                                                                                                                                                       31,
                                                                                                                                                                                                                       2013
                                                                                                                                                                                                                       in
                                                                                                                                                                                                                       accordance
                                                                                                                                                                                                                       with
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       NCIB
                                                                                                                                                                                                                       approved
                                                                                                                                                                                                                       in
                                                                                                                                                                                                                       2012.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | Effective
                                                                                                                                                                                                                       June
                                                                                                                                                                                                                       12,
                                                                                                                                                                                                                       2013,
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       Company
                                                                                                                                                                                                                       amended
                                                                                                                                                                                                                       its
                                                                                                                                                                                                                       Article
                                                                                                                                                                                                                       whereby
                                                                                                                                                                                                                       authorized
                                                                                                                                                                                                                       number
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       common
                                                                                                                                                                                                                       shares
                                                                                                                                                                                                                       increased
                                                                                                                                                                                                                       from
                                                                                                                                                                                                                       100,000,000
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       unlimited
                                                                                                                                                                                                                       and
                                                                                                                                                                                                                       authorized
                                                                                                                                                                                                                       number
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       preferred
                                                                                                                                                                                                                       shares
                                                                                                                                                                                                                       increased
                                                                                                                                                                                                                       from
                                                                                                                                                                                                                       5,000,000
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       unlimited.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | On
                                                                                                                                                                                                                       September
                                                                                                                                                                                                                       9,
                                                                                                                                                                                                                       2013
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       Company
                                                                                                                                                                                                                       received
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       approval
                                                                                                                                                                                                                       from
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       TSX.V
                                                                                                                                                                                                                       on
                                                                                                                                                                                                                       a
                                                                                                                                                                                                                       second
                                                                                                                                                                                                                       NCIB
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       purchase
                                                                                                                                                                                                                       up
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       3,512,580
                                                                                                                                                                                                                       issued
                                                                                                                                                                                                                       and
                                                                                                                                                                                                                       outstanding
                                                                                                                                                                                                                       common
                                                                                                                                                                                                                       shares
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       Company
                                                                                                                                                                                                                       on
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       open
                                                                                                                                                                                                                       market.
                                                                                                                                                                                                                       As
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       date
                                                                                                                                                                                                                       of
                                                                                                                                                                                                                       this
                                                                                                                                                                                                                       report,
                                                                                                                                                                                                                       the
                                                                                                                                                                                                                       Company
                                                                                                                                                                                                                       has
                                                                                                                                                                                                                       not
                                                                                                                                                                                                                       purchased
                                                                                                                                                                                                                       any
                                                                                                                                                                                                                       shares
                                                                                                                                                                                                                       pursuant
                                                                                                                                                                                                                       to
                                                                                                                                                                                                                       this
                                                                                                                                                                                                                       NCIB.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|Item
9. |  | THE
                                                                                            OFFER AND LISTING
|------- |  | -----------------------------------------------------------------------------------------------------------------



|A. |  | Offer
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Listing
                                                                                                                                                                                                                                             Details
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
currently trade on the TSX.V under the trading symbol “TRC-V”. There are currently no restrictions on
the transferability of these shares under Canadian securities laws. In addition, our shares trade on the OTC BB under the symbol
TRYLF.OB. There is also a U.S. market in our shares on the Pink Sheets. We are not specifically aware of prices
and other trading details for any shares which have or may have traded on the Pink Sheets. The ranges of the low and high sales
prices for our shares traded on the TSX.V and OTC BB for the periods indicated are as follows.



The
following summarizes the reported high and low prices for our shares on the TSX.V and the OTC BB for the periods indicated:



|                         |  | TSX.V(1) |      |  | OTC
    BB(2) | 
|------------------------ |  | -------- | ---- |  | ------------- | 
|                         |  | High     |      |  | Low           | 
|Monthly
    Stock Prices |  | Cdn$     |      |  | Cdn$          | 
|August
    2013          |  |          | 0.04 |  |               | 
|July
    2013            |  |          | 0.05 |  |               | 
|June
    2013            |  |          | 0.04 |  |               | 
|May
    2013             |  |          | 0.06 |  |               | 
|April
    2013           |  |          | 0.07 |  |               | 
|March
    2013           |  |          | 0.06 |  |               | 



| | (1) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            TSX.V.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            OTC
                                                                                                                                                                                                            BB.
                                                                                                                                                                                                            The
                                                                                                                                                                                                            quotations
                                                                                                                                                                                                            reflect
                                                                                                                                                                                                            inter-dealer
                                                                                                                                                                                                            prices,
                                                                                                                                                                                                            without
                                                                                                                                                                                                            retail
                                                                                                                                                                                                            mark-up,
                                                                                                                                                                                                            markdown
                                                                                                                                                                                                            or
                                                                                                                                                                                                            commission
                                                                                                                                                                                                            and
                                                                                                                                                                                                            may
                                                                                                                                                                                                            not
                                                                                                                                                                                                            represent
                                                                                                                                                                                                            actual
                                                                                                                                                                                                            transactions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                           |  | TSX.V(1) |      |  | OTC
    BB(2) | 
|-------------------------- |  | -------- | ---- |  | ------------- | 
|                           |  | High     |      |  | Low           | 
|Quarterly
    Stock Prices |  | Cdn$     |      |  | Cdn$          | 
|Fiscal
    2013            |  |          |      |  |               | 
|Fourth
    Quarter         |  |          | 0.07 |  |               | 
|Third
    Quarter          |  |          | 0.07 |  |               | 
|Second
    Quarter         |  |          | 0.09 |  |               | 
|First
    Quarter          |  |          | 0.08 |  |               | 
|Fiscal
    2012            |  |          |      |  |               | 
|Fourth
    Quarter         |  |          | 0.08 |  |               | 
|Third
    Quarter (1)      |  |          | 0.10 |  |               | 
|Second
    Quarter         |  |          | 0.13 |  |               | 
|First
    Quarter          |  |          | 0.13 |  |               | 



| | (1) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            TSX.V.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            OTC
                                                                                                                                                                                                            BB.
                                                                                                                                                                                                            The
                                                                                                                                                                                                            quotations
                                                                                                                                                                                                            reflect
                                                                                                                                                                                                            inter-dealer
                                                                                                                                                                                                            prices,
                                                                                                                                                                                                            without
                                                                                                                                                                                                            retail
                                                                                                                                                                                                            mark-up,
                                                                                                                                                                                                            markdown
                                                                                                                                                                                                            or
                                                                                                                                                                                                            commission
                                                                                                                                                                                                            and
                                                                                                                                                                                                            may
                                                                                                                                                                                                            not
                                                                                                                                                                                                            represent
                                                                                                                                                                                                            actual
                                                                                                                                                                                                            transactions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



35







|                        |  | TSX.V(1) |      |  | OTC
    BB(2) | 
|----------------------- |  | -------- | ---- |  | ------------- | 
|                        |  | High     |      |  | Low           | 
|Annual
    Stock Prices |  | Cdn$     |      |  | Cdn$          | 
|Fiscal
    2013         |  |          | 0.09 |  |               | 
|Fiscal
    2012         |  |          | 0.13 |  |               | 
|Fiscal
    2011         |  |          | 0.20 |  |               | 
|Fiscal
    2010         |  |          | 0.39 |  |               | 
|Fiscal
    2009         |  |          | 0.17 |  |               | 



| | (1) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            TSX.V.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Stock
                                                                                                                                                                                                            price
                                                                                                                                                                                                            information
                                                                                                                                                                                                            provided
                                                                                                                                                                                                            by
                                                                                                                                                                                                            OTC
                                                                                                                                                                                                            BB.
                                                                                                                                                                                                            The
                                                                                                                                                                                                            quotations
                                                                                                                                                                                                            reflect
                                                                                                                                                                                                            inter-dealer
                                                                                                                                                                                                            prices,
                                                                                                                                                                                                            without
                                                                                                                                                                                                            retail
                                                                                                                                                                                                            mark-up,
                                                                                                                                                                                                            markdown
                                                                                                                                                                                                            or
                                                                                                                                                                                                            commission
                                                                                                                                                                                                            and
                                                                                                                                                                                                            may
                                                                                                                                                                                                            not
                                                                                                                                                                                                            represent
                                                                                                                                                                                                            actual
                                                                                                                                                                                                            transactions.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
closing price of our common shares on the TSX.V on May 31, 2013 was Cdn$0.04 and on the OTC BB it was US$0.05.



|B. |  | Plan
                                                                                                                                                                                                                                             of
                                                                                                                                                                                                                                             Distribution
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|C. |  | Markets
|-- |  | -------



Our
common shares trade on the TSX.V under the symbol TRC-V. There are currently no restrictions on the transferability of these shares
under Canadian securities laws. In addition our common shares trade on the OTCBB under the symbol TRYLF.OB. Additionally, there
has been a U.S. market in our shares on the Pink Sheets.



|D. |  | Selling
                                                                                                                                                                                                                                             Shareholders
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|E. |  | Dilution
|-- |  | --------



Not
applicable.



|F. |  | Expenses
                                                                                                                                                                                                                                             of
                                                                                                                                                                                                                                             the
                                                                                                                                                                                                                                             Issue
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
10. |  | ADDITIONAL
                                                                                             INFORMATION
|-------- |  | -------------------------------------------------------------------------------------------------------------------



|A. |  | Share
                                                                                                                                                                                                                                             Capital
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|B. |  | Memorandum
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Articles
                                                                                                                                                                                                                                             of
                                                                                                                                                                                                                                             Association
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Securities
Register



We
maintain at Computer share Investor Services Inc. (“transfer agent”) a securities register in which we
record the securities issued by us in registered form, showing with respect to each class or series of securities:



| | (a) | the
                                                                                                                                                                                                                   names,
                                                                                                                                                                                                                   alphabetically
                                                                                                                                                                                                                   arranged
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   latest
                                                                                                                                                                                                                   known
                                                                                                                                                                                                                   address
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   each
                                                                                                                                                                                                                   person
                                                                                                                                                                                                                   who
                                                                                                                                                                                                                   is
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   has
                                                                                                                                                                                                                   been
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   security
                                                                                                                                                                                                                   holder;
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (b) | the
                                                                                                                                                                                                                   number
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   securities
                                                                                                                                                                                                                   held
                                                                                                                                                                                                                   by
                                                                                                                                                                                                                   each
                                                                                                                                                                                                                   security
                                                                                                                                                                                                                   holder;
                                                                                                                                                                                                                   and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | (c) | the
                                                                                                                                                                                                                   date
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   particulars
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   issue
                                                                                                                                                                                                                   and
                                                                                                                                                                                                                   transfer
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   each
                                                                                                                                                                                                                   security.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        



The
transfer agent keeps information relating to a security holder that is entered in the securities register for at least seven years
after the security holder ceases to be a security holder.



36







Registration



We
were incorporated pursuant to the British Columbia Company Act (the predecessor statute to the BCBCA) by memorandum and
articles filed with the British Columbia Registrar of Companies on May 23, 1980. There are no restrictions on the type of business
which may be carried out by us in our memorandum and articles and our objectives and purposes are not set out in our memorandum
and articles.



Powers
of Directors



Approval
and Voting



A
director or senior officer who holds a disclosable interest (as that term is used in the BCBCA) in a contract or transaction into
which we have entered or propose to enter is:



| | ● | liable
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         account
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         us
                                                                                                                                                                                                                         for
                                                                                                                                                                                                                         any
                                                                                                                                                                                                                         profit
                                                                                                                                                                                                                         that
                                                                                                                                                                                                                         accrues
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         director
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         senior
                                                                                                                                                                                                                         officer
                                                                                                                                                                                                                         under
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         as
                                                                                                                                                                                                                         a
                                                                                                                                                                                                                         result
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         contract
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         transaction
                                                                                                                                                                                                                         only
                                                                                                                                                                                                                         if
                                                                                                                                                                                                                         and
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         extent
                                                                                                                                                                                                                         provided
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         BCBCA.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | not
                                                                                                                                                                                                                         entitled
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         vote
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         any
                                                                                                                                                                                                                         directors’
                                                                                                                                                                                                                         resolution
                                                                                                                                                                                                                         to
                                                                                                                                                                                                                         approve
                                                                                                                                                                                                                         that
                                                                                                                                                                                                                         contract
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         transaction,
                                                                                                                                                                                                                         unless
                                                                                                                                                                                                                         all
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         directors
                                                                                                                                                                                                                         have
                                                                                                                                                                                                                         a
                                                                                                                                                                                                                         disclosable
                                                                                                                                                                                                                         interest
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         that
                                                                                                                                                                                                                         contract
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         transaction,
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         which
                                                                                                                                                                                                                         case
                                                                                                                                                                                                                         any
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         all
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         those
                                                                                                                                                                                                                         directors
                                                                                                                                                                                                                         may
                                                                                                                                                                                                                         vote
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         such
                                                                                                                                                                                                                         resolution.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | ● | and
                                                                                                                                                                                                                         who
                                                                                                                                                                                                                         is
                                                                                                                                                                                                                         present
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         meeting
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         directors
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         which
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         contract
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         transaction
                                                                                                                                                                                                                         is
                                                                                                                                                                                                                         considered
                                                                                                                                                                                                                         for
                                                                                                                                                                                                                         approval
                                                                                                                                                                                                                         may
                                                                                                                                                                                                                         be
                                                                                                                                                                                                                         counted
                                                                                                                                                                                                                         in
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         quorum
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         meeting
                                                                                                                                                                                                                         whether
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         not
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         director
                                                                                                                                                                                                                         votes
                                                                                                                                                                                                                         on
                                                                                                                                                                                                                         any
                                                                                                                                                                                                                         or
                                                                                                                                                                                                                         all
                                                                                                                                                                                                                         of
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         resolutions
                                                                                                                                                                                                                         considered
                                                                                                                                                                                                                         at
                                                                                                                                                                                                                         the
                                                                                                                                                                                                                         meeting.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A
director or senior officer who holds any office or possesses any property, right or interest that could result, directly or indirectly,
in the creation of a duty or interest that materially conflicts with that individual’s duty or interest as a director or
senior officer, must disclose the nature and extent of the conflict as required by the BCBCA.



Remuneration
and Expenses



The
directors are entitled to the remuneration for acting as directors, if any, as the directors may from time to time determine.
If the directors so decide, the remuneration of the directors, if any, will be determined by the Board. That remuneration may
be in addition to any salary or other remuneration paid to any officer or employee as such, who is also a director.



Borrowing



If
authorized by the Board, we may:



|(1) | borrow
                                                                                                                                         money
                                                                                                                                         in
                                                                                                                                         the
                                                                                                                                         manner
                                                                                                                                         and
                                                                                                                                         amount,
                                                                                                                                         on
                                                                                                                                         the
                                                                                                                                         security,
                                                                                                                                         from
                                                                                                                                         the
                                                                                                                                         sources
                                                                                                                                         and
                                                                                                                                         on
                                                                                                                                         the
                                                                                                                                         terms
                                                                                                                                         and
                                                                                                                                         conditions
                                                                                                                                         that
                                                                                                                                         we
                                                                                                                                         consider
                                                                                                                                         appropriate;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | issue
                                                                                                                                         bonds,
                                                                                                                                         debentures
                                                                                                                                         and
                                                                                                                                         other
                                                                                                                                         debt
                                                                                                                                         obligations
                                                                                                                                         either
                                                                                                                                         outright
                                                                                                                                         or
                                                                                                                                         as
                                                                                                                                         security
                                                                                                                                         for
                                                                                                                                         any
                                                                                                                                         liability
                                                                                                                                         or
                                                                                                                                         obligation
                                                                                                                                         or
                                                                                                                                         any
                                                                                                                                         other
                                                                                                                                         person
                                                                                                                                         and
                                                                                                                                         at
                                                                                                                                         such
                                                                                                                                         discounts
                                                                                                                                         or
                                                                                                                                         premiums
                                                                                                                                         and
                                                                                                                                         on
                                                                                                                                         such
                                                                                                                                         other
                                                                                                                                         terms
                                                                                                                                         as
                                                                                                                                         we
                                                                                                                                         consider
                                                                                                                                         appropriate;
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | guarantee
                                                                                                                                         the
                                                                                                                                         repayment
                                                                                                                                         of
                                                                                                                                         money
                                                                                                                                         by
                                                                                                                                         any
                                                                                                                                         other
                                                                                                                                         person
                                                                                                                                         or
                                                                                                                                         the
                                                                                                                                         performance
                                                                                                                                         of
                                                                                                                                         any
                                                                                                                                         obligation
                                                                                                                                         of
                                                                                                                                         any
                                                                                                                                         other
                                                                                                                                         person;
                                                                                                                                         and
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(4) | mortgage,
                                                                                                                                         charge,
                                                                                                                                         whether
                                                                                                                                         by
                                                                                                                                         way
                                                                                                                                         of
                                                                                                                                         specific
                                                                                                                                         or
                                                                                                                                         floating
                                                                                                                                         charge,
                                                                                                                                         grant
                                                                                                                                         a
                                                                                                                                         security
                                                                                                                                         interest
                                                                                                                                         in,
                                                                                                                                         or
                                                                                                                                         give
                                                                                                                                         other
                                                                                                                                         security
                                                                                                                                         on,
                                                                                                                                         the
                                                                                                                                         whole
                                                                                                                                         or
                                                                                                                                         any
                                                                                                                                         part
                                                                                                                                         of
                                                                                                                                         our
                                                                                                                                         present
                                                                                                                                         and
                                                                                                                                         future
                                                                                                                                         assets
                                                                                                                                         and
                                                                                                                                         undertaking.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Any
bonds, debentures or other debt obligations may be issued at a discount, premium or otherwise, and with any special privileges
as to redemption, surrender, drawings, allotment of or conversion into or exchange for shares or other securities, attending and
voting at our general meetings, appointment of directors or otherwise and may by their terms be assignable free from any equities
between us and the person to whom they were issued or any subsequent holder thereof, all as the Board may determine.



