---

**UNITED STATESSECURITIES 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 n/a

OR

[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 - 
  For the fiscal year ended May 31, 2004

OR

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

OR

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

Commission File Number 000-31076

TERYL RESOURCES
CORP.(Exact name of registrant as specified in its charter)

British Columbia, Canada(Jurisdiction
of incorporation or organization)

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

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

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

Indicate the number of outstanding shares of each of the issuers
  classes of capital or common stock as of the close of the period covered by
  the annual report.33,180,688shares of Common Stock as at
  May 31, 2004.

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

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

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

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

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

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

Index to Exhibits on Page 75

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TABLE OF CONTENTS

PART I
      
      6ITEM 1.
      IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
        AND ADVISORS
      6ITEM 2.
      OFFER STATISTICS AND EXPECTED
        TIMETABLE
      6ITEM 3.
      KEY INFORMATION
      6A.
      SELECTED FINANCIAL DATA
      6B.
      CAPITALIZATION AND INDEBTEDNESS
      8C.
      REASON FOR THE OFFER AND
        USE OF PROCEEDS
      8D.
      RISK FACTORS
      8ITEM 4.
      INFORMATION ON THE COMPANY
      16A.
      HISTORY AND DEVELOPMENT OF THE COMPANY
      16B.
      BUSINESS OVERVIEW
      18C.
      ORGANIZATIONAL STRUCTURE
      29D.
      PROPERTY, PLANTS AND EQUIPMENT
      29ITEM 4A.
      UNRESOLVED STAFF COMMENTS
      49ITEM 5.
      OPERATING AND FINANCIAL
        REVIEW AND PROSPECTS
      49A.
      OPERATING RESULTS
      49B.
      LIQUIDITY AND CAPITAL
        RESOURCES
      51C.
      RESEARCH AND DEVELOPMENT, PATENTS AND
        LICENSES, ETC
      53D.
      TREND INFORMATION
      54E.
      OFF-BALANCE SHEET ARRANGEMENTS
      54F.
      TABULAR DISCLOSURE OF
        CONTRACTUAL OBLIGATIONS
      54G.
      SAFE HARBOUR
      55ITEM 6.
      DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
      55A.
      DIRECTORS AND SENIOR MANAGEMENT
      55B.
      COMPENSATION
      56C.
      BOARD PRACTICES
      60D.
      EMPLOYEES
      60E.
      SHARE OWNERSHIP
      60ITEM 7.
      MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
      61A.
      MAJOR SHAREHOLDERS
      61B.
      RELATED PARTY TRANSACTIONS.
      61C.
      INTERESTS OF EXPERTS AND
        COUNSEL.
      62ITEM 8.
      FINANCIAL INFORMATION
      62A.
      CONSOLIDATED STATEMENTS
        AND OTHER FINANCIAL INFORMATION
      62B.
      SIGNIFICANT CHANGES
      63ITEM 9.
      THE OFFER AND LISTING
      63A.
      OFFER AND LISTING DETAILS
      63B.
      PLAN OF DISTRIBUTION
      65C.
      MARKETS
      66D.
      SELLING SHAREHOLDERS
      66E.
      DILUTION
      66F.
      EXPENSES OF THE ISSUE
      66ITEM 10.
      ADDITIONAL INFORMATION
      66A.
      SHARE CAPITAL
      66B.
      MEMORANDUM AND ARTICLES OF ASSOCIATION
      66C.
      MATERIAL CONTRACTS
      68D.
      EXCHANGE CONTROLS
      68E.
      TAXATION
      69F.
      DIVIDENDS AND PAYING AGENTS
      70G.
      STATEMENT BY EXPERTS.
      70H.
      DOCUMENTS ON DISPLAY.
      70I.
      SUBSIDIARY INFORMATION
      71ITEM 11.
      QUANTITATIVE AND QUALITATIVE DISCLOSURES
        ABOUT MARKET RISK
      71ITEM 12.
      DESCRIPTION OF SECURITIES
        OTHER THAN EQUITY SECURITIES
      72PART II
      
      72


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|ITEM 13.                 | DEFAULTS, DIVIDEND ARREARAGES
      AND DELINQUENCIES                               | 72
|------------------------ | ----------------------------------------------------------------------------------- | --
|ITEM 14.                 | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS. | 72
|A.                       | MATERIAL MODIFICATIONS TO
      THE RIGHTS OF SECURITY HOLDERS                      | 72
|B.                       | USE OF PROCEEDS.                                                                    | 73
|ITEM 15.                 | CONTROLS AND PROCEDURES                                                             | 73
|ITEM 16.                 | [Reserved]                                                                          | 73
|ITEM 16A.                | Audit Committee Financial
      Expert                                              | 73
|ITEM 16B.                | Code of Ethics                                                                      | 73
|ITEM 16C.                | Principal Accountant Fees
      and Services                                        | 74
|ITEM 16D.                | Exemptions from the Listing Standards for
      Audit Committees                    | 74
|ITEM 16E.                | Purchases of Equity Securities
      by the Issuer and Affiliated Purchasers        | 74
|PART III                 |                                                                                     | 74
|ITEM 17.                 | FINANCIAL STATEMENTS                                                                | 74
|ITEM 18.                 | FINANCIAL STATEMENTS                                                                | 75
|ITEM 19.                 | EXHIBITS                                                                            | 75
|GLOSSARY OF MINING TERMS | 76                                                                                 
|                         |                                                                                     |   
|**SIGNATURE PAGE**       | 79                                                                                 

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Introduction

BUSINESS OF TERYL RESOURCES CORP.

We make expenditures on acquiring mineral properties and
carrying out exploration work. We also acquire oil and gas property interests
and participate in drilling wells. The recoverability of amounts shown for
investments, mineral properties, interest in oil and gas properties and the
related deferred expenditures are dependent upon the existence of economically
recoverable reserves, the ability to obtain the necessary financing to complete
the exploration, the profitability of future production or our ability to
dispose of those assets on a profitable basis. Our ongoing operation is
dependent upon cash flow from successful operations and equity financing. Under
US GAAP the Company has incurred a loss of $1,444,266 in the year ended May 31,
2004 (2003 - $543,950; 2002 - $169,321). These consolidated financial statements
do not include adjustments that would be necessary should it be determined that
we may be unable to continue as a going concern.

Foreign Private Issuer Status:

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

FINANCIAL AND OTHER INFORMATION

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

FORWARD-LOOKING STATEMENTS

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

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PART I

ITEM 1.        IDENTITY OF
DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

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

ITEM 2.        OFFER
STATISTICS AND EXPECTED TIMETABLE

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

ITEM 3.        KEY
INFORMATION

A.        SELECTED FINANCIAL
DATA

The summary consolidated financial information set forth below
should be read in conjunction with, and is qualified in its entirety by
reference to, the Consolidated Financial Statements, as of and for the years
ended May 31, 2004 and May 31, 2003, together with the notes thereto, which
appear elsewhere in this annual report. The Consolidated Financial Statements as
of and for the years ended May 31, 2004, 2003 and 2002 have been audited by
Morgan & Company Chartered Accountants, as indicated in their audit report.
Our selected financial data for Fiscal 2003/2002 ended May 31st was derived from
our financial statements that have been audited by June Fitzmartyn, Chartered
Accountant, as indicated in her audit reports. Both Morgan and Company and June
Fitzmartyn are members of the Canadian Institute of Chartered Accountants.

The selected financial data set forth in the following table is
expressed in Canadian dollars. Since June 1, 1970, the Government of Canada has
permitted a floating exchange rate to determine the value of the Canadian dollar
as compared to the United States dollar. At May 31, 2004, US$1.00 was equal to
approximately C$1.3666.

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

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

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Fiscal Years Ended May 31

May 31, 2004
    May 31, 2003
    May 31, 2002
    May 31, 2001
    May 31, 2000CANADIAN GAAPRevenue
    $ 21,037
    $ 24,255
    $ 19,510
    $ 92,911
    $ 54,330Income (Loss) for the Period
    (791,776)
    (323,812)
    (82,360)
    68,843
    (575,669)Basic Income (Loss) Per Share
    (0.03)
    (0.01)
    (0.00)
    (0.00)
    (0.03)Dividends Per Share
    Nil
    Nil
    Nil
    Nil
    NilWeighted Average. Shares
    28,295,934
    23,939,714
    23,033,238
    23,033,238
    22,961,937Period-end Shares (#)
    33,180,688
    25,238,088
    23,033,238
    23,033,238
    23,033,238Working Capital
    20,032
    (1,395,628)
    (1,023,465)
    (873,430)
    (472,248)Mineral Properties
    196,795
    176,150
    156,698
    156,699
    168,413Long-Term Debt
    Nil
    Nil
    Nil
    Nil
    NilCapital Stock
    9,018,122
    6,297,375
    6,020,427
    6,020,427
    6,020,427Shareholders Equity (Deficit)
    2,736,381
    638,054
    772,990
    843,350
    774,506Total Assets
    3,144,121
    2,117,591
    1,829,524
    1,733,434
    1,265,648U.S GAAPNet Loss (1)
    1,444,266
    (543,950)
    (169,321)
    (432,005)
    (443,741)Loss Per Share
    (0.05)
    (0.02)
    (0.01)
    (0.02)
    (0.02)Mineral Properties
    196,795
    176,150
    156,698
    156,699
    168,413Shareholders Equity
    234,842
    (1,214,996)
    (860,909)
    (707,579)
    (127,890)Total Assets
    $ 642,583
    $ 264,541
    $ 195,625
    $ 182,505
    $ 363,252


(1) Cumulative Net Loss since incorporation through May 31,
2004 under US GAAP was $9,023,126 approximately.

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

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

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

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

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Currencies and Exchange Rates:

We publish our financial statements in Canadian dollars. Unless
otherwise indicated, monetary amounts referred to in this annual report are in
Canadian dollars. Unless otherwise indicated, all translations from Canadian
dollars to US dollars have been made at a rate of CDN$ 1.3666 to US$ 1.00, the
noon buying rate as certified for customs purposes by the Federal Reserve Bank
of New York (the "Noon Buying Rate") on May 31, 2004. We do not represent that
Canadian dollar or US dollar amounts could be converted into US dollars or
Canadian dollars, as the case may be, at any particular rate, the rates below or
at all. The following table sets forth noon buying rate for US dollars in New
York City for cable transfers in Canadian dollars as certified for customs
purposes by the Federal Reserve Bank of New York for the periods indicated:

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

Year
    Average (CAD $)
    Low/High (CAD$)
    May 31 (CAD $)2004
    1.3435
    1.2690/1.4114
    1.36662003
    1.5272
    1.3446/1.5963
    1.37122002
    1.5679
    1.5102/1.6128
    1.52752001
    1.5153
    1.4639/1.5790
    1.54612000
    1.4729
    1.4350/1.5135
    1.49771999
    1.5112
    1.5459/1.4582
    1.4741


B.        CAPITALIZATION AND
INDEBTEDNESS

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

C.        REASON FOR THE
OFFER AND USE OF PROCEEDS

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

D.        RISK FACTORS

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

RISK FACTORS RELATED TO OUR BUSINESS

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

We have no current mining operations and no revenue from mining
operations. If we ever commence actual mining operations, such operations would
face the risk of changing circumstances, including but not limited to:

- failure of production to achieve metal recovery levels indicated by
  pre-production testing of drill core and bulk samples;
- estimates of reserves being adversely affected by encountering unexpected
  or unusual geological formations;

- 8 -

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- 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.

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

Crude oil, natural gas, condensate and other oil and gas
products are generally sold to other oil and gas companies, government agencies
and other industries. The availability of ready markets for oil and gas that we
might discover and the prices obtained for such oil and gas depend on many
factors beyond our control, including:

- the extent of local production and imports of oil and gas;
- the proximity and capacity of pipelines and other transportation
  facilities;
- fluctuating demand for oil and gas;
- the marketing of competitive fuels; and
- the effects of governmental regulation of oil and gas production and sales.

Natural gas associated with oil production is often not
marketable due to demand or transportation limitations and is often flared at
the producing well site. Pipeline facilities do not exist in certain areas of
exploration and, therefore, any actual sales of discovered oil and gas might be
delayed for extended periods until such facilities are constructed.

Financing Risks.

There is no assurance that we will be able to secure the
financing necessary to explore, develop and produce our mineral properties.

We do not presently have sufficient financial resources or
operating cash-flow to undertake solely all of our planned exploration and
development programs. The development of our properties may therefore depend on
obtaining a joint venture partners, and on our ability to obtain additional
required financing. There is no assurance we will be successful in obtaining the
required financing, the lack of which could result in the loss or substantial
dilution of our interests (as existing or as proposed to be acquired) in our
properties as disclosed herein. In addition, we have no experience in developing
mining properties into production and its ability to do so will be dependent
upon securing the services of appropriately experienced personnel or entering
into agreements with other major mining companies which can provide such
expertise.

As noted in our audited consolidated financial statements for
  the year ended May 31, 2004 we have incurred significant operating losses and
  have an accumulated deficit of $ 6,521,069 at May 31, 2004. Furthermore, we
  had working capital surplus of $ 20,032 as at May 31, 2004, which is not sufficient
  to achieve our planned business objectives. Our ability to continue as a going
  concern is dependent on continued financial support from our shareholders and
  other related parties, the ability of the Registrant to raise equity financing,
  and the attainment of profitable operations, external financings and further
  share issuances to meet our liabilities as they become payable.

- 9 -

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Our ability to continue as a going concern is dependent on continued
  financial support from our shareholders and other related parties, our ability
  to raise equity capital financing, and the attainment of profitable operations,
  external financings and further share issuance to satisfy working capital and
  operating needs.

Significant Losses for the Foreseeable
Future.

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

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

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

We do not expect to pay cash dividends.

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

Potential lack of attractive investment
targets.

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

Other Factors.

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

Conflict of Interest.

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

U.S. Investors May Not Be Able To Enforce Their Civil
Liabilities Against Us or Our Directors, Controlling Persons and
Officers.

We are organized under the laws of Canada. All of our directors,
  controlling persons and officers are residents of Canada and all or a substantial
  portion of their assets and substantially all of our assets are located outside
  of the United States. As a result, it may be difficult for U.S. holders of our
  common shares to effect service of process on these persons within the United
  States or to realize in the United States upon judgments rendered against them.

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In addition, you should not assume that the courts of Canada
  (i) would enforce judgments of U.S. courts obtained in actions against us or
  such persons predicated upon the civil liability provisions of the U.S. federal
  securities laws or other laws of the United States, or (ii) would enforce, in
  original actions, liabilities against us or such persons predicated upon the
  U.S. federal securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian
court provided that those laws are not contrary to Canadian public policy, are
not foreign penal laws or laws that deal with taxation or the taking of property
by a foreign government and provided they are in compliance with applicable
Canadian legislation regarding the limitation of actions. Also, a judgment
obtained in a U.S. court would generally be recognized by a Canadian court
except, for example:

|- | where the U.S. court where the judgment was rendered had
      no jurisdiction according to applicable Canadian law;                                                                                                                                                                                       
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                            
|- | the judgment was subject to ordinary remedy (appeal,
      judicial review and any other judicial proceeding which renders the
      judgment not final, or enforceable under the laws of the applicable state)
      or not final, conclusive or enforceable under the laws of the applicable
      state;
|  |                                                                                                                                                                                                                                                                                                            
|- | the judgment was obtained by fraud or in any manner
      contrary to natural justice or rendered in contravention of fundamental
      principles of procedure;                                                                                                                                           
|  |                                                                                                                                                                                                                                                                                                            
|- | a dispute between the same parties, based on the same
      subject matter has given rise to a judgment rendered in a Canadian court
      or has been decided in a third country and the judgment meets the
      necessary conditions for recognition in a Canadian court;                               
|  |                                                                                                                                                                                                                                                                                                            
|- | the outcome of the judgment of the U.S. court was
      inconsistent with Canadian public policy;                                                                                                                                                                                                          
|  |                                                                                                                                                                                                                                                                                                            
|- | the judgment enforces obligations arising from foreign
      penal laws or laws that deal with taxation or the taking of property by a
      foreign government; or                                                                                                                                        
|  |                                                                                                                                                                                                                                                                                                            
|- | there has not been compliance with applicable Canadian
      law dealing with the limitation of actions.                                                                                                                                                                                                   

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

Significant and increasing competition exists for mineral
opportunities in Canada and the United States. There are a number of large
established mineral companies with substantial capabilities and greater
financial and technical resources than us. We may be unable to acquire
additional attractive mineral properties on terms we consider acceptable.
Accordingly, there can be no assurance that our exploration programmes will
yield any new reserves or result in any commercial mineral operations.

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

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

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

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

RISK FACTORS RELATED TO THE NATURAL RESOURCE INDUSTRY

Exploration and Development Risks.

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

Estimates of Mineral Deposits.

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

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Mineral Prices.

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

Title Opinions.

The existence of title opinions should not be construed to
suggest that we have good and marketable title to all of our properties. We
follow the usual industry practice in obtaining title opinions with respect to
our lands. No examination has been made of the ground to determine if any of our
mineral claims have been staked or assessment work carried out.

Regulatory Approvals.

Our operations require the procurement of numerous permits and
compliance with an extensive number of codes and regulations. Mining,
exploration and exploitation permits are required. While we believe that all
requirements in this regard have been met, failure to comply with regulatory
requirements could result in permits being withdrawn or suspended. Further,
changes in these regulations or in their application may adversely affect our
operations.

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

The results of our operations are highly dependent upon the
prices received for our anticipated oil and natural gas production. As of the
date of this 20-F, we do not own any interests in any properties which are
producing more than minimal levels of oil or natural gas. Should we acquire an
interest in an actual producing property, substantially all of our sales of oil
and natural gas would likely be made in the spot market, or pursuant to
contracts based on spot market prices, and not pursuant to long-term,
fixed-price contracts. Accordingly, the prices we might receive for any eventual
oil and natural gas production are dependent upon numerous factors beyond our
control. These factors include the level of consumer product demand,
governmental regulations and taxes, weather trends, the price and availability
of alternative fuels, the level of foreign imports of oil and natural gas and
the overall economic environment. Significant declines in prices for oil and
natural gas could harm our financial condition, results of operations and
quantities of reserves recoverable on an economic basis. Any significant decline
in demand for or prices of oil or gas could harm our financial condition and
results of operations.

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

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

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Although we believe that any current operations are in
substantial compliance with existing requirements of governmental bodies, our
ability to conduct continued operations is subject to satisfying applicable
regulatory and permitting controls. Our current permits and authorizations and
ability to get future permits and authorizations, particularly in foreign
countries, may be susceptible, on a going forward basis, to increased scrutiny,
greater complexity resulting in increased costs, or delays in receiving
appropriate authorizations. We are required to obtain an environmental permit or
approval from Utah prior to conducting seismic operations, drilling a well or
constructing a pipeline in that location. Compliance with these laws and
regulations may increase our costs of operations, as well as further restrict
our operations. If the costs of such compliance exceeds what we may have
budgeted, our ability to earn revenues will be harmed.

Third Party Reliance.

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

UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES

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

There is only a limited public market for our common shares on
the TSX Venture Exchange, and there is a risk that that a broader or more active
public trading market for our common shares will never develop or be sustained,
or that current trading levels will not be sustained.

The market price for the common shares on the TSX Venture
Exchange has been and we anticipate will continue to be extremely volatile and
subject to significant price and volume fluctuations in response to a variety of
external and internal factors. This is especially true with respect to emerging
companies such as ours. Examples of external factors, which can generally be
described as factors that are unrelated to the operating performance or
financial condition of any particular company, include changes in interest rates
and worldwide economic and market conditions, as well as changes in industry
conditions, such as changes in oil and natural gas prices, oil and natural gas
inventory levels, regulatory and environment rules, and announcements of
technology innovations or new products by other companies. Examples of internal
factors, which can generally be described as factors that are directly related
to our consolidated financial condition or results of operations, would include
release of reports by securities analysts and announcements we may make from
time-to-time relative to our operating performance, drilling results, advances
in technology or other business developments.

Because we have a limited operating history and no profits to
date, the market price for the common shares is more volatile than that of a
seasoned issuer. Changes in the market price of the common shares, for example,
may have no connection with our operating results or prospects. No predictions
or projections can be made as to what the prevailing market price for the common
shares will be at any time, or as to what effect, if any, that the sale of
shares or the availability of common shares for sale at any time will have on
the prevailing market price.

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

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

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

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

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

A limited number of shareholders will collectively continue to
own a majority of our common shares after this offering and may act, or prevent
corporate actions, to the detriment of other shareholders. Our principal
shareholders, including entities affiliated with members of our management team,
will own more than 23% of our outstanding common shares. Accordingly, these
shareholders may, if they act together, exercise significant influence over all
matters requiring shareholder approval, including the election of a majority of
the directors and the determination of significant corporate actions after this
offering. This concentration could also have the effect of delaying or
preventing a change in control that could be otherwise beneficial to our
shareholders.

You should not expect to receive dividends.

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

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

We are authorized under our Articles of Incorporation to issue
100,000,000 common shares. Subject to compliance with applicable corporate and
securities laws, we may issue these shares under such circumstances and in such
manner and at such times, prices, amounts and purposes as our board of directors
may, in their discretion, determine to be necessary and appropriate. Your
proportionate ownership and voting rights as a common shareholder could be
adversely affected by the issuance of additional common shares, including a
substantial dilution in your net tangible book value per share.

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ITEM 4.        INFORMATION
ON THE COMPANY

A.        HISTORY AND
DEVELOPMENT

History

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

In September 1985 we made a public offering of our Common
Shares to residents of British Columbia and, following the completion of the
offering, our shares were listed on the Vancouver Stock Exchange (now the TSX
Venture Exchange) on September 13, 1985.

On October 25, 1985 a special resolution was passed authorising
the creation of 5,000,000 preferred shares with a par value of $1.00.

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

At the Annual General Meeting of Shareholders held in November,
2000, it was resolved to increase the Common shares to 100,000,000, which was
completed November 25, 2002.

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

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

As a pre-existing Corporation under the Company Act, we were
subject to provisions contained in the BCA known as the Pre-Existing Company
Provisions. The Pre-Existing Company Provisions are statutory provisions
intended to preserve certain provisions of the Company Act to companies
incorporated under the Company Act. Under the BCA, we have the option to replace
the Pre-Existing Company Provisions with a new form of Articles to take
advantage of the benefits of the BCBCA, provided the shareholders approve the
change.

Accordingly, at the annual meeting held on November 15, 2004,
our shareholders approved a special resolution to alter the Notice of Articles
to remove the application of the Pre-Existing Company Provisions.

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

Since our inception and during the five fiscal years ending in
May 31, 2004, we have been involved in oil and gas exploration/production and
mineral property development. We have investigated several mineral properties in
both Canada and the United States and currently retain only the interests
described below. Although testing work has been done on these properties
indicating the presence of gold, there is presently no positive indication that
they contain any economic mineral resources and, as a result, their value has
been written down to $1.

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

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

As at May 31, 2004, we owned interests in the following mineral
properties:

- a 10% interest in the Stepovich Lease mining claims located in the Dome
  Creek area of the Fairbanks District of Alaska;
- a 100% interest in the West Ridge mining claims located in the Dome Creek
  area of the Fairbanks District of Alaska carrying a formal agreement between
  us and Fairbanks Gold Mining, Inc., wherein a five year payment and
  expenditure program and an ongoing advance royalty payment program against
  future production by Fairbanks Gold Mining, Inc. to us may subsequently result
  in Fairbanks earning a 70% vested interest in the West Ridge mining claims
  with us retaining a 30% vested interest.
- a 20% participating interest in the Gil Venture mining claims located in
  the Dome Creek area of the Fairbanks District of Alaska, An agreement. with
  Fort Knox Venture required them to pay us a total of $143,500 US, all of which
  was received by May 31, 1995, and to contribute $600,000 US to fund approved
  programs and budgets, which was done, and earned them an 80% participating
  interest in the property.
- On March 5, 2002, the Company and Linux Gold Corp. entered into an
  agreement whereby Teryl may earn up to a 50% interest in the Fish Creek
  mineral claims located in the Fairbanks district of Alaska, USA by expending $
  500,000 US within three years and issuing 200,000 common shares (issued
  December 16, 2002 for a deemed value of $ 16,000). Linux will have a 5% net
  royalty interest until Teryl pays $ 200,000 US.
- Pursuant to a purchase agreement dated August 18, 2003, the Company paid
  Michael D. Roberts $5,000 ($ 6,559 Cdn.), with an additional $ 142,500 US
  owing in the next three years, for a 100% interest (subject to a 5% net profit
  interest) for 70.785 acres located in the Fairbanks Mining district of Alaska,
  USA, known as Anderson Group 2nd Tier R.L. of Dome Creek.

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

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To May 31, 2004, the mineral development business has produced
  no revenues from operations and the oil and gas business has produced only limited
  revenues.

The fiscal year end of the Registrant is May 31.

We had no employees at May 31, 2004.

B.        BUSINESS OVERVIEW

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

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

Equity financing is required to continue exploration work on
our mineral claims. As a result of the uncertainty that is typical in an
explorative company there is doubt about our ability to continue as going
concern as ultimate success will be based on securing adequate equity financing
and/or the determination of economically recoverable mineral reserves on its
mineral property claims.

During the fiscal year ended May 31, 2004 we raised $2,650,187
through the sale of equity securities. We raised $ 260,948 through the sale of
equity securities during the fiscal year ended May 31, 2003.

We make expenditures on acquiring mineral properties and
carrying out exploration work. We also acquire oil and gas property interests
and participate in drilling wells. The recoverability of amounts shown for
investments, mineral properties, interest in oil and gas properties and the
related deferred expenditures are dependent upon the existence of economically
recoverable reserves, the ability to obtain the necessary financing to complete
the exploration, the profitability of future production or our ability to
dispose of those assets on a profitable basis. Our ongoing operation is
dependent upon cash flow from successful operations and equity financing. Under
US GAAP, the Company has incurred a loss of $1,444,266 in the year ended May 31,
2004 (2003 - $543,950; 2002 - $169,321). These consolidated financial statements
do not include adjustments that would be necessary should it be determined that
we may be unable to continue as a going concern.

