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UNITED STATESSECURITIES AND EXCHANGE COMMISSION
    Washington, D.C. 20549 FORM 20-F [   ]
        REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THESECURITIES EXCHANGE ACT OF 1934OR[ x ]
        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES **EXCHANGE ACT OF 1934**For fiscal year ended February 28, 2010OR[   ]
        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES **EXCHANGE ACT OF 1934**For the transition period from ___ to ___OR[   ]
        SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE **SECURITIES EXCHANGE ACT OF 1934**Date of event requiring this shell company report:
  Commission file number: 000-30084 LINUX GOLD CORP.(Exact name of Registrant as specified in its charter) N/A(Translation of Registrants name into English) British Columbia, Canada(Jurisdiction of incorporation or organization) 240-11780 Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada(Address of principal executive offices) John Robertson, President240-11780 Hammersmith Way, Richmond, British Columbia V7A 5E9, CanadaPhone: 604-278-5996 Fax 604-278-3409(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act.None Securities registered or to be registered pursuant to Section 12(g) of the Act. Common Shares, No Par Value(Title of Class) Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act. Not Applicable(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. 92,650,825 Common Shares outstanding as of February 28, 2010 1


Indicate by check mark if the registration is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act 
    [   ] Yes [ X ] No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
    [   ] Yes [ X ] No Note  Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
    [ X ] Yes [   ] No Indicate by check mark whether the registrant is a large accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in Rule 12b-2 of the Exchange Act. Large accelerated filer [ ]
        Accelerated file [ ]
        Non-accelerated filer [X]
  Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: [ X ] U.S. GAAP
        [   ] International Financial Reporting Standards as issued
        [   ] Other by the International Accounting Standards Board
  If Other has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
          Item 17. [   ] Item 18. [ X ]If this is an annual report, indicate by check mark whether the Company is a shell company (as defined in Rule 12b-2
          of the Exchange Act). 
          Yes [   ] No [ X ]
  2


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TABLE OF CONTENTS GENERAL INFORMATION:
        5PART I
        
        9ITEM 1.
        IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
        9ITEM 2.
        OFFER STATISTICS AND EXPECTED TIMETABLE
        9ITEM 3.
        KEY INFORMATION
        9A.
        SELECTED FINANCIAL DATA
        9B.
        CAPITALIZATION AND INDEBTEDNESS
        10C.
        REASON FOR THE OFFER AND USE OF PROCEEDS
        10D.
        RISK FACTORS
        10ITEM 4.
        INFORMATION ON THE COMPANY
        16A.
        HISTORY AND DEVELOPMENT OF THE COMPANY
        16B.
        BUSINESS OVERVIEW
        17C.
        ORGANIZATIONAL STRUCTURE
        19D.
        PROPERTY, PLANTS AND EQUIPMENT
        19ITEM 4A.
        **UNRESOLVED STAFF COMMENTS**
        31ITEM 5.
        OPERATING AND FINANCIAL REVIEW AND PROSPECTS
        31A.
        OPERATING RESULTS
        31B.
        LIQUIDITY AND CAPITAL RESOURCES
        32C.
        RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
        33D.
        TREND INFORMATION
        33E.
        OFF-BALANCE SHEET ARRANGEMENTS
        34F.
        TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
        34G.
        SAFE HARBOR
        35ITEM 6.
        DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
        35A.
        DIRECTORS AND SENIOR MANAGEMENT
        35B.
        COMPENSATION
        38C.
        BOARD PRACTICES
        44D.
        EMPLOYEES
        44E.
        SHARE OWNERSHIP
        44ITEM 7.
        MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
        45A.
        MAJOR SHAREHOLDERS
        45B.
        RELATED PARTY TRANSACTIONS.
        45C.
        INTERESTS OF EXPERTS AND COUNSEL
        45ITEM 8.
        FINANCIAL INFORMATION
        46A.
        CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
        46B.
        SIGNIFICANT CHANGES
        46ITEM 9.
        THE OFFER AND LISTING
        46ITEM 10 .
        **ADDITIONAL INFORMATION**
        47A.
        SHARE CAPITAL
        47B.
        MEMORANDUM AND ARTICLES OF ASSOCIATION
        47C.
        MATERIAL CONTRACTS
        47D.
        EXCHANGE CONTROLS.
        49
  3