37







Qualification



A
director is not required to hold a share in our capital as qualification for his or her office but must be qualified as required
by the BCBCA to become, act or continue to act as a director.



The
BCBCA states that



|(1) | A
                                                                                                                                          person
                                                                                                                                          must
                                                                                                                                          not
                                                                                                                                          become
                                                                                                                                          or
                                                                                                                                          act
                                                                                                                                          as
                                                                                                                                          a
                                                                                                                                          director
                                                                                                                                          of
                                                                                                                                          a
                                                                                                                                          company
                                                                                                                                          unless
                                                                                                                                          that
                                                                                                                                          person
                                                                                                                                          is
                                                                                                                                          an
                                                                                                                                          individual
                                                                                                                                          who
                                                                                                                                          is
                                                                                                                                          qualified
                                                                                                                                          to
                                                                                                                                          do
                                                                                                                                          so.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) | An
                                                                                                                                                              individual
                                                                                                                                                              is
                                                                                                                                                              not
                                                                                                                                                              qualified
                                                                                                                                                              to
                                                                                                                                                              become
                                                                                                                                                              or
                                                                                                                                                              act
                                                                                                                                                              as
                                                                                                                                                              a
                                                                                                                                                              director
                                                                                                                                                              of
                                                                                                                                                              a
                                                                                                                                                              company
                                                                                                                                                              if
                                                                                                                                                              that
                                                                                                                                                              individual
                                                                                                                                                              is
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) | under
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   age
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   18
                                                                                                                                                                                                                   years,
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | found
                                                                                                                                                                                                                   by
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   court,
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   Canada
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   elsewhere,
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   be
                                                                                                                                                                                                                   incapable
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   managing
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   individual’s
                                                                                                                                                                                                                   own
                                                                                                                                                                                                                   affairs,
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) | an
                                                                                                                                                                                                                   undischarged
                                                                                                                                                                                                                   bankrupt,
                                                                                                                                                                                                                   or
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (d) | convicted
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   out
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   British
                                                                                                                                                                                                                   Columbia
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   an
                                                                                                                                                                                                                   offence
                                                                                                                                                                                                                   in
                                                                                                                                                                                                                   connection
                                                                                                                                                                                                                   with
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   promotion,
                                                                                                                                                                                                                   formation
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   management
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   corporation
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   unincorporated
                                                                                                                                                                                                                   business,
                                                                                                                                                                                                                   or
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   an
                                                                                                                                                                                                                   offence
                                                                                                                                                                                                                   involving
                                                                                                                                                                                                                   fraud,
                                                                                                                                                                                                                   unless
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | the
                                                                                                                                                                                                                  court
                                                                                                                                                                                                                  orders
                                                                                                                                                                                                                  otherwise,
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (ii) | 5
                                                                                                                                                                                                                   years
                                                                                                                                                                                                                   have
                                                                                                                                                                                                                   elapsed
                                                                                                                                                                                                                   since
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   last
                                                                                                                                                                                                                   to
                                                                                                                                                                                                                   occur
                                                                                                                                                                                                                   of
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (A) | the
                                                                                                                                                                                                                   expiration
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   period
                                                                                                                                                                                                                   set
                                                                                                                                                                                                                   for
                                                                                                                                                                                                                   suspension
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   passing
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   sentence
                                                                                                                                                                                                                   without
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   sentence
                                                                                                                                                                                                                   having
                                                                                                                                                                                                                   been
                                                                                                                                                                                                                   passed,
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (B) | the
                                                                                                                                                                                                                   imposition
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   a
                                                                                                                                                                                                                   fine,
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (C) | the
                                                                                                                                                                                                                   conclusion
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   term
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   any
                                                                                                                                                                                                                   imprisonment,
                                                                                                                                                                                                                   and
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (D) | the
                                                                                                                                                                                                                   conclusion
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   the
                                                                                                                                                                                                                   term
                                                                                                                                                                                                                   of
                                                                                                                                                                                                                   any
                                                                                                                                                                                                                   probation
                                                                                                                                                                                                                   imposed,
                                                                                                                                                                                                                   or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (iii) | a
                                                                                                                                                                pardon
                                                                                                                                                                was
                                                                                                                                                                granted
                                                                                                                                                                or
                                                                                                                                                                issued
                                                                                                                                                                under
                                                                                                                                                                the
                                                                                                                                                                Criminal
                                                                                                                                                                Records
                                                                                                                                                                Act
                                                                                                                                                                (Canada).
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(3) | A
                                                                                                                                                              director
                                                                                                                                                              who
                                                                                                                                                              ceases
                                                                                                                                                              to
                                                                                                                                                              be
                                                                                                                                                              qualified
                                                                                                                                                              to
                                                                                                                                                              act
                                                                                                                                                              as
                                                                                                                                                              a
                                                                                                                                                              director
                                                                                                                                                              of
                                                                                                                                                              a
                                                                                                                                                              company
                                                                                                                                                              must
                                                                                                                                                              promptly
                                                                                                                                                              resign.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Description
of Securities



Common
Shares



We
are authorized to issue unlimited common shares without par value of which, as at September 30, 2013, 70,251,605 common shares
are issued and outstanding as fully paid and non-assessable. As at September 30, 2013, we have 4,800,000 common shares reserved
under our stock option plan. These options are exercisable at prices ranging between $0.10 and $0.185 per share, expiring on dates
ranging from October 20, 2014 to May 28, 2018.



The
holders of the common share are entitled to vote at all meetings of shareholders, except meetings at which only holders of a specified
class of shares are entitled to vote, and on every poll taken at every such meeting, or adjourned meeting, every holder of common
shares shall be entitled to one vote in respect of each common share held.



38







Preferred
Shares



We
are authorized to issue unlimited preferred shares with no par value, which, as at September 30, 2013, no preferred shares are
issued and outstanding. The Preferred Shares have attached thereto a right to receive dividends as determined by the Board. Pursuant
to the special rights and restrictions attached to the shares, we may, by directors’ resolution or ordinary resolution, in each
case as determined by the Board: (a) determine the maximum number of shares of any of those
series of preferred shares that we are authorized to issue, determine that there is
no such maximum number or alter any determination made in relation to a maximum number of those shares; (b) create an identifying
name by which the shares of any of those series of preferred shares may be identified or alter any identifying name created for
those shares; and (c) attach special rights or restrictions to the shares of any of those series of preferred shares or alter
any special rights or restrictions attached to those shares, subject to the special rights and restrictions attached to the series
of preferred shares by our Articles. Where these alterations, determinations or authorizations are
to be made in relation to a series of preferred shares of which there are issued shares, such alteration must be made by
special resolution of our shareholders and a separate special resolution of the holders of that series.



Annual
and Extraordinary General Meetings



Unless
an annual general meeting is deferred or waived in accordance with the BCBCA, we must hold an annual general meeting at
least once in each calendar year and not more than 15 months after the last annual meeting date at such time and place as may
be determined by the Directors. 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 consent of the Chairman of the meeting.



Notice
of Meetings



We
must send notice of the date, time and location of any meeting of shareholders, in the manner provided in our Articles, or in
such other manner, if any, as may be prescribed by directors’ resolution (whether previous notice of the resolution has
been given or not), to each shareholder entitled to attend the meeting, to each Director and to our auditor, unless our Articles
otherwise provide, at least the following number of days before the meeting:



|(1) |  | if
                                                                                                                                                                                                                                    and
                                                                                                                                                                                                                                    for
                                                                                                                                                                                                                                    so
                                                                                                                                                                                                                                    long
                                                                                                                                                                                                                                    as
                                                                                                                                                                                                                                    we
                                                                                                                                                                                                                                    are
                                                                                                                                                                                                                                    a
                                                                                                                                                                                                                                    public
                                                                                                                                                                                                                                    company,
                                                                                                                                                                                                                                    21
                                                                                                                                                                                                                                    days;
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|(2) |  | otherwise,
                                                                                                                                                                                                                                    10
                                                                                                                                                                                                                                    days.
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dividend
Rights



The
dividend entitlement of a common shareholder of record is fixed at the time of declaration by the Board. 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.



Rights
of Shareholders



Under
the BCBCA, 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.



39







Limitations



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



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



|C. |  | Material
                                                                                                                                                                                                                                             Contracts
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During
the year ended May 31, 2013 and subsequent to that date we did not enter into material contracts.



|D. |  | Exchange
                                                                                                                                                                                                                                             Controls
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There
are no governmental laws, decrees or regulations in Canada relating to restrictions on the export or import of capital, or affecting
the remittance of interest, dividends or other payments to non-resident holders of our common stock. See “Taxation”
below.



The
Investment Canada Act requires a non-Canadian making an investment which would result in the acquisition of control of
a Canadian business, the gross value of the assets of which exceed certain threshold levels or the business activity of which
is related to Canada’s cultural heritage or national identity, to either notify, or file an application for review with,
Investment Canada, the federal agency created by the Investment Canada Act.



The
notification procedure involves a brief statement of information about the investment on a prescribed form, which is required
to be filed with Investment Canada by the investor at any time up to 30 days following implementation of the investment. It is
intended that investments requiring only notification will proceed without government intervention unless the investment is in
a specific type of business activity related to Canada’s cultural heritage and national identity.



If
an investment is reviewable under the Act, an application for review in the form prescribed is normally required to be filed with
Investment Canada prior to the investment taking place and the investment may not be implemented until the review has been completed
and the Minister responsible for Investment Canada is satisfied that the investment is likely to be of net benefit to Canada.
If the Minister is not satisfied that the investment is likely to be of net benefit to Canada, the non-Canadian must not implement
the investment or, if the investment has been implemented, must divest himself of control of the business that is the subject
of the investment.



|E. |  | Taxation
|-- |  | --------



Canadian
Federal Income Tax Consequences



The
following is a general discussion of all material Canadian federal income tax consequences, under current law, generally applicable
to a holder of one or more Common Shares (a “Holder”) who for the purposes of the Income Tax Act (Canada)
(the “Canadian Tax Act”) is a non-resident of Canada, holds his Common Shares as capital property and deals at
arm’s length with our company and is restricted to such circumstances.



The
following summary describes the principal Canadian federal income tax considerations generally applicable to a holder of the Common
Shares who, for purposes of the Canadian Tax Act and the Convention between Canada and the United States of America with Respect
to Taxes on Income and on Capital (the “Convention”) and at all relevant times, is resident in the United States
and was not and is not resident in Canada, deals at arm’s length and is not affiliated with our company, holds the Common Shares
as capital property, does not use or hold and is not deemed to use or hold the Common Shares in or in the course of carrying on
business in Canada and is not a non-resident insurer and who otherwise qualifies for the full benefit of the Convention (a “United
States Holder”).



40







This
summary is based on the current provisions of the Convention, the Canadian Tax Act and the regulations thereunder, and specific
proposals to amend the Canadian Tax Act and the regulations announced by the Minister of Finance (Canada) prior to the date hereof
and our understanding of the administrative practices published in writing by the Canada Revenue Agency prior to the date hereof.
On September 21, 2007, the Minister of Finance (Canada) and the United States Secretary of the Treasury signed the fifth protocol
to the Convention (the “Protocol”) which includes amendments to many of the provisions of the Convention, including
significant amendments to the limitation on benefits provision and treatment of fiscally transparent entities such as some United
States limited liability companies. The Protocol was ratified by the United States government in December 2008 (it was ratified
by the Canadian government in 2007) and came into force in 2010. United States Holders are urged to consult their own tax advisors
to determine the impact of the Protocol and their entitlement to relief under the Convention based on their particular circumstances.



This
summary does not take into account or anticipate any other changes in the governing law, whether by judicial, governmental or
legislative decision or action, nor does it take into account the tax legislation or considerations of any province, territory
or non-Canadian (including U.S.) jurisdiction, which legislation or considerations may differ significantly from those described
herein.



For
the purposes of the Canadian Tax Act, the Canadian tax results of a United States Holder are to be determined using Canadian currency
based on the relevant exchange rate applicable thereto.



Prospective
purchasers and holders of Common Shares should consult their own tax advisors with respect to their individual circumstances.



Dividends



Generally,
dividends paid by Canadian corporations to non-resident shareholders are subject to a withholding tax of 25% of the gross amount
of such dividends. Pursuant to the Convention, the withholding tax rate on the gross amount of dividends paid to United States
Holders may be reduced to 15% or, in the case of a United States Holder that is a U.S. corporation which beneficially owns at
least 10% of the voting stock of the Canadian corporation paying the dividends, to 5% of the gross amount of such dividends.



Under
the Convention, dividends paid to certain religious, scientific, charitable and other similar tax-exempt organizations and certain
organizations that are resident in, and exempt from tax in, the United States are exempt from Canadian non-resident withholding
tax, including any withholding tax levied in respect of dividends received on the shares.



Disposition
of Common Shares



In
general, a United States Holder will not be subject to Canadian income tax on capital gains arising on the disposition of the
Common Shares, unless such shares are “taxable Canadian property” within the meaning of the Canadian Tax Act and no
relief is afforded under the Convention. Generally, the Common Shares would be taxable Canadian property of a United States Holder
if at any time during the sixty month period immediately preceding a disposition by the United States Holder of such shares, not
less than 25% of the issued shares of any class or series of a class of shares of our company belonged to the United States Holder,
to persons with whom the United States Holder did not deal at arm’s length (within the meaning of the Canadian Tax Act), or to
the United States Holder and persons with whom the non-resident did not deal at arm’s length (within the meaning of the Canadian
Tax Act). Even if the Common Shares are “taxable Canadian property” under the Canada Tax Act, under the Convention,
a capital gain realized by a United States Holder will not be subject to Canadian tax unless the value of the Common Shares is
derived principally from real property (as defined in the Convention) situated in Canada. We do not believe the value of our Common
Shares is derived principally from real property situated in Canada.



U.S.
Federal Income Tax Consequences



The
following is a summary of the anticipated material U.S. federal income tax consequences to a U.S. Holder (as defined below) arising
from and relating to the acquisition, ownership, and disposition of Common Shares.



Each
U.S. Holder is encouraged to consult his own financial advisor, legal counsel, or accountant regarding the U.S. federal, U.S.
state and local, and foreign tax consequences of the acquisition, ownership, and disposition of Common Shares.



41







Scope
of this Disclosure



Authorities



This
summary is based on the Internal Revenue Code of 1986, as amended (the “Code”), Treasury Regulations (whether
final, temporary. or proposed), published rulings of the Internal Revenue Service (“IRS”), published administrative
positions of the IRS, and U.S. court decisions that are applicable and, in each case, as in effect and available, as of the date
of this Registration Statement. Any of the authorities on which this summary is based could be changed in a material and adverse
manner at any time, and any such change could be applied on a retroactive basis. This summary does not discuss the potential effects,
whether adverse or beneficial, of any proposed legislation that, if enacted, could be applied on a retroactive basis.



U.S.
Holders



For
purposes of this summary, a “U.S. Holder” is a beneficial owner of Common Shares that, for U.S. federal income
tax purposes, is (a) an individual who is a citizen or resident of the U.S., (b) a corporation, or any other entity classified
as a corporation for U.S. federal income tax purposes, that is created or organized in or under the laws of the U.S. or any state
in the U.S., including the District of Columbia, (c) an estate if the income of such estate is subject to U.S. federal income
tax regardless of the source of such income, or (d) a trust subject to the primary supervision of a court within the U.S. and
control of a U.S. fiduciary as described Section 7701(a)(30) of the Code. If a partnership or other “pass-through”
entity treated as a partnership for U.S. federal income tax purposes holds Common Shares, the U.S. federal income tax treatment
of the partners or owners of such partnership or other pass-through entity generally will depend on the status of such partners
or owners and the activities of such partnership or pass-through entity.



Persons
Not Covered



This
summary does not address the U.S. federal income tax consequences to persons (including persons who are U.S. Holders) subject
to special provisions of U.S. federal income tax law, including (i) persons who are tax-exempt organizations, qualified retirement
plans, individual retirement accounts and other tax-deferred accounts, financial institutions, insurance companies, real estate
investment trusts, regulated investment companies, or brokers, dealers or traders in securities, (ii) persons who have a “functional
currency” other than the U.S. dollar, (iii) persons subject to the alternative minimum tax, (xi) persons who own their Common
Shares as part of a straddle, hedging, conversion transaction, constructive sale or other arrangement involving more than one
position, (iv) persons who acquired their Common Shares through the exercise of employee stock options or otherwise as compensation
for services, (v) persons that own an interest in an entity that owns Common Shares, (vi) persons who own, exercise or dispose
of any options, warrants or other rights to acquire Common Shares, (vii) persons who are partners or owners of partnerships or
other pass-through entities or (viii) persons who own their Common Shares other than as a capital asset within the meaning of
Section 1221 of the Code.



Distributions
Made by the Corporation to U.S. Holders



General
Rules. U.S. Holders receiving distributions (including constructive distributions) with respect to Common Shares issued
by us are required to include in gross income as a dividend for U.S. federal income tax purposes the gross amount of such distributions
(without reduction for any Canadian income tax withheld from such distributions), equal to the U.S. dollar value of such distributions
on the date of receipt (based on the exchange rate on such date), to the extent that we have current or accumulated earnings and
profits. To the extent that distributions from us exceed our current and accumulated earnings and profits, such distributions
will be treated first as a return of capital, to the extent of the U.S. Holder’s adjusted basis in the shares, and thereafter
as gain from the sale or exchange of the shares. (See more detailed discussion at “Disposition of Shares” below).
Any Canadian tax withheld from a distribution by us may be credited, subject to certain limitations, against the U.S. Holder’s
U.S. federal income tax liability or, alternatively, may be deducted in computing the U.S. Holder’s U.S. federal taxable
income by those who itemize deductions. (See more detailed discussion at “Foreign Tax Credit” below).