Mineral Properties

Gil Venture

Pursuant to various agreements the Company, through its subsidiary,
  Teryl, Inc., acquired a 50% interest in 237 claims located in the Gilmore Dome
  area of Fairbanks District of Alaska. On May 31, 1991, the Company, its subsidiary
  Teryl Inc., NERCO Exploration Company and Fort Knox Venture entered into an
  agreement which granted the Company a 20% participating interest in the claims,
  valued at $ 150,000 US ($ 171,720 Cdn). Under the agreement Fort Knox Venture
  paid the Company a total of $ 143,500 US and to contributed $ 600,000 US to
  fund approved programs and budgets earning them an 80% participating interest
  in the property with Teryl, Inc. retaining a 20% participating interest. Fort
  Knox Venture through its operator Fairbanks Gold, has been doing exploration
  and development work on this property and hopes to go into production in the
  next few years. This has resulted in the Company, Inc. being required to pay
  its 20% share of expenses, which amounted to $ 227,916 US ($305,267 Cdn) in
  the May, 2004 year and $ 101,228 US ($149,567 Cdn ) in the May, 2003 year. Further
  cash calls are expected for the 2005 year.

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In March, 2003 we announced the proposed exploration budget of
  US$830,000 for the Gil joint venture in 2003 as received from Fairbanks Gold
  Mining Inc. The program will focus on fully defining the limits of the gold
  deposits at the Main and North Gil and conducting in-fill drilling of previously
  tested areas to increase confidence in the resource, as well as extend those
  mineralized zones to the east and the northeast. In addition, the program seeks
  to establish the presence of substantial mineralization at the Sourdough Ridge
  and scarn grid targets.

In April, 2003 the Company commenced the first phase
exploration program. Drill results from the first six holes of a 60-hole first
phase exploration program from joint venture partner Kinross Gold Corporation.
Drilling of the initial holes was directed primarily at the North Gil Gold Zone
where a 35-foot section of over 1/3 ounce of gold per ton was intersected. In
terms of grade and length, this was one of the best intersections drilled to
date on the Gil Project. Three core holes totaling 1,150 feet and six RC holes
were drilled totaling 2,260 feet. Also a 375-foot trench was excavated using a
D-8 dozer.

In September 29, 2003 we completed the first phase drill
program served two purposes. Firstly, it increased the geologic understanding of
the Main Gil gold deposit to provide a more accurate gold distribution deposit
model, and secondly, it has extended the strike length of the Main Gil zone to
almost 3,000 feet.

In November 2003, the Company and Kinross Gold Corp. increased
the exploration program at the Fort Knox-Gil joint venture project in Alaska and
commenced Phase II. Added to the original program of core and reverse
circulation drilling, budgeted at US$750,000, is project assessment studies,
essential for the development of the Gil gold deposits.

Following is a summary of the 2003 Phase 2 Exploration Program
for the Gil Project including estimated costs:

| | 1. | Additional core and reverse circulation drilling to more
      fully define the limits and magnitude of gold mineralization at the Main
      Gils deposit and other targets. This phase including assaying, geologic
      services, access road and drill pad construction, and reclamation of
      surface disturbance, is estimated at US$750,000;
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | A cultural resources survey to determine the presence (or
      absence) of historical artifacts in the project area. This phase of work
      is estimated to cost US$81,000;                                                                                                                                                                         
| | 3. | Wetlands delineation and a Threatened and Endangered
      Species surveys are estimated to cost US$26,000;                                                                                                                                                                                                                                            
| | 4. | Costs under a State of Alaska Reimbursable Services
      Agreement for project-related activities are estimated to be
    US$23,000;                                                                                                                                                                                                                  
| | 5. | Detailed digital topography, suitable for engineering
      studies and design, for the area of the mineral deposits are estimated to
      be US$20,000;                                                                                                                                                                                              
| | 6. | Access and haul road design activities and construction
      cost estimates, US$75,000;                                                                                                                                                                                                                                                               
| | 7. | Preliminary hydrologic studies and construction of a
      piezometer network are estimated to cost US$50,000; and                                                                                                                                                                                                                                     
| | 8. | Drilling of a production (water) well to characterize the
      nature and volume of ground water in the vicinity of the Main Gil deposit,
      US$50,000.                                                                                                                                                                                            

The total estimated cost of the proposed work program is
US$1,075,000. Teryl Resources Corp.s share (20%) of these costs is US$215,000
plus management fees.

Phase 2 drilling was completed bringing 2003 drilling totals to
27,590 feet of reverse circulation drilling in 127 holes and 8,917 feet of
diamond core drilling in 31 holes. The best gold results were on Hole #
GVR03-398, which intersected 135 feet of 0.087 opt gold including 85 feet of
0.121 opt gold.

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Elsewhere on the Gil project, preliminary hydrology and
engineering studies, resource database modeling and baseline environmental data
continue to be gathered in accordance with revised Phase II work plans.

Sourdough Ridge fieldwork has outlined two significant
calc-silicate units that out crop on the surface for approximately 300 feet in a
northeast-southwest trend and remains open to the northeast. In the Intersection
Area drilling confirmed strong gold values located in trenching and outlined an
east-west trend to the mineralization. One drill hole was collared in the
western portion of the Gil Joint Venture block, but did not intersect
significant mineralization. This area remains to be thoroughly investigated. The
2004 Gil exploration program, due to extensive exploration work completed in
2003, has three major goals:

|1. | Delineate mineralized zones at the Intersection
    Area
|-- | --------------------------------------------------------
|2. | Delineate mineralized zones at Sourdough Ridge          
|3. | Develop new targets in the Gil Exploration
  Area       

The overall objective of the 2004 Gil Exploration Program is to
significantly expand the resource potential within the claim area. The program
will allow for 1,000 soil and rock samples, 4,200 feet of trenches, and the
drilling of approximately 25 drill holes for a total of 7,000 feet to accomplish
the three major goals of the plan. An all-inclusive cost of US$526,750 is
estimated for the entire program.

Intersection Area

The area east of the North Gil and northeast of the Main Gil,
designated as the Intersection Area, is sparsely explored. Drilling results
from 2002 and 2003 reveal scattered zones of high-grade gold mineralization that
deserve further exploration. A total of 3,000 feet of drilling in conjunction
with soil sampling and possible trenching is proposed to test this target.

Sourdough Ridge

The Sourdough Ridge target is located on the adjacent ridge
east of the Main Gil. Drilling and trenching have outlined a mineralized trend
that strikes northeast. Gold is primarily found in veins and shears hosted in
calc-silicate rock, similar to that of the Main Gil. This prospect and several
gold anomalies associated with calc-silicate units in the area have not been
adequately drill tested. A 2,500- foot drilling program in conjunction with soil
sampling and trenching is proposed to test this target.

2004 Gil Exploration Area

The 2004 Gil Exploration Area begins in the Last Chance Creek
drainage and extends for five miles in a northeast direction to soil anomalies
in the Lohr Creek drainage. Most exploration activities have focused in the Main
Gil area, leaving a large portion under-explored. A total of 600 rock and soil
samples, 1,500 feet of drilling and 1,200 feet of trenches are proposed to test
this trend.

Project Status

The Gil project has been explored periodically by Fairbanks
Gold Mining, Inc. since its identification in 1991. Previous detailed drilling
in the Main and North Gil areas has outlined two gold deposits. Initial
exploration in the intersection Area and along Sourdough Ridge was encouraging
and good potential for new discoveries exists in the Gil area. Large portions of
the Gil Joint Venture Claim block remain under explored and hold excellent
potential for additional gold resources.

In September the following exploration updates for the Gil
Joint Venture Claims were reported by Kinross Gold Corporation, our joint
venture partner:

- First pass soil sampling within the Gil Exploration Program is 90% complete.
    Work accomplished includes the construction of approximately 40,000 feet of
    soil line and the collection of 488 soil samples.

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- Exploration in the Main Gil Area and along Sourdough Ridge has generated
    several new targets. These targets consist of soil samples with anomalous
    gold associated with calcsilicate rocks and/or quartz veining.
- A 400-foot trench was excavated, mapped, and sampled on Sourdough Ridge.
    The 400-foot trench exposed 100 feet of calc-silicate rock with abundant quartz
    veining. Visible gold has been identified in two of the quartz veins. Assay
    results on this trench are pending.
- Initial soil sampling has been completed on All Gold Ridge, Too Much Gold
    Ridge and Intrusive Ridge. Fieldwork has outlined a small outcrop of intrusive
    rocks along Intrusive Ridge. Soil samples in and around the intrusive rock
    have gold values ranging from 14 and 22 ppb Au. On All Gold Ridge, fieldwork
    located calc-silicate rocks along strike with the Main Gil unit. Soil samples
    taken from the area of these calc-silicate rocks assay approximately 28 ppb
    Au. Too Much Gold Ridge assays are still pending.

West Ridge

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

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

Pursuant to a letter agreement, between Kinross Gold
Corporation and Teryl, Inc. dated October 15, 1998 and a formal agreement dated
August 1, 1999, Kinross may earn a 70% interest in the West Ridge claims by
paying $ 285,000 US over five years ($ 25,000 US [$37,388 Cdn] was received
Sept. 23, 1999), expending $ 1,500,000 US on a work program over five years and
paying all property and assessment payments during that time. Beginning with the
fifth anniversary Kinross will pay $ 200,000 US annually as advance royalty
payments against future production from the property. After the five year
payment and expenditure program Kinross will have earned a 70% vested interest
and Teryl, Inc. will retain a 30% vested interest and they will proportionately
share any further expenditures.

At May 31, 2000, Teryl, Inc. wrote off $ 8,367 in property
costs and $ 17,186 in deferred exploration costs against the option payment
received and at May 31, 2001, wrote off $ 11,714 in property costs and $23,033
in deferred exploration costs against the $ 53,036 ($ 35,000 US) option payment
received. On November 30, 2001, Kinross withdrew from the agreement after
satisfying all current obligations. Teryl, Inc. retains its 100% interest in the
claims.

In August 2003 field exploration on the Companys 100%-owned
West Ridge property discovered a new gold zone with the same mineralization that
hosts the gold deposits in the Fairbanks Mining District, Alaska, including the
Fort Knox gold mine, eight miles southeast. Exploration activity identified
several highly prospective areas for future reverse circulation drill targets.

Rock and soil sampling was completed by the Companys geological
  consultants, Avalon Development Corporation at the Old Glory prospect. In addition,
  a small close-spaced soil auger grid was placed over a trench area to try to
  determine the extent and trend of the mineralization. Rock samples consisted
  of quartz mica schist and medium grained diorite intrusive containing abundant
  sericite alteration associated with brown iron oxide after carbonate and reddish
  brown hematite after pyrite.

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Quartz veining ranged from fine chalcedonic veinlets to +2 cm
  milky white mesothermal veins with pitted pyrite and minor scorodite after arsenopyrite.
  Soil sampling results suggest a false bedrock layer of shingled barren quartz
  mica schist exists about 3 to 4 feet below surface. Once through this false
  bedrock, soil samples were taken as deep as 6 feet below surface and often contained
  abundant ocherous red-orange soil at the bedrock interface. Soil such as this
  is often associated with gold bearing shear zones in the district. Assays were
  received from the Phase I auger drilling and rock sampling program on the Old
  Glorygold zone of the Companys 100% owned West Ridge Property.

The highest rock sample assayed 0.29 ounces of gold per ton and
the best results from the auger drilling samples assayed 1,155 ppb gold. Ten
samples have values of 250 to 1,000 ppb and 43 samples have values of 100 to 250
ppb values in gold in the soil (see chart below). Gold values in excess of 100
ppb outline several significant gold deposits in the district, including Fort
Knox, True North and Dolphin, suggesting the soil anomalies at the Old Glory
zone may represent a significant new intrusive-related gold discovery.

Soil sampling results suggest a false bedrock layer of shingled
barren quartz mica schist exists about 3 to 4 feet below surface. Once through
this false bedrock, soil samples were taken as deep as 6 feet below surface and
often contained abundant ocherous red-orange soil at the bedrock interface. Soil
such as this is often associated with gold bearing shear zones in the Fairbanks
Mining District. According to Avalon Development Corporation, these anomalous
values warrant additional exploration to define drill targets in search of an
intrusive-related gold discovery.

In September 2003 the Phase II field exploration on the
Companys 100%-owned West Ridge property expanded the size of the gold discovery
at the Old Glory prospect. In addition, fieldwork confirmed the presence of
eclogite-grade metamorphic rocks similar to those which host Kinross Golds
660,000 ounce True North gold deposit located two miles north of the West Ridge
project. Phase II rock and soil auger sampling was completed at the Old Glory
prospect and expanded the extent of anomalous gold in rocks and soil to an area
measuring 400 meters northeast-southwest by 200 meters northwest-southeast. Soil
values in this grid range up to 1,155 parts per billion (1.16 grams per tonne)
gold with 2,850 parts per million (ppm) arsenic and 200 ppm tungsten. Rock
samples collected from old prospect pits and trenches within the soil grid
returned values up to 10.0 grams (1/3 of an ounce) per tonne gold, 5,900 ppm
arsenic and 144 ppm bismuth. Substantial mineralization is found where the
northeast trending structure intersects the northwest-trending structure.
Arsenic mimics gold to a large degree while tungsten and bismuth mineralization
are less definitive.

Gold mineralization at Old Glory is associated with sericite
alteration in a strong sodium depletion zone. Of significance is that
mineralization appears to be controlled by the Eldorado fault, a major
northeast-trending district-scale structure which bounds the 2.4 million ounce
Ryan Lode gold deposit located 16 miles southwest and the 660,000 ounce True
North gold mine, just 2 miles northeast. Along this same fault lies Teryls
Black Dome prospect, State of Alaska lease recently acquired, another gold
anomalous area discovered by summer field exploration. Rocks of similar
character to True North are present at both the Old Glory and the Black Dome
areas, which suggests a genetic link between both mineralized prospects.

In November 2003 the third phase of auger drilling was completed
  and three trenches totaling 342 meters were completed on the newly discovered
  West Ridge gold zone. The Companys geological consultants, Avalon Development,
  report that a series of shear zones were encountered in the trenches with widespread
  iron, arsenic and antimony oxides present. The shears strike northeast and northnorthwest
  and are marked by fault gouge, breccia and shearing with quartz veins ranging
  up to centimeters. The most promising rocks include intense red iron oxide after
  pyrite, yellow antimony oxide after stibnite and apple green arsenic oxide after
  arsenopyrite. Unaltered quartz veins containing jamesonite were discovered in
  a shear zone in Trench 1. Jamesonite is commonly present in high-grade mineralization
  found elsewhere in the Fairbanks District. The rocks are pervasively sericite
  altered and at the southwest end of Trench 3 a granodiorite intrusive body was
  encountered which exhibits sericitic alteration similar to that seen in other
  intrusive-hosted gold systems in the region. The extent of this intrusive body
  is unknown at present.

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Auger drilling on the Old Glory prospect has expanded the extent
  of anomalous gold in rocks and soil to an area measuring 500 meters northeast
   southwest by 500 meters northwest  southeast. Soil values in this
  grid range up to 2,130 parts per billion (over 2 grams of gold per ton) and
  rock samples collected from the trenches returned values up to 10 grams (1/3
  of an ounce per ton gold). Mineralization remains open to expansion to the northeast,
  southwest and northwest. In December, 2003 the Company received results from
  Avalon Development Corp. on the trench geochemical results and ground geophysics
  recently completed on the Old Glory prospect on the Companys 100% owned
  West Ridge claims in the Fairbanks District.

The most significant geochemical results from the three West
Ridge trenches came from the last 15 meters of trench 3 which averaged 596 ppb
gold and intersected a highly oxidized sericite altered diorite to granodiorite
intrusive containing up to 2.98 grams per tonne gold with 3,140 ppm arsenic
(Table 1). Alteration associated with the intrusive included strong sericitic
alteration and a marked increase in aluminum and sodium values. This sort of
silicate alteration is normally associated with albitization in and adjacent to
gold-bearing intrusives in the Tintina Gold Belt of Alaska and the Yukon. This
intrusive mass remains open to expansion to the west and south into an area of
the previously completed soil auger grid where gold soil values are consistently
anomalous (+50 ppb) and reach up to 1,000 ppb. This portion of the soil grid,
measuring at least 100 meters north-south by 150 meters east-west, is defined by
an amorphous gold-in-soil pattern similar to that seen in intrusive hosted gold
occurrences elsewhere in the district. This portion of the grid also yielded
grab rock samples which returned up to 10 grams per tonne gold from quartz-vein
float, the highest grades recovered from the property to date.

Given the presence of well-mineralized intrusives in Trench 3,
the extent of anomalous gold in soils adjacent to it and the presence of higher
grade gold in rock samples from this area, a larger intrusive mass may exist
south of the Old Glory discovery zone. Geophysical evidence supports this and
the following conclusions:

1. Backhoe trenching has revealed the presence of northeast
trending mineralized shear zones at Old Glory. These shear zones correspond to
linear gold  arsenic anomalies outlined by soil auger sampling. 2. Backhoe
trenching has revealed the presence of highly mineralized sericite altered
intrusives which appear to underlie the southern end of the 2003 soil auger
grid. 3. Magnetics profiles appear capable of distinguishing between barren
quartz mica schist and quartzite of the Fairbanks Schist from more magnetic
rocks of the Chatanika Terrane. 4. Magnetic profiles did not encounter enough
intrusive rock to determine whether or not it could distinguish intrusives from
Fairbanks Schist with any certainty.

Avalon Development Corp. has recommended additional ground
geophysics, trenching and drilling. The Company anticipates this will commence
on the gold intrusive discovery in early 2004.

A follow-up magnetic survey was conducted January 26th, 2004.
The survey is a southern extension to the earlier work based on prior trenching
and soil sampling, and is an attempt to define the southern limits of the
intrusive - hosted schist. The ground magnetic over the intrusive in trench 3
extends the target area at least 700 feet south of the end of the trench and it
corresponds with the high gold in soils discovered by last years soil auger
drill program.

In April 2004 2680 feet of reverse circulation drilling was
completed on the first phase of our gold exploration program on the West Ridge
property. To date, a total of six holes, of the proposed 15 hole drilling
program, have been completed to test the targets outlined by last years
trenching, sampling and geophysical work. all of the holes encountered anomalous
gold mineralization. The most significant of the intervals came from hole #4,
which returned 35 feet grading 1.68 grams of gold per tonne (0.049 opt)
including a 20 foot section that returned 2.2 grams gold per tonne. The last
three holes were designed to test the intrusive and EM conductors outlined by
the State Airborne Geophysical survey. Three of the holes hit intrusive rock as
well as schist, sulphide mineralization, with quartz veining, which was present
in all six holes. Most of the drilling intersected favourable rock at or near
the surface and more pervasive mineralization at greater depths.

Rock and soil sampling was conducted in August approximately
  1,600 meters west of the Old Glory prospect where the Company discovered significant
  gold mineralization in 2003 (see News Release dated April 28, 2004). Exploration
  in the newly discovered area was prompted by past soil sampling conducted by
  Amax Gold that indicated anomalous gold and arsenic in soils on the ridgeline
  between Moose Creek #1 and Moose Creek #2. Initial sampling consisted of 14
  soil samples and 20 rock samples collected from hand-dug pits.

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One of two areas selected for this work returned soil samples
  containing gold values ranging up to 848 ppb with elevated arsenic and antimony
  values. Gold, arsenic and antimony values were consistently higher in soil samples
  collected over granodiorite intrusive host rocks suggesting a possible genetic
  association between the intrusive rocks and gold mineralization. Rock samples
  collected from the same hand-dug pits where soil samples were collected returned
  gold values ranging up to 4,350 ppb (4.3 gpt or 0.127 opt). Gold was associated
  with anomalous arsenic and antimony and was hosted by iron oxide stained quartz-bearing
  intrusives and quartz-mica schist of the Fairbanks Schist. The extent of the
  mineralization is open to expansion beyond the areas sampled to date in 2004.

Based on the positive results from preliminary sampling,
additional soil and rock sampling will be conducted in October with the goal of
defining future drilling targets for this part of the West Ridge property. The
100%-owned West Ridge property is two miles south of the Kinrosss True North
deposit, and six miles north of the Fort Knox deposit, which was reported to
contain 4 million ounces of gold at a grade of 0.03 opt gold.

Black Dome

In July 2003 we announced we had successfully negotiated a
lease of 440 acres in the Fairbanks Mining District, Alaska from the State of
Alaska, Mental Health Trust Land Office (TLO). The trust land is adjacent to the
western portion of the Companys 100% owned West Ridge claims and 40 acres is
strategically located within the West Ridge claims, which is on the edge of a
geochemical gold anomaly. The gold anomaly may possibly be on trend with the
4000-foot western gold anomaly, which is geochemically similar to the gold
mineralization at the True North deposit, according to AMAX Golds report
completed in 1999. The True North gold deposit was purchased by Kinross Gold for
CAD$94 million in shares and cash from La Teko Resources and Newmont Mining
Corporation. An exploration work program will be submitted for approval
immediately to the Trust Land Office to locate drill targets on the newly
acquired lease.

In consideration for the State of Alaska lease, a production
royalty on the lease land is granted to the State of Alaska, Trust Land Office
(TLO) as follows:

Price of Gold (per ounce) Production Royalty Below $300.00
2.5% $300.01 - $350.00 3.0% $350.01 - $400.00 3.5% $400.01 - $450.00
4.0% $450.01 - $500.00 4.5% Above $500.00 5.0%

Additionally, Teryl will grant a 1% Net Smelter Return (NSR) on
its 100% owned West Ridge property with first refusal to purchase the 1% NSR in
the event that TLO decides to sell.

An exploration program started in August 2003. Exploration is
being conducted by the Companys geological consultant, Avalon Development
Corp., who is focused on finding another True North-type gold discovery on the
Black Dome area of Teryls recently acquired trust land. The Eldorado Fault cuts
through the Black Dome, the same fault that bounds Kinross Golds True North
gold deposit, approximately three miles northeast.

Avalon field crews will sample a newly discovered old trench at
Black Dome, which contains rubble composed of black carbonaceous schist cut by
numerous quartz-carbonate veinlets. Most of the carbonate has been altered to a
soft brown-red oxide, similar to oxide ore at the True North. The trench will be
cleared of debris to sample bedrock and determine gold values to locate drill
targets.

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We do not consider the Black Dome Property to be a material
property.

Misty Lake Diamond Property

In September 2001, International Diamond Syndicate Ltd. (a
private company 40% owned by the Issuer, 40% owned by Berkshire International
Mining Ltd. and 20% owned by Geodex Minerals Ltd.), along with its partners,
Major General Resources Ltd. and SouthernEra Resources Ltd., entered into a
letter agreement optioning the Misty Lake diamond property to BHP Billiton
Diamonds Inc. The International Diamond Syndicate Ltd. owns a 16% interest in
the 71,600-acre Misty Lake Diamond Property located in the Northwest
Territories.

In the same month, BHP Billiton Diamonds Inc. completed a
2,800-line kilometre, high-definition airborne electromagnetic survey over the
majority of the property. Preliminary interpretation indicated the presence of a
variety of scattered geophysical anomalies on the property. BHP Billiton Diamond
Inc. must drill test its selected targets by 2003 and if kimberlite is
encountered through drilling, then it will have earned a 35% in the Misty Lake
property. BHP has terminated the agreement with Major General, SouthernEra and
The International Diamond Syndicate. We do not consider the Misty Lake Diamond
Property to be a material property.

Fish Creek Claims

In March 2002, the Issuer entered into an agreement with
LinuxWizardry Systems, Inc. whereby the Issuer acquired the option to purchase a
50% undivided interest, subject to a 5% royalty interest to a maximum of
US$2,000,000, in 30 mineral claims located in the Fort Knox Mine area of the
Fairbanks District, Alaska. The Issuer must issue 200,000 shares to the optionor
and spend US$500,000 on property exploration over a three-year period. The
Issuer may purchase the optionors 5% royalty for US$500,000 within the first
year of production on the claims. The said agreement was subsequently amended
allowing LinuxWizardry to back-in for a 25% working interest after the $500,000
expenditure in lieu of the 5% royalty interest.

In September, 2002 the Company received confirmation of an
approved mining lease. The confirmation eliminates any past or future claim
disputes. This mining lease clearly delineates our 30 claims, which were
previously overstaked.

The Fish Creek gold claims lie adjacent to the Gil Claims.

Our engineer has recommended to extend the Fish Creek claims
previous line of forty auger drill holes and based on positive results follow up
with additional reverse circulation and/or diamond drilling.

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

The next phase of drilling recommended is to locate the
extension of the gold discovery on the adjoining Gil project, which may extend
onto the Fish Creek property. Also recommended on Fish Creek is seismic
exploration on the western portion of the property to locate economic placer
channels.

A ground magnetic survey was completed on the Fish Creek
property on November 20, 2003 on the right limit (east) side of Fish Creek
Valley, approximately 600  700 feet down-valley from the toe of the Fort Knox
mine fresh water supply dam. Extremely high grade gold placer accumulations
were

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encountered in a narrow right-limit channel during excavation
of the Fort Knox mine fresh water dam site but their extent and grade downstream
on the Fish Creek property has never been explored. A two-person crew,
consisting of James Munsell, from Avalon Development and equipment operator,
Kerry Adler from On-Line Exploration Services, Inc. conducted the survey. This
was an orientation survey to test the right limit bench for a suspected buried
placer gold-bearing channel east of Fish Creek. Surveys of this type have been
successful in locating elevated magnetic field intensities associated with the
heavy, magnetic mineral concentrations often associated with placer gold
accumulations.