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E.
        TAXATION.
        49F.
        DIVIDENDS AND PAYING AGENTS
        50G.
        STATEMENT BY EXPERTS
        50H.
        DOCUMENTS ON DISPLAY.
        50I.
        SUBSIDIARY INFORMATION.
        51ITEM 11.
        **QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**
        51ITEM 12.
        **DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**
        51PART II
        
        51ITEM 13.
        **DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES**
        51ITEM 14.
        **MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF** **PROCEEDS.**51A.
        MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
        51B.
        USE OF PROCEEDS
        51ITEM 15.
        CONTROLS AND PROCEDURES
        51ITEM 15T.
        **CONTROLS AND PROCEDURES**
        52ITEM 16.
        [Reserved]
        52ITEM 16A.
        Audit Committee Financial Expert
        53ITEM 16B.
        Code of Ethics
        53ITEM 16C.
        Principal Accountant Fees and Services
        53ITEM 16D.
        Exemptions from the Listing Standards for Audit Committees
        54ITEM 16E.
        Purchases of Equity Securities by the Issuer and Affiliated Purchasers
        54Item 16F.
        Change in Registrants Certifying Accountant
        55PART III
        
        56ITEM 17.
        **FINANCIAL STATEMENTS**
        56ITEM 18.
        **FINANCIAL STATEMENTS**
        56ITEM 19.
        **EXHIBITS**
        57SIGNATURE PAGE
        59
  4


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GENERAL INFORMATION: Unless otherwise indicated, all references herein are to Canadian dollars. Linux Gold Corp. and its subsidiaries (the Company) is required under Canadian law (National Instrument 43-101 Standards Of Disclosure For Mineral Projects (NI 43-101)) to calculate and categorize mineral reserve, proven mineral reserve, probable mineral reserve, mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource under the Canadian Institute of Mining Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Reserves - Definitions and Guidelines dated December 11, 2005. These standards establish definitions and guidelines for the reporting of exploration information, mineral resources and mineral reserves in Canada. Canadian law also requires disclosure of mineral resources that equate to measured, indicated and inferred resources. These definitions have not been adopted for use in the United States by the Securities and Exchange Commission (the SEC) under Industry Guide 7 (SEC Guide 7) promulgated under U.S. Securities laws. See Item 3.D. Risk Factors  Differences in United States and Canadian reporting of reserves and resources. GLOSSARY The following is a glossary of geological and technical terms used in this annual report: $/yd3dollars per cubic yard 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 Biotite dark-colored mica rich in iron, magnesium, and potassium Breccia a fragmental rock; any rock formation essentially composed of uncemented, or loosely consolidated, small angular Colluvium- A loose deposit of rock debris accumulated through the action of gravity at the base of a cliff or slope Conglomerate a sedimentary rock composed of rounded fragments larger than 2 mm in diameter 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 Dike- a tabular igneous intrusion that cuts across the layering of the country rock Feasibility study a detailed report assessing the feasibility, economics and engineering of placing a mineral deposit into commercial production Foliated said of a rock in which mineral grains have been aligned in a planar fabric by shearing or metamorphism 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 mineralised with gold Gold resource see geological or mineral resource 5


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Grams per cubic meter- alluvial mineralisation 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 Greenstone a rock in which the original igneous minerals are replaced by dark green metamorphic minerals 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 Hornblende a dark a dark-colored, prismatic or needle-shaped mineral rich in iron, magnesium, sodium and calcium Indicated mineral resource -that part of a mineral resource for which quantity, 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 Mafic said of a dark-colored, iron and magnesium rich igneous rock 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 claimor 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 Oz/yd3ounces per cubic yard 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 Pluton an igneous rock or body formed at depth within the earth 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 6


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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 Pyrite an iron sulfide mineral Quartz monzonite- a light-colored intrusive rock composed of quartz and feldspar with moderately abundant biotite and hornblende crystals Reserve -that part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination Reverse circulation drill a large machine that produces a continuous chip sample of the rock or material being drilled Silicic said of a light colored rock composed primarily of silica and aluminum Skarn -a finegrained metamorphic rock that is usually coloured green or red, ocassionally grey, 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 Slickensides- a polished, striated rock surface caused by one rock mass sliding over another in a fault plane Stockwork -small veins of mineralization that have so penetrated a rock mass that the whole rock mass can be considered mineralized Syenite Potassium-rich intrusive rock; at Granite Mountain the syenite commonly has an abundance of mafic minerals 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 kilometres
        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
  Unless the context otherwise requires, all references to the Registrant or the Company or Linux refer to Linux Gold Corp. All monetary figures are in terms of Canadian dollars unless otherwise indicated. Forward Looking Statements This Annual Report contains forward-looking statements that are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and under Canadian securities laws that involve a number of risks and uncertainties. Such statements are based on the Companys current expectations, estimates and projections about the industry, managements beliefs and certain assumptions made by it. The Company uses words such as expect, anticipate, project, believe, plan, intend, seek, should, estimate, future and other similar expressions to identify forward-looking statements. The Companys actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. 7