Currency
Gain or Loss. In the case of foreign currency received as a distribution that is not converted by the recipient into U.S.
dollars on the date of receipt, a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on
the date of receipt. Generally any gain or loss recognized upon a subsequent sale or other disposition of the foreign currency,
including the exchange for U.S. dollars, will be ordinary income or loss. However, an individual whose realized gain does not
exceed $200 will not recognize that gain, to the extent that there are no expenses associated with the transaction that meet the
requirements for deductibility as a trade or business expense (other than travel expenses in connection with a business trip)
or as an expense for the production of income.



42







Dividend
may be Eligible for Reduced Tax Rate. For taxable years beginning after September 30, 2002 and before January 1, 2009,
dividends received by U.S. Holders that are individuals, estates or trusts from “qualified foreign corporations,”
as defined in Section 1(h)(11) of the Code, generally are taxed at the same preferential tax rates applicable to long-term capital
gains. Although not free from doubt, it appears that we would be a “qualified foreign corporation,” as defined in
Section 1(h)(11) of the Code pursuant to the U.S. Canada income tax treaty if we are not a Passive Foreign Investment Company
(“PFIC”). A corporation that is properly described as a PFIC, Foreign Personal Holding Company (defined below),
or a Foreign Investment Company (defined below) for its taxable year during which it pays a dividend, or for its immediately preceding
taxable year, will not be treated as a “qualifying foreign corporation” and dividends received by U.S. Holders that
are individuals, estates or trusts generally will be subject to U.S. federal income tax at ordinary income tax rates (and not
at the preferential tax rates applicable to long-term capital gains).



Dividends
not Eligible for Dividends Received Deduction. Dividends paid by us generally will not be eligible for the “dividends
received deduction” allowed to corporate shareholders receiving dividends from certain U.S. corporations. Under certain
circumstances, a U.S. Holder that is a corporation and that owns shares representing at least 10% of the total voting power and
the total value of shares issued by us may be entitled to a 70% deduction of the “U.S. source” portion of dividends
received from us (unless we qualify as a “Foreign Personal Holding Company” or a “PFIC”
as defined below). The availability of the dividends received deduction is subject to several complex limitations that are beyond
the scope of this discussion, and U.S. Holders of shares issued by us should consult their own financial advisor, legal counsel
or accountant regarding the dividends received deduction.



Dividend
Paid to Shareholder who Made QEF Election may be Exempt from Tax. Generally, shareholders are not subject to additional
income taxation on distributions made by a PFIC to the extent of the shareholder’s basis in the corporation’s shares
if a Qualified Electing Fund (“QEF”) election is in effect. (Please see the QEF election discussion below.)
A shareholder’s basis in this situation is usually equal to the cost of purchasing the shares plus the amount of the corporation’s
income that was reported on the shareholder’s return pursuant to the QEF election less any prior distributions made by the
corporation to the shareholder. Again, these rules are subject to several exceptions that are beyond the scope of this discussion.
U.S. Holders of shares issued by us should consult their own financial advisor, legal counsel or accountant regarding whether
dividends paid by us to them will be exempt from federal income tax if a QEF election is made.



Disposition
of Shares



General
Rule. A U.S. Holder will recognize gain or loss upon the sale or other taxable disposition of shares issued by us equal to
the difference, if any, between (i) the amount of cash plus the fair market value of any property received, and (ii) the
shareholder’s tax basis in the shares. This gain or loss will be capital gain or loss if the Common Shares are a capital
asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the shares are held for more than one year.



Reduced
Tax Rate. Preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts.
There are currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation (other than
a corporation subject to Subchapter S of the Code). Deductions for net capital losses are subject to significant limitations.
For U.S. Holders that are not corporations, any unused portion of such net capital loss may be carried over to be used in later
tax years until such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject
to Subchapter S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the
loss year to be offset against capital gains until such net capital loss is thereby exhausted. Sales of PFIC stock are not eligible
for the reduced long-term capital gains rates that are usually applicable to sales of stock unless the shareholder made a QEF
election regarding such shares.



Our
Corporation may be a Passive Foreign Investment Company



General
Discussion. It is highly likely that we will be classified as a passive foreign investment company (“PFIC”)
from time to time for U.S. federal income tax purposes. A non-U.S. corporation is classified as a PFIC whenever it satisfies either
the asset test or the income test. This determination is not binding on U.S. Holders or the IRS and there can be no assurance
that the IRS will not challenge this determination. A U.S. Holder who holds stock in a foreign corporation during any year in
which such corporation qualifies as a PFIC is subject to numerous special U.S. federal income taxation rules and may elect to
be taxed under two alternative tax regimes. The following is a discussion of these three sets of special rules applied to U.S.
Holders of shares issued by us. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled
foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10% or more of the total combined
voting power of all classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled
Foreign Corporation” below).



43







Definition
of PFIC. Section 1297 of the Code defines a PFIC as a corporation that is not formed in the U.S. and, for any taxable
year, either (a) 75% or more of its gross income is “passive income” or (b) the average percentage, by fair
market value (or, if the corporation is not publicly traded and either is a controlled foreign corporation or makes an election,
by adjusted tax basis), of its assets that produce or are held for the production of “passive income” is 50% or more.
“Passive income” includes, for example, dividends, interest, certain rents and royalties, certain gains from
the sale of stock and securities, and certain gains from commodities transactions. However, gains resulting from commodities transactions
are generally excluded from the definition of passive income if “substantially all” of a merchant’s, producer’s
or handler’s business is as an active merchant, producer or handler of such commodities. For purposes of the PFIC income
test and the assets test, if a foreign corporation owns (directly or indirectly) at least 25% by value of the stock of another
corporation, such foreign corporation shall be treated as if it (a) held a proportionate share of the assets of such other corporation,
and (b) received directly its proportionate share of the income of such other corporation. Also, for purposes of such PFIC tests,
passive income does not include any interest, dividends, rents or royalties that are received or accrued from a “related”
person to the extent such amount is properly allocable to the income of such related person which is not passive income. For these
purposes, a person is related with respect to a foreign corporation if such person “controls” the foreign corporation
or is controlled by the foreign corporation or by the same persons that control the foreign corporation. For these purposes, “control”
means ownership, directly or indirectly, of stock possessing more than 50% of the total voting power of all classes of stock entitled
to vote or of the total value of stock of a corporation



Generally
Applicable PFIC Rules. If a U.S. Holder does not make a timely election to be taxed in conformity with the Mark-to-Market
rules or the QEF rules during a year in which it holds (or is deemed to have held) shares issued by us while we are a PFIC (a
“Non-Electing U.S. Holder”), then special taxation rules under Section 1291 of the Code will apply to (i) gains
realized on the disposition (or deemed to be realized by reasons of a pledge) of his Common Shares and (ii) certain “excess
distributions” (generally, distributions received in the current taxable year that are in excess of 125% of the average
distributions received during the three preceding years or, if shorter, the U.S. Holder’s holding period) by us.



A
Non-Electing U.S. Holder generally would be required to pro rate all gains realized on the disposition of his Common Shares and
all excess distributions on his Common Shares over the entire holding period for the Common Shares. All gains or excess distributions
allocated to prior years of the U.S. Holder would be taxed at the highest tax rate for each such prior year applicable to ordinary
income. The Non-Electing U.S. Holder also would be liable for interest on the foregoing tax liability for each such prior year
calculated as if such liability had been due with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation
must treat this interest charge as “personal interest” which, as discussed above, is wholly non-deductible.
The balance of the gain or the excess distribution will be treated as ordinary income in the year of the disposition or distribution,
and no interest charge will be incurred with respect to such balance.



If
we are a PFIC for any taxable year during which a Non-Electing U.S. Holder holds shares issued by us, then we will continue to
be treated as a PFIC with respect to such Common Shares, even if we cease meeting the definition of a PFIC. A Non-Electing U.S.
Holder may terminate this deemed PFIC status by electing to recognize gain (which will be taxed under the rules discussed above
for Non-Electing U.S. Holders) as if such Common Shares had been sold on the last day of the last taxable year for which it was
a PFIC.



Market-to-Market
Election. U.S. Holders who hold, actually or constructively, marketable stock (as specifically defined in the Treasury
Regulations) of a foreign corporation that qualifies as a PFIC may annually elect to mark such stock to the market (a “market-to-market
election”). If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules
of Section 1291 discussed above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning
of the holding period for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on
and other amounts taxable with respect to our Common Shares. A U.S. Holder who makes the mark-to market election will include
in income for the taxable year for which the election was made an amount equal to the excess, if any, of the fair market value
of our Common Shares as of the close of such tax year over such U.S. Holder’s adjusted basis in such Common Shares. In addition,
the U.S. Holder is allowed a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax
basis in the Common Shares over the fair market value of such shares as of the close of the tax year, or (ii) the excess,
if any, of (A) the mark-to-market gains for our shares included by such U.S. Holder for prior tax years, including any amount
which would have been included for any prior tax year but for the Section 1291 interest on tax deferral rules discussed above
with respect to Non-Electing U.S. Holders, over (B) the mark-to-market losses for shares that were allowed as deductions
for prior tax years. A U.S. Holder’s adjusted tax basis in his shares will be adjusted to reflect the amount included in
or deducted from income as a result of a mark-to-market election. A mark-to-market election applies to the taxable year in which
the election is made and to each subsequent taxable year, unless the shares cease to be marketable, as specifically defined, or
the IRS consents to revocation of the election.



44







QEF
Election. A U.S. Holder who makes a timely QEF election (an “Electing U.S. Holder”) regarding his shares
issued by us will be subject, under Section 1293 of the Code, to current U.S. federal income tax for any taxable year in which
we qualify as a PFIC on his pro rata share of our (i) “net capital gain” (the excess of net long-term capital gain
over net short-term capital loss), which will be taxed as long-term capital gain to the Electing U.S. Holder and (ii) “ordinary
earnings” (the excess of earnings and profits over net capital gain), which will be taxed as ordinary income to the
Electing U.S. Holder, in each case, for the shareholder’s taxable year in which (or with which) our taxable year ends, regardless
of whether such amounts are actually distributed.



The
effective QEF election also allows the Electing U.S. Holder to (i) generally treat any gain realized on the disposition of
his Common Shares (or deemed to be realized on the pledge of his shares) as capital gain; (ii) treat his share of our net
capital gain, if any, as long-term capital gain instead of ordinary income; and (iii) either avoid interest charges resulting
from PFIC status altogether, or make an annual election, subject to certain limitations, to defer payment of current taxes on
his share of our annual realized net capital gain and ordinary earnings subject, however, to an interest charge. If the Electing
U.S. Holder is not a corporation, such an interest charge would be treated as “personal interest” that is not deductible.



The
procedure a U.S. Holder must comply with in making an effective QEF election, and the U.S. federal income tax consequences of
the QEF election, will depend on whether the year of the election is the first year in the U.S. Holder’s holding period
in which we are a PFIC. If the U.S. Holder makes a QEF election in such first year, i.e., a timely QEF election, then the
U.S. Holder may make the QEF election by simply filing the appropriate QEF election documents at the time the U.S. Holder files
his tax return for such first year. However, if we qualified as a PFIC in a prior year, then in addition to filing the QEF election
documents, the U.S. Holder must elect to recognize (i) under the rules of Section 1291 of the Code (discussed herein), any
gain that he would otherwise recognize if the U.S. Holder sold his stock on the qualification date or (ii) if we are a controlled
foreign corporation, the U.S. Holder’s pro rata share of our earnings and profits as of the qualification date. The qualification
date is the first day of our first tax year in which we qualified as a QEF with respect to such U.S. Holder. The elections to
recognize such gain or earnings and profits can only be made if such U.S. Holder’s holding period for the shares includes
the qualification date. By electing to recognize such gain or earnings and profits, the U.S. Holder will be deemed to have made
a timely QEF election. U.S. Holders are urged to consult a tax advisor regarding the availability of and procedure for electing
to recognize gain or earnings and profits under the foregoing rules. In addition to the above rules, under very limited circumstances,
a U.S. Holder may make a retroactive QEF election if such U.S. Holder failed to file the QEF election documents in a timely manner.



A
QEF election, once made with respect to our company, applies to the tax year for which it was made and to all subsequent tax years,
unless the election is invalidated or terminated, or the IRS consents to revocation of the election. If a QEF election is made
by a U.S. Holder and we cease to qualify as a PFIC in a subsequent tax year, the QEF election will remain in effect, although
not applicable, during those tax years in which we do not qualify as a PFIC. Therefore, if we again qualify as a PFIC in a subsequent
tax year, the QEF election will be effective and the U.S. Holder will be subject to the rules described above for Electing U.S.
Holders in such tax year and any subsequent tax years in which we qualify as a PFIC. In addition, the QEF election remains in
effect, although not applicable, with respect to an Electing U.S. Holder even after such U.S. Holder disposes of all of his or
its direct and indirect interest in our shares. Therefore, if such U.S. Holder reacquires an interest in our company, that U.S.
Holder will be subject to the rules described above for Electing U.S. Holders for each tax year in which we qualify as a PFIC.



Generally,
shareholders do not make a QEF election unless they have sufficient information to determine their proportionate shares of a corporation’s
net capital gain and ordinary earnings. We have not calculated these amounts for any shareholder and do not anticipate making
these calculations in the foreseeable future. Therefore, U.S. Holders of our Common Shares should consult their own financial
advisor, legal counsel or accountant regarding the QEF election before making this election.



45







Other
PFIC Rules. Under Section 1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain
exceptions, would treat as taxable certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise
taxed, such as gifts, exchanges pursuant to corporate reorganizations, and transfers at death. Generally, in such cases the basis
of shares in the hands of the transferee and the basis of any property received in the exchange for those shares would be increased
by the amount of gain recognized. However, the specific U.S. federal income tax consequences to the U.S. Holder and the transferee
may vary based on the manner in which the Common Shares are transferred.



Certain
special, generally adverse, rules will apply with respect to shares issued by us while we are a PFIC whether or not it is treated
as a QEF. For example under Section 1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including
a margin loan) will, except as may be provided in regulations, be treated as having made a taxable disposition of such shares.



The
PFIC rules are very complicated, and U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding
the PFIC rules, including the advisability of and procedure for making a QEF election or a mark-to-mark election, and how these
rules may impact their U.S. federal income tax situation.



Foreign
Tax Credit



A
U.S. Holder who pays (or has withheld from distributions) Canadian or other foreign income tax with respect to the ownership of
shares issued by us may be entitled, at the option of the U.S. Holder, to either receive a deduction or a tax credit for U.S.
federal income tax purposes with respect to such foreign tax paid or withheld. Generally, it will be more advantageous to claim
a credit because a credit reduces U.S. federal income taxes on a dollar-for-dollar basis, while a deduction merely reduces the
taxpayer’s income subject to U.S. federal income tax. This election is made on a year-by-year basis and applies to all foreign
taxes paid by (or withheld from distributions to) the U.S. Holder during that year.



There
are significant and complex limitations that apply to the foreign tax credit, among which is the general limitation that the credit
cannot exceed the proportionate share of the U.S. Holder’s U.S. income tax liability that the U.S. Holder’s “foreign
source” income bears to his or its worldwide taxable income. In applying this limitation, the various items of income and
deduction must be classified as either “foreign source” or “U.S. source.” Complex rules
govern this classification process. In addition, this limitation is calculated separately with respect to specific classes of
income such as “passive income,” “high withholding tax interest,” “financial services
income,” “shipping income,” and certain other classifications of income. Dividends distributed by
us will generally constitute “foreign source” income, and will be classified as “passive income” or, in
the case of certain U.S. Holders, “financial services income” for these purposes.



In
addition, U.S. Holders that are corporations and that own 10% or more of our voting stock may be entitled to an “indirect”
foreign tax credit under Section 902 of the Code with respect to the payment of dividends by us under certain circumstances and
subject to complex rules and limitations.The availability of the foreign tax credit and the application of the limitations
with respect to the foreign tax credit are fact specific, and each U.S. Holder of Common Shares issued by us should consult their
own financial advisor, legal counsel or accountant regarding the foreign tax credit rules.



Information
Reporting; Backup Withholding



Certain
information reporting and backup withholding rules may apply with respect to certain payments related to shares issued by us.
In particular, a payor or middleman within the U.S., or in certain cases outside the U.S., will be required to withhold 28% (which
rate is scheduled for periodic adjustment) of any payments to a U.S. Holder regarding dividends paid by us, or proceeds from the
sale of, such Common Shares within the U.S., if a U.S. Holder fails to furnish its correct taxpayer identification number (generally
on Form W-9) or otherwise fails to comply with, or establish an exemption from, the backup withholding tax requirements. Any amounts
withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s U.S.
federal income tax liability, provided the required information is furnished to the IRS. U.S. Holders should consult their
own financial advisor, legal counsel or accountant regarding the information reporting and backup withholding rules applicable
to our shares.



46







Other
Considerations for U.S. Holders



In
the following circumstances, the above sections of this discussion may not describe the U.S. federal income tax consequences to
U.S. Holders resulting from the ownership and disposition of shares issued by a foreign corporation.



Foreign
Personal Holding Company. If at any time during a taxable year (a) more than 50% of the total voting power or the total
value of outstanding shares issued by us is owned, directly or indirectly, by five or fewer individuals who are citizens or residents
of the U.S. and (b) 60% (or 50% in certain cases) or more of our gross income for such year is “foreign personal holding
company income” as defined in Section 553 of the Code (e.g., dividends, interest, royalties, certain gains from the
sale of stock and securities, and certain gains from commodities transactions), we may be treated as a “Foreign Personal
Holding Company” (“FPHC”) In that event, U.S. Holders of our Common Shares would be required to include
in gross income for such year their allocable portions of such “foreign personal holding company income” to
the extent we do not actually distribute such income.