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

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

Avalon Development has recommended a program of additional
ground magnetics followed by trenching and/or large-diameter auger drilling to
evaluate the two most promising alluvial gold targets in early 2004. Avalon
Development has recommended a program of additional ground magnetics followed by
trenching and/or large-diameter auger drilling to evaluate the two most
promising alluvial gold targets in early 2004.

The Company and Linux Gold Corp. will commence an additional
closely spaced magnetic survey over the previous magnetic targets that were
discovered last winter on the Fish Creek property. The magnetic survey located
two anomalies indicative of a potential buried placer gold bearing channel.
Extremely high-grade placer gold was encountered during the excavation of the
Fort Knox mine fresh water dam, immediately upstream of the Fish Creek property.
Upon completion of the magnetic data, large diameter auger drilling will take
place to top off the bedrock to determine the grade and extent of placer gold in
the channel. Since 1902 a total of 8,000,000 ounces of gold has been placer
mined in the Fairbanks Mining District making it the most prolific placer gold
producing district in Alaska. The secondary goal is to assay bedrock samples to
determine if significant lode gold is present in the bedrock areas drilled.

The total time to complete the geophysical and Bombardier drill
work on the Fish Creek property is estimated to take 30 days, according to our
consultant, Curt Freeman, of Avalon Development. In July 2004 we announced that
the drilling permit had been approved by the State of Alaska exploration
division, on the Fish Creek property. The Company plans to drill up to 25
vertical eight inch diameter holes, on two lines, to explore the potential Fish
Creek placer gold paystreak. Each line will be composed of 10 to 15 drill holes
spaced 50 to 200 feet apart, and from 45 to 75 feet deep, to test two anomalies
located last year by a magnetic survey. The survey located two anomalies
indicative of a potential buried placer gold bearing channel, extremely
high-grade placer gold was encountered during the excavation of the Fort Knox
mine fresh water dam, immediately upstream of the Fish Creek property.

In addition to placer drilling, it is planned to drill up to 40
auger holes on a 200 feet grid and drill two vertical five inch holes up to 300
feet deep with the reverse circulation drilling rig along the east flank of Fish
Creek valley to explore the mineral potential of an intrusive and lithology of
bedrock. According to our geologist, the goal of the drilling is to establish a
tight cross section of the potential Fish Creek paystreak with important data
regarding the location and value of the placer and the lode ore body.

In September, we announced that drilling has commenced on the
  Fish Creek Gold Target. The dual targets to drill are the placer target and
  the intrusive target, with the objective to test the lithology and to analyze
  for concentrations of precious/base metals. The Company will drill 25 vertical
  eight-inch diameter holes on two lines to explore the potential Fish Creek placer
  gold paystreak, and to test the two anomalies located last year by a magnetic
  survey.

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Stepovich Lease

The Company, through our subsidiary Teryl, Inc., entered into a
mineral lease agreement, effective August 1, 1989, with the Estate of Mike
Stepovich for a twenty year period, on the seven Stepovich lode claims located
in the Dome Creek area of the Fairbanks District of Alaska for annual royalty
payments, work commitments and shares, subject to production royalties of
between 4% and 13% of Net Smelter Returns. On September 28, 1990, we granted an
option to Fort Knox Venture to acquire all of Teryls interest in the Stepovich
lease, except for a 10% Net Profit Interest for Teryl, for US$187,500 (C$217,819
paid) and performing 3,000 feet of drilling on the property, which was done.
Fort Knox Venture assumed all of the Companys liabilities and obligations under
the Stepovich lease, under an assignment dated May 29, 1992. Teryl, Inc. retains
the 10% Net Profit Interest in the claims. The Companys subsidiary, Teryl,
Inc., has written down these claims to a nominal value of US$I.

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

Oil and Gas Properties

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

Competition

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

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

Seasonality

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

Availability of Raw Materials

Not applicable.

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Marketing Strategy

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

Dependency upon Patents/Licenses/Contracts/Processes

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

Material Effects of Government Regulation

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

Mineral Exploration

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

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

Oil and Gas Exploration

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

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

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

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

C.        ORGANIZATIONAL STRUCTURE

Our wholly-owned subsidiary, Teryl, Inc. was incorporated on
November 17, 1988, in the State of Delaware and registered to do business in the
USA, to hold and operate the Alaska mineral property interests and Texas oil and
gas well interests. Teryl Resources Corp. owns 6,500,500 shares of Teryl, Inc.,
which is 100% of the issued shares at May 31, 2004.

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

D.        PROPERTY, PLANT
  AND EQUIPMENT

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

Our executive offices are located in rented premises in a
commercial business park located in Richmond, British Columbia, Canada, a suburb
of Vancouver. The space is shared with several other companies which share
common management. The monthly rent for its portion of this 1,000 square foot
space is $500.00. These facilities are believed to be adequate for meeting our
needs for the immediate future. If required in the future, we do not anticipate
that we will have any difficulty in obtaining additional space at favorable
rates. There are no current plans to purchase or otherwise acquire any
properties in the near future.

Mineral Properties

GIL PROPERTY

Project Description and Location

We own a 20% interest in the Gil Mineral Claims, which consist
of 237 unpatented contiguous state mineral claims encompassing slightly less
than 3,836.4 hectares located 32 kilometers northeast of Fairbanks, Alaska.
Kinross Gold Corporation (Kinross) owns the other 80% of the claims and acts
as operator of the project.

Kinross and the Company each contribute to annual exploration
costs on an 80:20 ratio with net profits distributed in that same proportion in
the event of production. We may opt to reduce its interest in the Gil Mineral
Claims by choosing not to contribute its portion of the annual exploration
expenditure. Its interest would then be reduced on a pro-rata basis utilizing
the following formula:

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

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

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

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

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

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

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

Fairbanks is the main population and service centre in the
area. The hamlet of Fox twenty kilometers west is residence to several dozen
locals and provides a few facilities for food and gas. While the claim area is
void of any buildings or other infrastructure, it does lie adjacent to the
Kinross Fort Knox open pit gold mine, a 40,000 ton per day operation with 250
permanent employees.

History

In 1989, we acquired an option on the Gil Mineral Claims from
Nerco Exploration Company whose exploration work on the property had consisted
largely of surface magnetometer surveys. In 1991, we signed a joint venture and
option agreement respecting the property with Fairbanks Gold Corp., which
eventually became Kinross. Kinross earned an 80% interest in the Gil Mineral
Claims from us by incurring exploration expenditures on the property of
$600,000. During the past ten years, Kinross and its predecessors have conducted
an integrated exploration program on the claims incurring total expenditures of
between US$3,500,000 and US$4,000,000.

Geological Setting

Regional Geology

In regional terms, the Gil Mineral Claims are located within
  the Yukon-Tanana terrane, popularly labelled the Tintina Gold Belt. The lithologies
  are polymetamorphic and are approximately Precambrian to Upper Paleozoic in
  age.

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The protoliths are believed to have been primarily sedimentary,
  with lessor volcanic and plutonic origins. The rocks have undergone dynamothermal
  metamorphism; an early prograde amphibolite facies event and a later greenschist
  facies retrograde event. Using detailed fabric studies, four phases of penetrative
  deformation have been described. Radiometric ages of the Yukon-Tanana terrane
  indicated that a widespread regional metamorphic event occurred both in early
  Jurassic (about 180 Ma) and most recently during mid-Cretaceous time (105-125
  Ma).

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

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

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

Local Geology

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

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

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

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Property Geology

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

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

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

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

Exploration and Development during the past 3 years

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

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

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

Fieldwork along Sourdough Ridge identified two amphibolite/calc-silicate
  units with significant gold mineralization that warrant further testing. Exploration
  efforts along strike in the eastern margin of the Main Gil Zone identified discontinuous
  gold mineralization associated with quartz veins and shears in quartz-mica schist.
  Two out of four holes drilled in the North Gil intercepted significant gold
  mineralization. Ore zones located in the central portion of the North Gil appear
  to show good correlation with adjacent holes. Trenching between the North Gil
  and Main Gil Zones outlined a calc-silicate layer approximately 60 feet wide
  that warrants additional work.

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Geothermometry research shows increasing temperatures of mineral
  formation toward upper Slippery Creek. This could indicate the presence of a
  causative pluton and represents a good target for the 2002 exploration season.

The 2002 drill program on the Gil joint venture tested portions
of the North Gil and Main Gil deposits and the Sourdough Ridge anomaly on
Teryls joint venture land. Several notable drill holes came from this 2002
drill program:

- North Gil encountered 15 feet of 0.095 ounces per ton at a depth of 65
  feet from the surface.
- At Sourdough Ridge a hole intersected 15 feet of 0.49 ounces of gold per
  ton at a depth of 95 feet.
- An isolated drill hole on All Gold Creek located on the western end of the
  new scarn zone encountered a 15 foot interval of 0.228 ounces of gold per ton
  at a depth of 265 feet.

The first phase of the 2003 drill program served two purposes.
Firstly it increased the geologic understanding of the Main Gil gold deposit to
provide a more accurate gold distribution deposit model, and secondly, it has
extended the strike length of the Main Gil zone to almost 3,000 feet.

Following is a summary of the 2003 Phase 2 Exploration Program
for the Gil Project including estimated costs:

- Additional core and reverse circulation drilling to more fully define the
  limits and magnitude of gold mineralization at the Main Gils deposit and other
  targets. This phase including assaying, geologic services, access road and
  drill pad construction, and reclamation of surface disturbance, is estimated
  at US750,000;
- A cultural resources survey to determine the presence (or absence) of
  historical artifacts in the project area. This phase of work is estimated to
  cost US$81,000;
- Wetlands delineation and a Threatened and Endangered Species surveys are
  estimated to cost US$26,000;
- Costs under a State of Alaska Reimbursable Services Agreement for
  project-related activities are estimated to be US$23,000;
- Detailed digital topography, suitable for engineering studies and design,
  for the area of the mineral deposits are estimated to be US$20,000;
- Access and haul road design activities and construction cost estimates,
  US$75,000;
- Preliminary hydrologic studies and construction of a piezometer network
  are estimated to cost US$50,000; and
- Drilling of a production (water) well to characterize the nature and
  volume of ground water in the vicinity of the Main Gil deposit, US$50,000.

Phase 2 drilling has recently been completed bringing 2003
drilling totals to 27,590 feet of reverse circulation drilling in 127 holes and
8,917 feet of diamond core drilling in 31 holes. The best gold results were on
Hole # GVR03-398, which intersected 135 feet of 0.087 opt gold including 85 feet
of 0.121 opt gold.

Elsewhere on the Gil project, preliminary hydrology and
engineering studies, resource database modeling and baseline environmental data
continue to be gathered in accordance with revised Phase II work plans.Sourdough
Ridge fieldwork has outlined two significant calc-silicate units that out crop
on the surface for approximately 300 feet in a northeast-southwest trend and
remains open to the northeast. In the Intersection Area drilling confirmed
strong gold values located in trenching and outlined an east-west trend to the
mineralization. One drill hole was collared in the western portion of the Gil
Joint Venture block, but did not intersect significant mineralization. This area
remains to be thoroughly investigated.

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The 2004 Gil exploration program, due to extensive exploration
work completed in 2003, has three major goals:

|1. | Delineate mineralized zones at the Intersection
    Area
|-- | --------------------------------------------------------
|2. | Delineate mineralized zones at Sourdough Ridge          
|3. | Develop new targets in the Gil Exploration
  Area       

The overall objective of the 2004 Gil Exploration Program is to
significantly expand the resource potential within the claim area. The program
will allow for 1,000 soil and rock samples, 4,200 feet of trenches, and the
drilling of approximately 25 drill holes for a total of 7,000 feet to accomplish
the three major goals of the plan. An all-inclusive cost of US$526,750 is
estimated for the entire program.

Mineralization

Gold mineralization is contained within two distinct zones
designated the Main Gil and the North Gil, the latter situated 366 metres north
of the former. A third zone showing potential, the Sourdough Ridge zone, occurs
some 790 metres further east and is in the early stages of exploration.

To date, the Main Gil zone has been extensively drill tested
over a minimal strike distance of 1,006 metres to 152 metre depths. Gold values
occurs within a calc-silicate horizon approximately 21 metres thick striking
N60E, dipping between 45 and 70 degrees NW. Indicated resource is calculated to
be 10,700,000 tons at 0.04 opt gold.

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

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

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

More persistent gold values are found a) when quartz veining
occurs within the felsic schist or the interlayered felsic schist; b) when
quartz veins occur in or near contacts between lithologies; c) in and around the
margins of shear zones; and d) among areas of increased carbonate rock (calcite
veins and/or marble).

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A third area receiving increased exploration attention is the
Sourdough Ridge Zone. Four reverse circulation drill holes have returned values
of potentially mineable grade material while an additional two contain
significant values. Two types of gold bearing veins occur within the
calc-silicate units and mica schists, namely quartz-carbonate-amphibole and
quartz veins. They tend to be narrow, striking in an east-westerly direction
with near vertical dips. Positive exploration results in this zone imply a
doubling of the previously known mineralized strike length.

Drilling

Kinross had initially utilized an auger drill in its
exploration on the Gil Mineral Claims. Auger drill depths generally range from
two to 60 feet with the average in the eight to 20 foot range. Cuttings are
assayed using a one assay ton fire assay and a 34 element ICP package.

The core from diamond drilling is generally HQ sized with
occasional NQ where reduction is dictated by faulted ground. The core is logged,
photographed and a sample taken for reference approximately every ten feet. The
remaining core is submitted in five-foot intervals for gold assay using a one
assay ton fire assay with AA finish.

As reverse circulation drilling is used for grade evaluation in
a low-grade gold environment, great care is employed in the sampling procedure.
Holes are sampled on continuous intervals of five feet with a quarter split
retained as a sample. A Jones splitter mounted directly below the cyclone is
used when drilling dry while a rotary wet splitter is used when drilling
wet.

Sampling, Analysis and Security of Samples

Samples are analysed by one assay ton with an AA finish.
Duplicates of each 10th, 30th, 50th,
70th, 90th sample, and so on, are sent to the primary lab
under different numbers while duplicates of each 20th,
40th, 60th,80th, 100th, etc.,
sample are sent to another lab. On every 40th sample, the primary lab
does a recheck at their own facility while every 80th is sent to an
outside lab. A duplicate sample at the end of every logging page, every 100
feet, is taken at the drill and sent to the primary lab. Chemex Labs, and more
recently Bondar-Klegg, have carried out the bulk of Issuers analyses over the
decade.

In addition, an experienced gold panner employed at the rig
takes a gold pan full of cuttings at each five foot interval. The cuttings are
panned and the concentrate examined for gold colours, the presence and type of
sulphides and, should suspected tungsten minerals occur, these are placed under
an ultraviolet light for examination. Everything is recorded along with the
details of the lithology. Samplers and loggers are discouraged from wearing
jewellery during work.

Mineral Resources and Mineral Reserve Estimates

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

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

Drilling at the Main Gil has indicated consistent, somewhat strataform
  mineralization over a strike length of 2,500 feet. At present, the numbers indicated
  would not be viewed as hard mineable reserves. A typical section is characterised
  by thin higher grade zones up to 0.6 opt gold interspersed with relatively wide,
  low grade or barren intervals. The zone has been drilled to depths of 500 feet.
  Thickness is an average of 75 feet. At an average dip of 65 degrees and a specific
  gravity of 2.5, such a zone would contain a resource of 10,795,500 short tons.

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

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

Mining Operations

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

WEST RIDGE PROPERTY

Pursuant to an agreement, between Kinross Gold Corporation and
Teryl, Inc. dated August 1, 1999, Kinross could earn a 70% interest in the West
Ridge claims by paying $ 285,000 US over five years, expending $ 1,500,000 US on
work program and paying all property and assessment payments during that time.

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

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

On November 30, 2001, Kinross withdrew from the agreement after
satisfying all current obligations. Teryl, Inc. retains its 100% interest in the
claims.

In August 2003 field exploration on the Companys 100%-owned
West Ridge property discovered a new gold zone with the same mineralization that
hosts the gold deposits in the Fairbanks Mining District, Alaska, including the
Fort Knox gold mine, eight miles southeast. Exploration activity identified
several highly prospective areas for future reverse circulation drill targets.

Rock and soil sampling was completed by the Companys geological
  consultants, Avalon Development Corporation at the Old Glory prospect. In addition,
  a small close-spaced soil auger grid was placed over a trench area to try to
  determine the extent and trend of the mineralization. Rock samples consisted
  of quartz mica schist and medium grained diorite intrusive containing abundant
  sericite alteration associated with brown iron oxide after carbonate and reddish
  brown hematite after pyrite.

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Quartz veining ranged from fine chalcedonic veinlets to +2 cm
  milky white mesothermal veins with pitted pyrite and minor scorodite after arsenopyrite.
  Soil sampling results suggest a false bedrock layer of shingled barren quartz
  mica schist exists about 3 to 4 feet below surface. Once through this false
  bedrock, soil samples were taken as deep as 6 feet below surface and often contained
  abundant ocherous red-orange soil at the bedrock interface. Soil such as this
  is often associated with gold bearing shear zones in the district. Assays were
  received from the Phase I auger drilling and rock sampling program on the Old
  Glorygold zone of the Companys 100% owned West Ridge Property.

The highest rock sample assayed 0.29 ounces of gold per ton and
the best results from the auger drilling samples assayed 1,155 ppb gold. Ten
samples have values of 250 to 1,000 ppb and 43 samples have values of 100 to 250
ppb values in gold in the soil (see chart below). Gold values in excess of 100
ppb outline several significant gold deposits in the district, including Fort
Knox, True North and Dolphin, suggesting the soil anomalies at the Old Glory
zone may represent a significant new intrusive-related gold discovery.

Soil sampling results suggest a false bedrock layer of shingled
barren quartz mica schist exists about 3 to 4 feet below surface. Once through
this false bedrock, soil samples were taken as deep as 6 feet below surface and
often contained abundant ocherous red-orange soil at the bedrock interface. Soil
such as this is often associated with gold bearing shear zones in the Fairbanks
Mining District. According to Avalon Development Corporation, these anomalous
values warrant additional exploration to define drill targets in search of an
intrusive-related gold discovery.

In September 2003 the Phase II field exploration on the
Companys 100%-owned West Ridge property expanded the size of the gold discovery
at the Old Glory prospect. In addition, fieldwork confirmed the presence of
eclogite-grade metamorphic rocks similar to those which host Kinross Golds
660,000 ounce True North gold deposit located two miles north of the West Ridge
project. Phase II rock and soil auger sampling was completed at the Old Glory
prospect and expanded the extent of anomalous gold in rocks and soil to an area
measuring 400 meters northeast-southwest by 200 meters northwest-southeast. Soil
values in this grid range up to 1,155 parts per billion (1.16 grams per tonne)
gold with 2,850 parts per million (ppm) arsenic and 200 ppm tungsten. Rock
samples collected from old prospect pits and trenches within the soil grid
returned values up to 10.0 grams (1/3 of an ounce) per tonne gold, 5,900 ppm
arsenic and 144 ppm bismuth. Substantial mineralization is found where the
northeast trending structure intersects the northwest-trending structure.
Arsenic mimics gold to a large degree while tungsten and bismuth mineralization
are less definitive.

Gold mineralization at Old Glory is associated with sericite
alteration in a strong sodium depletion zone. Of significance is that
mineralization appears to be controlled by the Eldorado fault, a major
northeast-trending district-scale structure which bounds the 2.4 million ounce
Ryan Lode gold deposit located 16 miles southwest and the 660,000 ounce True
North gold mine, just 2 miles northeast. Along this same fault lies Teryls
Black Dome prospect, State of Alaska lease recently acquired, another gold
anomalous area discovered by summer field exploration. Rocks of similar
character to True North are present at both the Old Glory and the Black Dome
areas, which suggests a genetic link between both mineralized prospects.

In November 2003 the third phase of auger drilling was completed
  and three trenches totaling 342 meters were completed on the newly discovered
  West Ridge gold zone. The Companys geological consultants, Avalon Development,
  report that a series of shear zones were encountered in the trenches with widespread
  iron, arsenic and antimony oxides present. The shears strike northeast and northnorthwest
  and are marked by fault gouge, breccia and shearing with quartz veins ranging
  up to centimeters. The most promising rocks include intense red iron oxide after
  pyrite, yellow antimony oxide after stibnite and apple green arsenic oxide after
  arsenopyrite. Unaltered quartz veins containing jamesonite were discovered in
  a shear zone in Trench 1. Jamesonite is commonly present in high-grade mineralization
  found elsewhere in the Fairbanks District.

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The rocks are pervasively sericite altered and at the southwest
  end of Trench 3 a granodiorite intrusive body was encountered which exhibits
  sericitic alteration similar to that seen in other intrusive-hosted gold systems
  in the region. The extent of this intrusive body is unknown at present.

Auger drilling on the Old Glory prospect has expanded the
extent of anomalous gold in rocks and soil to an area measuring 500 meters
northeast  southwest by 500 meters northwest  southeast. Soil values in this
grid range up to 2,130 parts per billion (over 2 grams of gold per ton) and rock
samples collected from the trenches returned values up to 10 grams (1/3 of an
ounce per ton gold). Mineralization remains open to expansion to the northeast,
southwest and northwest.

In December, 2003 the Company received results from Avalon
Development Corp. on the trench geochemical results and ground geophysics
recently completed on the Old Glory prospect on the Companys 100% owned West
Ridge claims in the Fairbanks District.

The most significant geochemical results from the three West
Ridge trenches came from the last 15 meters of trench 3 which averaged 596 ppb
gold and intersected a highly oxidized sericite altered diorite to granodiorite
intrusive containing up to 2.98 grams per tonne gold with 3,140 ppm arsenic
(Table 1). Alteration associated with the intrusive included strong sericitic
alteration and a marked increase in aluminum and sodium values. This sort of
silicate alteration is normally associated with albitization in and adjacent to
gold-bearing intrusives in the Tintina Gold Belt of Alaska and the Yukon. This
intrusive mass remains open to expansion to the west and south into an area of
the previously completed soil auger grid where gold soil values are consistently
anomalous (+50 ppb) and reach up to 1,000 ppb. This portion of the soil grid,
measuring at least 100 meters north-south by 150 meters east-west, is defined by
an amorphous gold-in-soil pattern similar to that seen in intrusive hosted gold
occurrences elsewhere in the district. This portion of the grid also yielded
grab rock samples which returned up to 10 grams per tonne gold from quartz-vein
float, the highest grades recovered from the property to date.

Given the presence of well-mineralized intrusives in Trench 3,
the extent of anomalous gold in soils adjacent to it and the presence of higher
grade gold in rock samples from this area, a larger intrusive mass may exist
south of the Old Glory discovery zone. Geophysical evidence supports this and
the following conclusions:

| | 1. | Backhoe trenching has revealed the presence of northeast
      trending mineralized shear zones at Old Glory. These shear zones
      correspond to linear gold  arsenic anomalies outlined by soil auger
      sampling.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Backhoe trenching has revealed the presence of highly
      mineralized sericite altered intrusives which appear to underlie the
      southern end of the 2003 soil auger grid.                                          
| | 3. | Magnetics profiles appear capable of distinguishing
      between barren quartz mica schist and quartzite of the Fairbanks Schist
      from more magnetic rocks of the Chatanika Terrane.                                
| | 4. | Magnetic profiles did not encounter enough intrusive rock
      to determine whether or not it could distinguish intrusives from Fairbanks
      Schist with any certainty.                                               

Avalon Development Corp. has recommended additional ground
geophysics, trenching and drilling. The Company anticipates this will commence
on the gold intrusive discovery in early 2004.

A follow-up magnetic survey was conducted January 26th, 2004.
The survey is a southern extension to the earlier work based on prior trenching
and soil sampling, and is an attempt to define the southern limits of the
intrusive - hosted schist. The ground magnetic over the intrusive in trench 3
extends the target area at least 700 feet south of the end of the trench and it
corresponds with the high gold in soils discovered by last years soil auger
drill program.

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In April 2004 2680 feet of reverse circulation drilling was
completed on the first phase of our gold exploration program on the West Ridge
property. To date, a total of six holes, of the proposed 15 hole drilling
program, have been completed to test the targets outlined by last years
trenching, sampling and geophysical work. all of the holes encountered anomalous
gold mineralization. The most significant of the intervals came from hole #4,
which returned 35 feet grading 1.68 grams of gold per tonne (0.049 opt)
including a 20 foot section that returned 2.2 grams gold per tonne. The last
three holes were designed to test the intrusive and EM conductors outlined by
the State Airborne Geophysical survey. Three of the holes hit intrusive rock as
well as schist, sulphide mineralization, with quartz veining, which was present
in all six holes. Most of the drilling intersected favourable rock at or near
the surface and more pervasive mineralization at greater depths.

Rock and soil sampling was conducted in August approximately
1,600 meters west of the Old Glory prospect where the Company discovered
significant gold mineralization in 2003 (see News Release dated April 28, 2004).
Exploration in the newly discovered area was prompted by past soil sampling
conducted by Amax Gold that indicated anomalous gold and arsenic in soils on the
ridgeline between Moose Creek #1 and Moose Creek #2. Initial sampling consisted
of 14 soil samples and 20 rock samples collected from hand-dug pits.

One of two areas selected for this work returned soil samples
containing gold values ranging up to 848 ppb with elevated arsenic and antimony
values. Gold, arsenic and antimony values were consistently higher in soil
samples collected over granodiorite intrusive host rocks suggesting a possible
genetic association between the intrusive rocks and gold mineralization. Rock
samples collected from the same hand-dug pits where soil samples were collected
returned gold values ranging up to 4,350 ppb (4.3 gpt or 0.127 opt). Gold was
associated with anomalous arsenic and antimony and was hosted by iron oxide
stained quartz-bearing intrusives and quartz-mica schist of the Fairbanks
Schist. The extent of the mineralization is open to expansion beyond the areas
sampled to date in 2004.

Based on the positive results from preliminary sampling,
additional soil and rock sampling will be conducted in October with the goal of
defining future drilling targets for this part of the West Ridge property. The
100%-owned West Ridge property is two miles south of the Kinrosss True North
deposit, and six miles north of the Fort Knox deposit, which was reported to
contain 4 million ounces of gold at a grade of 0.03 opt gold.