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Statements about future property acquisitions, expected completion dates of acquisitions/transactions, feasibility studies, anticipated commencement dates of mining or metal production operations, projected quantities of future metal production and anticipated production rates, operating efficiencies, costs and expenditures, business development efforts, the need for additional capital and the Company's production capacity are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, the Company's actual results could differ materially and adversely from those expressed in any forward-looking statements as a result of various factors. You should not place undue reliance on these forward-looking statements. Information relating to the magnitude or quality of mineral deposits is deemed to be forward-looking information. The reliability of such information is affected by, among other things, uncertainty involving geology of mineral deposits; uncertainty of estimates of their size or composition; uncertainty of projections relating to costs of production or estimates of market prices for the mineral; the possibility of delays in mining activities; changes in plans with respect to exploration, development projects or capital expenditures; and various other risks including those relating to health, safety and environmental matters. The Company cautions that the list of factors set forth above is not exhaustive. Some of the risks, uncertainties and other factors which negatively affect the reliability of forward-looking information are discussed in the Company's public filings with the Canadian securities regulatory authorities, including its most recent annual report, quarterly reports, material change reports and press releases, and with the SEC. In particular, your attention is directed to the risks detailed in Item 3. Key Information - Risk Factors and similar discussions in the Company's other SEC and Canadian filings concerning some of the important risk factors that may affect its business, results of operations and financial conditions. You should carefully consider those risks, in addition to the other information in this annual report and in the Company's other filings and the various public disclosures before making any business or investment decisions involving the Company and its securities. The Company undertakes no obligation to revise or update any forward-looking statement, or any other information contained or referenced in this annual report to reflect future events and circumstances for any reason. In addition, any forecasts or guidance provided by the Company are based on the beliefs, estimates and opinions of the Companys management as at the date of this annual report and, accordingly, they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update such projections if managements beliefs, estimates or opinions, or other factors should change. BUSINESS OF LINUX GOLD CORP. We make expenditures on acquiring mineral properties and carrying out exploration work. The recoverability of amounts shown for investments, mineral 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, 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. The Company has incurred a loss of $409,573 in the year ended February 28, 2010 (2009 - $536,201; 2008 - $2,260,291). These consolidated financial statements do not include adjustments that would be necessary should it be determined that we may be unable to continue as a going concern. FINANCIAL AND OTHER INFORMATION In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$ or $). The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$). 8


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PART I ITEM 1.
        IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
  Not applicable. ITEM 2.
        OFFER STATISTICS AND EXPECTED TIMETABLE
  Not applicable. 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 February 28, 2010, February 28, 2009 and February 29, 2008, together with the notes thereto, which appear elsewhere in this annual report. The Consolidated Financial Statements as of and for the year ended February 28, 2010 have been audited by ACAL Group, Chartered Accountants; and for the year ended February 28, 2009 have been audited by James Stafford, Inc., Chartered Accountants; and for the year ended February 29, 2008 by Smythe Ratcliffe LLP Chartered Accountants. The Consolidated Financial Statements are prepared in accordance with U.S. GAAP. See Note 2 of the Notes to Consolidated Financial Statements. 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 February 28, 2010 US$1.00 was equal to approximately CAD$1.0523. The following represents our selected financial data for each of the past five fiscal years, ending on February 28/29. The data presented is prepared in accordance with generally accepted accounting principles in the United States: 2010
        
        
        2009
        
        
        2008
        
        
        2007
          (Re-stated)
        
        
        2006Net Revenue
        $
        -
        
        $
        -
        
        $
        -
        
        $
        -
        
        $
        -Income (loss) from continuing operations
        
        (409,573
        )
        
        (536,201
        )
        
        (2,260,291
        )
        
        (3,571,183
        )
        