We
do not believe that we currently qualify as a FPHC. However, there can be no assurance that we will not be considered a FPHC for
the current or any future taxable year.



Foreign
Investment Company. If (a) 50% or more of the total voting power or the total value of our outstanding shares is owned,
directly or indirectly, by citizens or residents of the U.S., U.S. partnerships or corporations, or U.S. estates or trusts (as
defined by the Code Section 7701(a)(30)), and (b) we are found to be engaged primarily in the business of investing, reinvesting,
or trading in securities, commodities, or any interest therein, we may be treated as a “Foreign Investment Company”
(“FIC”) as defined in Section 1246 of the Code, causing all or part of any gain realized by a U.S. Holder selling
or exchanging our Common Shares to be treated as ordinary income rather than capital gain.



We
do not believe that we currently qualify as a FIC. However, there can be no assurance that we will not be considered a FIC for
the current or any future taxable year.



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



The
classification of our company as a CFC would affect many complex results, including that 10% Shareholders would generally (i)
be treated as having received a current distribution of our “Subpart F income” and (ii) would also be subject
to current U.S. federal income tax on their pro rata shares of our earnings invested in “U.S. property.” The foreign
tax credit may reduce the U.S. federal income tax on these amounts for such 10% Shareholders (See more detailed discussion at
“Foreign Tax Credit” above). In addition, under Section 1248 of the Code, gain from the sale or other taxable
disposition of our Common Shares by a U.S. Holder that is or was a 10% Shareholder at any time during the five-year period ending
with the sale is treated as a dividend to the extent of our earnings and profits attributable to the Common Shares sold or exchanged.



If
we are classified as both a PFIC and a CFC, we generally will not be treated as a PFIC with respect to 10% Shareholders. This
rule generally will be effective for taxable years of 10% Shareholders beginning after 1997 and for its taxable years ending with
or within such taxable years of 10% Shareholders.



We
do not believe that we currently qualify as a CFC. However, there can be no assurance that we will not be considered a CFC for
the current or any future taxable year.



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



|F. |  | Dividends
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Paying
                                                                                                                                                                                                                                             Agents
|-- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



47







|G. |  | Statements
                                                                                                                                                                                                                                             by
                                                                                                                                                                                                                                             Experts
|-- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|H. |  | Documents
                                                                                                                                                                                                                                             on
                                                                                                                                                                                                                                             Display
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We
have filed with the SEC this Annual Report on Form 20-F, including exhibits, under the Exchange Act with respect to our common
shares.



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



|I. |  | Subsidiary
                                                                                                                                                                                                                                             Information
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
11. |  | quantitative
                                                                                             and qualitative disclosures about
                                                                                             market risk
|-------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
12. |  | DESCRIPTION
                                                                                             OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



PART
II



|Item
13. |  | DEFAULTS,
                                                                                             DIVIDEND ARREARAGES AND DELINQUENCIES
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------



There
have been no defaults, dividends arrearages or delinquencies.



|Item
14. |  | MATERIAL
                                                                                             MODIFICATION TO THE RIGHTS OF SECURITY
                                                                                             HOLDERS AND USE OF PROCEEDS
|-------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



There
have been no material modifications to our common shares.





|ITEM
15. |  | CONTROLS
                                                                                             AND PROCEDURES
|-------- |  | --------------------------------------------------------------------------------------------------------------------



|A. |  | Disclosure
                                                                                                                                                                                                                                             Controls
                                                                                                                                                                                                                                             and
                                                                                                                                                                                                                                             Procedures
|-- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As
at the end of the period covered by this Form 20-F Annual Report, our management, with the participation of our Chief Executive
officer and our Chief Financial Officer, performed an evaluation of the effectiveness of our disclosure controls and procedures
that are designed to ensure that the material financial and non-financial information required to be disclosed by Rules 13a-15
and 15d-15 of the Exchange Act and filed with the SEC is recorded, processed, summarized and timely reported. Disclosure controls
and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed
by us in our reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our
Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding our required disclosure.



Management,
including our CEO and CFO, does not expect that our disclosure controls and procedures or internal controls and procedures will
prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of
the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our company have been detected. These inherent limitations include the realities that judgments
in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can
be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of control.
The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and
there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over
time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures
may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may
occur and not be detected.



48







Management,
including the CEO and CFO, directly supervises the preparation of all of the financial reports prepared by us and is directly
involved in our financial record keeping and reporting. All accounting records and financial reports prepared by us are reviewed
for accuracy by the CEO and CFO.



After
evaluation of our disclosure controls and procedures as of the year end covered by this report, our Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and procedures were not effective as a result of weaknesses in
the design of internal control over financial reporting.



|B. |  | Management’s
                                                                                                                                                                                                                                             Annual
                                                                                                                                                                                                                                             Report
                                                                                                                                                                                                                                             on
                                                                                                                                                                                                                                             Internal
                                                                                                                                                                                                                                             Control
                                                                                                                                                                                                                                             over
                                                                                                                                                                                                                                             Financial
                                                                                                                                                                                                                                             Reporting
|-- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Our
management is responsible for establishing and maintaining adequate internal control over the financial reporting of our company.
Internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act is a process designed
by, or under the supervision of, our Chief Executive Officer and Chief Financial Officer, and affected by our Board, to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, and includes those policies and procedures that: (i) pertain to the maintenance of records that,
in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; (ii) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts
and expenditures are being made only in accordance with the authorizations of management and our Board; and (iii) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have
a material effect on our financial statements.



Management
has concluded, based on their evaluation, that as of May 31, 2013, weaknesses existed in the design of internal control over financial
reporting caused by a lack of adequate segregation of duties and ineffective risk management. These weaknesses have the potential
to result in material misstatements in our financial statements, and should also be considered a weakness in our disclosure controls
and procedures. As a result of limited staffing due to the size of our business certain staff members carry out multiple responsibilities
independently. To remediate such weakness, we plan to appoint additional qualified personnel to address inadequate segregation
of duties and ineffective risk management, and adopt sufficient written policies and procedures for accounting and financial reporting.
These remediation efforts are largely dependent upon securing additional financing to cover the costs of implementing the changes
required. Because of the material weakness described, management believes that, as of May 31, 2013, our company’s internal
control over financial report was not effective as of the Evaluation Date.



The
Audit Committee has been provided information on the deficiency. Together, the Audit Committee, the Board and management continue
to work to mitigate the risk of a material misstatement in our financial statements. Management will continue to identify certain
areas where it can improve process controls and will incorporate these changes into the control over the financial reporting going
forward.



|C. |  | Attestation
                                                                                                                                                                                                                                             Report
                                                                                                                                                                                                                                             of
                                                                                                                                                                                                                                             the
                                                                                                                                                                                                                                             Registered
                                                                                                                                                                                                                                             Public
                                                                                                                                                                                                                                             Accounting
                                                                                                                                                                                                                                             Firm
|-- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



This
annual report does not include an attestation report of our registered public accounting firm regarding internal control over
financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant
to temporary rules of the SEC that permit us to provide only management’s report in this annual report.



|D. |  | Changes
                                                                                                                                                                                                                                             in
                                                                                                                                                                                                                                             Internal
                                                                                                                                                                                                                                             Control
                                                                                                                                                                                                                                             over
                                                                                                                                                                                                                                             Financial
                                                                                                                                                                                                                                             Reporting
|-- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



During
the period covered by this report, there has been no change in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control over financial reporting.



49







|ITEM
16A. |  | AUDIT
                                                                                              COMMITTEE FINANCIAL EXPERT
|--------- |  | ------------------------------------------------------------------------------------------------------------------------------



We
do not currently have a financial expert on our audit committee. We rely upon the services of a chartered accountant in Vancouver,
BC, Canada, to prepare our consolidated financial statements.



Our
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. 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 yet adopted a written “code of ethics” that meets the new United States’ Sarbanes-Oxley standards.
The Board believes that its existing standards and procedures are adequate for its purposes. We believe that our management structure
and corporate culture effectively deter wrongdoing and promote honest and ethical conduct, full, fair and accurate, timely, and
understandable disclosure in reports and documents, compliance with applicable governmental laws, rules and regulations, prompt
internal reporting of unethical conduct and accountability for adherence to the conduct standards. We have no employees and our
officers are also directors, thus eliminating any split between our management and the directors who are responsible to safeguard
shareholder interests. As a result, we believe that the activities of our officers, employees and other agents can be easily monitored
by our directors, thus eliminating the need for a formal written code of ethics.



|ITEM
16C. |  | PRINCIPAL
                                                                                              ACCOUNTANT FEES AND SERVICES
|--------- |  | ------------------------------------------------------------------------------------------------------------------------------------



A
Chan and Company LLP, Chartered Accountants (“ACAL”) audited our financial statements for the years ended May
31, 2013 and May 31, 2012.



ACAL
were paid or accrued the corresponding fees for the fiscal years ended May 31, 2013 and May 31, 2012,
respectively.



Audit
Fees



Fees
billed by ACAL for professional services for the year ended May 31, 2013 were $17,000 and for the year ended May 31, 2012 were
$19,000. Such fees were for the audit of our annual financial statements and for services in connection with statutory and regulatory
filings for such fiscal years.



Audit
Related Fees



Fees
billed for audit related fees by ACAL for assurance and related services that are reasonably related to the performance of the
audit or review of our financial statements and not reported under audit fees totaled $Nil for ACAL for the years ended May 31,
2013 and 2012.



Tax
Fees



Fees
for tax services, including tax compliance, tax advice and tax planning work billed by ACAL were $1,000 for each of the years
ended May 31, 2013 and 2012.



All
Other Fees



All
other fees billed by ACAL during the fiscal years ended May 31, 2013 and 2012 were $Nil for compilation reports on the pro forma
financial statements.



Audit
Committee Policies and Procedures



The
audit services provided to us by ACAL in the fiscal years ended May 31, 2013 and May 31, 2012 were pre-approved by our audit committee.
Prior to engaging ACAL, as the case may be, to perform audit and review services, our audit committee reviewed the services to
be provided and the fee to be paid by us for such service and assessed the impact of the service on each of the auditor’s
independence.



50







It
is our policy for our Audit Committee to pre-approve all audit and audit-related fees prior to commencement of the services. The
percentage of audit related fees pre-approved by our Audit Committee during fiscal 2013 was 100%.



There
were no hours expended on ACAL’s engagement to audit our financial statements for the most recent fiscal year that were
attributed to work performed by persons other than ACAL’s full-time, permanent employees.



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



Not
applicable.



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



No
purchases of shares or any other units of any class of our equity securities have been made by or on our behalf, or any affiliated
purchaser.



|ITEM
16F. |  | CHANGE
                                                                                              IN REGISTRANT’S CERTIFYING
                                                                                              ACCOUNTANT
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Not
applicable.



|ITEM
16G. |  | CORPORATE
                                                                                              GOVERNANCE
|--------- |  | ------------------------------------------------------------------------------------------------------------------



Not
applicable.



PART
III



|Item
17. |  | Financial
                                                                                             Statements
|-------- |  | -----------------------------------------------------------------------------------------------------------------



The
consolidated financial statements have been prepared in accordance with Canadian GAAP and are presented in Canadian dollars. There
are material measurement differences between United States and Canadian GAAP. A reconciliation of the financial statements to
United States GAAP is set forth in Note 16 to the consolidated financial statements.



Consolidated
Financial Statements for the Years Ended May 31, 2013 and 2012



|Auditors’ Report dated September 27, 2013.                            | F-1
|--------------------------------------------------------------------- | ---
|Consolidated Statements of Financial Position                         | F-2
|Consolidated Statements of Operations and Comprehensive Income (Loss) | F-3
|Consolidated Statements of Cash Flows                                 | F-4
|Consolidated Statements of Changes in Equity                          | F-5
|Notes to the Consolidated Financial Statements                        | F-6





51







TERYL
RESOURCES CORP.



CONSOLIDATED
FINANCIAL STATEMENTS



AS
AT MAY 31, 2013 AND 2012



(Stated
in Canadian Dollars)



52







|SUITE
    1850                |                         
|----------------------------- | ------------------------
|1066
    WEST HASTINGS STREET | A
    CHANANDCOMPANY LLP
|VANCOUVER,
    BC V6E 3X2     | CHARTEREDACCOUNTANTS    
|                              |                         
|T:
    604.683.3850           |                         
|F:
    604.688.8479           |                         



INDEPENDENT
AUDITORS’ REPORT



|To: | the
    Shareholders of  
|--- | -------------------------
|    | Teryl
    Resources Corp.



We
have audited the accompanying consolidated financial statements of Teryl Resources Corp. (the “Company”), which comprise
the consolidated statements of financial position as at May 31, 2013 and May 31, 2012, and the consolidated statements of operations
and comprehensive loss, consolidated statements of cash flows and consolidated statements of changes in equity for the years ended
May 31, 2013 and May 31, 2012, and a summary of significant accounting policies and other explanatory information.



Management’s
Responsibility for the Financial Statements



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



Auditors’
Responsibility



Our
responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free from material misstatement. We were not engaged
to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal
control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not
for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.
Accordingly, we express no such opinion.



An
audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.



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



Opinion



In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as at May 31, 2013 and May 31, 2012, and its financial performance and its cash flows for the years ended May 31, 2013 and May
31, 2012 in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.



Emphasis
of Matter



Without
qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which indicates that the Company
has incurred losses to date. This condition, along with other matters as set forth in Note 1, indicates the existence of a material
uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.





|                                | “A
    Chan and Company LLP”
|------------------------------- | ----------------------------
|                                | Chartered Accountants       
|Vancouver,
    British Columbia |                             
|September
    27, 2013          |                             



F-1







TERYL RESOURCES CORP.

CONSOLIDATED
STATEMENTS OF FINANCIAL POSITION

(Stated
in Canadian Dollars)



|                                                                                   |  | May
    31, 2013 |             |   | May
    31, 2012 | 
|---------------------------------------------------------------------------------- |  | ---------------- | ----------- | - | ---------------- | 
|                                                                                   |  | $                |             |   | $                | 
|Assets                                                                             |  |                  |             |   |                  | 
|Current                                                                            |  |                  |             |   |                  | 
|Cash
    and cash equivalent                                                       |  |                  | 822,119     |   |                  | 
|Amounts
    receivable and prepaid expenses                                        |  |                  | 4,607       |   |                  | 
|Promissory
note receivable – related party (Note 10)                               |  |                  | 26,704      |   |                  | 
|                                                                                   |  |                  | 853,430     |   |                  | 
|                                                                                   |  |                  |             |   |                  | 
|Reclamation
    Bonds                                                              |  |                  | 5,800       |   |                  | 
|Equipment(Note 7)                                                                  |  |                  | 1,146       |   |                  | 
|Mineral
    Property Interests(Note 9)                                             |  |                  | 176,643     |   |                  | 
|Deferred
    Exploration Expenditures(Note 9)                                      |  |                  | 842,516     |   |                  | 
|                                                                                   |  |                  | 1,879,535   |   |                  | 
|LIABILITIES                                                                        |  |                  |             |   |                  | 
|Current                                                                            |  |                  |             |   |                  | 
|Accounts
    payable                                                               |  |                  | 115,541     |   |                  | 
|Accrued
    liabilities                                                            |  |                  | 21,600      |   |                  | 
|Due
    to related parties (Note 10)                                               |  |                  | 6,716       |   |                  | 
|                                                                                   |  |                  | 143,857     |   |                  | 
|SHAREHOLDERS’
    EQUITY                                                           |  |                  |             |   |                  | 
|Share
    Capital(Note 11)                                                         |  |                  |             |   |                  | 
|Authorized:
    (Note 17)                                                          |  |                  |             |   |                  | 
|Unlimited
    common shares, voting, no par value                                  |  |                  |             |   |                  | 
|Unlimited
    preferred shares, non-voting, $1 par value                           |  |                  |             |   |                  | 
|Issued
    and outstanding:                                                        |  |                  |             |   |                  | 
|70,545,605
    and 72,678,605 common shares on May 31, 2013 and 2012, respectively |  |                  | 13,633,533  |   |                  | 
|Treasury
Shares                                                                    |  |                  | (13,425     | ) |                  | 
|Reserves                                                                           |  |                  | 749,582     |   |                  | 
|Accumulated
    Other Comprehensive Loss                                           |  |                  | (71,834     | ) |                  | 
|Deficit                                                                            |  |                  | (12,562,178 | ) |                  | 
|                                                                                   |  |                  | 1,735,678   |   |                  | 
|                                                                                   |  |                  | 1,879,535   |   |                  | 



Going
Concern(Note 1) and Subsequent Events(Note 17)



|Approved on behalf of the Board of Directors: |          |  |                  
|--------------------------------------------- | -------- |  | -----------------
|                                              |          |  |                  
|“John Robertson”                              | Director |  | “Suzan El-Khatib”



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



F-2







TERYL
RESOURCES CORP.

CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(Stated
in Canadian Dollars)



|                                                                            |  | Year
    Ended   |            |   | Year
    Ended   | 
|--------------------------------------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | 
|                                                                            |  | May
    31, 2013 |            |   | May
    31, 2012 | 
|                                                                            |  | $                |            |   | $                | 
|                                                                            |  |                  |            |   |                  | 
|General
    and Administrative Expenses                                     |  |                  |            |   |                  | 
|Amortization
    of equipment                                               |  |                  | 921        |   |                  | 
|Filing
    and regulatory fees                                              |  |                  | 19,713     |   |                  | 
|Foreign
    exchange (gain) loss                                            |  |                  | 15,510     |   |                  | 
|Geological
    consulting                                                   |  |                  | 5,212      |   |                  | 
|Consulting,
    management and directors’ fees (Note 13)                    |  |                  | 220,706    |   |                  | 
|Office
    and sundry                                                       |  |                  | 38,680     |   |                  | 
|Office
    rent and utilities                                               |  |                  | 32,984     |   |                  | 
|Professional
    fees                                                       |  |                  | 42,729     |   |                  | 
|Publicity,
    promotion and investor relations                             |  |                  | 104,023    |   |                  | 
|Secretarial
    and employee benefits (Note 13)                             |  |                  | 60,223     |   |                  | 
|Stock-based
    compensation (Note 11)                                      |  |                  | 47,757     |   |                  | 
|Telephone                                                                   |  |                  | 12,531     |   |                  | 
|Transfer
    agent fees                                                     |  |                  | 9,211      |   |                  | 
|Travel,
    auto and entertainment                                          |  |                  | 17,674     |   |                  | 
|                                                                            |  |                  |            |   |                  | 
|Operating
    Loss                                                          |  |                  | (627,874   | ) |                  | 
|                                                                            |  |                  |            |   |                  | 
|Other
    Income (Expenses)                                                 |  |                  |            |   |                  | 
|Miscellaneous
    income                                                    |  |                  | 8,976      |   |                  | 
|Interest
    income                                                         |  |                  | 17,133     |   |                  | 
|Loss
    on sale of mineral property                                        |  |                  | -          |   |                  | 
|Capital
    asset written off                                               |  |                  | (3,916     | ) |                  | 
|Reclamation
    bond written off                                            |  |                  | (2,978     | ) |                  | 
|                                                                            |  |                  | 19,215     |   |                  | 
|                                                                            |  |                  |            |   |                  | 
|Net
    Loss for the Year                                                   |  |                  | (608,659   | ) |                  | 
|                                                                            |  |                  |            |   |                  | 
|Translation
    of foreign operation (Note 3)                               |  |                  | 11,326     |   |                  | 
|                                                                            |  |                  |            |   |                  | 
|Comprehensive
    Income (Loss) for the Year                                |  |                  | (597,335   | ) |                  | 
|                                                                            |  |                  |            |   |                  | 
|Loss
    per Share – Basic and Diluted                                      |  |                  | (0.01      | ) |                  | 
|Weighted
    Average Number of Common Shares Outstanding, Basic and Diluted |  |                  | 71,761,356 |   |                  | 



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



F-3







TERYL
RESOURCES CORP.

CONSOLIDATED
STATEMENTS OF CASH FLOWS

(Stated
in Canadian Dollars)





|                                                           |  | Year
    Ended   |            |   | Year
    Ended   | 
|---------------------------------------------------------- |  | ---------------- | ---------- | - | ---------------- | 
|                                                           |  | May
    31, 2013 |            |   | May
    31, 2012 | 
|                                                           |  | $                |            |   | $                | 
|Cash
    flows from (used in) operating activities         |  |                  |            |   |                  | 
|Net
    loss for the year                                  |  |                  | (608,659   | ) |                  | 
|Items
    not affecting cash                               |  |                  |            |   |                  | 
|Amortization
    of equipment                              |  |                  | 921        |   |                  | 
|Reclamation
    bond written off                           |  |                  | 2,978      |   |                  | 
|Capital
    asset written off                              |  |                  | 3,916      |   |                  | 
|Interest
    income on related party promissory note       |  |                  | (1,480     | ) |                  | 
|Loss
on sale of mineral property                           |  |                  | -          |   |                  | 
|Stock-based compensation                                   |  |                  | 47,757     |   |                  | 
|Changes
    in non-cash working capital items              |  |                  |            |   |                  | 
|Amounts
    receivable and prepaid expenses                |  |                  | 20,929     |   |                  | 
|Accounts
    payable and accrued liabilities               |  |                  | (6,669     | ) |                  | 
|Advances
    to related parties                            |  |                  | (47,175    | ) |                  | 
|                                                           |  |                  | (587,482   | ) |                  | 
|                                                           |  |                  |            |   |                  | 
|Cash
    flows from (used in) investing activities         |  |                  |            |   |                  | 
|Deposit
    paid                                           |  |                  | -          |   |                  | 
|Mineral
    property and deferred exploration expenditures |  |                  | (506,777   | ) |                  | 
|Proceed
    on sale of mineral property interest           |  |                  | -          |   |                  | 
|Purchase
    of equipment                                  |  |                  | (929       | ) |                  | 
|                                                           |  |                  | (507,706   | ) |                  | 
|                                                           |  |                  |            |   |                  | 
|Cash
    flows from (used in) financing activities         |  |                  |            |   |                  | 
|Repurchase
    of share capital                            |  |                  | (145,065   | ) |                  | 
|Share
    capital issued for cash                          |  |                  | -          |   |                  | 
|Share
    issuance costs                                   |  |                  | -          |   |                  | 
|                                                           |  |                  | (145,065   | ) |                  | 
|                                                           |  |                  |            |   |                  | 
|Effect
    of exchange rate changes on cash                |  |                  | 2,890      |   |                  | 
|                                                           |  |                  |            |   |                  | 
|Increase
    (decrease) in cash                            |  |                  | (1,237,363 | ) |                  | 
|Cash,
    beginning of year                                |  |                  | 2,059,482  |   |                  | 
|                                                           |  |                  |            |   |                  | 
|Cash,
    end of year                                      |  |                  | 822,119    |   |                  | 
|                                                           |  |                  |            |   |                  | 
|Supplemental
    Disclosures                               |  |                  |            |   |                  | 
|Interest
    paid                                          |  |                  | -          |   |                  | 
|Income
    taxes paid                                      |  |                  | -          |   |                  | 
|Non-cash
    Transactions                                  |  |                  | -          |   |                  | 





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



F-4









TERYL
RESOURCES CORP.

CONSOLIDATED
STATEMENTS OF CHANGE IN EQUITY

(Stated
in Canadian Dollars)



|                                                    |  | Share
    Capital |            |   |        |  |            | Accumulated Other
    Comprehensive |  |  |         |  |  |                 |            |   |         | 
|--------------------------------------------------- |  | ----------------- | ---------- | - | ------ |  | ---------- | ----------------------------------- |  |  | ------- |  |  | --------------- | ---------- | - | ------- | 
|                                                    |  |                   |            |   | Amount |  |            | Reserves                            |  |  | Loss    |  |  | Treasury Shares |            |   | Deficit | 
|                                                    |  | Number            |            |   | $      |  |            | $                                   |  |  | $       |  |  | $               |            |   | $       | 
|Balance,
    May 31, 2011                           |  |                   | 72,103,605 |   |        |  | 14,004,922 |                                     |  |  | 688,112 |  |  |                 | (1,084,750 | ) |         | 
|Shares
    issued for cash, net of share issue cost |  |                   | 575,000    |   |        |  | 41,033     |                                     |  |  | 11,614  |  |  |                 | -          |   |         | 
|Fair
    value of broker warrants                   |  |                   | -          |   |        |  | (202       | )                                   |  |  | 202     |  |  |                 | -          |   |         | 
|Stock
    based compensation                        |  |                   | -          |   |        |  | -          |                                     |  |  | 1,897   |  |  |                 | -          |   |         | 
|Net
    loss for the year                           |  |                   | -          |   |        |  | -          |                                     |  |  | -       |  |  |                 | -          |   |         | 
|Translation
    of foreign operation                |  |                   | -          |   |        |  | -          |                                     |  |  | -       |  |  |                 | 1,001,590  |   |         | 
|                                                    |  |                   |            |   |        |  |            |                                     |  |  |         |  |  |                 |            |   |         | 
|Balance,
    May 31, 2012                           |  |                   | 72,678,605 |   |        |  | 14,045,753 |                                     |  |  | 701,825 |  |  |                 | (83,160    | ) |         | 
|Stock
    based compensation                        |  |                   | -          |   |        |  | -          |                                     |  |  | 47,757  |  |  |                 | -          |   |         | 
|Repurchase
    of shares                            |  |                   | (2,133,000 | ) |        |  | (412,220   | )                                   |  |  | -       |  |  |                 | -          |   |         | 
|Treasury
    shares                                 |  |                   | -          |   |        |  | -          |                                     |  |  | -       |  |  |                 | -          |   |         | 
|Net
    loss for the year                           |  |                   | -          |   |        |  | -          |                                     |  |  | -       |  |  |                 | -          |   |         | 
|Translation
    of foreign operation                |  |                   | -          |   |        |  | -          |                                     |  |  | -       |  |  |                 | 11,326     |   |         | 
|Balance,
    May 31, 2013                           |  |                   | 70,545,605 |   |        |  | 13,633,533 |                                     |  |  | 749,582 |  |  |                 | (71,834    | ) |         | 



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



F-5







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|1. | NATURE
    OF OPERATIONS AND GOING CONCERN
|-- | ------------------------------------------



Teryl
Resources Corp. (the “Company”) is a public company incorporated in British Columbia on May 23, 1980 and changed to
its current name on February 28, 1984. Its shares are listed on the TSX Venture Exchange (“TSX.V”). The Company is
in the business of acquiring mineral properties and carries out exploration work. It also acquires oil and gas property interests
and participates in drilling wells. The Company’s registered office is located at #240 – 11780, Hammersmith Way, Richmond,
BC, V7A 5E9.



These
consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which
assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge
its liabilities in the normal course of operations. Several adverse conditions cast substantial doubt on the validity of this
assumption. The Company continues to incur operating losses, has limited financial resources, limited sources of operating cash
flow, and no assurances that sufficient funding, including adequate financing, will be available to conduct further exploration
and development of its mineral property projects.



The
Company’s ability to continue as a going concern is dependent upon its ability to obtain the financing necessary to complete
its mineral projects by issuance of share capital or through joint ventures, and to realize future profitable production or proceeds
from the disposition of its natural resource interests. The Company has incurred an accumulated deficit of $12,562,178 (2012 -
$12,234,099) as at May 31, 2013 and has incurred a loss of $608,659 in the year ended May 31, 2013 (2012 – $766,330). These
consolidated financial statements do not include adjustments that would be necessary should it be determined that the Company
may be unable to continue as a going concern.



If
the going concern assumption was not appropriate for these consolidated financial statements, adjustments would be necessary in
the carrying values of assets, liabilities, reported income and expenses and the balance sheet classifications used. Such adjustments
could be material.



|2. | STATEMENT
    OF COMPLIANCE
|-- | ---------------------------



These consolidated
financial statements of the Company and its subsidiaries, including comparatives, have been prepared in accordance with International
Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”).
The policies set out below were consistently applied to all the periods presented unless otherwise noted below.



These
consolidated financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors
on September 27, 2013.



F-6







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES
|-- | -----------------------------------



Basis
of preparation



These
consolidated financial statements were prepared on a going concern basis, under the historical cost convention, except for the
revaluation of certain financial instruments.



The
preparation of financial statements in accordance with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise judgment in applying the Company’s accounting policies. The areas involving a higher degree
of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are
disclosed in Note 4.



Basis
of consolidation and presentation



These
consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Argon Investment Corporation
(inactive) and Teryl, Inc. 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, the Texas oil and gas well interests and the Arizona mineral
property interests.



All
inter-company transactions are eliminated upon consolidation.



Cash
equivalents



Cash
equivalents consist of highly liquid investments that are readily convertible to cash with original maturities of three months
or less when purchased.



Equipment



The
Company records its office and automotive equipment at cost and depreciates them on the following basis:



|Office
    equipment                                                                                                                 |  | Declining-balance
    basis at 20%
|------------------------------------------------------------------------------------------------------------------------------------ |  | ----------------------------------
|Automotive
    equipment                                                                                                             |  | Declining-balance
    basis at 30%
|Computer
                                                                                     equipment purchased after May 31, 2010 |  | 50%
per annum over two years      



Foreign
currency translation



The
functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional
currency of the Company and each of its subsidiaries is the Canadian dollar. The functional currency determinations were conducted
through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.



Transactions
in currencies other than the Canadian dollar are recorded at exchange rates prevailing on the dates of the transactions. At the
end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the year end
exchange rate while non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated
at the exchange rates approximating those in effect on the date of the transactions. Exchange gains and losses arising on translation
are included in the operations of the year.



The
results and financial position of all the group entities that have a functional currency different from the presentation currency
are translated into the presentation currency as follows:



| | ● | Assets
    and liabilities are translated at year-end exchange rates prevailing at that reporting date;                                                                                                                                                                                                    
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | Income
    and expenses are translated at average exchange rates for the period; and                                                                                                                                                                                                                       
| | ● | Exchange
    differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation
    reserve in the consolidated statement of comprehensive income and are recognized in the profit or loss in the period in which
    the operation is disposed.



F-7







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



Share
- based compensation



The
Company’s share option plan allows Company employees, directors, officers and consultants to acquire shares of the Company.
The fair value of options granted is recognized as share-based compensation expense with a corresponding increase in equity. An
individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides
services similar to those performed by a direct employee.



Fair
value is measured at grant date, and each tranche is recognized using the graded vesting method over the period during which the
options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account
the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized
as an expense is adjusted to reflect the actual number of share options that are expected to vest. In situations where equity
instruments are issued to consultants and some or all of the goods or services received by the entity as consideration cannot
be specifically identified, they are measured at the fair value of the share-based payment. Otherwise, share-based payments are
measured at the fair value of goods or services received.



Income
taxes



Income
tax expense comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates
to items recognized directly in equity. Current tax expense is the expected tax payable on taxable income for the year, using
tax rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous years.



Deferred
tax is recorded using the liability method, providing for temporary differences, between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for relating
to goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting or
taxable loss, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the
foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying
amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date.



A
deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against
which the asset can be utilized. To the extent that the Company does not consider it probable that a future income tax asset will
be recovered, it does not recognize the asset.



Loss
per share



Basic
loss per share is calculated using the weighted average number of common shares outstanding during the year. The Company uses
the treasury stock method for calculating diluted loss per share. Under this method the dilutive effect on loss per share is recognized
on the use of the proceeds that could be obtained upon exercise of options, warrants and similar instruments. It assumes that
the proceeds would be used to purchase common shares at the average market price during the period. However, diluted loss per
share is not presented where the effects of various conversions and exercise of options and warrants would be anti-dilutive. Shares
held in escrow, other than where their release is subject to the passage of time, are not included in the calculation of the weighted
average number of common shares outstanding.



F-8







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



Financial
instruments



Initial
recognition and measurement



Financial
assets and liabilities are initially recognized at fair value. Financial assets are classified at initial recognition as financial
assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial
assets. The Company does not use any hedging instruments. Financial instruments measured at fair value are classified into one
of three levels in the fair value hierarchy according to the reliability of the inputs used to estimate the fair values. The three
levels of the fair value hierarchy are:



|Level
    1 | - | unadjusted
quoted prices in active markets for identical assets or liabilities;                                  
|----------- | - | -----------------------------------------------------------------------------------------------------------------
|Level
    2 | - | inputs
other than quoted prices that are observable for the asset or liability either directly or indirectly; and
|Level
    3 | - | inputs
that are not based on observable market data.                                                             



At
May 31, 2013, all of the financial instruments measured at fair value are included in Level 1.



Subsequent
measurement



The
subsequent measurement of financial assets depends on their classification. Financial assets at fair value through profit or loss
includes financial assets held-for-trading which represent assets that are acquired for the purpose of selling or repurchasing
in the near term. These financial assets are initially recorded in the statement of financial position at fair value with changes
in fair value recognized in the operations of the year.



Loans
and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. After initial
measurement at fair value, such financial assets are subsequently measured at amortized cost using the effective interest rate
method, less impairment. Any amortization of the effective interest rate method and any impairment is recognized in the operations
of the year.



Held-to-maturity
investments represent assets to be held until a specific time period and are initially measured at fair value, including transaction
costs. After initial measurement at fair value, such financial assets are subsequently measured at amortized cost using the effective
interest rate method, less impairment. Any amortization of the effective interest rate method and any impairment is recognized
in the operations of the year.



Available-for-sale
financial assets are investments in equity instruments that are measured at fair value with gains and losses, net of applicable
taxes, included in other comprehensive income until the asset is removed from the consolidated statement of financial position.
Once this occurs, the resultant gains or losses are recognized in comprehensive loss. Any permanent impairment of available-for-sale
financial assets is also included in the operations of the year.



Financial
liabilities are initially recorded at fair value and are designated as fair value through profit or loss or other financial liabilities.
Derivative financial liabilities are classified as fair value through profit or loss and are initially recorded in the consolidated
statement of financial position at fair value with changes in fair value recognized in finance income or finance cost in the operations
of the year. Non-derivative financial liabilities are recorded at amortized cost using the effective interest rate method. Any
amortization of the effective interest rate method is recognized in the operations of the year.



Financial
assets, others than those at fair value through profit and loss are assessed for indicators of impairment at each period end.
Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after initial
recognition of the financial asset, the estimated future cash flows of the investment have been impacted. The amount of impairment
loss is recognized in the operations of the year. Any subsequent reversals of impairment is also recognized in the operations
of the year, except for those related to available-for-sale financial assets.



F-9







TERYL
                                                                                    RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



Mineral
property or exploration and evaluation



The
Company follows the practice of capitalizing all costs relating to the acquisition of, exploration and development of mineral
claims and crediting all proceeds received for farm-out arrangements or recovery of costs against the cost of the related claims.
Such costs include, but are not exclusive to, geological, geophysical studies, exploratory drilling and sampling. At such time
as commercial production commences, these costs will be charged to operations on a unit-of-production method based on proven and
probable reserves. The aggregate costs related to abandoned mineral claims are charged to operations at the time of any abandonment
or when it has been determined that there is evidence of a permanent impairment. An impairment charge relating to a mineral property
is subsequently reversed when new exploration results or actual or potential proceeds on sale or farm-out of the property result
in a revised estimate of the recoverable amount but only to the extent that this does not exceed the original carrying value of
the property that would have resulted if no impairment had been recognized.