Description and Location

The West Ridge Au property is located approximately 15 miles
north of Fairbanks, Alaska, in the Livengood A-2 1:63,360 quadrangle. The
propertys western margin is crossed by the Elliott Highway, a major paved
artery connecting Fairbanks to the North Slope oil and gas production facilities
at Prudhoe Bay (Figure 1). The West Ridge property consists of 48 state of
Alaska mining claims covering 1750.5 acres, 440 acres of leased Mental Health
Trust (MHT) land and 75 acres of patented mining claims under lease purchase
option in the Livengood quadrangle Township 2 North, Range 1 East (Figure 2).
The state claims are registered with the Alaska Division of Mining, Land, and
Water Management with Teryl Resources Corp. as the 100% owner.

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Mineral rights in this part of Alaska are administered by the
  State of Alaska (for both State mining claims and Mental Health Trust lands).
  Annual mining claim rents vary according to claim size and age and are due and
  payable by November 30 of each year for State mining claims. Claim rentals are
  paid in addition to annual work commitment on State mining claims total ($2.50
  per acre per year).

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Amounts spent in excess of these levels are bankable on State
  mining claims for up to four years into the future. All claims on the West Ridge
  project currently are in good standing. There currently are no unusual social,
  political or environmental encumbrances to mining on the project. Two open pit
  gold mines currently operate within 10 miles of the West Ridge project, Fort
  Knox and True North, both operated by Kinross Gold. None of the claims or Mental
  Health Trust lands controlled by the West Ridge project have been surveyed by
  a registered land or mineral surveyor and there are no State or federal laws
  or regulations requiring such surveying. Teryl currently holds a valid 3-year
  Hardrock Exploration Permit on the project. Additional permits for future work
  will be acquired from the Alaska Department of Natural Resources on an as-needed
  basis.

Accessibility, Climate and Infrastructure

The West Ridge property is approximately 15 road miles north of
Fairbanks via the paved Elliott Highway. The south side of the property is
accessible via seasonal dirt roads and the Old Murphy Dome Road while the north
side of the property is accessible via the Dome Creek Road and seasonal dirt
roads connecting to it. Land telephone lines and a high voltage electrical power
line service Kinross Golds True North mine, less than 2 miles from the
property. A cellular phone network already covers the West Ridge property. The
greater Fairbanks area supports a population of approximately 75,000 and has
excellent labor and services infrastructure, including rail and international
airport access. Exploration and development costs in the Fairbanks area are at
or below those common in the western United States.

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

Elevations on the property range from 800 feet to over 1900
feet (Figure 2). Topography in the area is dominated by low rounded hills
dissected by relatively steep walled valleys. Outcrops are scarce except in
man-made exposures. Vegetation consists of a tundra mat that supports subarctic
vegetation. A variably thick layer of aeolian silt covers valley bottoms on the
property. Permafrost is limited to small discontinuous lenses on steep, poorly
drained north-facing slopes and has posed no hindrance to past exploration.
Average annual precipitation is 13 inches, mostly as snowfall. Mining operations
can be conducted on a year-round basis and heap leach technology has been
profitably employed at two locations in the Fairbanks district since 1985.

History

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

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

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

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

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

Geological Setting

Bedrock geology of the Fairbanks Mining District is dominated
by a N60-80E trending lithologic and structural trend covering a 30-mile by
15-mile area . The southern two-thirds of the West Ridge project is situated
primarily in lower to middle Paleozoic metavolcanic and metasedimentary rocks of
the Cleary Sequence and Fairbanks Schist (Figure 3). These rocks are in fault
contact along the northeast trending Eldorado Fault which separates Fairbanks
Schist on the south from eclogite and amphibolite facies rocks of the Chatanika
Terrane on the north. Rocks of the Cleary Sequence and Fairbanks Schist are
exposed in the Cleary antiform, the northern of two northeast trending
antiformal belts present in the district.

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

Most investigators believe rocks of the Cleary Sequence and Fairbanks
  Schist have been over thrust from the northeast by eclogite to amphibolite facies
  rocks of the Chatanika terrane ( Figure 3). The Chatanika terrane consists of
  quartz muscovite schist, carbonaceous quartzite, impure marble, garnet feldspar
  muscovite schist, and garnet-pyroxene eclogite that have yielded Ordovician
  Ar40/Ar39 age dates.

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Motion on the Chatanika thrust fault has been dated at approximately
  130 million years, Metamorphic histories of the Chatanika eclogite and Fairbanks
  Schist within the Yukon Tanana Terrane, Alaska, as revealed by electron microprobe
  geothermometry and 40AR/39AR single grain dating and resulted
  in structural preparation of favorable host units in the Chatanika terrane and
  adjacent lower plate rocks. Evidence from the district and from other parts
  of Interior Alaska with similar geologic histories suggest rocks classified
  as part of the Cleary Sequence may in fact be both Fairbanks Schist and Chatanika
  terrane rocks separated by multiple low angle structures that could be either
  thrust or gravity faults or both.

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

Rocks on the West Ridge project are folded about earlier
northwest and northeast trending isoclinal recumbent fold axes followed by an
open folded N60-80E trending system. Upper plate rocks of the Chatanika terrane
have been affected by more intense northwest and northeast trending isoclinal
and recumbent folding followed by folding along the same N60-80E trending axis
which affected lower plate rocks. Lithologic packages in both the upper and
lower plates are cut by steeply dipping, high angle northwest and northeast
trending shear zones, some of which are mineralized (Figure 3). Airborne
magnetic data in this part of the Fairbanks District indicate the presence of
district scale east-west and northeast trending structures which appear to
pre-date N60-80E folding. Although little empirical evidence exists from the
West Ridge property itself, gold mineralization on the West Ridge project
probably post-dates regional and district scale folding and probably is
contemporaneous with or slightly younger than district-scale northeast trending
structures and plutonic activity.



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Deposit Types

Recent discoveries in the Fairbanks District have outlined a
series of distinctive mineral occurrences which appear to be genetically related
to mid-Cretaceous plutonic activity which affected a large area of northwestern
British Columbia, Yukon, Alaska and the Russian Far East. This work, based on
extensive geologic and structural mapping and analytical studies (major and
trace element analysis, fluid inclusion microthermometry,
Ar40/Ar39geochronology, and isotope analysis) has
provided new information regarding gold metallogenesis in the Fairbanks
district. A synthesis of this information suggests an ore deposit model in which
gold and high CO2bearing fluids fractionate from ilmenite series,
I-type mid-Cretaceous intrusions during the late phases of differentiation. The
gold is deposited in anastomosing pegmatite and/or feldspar selvage quartz
veins. Brittle fracturing and continued fluid convection and concentration lead
to concentration of gold bearing fluids in intrusions and schist-hosted brittle
quartz-sericite shear zones. Carbonate and/or calcareous metamafic horizons host
W-Au skarns and replacement deposits. Structurally prepared calcareous and/or
carbonaceous horizons may host bulk-mineable replacement deposits. These occur
most distal to the intrusions within favorable host rock in the Fairbanks Schist
and Chatanika Terrane.

Seven different potentially economic gold deposit types have
been identified in Interior Alaska and the Fairbanks district. They are:

| | 1. | Gneiss or high-grade schist-hosted quartz veins or
      metasomatic replacement zones proximal to or within causative intrusives.
      Metals associated include Au, Bi, and As and possibly Cu and W. Pogo (5.6
      Moz) and Gil (433,000 oz) are examples of such mineralization. There is a
      strong genetic relationship between the causative intrusion and gold
      mineralization but no obvious spatial relationship.                                                                                                                                                                                                                                                                                                                                                                   
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 2. | Stockwork-shear style mineralization hosted in
      porphyritic intermediate to felsic intrusives. Mineralization contains Au
      with anomalous Bi, Te, W and trace Mo. Examples include Fort Knox (7.2
      Moz) and Dublin Gulch (+1 Moz). There is a strong genetic and spatial
      relationship between host intrusion and gold mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | 3. | Porphyritic stockwork with intrusion/schist shear hosted
      Au-As-Sb (Ryan Lode, 2.4 Moz) with a strong genetic and spatial
      relationship between host intrusion and gold mineralization,                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | 4. | Base metal ± Au, Ag and W intrusion hosted mineralization
      with both spatial and genetic relationship between precious metal
      mineralization and intrusion. Examples include Dolphin (0.6 Moz) and
      Silver Fox prospects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | 5. | Structurally controlled mineralization hosted by
      schist-only high angle shear zones and veins. Associated metals include
      Au, As, Sb, Ag, Pb and W in low sulfide quartz-carbonate veins. Alteration
      adjacent to veins is pervasive quartz-sericite-sulfide alteration that can
      extend for up to one mile from the source structure. Deposits were mined
      heavily prior to World War II and are noteworthy because of their
      exceptional grades (+1 to +5,000 opt Au). Examples include Cleary Hill
      (280,000 oz production), Christina, Hi Yu (110,000 oz production) and
      Tolovana (500 oz production) veins. There is a strong genetic relationship
      between the causative intrusion and gold mineralization but no obvious
      spatial relationship.
| | 6. | Low angle, disseminated, carbonate-hosted Au-As-Sb
      mineralization associated with brittle thrust or detachment zones distal
      to generative intrusives. The True North deposit (1.3 Moz) is an example
      of this type of mineralization. There is a strong genetic relationship
      between causative intrusions and gold mineralization but no obvious
      spatial relationship.                                                                                                                                                                                                                                                                                                                                                                                                       
| | 7. | Shear-hosted monominerallic massive stibnite pods and
      lenses. Trace As, Au, Ag and Pb but these prospects are noteworthy because
      they appear to represent the most distal end members of the intrusive gold
      hydrothermal systems. Examples include Scrafford and Stampede mines. There
      is a strong genetic relationship between causative intrusions and gold
      mineralization but no obvious spatial
relationship.                                                                                                                                                                                                                                                                                                                                                           

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Mineralization

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

Examination of the spatial arrangement of gold occurrences in
the Fairbanks District suggests clusters or swarms of gold-bearing veins,
stockworks and shear zones are controlled by a series of district-scale
northeast-trending structures regularly spaced approximately 8,000 feet (2.4 km)
apart across the district. These structures were first identified as district
scale features evident on public airborne geophysical surveys conducted in the
mid-1990s. Their periodicity with respect to clusters of known gold occurrences
was unrecognized prior to that time. The Eldorado fault, which cuts through the
West Ridge property (Figure 3), is the best documented of these district scale
northeast structures and appears to control mineralization at both the Ryan Lode
(2.4 million ounces) and the True North (1.3 million ounces) deposits. This
8,000-foot periodicity extends to the east where it is associated with the
600,000 ounce Dolphin deposit and several of the districts largest
past-producing lode gold mines (Freeman, 2004). Gold mineralization to the west
of the Eldorado Creek fault in the Treasure Creek area and the Sheep Creek area
of Ester Dome may also be controlled by regularly spaced northeast trending
structures.

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

Drilling and Exploration and Development

The only significant exploration work conducted on the West
Ridge project was that conducted by Teryl (1992-96) and Kinross (1998 and 1999,
See History). Teryls efforts consisted of ground magnetics and soil auger
sampling which identified the East and West anomalies (see History). Except for
gold values, details of these surveys are not available to the author. A total
of 718 soil auger samples were collected by Teryl with gold values ranging from
2 to 990 ppb (Teryl, 1996). Anomalous gold was clustered in two locations in the
central part of the property on the ridge between Moose Creek and Seattle Creek
and on the divide between upper Dome Creek and Steamboat Creek. A single
anomalous soil sample containing 215 ppb gold was detected near the Old Glory
prospect but was not associated with other anomalous soil samples.

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In 1998 Kinross Gold, then operating the Fort Knox project and
conducting district-scale work on a number of other projects acquired the West
Ridge property and completed due diligence sampling that confirmed the presence
of anomalous gold, arsenic and antimony on the East and West Anomalies.
Additional widely spaced Bombardier soil auger sampling was completed in 1999
and reverse circulation drilling was conducted on the West anomaly. This work
identified two large gold in soil anomalies, the East and West anomalies. The
West anomaly measures 4,000 feet NW-SE by 3,000 feet NE-SW and contained
numerous samples with +100 ppb gold and +200 ppm arsenic. Limited surface rubble
crop returned anomalous gold in felsic intrusive and quartzite with the values
ranging from <5 ppb to 16.45 ppm. The East anomaly, while containing lower
overall geochemical values, is over 7,000 feet long NE-SW and extends off the
West Ridge property to the northeast. Gold in soils on the East anomaly reached
a high of 1.64 ppm. A single sample anomaly containing 960 ppb gold was
identified 2,000 feet west of the Old Glory prospect but the Old Glory prospect
was not covered by the Kinross soil sampling grid.

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

In 2000, Kinross completed an exploration program on the
Westridge Claims. This was pursuant to the 1999 agreement which granted Kinross
the option to acquire a 70% undivided interest in the 53 mineral claims located
in the Dome Creek area of the Fairbanks District, Alaska known as the Westridge
Claims. In order to earn a 70% interest in the project, Kinross was obligated to
make cash payments to the Issuer totalling US$285,000 over five years, to make
five annual advanced royalty payments of US$200,000 each and to expend a minimum
of $1.5 million on exploration and development of the claims over five
years.

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

During 2003, the most significant geochemical results from the
three West Ridge trenches came from the last 15 meters of trench 3 which
averaged 596 ppb gold and intersected a highly oxidized sericite altered diorite
to granodiorite intrusive containing up to 2.98 grams per tonne gold with 3,140
ppm arsenic. Alteration associated with the intrusive included strong sericitic
alteration and a marked increase in aluminum and sodium values. This sort of
silicate alteration is normally associated with albitization in and adjacent to
gold-bearing intrusives in the Tintina Gold Belt of Alaska and the Yukon. This
intrusive mass remains open to expansion to the west and south into an area of
the previously completed soil auger grid where gold soil values are consistently
anomalous (+50 ppb) and reach up to 1,000 ppb. This portion of the soil grid,
measuring at least 100 meters north-south by 150 meters east-west, is defined by
an amorphous gold-in-soil pattern similar to that seen in intrusive hosted gold
occurrences elsewhere in the district. This portion of the grid also yielded
grab rock samples which returned up to 10 grams per tonne gold from quartz-vein
float, the highest grades recovered from the property to date.

Drilling

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

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Trenching

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

The most significant intervals encountered in trenching came
from the last 15 meters of trench 3 which averaged 596 ppb gold and intersected
a highly oxidized sericite altered diorite to granodiorite intrusive containing
up to 2.98 grams per tonne gold with 3,140 ppm arsenic (Table 1). This intrusive
did not contain anomalous Pd, Ag, Sb, Bi or W. Alteration associated with the
intrusive included strong sericitic alteration and a marked increase in aluminum
and sodium values. This sort of silicate alteration is normally associated with
albitization in and adjacent to gold-bearing intrusives in the Tintina Gold Belt
of Alaska and the Yukon. This intrusive mass remains open to expansion to the
west and south into an area of the previously completed soil auger grid where
gold soil values are consistently anomalous (+50 ppb) and reach up to 1,000 ppb.
This portion of the soil grid, measuring at least 100 meters north-south by 150
meters east-west, is defined by an amorphous gold-in-soil pattern similar to
that seen in intrusive hosted gold occurrences elsewhere in the district. This
portion of the grid also grab rock samples which returned up to 10 grams per
tonne gold from quartz-vein float, the highest grades recovered from the
property to date.

Mineral Processing and Metallurgical Testing

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

Mineral Resource and Mineral Reserve Estimates

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

Mining Operations

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

OIL AND GAS WELL INTERESTS

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

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Plan of Operations

Source of Funds for Fiscal 2004/2003

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

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

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

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

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

We had a working capital surplus of $20,032 on May 31,
2004.

Anticipated Changes to
Facilities/Employees

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

United States vs. Foreign Sales/Assets

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

As of May 31, 2004, we had assets valued at $ 445,269 located
in Canada; and assets valued at $2,698,852 located in the United States.

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ITEM 4A.     UNRESOLVED STAFF COMMENTS

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

ITEM 5.        OPERATING AND
FINANCIAL REVIEW AND PROSPECTS

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

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

Audited financial statements for the fiscal years ended May 31,
2004, May 31, 2003 and May 31, 2002 respectively are included in this
Registration Statement.

Overview

We are an oil, gas, and mineral exploration company engaged in
the acquisition and exploration of oil and gas, and mineral properties. Our
expenditures are made acquiring mineral properties and carrying out exploration
work. We do not have any producing mineral properties at this time. We also
acquire oil and gas property interests and participate in drilling wells. The
recoverability of amounts shown for investments, mineral properties, interests
in oil and gas properties and the related deferred expenditures is dependent
upon the existence of economically recoverable reserves, the ability to obtain
the necessary financing to complete the exploration, the profitability of future
production or our ability to dispose of those assets on a profitable basis. Our
ongoing operation is dependent upon cash flow from successful operations and
equity financing. Under US GAAP, we have incurred a loss of $ 1,444,266 in the
year ended May 31, 2004 (2003 - $ 543,950; 2002 - $ 169,321).

A.        OPERATING RESULTS

The following discussion of the Issuers financial condition at
May 31, 2004, and the changes in financial condition and results of operations
for the years ended May 31, 2004, 2003 and 2002 should be read in conjunction
with the financial statements of the Issuer and related notes included therein.
The Issuers reporting currency is the Canadian dollar. All amounts in this
discussion are expressed in Canadian dollars.

Fiscal Year Ended May 31, 2004 compared to Fiscal year Ended
May 31, 2003

Results of Operations

The Company realized a net loss of $791,776 in fiscal 2004,
compared to a net loss of $323,812 in fiscal 2003, mainly due to a marked
increase in advertising, promotion and public relations expenditures and related
administrative expenses. This was due to a determined effort to raise financing
since the stock market was strengthening and funds were required to pay for the
Companys share of the mineral exploration and development costs regarding the
Alaskan properties. The Company also repaid $170,992 to related parties during
fiscal 2004, which includes shares issued totaling $ 203,500.

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In 2004 expenditures for advertising, promotion and public
relations were $ 327,301 compared to $177,606 in 2003, due to increasing stock
market prices and a determined effort to raise financing to carry out their
exploration projects. Several other expenditures in 2004 were higher than in
2003 due to rising costs and increased administration and promotional
activities, although in 2003 this was partially offset by the $ 83,152 gain in
foreign exchange due to the stronger Canadian dollar. Due to a change in
generally accepted accounting policies, the Company is now recording stock based
compensation (stock options granted by not exercised as yet) resulting in an
expense of $169,356 increasing the net loss for the year.

During fiscal 2004, revenue from oil and gas operations was
$21,037 as compared to $24,255 for fiscal 2003. The Company also received
$2,446,687 upon the issuance of common shares during fiscal 2004.

Administrative expenses in fiscal 2004 totaled $779,900 as
compared to $337,144 in 2003. The expenses increased from the prior year mainly
due to the increased activity in investor relations, which was $327,301 in
fiscal 2004 (2003 - $177,606). Professional fees totaled $29,435 compared to
$49,182 in 2003. Management and directors fees decreased to $55,522 in 2004 from
$63,000 in 2003. The Company incurred $652,491 for mining exploration work in
2004 as compared to $222,290 in 2003.

In 2004 expenditure for exploration and development were $
652,491 compared to $ 222,290 in 2003, due to increased geophysical work,
drilling and trenching on the West Ridge and Gil claims located in Alaska. In
2004 the Oil and Gas operations had net income of $ 13,919 compared to net
income $15,432 in 2003.

Fiscal Year Ended May 31, 2003 compared to Fiscal year Ended
May 31, 2002

Results of Operations

Results of operations was a net loss of $323,812 ($0.01 per
share) as compared to a net loss of $82,360 ($0.00 per share) for 2002.

In 2003 the Oil and Gas operations had net income of $15,432
compared to net income $6,146 in 2002, which was mainly due to the reworking of
the C-S#1 and Jancik #2 wells resulting in increased production revenue,
increased oil and gas prices and the fact that the wells are now fully
amortized.

During fiscal 2003, revenue from oil and gas operations was
$24,255 as compared to $19,510 for fiscal 2002. The Company also received
advances from related parties of $260,318 during fiscal 2003.

Administrative expenses in fiscal 2003 totaled $337,092 as
compared to $112,505 in 2002. The expenses increased from the prior year mainly
due to the increased activity in investor relations, which was $177,606 in
fiscal 2003 (2002 - $4,413). Office, rent and telephone totaled $59,450 compared
to $23,585 in 2002. Professional fees totaled $49,182 compared to $15,970 in
2002. Management and directors fees increased to $63,000 in 2003 from $30,000 in
2002. The Company incurred $222,290 for mining exploration work in 2003 as
compared to $86,202 in 2002.

In 2003 expenditures for advertising, promotion and public
relations were $177,606 compared to $4,413 In 2002, due to increasing stock
market prices and a determined effort to raise financing to carry out their
exploration projects. Several other expenditures in 2003 were higher than in
2002 due to rising costs and increased administration and promotional
activities, although this was partially offset by the $83,152 gain in foreign
exchange due to the stronger Canadian dollar.

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Fiscal Year Ended May 31, 2002 compared to Fiscal year Ended
May 31, 2001

Results of Operations

At May 31, 2002, the Issuer held assets recorded at $1,829,524
including cash of nil, mineral property interests recorded at $156,698 and
deferred exploration and development expenditures of $1,629,429. Deferred
exploration and development expenditures increased from $1,545,495 at May 31,
2001 to $1,629,429 at May 31, 2002 primarily due to $86,202 spent on exploration
of the Gil Mineral Claims during the most recently completed fiscal year. This
exploration accounts for the major portion of the increase in the Issuers total
assets from $1,733,434 at May 31, 2001 to $1,829,524 at May 31, 2002.

The Issuers liabilities increased from $890,084 at May 31,
2001 to $1,056,534 at May 31, 2002 primarily due to increases in accounts
payable and advances from related parties.

The Issuer realized a net loss for the fiscal year ended May
31, 2002 of $82,360 or $0.00 per common share. The Issuer incurred
administrative expenses of $112,505 and wrote off $2,269 in property costs and
expenditures during the fiscal year. The Issuers administrative costs for the
fiscal year primarily consisted of management and directors fees ($30,000),
financing fees ($16,500), office rent and utilities ($13,985) and audit and
accounting costs ($14,582).

The Issuer realized a net loss of $82,360 in fiscal 2002,
compared to net income of $68,843 in fiscal 2001. The main reasons for the
deterioration in financial condition in the most recently completed fiscal year
were the downturn in the investment market which affected the Companys ability
to sell its investments and also to attract investors for its own shares.

As the Issuer is in the exploration stage and does not as yet
have a mine in production, the recoverability of operating expenses is dependent
upon the discovery of economically recoverable reserves.

B.        LIQUIDITY AND
CAPITAL RESOURCES

Liquidity and Capital Resources

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

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

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

Liquidity

Fiscal Year Ended May 31, 2004 compared to Fiscal year Ended
May 31, 2003

During the fiscal year ended May 31, 2004, we continued to
derive, as in the past, most of our development and operating capital primarily
from the issuance of capital stock and advances from related companies.

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During 2004, we financed our operations by the issue of
7,741,000 common shares for cash proceeds of $2,650,187, which consisted of the
issuance of 7,000,000 common shares pursuant to private placement offerings
completed during the year to raise cash proceeds of $2,505,012 after issue
costs, the issuance of 297,500 common shares pursuant to the exercise of stock
options for cash proceeds of $57,125, and the issue of 443,500 shares pursuant
to the exercise of share purchase warrants for cash proceeds of $88,050.

During 2004, we spent $390,492 of these funds on operating
activities as discussed above under Results of Operation for the year ended May
31, 2004 as compared to $342,517 the year ended May 31, 2003.

Our cash position increased by $420,939 to $370,558 and our
working capital at May 31, 2004 was $20,032.

Fiscal Year Ended May 31, 2003 compared to Fiscal year Ended
May 31, 2002

During the fiscal year ended May 31, 2003, we continued to
derive, as in the past, most of our development and operating capital primarily
from the issuance of capital stock and advances from related parties.

Of the total cash raised of $521,266 from financing activities,
$ 222,290 was spent on exploration and development of mineral property interests
and $342,517 was spent on operations. In 2002, $3,552 was spent on exploration
and development and $87,926 was spent on operations. The Companys cash deficit
at May 31, 2003 was $(50,381) compared to $(6,840) at May 31, 2002 and the
working capital deficit increased by $ 372,163 to $ 1,395,628 compared to $
1,023,465 at May 31, 2002. The Company plans to continue raising funds through
sale of capital stock and through option agreements on its mineral properties.
See subsequent events note in the consolidated financial statements regarding
private placement announced August 18, 2003.

The Company did not issue any shares in 2002. During the 2003
year the Company issued 2,004,850 common shares to net the treasury $ 260,948
(See Note 12 to the consolidated financial statements). The Company also issued
200,000 common shares for mineral property at a deemed price of $ 0.08 per
share. In 2003, the Company received loans, on a net basis, of $ 260,318 from
related companies.

Fiscal Year Ended May 31, 2002 compared to Fiscal year Ended
May 31, 2001

During the 2002 fiscal year ended May 31, 2002, we derived most
of our development and operating capital primarily from advances from related
parties.

At May 31, 2002, the Issuer had cash on hand of nil and a
working capital deficit of $1,023,465. At May 31, 2001, the Issuers working
capital deficit was $873,430. The increase in working capital deficit in fiscal
2002 was a result of an increase in accounts payable from $436,505 to $513,265
and an increase in advances from related parties from $302,717 to $385,567.

The Issuer did not complete any equity financings during the
fiscal years ended May 31, 2002 or May 31, 2001. Operations were primarily
funded through increases in short-term debt and the sale of equity investments.
At May 31, 2002, the Issuer held an additional 15,880 shares of LinuxWizardry
Systems, Inc. with a market value of $935.