        (810,105
        )Income (loss) from discontinued operations
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Income (loss) from continuing operations per Common Share
        
        (0.01
        )
        
        (0.01
        )
        
        (0.03
        )
        
        (0.05
        )
        
        (0.01
        )Income (loss) from discontinued operations per Common Share
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Total Assets
        
        206,244
        
        
        112,942
        
        
        328,923
        
        
        737,837
        
        
        669,057Working Capital (deficit)
        
        (264,821
        )
        
        (296,083
        )
        
        (219,213
        )
        
        (651,053
        )
        
        69,670Shareholders Equity (deficit)
        
        (257,874
        )
        
        (286,985
        )
        
        (207,248
        )
        
        (334,974
        )
        
        206,262Cash Dividends per common share
        
        nil
        
        
        nil
        
        
        nil
        
        
        nil
        
        
        nil
  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. 9


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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 C$1.0526 to US$ 1.00, average one day rate published by the Bank of Canada on February 26, 2010. We do not represent that Canadian dollar or US dollar amounts could be converted into US dollars or Canadian dollars, as the case may be, at any particular rate, the rates below or at all. On June 25, 2010, the noon rate by the Bank of Canada was CDN$ 1.037 to US$ 1.00. The following tables set forth rates for US dollars for the periods indicated. The following table reflects the monthly high and low exchange rates for U.S.$1.00 to the Canadian dollar for the following periods. Month (1)
        Year
        High (CAD$)
        Low (CAD$)December
        2010
        1.0713
        1.0405January
        2010
        1.0657
        1.0251February
        2010
        1.0734
        1.0420March
        2010
        1.0421
        1.0113April
        2010
        1.0201
        1.0075May
        2010
        1.0778
        1.0134 (1) noon buying rate for US dollars published by the Bank of Canada
 The following table lists the average exchange rate for US$1.00 to the Canadian dollar for in New York City for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York, or by the Bank of Canada, for the last five years based on the average month-end exchange rates: Year
        Average
        Low/High (CAD$)
        February 29/28 (CAD$)2010 (1)
        1.1116
        1.0251/1.300
        1.05262009 (1)
        1.1414
        0.984/1.2971
        0.78702008 (2)
        1.0470
        0.9168 / 1.181
        0.97962007 (2)
        1.1374
        1.0989 /1.1852
        1.172006 (2)
        1.1992
        1.1379 / 1.2425
        1.1379 (1) noon buying rate for US dollars published by the Bank of Canada
    (2) 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
 B.
        CAPITALIZATION AND INDEBTEDNESS
  Not applicable. C.
        REASON FOR THE OFFER AND USE OF PROCEEDS
  Not applicable. 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. 10


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RISK FACTORS RELATED TO OUR BUSINESS We have a limited and changing operating history. We initially focused the business of the Company on natural resource development. We changed direction becoming involved in the information technology industry to take advantage of the booming technology sector and the declining precious metals markets. We were not successful in that industry segment. We have returned our focus on mining and exploration. We may not be able to secure the financing necessary to explore, develop and produce our mineral properties. 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 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 our 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 February 28, 2010 we have incurred significant operating losses and have an accumulated deficit since inception of $15,863,605 at February 28, 2010. Furthermore, we had working capital deficit of $264,821 as at February 28, 2010, which is not sufficient to achieve our planned business objectives. Our ability to continue as a going concern is dependent on continued financial support from our shareholders and other related parties, our ability to raise equity capital financing, and the attainment of profitable operations, external financings and further share issuance to satisfy working capital and operating needs. The auditors report on the February 28, 2010 consolidated financial statements includes additional comments for U.S. readers that states that conditions exist that raise substantial doubt about our ability to continue as a going concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty (see Item 5.B. Liquidity and Capital Resources). We expect to incur significant losses for the foreseeable future. We expect to incur significant losses for the foreseeable future and cannot be certain when or if we will achieve profitability. Failure to become and remain profitable will adversely affect the value of our Common Shares and our ability to raise capital and continue operations (see Item 5.B. Liquidity and Capital Resources). Our business may be affected by such matters as changes in general economic conditions, changes in laws, regulations, and other factors. From time to time, our business may be affected by such matters as changes in general economic conditions, changes in laws and regulations, taxes, tax laws, prices and costs, and other factors of a general nature which may have an adverse effect on our business. Certain of the Companys directors and officers are also directors and/or officers and/or shareholders of potential competitors of the Company, giving rise to potential conflicts of interest. Several of the Companys directors and officers are also directors, officers or shareholders of other companies. In particular, Mr. Robertson, Ms. Lorette, Mrs. Robertson and Ms. van Oord are directors and/or officers of Teryl Resources Corp., a public natural resource exploration company that shares office space and administrative staff with the Company. We entered into an agreement with Teryl Resources Corp. whereby Teryl could earn up to 50% of the Fish Creek claim (see Item 4.D.). In addition, Mrs. Robertson and Mr. Robertson are directors and officers of SMR Investments Ltd. which holds approximately 5.8% of the Common Shares of the Company, and together, our directors and officers hold 6.9% of the Common Shares of the Company (see the biographical sketches of our directors and officers at Item 6.A, and Share Ownership at Item 6.E). Some of our directors and officers are engaged and will continue to be engaged in the search for additional business opportunities on behalf of other corporations, and situations may arise where these directors and officers will be in direct competition with the Company. Such associations may give rise to conflicts of interest from time to time (see Item 7.B.). Such a conflict poses the risk that the Company may enter into a transaction on terms which could place the Company in a worse position than if no conflict existed. Conflicts, if any, will be dealt with in accordance with the relevant provisions of the BCA. The Board has resolved that any transaction involving a related party to the Company is required to be reviewed and approved by the Companys Audit Committee. The Companys directors are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest which they many have in any project or opportunity in respect of which the Company is proposing to enter into a transaction. 11