The
recoverability of amounts shown for exploration and evaluation assets is dependent upon the discovery of economically recoverable
reserves, the ability of the Company to obtain financing to complete development of the properties, and on future production or
proceeds of disposition.



The
Company recognizes in income the costs recovered on mineral properties when the amounts received or receivable are in excess of
the carrying amount.



Upon
transfer of “Exploration and evaluation costs” into “Mine Development”, all subsequent expenditure on
the construction, installation or completion of infrastructure facilities is capitalized within “Mine development”.
After production starts, all assets included in “Mine development” are transferred to “Producing Mines”.



All
capitalized exploration and evaluation expenditure is monitored for indications of impairment. Where a potential impairment is
indicated, assessments are performed for each area of interest. To the extent that exploration expenditure is not expected to
be recovered, it is charged to the results of operations. Exploration areas where reserves have been discovered, but require major
capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist
or to ensure that additional exploration work is underway as planned.



Provisions



A
provision is recognized when the Company has a present legal or constructive obligation as a result of a past event; it is probable
that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably
estimated. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.



Rehabilitation
Provisions:



Provision
related to asset retirement obligation, dismantling, decommissioning and site disturbance remediation is made for the estimated
cost and capitalized in the relevant asset category. Such provision is measured at the present value of management’s best
estimate of expenditure required to settle the present obligation at the Consolidated Statement of Financial Position date. Subsequent
to the initial measurement, the obligation is adjusted at the end of each reporting period to reflect the passage of time and
changes in the estimated future cash flows underlying the obligation. The increase in the provision due to the passage of time
is recognized as finance costs in the Consolidated Statement of Operations whereas increases/decreases due to changes in the estimated
future cash flows are capitalized. Actual costs incurred upon settlement of the obligation are charged against the provision to
the extent the provision is established.



Other
Provisions:



Provisions
are recognized for liabilities of uncertain timing or amount that have arisen as a result of past transactions, including legal
or constructive obligations. The provision is measured at the best estimate of the expenditure required to settle the obligation
at the reporting date. The Company had no provisions as at May 31, 2013.



F-10







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



Revenue
recognition



Revenue
associated with the sales of oil and gas are recorded when title passes to the customer. Revenues from oil and gas production
from properties in which the Company has an interest with other producers are recognized on the basis of the Company’s net
working interest.



Impairment
of assets



The
carrying amount of the Company’s assets (which includes the exploration and evaluation asset) are reviewed at each reporting
date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss. An impairment loss isrecognized
whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized
in the operations of the year.



The
recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the
current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate
cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit
to which the asset belongs. An impairment loss is only reversed if there is an indication that the impairment loss may no longer
exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher
than the carrying amount that would have been determined had no impairment loss been recognized in previous years. Assets that
have an indefinite useful life are not subject to amortization and are tested annually for impairment.



Accounting
for Oil and Gas Well Interests



| | (i) | Recognition
                                                                                                                                                                                                                                                                           and
                                                                                                                                                                                                                                                                           measurement
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Oil
and gas properties/exploration and evaluation expenditures



Pre-license
costs are expensed in the statement of comprehensive loss as incurred.



Oil
and gas properties costs, including the costs of acquiring licenses, initially are capitalized as oil and gas properties. The
costs are accumulated in cost centers by well, field or exploration area pending determination of technical feasibility and commercial
viability.



Oil
and gas properties are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial
viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.



The
technical feasibility and commercial viability of extracting oil & gas resource is considered to be determinable when proved
and/or probable reserves are determined to exist. A review of each exploration license or field is carried out, at least annually,
to ascertain whether proved and/or probable reserves have been discovered. Upon determination of proved and/or probable reserves,
oil and gas properties attributable to those reserves are first tested for impairment and then reclassified from oil and gas properties
to PP&E or expensed in income or loss to the extent of any impairment.



Development
and production costs



Items
of PP&E, which include crude oil and natural gas development and production assets, are measured at cost less accumulated
depletion and depreciation and accumulated impairment losses. Development and production assets are grouped into CGU’s for
impairment testing. When significant parts of an item of PP&E, including oil and natural gas interests, have different useful
lives, they are accounted for as separate items (major components). Gains and losses on disposal of an item of PP&E, including
crude oil and natural gas interests, are determined by comparing the proceeds from disposal with the carrying amount of PP&E
and are recognized in income or loss.



F-11







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



Accounting
for Oil and Gas Well Interests (Continued)



| | (ii) | Depletion
| | ---- | ---------



Development
and production oil assets are measured at cost less accumulated depletion and depreciation and accumulated impairment losses.
The net carrying value of development or production assets is depleted using the unit of production method by reference to the
ratio of production in the year to the related proven reserves, taking into account estimated future development costs necessary
to bring those reserves into production. Future development costs are estimated taking into account the level of development required
to produce the reserves.



| | (iii) | Derecognition
| | ----- | -------------



The
carrying amount of an item of oil and gas properties is derecognized when no future economic benefits are expected from its use
or upon sale to a third party. The gain or loss arising from derecognition is included in income or loss and is measured as the
difference between the net proceeds, if any, and the carrying amount of the asset.



| | (iv) | Major
                                                                                                                                                                                                                                                                            maintenance
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Ongoing
costs to maintain properties are generally expensed as incurred. The costs of material replacement, turnarounds and major inspections
are capitalized provided it is probable that future economic benefits in excess of cost will be realized and such benefits are
expected to extend beyond the current operating period.



New
standards and interpretations



New
standards, amendments and interpretations not yet effective:



Certain
new standards, interpretations and amendments to existing standards have been issued by the IASB that are mandatory for future
accounting periods. Some updates that are not applicable or are not consequential to the Company may have been excluded from the
list below.



New
accounting standards effective June 1, 2013



IFRS
7 - Financial Instruments: Disclosures - In December 2011, the IASB issued an amendment to this standard, which requires entities
to provide additional information about offsetting of financial assets and financial liabilities that will enable users of financial
statements to evaluate the effect or potential effect of netting arrangements, including rights of set-off associated with an
entity’s recognized financial assets and recognized financial liabilities, on the entity’s financial position. This
amendment is not expected to affect the Company.



IFRS
10 Consolidated Financial Statements - IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect those returns through its power over
the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating
policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12 Consolidation - Special Purpose Entities
and parts of IAS 27 Consolidated and Separate Financial Statements.



F-12







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



New
standards and interpretations (continued)



IFRS
11 Joint Arrangements - IFRS 11 requires a venturer to classify its interest in a joint arrangement as a joint venture or joint
operation. Joint ventures will be accounted for using the equity method of accounting whereas for a joint operation the venturer
will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under existing IFRS, entities
have the choice to proportionately consolidate or equity account for interests in joint ventures. IFRS 11 supersedes IAS 31 Interests
in Joint Ventures and SIC-13 Jointly Controlled Entities - Non-monetary Contributions by Venturers.



IFRS
12 Disclosure of Interests in Other Entities - IFRS 12 establishes disclosure requirements for interests in other entities, such
as joint arrangements, associates, special purpose vehicles and off balance sheet vehicles. The standard carries forward existing
disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated
with, an entity’s interests in other entities.



IFRS
13 Fair Value Measurement - IFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use
across all IFRS standards. The new standard clarifies that fair value is the price that would be received to sell an asset, or
paid to transfer a liability in an orderly transaction between market participants, at the measurement date. It also establishes
disclosures about fair value measurement. Under existing IFRS, guidance on measuring and disclosing fair value is dispersed among
the specific standards requiring fair value measurements and in many cases does not reflect a clear measurement basis or consistent
disclosures.



IAS
1 – Presentation of Financial Statements - In June 2011, the IASB issued an amendment to IAS 1, which requires entities
to separately present items in other comprehensive income based on whether or not they may be recycled to profit or loss in future
periods.



IAS
19 – Employee Future Benefits - In June 2011, the IASB issued an amendment to IAS 19, which changes the recognition, measurement
and presentation of defined benefit pension expense and provides for additional disclosures for all employee benefits.



IAS
27 – Separate Financial Statements - As a result of the issue of the new consolidation suite of standards, IAS 27 Separate
Financial Statements has been reissued, as the consolidation guidance will now be included in IFRS 10. IAS 27 will now only prescribe
the accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares
separate financial statements.



IAS
28 – Investments in Associates and Joint Ventures - As a consequence of the issue of IFRS 10, IFRS 11 and IFRS 12, IAS 28
has been amended and will provided the accounting guidance for investments in associates and to set out the requirements for the
application of the equity method when accounting for investments in associates and joint ventures. The amended IAS 28 will be
applied by all entities that are investors with joint control of, or significant influence over, an investee.



F-13







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|3. | SIGNIFICANT
    ACCOUNTING POLICIES(Continued)
|-- | ----------------------------------------------



New
standards and interpretations (continued)



New
accounting standard effective June 1, 2015



IAS
32 – Financial Instruments: Presentation



In
December 2011, the IASB issued an amendment to clarify the meaning of the offsetting criterion and the principle behind net settlement,
including identifying when some gross settlement systems may be considered equivalent to net settlement. Earlier application is
permitted when applied with corresponding amendment to IFRS 7.



IFRS
9 – Financial Instruments



In
November 2009, as part of the IASB project to replace IIAS 39 Financial Instruments: Recognition and Measurement, the IASB issued
the first phase of IFRS 9 Financial Instruments, that introduces new requirements for the classification and measurement of financial
assets. The standard was revised in October 2010 to include requirements regarding classification and measurement of financial
liabilities.



Unless
otherwise noted, the extent of the impact of adoption of these standards and interpretations on the consolidated financial statements
of the Company has not been determined.



|4. | CRITICAL
    ACCOUNTING ESTIMATES AND JUDGMENTS
|-- | -----------------------------------------------



Use
of Estimates



The
preparation of financial statements in accordance with IFRS requires management to make estimates and assumptions about the reported
amounts of assets and liabilities, the disclosures of contingent assets and liabilities, and the results of operations. Significant
areas requiring the use of management estimates include determination of accrued liabilities, deferred tax assets and stock-based
compensation. Actual results could differ from the estimates made.



The
estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimates is revised if the revision affects only that period or in the period of the revision and further
periods if the review affects both current and future periods.



Use
of judgements



Critical
accounting judgements are accounting policies that have been identified as being complex or involving subjective judgements or
assessments with a significant risk of material adjustment in the next year.



| | (i) | Determination
                                                                                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                                                                                      functional
                                                                                                                                                                                                                                                                                                                      currency
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company determines the functional currency through an analysis of several indicators such as expenses and cash flow, financing
activities, retention of operating cash flows, and frequency of transactions with the reporting entity.



F-14







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|4. | CRITICAL
    ACCOUNTING ESTIMATES AND JUDGMENTS(Continued)
|-- | ----------------------------------------------------------



Use
of judgements (Continued)



| | (ii) | Valuation
                                                                                                                                                                                                                                                                                                                       of
                                                                                                                                                                                                                                                                                                                       share-based
                                                                                                                                                                                                                                                                                                                       payments
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company uses the Black-Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input
of subjective assumptions including expected price volatility, interest rate, and forfeiture rate. Changes in the input assumptions
can materially affect the fair value estimate and the Company’s earnings and equity reserves.



| | (iii) | Income
                                                                                                                                                                                                                                                                                                                        taxes
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In
assessing the probability of realizing income tax assets, management makes estimates related to expectations of future taxable
income, applicable tax opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax
positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives
additional weight to positive and negative evidence that can be objectively verified.



| | (iv) | Depreciation
                                                                                                                                                                                                                                                                                                                       for
                                                                                                                                                                                                                                                                                                                       equipment
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Depreciation
expense is allocated based on assumed asset lives. Should the asset life or depreciation rates differ from the initial estimate,
an adjustment would be made in the consolidated statements of comprehensive loss.



| | (v) | Economic
                                                                                                                                                                                                                                                                                                                      recoverability
                                                                                                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                                                                                                      probability
                                                                                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                                                                                      future
                                                                                                                                                                                                                                                                                                                      economic
                                                                                                                                                                                                                                                                                                                      benefits
                                                                                                                                                                                                                                                                                                                      of
                                                                                                                                                                                                                                                                                                                      mineral
                                                                                                                                                                                                                                                                                                                      properties
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Management
has determined that mineral property and deferred exploration costs incurred which were capitalized have future economic benefits
and are economically recoverable. Management uses several criteria in its assessments of economic recoverability and probability
of future economic benefits including geological and metallurgic information, history of conversion of mineral deposits to proven
and probable reserves, scoping and feasibility studies, accessible facilities, existing permits and life of mine plans.



|5. | FINANCIAL
    INSTRUMENTS AND RISK MANAGEMENT
|-- | ---------------------------------------------



Foreign
exchange risk



The
Company is primarily exposed to currency fluctuations relative to the Canadian dollar through expenditures that are denominated
in US dollars. Also, the Company is exposed to the impact of currency fluctuations on its monetary assets and liabilities.



The
operating results and the financial position of the Company are reported in Canadian dollars. Fluctuations in exchange rates will,
consequently, have an impact upon the reported operations of the Company and may affect the value of the Company’s assets
and liabilities.



The
Company currently does not enter into financial instruments to manage foreign exchange risk.



F-15







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|5. | FINANCIAL
                                                                                                                                                                                                                        INSTRUMENTS
                                                                                                                                                                                                                        AND
                                                                                                                                                                                                                        RISK
                                                                                                                                                                                                                        MANAGEMENT(Continued)
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Foreign
exchange risk (Continued)



The
Company is exposed to foreign currency risk through the following financial assets and liabilities that are denominated in United
States dollars:



|May
    31, 2013 |  | Cash   |  | Accounts
payable
|---------------- |  | ------ |  | ----------------
|                 |  | 10,443 |  | 95,600          



At
May 31, 2013 with other variables unchanged, a +/-10% change in exchange rates would increase/decrease pre-tax loss by approximately
+/- $8,516.



Interest
rate and credit risk



The
Company has no significant concentrations of credit risk arising from operations. The Company’s current policy is to invest
any significant excess cash in investment-grade short-term deposit certificates issued by reputable financial institutions with
which it keeps its bank accounts and management believes the risk of loss to be remote. The Company periodically monitors the
investments it makes and is satisfied with the credit ratings of its banks.



Receivables
consist of goods and services tax due from the Federal Government. Management believes that the credit risk concentration with
respect to receivables is remote.



Liquidity
Risk



The
Company has no recent history of profitable operations and its present business is at an early stage. As such, the Company is
subject to many risks common to such enterprises, including under-capitalization, cash shortages and limitations with respect
to personnel, financial and other resources, and the lack of revenues. The Company has no investments in asset backed commercial
paper.



In
order to finance the Company’s exploration programs and to cover administrative and overhead expenses, the Company raises
money through equity sales, from the exercise of convertible securities, loans from related parties and from the sale of investments.
There can be no such assurance that it will be able to obtain adequate financing in the future or that the terms of any financing
will be favourable. Many factors influence the Company’s ability to raise funds, including the state of the resource market
and commodities prices, the climate for mineral exploration, the Company’s track record, and the experience and calibre
of its management.



F-16







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|6. | INVESTMENT
|-- | ----------



As
at May 31, 2011, the Company wrote off its investments in 15,880 common shares of Linux Gold Corp., a company with directors in
common as a result of permanent impairment.



| | 7. | EQUIPMENT
| | -- | ---------



|                                               |  | May
    31, 2013 |        |   | May
    31, 2012 | 
|---------------------------------------------- |  | ---------------- | ------ | - | ---------------- | 
|                                               |  | $                |        |   | $                | 
|Computer,
    furniture and fixtures – at cost |  |                  | 2,230  |   |                  | 
|Less:
    Accumulated amortization             |  |                  | (1,084 | ) |                  | 
|                                               |  |                  | 1,146  |   |                  | 



|8. | OIL
                                                                                                                                                                            AND
                                                                                                                                                                            GAS
                                                                                                                                                                            WELL
                                                                                                                                                                            INTERESTS
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



The
Company entered into agreements with IAS Energy, Inc., a company with common directors, to purchase 40% interests (subject to
40% net revenue interests to others) on May 18, 2006, in the Ken Lee #1 natural gas well for $103,045 ($92,500 US), on June 8,
2006, in the Elvis Farris #2 natural gas well for $104,461 ($92,500 US) and on July 31, 2006, in the Clarence Bright #1 natural
gas well for $104,673 ($92,500 US). All three wells are located in Knox and Laurel Counties, Kentucky. The three wells commenced
production late in 2006. During the May 31, 2008 year end, the Company wrote off the carrying costs of the wells to $Nil, since
the wells have no proven economic reserves.



|9. | MINERAL
                                                                                                                                                                            PROPERTY
                                                                                                                                                                            INTERESTS
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|                               |  | Balance          |         |  |         |  |   | Balance          | 
|------------------------------ |  | ---------------- | ------- |  | ------- |  | - | ---------------- | 
|                               |  | May
    31, 2012 |         |  | Changes |  |   | May
    31, 2013 | 
|                               |  | $                |         |  | $       |  |   | $                | 
|                               |  |                  |         |  |         |  |   |                  | 
|Property
    acquisition costs |  |                  |         |  |         |  |   |                  | 
|Silverknife                    |  |                  | 32,001  |  |         |  | - |                  | 
|Fish
    Creek                 |  |                  | 49,538  |  |         |  | - |                  | 
|West
    Ridge                 |  |                  | 95,104  |  |         |  | - |                  | 
|                               |  |                  |         |  |         |  |   |                  | 
|                               |  |                  | 176,643 |  |         |  | - |                  | 



F-17







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|9. | MINERAL
                                                                                                                                                                            PROPERTY
                                                                                                                                                                            INTERESTS(continued)
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Silverknife,
Laird, BC, Canada



Pursuant
to agreements between Reg Technologies Inc. (“Reg Tech”), SMR Investments Ltd. (“SMR”), Rapitan Resources
Inc. (“Rapitan”), and Chevron Minerals Ltd. (“Chevron”), the Company acquired a 30% working interest in
the Silverknife mineral claims, situated in the Liard Mining Division in the Province of British Columbia, subject to a 10% Net
Profit Royalty (“NPR”) to Rapitan and a 1% Net Smelter Returns to SMR. On December 21, 2010 the Company purchased
the 10% NPR in the Silverknife property from Rapitan for consideration of 200,000 common shares of the Company issued at a fair
value of $32,000 on January 25, 2011.