To a significant extent, the Issuers ability to raise capital
is affected by trends and uncertainties beyond its control. These include the
market prices for base and precious metals and results from the Issuers
exploration programs. The Issuers ability to attain its business objectives may
be significantly impaired if prices for metals fall or if results from
exploration programs on its properties are unsuccessful.

Capital Resources

Our authorized capital consists of 100,000,000 common shares
without par value and 5,000,000 Preferred Shares (non-voting) with a par value
of $1.00. At May 31, 2004 we had 33,180,688 issued and outstanding common shares
(May 31, 2003  25,238,088. No Preferred Shares have been issued to date.

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The directors of the Company adopted the Teryl Resources Corp.
2002 Stock Option Plan (the Plan or the 2002 Plan), and received initial
shareholder approval of same on January 22, 2003. The Company has adopted a type
of plan under which options may be granted for a number of shares up to 10% of
the issued and outstanding shares of the Company from time to time. As the
number of shares reserved for issuance under the Plan increases with the issue
of additional shares by the Company, the Plan is considered to be a rolling
stock option plan. This rolling plan requires Shareholder approval annually.
The shareholders approved the Plan for fiscal 2004/5 on November 15, 2004.

During the year ended May 31, 2004, 297,500 stock options were
exercised,75,000 stock options expired or were cancelled. We granted 500,000
stock options to employees, officers and directors. As at May 31, 2004 we had
2,565,000 stock options outstanding at exercise prices ranging from $0.15 per
share to $0.63 per share with expiry dates ranging from February 19, 2006 to
March 5, 2009. These stock options vest over a two-year period from the date of
grant. If exercised, the 2,565,000 stock options would increase our available
cash by $655,000.

As at May 31, 2004 we had the following warrants outstanding:

No. of Warrants
    Exercise Price
    Expire Date1,000,000
    0.15
    Dec. 11, 2004806,500
    0.30 / 0.40
    Aug. 26, 2004 / 20051,500,000
    0.5
    Nov. 24, 20042,000,000
    0.6
    Oct. 26, 2005


If exercised, the outstanding 5,306,500 warrants would increase
our available cash by $2,069,535 at an average price of $0.39.

US GAAP Reconciliation

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

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

Under Canadian GAAP, future income taxes are calculated based
on enacted or substantially enacted tax rates applicable to future years. Under
U.S. GAAP, only enacted rates are used in the calculation of future income
taxes. This GAAP difference did not result in a difference in our financial
position, results of operations or cash flows for the years ended May 31, 2004,
2003 and 2002.

We have adopted the fair value based approach to Stock Based
Compensation under the provisions of CICA 3870 and SFAS No. 123. The method of
adoption applied by us is permissible under both Canadian and US standards.

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

There were no expenditures on research and development over the
past three years ended May 31, 2004, 2003 and 2002. We do not hold any patents,
trademarks or copyrights.

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D.        TREND INFORMATION

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

E.        OFF-BALANCE SHEET
ARRANGEMENTS

There are no known off-balance sheet arrangements other than
those disclosed in this Form 20-F and in our audited consolidated financial
statements for the year ended May 31, 2004.

F.        TABULAR DISCLOSURE
OF CONTRACTUAL OBLIGATIONS

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

Payments due by periodContractual Obligations
      Total
      Less than 
        1 year
      1-3 years
      3-5 
        years
      More than 
        5 yearsMineral Property Obligations
      US$548,340
      US$7,500
      US$540,840
      Nil
      NilLong-term debt obligations
      Nil
      Nil
      Nil
      Nil
      NilCapital (Finance) Lease obligations
      Nil
      Nil
      Nil
      Nil
      NilOperating lease obligations
      Nil
      Nil
      Nil
      Nil
      NilPurchase Obligations
      Nil
      Nil
      Nil
      Nil
      NilOther Long-term liabilities reflected on the Companys
        Balance sheet under US GAAP
      Nil
      Nil
      Nil
      Nil
      NilTotal
      US$548,340
      US$7,500
      US$540,840
      Nil
      Nil


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

Property
    Calendar Year
    Option/Advance Royalty Payment
    Expenditure Commitment
    Number of SharesGil Property, Alaska
    2004
    $ -
    $ -
    -2003
    $ -
    $ -
    -Westridge Property, Alaska
    2004
    $ -
    $ -
    -2003
    $ -
    $ -
    -Stepovich, Alaska
    2004
    $ -
    $ -
    -2003
    $ -
    $ -
    -Fish Creek, Alberta
    2004
    
    US$405,8402003
    
    US438,700Anderson Group, Alaska
    2004
    US$142,5002003
    $ -
    $ -
    -


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

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Oil and Gas Wells:

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

Under Canadian GAAP the cost of the wells has been fully
amortized. Under U.S. GAAP the wells would be written down to a nominal value of
$1 each. This difference would result in the assets being increased by $3.

G.        Safe Harbor

Not applicable.

ITEM 6.        DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES

A.        DIRECTORS, SENIOR
MANAGEMENT AND EMPLOYEES

As of May 31, 2004, our Board of Directors consisted of three
Directors, two of whom are independent (or outside) non-executive Directors.
The following table provides certain information about the members of our Board
of Directors as of May 31, 2004.

Name
    Position with the Company
    Age
    Date of First Election or
      AppointmentJohn G. Robertson (1)(2)(3)
    President, Chief Financial Officer, Secretary,
      Director
    64
    October 25, 1985Jennifer Lorette (2)(3)
    Vice President and Director
    31
    February 20, 2001Susanne Robertson (1)(3)
    Director
    58
    September 12, 1990Monique Van Oord (1)(3)
    Director
    43
    October 17, 2002


| | (1) | Indicates member of the Issuer's audit
  committee.                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                      
| | (2) | The Senior Management serves at the pleasure of the Board
      of Directors.                                                                                                                                                                                                                                        
| |     |                                                                                                                                                                                                                                                                                                                      
| | (3) | Each director of the Issuer holds office until the next
      Annual General Meeting unless his or her office is earlier vacated in
      accordance with the Articles of the Company and the Business
      Corporations Act(British Columbia), or unless he or she becomes
      disqualified to act as a director.

John Robertson.Mr. Robertson is thePresident
  and a founder of the Company since 1985; Mr. Robertson has been the Chairman,
  President and Chief Executive Officer of REGI U.S., Inc., an Oregon corporation
  traded on the OTC bulletin board, since July 1992, a U.S. public company engaged
  in the development of a rotary engine/compressor (Rand Cam Engine).
  Since October 1984 Mr. Robertson has been President and a Director of Reg Technologies
  Inc., a British Columbia corporation listed on the TSX Venture Exchange that
  has financed the research on the Rand Cam Engine since 1986. REGI U.S. is ultimately
  controlled by Reg Technologies Inc. Mr. Robertson has been the President, Chief
  Executive Officer and Chairman of the Board of Linux Gold Corp. since 1979.
  Mr. Robertson has been the President and Principal Executive Officer and a Director
  of IAS Communications, Inc. since its formation in December 1994, a U.S. public
  company which is developing and marketing proprietary antenna technology.

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Since June 1997 Mr. Robertson has been President, Principal Executive
  Officer and a Director of Information Highway.com, Inc., an inactive reporting
  Florida corporation. Since May 1977 Mr. Robertson has been President and a member
  of the Board of Directors of SMR Investments Ltd., a private British Columbia
  corporation engaged in management of public companies. Mr. Robertson is also
  the President and Director of the following private companies: JGR Petroleum,
  Inc., BlueCrow Internet Co. Ltd., 394754 B.C. Ltd., dba SOVO Computer Centre,
  Pavlik Travel Services Ltd., World Tel-Internet (Toronto) Ltd., International
  Diamond Syndicate Ltd., and Argon Investment Corporation. Mr. Robertson is a
  citizen and resident of Canada.

Susanne Robertson.Director of the Company since 1990;
Principal of SMR Investments, Ltd., a private business and financial consulting
company, since 1979; Director of Linux Gold Corp, a BC company reporting in the
US and Canada involved in the development of computer software, since 1984. Ms.
Robertson is a citizen and resident of Canada

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

Monique van Oord. Director of the Company and Chief
Financial Officer since January 2003. Administrator for several public and
private companies from 2002 to date; Counsellor with Magdeline Society between
2001 and 2002. Ms. van Oord is a citizen and resident of Canada.

Yale Hirsch.Mr. Hirsch is the Vice President of
Corporate Affairs for the Company. Mr. Hirsch is a stock market historian and
stock analyst for the Stock Trader's Almanac. He is the founder of the 'Smart
Money' and 'Ground Floor' newsletters. Both newsletters are now combined into an
enlarged publication called the 'Almanac Investor.' Mr. Hirsch is a citizen and
resident of the United States.

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

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

There is a family relationship between two of the Directors or
Senior Management. John Robertson and Susanne Robertson are husband wife.

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

B.        COMPENSATION

The following table sets out the compensation information for
the fiscal years ended May 31, 2004, May 31,

- 56 -

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2003 and May 31, 2002 for our directors and members of our
administrative, supervisory or management bodies.

Name and 
        Principal 
        Position
      Year
      Annual Compensation
      Long-Term CompensationAwards
      PayoutsSalary  ($)
      Bonus  ($)
      Other Annual
         Compensation
        
        ($)
      Securities
        
        Granted under 
        Options(2) / 
        SARS(1)Granted 
        #
      Restricted
        Shares
        or Restricted Share Units 
        ($)
      LTIP (2) Payouts
        
        ($)
      All Other  Compensation 
        ($)John G. Robertson, President,
        CFO, Secretary and Director
      2004 2003 2002
      $12,000(3)() Nil Nil
      Nil Nil Nil
      17,500.00(4) 30,000.0043) 30,000.00(4)
      Nil / Nil Nil / Nil Nil / Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilJennifer *Lorette,*Vice *President*
        Director
      2004 2003 2002
      24,375(6) $33,000(6) *$3,568(6)*
      Nil Nil Nil
      Nil Nil Nil
      Nil / Nil 100,000 / Nil
        Nil / Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilSusanne Robertson, Director
      2004 2003 2002
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil / Nil 500,000 / Nil
        Nil/ Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilMonique van Oord, Director
      2004 2003 2002
      $20,874(7) Nil
        Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil / Nil 25,000 / Nil Nil / Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil NilYale Hirsch, Vice President
      2004 2003 2002
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil / Nil 200,000 / Nil
        Nil / Nil
      Nil Nil Nil
      Nil Nil Nil
      Nil Nil Nil


|(1) | "SARS"or "stock appreciation right"means
      a right granted by the Company, as compensation for services rendered, to
      receive a payment of cash or an issue or transfer of securities based
      wholly or in part on changes in the trading price of publicly traded
      securities of the Company.                                                                                                                                                                                                        
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(2) | "LTIP"or "long term incentive plan"means
      any plan which provides compensation intended to serve as incentive for
      performance to occur over a period longer than one financial year, but
      does not include option or stock appreciation right plans or plans for
      compensation through restricted shares or restricted share
units.                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(3) | John Robertson received $12,000 in Directors
  Fees.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(4) | Management fees paid to SMR Investments Ltd., a company
      for which John Robertson acts as a director.                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|(5) | Number of stock options granted to the above during the
      2004 fiscal year were nil. During fiscal 2003, Mr. Robertson held 990,000
      options exercisable at $0.10. Jennifer Lorette, a Vice President, held
      100,000 options exercisable @ $0.15 per share, Jennifer Lorette has not
      exercised any options to record date. Yale Hirsch, a Vice President, was
      granted 200,000 options exercisable at $0.15 during fiscal 2002. Yale
      Hirsch exercised all his options during fiscal
2004.

- 57 -

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|(6) | Jennifer Lorette, a Vice President, received consulting
      fees or wages either directly or through her proprietorship, Lorette
      Enterprises.
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                      
|(7) | Monique van Oord, a Director, received $20,874 in
      consulting fees.                                                                             

During fiscal 2004, John Robertson, President and Director
received $12,000 directors fees; Jennifer Lorette, Vice President and Director,
received $24,375 administration consulting fees/wages; and Monique van Oord,
Director, received $20,874 secretarial and consulting fees/wages.

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

Option/SAR Grants

Name
      Number of 
        Options Granted
      % of Total 
        Options
      Granted as of May 31, 2004
      Exercise or Base 
        Price
      ($/Security) (1)
      Date of 
        Grant
      Mkt. Value of 
        Securities
      Underlying Options on Date of Grant ($)
      Expiry 
        DateJohn Robertson, President,
      Director and CEO
    Nil(1)(3)
    nil% (1)(2)
    N/A
    N/A
    $ N/A (1)
    (1)Directors who are not Named
      Executive Officers
    Nil
    nil%
    N/A
    N/A
    $ N/A


|(1) | There were no options granted to the Named Executive
      Officer of the Company during the year ended May 31, 2004.                   
|--- | ----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                         
|(2) | During the fiscal year ended May 31, 2004 500,000
      additional stock options were granted to two consultants and one
      employee.

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

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

During the fiscal year ended May 31, 2004, 500,000 stock
options were granted pursuant to stock option plans. 297,500 options were
exercised and 75,000 options were cancelled or expired (see Note 12 to our
Financial Statements).

Total options currently exercisable at May 31, 2004 are
2,565,000. All exercise prices are CDN dollars as listed in the following
tables. See Note 12 to the financial statements.

The following table gives certain information concerning stock
option exercises during the year ended May 31, 2004 by our Senior Management and
Directors. It also gives information concerning stock option values.

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Aggregated Stock Options Exercises in Fiscal 2004
Fiscal Year End Unexercised Stock Options Fiscal
Year End Stock Option Values Senior
Management/Directors

Name
    Number of Shares
      Acquiredon Exercise
    **Aggregate Value**
      Realized (Cdn $)
    Number of Unexercised
      Options at Fiscal Year-End Exercisable/Unexercisable
    Value of Unexercised In-
      the-Money Options at Fiscal Year-End
      Exercisable/ Unexercisable (1)John G. Robertson, President,
      Chief Financial Officers, Secretary and Director
    10,000
    $1,700
    990,000 / Nil
    $217,800 / N/AJennifer Lorette, Vice
      President
    N/A
    N/A
    100,000 / Nil
    $22,000 / N/ASusanne Robertson,
      Director
    N/A
    N/A
    500,000 / Nil
    $110,000 / N/AMonique van Oord Director
    25,000
    $12,500
    50,000 / Nil
    (1) / N/AYale Hirsch
    200,000
    $96,000
    Nil / Nil
    $0 / N/A


|(1) | Other than the options held by Monique van Oord, the
      Senior Management/Directors were in the money as of May 31, 2004. The
      closing price of the Companys shares on the TSX Venture Exchange was
      $0.37 Cdn. Ms. van Oords options are priced at
$0.63.
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

NAME OF OPTIONEE
    NUMBER OF OPTIONS
    EXERCISE PRICE (CDN $)
    EXPIRY DATEJohn G. Robertson
    990,000
    $0.15
    April 22, 2007Jennifer Lorette
    100,000
    $0.15
    April 22, 2007Susanne Robertson
    500,000
    $0.15
    April 22, 2007Monique van Oord
    50,000
    $0.63
    March 5, 2009TOTAL HELD AS A GROUP:
    1,640,000


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

Name of Optionee
      No. of Optioned Shares
      Exercise Price Per Share
      Expiry DateArnie Winrob
    50,000
    $0.40
    December 16, 2002National Media Association
    350,000
    $0.40
    February 19, 2003James Kerr
    75,000
    $0.40
    March 4, 2008Peter Zihlman
    150,000
    $0.40
    October 20, 2008George Duggan
    300,000
    $0.45
    November 13, 2008TOTAL HELD AS A GROUP:
    925,000


- 59 -

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INDEBTEDNESS OF DIRECTORS AND OFFICERS

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

C.        BOARD PRACTICES

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

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

D.        EMPLOYEES

We employed no employees during any of the years ended May 31,
2004, May 31, 2003 and May 31, 2002. Our legal, accounting, marketing and
administrative functions are, and have been during the last three fiscal years,
contracted out to consultants.

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

E.        SHARE OWNERSHIP

The following table sets forth the ownership of our common
shares by our Directors and Officers as at May 31, 2004:

Shareholder
    Number of shares issued and outstanding
    Percentage ownership (1)John G. Robertson
    3,136,014 (2)
    9.45 %Jennifer Lorette
    212,800 (3)
    * %Susanne Robertson
    6,375,483 (4)
    19.21 %Monique van Oord
    25,000
      (5)
    *%Yale Hirsch
    0
    *%


| | (1) | as at May 31, 2004, there were 33,180,688 issued and
      outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Includes 1,750,564 common shares are held directly and
      the balance of 395,450 common shares are held by Access Information
      Services Inc., a private company wholly-owned by The Robertson Family
      Trust., and 990,000 options registered in the name of Mr. Robertson that
      are currently exercisable. [Mr. Robertson is one of three trustees of the
      Robertson Family Trust, which acts by the majority vote of the three
      trustees. Mr. Robertson disclaims beneficial ownership of the shares owned
      or controlled by the Robertson Family Trust], Mr. Robertson's address is
      the same as our address].
| | (3) | Includes 100,000 options that are currently exercisable.
      Ms. Lorette's address is the same as our address.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

- 60 -

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| | (4) | Includes 766,600 common shares held directly and
      5,108,883 common shares held by SMR Investments Ltd., a private company
      wholly-owned by Susanne M. Robertson and 500,000 options that are
      currently exercisable, . Ms. Robertson's address is the same as the
      Companys.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (5) | Includes 25,000 options that are currently exercisable.
      Ms. van Oord's address is the same as our address.                                                                                                                                                                                 

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

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

ITEM 7.        MAJOR
SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.        MAJOR
SHAREHOLDERS.

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

At May 31, 2004, we are aware of the following shareholders who
owns 5% or greater of the voting shares of the Company:

Name of Shareholder
    No. of Common Shares Owned
    Percentage of Outstanding
      Common SharesSusanne M. Robertson
    6,375,483 (1)
    19.21 %John G. Robertson
    3,136,014 (2)
    9.45 %


| | (1) | Of the 6,375,483 common shares owned by Susanne
      Robertson, 766,600 common shares held directly and 5,108,883 common shares
      held by SMR Investments Ltd., a private company wholly-owned by Susanne M.
      Robertson and 500,000 options that are currently exercisable.                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | Of the 3,136,014 common shares owned by John G. Robertson
      Includes 1,750,564 common shares are held directly and the balance of
      395,450 common shares are held by Access Information Services Inc., a
      private company wholly- owned by The Robertson Family Trust., and 990,000
      options registered in the name of Mr. Robertson that are currently
      exercisable. [Mr. Robertson is one of three trustees of the Robertson
      Family Trust, which acts by the majority vote of the three trustees. Mr.
      Robertson disclaims beneficial ownership of the shares owned or controlled
      by the Robertson Family Trust].

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

Control of the Company

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

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

B.        RELATED PARTY
TRANSACTIONS.

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

- 61 -

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During fiscal 2004, John Robertson, President and Director received
  $12,000 directors fees; Jennifer Lorette, Vice President and Director, received
  $24,375 administration consulting fees/wages; and Monique van Oord, Director,
  received $20,874 secretarial and consulting fees/wages.

We had related party advances outstanding of $ 208,221 at the
May 31, 2004 year-end, compared to $ 655,996 at the end of our previous fiscal
year. These were unsecured, non-interest bearing and with no fixed terms of
repayment. These transactions with related parties during the year ended May 31,
2004 are as follows (Note references are to our audited financial statements for
the years ended May 31, 2004 and 2003):

- Reg Technologies Inc. is a public company which shares office facilities
  and staff, several directors and participates in Joint Ventures with the
  Company. See Note 7A in respect to the property that is operated as a Joint
  Venture with Reg. See Note 3 advances to Reg.
- SMR Investments Ltd. is a private company which is controlled by an officer
  of the Company who has significant influence on the affairs of the companies.
  Under a management contract with SMR Investments Ltd. the Company agreed to
  pay up to $ 2,500 per month for management services. The Company was deemed to
  have paid SMR management fees totalling $ 17,500 during the current year (2003
  - $ 30,000). See Note 7A regarding mineral property transactions with SMR and
  Note 10 re advances from SMR.
- The Company holds 15,880 shares of Linux Gold Corp., US a public company
  controlled by an officer of the Company, as described in Note 4. See Note 3 re
  Linux advances. See Note 7B regarding mineral property transactions with
  Linux.
- Directors fees of $ 12,000 were paid to J. Robertson, President of the
  Company, during the 2004 fiscal year; Administration consulting fees of $
  24,375 (2003 - $ 33,000) were paid to Lorette Enterprises and/or J. Lorette,
  Vice-President of the company. Secretarial fees of $ 20,874 (2003 - $ 15,013)
  were paid to M. van Oord, a director of the company.
- Administration fees of $ 1,646 were paid to KLR Petroleum Ltd. which is
  controlled by an officer of the Company who has significant influence on their
  affairs.Refer to Note 13 of our audited consolidated financial statements for
  the fiscal years ended May 31, 2004 and May 31, 2003.

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

C.        INTERESTS OF
EXPERTS AND COUNSEL.

Not applicable.

ITEM 8.        FINANCIAL
INFORMATION

A.        CONSOLIDATED
STATEMENTS AND OTHER FINANCIAL INFORMATION

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

- 62 -

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See our audited consolidated financial statements for the
fiscal years ended May 31, 2004, May 31, 2003 and May 31, 2002.

Legal Proceedings.

We are not a party to any material legal proceedings.

Dividend Distribution Policy.

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

B.        SIGNIFICANT
CHANGES

None.

ITEM 9.        THE OFFER AND
LISTING

A.        OFFER AND LISTING
DETAILS

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

We believe that our common stock falls under the classification
of a penny stock, as that term is defined by Rule 3a51-1 of the Securities
Exchange Act of 1934. Transaction costs associated with purchases and sales of
penny stocks are likely to be higher than those for other securities. Penny
stocks generally are equity securities with a price of less than US $5.00 (other
than securities registered on certain national securities exchanges or quoted on
the NASDAQ system, provided that current price and volume information with
respect to transactions in such securities is provided by the exchange or
system).

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

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

- 63 -

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Year
    High ($CDN)
    Low ($CDN)
    Close ($ CDN)2004
      0.85  0.24
      0.372003
      0.53  0.08
      0.352002
      0.27  0.05
      0.222001
      0.47  0.08
      0.102000
      0.52  0.10
      0.25


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

Period
    High
    Low
    Close
    Volume2004 Q4 5/31/04
    0.71
    0.30
    0.37
    2,072,359Q3 2/28/04
    0.85
    0.50
    0.62
    3,836,012Q2 11/30/03
    0.75
    0.36
    0.71
    4,881,272Q1 8/31/03
    0.42
    0.24
    0.37
    2,090,7192003 Q4 5/31/03
    0.47
    0.28
    0.35
    1,704,368Q3 2/28/03
    0.53
    0.10
    0.45
    5,938,902Q2 11/30/02
    0.16
    0.09
    0.10
    968,442Q1 8/31/02
    0.23
    0.08
    0.10
    575,881


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

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

Common Share Description

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

Holders of common shares are entitled to one vote for each
share held of record on all matters to be acted upon by the shareholders.
Holders of common shares are entitled to receive such dividends as may be
declared from time to time by the Board of Directors, in its discretion, out of
funds legally available therefore.

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

- 64 -

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No shares have been issued subject to call or assessment. There
  are no pre-emptive or conversion rights and no provisions for redemption or
  purchase for cancellation, surrender, or sinking or purchase funds.

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

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

Convertible Securities / Warrants

The following table lists, as of May 31, 2004, the share
purchase warrants outstanding.

Effective Date
      Number of
      Number of
      Year 1
      Year 2
      Expiration Date of Shareof Issuance
      Share Purchase
      Share Purchase
      
      
      Purchase WarrantsWarrants
      Warrants StillOriginally
      OutstandingIssuedDecember 11, 2002 (1)
      1,500,000
      1,000,000
      $0.12
      $0.15
      December 11, 2004August 26, 2003 (2)
      1,000,000
      806,500
      0.30
      0.40
      August 26, 2005November 24, 2003 (3)
      1,500,000
      1,500,000
      0.50
      N/a
      November 24, 2004April 26, 2004 (4)
      2,000,000
      2,000,000
      0.60
      N/a
      October 26, 2005


| | (1) | On December 11, 2002, the Company issued 1,500,000 units
        of capital stock at a price of $ 0.10 per unit, pursuant to a Private
        Purchase agreement, to net the treasury $ 150,000. Each unit consists
        of one common share and one share purchase warrant exercisable within
        the first year for $ 0.12 and $ 0.15 within the second year per common
        share.                                         
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (2) | On August 26, 2003, the Company issued 2,000,000 units
        of capital stock pursuant to a Private Placement with 27 placees at a
        price of $ 0.25 per unit ($ 500,000 less issue costs of $ 4,113) to net
        the treasury $ 495,887. Each unit consists of one common share and one-half
        share purchase warrant exercisable in the first year for $ 0.30 and $
        0.40 in the second year, per common share.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (3) | On November 24, 2003, the Company issued 3,000,000 units
        of capital stock pursuant to a Private Placement with 50 placees at a
        price of $ 0.35 per unit ($ 1,050,000 less issue costs of $ 23,625) to
        net the treasury $ 1,026,375. Each unit consists of one common share and
        one-half share purchase warrant exercisable within one year for $ 0.50
        per common share.                          
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | (4) | On April 26, 2004, the Company issued a Private Placement
        with 27 placees for 2,000,000 units at $ 0.50 per unit to net the treasury
        $ 982,750 ($ 1,000,000 less issue costs of $ 17,250). Each unit consists
        of one common share and one share purchase warrant for one additional
        common share exercisable within eighteen months for a price of $ 0.60
        per share.                             

B.        PLAN OF
DISTRIBUTION

Not applicable.

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C.        MARKETS

Our shares trade solely on the TSX Venture Exchange (the
"TSXV") under the symbol TRC. There are currently no restrictions on the
transferability of these shares under Canadian securities laws.

D.        SELLING
SHAREHOLDERS

Not applicable.

E.        DILUTION

Not applicable.

F.        EXPENSES OF THE
ISSUE

Not applicable.

ITEM 10.        ADDITIONAL
INFORMATION

A.        SHARE CAPITAL

Not applicable.

B.        MEMORANDUM AND
ARTICLES OF ASSOCIATION

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

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

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

A director who, in any way, directly or indirectly, is interested
  in a proposed contract or transaction with us must disclose in writing the nature
  and extent of the director's interest at a meeting of directors and abstain
  from voting on approval of the matter. Our Articles permit an interested director
  to be counted in the quorum and the Business Corporations Act(British
  Columbia) provides that a director of a company is not deemed to be interested
  in a proposed contract or transaction merely because the proposed contract or
  transaction relates, among other things, to an indemnity, liability insurance
  or the remuneration of a director in that capacity. Hence, directors can vote
  compensation to themselves or any of their members. The board of directors has
  an unlimited power to borrow, issue debt obligations and to charge our assets,
  provided only that such power is exercised bona fide and in our best interests.
  There is no mandatory retirement age for directors. A director is not required
  to have any share qualification.

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

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

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

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

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

Our memorandum and articles contain no limitations on the
rights of non-resident or foreign shareholders to hold or exercise rights on our
shares. There is no limitation at law upon the right of a non-resident to hold
shares in a Canadian company.

There are no provisions in our memorandum and articles that
would have an effect of delaying, deferring or preventing a change in control
and that would operate only with respect to a merger, acquisition or corporate
restructuring involving us or any of our subsidiaries.

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

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C.        MATERIAL CONTRACTS

During the years ended May 31, 2004 and May 31, 2003, we
entered into the following material contracts.

- On March 5, 2002 (amended November 2002), the Company and LinuxWizardry
  Systems, Inc. entered into an agreement whereby Teryl 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 subject to regulatory approval. Linux will have a 5% net royalty
  interest until Teryl pays $ 200,000 US.
- Pursuant to a purchase agreement dated August 18, 2003, the Company paid
  Michael D. Roberts $ 6,559 ($ 5,000 US), with an additional $ 142,500 US owing
  in the next three years, for a 100% interest (subject to a 5% net profit
  interest) for 70.785 acres located in the Fairbanks Mining district of Alaska,
  USA, known as Anderson Group 2nd Tier R.L. of Dome Creek.
- In July 2003 we announced we had successfully negotiated a lease of 440
  acres in the Fairbanks Mining District, Alaska from the State of Alaska,
  Mental Health Trust Land Office (TLO). The trust land is adjacent to the
  western portion of the Companys 100% owned West Ridge claims and 40 acres is
  strategically located within the West Ridge claims, which is on the edge of a
  geochemical gold anomaly. The gold anomaly may possibly be on trend with the
  4000-foot western gold anomaly, which is geochemically similar to the gold
  mineralization at the True North deposit, according to AMAX Golds report
  completed in 1999. The True North gold deposit was purchased by Kinross Gold
  for CAD$94 million in shares and cash from La Teko Resources and Newmont
  Mining Corporation. An exploration work program will be submitted for approval
  immediately to the Trust Land Office to locate drill targets on the newly
  acquired lease.In consideration for the State of Alaska lease, a
  production royalty on the lease land is granted to the State of Alaska, Trust
  Land Office (TLO) as follows:Price of Gold (per ounce) Production
  Royalty Below $300.00 2.5% $300.01 - $350.00 3.0% $350.01 -
  $400.00 3.5% $400.01 - $450.00 4.0% $450.01 - $500.00 4.5% Above
  $500.00 5.0%Additionally, Teryl will grant a 1% Net Smelter Return
  (NSR) on its 100% owned West Ridge property with first refusal to purchase the
  1% NSR in the event that TLO decides to sell.

Morgan and Company replaced June Fitzmartyn, Chartered
Accountant, as auditor of the Company who resigned as auditor on her own
initiative due to changes in Canadian Public Accountability Board. The Board of
Directors and Audit Committee of the Company have approved Morgan and Company as
the new auditor.

D.        EXCHANGE CONTROLS.

There are no governmental laws, decrees or regulations in
Canada relating to restrictions on the export of capital affecting the
remittance of interest, dividends or other payments to nonresident holders of
the Registrant's shares. Any such remittances, however, are subject to
withholding tax. See Item 10.E, "Taxation".

- 68 -

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There are no limitations under the laws of Canada, the Province
of British Columbia or in the charter or any other constituent documents of the
Company on the right of foreigners to hold or vote the shares of the Company.
However, under the provisions of the Investment Canada Act, when control of a
Canadian business is acquired by a non- Canadian, the transaction may be
reviewable in certain circumstances by Investment Canada, an agency of the
federal government of Canada. Reviewable transactions are those in which a
non-Canadian acquires the assets of a Canadian business or the voting shares of
a Canadian corporation the value of which assets or shares exceeds $5 million
(Canadian). Also, certain transactions are specifically exempted from review.

E.        TAXATION.

Certain Canadian Federal Income Tax Consequences

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

The provisions of the Canadian Tax Act are subject to income
tax treaties to which Canada is a party, including the Canada-United States
Income Tax Convention(1980), as amended (the Convention).

Dividends on Common Shares and Other
Income

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

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

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

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Dispositions of Common Shares

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

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

The Convention relieves U.S. residents from liability for
Canadian tax on capital gains derived on a disposition of shares unless:

(a) the value of the shares is derived principally from
real property in Canada, including the right to explore for or exploit
natural resources and rights to amounts computed by reference to production;

(b) the shareholder was resident in Canada for 120 months
during any period of 20 consecutive years preceding, and at any time during the
10 years immediately preceding, the disposition and the shares were owned by him
when he or she ceased to be resident in Canada; or

(c) the shares formed part of the business property of a
permanent establishment that the holder has or had in Canada within the
12 months preceding the disposition.

F.        DIVIDENDS AND
PAYING AGENTS

Not applicable.

G.        STATEMENT BY
EXPERTS.

Our financial statements included in this annual report for the
years ended May 31, 2004 and 2003 were audited by Morgan and Company, Chartered
Accountants as stated in their report appearing herein (which reports express an
unqualified opinion), and are included in reliance upon the reports of such firm
given upon their authority as experts in accounting and auditing.

H.        DOCUMENTS ON
DISPLAY.

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

We filed a registration statement on Form 20-F filed the Securities
  and Exchange Commission in Washington, D.C. (Registration No. 000-30624) on
  December 29, 2000, which became effective February 27, 2001 The Registration
  Statement contains exhibits and schedules. Any statement in this annual report
  about any of our contracts or other documents is not necessarily complete.

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If the contract or document is filed as an exhibit to the Registration
  Statement, the contract or document is deemed to modify the description contained
  in this annual report. You must review the exhibits themselves for a complete
  description of the contract or documents.

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

I.        SUBSIDIARY
INFORMATION.

We own interests in the following companies:

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

ITEM 11.        QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

- 71 -

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

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

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

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

ITEM 12.        DESCRIPTION
OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

PART II

ITEM 13.        DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES

None.

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

A.        MATERIAL MODIFICATIONS
  TO THE RIGHTS OF SECURITY HOLDERS

None.

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B.        USE OF PROCEEDS.

Not applicable.

ITEM 15.        CONTROLS AND
PROCEDURES

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

Changes in Internal Controls over Financial Reporting.

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

ITEM 16.       
[Reserved]

ITEM 16A.     Audit Committee Financial
Expert

We do not currently have a financial expert in our audit
committee due to our relatively small size. In 2004, we had no employees and we
relied upon the services of a chartered accounting firm in Vancouver, BC,
Canada, to prepare our interim unaudited quarterly consolidated financial
statements. Also, we retained the audit services of Morgan and Company,
Chartered Accountants to perform the audit on our year-end consolidated
financial statements.

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

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

ITEM 16B.     Code of Ethics

We have not adopted a formal written code of ethics given our
relatively small size, whereby we had no employees in 2004.

- 73 -

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

ITEM 16C.     Principal Accountant
Fees and Services

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

(Stated in terms of Canadian dollars)

2004
    2003Type of Services Rendered
    Fiscal Year
    Fiscal Year


(a) Audit Fees
    $2,200
    $2,475(b) Audit-Related Fees
    $13,625
    $5,000(c) Tax Fees
    $3,200
    $nil(d) All Other Fees
    $1,175
    $1,170


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

Not applicable.

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

Not applicable.

PART III

ITEM 17.        FINANCIAL
STATEMENTS

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

|Independent Auditors
      Report dated October 1, 2004                                                                               
|---------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                       
|Consolidated Balance Sheets
      at May 31, 2004 and 2003                                                                             
|                                                                                                                                       
|Consolidated Statements
      of Operations and Deficit for the years ended May 31, 2004, 2003 and 2002                                
|                                                                                                                                       
|Consolidated Statement of Administrative
      Expenditures for the years ended May 31, 2004, 2003 and 2002                            
|                                                                                                                                       
|Consolidated Statement
      of Deferred Exploration and Development Expenditures for the years ended
      May 31, 2004, 2003 and 2002
|                                                                                                                                       
|Consolidated Statements
      of Cash Flows for the years ended May 31, 2004, 2003 and 2002                                            
|                                                                                                                                       
|Notes to the Consolidated
      Financial Statements for the years ended May 31, 2004, 2003 and 2002                                   

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TERYL RESOURCES CORP.

CONSOLIDATED FINANCIAL STATEMENTS

AS AT MAY 31, 2004





---



**AUDITORS' REPORT**



To the Shareholders of
  Teryl Resources Corp.

We have audited the consolidated balance sheet of Teryl Resources
  Corp. as at May 31, 2004, the consolidated statements of operations, deficit,
  and cash flows for the year then ended. These financial statements are the responsibility
  of the Company's management. Our responsibility is to express an opinion on
  these financial statements based on our audit.

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

In our opinion, these financial statements present fairly,
  in all material respects, the financial position of the Company as at May 31,
  2004, and the results of its operations and cash flows for the year then ended
  in accordance with Canadian generally accepted accounting principles. The financial
  statements as at May 31, 2003 and for the year then ended, were audited by other
  auditors who expressed an opinion without reservation in their report dated
  October 16, 2003.

|Vancouver, B.C. | Morgan & Company   
|--------------- | ---------------------
|                |                      
|October 1, 2004 | Chartered Accountants



---

TERYL RESOURCES CORP.

CONSOLIDATED BALANCE SHEET

AS AT MAY 31, 2004

|                                                |  | 2004       |   |  | 2003       |  
|----------------------------------------------- |  | ---------- | - |  | ---------- | -
|                                                |  | $          |   |  | $          |  
|**ASSETS**                                      |  |            |   |  |            |  
|Current Assets:                                 |  |            |   |  |            |  
|Cash                                            |  | 370,558    |   |  | -          |  
|Amounts receivable                              |  | 7,498      |   |  | 70,738     |  
|Prepaid
      expense                           |  | 33,157     |   |  | 3,059      |  
|Advances to related
      companies (Note 3)    |  | 16,559     |   |  | 10,112     |  
|                                                |  | 427,772    |   |  | 83,909     |  
|Investments(Note 4)                             |  | 4,026      |   |  | 4,026      |  
|Office Equipment(Note 5)                        |  | 13,470     |   |  | 3,939      |  
|Oil and Gas Well Interests (Note 6)             |  | -          |   |  | -          |  
|Mineral Property Interests (Note 7)             |  | 196,795    |   |  | 176,150    |  
|Deferred Expenditures:                          |  |            |   |  |            |  
|Exploration
      and development (Note 7)      |  | 2,502,058  |   |  | 1,849,567  |  
|                                                |  | 3,144,121  |   |  | 2,117,591  |  
|LIABILITIES                                     |  |            |   |  |            |  
|Current Liabilities:                            |  |            |   |  |            |  
|Bank
      overdraft                            |  | -          |   |  | 50,381     |  
|Accounts payable and
      accrued liabilities  |  | 48,772     |   |  | 622,410    |  
|Income
      taxes payable                      |  | 747        |   |  | 750        |  
|Debenture payable
      (Note 9)                |  | 150,000    |   |  | 150,000    |  
|Advances
      from related companies (Note 10) |  | 208,221    |   |  | 655,996    |  
|                                                |  | 407,740    |   |  | 1,479,537  |  
|Contingencies and Commitments(Note
      11)    |  |            |   |  |            |  
|SHAREHOLDERS' EQUITY                            |  |            |   |  |            |  
|Share Capital: (Note 12)                        |  |            |   |  |            |  
|Issued                                          |  | 9,018,122  |   |  | 6,297,375  |  
|Subscriptions Received(Note 15)                 |  | 69,972     |   |  | 69,972     |  
|Contributed Surplus                             |  | 169,356    |   |  | -          |  
|Deficit                                         |  | (6,521,069 | ) |  | (5,729,293 | )
|                                                |  | 2,736,381  |   |  | 638,054    |  
|                                                |  | 3,144,121  |   |  | 2,117,591  |  

Approved by the Directors:

J. ROBERTSON  
  J. Robertson

J. LORETTE  
  J. Lorette

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED MAY 31, 2004

|                                                                 |  | 2004       |   |  | 2003       |   |  | 2002       |  
|---------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                                                 |  | $          |   |  | $          |   |  | $          |  
|Mineral Claim Operations:                                        |  |            |   |  |            |   |  |            |  
|Revenue                                                          |  | -          |   |  | -          |   |  | -          |  
|Expenses:                                                        |  |            |   |  |            |   |  |            |  
|Exploration
      and development written off re inactive claims |  | 2,152      |   |  | 2,152      |   |  | 2,268      |  
|Proceeds from option agreements                                  |  | -          |   |  | -          |   |  | 1          |  
|                                                                 |  |            |   |  |            |   |  |            |  
|Net
      Income (Loss) from Mineral Claim Operations            |  | (2,152     | ) |  | (2,152     | ) |  | (2,269     | )
|Oil and Gas Operations:                                          |  |            |   |  |            |   |  |            |  
|Revenue                                                          |  | 21,037     |   |  | 24,255     |   |  | 19,510     |  
|Expenses:                                                        |  |            |   |  |            |   |  |            |  
|Amortization on wells                                            |  | -          |   |  | -          |   |  | 10,337     |  
|Operating
      expenses                                         |  | 7,118      |   |  | 8,823      |   |  | 3,027      |  
|Net
      Income (Loss) from Oil and Gas Operations              |  | 13,919     |   |  | 15,432     |   |  | 6,146      |  
|Net Operating Income
      (Loss)                                |  | 11,767     |   |  | 13,280     |   |  | 3,877      |  
|Other Income:                                                    |  |            |   |  |            |   |  |            |  
|Recovery of bad debt                                             |  | -          |   |  | -          |   |  | 26,268     |  
|Net
      Income (Loss) before other Expenses                    |  | 11,767     |   |  | 13,280     |   |  | 30,145     |  
|Other Expenses:                                                  |  |            |   |  |            |   |  |            |  
|Administration
      expenditures (Schedule A)                   |  | 777,275    |   |  | 337,092    |   |  | 112,505    |  
|                                                                 |  |            |   |  |            |   |  |            |  
|Accounts
      receivable written off                            |  | 26,268     |   |  | -          |   |  | -          |  
|                                                                 |  |            |   |  |            |   |  |            |  
|Net
      Income (Loss) for the Year                             |  | (791,776   | ) |  | (323,812   | ) |  | (82,360    | )
|                                                                 |  |            |   |  |            |   |  |            |  
|EARNINGS
      (LOSS) PER SHARE- Basic and diluted               |  | (0.03      | ) |  | (0.01      | ) |  | (0.00      | )
|Weighted Average
      number of Common shares outstanding:      |  |            |   |  |            |   |  |            |  
|Basic and diluted                                                |  | 28,925,934 |   |  | 23,937,235 |   |  | 23,033,238 |  

CONSOLIDATED STATEMENT OF DEFICIT

|Deficit at Beginning of Year        |  | (5,729,293 | ) |  | (5,405,481 | ) |  | (5,323,121 | )
|----------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
|                                    |  |            |   |  |            |   |  |            |  
|Add: Net Income (Loss) for the Year |  | (791,776   | ) |  | (323,812   | ) |  | (82,360    | )
|                                    |  |            |   |  |            |   |  |            |  
|Deficit at End of Year              |  | (6,521,069 | ) |  | (5,729,293 | ) |  | (5,405,481 | )

---

Schedule A

TERYL RESOURCES CORP.

CONSOLIDATED SCHEDULE OF ADMINISTRATION EXPENDITURES

FOR THE YEAR ENDED MAY 31, 2004

|                                               |  | 2004    |  |  | 2003    |   |  | 2002    |  
|---------------------------------------------- |  | ------- |  |  | ------- | - |  | ------- | -
|                                               |  | $       |  |  | $       |   |  | $       |  
|                                               |  |         |  |  |         |   |  |         |  
|Publicity, promotion and investor relations    |  | 327,301 |  |  | 177,606 |   |  | 4,413   |  
|Stock based compensation                       |  | 169,356 |  |  | -       |   |  | -       |  
|Travel, auto and entertainment                 |  | 64,466  |  |  | 6,535   |   |  | -       |  
|Management and director's fees (Note 13)       |  | 55,522  |  |  | 63,000  |   |  | 30,000  |  
|Filing fees                                    |  | 28,843  |  |  | 17,030  |   |  | 6,218   |  
|Secretarial and employee benefits              |  | 25,141  |  |  | 15,013  |   |  | -       |  
|Office, stationery, delivery and moving        |  | 21,974  |  |  | 18,140  |   |  | 6,465   |  
|Audit, accounting and consulting (Note 13)     |  | 21,700  |  |  | 34,953  |   |  | 14,582  |  
|Interest on debenture (Note 9)                 |  | 14,737  |  |  | 14,697  |   |  | 14,697  |  
|Telephone and telecopier                       |  | 13,193  |  |  | 26,119  |   |  | 3,335   |  
|Transfer agent fees                            |  | 10,405  |  |  | 15,191  |   |  | 3,273   |  
|Legal                                          |  | 7,735   |  |  | 14,229  |   |  | 1,388   |  
|Office rent and utilities                      |  | 5,200   |  |  | 5,951   |   |  | 13,785  |  
|Corporation capital taxes re subsidiary        |  | 4,528   |  |  | 4,751   |   |  | 4,977   |  
|Shareholders and meeting costs                 |  | 4,324   |  |  | 2,284   |   |  | -       |  
|Bank charges and interest                      |  | 3,123   |  |  | 1,847   |   |  | 970     |  
|Foreign exchange loss (gain)                   |  | 153     |  |  | (83,152 | ) |  | (9,169  | )
|Write off of incorporation costs               |  | -       |  |  | 1,379   |   |  | -       |  
|Financing costs                                |  | -       |  |  | -       |   |  | 16,500  |  
|Amortization                                   |  | 2,199   |  |  | 984     |   |  | 1,231   |  
|                                               |  | 779,900 |  |  | 337,144 |   |  | 112,665 |  
|Less:
      Interest income                    |  | 2,625   |  |  | 52      |   |  | 160     |  
|                                               |  |         |  |  |         |   |  |         |  
|Administration
      Expenditures for the Year |  | 777,275 |  |  | 337,092 |   |  | 112,505 |  

---

TERYL RESOURCES CORP.

CONSOLIDATED SCHEDULE OF DEFERRED EXPLORATION

AND DEVELOPMENT EXPENDITURES

FOR THE YEAR ENDED MAY 31, 2004

|                                                       |  | 2004      |  |  | 2003      |  |  | 2002      | 
|------------------------------------------------------ |  | --------- |  |  | --------- |  |  | --------- | 
|                                                       |  | $         |  |  | $         |  |  | $         | 
|Silverknife Claims: (Joint Venture)
      (Note 7A)    |  |           |  |  |           |  |  |           | 
|Work assessment                                        |  | -         |  |  | 2,152     |  |  | 2,268     | 
|Fish Creek Claims: (Joint Venture) (Note
      7B)     |  |           |  |  |           |  |  |           | 
|Geophysical survey                                     |  | 37,038    |  |  | 45,100    |  |  | -         | 
|Assays, maps,
      reports and insurance              |  | 2,320     |  |  | 2,495     |  |  | -         | 
|                                                       |  | 39,358    |  |  | 47,595    |  |  | -         | 
|West Ridge Claims: (Note 7D)                           |  |           |  |  |           |  |  |           | 
|Geophysical survey                                     |  | 295,560   |  |  | 11,277    |  |  | 500       | 
|Rent assessment                                        |  | 8,185     |  |  | 9,815     |  |  | -         | 
|Assays and maps                                        |  | 4,121     |  |  | 1,884     |  |  | 784       | 
|                                                       |  | 307,866   |  |  | 22,976    |  |  | 1,284     | 
|Gil Venture: (Joint Venture) (Note 7E)                 |  |           |  |  |           |  |  |           | 
|Maps and reports                                       |  | 1,374     |  |  | 5,072     |  |  | -         | 
|Phase II exploration 
      trenching and drilling    |  | 303,893   |  |  | 144,495   |  |  | 82,650    | 
|                                                       |  | 305,267   |  |  | 149,567   |  |  | 82,650    | 
|Exploration and Development
      for the Year         |  | 652,491   |  |  | 222,290   |  |  | 86,202    | 
|Exploration and Development at Beginning of
      Year |  | 1,849,567 |  |  | 1,629,429 |  |  | 1,545,495 | 
|                                                       |  | 2,502,058 |  |  | 1,851,719 |  |  | 1,631,697 | 
|Less: Exploration and development written off:         |  |           |  |  |           |  |  |           | 
|Re inactive claims                                     |  | -         |  |  | 2,152     |  |  | 2,268     | 
|                                                       |  |           |  |  |           |  |  |           | 
|Exploration and Development at End of Year             |  | 2,502,058 |  |  | 1,849,567 |  |  | 1,629,429 | 

---

TERYL RESOURCES CORP.

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED MAY 31, 2004

|                                                          |  | 2004       |   |  | 2003     |   |  | 2002    |  
|--------------------------------------------------------- |  | ---------- | - |  | -------- | - |  | ------- | -
|                                                          |  | $          |   |  | $        |   |  | $       |  
|                                                          |  |            |   |  |          |   |  |         |  
|Operating Activities:                                     |  |            |   |  |          |   |  |         |  
|Revenue receipts for
      the year                       |  | 22,764     |   |  | 22,915   |   |  | 8,291   |  
|Receipt
      of interest income                          |  | 2,625      |   |  | 49       |   |  | 164     |  
|Refunds of goods and
      services sale taxes            |  | 16,634     |   |  | 10,824   |   |  | 3,873   |  
|Decrease
      in estimated liability for taxes           |  | (3         | ) |  | (112     | ) |  | -       |  
|Payment of interest
      on debenture                    |  | (15,000    | ) |  | (15,000  | ) |  | (15,000 | )
|Payments
      to suppliers for goods and services        |  | (1,228,954 | ) |  | (361,193 | ) |  | (85,254 | )
|Cash Flows Provided (Used) by Operating Activities        |  | (1,201,934 | ) |  | (342,517 | ) |  | (87,926 | )
|                                                          |  |            |   |  |          |   |  |         |  
|Financing Activities:                                     |  |            |   |  |          |   |  |         |  
|Share
      Capital Issued for Cash (Note 12)             |  | 2,446,687  |   |  | 260,948  |   |  | -       |  
|Advances from (to)
      related companies (Notes 3 & 10) |  | (170,922   | ) |  | 260,318  |   |  | 83,741  |  
|Cash Flows Provided by Financing Activities               |  | 2,275,765  |   |  | 521,266  |   |  | 83,741  |  
|                                                          |  |            |   |  |          |   |  |         |  
|Investing Activities:                                     |  |            |   |  |          |   |  |         |  
|Purchase of mineral
      property interests              |  | (20,645    | ) |  | -        |   |  | -       |  
|Purchase
      of office equipment                        |  | (11,730    | ) |  | -        |   |  | -       |  
|Exploration and development
      payments                |  | (620,517   | ) |  | (222,290 | ) |  | (3,552  | )
|Cash Flows Provided (Used) by Investing Activities        |  | (652,892   | ) |  | (222,290 | ) |  | (3,552  | )
|                                                          |  |            |   |  |          |   |  |         |  
|Increase
      (Decrease) in Cash for the Year            |  | 420,939    |   |  | (43,541  | ) |  | (7,737  | )
|                                                          |  |            |   |  |          |   |  |         |  
|Cash (Deficiency) at Beginning of Year                    |  | (50,381    | ) |  | (6,840   | ) |  | 897     |  
|                                                          |  |            |   |  |          |   |  |         |  
|Cash
      (Deficiency) at End of Year                    |  | 370,558    |   |  | (50,381  | ) |  | (6,840  | )

Supplemental Disclosure of Non-Cash Financing Activities:During the year ended May 31, 2004, the Company issued 201,600 common shares
  in settlement of debt totalling $ 70,560 During the year ended May 31, 2004
  $203,500 owing to related parties was accepted for amounts owing for private
  placement subscriptions.