On
April 20, 2012 the Company and Minewest Silver and Gold Inc. (“Minewest”), a former 100% owned subsidiary of Reg Tech
to which Reg Tech spun off 100% of its interest in the Silverknife claims, entered into an Exploration, Development and Mine Operating
Agreement (the “Exploration Agreement”) until the completion of mining and environmental restoration on the Property
with initial participation interests of 70% and 30% for Minewest and the Company respectively. The Exploration Agreement was approved
by the TSX Venture Exchange on September 7, 2012.



Fish
Creek, Fairbanks, Alaska, USA



The
Company and Linux Gold Corp. (“Linux”) entered into an agreement on March 5, 2002, whereby the Company may earn up
to a 50% interest in the Fish Creek mineral claims, located in the Fairbanks district of Alaska, USA, by expending $500,000 US
within three years and issuing 200,000 common shares (issued on December 16, 2002 at $0.08 per share). An additional 100,000 shares
were issued on February 14, 2007 at $0.16 per share in payment of an extension of the expenditure date to March 5, 2007, which
was further extended to March 5, 2011. Linux will have a 5% Net Royalty Interest in Fish Creek limited to US$2,000,000, and the
Company has the right to purchase the 5% Net Royalty for US$500,000 within one year of production. On March 4, 2011 the Company
and Linux further amended the agreement to extend the option agreement to March 5, 2012.



On
December 1, 2011 the Company and Linux further amended the agreement to include the following terms:



| | ● | Linux
    applies $75,000 owed by the Linux to the Company towards the above stated minimum exploration budget of US$500,000;                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | The
    Company has an option to pay the expenditures for the Fish Creek property in cash in lieu of the exploration costs to the
    Company; and
| | ● | The
    term of the agreement is extended to March 5, 2013.                                                                                       



The
Company exercised its option to pay the expenditures in cash in lieu of the exploration costs to Linux. As a result, $75,000 advanced
to Linux by the Company was applied as a recovery of exploration costs for the year ended May 31, 2012.



During
May, 2012 the Company and Linux agreed to apply towards the minimum exploration budget of $500,000 the balance owed by Linux of
$7,517 and additional cash payment of $60,000, which was paid off as of May 31, 2013.



Effective
March 5, 2013, the Company completed the expenditure of $500,000 on exploration on Fish Creek property and cash payments made
in lieu of exploration and the purchase of its interest in the Fish Creek property in accordance with the option agreement.



F-18







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|9. | MINERAL
                                                                                                                                                                                                                        PROPERTY
                                                                                                                                                                                                                        INTERESTS(Continued)
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Kahiltna
Terrane Option, Alaska, USA



On
September 1, 2010 the Company signed an option agreement (the “Option Agreement”) to acquire a 50% interest in eleven
mineral claims located in the Kahiltna Terrane area approximately 130 kilometers northwest of Anchorage, Alaska. Consideration
for the option is as follows:



| | ● | issue
    50,000 common shares upon approval of the option agreement by the TSX.V (the “Approval Date”) (issued on November
    2, 2010, at a fair value of $7,500);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ● | issue
    an additional 50,000 common shares on the first anniversary of the Approval Date;                                                                         
| | ● | issue
    an additional 100,000 common shares and pay a US$10,000 cash payment on the second anniversary of the Approval Date; and                                  
| | ● | contribute
    $50,000 US for exploration expenditures in the first year and $100,000 US in exploration expenditures in the second year.                            



On
October 26, 2010 the Company staked and recorded an additional 23 mineral claims in the Kahiltna Terrane.



As
at May 31, 2011, the Company planned to terminate the Option Agreement with the Vendors. Accordingly, property cost of $7,500
and exploration costs of $34,261 were written off. The Option Agreement was officially terminated on October 4, 2011.



West
Ridge, Dome Creek, Alaska, USA



Pursuant
to various agreements, the Company earned 100% interest in the West Ridge mineral properties (approximately

5,200
acres) located in the Dome Creek area of the Fairbanks District of Alaska, USA.



Gil
Venture, Dome Creek, Alaska, USA



Pursuant
to various agreements, the Company acquired a 20% interest in 237 claims located in the Gilmore Dome area of Fairbanks District
of Alaska. On May 31, 1991, the Company, NERCO Exploration Company and Fort Knox Venture entered into an agreement, which granted
the Company a 20% participating interest in the claims. Under the agreement, Fort Knox Venture paid the Company cash and funded
approved programs, earning them an 80% participating interest in the property, with the Company retaining a 20% participating
interest. Fort Knox Venture, through its operator Fairbanks Gold Mining, Inc. (“Fairbanks”), was doing exploration
work on this property. During the year ended May 31, 2011 the Company incurred exploration expenditure of $270,462 on the property.



Effective
December 21, 2011 the Company executed the Asset Purchase Agreement to sell all of its remaining 20% interest in the Gil Venture
property to Fairbanks. Fairbanks granted to the Company a production royalty equal to 1% of net smelter returns on all production
from the property up to US$15,000,000, after which the royalty is equal to 0.5% of the net smelter returns on all production from
the property. On December 19, 2011 Fairbanks paid the Company US$2,500,000 as an advance payment of the production royalty. An
additional advance payment of royalty of US$1,500,000 will be paid to the Company upon commencement of commercial production from
a mine constructed on the property. As at May 31, 2013, no additional advance payment was received from Fairbanks as a result
of their production commencement.



F-19







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|9. | MINERAL
                                                                                                                                                                                                                        PROPERTY
                                                                                                                                                                                                                        INTERESTS(Continued)
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred
Exploration Expenditures



|                                                 |  | May
    31, 2013 |         |  | May
    31, 2012 | 
|------------------------------------------------ |  | ---------------- | ------- |  | ---------------- | 
|                                                 |  | $                |         |  | $                | 
|Silverknife
    Claims                           |  |                  |         |  |                  | 
|Staking
    and recording                        |  |                  | 648     |  |                  | 
|Drilling                                         |  |                  | 27,115  |  |                  | 
|Geological
    consulting                        |  |                  | 3,515   |  |                  | 
|                                                 |  |                  | 31,278  |  |                  | 
|Fish
    Creek Claims                            |  |                  |         |  |                  | 
|Cash
    in lieu of exploration work             |  |                  | 165,285 |  |                  | 
|Staking
    and recording                        |  |                  | 10,545  |  |                  | 
|Drilling                                         |  |                  | 164,281 |  |                  | 
|Geological
    consulting                        |  |                  | -       |  |                  | 
|                                                 |  |                  | 340,111 |  |                  | 
|Gil
    Venture Claims                           |  |                  |         |  |                  | 
|Disposition                                      |  |                  | -       |  |                  | 
|                                                 |  |                  | -       |  |                  | 
|West
    Ridge Claims                            |  |                  |         |  |                  | 
|Staking
    and recording                        |  |                  | 11,429  |  |                  | 
|Drilling                                         |  |                  | 231,245 |  |                  | 
|Assaying                                         |  |                  | 633     |  |                  | 
|Geological                                       |  |                  | 23,930  |  |                  | 
|                                                 |  |                  | 267,237 |  |                  | 
|Exploration
    expenditures for the year        |  |                  | -       |  |                  | 
|Disposition                                      |  |                  | -       |  |                  | 
|Effect
    of foreign exchange rate changes      |  |                  | 8,514   |  |                  | 
|                                                 |  |                  | 647,140 |  |                  | 
|Exploration
    expenditures – beginning of year |  |                  | 195,376 |  |                  | 
|Exploration
    expenditures – end of year       |  |                  | 842,516 |  |                  | 



F-20







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|10. | ADVANCES
                                                                                                                                                                                                                         TO/
                                                                                                                                                                                                                         FROM
                                                                                                                                                                                                                         RELATED
                                                                                                                                                                                                                         PARTIES
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Amounts
due to/ from related parties, other than the note receivable from REGI US, Inc. are unsecured, non-interest bearing and have no
fixed terms of repayment. Unless otherwise indicated, the following table represents companies controlled by the President and
CEO of the Company or companies where he is the President and CEO.



Advances
to related parties:



|                      |  | May 31, 2013 |        |  | May
    31, 2012 | 
|--------------------- |  | ------------ | ------ |  | ---------------- | 
|                      |  | $            |        |  | $                | 
|REGI
    US, Inc. (a) |  |              | 26,704 |  |                  | 
|                      |  |              | 26,704 |  |                  | 



Advances
from related parties:



|                                   |  | May
    31, 2013 |       |  | May
    31, 2012 | 
|---------------------------------- |  | ---------------- | ----- |  | ---------------- | 
|                                   |  | $                |       |  | $                | 
|Minewest
    Silver and Gold Corp. |  |                  | 3,717 |  |                  | 
|Linux
    Gold Corp. (b)           |  |                  | 2,642 |  |                  | 
|KLR
    Petroleum Ltd.             |  |                  | 357   |  |                  | 
|                                   |  |                  | 6,716 |  |                  | 



(a)
During the year ended May 31, 2012 REGI US, Inc. repaid $3,916 to the Company and converted the balance of $24,684 into a promissory
note owed to the Company at annual interest rate of $6%, for which the Company recorded interest income of $1,480 (2012 - $540)
on the promissory note during the year ended May 31, 2013. The note initially matured on April 18, 2012 and was extended to the
expiry date of June 30, 2013 and further to June 30, 2014.



(b)
During the year ended May 31, 2013, the Company completed the expenditure of $500,000 on exploration on Fish Creek property and
cash payments made in lieu of exploration and the purchase of its interest in the Fish Creek property in accordance with the option
agreement (Note 9).



F-21







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)

|11. | SHARE
                                                                                                                                                                             CAPITAL
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Authorized
share capital consists of: (Note 17)



| | ● | Unlimited
    voting common shares with no par value; and  
| | - | -----------------------------------------------------------
| | ● | Unlimited
    non-voting preferred shares with $1 par value



The
Preferred Shares have attached thereto a right to receive dividends as determined by the Directors. The Preferred Shares may be
issued in series, with special rights and restrictions therefore being determined by the Directors, subject to regulatory approval.
No Preferred Shares have been issued to the date of these consolidated financial statements.



On
September 30, 2011, the Company issued 575,000 units of capital stock pursuant to a private placement at $0.10 per unit. Each
unit consists of one common share and one share purchase warrant exercisable into the Company’s common stock at $0.15 per
share expiring September 30, 2012. In connection with the private placement finders’ fee of $2,100 was paid and 10,000 broker
warrants were issued which are exercisable into the Company’s common stock at $0.15 per share expiring September 30, 2012.
The broker warrants were valued at $202 using the Black-Scholes option pricing model, with the assumptions of risk free interest
rate – 0.83%, expected life - one year, expected dividend yield - $ nil and expected stock price volatility – 111.84%.



On
July 4, 2012, the Company received the approval from the TSX.V on a normal course issuer bid (“NCIB”) to purchase
up to 10% of the issued and outstanding common shares of the Company on the open market. As at May 31, 2013, the Company repurchased
with cash consideration of $145,065 a total of 2,427,000 common shares, of which 2,133,000 common shares were cancelled and returned
to treasury by May 31, 2013 and the remaining 294,000 common shares were cancelled and returned to treasury in July, 2013.  The
average carrying value of the common shares was $0.1933 per share. The difference between the purchase price and the carrying
value of the common shares was $280,580.



F-22







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|11. | SHARE
                                                                                                                                                                             CAPITAL(Continued)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock
Options



The
Company has a stock option plan to issue up to 10% of the issued common shares to certain directors and employees. All options
have the following vesting schedule:



| | i)   | Up
    to 25% of the options may be exercised at any time during the term of the option; such initial exercise is referred to as
    the “First Exercise”;                           
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                      
| | ii)  | The
    second 25% of the options may be exercised at any time after 90 days from the date of the First Exercise; such second exercise
    is referred to as the “Second Exercise”;  
| |      |                                                                                                                                                                                      
| | iii) | The
    third 25% of the options may be exercised at any time after 90 days from the date of the Second Exercise; such third exercise
    is referred to as the “Third Exercise”; and
| |      |                                                                                                                                                                                      
| | iv)  | The
    fourth and final 25% of the options may be exercised at any time after 90 days from the date of the Third Exercise.                                                          



As
the Company believes that it is not probable that any options (other than those granted to investor relations) would vest except
the first 25% of the options that vested immediately upon a date of grant, the fair value of the first 25% of the options that
vested were charged to the consolidated statements of operations and comprehensive loss.



During
the year ended May 31, 2012, the Company granted 300,000 stock options exercisable at $0.08 per share up to three months after
the termination of the consultant’s service with fair value of $1,897 for the options vested during the year. Because the
options were granted to a consultant performing investor relation activities, 25% of the options vested immediately and the rest
were to vest at 25% every three months. The investor relation agreement was terminated after the three month trial period.



On
July 10, 2012, the Company received the approval from the TSX-V on re-pricing 300,000 options from exercise prices between $0.185
and $0.24 to the new exercise price of $0.10. The incremental fair value of the repriced options was recorded at $531.



On
June 21, 2012, the Company granted 2,125,000 options exercisable into the Company’s common shares at $0.10 per share until
June 21, 2017. The fair value of the options was recorded at $24,261.



During
the year ended May 31, 2013, 550,000 options were forfeited due to the termination of the agreement with the consultant.



On
May 28, 2013, the Company granted 2,500,000 options exercisable into the Company’s common shares at $0.10 per share until
May 28, 2018. The fair value of the options was recorded at $22,965.



The
fair value of options granted was estimated on the date of grant using the Black-Scholes option pricing model, with the following
weighted-average assumptions:





|                                    |  | 2013 |                |  | 2012 | 
|----------------------------------- |  | ---- | -------------- |  | ---- | 
|Risk-free
    interest rate         |  |      | 0.93
%- 1.48 % |  |      | 
|Expected
    dividend yield         |  |      | Nil            |  |      | 
|Expected
    stock price volatility |  |      | 116
%- 172 %   |  |      | 
|Forfeiture
    rate                 |  |      | 75%            |  |      | 
|Expected
    life (in years)        |  |      | 0.67- 5        |  |      | 







F-23







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|11. | SHARE
                                                                                                                                                                             CAPITAL(Continued)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock
Options(Continued)



The
following is a summary of the Company’s stock option activities during the years ended May 31, 2013 and 2012:



|                           |  | Number of |            |   | Weighted
                                                                                              Average Exercise
                                                                                              Price | 
|-------------------------- |  | --------- | ---------- | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|                           |  | Options   |            |   | $                                                                                                                                                                                                                           | 
|                           |  |           |            |   |                                                                                                                                                                                                                             | 
|Balance
    – May 31, 2011 |  |           | 2,400,000  |   |                                                                                                                                                                                                                             | 
|Issued                     |  |           | 300,000    |   |                                                                                                                                                                                                                             | 
|Forfeited,
    unexercised |  |           | (75,000    | ) |                                                                                                                                                                                                                             | 
|Expired                    |  |           | (1,675,000 | ) |                                                                                                                                                                                                                             | 
|Balance
    – May 31, 2012 |  |           | 950,000    |   |                                                                                                                                                                                                                             | 
|Issued                     |  |           | 4,625,000  |   |                                                                                                                                                                                                                             | 
|Repriced                   |  |           | (300,000   | ) |                                                                                                                                                                                                                             | 
|Repriced                   |  |           | 300,000    |   |                                                                                                                                                                                                                             | 
|Expired                    |  |           | (75,000    | ) |                                                                                                                                                                                                                             | 
|Forfeited,
    unexercised |  |           | (700,000   | ) |                                                                                                                                                                                                                             | 
|Balance
    – May 31, 2013 |  |           | 4,800,000  |   |                                                                                                                                                                                                                             | 



The
following share purchase options were outstanding at May 31, 2013:



|                     |  | Exercise
                                                                  Price |       |  | Number         |  |           | Remaining
                                                                  Contractual Life |  |  | Number
                                                                                                                                          of
                                                                                              Options | 
|-------------------- |  | -------------------------------------------------------------------------------- | ----- |  | -------------- |  | --------- | -------------------------------------------------------------------------------------------- |  |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | 
|Expiry
    Date      |  | $                                                                                |       |  | of
    Options |  |           | (years)                                                                                      |  |  | Exercisable                                                                                                                                                                                                                                               | 
|                     |  |                                                                                  |       |  |                |  |           |                                                                                              |  |  |                                                                                                                                                                                                                                                           | 
|October
    30, 2014 |  |                                                                                  | 0.185 |  |                |  | 100,000   |                                                                                              |  |  | 1.42                                                                                                                                                                                                                                                      | 
|October
    30, 2014 |  |                                                                                  | 0.100 |  |                |  | 125,000   |                                                                                              |  |  | 1.42                                                                                                                                                                                                                                                      | 
|April
    19, 2015   |  |                                                                                  | 0.100 |  |                |  | 100,000   |                                                                                              |  |  | 1.88                                                                                                                                                                                                                                                      | 
|June
    21, 2017    |  |                                                                                  | 0.100 |  |                |  | 1,975,000 |                                                                                              |  |  | 4.06                                                                                                                                                                                                                                                      | 
|May
    28, 2018     |  |                                                                                  | 0.100 |  |                |  | 2,500,000 |                                                                                              |  |  | 4.99                                                                                                                                                                                                                                                      | 
|                     |  |                                                                                  |       |  |                |  | 4,800,000 |                                                                                              |  |  |                                                                                                                                                                                                                                                           | 