---

TERYL RESOURCES CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

AS AT MAY 31, 2004

|1. | SIGNIFICANT CANADIAN ACCOUNTING POLICIES:
|-- | -----------------------------------------
|   |                                          
|   | [a]                                      
|   |                                          
|   |                                          

| | [b] | Equipment:
| | --- | ----------

The Company records its equipment at
  cost and depreciates it on the declining-balance basis at 20% per annum, over
  the estimated useful life of the equipment.

| | [c] | Accounting for Oil and Gas Well Interests:
| | --- | ------------------------------------------

The Company capitalizes the drilling
  and equipment costs of its interest in specific wells, which are to be amortized
  or written off as follows:

| | ( i) | If wells are productive and
        connected to gathering systems - wells are depreciated on the straight-line
        basis over their estimated productive life of seven years, from date production
        begins.
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (ii)  | If wells are believed to be productive but not connected
        to gathering systems (shut-in) - wells are deemed to produce for two months
        a year and depreciated on that basis.
| | ----- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                           
| | (iii) | If wells are, or are believed to become, non-productive
        - costs are charged to expense.                                                                                           

| | [d] | Accounting for Mineral Property Interests:
| | --- | ------------------------------------------

The Company capitalizes its acquisition
  costs of mineral properties (including finders fees) and the related exploration
  and development expenditures by claim groups, or its share of costs on joint
  ventures, which are to be amortized as follows:

| | ( i) | If property sold outright - costs written off
      entirely against proceeds.
| | ---- | ------------------------------------------------------------------------------

| | (ii)  | If property sold under option-type agreement - on basis
        of cash or shares received over total undiscounted amount to be received
        under agreement, exclusive of royalties or net profit participation.
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                      
| | (iii) | If property brought into production - on basis of units
        of production over total estimated reserves recoverable.                                                                                             
| |       |                                                                                                                                                                                                                      
| | (iv)  | If property retained, but has no proven economic reserves
        and is not currently being explored or developed by the Company or joint
        venture partner - costs written down to a nominal value.          
| |       |                                                                                                                                                                                                                      
| | (v)   | If property abandoned - costs written off entirely.                                                                                                                                                                  

| | [e] | Accounting for Administration Expenditures:                                                                                                                                                                                                                                                                                          
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                      
| |     | The Company expenses its administration expenditures
        in the current year, except for items directly attributable to mineral
        properties.                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                      
| | [f] | Revenue and Property Costs:                                                                                                                                                                                                                                                                                                          
| |     |                                                                                                                                                                                                                                                                                                                                      
| |     | These statements reflect only Teryl's share of oil and
        gas revenue and expenses, although operations are conducted jointly with
        several parties. These statements reflect only Teryl's share of acquisition
        costs and expenditures on mineral property interests operated jointly
        with other parties.

. . . 2

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 2
|As At May 31, 2004                         |       

|1. | SIGNIFICANT ACCOUNTING POLICIES (Continued):
|-- | --------------------------------------------

| | [ g] | Foreign Exchange Translations:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | ---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | The Company converts its current
        assets and liabilities and future payments receivable at current exchange
        rates, its non-current assets and liabilities at rates in effect on transaction
        dates, and its income and expenses at average rates of exchange for the
        period. Gains or losses on the transactions are reflected as administration
        expense.                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | [ h] | Investments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| |      | The Company's marketable securities
        are carried at cost until sold or a deemed disposition has occurred as
        defined under the Income Tax Act. The cost of shares sold is determined
        by the average cost method when less than all the shares held in one company
        are sold.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | [ I] | Financial Instruments:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |      | The carrying value of financial
        instruments not otherwise disclosed separately in the financial statements,
        approximate their fair values. Those financial instruments include cash,
        accounts and advances receivable, bank overdraft, accounts payable and
        amounts due to related parties, and their fair values approximate their
        carrying values, since they are short term in nature and are receivable
        or payable on demand.                                                                                                                                                                                                                                                                                                                                                               
| | [ j] | Use of Estimates:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | The preparation of financial
        statements in conformity with generally accepted accounting principles
        requires the Company's management to make estimates and assumptions that
        affect the amounts reported in the consolidated financial statements and
        related notes to the consolidated financial statements. Actual results
        may differ from those estimates.                                                                                                                                                                                                                                                                                                                                                                                                                                           
| | [ k] | Income Taxes:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |      | The Company uses the liability
        method of accounting for future income taxes whereby future income taxes
        assets and liabilities are computed based on the differences between the
        carrying amount of assets and liabilities on the balance sheet, and their
        corresponding tax values using the currently enacted or substantially
        enacted, income tax rates expected to apply when these differences reverse.
        Future income tax assets also result from unused loss carry forwards and
        other deductions. The valuation of future income tax assets is reviewed
        annually and adjusted , if necessary, by the use of a valuation allowance
        which is recorded against any future income tax asset if it is more likely
        that not that the asset will not be realized.
| | [ l] | Earnings Per Share:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |      | Basic and diluted loss per share
        amounts are computed using the weighted average number of common shares
        outstanding during the year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |      | The Company calculates earning
        per share using a new standard, the treasury stock method. Under the treasury
        stock method, only instruments with exercise amounts less than the market
        prices impact the diluted calculations. In computing diluted loss per
        share, no shares were added to the weighted average number of common shares
        outstanding during the years ended May 31, 2004 and 2003 for the dilutive
        effect of employee stock options and warrants, as they were all anti-dilutive.
        No adjustments were required to reported loss from operations in computing
        diluted per share amounts.                                                                                                                                                                         
| | [ m] | Stock Based Compensation:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |      | On June 1, 2003, the Company
        adopted the amended CICA Handbook Section 3870 - Stock Based Compensation
        and Other Stock Based Payments. This change in accounting policy as been
        applied prospectively without restatement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

. . . 3

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 3
|As At May 31, 2004                         |       

|1. | SIGNIFICANT ACCOUNTING POLICIES (Continued):
|-- | --------------------------------------------

| | [ m] | Stock Based Compensation
        (Continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | ---- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | Under this amended standard,
        the Company must account for compensation expensed based on the fair value
        of the rights granted under its stock based compensation plan. Under this
        method, compensation costs attributable to the share options granted to
        employees or directors is measured at fair market value at the grant date,
        and expensed over the expected exercise time frame with a corresponding
        increase to contributed surplus. Upon exercise of the stock options, consideration
        paid by the option holder, together with the amount previously recognized
        in contributed surplus, is recorded as an increase to share capital.
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
| |      | Previously, the Company accounted
        for its stock based compensation using the intrinsic value method. No
        compensation costs were recorded in the financial statements for stock
        options granted as the options had no intrinsic value at the date of grant.
        Consideration paid by employees on the exercise of stock options and purchase
        of stock was credited to share capital.                                                                                                                                                                                                                                                                                      

|2. | BASIS OF 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 inter- ests
        and Texas oil and gas well interests. In April, 1998, Teryl, Inc. reorganized
        and increased its authorized share capital from 1,000 common shares to
        100,000,000 common shares, in preparation for taking the company public.
        Teryl Resources Corp. was issued 6,500,000 shares of Teryl, Inc. and owns
        100% of the issued shares at May 31, 2004. If Teryl, Inc. shares are issued
        to others, Teryl Resources Corp's percentage holdings will decrease.
        See Note 15 re Teryl, Inc. transactions.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|3. | ADVANCES TO RELATED COMPANIESconsist of the
        following:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

| |                                                   |  | 2004   |  |  | 2003   | 
| | ------------------------------------------------- |  | ------ |  |  | ------ | 
| | Linux Gold Corp. (See Note 4)                     |  | -      |  |  | 3,719  | 
| | Reg Technologies Inc.                             |  | 1,300  |  |  | 5,983  | 
| | REGI US, Inc.                                     |  | 14,440 |  |  | -      | 
| | Information Highway.com Inc.                      |  | 818    |  |  | 409    | 
| | International Diamond Syndicate Ltd. (See Note 4) |  | 1      |  |  | 1      | 
| |                                                   |  | 16,559 |  |  | 10,112 | 

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

|4. | INVESTMENTSconsist of:                                                                                                                                                                                                                                                                                              
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                     
|   | International Diamond Syndicate Ltd. (IDS) is a private
        company having no quoted market, in which Teryl Resources owns 40% of
        the issued shares. At May 31, 2000, the investment and advances to IDS
        were written down to $ 1 each as IDS property has no proven economic
        reserves.
|   |                                                                                                                                                                                                                                                                                                                     
|   | Linux Gold Corp. (formerly LinuxWizardry Systems, Inc.)
        is a public company listed on US Stock Exchanges having a market value
        of $ 4,545 Cdn. at May 31, 2004 (2003 - $ 543).                                                                                                                      

. . . 4

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 4
|As At May 31, 2004                         |       

|4. | INVESTMENTSconsist of: (Continued)
|-- | ----------------------------------

| |                                                |  | 2004    |   |  | 2003    |  
| | ---------------------------------------------- |  | ------- | - |  | ------- | -
| | International Diamond Syndicate Ltd.:          |  |         |   |  |         |  
| | 40 shares acquired June 24, 1993               |  | 30,500  |   |  | 30,500  |  
| | Linux Gold Corp.:                              |  |         |   |  |         |  
| | 120,000 shares acquired March
      4, 1986    |  | 30,500  |   |  | 30,500  |  
| | 24,780 shares acquired February
      28, 1993 |  | 6,195   |   |  | 6,195   |  
| | (128,900) shares sold in
      2000            |  | (32,670 | ) |  | (32,670 | )
| | 15,880                                         |  | 4,025   |   |  | 4,025   |  
| |                                                |  | 4,026   |   |  | 4,026   |  

|5. | OFFICE FURNITURE consists of:    |  |        |  |  |        | 
|-- | -------------------------------- |  | ------ |  |  | ------ | 
|   | Furniture and fixtures - at cost |  | 46,662 |  |  | 34,932 | 
|   | Less: Accumulated amortization   |  | 33,192 |  |  | 30,993 | 
|   |                                  |  | 13,470 |  |  | 3,939  | 

|6. | OIL AND GAS WELL INTERESTS:                                                                                                                                                                                                                                                                                                                                                  
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                              
|   | The Company owns 6.5% working interest (4.680% net revenue
        interest) in the Peters No. 1 Well, in Fayette County, Texas, and a 7.5%
        working interest (5.79375% net revenue interest) in each of the C-S #1,
        Jancik #2 and Herrmann #4 wells, located in Burleson County, Texas. The
        carried cost of these wells has been completely depleted.
|   |                                                                                                                                                                                                                                                                                                                                                                              
|7. | MINERAL PROPERTY INTERESTSconsist of the following:                                                                                                                                                                                                                                                                                                                          

Acquisition CostClaim Group
      Region
      Interest
      Ref.
      2004
      
      2003Silverknife
      Liard, BC
      26.7 %
      A
      1
      
      1Fish Creek
      Fairbanks, Alaska
      0-45 %
      B
      33,538
      
      19,452Anderson Group
      Fairbanks, Alaska
      95 %
      C
      6,559
      
      -West Ridge
      Dome Creek, Alaska
      100 %
      D
      116,189
      
      116,189Gil Venture
      Dome Creek, Alaska
      20 %
      E
      31,127
      
      31,127Stepovich Lease
      Dome Creek, Alaska
      10 %
      F
      9,381
      
      9,381196,795
      
      176,150


| | A. | SILVERKNIFE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Pursuant to agreements between Reg Technologies Inc.,
        SMR Investments Ltd., Rapitan Resources Inc., and Chevron Minerals Ltd.,
        the Company acquired a 30% working interest in the Silverknife mineral
        claims, situate in the Liard Mining Division in the Province of British
        Columbia, subject to a 10% Net Profit Royalty to Rapitan and a 1% Net
        Smelter Returns to SMR. The Company has written down their acquisition
        costs to $ 1 and has written off their exploration and development expenditures
        entirely, since the claims are not currently being explored and have no
        proven economic reserves.

. . . 5

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 5
|As At May 31, 2004                         |       

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

| | B. | FISH CREEK:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | On March 5, 2002, the Company and Linux Gold Corp. entered
        into an agreement whereby the Company may earn up to a 50% interest in
        the Fish Creek mineral claims located in the Fairbanks district of Alaska,
        USA by expending $ 500,000 US within three years and issuing 200,000 common
        shares (issued December 16, 2002 for a deemed value of $ 16,000. Linux
        will have a 5% net royalty interest until the Company pays $ 2,000,000
        US.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | C. | ANDERSON GROUP (2ND TIER):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Pursuant to a purchase agreement dated August 18, 2003,
        the Company paid Michael D. Roberts $ 6,559 ($ 5,000 US), with an additional
        $ 142,500 US owing in the next three years, for a 100% interest (subject
        to a 5% net profit interest) for 70.785 acres located in the Fairbanks
        Mining district of Alaska, USA, known as Anderson Group 2nd Tier R.L.
        of Dome Creek.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | D. | WEST RIDGE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Pursuant to various agreements the Company earned a
        100% interest in the West Ridge (48 claims) mineral properties (approximately
        5,200 acres) located in the Dome Creek area of the Fairbanks District
        of Alaska, USA. Teryl, Inc. has been conducting a geophysical survey over
        the past three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | E. | GIL VENTURE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | Pursuant to various agreements the Company acquired
        a 50% 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, valued at $ 150,000 US ($
        171,720 Cdn). Under the agreement Fort Knox Venture paid the Company a
        total of $ 143,500 US and contributed $ 600,000 US to fund approved programs
        and budgets 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, has been doing exploration and development
        work on this property and hopes to go into production in the next few
        years. This has resulted in the Company, Inc. being required to pay its
        20% share of expenses, which amounted to $ 305,267 ($ 227,916 US) in the
        May, 2004 year and $ 149,567 ($ 101,228 US) in the May, 2003 year. Further
        cash calls are expected for the 2005 year.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| | F. | STEPOVICH LEASE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
| |    | On May 29, 1992, the Company granted Fort Knox Venture
        all of their interest in the Stepovich lease, except for a 10% Net Profit
        Interest. Fort Knox Venture assumed all of the Company's liabilities and
        obligations under the Stepovich lease.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

SUMMARY OF MINING PROPERTIES:Balance
      
      Changes
      
      Balance
      
      Changes
      
      BalancePROPERTY COSTS:
      May
        31/02
      
      2003
      
      May
        31/03
      
      2004
      
      May
        31/04Silverknife
      1
      
      
      
      1
      
      
      
      1Fish Creek
      
      
      19,452
      
      19,452
      
      14,086
      
      33,538Anderson Group - 2nd Tier
      -
      
      
      
      -
      
      6,559
      
      6,559West Ridge
      116,189
      
      
      
      116,189
      
      
      
      116,189Gil Venture
      31,127
      
      
      
      31,127
      
      
      
      31,127Stepovich Lease
      9,381
      
      
      
      9,381
      
      
      
      9,381156,698
      
      19,452
      
      176,150
      
      20,645
      
      196,795


. . . 6

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 6
|As At May 31, 2004                         |       

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

Balance
      
      Changes
      
      Balance
      
      Changes
      
      BalanceMay
        31/02
      
      2003
      
      May
        31/03
      
      2004
      
      May
        31/04DEFERRED EXPLORATION AND DEVELOPMENT:West Ridge
      246,186
      
      22,976
      
      269,162
      
      307,866
      
      577,028Gil Venture
      1,382,242
      
      149,567
      
      1,531,809
      
      305,267
      
      1,837,076Stepovich Lease
      1,001
      
      
      
      1,001
      
      
      
      1,001Fish Creek
      
      
      47,595
      
      47,595
      
      39,358
      
      86,953Silverknife - inactive
      
      
      2,152
      
      
      
      -
      
      -Silverknife - inactive
      -
      
      (2,152
      )
      -
      
      -
      
      -1,629,429
      
      220,138
      
      1,849,567
      
      652,491
      
      2,502,058


|8. | INCOME TAXES:                                                                                                                                               
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                             
|   | The Company has available losses of $ 1,592,000, which
        may be offset against future Canadian taxable income. These losses expire
        as follows:

| | Year ending May 31, 2005 | $ | 48,000    | 
| | ------------------------ | - | --------- | 
| | Year ending May 31, 2006 |   | 151,000   | 
| | Year ending May 31, 2007 |   | 78,000    | 
| | Year ending May 31, 2008 |   | 227,000   | 
| | Year ending May 31, 2009 |   | 10,000    | 
| | Year ending May 31, 2010 |   | 72,000    | 
| | Year ending May 31, 2011 |   | 381,000   | 
| | Year ending May 31, 2012 |   | 625,000   | 
| |                          | $ | 1,592,000 | 

|   | The Company has provided a full valuation allowance
        against any future tax asset arising from losses carried forward as it
        is considered less than likely that any benefit will be realized. The
        Company has Canadian and foreign exploration and development expenditures
        of $ 1,245,039 available to reduce future taxable income from mineral
        properties.                                                                                                                                                                                                                                                                                                                                             
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|9. | DEBENTURE PAYABLE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | Pursuant to various agreements the Company agreed to
        issue a convertible debenture for $ 150,000 to Keltic Bryce Enterprises
        Inc., subject to regulatory approval. The original agreement dated September
        1, 1991 was approved. However, an amendment requested by Keltic Bryce,
        which resulted in the withdrawal of the original agreement, increasing
        the number of units and decreasing the share and warrant prices, did not
        subsequently receive approval and the debenture is not convertible under
        existing regulatory policy. Interest of $ 13,563 was accrued to May 31,
        2004 (2003 - $ 13,827). Teryl paid Keltic Bryce $ 15,000 interest on November
        12, 2003.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   | After various disputes the Company and Keltic Bryce
        Enterprises Inc. are negotiating a Settlement Agreement to repay Keltic
        Bryce the $ 150,000 loan and all accrued interest as full settlement of
        the Debenture. As at May 31, 2004, no resolution has been obtained.                                                                                                                                                                                                                                                                                                                                                                                                                                                  

. . . 7

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 7
|As At May 31, 2004                         |       

|10. | ADVANCES FROM RELATED COMPANIESconsist of: |  | 2004    |  |  | 2003    | 
|--- | ------------------------------------------ |  | ------- |  |  | ------- | 
|    | Access Information Systems Inc.            |  | -       |  |  | 128,578 | 
|    | JGR Petroleum Inc.                         |  | -       |  |  | 102,214 | 
|    | Rainbow Network                            |  | 55,611  |  |  | 61,348  | 
|    | 540330 BC Ltd.                             |  | -       |  |  | 78,228  | 
|    | Sovo Computer Centre                       |  | -       |  |  | 4,953   | 
|    | SMR Investments Ltd.                       |  | 152,610 |  |  | 280,675 | 
|    |                                            |  | 208,221 |  |  | 655,996 | 

|    | The advances from related companies bear no interest
        and have no fixed repayment terms.
|--- | -----------------------------------------------------------------------------------------------
|    |                                                                                                
|11. | CONTINGENCIES AND COMMITMENTS:                                                                 
|    |                                                                                                
|    | See Note 12 below for "Outstanding Commitments to Issue
        Shares".                       
|    |                                                                                                
|12. | SHARE CAPITAL:                                                                                 
|    |                                                                                                
|    | Authorized Share Capitalconsists of:                                                           

| | Common Shares - voting                               
      No Par Value |  | 100,000,000 | 
| | ------------------------------------------------------------------------ |  | ----------- | 
| |                                                                          |  |             | 
| | Preferred Shares - non-voting                      
       $ 1 Par Value |  | 5,000,000   | 
| |                                                                          |  |             | 
| |                                                                          |  | 105,000,000 | 

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

Issued Share Capital- Common- consists of the following:

| |                                            |  |      |  |  | No. of     |  |  |       |  |  |           | 
| | ------------------------------------------ |  | ---- |  |  | ---------- |  |  | ----- |  |  | --------- | 
| | FOR CASH:                                  |  | Ref. |  |  | Shares     |  |  | Price |  |  | Amount    | 
| |                                            |  |      |  |  |            |  |  |       |  |  |           | 
| | Total Issued for Cash at May 31, 2002      |  |      |  |  | 18,633,174 |  |  |       |  |  | 5,062,288 | 
| | Shares issued in May 31, 2003 Year:        |  |      |  |  |            |  |  |       |  |  |           | 
| | Private placement                          |  | A    |  |  | 1,500,000  |  |  | 0.10  |  |  | 150,000   | 
| | Employee stock option exercised            |  | B    |  |  | 12,500     |  |  | 0.15  |  |  | 1,875     | 
| | Private placement
      warrants exercised |  | C    |  |  | 275,000    |  |  | 0.12  |  |  | 33,000    | 
| | Private placement                          |  | D    |  |  | 217,350    |  |  | 0.35  |  |  | 76,073    | 
| |                                            |  |      |  |  | 2,004,850  |  |  |       |  |  | 260,948   | 
| | Total Issued for Cash at May 31, 2003      |  |      |  |  | 20,638,024 |  |  |       |  |  | 5,323,236 | 

. . . 8

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 8
|As At May 31, 2004                         |       

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

| | Total Issued for Cash at May 31,
      2003               |  |   |  |  | 20,638,024 |  |  |      |  |  | 5,323,236 | 
| | --------------------------------------------------------- |  | - |  |  | ---------- |  |  | ---- |  |  | --------- | 
| | Shares issued in May 31, 2004 Year:                       |  |   |  |  |            |  |  |      |  |  |           | 
| | Stock options exercised                                   |  | E |  |  | 247,500    |  |  | 0.15 |  |  | 37,125    | 
| | Private placement                                         |  | F |  |  | 2,000,000  |  |  | 0.25 |  |  | 495,887   | 
| | Private placement
      warrants exercised                |  | G |  |  | 250,000    |  |  | 0.12 |  |  | 30,000    | 
| | Stock option exercised                                    |  | H |  |  | 50,000     |  |  | 0.40 |  |  | 20,000    | 
| | Private placement                                         |  | I |  |  | 3,000,000  |  |  | 0.35 |  |  | 1,026,375 | 
| | Private placement warrants exercised                      |  | J |  |  | 193,500    |  |  | 0.30 |  |  | 58,050    | 
| | Private placement                                         |  | L |  |  | 2,000,000  |  |  | 0.50 |  |  | 982,750   | 
| |                                                           |  |   |  |  | 7,741,000  |  |  |      |  |  | 2,650,187 | 
| | Total Issued for Cash at May 31,
      2004               |  |   |  |  | 28,379,024 |  |  |      |  |  | 7,973,423 | 
| | FOR MINERAL PROPERTY INTERESTS:                           |  |   |  |  |            |  |  |      |  |  |           | 
| | Total Issued for Mineral Property                         |  |   |  |  |            |  |  |      |  |  |           | 
| | at May 31, 2002                                           |  |   |  |  | 2,497,359  |  |  |      |  |  | 604,659   | 
| | Shares issued in May 31, 2003 Year:                       |  |   |  |  |            |  |  |      |  |  |           | 
| | Fish Creek mineral property                               |  | M |  |  | 200,000    |  |  | 0.08 |  |  | 16,000    | 
| | Total Issued at May 31, 2003 and 2004                     |  |   |  |  | 2,697,359  |  |  |      |  |  | 620,659   | 
| | FOR DEBT, EXTENSIONS AND ACQUISITION:                     |  |   |  |  |            |  |  |      |  |  |           | 
| | Total Issued for Debt, Extensions and Acquisition
      : |  |   |  |  |            |  |  |      |  |  |           | 
| | at May 31, 2003                                           |  |   |  |  | 1,902,705  |  |  |      |  |  | 353,480   | 
| | Shares issued in May 31, 2004 Year:                       |  |   |  |  |            |  |  |      |  |  |           | 
| | Debt settlement                                           |  | K |  |  | 201,600    |  |  | 0.35 |  |  | 70,560    | 
| | Total Issued for Debt, Extensions and Acquisition
      : |  |   |  |  |            |  |  |      |  |  |           | 
| | at May 31, 2004                                           |  |   |  |  | 2,104,305  |  |  |      |  |  | 424,040   | 
| |                                                           |  |   |  |  |            |  |  |      |  |  |           | 
| | TOTAL SHARES ISSUED AT MAY 31, 2004                       |  |   |  |  | 33,180,688 |  |  |      |  |  | 9,018,122 | 

| | A. | On December 11, 2002, the Company issued 1,500,000 units
        of capital stock at a price of $ 0.10 per unit, pursuant to a Private
        Purchase agreement, to net the treasury $ 150,000. Each unit consists
        of one common share and one share purchase warrant exercisable in the
        first year for $ 0.12 and $ 0.15 in the second year, per common share.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | B. | On December 20, 2002, 12,500 shares at $ 0.15 per share
        were issued on exercise of stock options.                                                                                                                                                                                                                                                                        
| | C. | On January 15 and 23, 2003, Private placement warrants
        for a total of 275,000 shares at $ 0.12 per share were exercised.                                                                                                                                                                                                                                                 
| | D. | On May 23, 2003, the Company issued 217,350 shares of
        capital stock at a price of $ 0.35 per unit, pursuant to a Private Purchase
        agreement, to net the treasury $ 76,073. These shares were issued in regards
        to a subscription received by its subsidiary, Teryl, Inc., as described
        in Note 15.                                               

. . . 9

---

|Teryl Resources Corp.                      |       
|------------------------------------------ | ------
|Notes to Consolidated Financial Statements | Page 9
|As At May 31, 2004                         |       

|12. | SHARE CAPITAL (Continued):
|--- | --------------------------

| | E. | On June 23, 2003, the president of the Company, exercised
        a Stock Option for 10,000 shares and on November 28, December 4, 2003
        and February 24, 2004 three employees exercised Stock Options for 237,500
        shares, at $ 0.15 per share to net the treasury $ 37,125.                                                                                                                                              
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | F. | On August 26, 2003, the Company issued 2,000,000 units
        of capital stock pursuant to a Private Placement with 27 placees at a
        price of $ 0.25 per unit ($ 500,000 less issue costs of $ 4,113) to net
        the treasury $ 495,887. Each unit consists of one common share and one-half
        share purchase warrant exercisable in the first year for $ 0.30 and $
        0.40 in the second year, per common share.
| | G. | On October 20, 2003, one individual exercised Private
        placement warrants for a total of 250,000 shares at $ 0.12 per share to
        net the treasury $ 30,000.                                                                                                                                                                                                                                                                 
| | H. | On November 21, 2003, 50,000 shares at $ 0.40 per share
        were issued on the exercise of stock options.                                                                                                                                                                                                                                                                                                                            
| | I. | On November 24, 2003, the Company issued 3,000,000 units
        of capital stock pursuant to a Private Placement with 50 placees at a
        price of $ 0.35 per unit ($ 1,050,000 less issue costs of $ 23,625) to
        net the treasury $ 1,026,375. Each unit consists of one common share and
        one-half share purchase warrant exercisable within one year for $ 0.50
        per common share.                          
| | J. | In December, 2003 and January, March and April, 2004,
        private placement warrants totalling 193,500 shares at $ 0.30 per share
        were exercised.                                                                                                                                                                                                                                                                            
| | K. | On March 9, 2004, the Company issued 201,600 common
        shares at $0.35 per share for settlement of debt totalling $ 70,560.                                                                                                                                                                                                                                                                                                         
| | L. | On April 26, 2004, the Company issued a Private Placement
        with 27 placees for 2,000,000 units at $ 0.50 per unit to net the treasury
        $ 982,750 ($ 1,000,000 less issue costs of $ 17,250). Each unit consists
        of one common share and one share purchase warrant for one additional
        common share exercisable within eighteen months for a price of $ 0.60
        per share.                             
| | M. | On December 16, 2002, the Company issued 200,000 common
        shares, at a price of $ 0.08 each, to Linux Gold Corp. pursuant to the
        Fish Creek mineral claims agreement described in Note 7B.                                                                                                                                                                                                                                 

Outstanding Commitments to Issue Shares:
  
  At May 31, 2004, the following commitments to issue shares were outstanding:

No. of
      
      ExpiryType of Commitment
      Shares
      Price
      DatePrivate placement warrants (Note 12A)
      1,000,000
      0.15
      Dec. 11/04Private placement warrants (Note 12F)
      806,500
      0.30/0.40
      Aug. 26/04/05Private placement warrants (Note 12I)
      1,500,000
      0.50
      Nov. 24/04Private placement warrants (Note 12L)
      2,000,000
      0.60
      Oct. 26/05Consultants option
      350,000
      0.40
      Feb. 19/06Directors option
      990,000
      0.15
      Apr. 22/07Senior Officers options
      600,000
      0.15
      Apr. 22/07Consultants option
      50,000
      0.40
      Dec. 16/07Consultants option
      75,000
      0.40
      Mar. 4/08Consultants option
      150,000
      0.40
      Oct. 20/08Consultants option
      300,000
      0.45
      Nov. 14/08Employees option
      50,000
      0.63
      Mar. 5/097,871,500


. . . 10

---

|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 10
|As At May 31, 2004                         |        

|12. | SHARE CAPITAL (Continued):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | During the year ended May 31, 2003, the Company granted
        a stock option to an employee to purchase up to 25,000 common shares,
        a stock option to a senior officer to purchase up to 200,000 common shares,
        at a price of $ 0.15 and a stock options to four consultants to purchase
        up to 525,000 common shares at a price of $ 0.40, for five year periods.                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | During the year ended May 31, 2004, the Company issued
        stock options to two consultants, for 150,000 common shares at $ 0.40
        and 300,000 common shares at $ 0.45 respectively, and to one employee
        for 50,000 common shares at $ 0.63, exercisable within a five year period.
        In November, 2003, the Company cancelled two employee stock options one
        for 50,000 common shares at $ 0.40 expiring March 4, 2008 and the other
        for 25,000 common shares at $ 0.15 expiring April 22, 2007.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | During the year ended May 31, 2004, the Company had
        the following stock option activity:                                                                                                                                                                                                                                                                                                                                                                                                                                         

| |                                   |  | NUMBER    |   |  | WEIGHTED | 
| | --------------------------------- |  | --------- | - |  | -------- | 
| |                                   |  | OF        |   |  | AVERAGE  | 
| |                                   |  | OPTIONS   |   |  | EXERCISE | 
| |                                   |  |           |   |  | PRICE    | 
| |                                   |  |           |   |  |          | 
| | Balance outstanding, May 31, 2003 |  | 2,437,500 |   |  | $   0.21 | 
| |                                   |  |           |   |  |          | 
| | Granted                           |  | 500,000   |   |  | 0.45     | 
| | Exercised                         |  | (297,500  | ) |  | 0.19     | 
| | Cancelled                         |  | (75,000   | ) |  | 0.32     | 
| |                                   |  |           |   |  |          | 
| | Balance outstanding, May 31, 2004 |  | 2,565,000 |   |  | $   0.26 | 

The following table summarizes information
  about the stock options outstanding as at May 31, 2004:

WEIGHTEDNUMBER
      AVERAGE
      NUMBEROF
      REMAINING
      OFEXERCISE
      OPTIONS
      CONTRACTUAL
      OPTIONSPRICE
      OUTSTANDING
      LIFE
        (YEARS)
      EXERCISABLE$ 0.15
      1,590,000
      2.89
      1,590,000$ 0.40
      625,000
      2.75
      625,000$ 0.45
      300,000
      4.46
      300,000$ 0.63
      50,000
      4.76
      50,000$ 0.26
      2,565,000
      3.08
      2,565,000


Stock Based Compensation Expense:

The fair value of each option granted
  is estimated on the grant date using the Black-Scholes option-pricing model
  assuming no dividend yield and the following weighted average assumption for
  options granted: expected volatility of 158% (2003 - 500%), weighted average
  risk free interest rate of between 4.56% (2003 - 4.5%) and expected life of
  2 years (2003 - 3 to 5 years).

For the year ended May 31, 2003 had compensation
  expense for the stock options been determined based on the fair value method,
  the Company's net loss for the year would have been increased by $ 115,980 to
  $ 439,792. The pro-forma net loss per share would have increased to $ 0.02 from
  $ 0.01.

. . . 11

---

|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 11
|As At May 31, 2004                         |        

|13. | RELATED PARTY TRANSACTIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Reg Technologies Inc. is a public company which shares
        office facilities and staff, several directors and participates in Joint
        Ventures with the Company. See Note 7A in respect to the property that
        is operated as a Joint Venture with Reg. See Note 3 advances to Reg.                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | SMR Investments Ltd. is a private company which is controlled
        by an officer of the Company who has significant influence on the affairs
        of the companies. Under a management contract with SMR Investments Ltd.
        the Company agreed to pay up to $ 2,500 per month for management services.
        The Company was deemed to have paid SMR management fees totalling $ 17,500
        during the current year (2003 - $ 30,000). See Note 7A regarding mineral
        property transactions with SMR and Note 10 re advances from SMR.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | The Company holds 15,880 shares of Linux Gold Corp.,
        US a public company controlled by an officer of the Company, as described
        in Note 4. See Note 3 re Linux advances. See Note 7B regarding mineral
        property transactions with Linux.                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Directors fees of $ 12,000 were paid to J. Robertson,
        President of the Company, during the 2004 fiscal year; Administration
        consulting fees of $ 24,375 (2003 - $ 33,000) were paid to Lorette Enterprises
        and/or J. Lorette, Vice-President of the company. Secretarial fees of
        $ 20,874 (2003 - $ 15,013) were paid to M. van Oord, a director of the
        company.                                                                                                                                                      
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    | Administration fees of $ 1,646 were paid to KLR Petroleum
        Ltd. which is controlled by an officer of the Company who has significant
        influence on their affairs.                                                                                                                                                                                                                                                                                                                                                                                

|14. | SUBSEQUENT EVENTS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | On June 23, 2004, the Company, Jean Turner and Ron Way
        (Owners) entered into a mineral property lease with Right of First Refusal,
        whereby the Company may, for a period of ten years (and longer if still
        developing or in production), develop the property known as the Upper
        Fox Creek mining lease, subject to a 3% Net Smelter Return, for payments
        of $ 10,000 US per year. The Company may purchase the production royalty
        for $1,000,000 US before production or $ 1,500,000 US after production.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|    | Subsequent to May 31, 2004 an aggregate of 847,000 shares
        had been issued for warrants exercised for total proceeds of $220,275.                                                                                                                                                                                                                                                                                                                                                                                                                  

|15. | TERYL, INC. TRANSACTIONS (100% US Subsidiary):                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In April, 1998, Teryl, Inc. reorganized and increased
        its authorized share capital from 1,000 common shares to 100,000,000 common
        shares, in preparation for taking the company public on US exchanges.
        Teryl Resources Corp. was issued 6,500,000 shares of Teryl, Inc. and holds
        100% of the shares at May 31, 2004.                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | In 1998, Teryl, Inc. offered a private placement for
        up to 1,000,000 shares at a price of $ 0.15 US and subscriptions of $
        146,044 ($ 96,750 US) were received by November 19, 1999. Since the offering
        was not fully subscribed, the Companies negotiated with the subscribers
        to replace the Teryl, Inc. shares with Teryl Resources Corp. shares. See
        Note 12 regarding the $ 76,073 ($ 51,750 US) worth of capital stock issued
        May 23, 2003 for these subscriptions. One subscriber did not return the
        agreement and negotiations are proceeding to resolve this.

. . . 12

---

|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 12
|As At May 31, 2004                         |        

|16. | CHANGE OF NAME:                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|    | At the Annual General Meeting held January 22, 2003,
        the Board was granted approval to apply to have the Companys named
        changed to Teryl Gold Inc. The name change was accepted by the Province
        of British Columbia on February 1, 2003, however, the Company had not
        completed all the paperwork for informing regulatory authorities by the
        date of these financial statements and, therefore, still uses the name
        of Teryl Resources Corp.

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | These consolidated financial statements have been prepared
        in accordance with Canadian generally accepted accounting principles (Canadian
        GAAP). Material variations in the accounting measurement principles,
        practices and methods used in preparing these financial statements from
        measurement principles, practices and methods accepted in the United States
        (US GAAP) are described and quantified below.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Mineral properties and deferred exploration costs                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Under Canadian GAAP, mineral property interests and
        deferred exploration costs, including acquisition and exploration costs,
        are carried at cost and written down if the properties are abandoned,
        sold or if management determines there to be an impairment in value. Under
        United States GAAP, mineral property exploration costs are expensed as
        incurred. Once a final feasibility study has been completed, additional
        costs incurred to bring the mine into production are capitalized as development
        costs. Costs incurred to access ore bodies identified in the current mining
        plan after production has commenced are considered production costs and
        are expensed as incurred. Costs incurred to extend production beyond those
        areas identified in the mining plan where additional reserves have been
        established are deferred as development costs until the incremental reserves
        are produced. Capitalized costs are amortized using the unit-of-production
        method over the estimated life of the ore body based on proven and probable
        reserves. Accordingly, there were material differences between Canadian
        GAAP and US GAAP for the years ended May 31, 2004, 2003 and 2002.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Asset retirement obligations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | Under US GAAP, Statement of Financial Accounting Standards
        No. 143, Accounting for Asset Retirement Obligations (SFAS
        143) requires companies to record the fair value of the liability
        for closure and removal costs associated with legal obligations upon the
        retirement or removal of any tangible long-lived assets effective June
        1, 2003. Under this standard, the initial recognition of the liability
        is capitalized as part of the asset cost and amortized over its estimated
        useful life. For Canadian GAAP purposes, effective June 1, 2004, the Company
        adopted the provisions of CICA HB 3110 Asset Retirement Obligations
        which are substantially similar to those of SFAS 143.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | The Company has determined that there were no material
        differences in the measurement and presentation of asset retirement obligations
        between Canadian GAAP and US GAAP as at May 31, 2004, 2003 and 2002.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

. . . 13



---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 13
|As At May 31, 2004                         |        

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Stock-based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Under US GAAP, Statement of Financial Accounting Standard
        No. 123, Accounting for Stock-Based Compensation (SFAS
        123) encourages companies to establish a fair market value based
        method of accounting for stock-based compensation plans. Accounting Principles
        Board Opinion No. 25 (APB 25) permits the measurement of compensation
        cost for stock options as the excess, if any, of the quoted market price
        of the Companys stock at the date of grant over the option price.
        On June 1, 2003, the Company has elected to account for stock-based compensation
        under SFAS 123.                                                                                                                                                                                                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The Company has a stock-based compensation plan which
        is described in note 12. The Company accounts for stock-based compensation,
        including stock options and warrants, using the fair value based method,
        as prescribed by CICA HB 3870 Stock-based Compensation and Other
        Stock-Based Payments to account for stock based transactions with
        officers, directors and consultants. Under this method, the fair value
        of the stock options and warrants at the date of grant is amortized over
        the vesting period, with an offsetting credit recorded as an increase
        in contributed surplus. If the stock options or warrants are exercised,
        the proceeds are credited to share capital and the fair value at the date
        of the grant is reclassified from contributed surplus to share capital.
        Accordingly, there were no material differences between Canadian GAAP
        and US GAAP for the years ended May 31, 2004, 2003 and 2002.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Marketable securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Under Canadian GAAP, short-term marketable securities
        are carried at the lower of aggregate cost or current market value, with
        any unrealized loss included in the statements of operations. Long-term
        investments are carried on the cost or equity basis and are only written
        down when there is evidence of a decline in value that is other than temporary.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | Under US GAAP, Statement of Financial Accounting Standard
        No. 115, Accounting for Certain Investments in Debt and Equity Securities
        (SFAS 115) requires that certain equity investments must be classified
        into available-for-sale securities and carried at fair market value. Any
        unrealized holding gains or losses are reported as a separate component
        of shareholders equity until realized for available-for- sale securities,
        and included in earnings for trading securities. Under SFAS 115, for the
        years ended May 31, 2004, 2003 and 2002 there were material differences
        between the Canadian GAAP and US GAAP in the Companys investment
        in marketable securities.                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    | The impact of the differences between Canadian GAAP
        and US GAAP on the consolidated balance sheets would be as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   

| |                            |  |           |  |  | May
      31, 2004 |   |  |         | 
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | ------- | 
| |                            |  | Balance   |  |  |                    |   |  | Balance | 
| |                            |  | Canadian  |  |  |                    |   |  | US      | 
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP    | 
| |                            |  | $         |  |  | $                  |   |  | $       | 
| | Current assets             |  | 427,773   |  |  |                   |   |  | 427,773 | 
| | Investments                |  | 4,026     |  |  | 519                |   |  | 4,545   | 
| | Equipment                  |  | 13,470    |  |  |                   |   |  | 13,470  | 
| | Mineral Property Interests |  | 196,795   |  |  |                   |   |  | 196,795 | 
| | Deferred Expenditures      |  | 2,502,057 |  |  | (2,502,057         | ) |  |        | 
| |                            |  | 3,144,121 |  |  | (2,501,538         | ) |  | 642,583 | 
| |                            |  |           |  |  |                    |   |  |         | 
| | Current liabilities        |  | 407,741   |  |  |                   |   |  | 407,741 | 
| | Shareholders Equity       |  | 2,736,380 |  |  | (2,501,538         | ) |  | 234,842 | 
| |                            |  | 3,144,121 |  |  | (2,501,538         | ) |  | 642,583 | 

. . . 14



---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 14
|As At May 31, 2004                         |        

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Continued)
|--- | -----------------------------------------------------------------------------------------------------------

| |                            |  |           |  |  | May
      31, 2003 |   |  |            |  
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | ---------- | -
| |                            |  | Balance   |  |  |                    |   |  | Balance    |  
| |                            |  | Canadian  |  |  |                    |   |  | US         |  
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP       |  
| |                            |  | $         |  |  | $                  |   |  | $          |  
| | Current assets             |  | 83,909    |  |  |                   |   |  | 83,909     |  
| | Investments                |  | 4,026     |  |  | (3,483             | ) |  | 543        |  
| | Office Equipment           |  | 3,939     |  |  |                   |   |  | 3,939      |  
| | Mineral Property Interests |  | 176,150   |  |  |                   |   |  | 176,150    |  
| | Deferred Expenditures      |  | 1,849,567 |  |  | (1,849,567         | ) |  |           |  
| |                            |  | 2,117,591 |  |  | (1,853,050         | ) |  | 264,541    |  
| |                            |  |           |  |  |                    |   |  |            |  
| | Current liabilities        |  | 1,479,537 |  |  |                   |   |  | 1,479,537  |  
| | Shareholders Equity       |  | 638,054   |  |  | (1,853,050         | ) |  | (1,214,996 | )
| |                            |  | 2,117,591 |  |  | (1,853,050         | ) |  | 264,541    |  

| |                            |  |           |  |  | May
      31, 2002 |   |  |           |  
| | -------------------------- |  | --------- |  |  | ------------------ | - |  | --------- | -
| |                            |  | Balance   |  |  |                    |   |  | Balance   |  
| |                            |  | Canadian  |  |  |                    |   |  | US        |  
| |                            |  | GAAP      |  |  | Adjustments        |   |  | GAAP      |  
| |                            |  | $         |  |  | $                  |   |  | $         |  
| | Current assets             |  | 33,069    |  |  |                   |   |  | 33,069    |  
| | Investments                |  | 4,026     |  |  | (3,091             | ) |  | 935       |  
| | Office Equipment           |  | 4,923     |  |  |                   |   |  | 4,923     |  
| | Mineral Property Interests |  | 156,698   |  |  |                   |   |  | 156,698   |  
| | Deferred Expenditures      |  | 1,630,808 |  |  | (1,630,808         | ) |  |          |  
| |                            |  | 1,829,524 |  |  | (1,633,899         | ) |  | 195,625   |  
| |                            |  |           |  |  |                    |   |  |           |  
| | Current liabilities        |  | 1,056,534 |  |  |                   |   |  | 1,056,534 |  
| | Shareholders Equity       |  | 772,990   |  |  | (1,633,899         | ) |  | (860,909  | )
| |                            |  | 1,829,524 |  |  | (1,633,899         | ) |  | 195,625   |  

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

| |                                               |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | --------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                               |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                               |  | 2004       |   |  | 2003       |   |  | 2002       |  
| |                                               |  | $          |   |  | $          |   |  | $          |  
| | Net income (loss) for the year, Canadian GAAP |  | (791,776   | ) |  | (323,812   | ) |  | (82,360    | )
| | Adjustments                                   |  |            |   |  |            |   |  |            |  
| | Amortization of natural
      gas well        |  | -          |   |  | -          |   |  | (3,027     | )
| | Deferred exploration costs                    |  | (652,490   | ) |  | (220,138   | ) |  | (83,934    | )
| | Net loss for the year, US GAAP                |  | (1,444,266 | ) |  | (543,950   | ) |  | (169,321   | )
| |                                               |  |            |   |  |            |   |  |            |  
| | Basic and diluted loss per share, US GAAP     |  | (0.05      | ) |  | (0.02      | ) |  | (0.01      | )
| |                                               |  |            |   |  |            |   |  |            |  
| | Weighted average number of common shares      |  |            |   |  |            |   |  |            |  
| | outstanding, basic and diluted                |  | 28,925,934 |   |  | 23,939,714 |   |  | 23,033,238 |  

. . . 15



---



|Teryl Resources Corp.                      |        
|------------------------------------------ | -------
|Notes to Consolidated Financial Statements | Page 15
|As At May 31, 2004                         |        

|17. | DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Continued)
|--- | -----------------------------------------------------------------------------------------------------------
|    |                                                                                                            
|    | The Companys comprehensive loss is comprised as
        follows:                                          

| |                                                               |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | ------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                               |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                                               |  | 2004       |   |  | 2003       |   |  | 2002       |  
| |                                                               |  | $          |   |  | $          |   |  | $          |  
| | Net loss for the year, US GAAP                                |  | (1,444,266 | ) |  | (543,950   | ) |  | (169,321   | )
| | Change in net unrealized gains (losses) on available-for-sale |  |            |   |  |            |   |  |            |  
| | investments                                                   |  | 4,002      |   |  | (392       | ) |  | (2,063     | )
| | Comprehensive income (loss)                                   |  | (1,440,264 | ) |  | (544,342   | ) |  | (171,384   | )

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

| |                                                                      |  | Year Ended |   |  | Year Ended |   |  | Year Ended |  
| | -------------------------------------------------------------------- |  | ---------- | - |  | ---------- | - |  | ---------- | -
| |                                                                      |  | May 31,    |   |  | May 31,    |   |  | May 31,    |  
| |                                                                      |  | 2004       |   |  | 2003       |   |  | 2002       |  
| |                                                                      |  | $          |   |  | $          |   |  | $          |  
| | Cash flows used in operating activities, Canadian
      GAAP         |  | (390,492   | ) |  | (342,517   | ) |  | (87,926    | )
| | Deferred exploration costs                                           |  | (163,320   | ) |  | (220,138   | ) |  | (83,934    | )
| | Cash flows used in operating activities, US
      GAAP               |  | (553,812   | ) |  | (562,655   | ) |  | (171,860   | )
| | Cash flows (used in) provided by financing activities, Canadian      |  |            |   |  |            |   |  |            |  
| | GAAP and US
      GAAP                                               |  | 548,206    |   |  | 521,266    |   |  | 83,741     |  
| | Cash flows provided by (used in) investing activities, Canadian      |  |            |   |  |            |   |  |            |  
| | GAAP                                                                 |  | (266,365   | ) |  | (222,290   | ) |  | (3,552     | )
| | Deferred exploration costs                                           |  | 163,320    |   |  | 220,138    |   |  | 83,934     |  
| | Cash flows provided by (used in) investing
      activities, US GAAP |  | (103,045   | ) |  | (2,152     | ) |  | 80,382     |  
| | (Decrease) Increase in cash for the year                             |  | (108,651   | ) |  | (43,541    | ) |  | (7,737     | )
| | Cash, beginning of the year                                          |  | 318,287    |   |  | (6,840     | ) |  | 897        |  
| | Cash, end of the year                                                |  | 209,636    |   |  | (50,381    | ) |  | (6,840     | )

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ITEM 18.        FINANCIAL
STATEMENTS

Not applicable.

ITEM 19.        EXHIBITS

Documents filed as exhibits to this annual report:

Number
    Description1.1
    Certificate of Incorporation  Candy Mountain Gold
      Corporation May 23, 1980
    (1)1.2
    Certificate of Name Change, Special Resolution and
      Altered Memorandum to change name from Candy Mountain Resources to Teryl
      Resources Corp. dated January 20, 1984
    (1)1.3
    Special resolutions and Altered memorandum dated October
      25, 1985 increasing the authorized capital to 15,000,000 by creating
      5,000,000 Preferred Shares with a par value of $1.00, and amending the
      Articles of the Company by adding Special Rights and Restrictions Attached
      to the Preferred Shares as a Class
    (1)1.4
    Altered memorandum and special resolution dated November
      30, 1988 increasing the number of authorized common shares to 30,000,000
      common shares from 10,000,000 common shares
    (1)1.5
    Altered memorandum and special resolution dated November
      30, 1988 canceling the then existing Articles of the Company and replacing
      the Articles in their entirety with new Articles of the Company
    (1)1.6
    Altered memorandum and special resolution dated November
      20, 2000 increasing the authorized capital to 100,000,000 common shares
      from 30,000,000, effective December 4, 2002
    (4)1.7
    Altered Memorandum and special resolution, certificate of
      name change dated February 4, 2003 changing the name from Teryl Resources
      Corp. to Teryl Gold Corp.
    (4)2.1
    Specimen copy of Registrants common share certificate
    (1)4.1
    Commitment to provide financing to Teryl Resources Corp.
      as required for ongoing operations dated February 14, 2000 from John
      Robertson
    (2)4.2
    Mining Joint Venture Agreement between Fairbanks Gold
      Mining, Inc. and Teryl, Inc. dated September 23, 1999
    (1)4.3
    Management Agreement dated December 1, 1994 between Teryl
      Resources Corp. and SMR Investments Ltd.
    (1)4.4
    Agreement between Teryl Resources Corp. and Linux Gold
      Corp. (formerly LinuxWizardry Systems, Inc.) made March 5, 2002 Fish Creek
      Mineral Claims
    (3)


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4.5
      Amendment to Joint Venture Agreement between
        Linux Gold Corp. and Teryl Resources Corp. dated November 4, 2002
      (4)4.6
      Anderson
          Group Property Purchase Agreement dated August 18, 2003
      (5)4.7
      West
          Ridge Property Lease Agreement dated July 2003
      (5)8.1
      List
          of Subsidiaries
      (5)12.1
      Certification
          pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002 
          (John G. Robertson)
      (5)12.2
      Certification
          pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
          to Section 302 of the Sarbanes-Oxley Act of 2002 
          (Susanne Robertson)
      (5)13.1
      Certification
          pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 
          (John G. Robertson)
      (5)13.2
      Certification
          pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
          to Section 906 of the Sarbanes-Oxley Act of 2002 
          (Susanne Robertson)
      (5)14.1
      Consent
          of Smythe Ratcliffe
      (5)14.2
      Consent
          of June Fitzmartyn
      (5)


|(1) | incorporated by reference to the Registrants
      Registration Statement on Form 20-F filed on December 29, 2000 with the US
      Securities and Exchange Commission
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year-ended May 31, 2000.                                                 
|(3) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year-ended May 31, 2002                                                  
|(4) | incorporated by reference to the Registrants Annual
      Report on Form 20-F for the fiscal year-ended May 31, 2003                                                  
|(5) | attached hereto                                                                                                                                                        

GLOSSARY OF MINING TERMS

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

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

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

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

Au - gold.

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

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

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

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

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

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

Gm/mtor gpt- grams per metric tonne.

Gold deposit - means a mineral deposit mineralized with
gold.

Gold resource  see geological or mineral resource

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

Graphite: A allotropic form of carbon found in nature

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

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

Intrusive:cuts across (is intrusive into)

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

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

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

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

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

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

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

ore  a naturally occurring rock or material from which
economic minerals can be extracted at a profit

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

opt troy ounces per short ton

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

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

prospect  an area prospective for economic minerals
based on geological, geophysical, geochemical and other criteria

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

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

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

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

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

ton- short ton (2,000 pounds).

tonne- metric tonne (2,204.6 pounds).

trenching  the surface excavation of a linear trench to
expose mineralization for sampling

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

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

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


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SIGNATURE PAGE

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



TERYL RESOURCES CORP. REGISTRANT

|Dated: August 3, 2007 | By: | /s/ John G. Robertson         
|--------------------- | --- | ------------------------------
|                      |     | John G. Robertson             
|                      |     | Chairman of the Board/Director

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