Warrants



The
following is a summary of the Company’s warrant activities during the years ended May 31, 2013 and 2012:



|                                    |  | Number
                                                                                                                                               of |            |   | Weighted
Average Exercise
Price | 
|----------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------- | - | ------------------------------- | 
|                                    |  | Warrants                                                                                                                                                 |            |   | $                               | 
|                                    |  |                                                                                                                                                          |            |   |                                 | 
|Balance
    – May 31, 2011          |  |                                                                                                                                                          | 3,381,659  |   |                                 | 
|Issued                              |  |                                                                                                                                                          | 585,000    |   |                                 | 
|Expired
    without being exercised |  |                                                                                                                                                          | (3,381,659 | ) |                                 | 
|Balance
    – May 31, 2012          |  |                                                                                                                                                          | 585,000    |   |                                 | 
|Expired
    without being exercised |  |                                                                                                                                                          | (585,000   | ) |                                 | 
|Balance
    – May 31, 2013          |  |                                                                                                                                                          | -          |   |                                 | 



F-24







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|11. | SHARE
                                                                                                                                                                             CAPITAL(Continued)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Warrants(continued)



During
the year ended May 31, 2012, a total of 575,000 warrants and 10,000 broker warrants were issued with fair values of $11,614 and
$202 respectively. The fair value of warrants issued was estimated on the date of grant using the Black-Scholes option pricing
model, with the following weighted-average assumptions:



|Risk-free
    interest rate         |  |  | 0.83   | %
|----------------------------------- |  |  | ------ | -
|Expected
    dividend yield         |  |  | Nil    |  
|Expected
    stock price volatility |  |  | 111.84 |  
|Expected
    life (in years)        |  |  | 1.00   |  



|12. | INCOME
                                                                                                                                                                             TAXES
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred
income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s Canadian
deferred tax assets as of May 31, 2013 and 2012 are as follows:



|                                     |  | 2013 |            |   | 2012 | 
|------------------------------------ |  | ---- | ---------- | - | ---- | 
|                                     |  | $    |            |   | $    | 
|Non-capital
    loss carry forwards  |  |      | 1,344,000  |   |      | 
|Equipment
    & others               |  |      | 29,000     |   |      | 
|Resource
    deductions              |  |      | 397,000    |   |      | 
|Share
    issue costs                |  |      | 6,000      |   |      | 
|                                     |  |      | 1,776,000  |   |      | 
|Unrecognized
    deferred tax assets |  |      | (1,776,000 | ) |      | 
|                                     |  |      | -          |   |      | 



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



|                                                    |  | 2013 |          |   | 2012 | 
|--------------------------------------------------- |  | ---- | -------- | - | ---- | 
|                                                    |  | $    |          |   | $    | 
|Statutory
    tax rate                              |  |      | 25.0     | % |      | 
|Income
    tax recovery at statutory rate           |  |      | (152,165 | ) |      | 
|Permanent
    differences and other                 |  |      | (45,378  | ) |      | 
|Change
    in tax rate for non-Canadian company     |  |      | 23       |   |      | 
|Effect
    of change in tax rate                    |  |      | -        |   |      | 
|Current
    and prior tax attributes not recognized |  |      | 197,520  |   |      | 
|                                                    |  |      | -        |   |      | 



The
Company has Canadian non-capital losses of approximately $5,376,000 (2012 - $4,815,000), which expire over the years 2014 to 2033.
The Company also has cumulative exploration expenses in the amount of $2,609,000 (2012 -$1,655,000) in Canada and the USA, which
can be carried forward indefinitely. At May 31, 2013, the net amount which would give rise to a deferred income tax asset has
not been recognized as it is not probable that such benefit will be utilized in the future years.



F-25







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|13. | RELATED
                                                                                                                                                                             PARTY
                                                                                                                                                                             TRANSACTIONS
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Related
party transactions occurred in the normal course of operations and are measured at agreed to amounts, which is the amount of consideration
established and agreed to by the parties.



Related
party transactions not disclosed elsewhere in these financial statements are as follows:



SMR
Investments Ltd. (“SMR”) is a private company controlled by an officer of the Company. Under a management contract
with SMR, the Company agreed to pay up to $2,500 per month for management services. The Company was charged management fees by
SMR of $30,000 during the year ended May 31, 2013 (2012 - $30,000). As of May 31, 2013, $357 (May 31, 2012 - $Nil) was payable
to SMR by the Company.



During
the year ended May 31, 2013, management and director’s fees of $36,000 (2012 - $19,000) were paid to the President of the
Company. Fees of $8,342 (2012 - $11,495) were paid to KLR Petroleum Ltd. (which is controlled by an officer of the Company) for
administration of the Company payroll and benefit plan.



|14. | TERYL,
                                                                                                                                                                                                                         INC.
                                                                                                                                                                                                                         TRASACTIONS(100%
                                                                                                                                                                                                                         US
                                                                                                                                                                                                                         Subsidiary)
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In
1998, Teryl, Inc. offered a private placement of up to 1,000,000 shares at a price of $0.23 ($0.15 US) and subscriptions of $146,044
($96,750 US) were received by November 19, 1999. Since the offering was not fully subscribed, the Company negotiated with the
subscribers to replace the Teryl, Inc. shares with shares of the Company. On October 17, 2006, the authorized capital for Teryl,
Inc. was reduced to 10,000 common shares, which resulted in a rollback to 1 common share for each 10,000 outstanding. On August
29, 2007, the final six subscribers agreed to a settlement of $70,000 ($50,250 US).



|15. | SEGMENTED
                                                                                                                                                                                                                         INFORMATION
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
Company’s business consists of mineral properties and oil and gas property interests. Details on a geographic basis are
as follows:



|                                      |  | Canada |          |   | United States |  |         | Total | 
|------------------------------------- |  | ------ | -------- | - | ------------- |  | ------- | ----- | 
|May
    31, 2013                      |  | $      |          |   | $             |  |         | $     | 
|Total
    assets                      |  |        | 944,700  |   |               |  | 934,835 |       | 
|Acquisition
    and exploration costs |  |        | 84,769   |   |               |  | 934,390 |       | 
|Net
    loss                          |  |        | (606,880 | ) |               |  | (1,779  | )     | 



|                                      |  | Canada |           |   | United States |  |          | Total | 
|------------------------------------- |  | ------ | --------- | - | ------------- |  | -------- | ----- | 
|May
    31, 2012                      |  |        | $         |   |               |  | $        |       | 
|Total
    assets                      |  |        | 2,262,481 |   |               |  | 285,613  |       | 
|Acquisition
    and exploration costs |  |        | 113,490   |   |               |  | 258,529  |       | 
|Net
    loss                          |  |        | (413,975  | ) |               |  | (352,355 | )     | 



F-26







TERYL
RESOURCES CORP.

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

FOR
THE YEARS ENDED MAY 31, 2013 AND 2012

(Stated
in Canadian Dollars)



|16. | CAPITAL
                                                                                                                                                                                                                         MANAGEMENT
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
capital of the Company consists of the items included in shareholders’ equity. The Company manages the capital structure
and makes adjustments in light of changes in economic conditions and the risk characteristics of the Company’s assets.



The
Company’s objectives of capital management are intended to safeguard the entity’s ability to continue the Company’s
development and exploration of its mineral properties and support any expansionary plans.



To
effectively manage the entity’s capital requirements, the Company has in place a planning and budgeting process to help
determine the funds required to ensure the Company has the appropriate liquidity to meet its development and exploration objectives.



|17. | SUBSEQUENT
                                                                                                                                                                                                                         EVENTS
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On
July 9, 2013 the Company cancelled and returned to treasury 294,000 common shares purchased by May 31, 2013 in accordance with
the NCIB. (Note 11)



Effective
June 12, 2013, the Company amended its Article whereby authorized number of common shares increased from 100,000,000 to unlimited
and authorized number of preferred shares increased from 5,000,000 to unlimited.



On
September 9, 2013 the Company received the approval from the TSX.V on a second NCIB to purchase up to 3,512,580 issued and outstanding
common shares of the Company on the open market. As of the date of this report, the Company has not purchased any shares pursuant
to this NCIB.



F-27









|Item
18. |  | Financial
                                                                                             Statements
|-------- |  | -----------------------------------------------------------------------------------------------------------------



Not
applicable.



|Item
19. |  | Exhibits
|-------- |  | --------



|Exhibit      |  | Description                                                                                                                                                                                                                                                                            
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1.1
    (1)  |  | Certificate
    of Incorporation in the name of Candy Mountain Gold Corporation dated May 23, 1980                                                                                                                                                                                     
|1.2
    (1)  |  | Certificate
    of Name Change, Special Resolution and Altered Memorandum dated January 20, 1984 to change name to Teryl Resources Corp.                                                                                                                                               
|1.3
    (1)  |  | Special
    Resolution and Altered Memorandum dated October 25, 1985 increasing authorized capital to 15,000,000 by creating 5,000,000
    Preferred Shares with a par value of $1.00, and amending Articles by adding Special Rights and Restrictions attached to Preferred
    Shares
|1.4
    (1)  |  | Special
    Resolution and Altered Memorandum dated November 30, 1988 increasing number of authorized common shares to 30,000,000 common
    shares                                                                                                                                    
|1.5
    (1)  |  | Special
    Resolution and Altered Memorandum dated November 30, 1988 canceling existing Articles and replacing with new Articles                                                                                                                                                      
|1.6
    (1)  |  | Special
    Resolution and Altered Memorandum dated November 20, 2000 increasing authorized capital to 100,000,000 common shares                                                                                                                                                       
|1.7
    (1)  |  | Special
    Resolution and Altered Memorandum, Certificate of Name Change dated February 4, 2003 changing the name Teryl Gold Corp.                                                                                                                                                    
|1.8
    (1)  |  | Transition
    Application and Notice of Articles dated September 15, 2004 transitioning from Company Act(British Columbia) to the
    Business Corporations Act (British Columbia)                                                                                                    
|1.9
    (1)  |  | Notice
    of Alteration effective November 25, 2004 changing name to Teryl Resources Corp.                                                                                                                                                                                            
|1.10
    (1) |  | Notice
    of Articles dated November 25, 2004 reflecting Altered Memorandum and Special Resolution dated November 15, 2004 canceling
    existing Articles and replacing with new Articles                                                                                            
|2.1
    (1)  |  | Specimen
    copy of common share certificate                                                                                                                                                                                                                                          
|4.1
    (1)  |  | Commitment
    to provide financing to Teryl Resources Corp. as required for ongoing operations dated February 14, 2000 from John Robertson                                                                                                                                            
|4.2
    (1)  |  | Mining
    Joint Venture Agreement dated September 23, 2009 between Fairbanks Gold Mining, Inc. and Teryl, Inc.                                                                                                                                                                        
|4.3
    (1)  |  | Joint
    Venture Agreement dated March 5, 2002 with Linux Gold Corp. (formerly LinuxWizardry Systems, Inc.)                                                                                                                                                                           
|4.4
    (1)  |  | Amendment
    to Joint Venture Agreement dated November 4, 2002 with Linux Gold Corp. (formerly LinuxWizardry Systems, Inc.)                                                                                                                                                           
|4.5
    (1)  |  | Extension
    to Joint Venture Agreement dated March 5, 2005 with Linux Gold Corp.                                                                                                                                                                                                     
|4.6
    (1)  |  | Management
    Agreement dated December 1, 1994 with SMR Investments Ltd.                                                                                                                                                                                                              
|4.6
    (2)  |  | Purchase
    Agreement dated August 18, 2003 with Michael D. Roberts                                                                                                                                                                                                                   
|4.7
    (2)  |  | West
    Ridge Property Lease Agreement dated July 2003                                                                                                                                                                                                                                
|4.8
    (3)  |  | Extension
    to Joint Venture Agreement dated March 5, 2005 with Linux Gold Corp.                                                                                                                                                                                                     
|4.9
    (3)  |  | Upper
    Fox Creek Development Agreement dated June 23, 2004 with Jean Turner and Ron Way                                                                                                                                                                                             
|4.10
    (4) |  | Natural
    Gas Well Interest Agreement dated May 18, 2006 with IAS Energy, Inc.                                                                                                                                                                                                       
|4.11
    (4) |  | Mineral
    Property Agreement dated June 10, 2006 with Frederic and John Rothermel - Gold Hill Property                                                                                                                                                                               
|4.12
    (5) |  | Natural
    Gas Well Interest Agreement dated April 2, 2008 with IAS Energy, Inc.                                                                                                                                                                                                      
|4.13
    (6) |  | Investor
    Relations Consulting Agreement dated August 18, 2010 with Torrey Hills Capital Inc.                                                                                                                                                                                       
|4.14
    (6) |  | Letter
    of Agreement dated August 17, 2010 with Mark C. Farrar, Christina J. Karnes, Robert W. Karnes and Donald Plancich –
    Fortitude Project                                                                                                                                   
|8.1
    (6)  |  | List
    of Subsidiaries                                                                                                                                                                                                                                                               
|12.1
    (7) |  | Section
    302 Certification - CEO                                                                                                                                                                                                                                                    
|12.2
    (7) |  | Section
    302 Certification - CFO                                                                                                                                                                                                                                                    
|13.1
    (7) |  | Section
    906 Certification - CEO                                                                                                                                                                                                                                                    
|13.2
    (7) |  | Section
    906 Certification - CFO                                                                                                                                                                                                                                                    
|15.1 (7)     |  | Auditors’ Consent
    Letter                                                                                                                                                                                                                                                           



|(1) | incorporated
                                                                                                                                         by
                                                                                                                                         reference
                                                                                                                                         to
                                                                                                                                         Registration
                                                                                                                                         Statement
                                                                                                                                         on
                                                                                                                                         Form
                                                                                                                                         20-F
                                                                                                                                         filed
                                                                                                                                         January
                                                                                                                                         19,
                                                                                                                                         2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | incorporated
                                                                                                                           by
                                                                                                                           reference
                                                                                                                           to
                                                                                                                           Annual
                                                                                                                           Report
                                                                                                                           on
                                                                                                                           Form
                                                                                                                           20-F
                                                                                                                           for
                                                                                                                           the
                                                                                                                           fiscal
                                                                                                                           year-ended
                                                                                                                           May
                                                                                                                           31,
                                                                                                                           2004
                                                                                                                           filed
                                                                                                                           August
                                                                                                                           3,
                                                                                                                           2007   
|(3) | incorporated
                                                                                                                           by
                                                                                                                           reference
                                                                                                                           to
                                                                                                                           Annual
                                                                                                                           Report
                                                                                                                           on
                                                                                                                           Form
                                                                                                                           20-F
                                                                                                                           for
                                                                                                                           the
                                                                                                                           fiscal
                                                                                                                           year-ended
                                                                                                                           May
                                                                                                                           31,
                                                                                                                           2005
                                                                                                                           filed
                                                                                                                           August
                                                                                                                           7,
                                                                                                                           2007   
|(4) | incorporated
                                                                                                                           by
                                                                                                                           reference
                                                                                                                           to
                                                                                                                           Annual
                                                                                                                           Report
                                                                                                                           on
                                                                                                                           Form
                                                                                                                           20-F
                                                                                                                           for
                                                                                                                           the
                                                                                                                           fiscal
                                                                                                                           year-ended
                                                                                                                           May
                                                                                                                           31,
                                                                                                                           2007
                                                                                                                           filed
                                                                                                                           October
                                                                                                                           19,
                                                                                                                           2007 
|(5) | incorporated
                                                                                                                           by
                                                                                                                           reference
                                                                                                                           to
                                                                                                                           Annual
                                                                                                                           Report
                                                                                                                           on
                                                                                                                           Form
                                                                                                                           20-F
                                                                                                                           for
                                                                                                                           the
                                                                                                                           fiscal
                                                                                                                           year-ended
                                                                                                                           May
                                                                                                                           31,
                                                                                                                           2008
                                                                                                                           filed
                                                                                                                           November
                                                                                                                           28,
                                                                                                                           2008
|(6) | incorporated
                                                                                                                           by
                                                                                                                           reference
                                                                                                                           to
                                                                                                                           Annual
                                                                                                                           Report
                                                                                                                           on
                                                                                                                           Form
                                                                                                                           20-F
                                                                                                                           for
                                                                                                                           the
                                                                                                                           fiscal
                                                                                                                           year-ended
                                                                                                                           May
                                                                                                                           31,
                                                                                                                           2010
                                                                                                                           filed
                                                                                                                           November
                                                                                                                           30,
                                                                                                                           2010
|(7) | filed
                                                                                                                                               herewith
                                                                                                                                               in
                                                                                                                                               this
                                                                                                                                               annual
                                                                                                                                               report
                                                                                                                                               on
                                                                                                                                               Form
                                                                                                                                               20-F                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              



53







SIGNATURE



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



| | TERYL
    RESOURCES CORP.
| | -------------------------
| |                          
| | By:                      
| |                          
| |                          



DATED:
September 30, 2013



54