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U.S. investors may not be able to enforce their civil liabilities against us or our directors, controlling persons and officers. We are organized under the laws of the province of British Columbia, Canada. All of our directors, controlling persons and officers are residents of Canada and all or a substantial portion of their assets and substantially all of our assets are located outside of the United States. As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them. In addition, you should not assume that the courts of Canada (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States. However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided they are in compliance with applicable Canadian legislation regarding the limitation of actions. Also, a judgment obtained in a U.S. court would generally be recognized by a Canadian court except, for example: where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law; the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state; the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure; a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court; the outcome of the judgment of the U.S. court was inconsistent with Canadian public policy; the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or there has not been compliance with applicable Canadian law dealing with the limitation of actions. Our mineral resources competitors have greater financial and technical measures and we may not be able to acquire additional attractive mineral properties on acceptable terms. Significant and increasing competition exists for mineral opportunities in Canada and the United States. There are a number of large established mineral companies with substantial capabilities and greater financial and technical resources than us. We may be unable to acquire additional attractive mineral properties on terms we consider acceptable. Accordingly, our exploration programs may not will yield any reserves or result in any commercial mineral operations (see Item 4.B. Competition). There are differences in United States and Canadian reporting of reserves and resources. The disclosure in this annual report uses terms that comply with reporting standards in Canada. In addition, the terms mineral resource, measured mineral resource, indicated mineral resource and inferred mineral resource are defined in and required to be used by the Company by NI 43-101; however, these terms are not defined terms under SEC Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Inferred mineral resources have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of the measured mineral resources, indicated mineral resources, or inferred mineral resources will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility, pre-feasibility studies or other economic studies, except in rare cases. 12


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Accordingly, information contained in this annual report containing descriptions of the Companys mineral deposits may not be comparable to similar information made public by United States companies. As a"foreign private issuer,we are exempt from the Section 14 proxy rules and Section 16 of the Securities Act, which may result in shareholders having less complete and timely data. The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result in shareholders having less complete and timely data. The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data. Our management team has no significant minerals exploration technical training. No member of our management team has significant technical training in minerals exploration or mining and starting and operating a mine. Due to these factors, our management may not be fully aware of many of the specific requirements related to working within his industry, that their decisions may not take into account standard engineering or managerial approaches mineral exploration companies commonly use. This risk is that our operations, earnings and ultimate financial success could suffer due to managements lack of experience in this industry. RISK FACTORS RELATED TO THE NATURAL RESOURCE INDUSTRY The Company faces risks related to the exploration and potential development of its properties. The exploration and development of mineral deposits involves significant risks. It is impossible to ensure that the current and future exploration programs and/or feasibility studies on the Companys existing mineral properties will establish reserves, or whether any of the Companys exploration stage properties can be brought into production. Few properties that are explored are ultimately developed into producing mines. At present, none of the our properties have defined ore bodies with reserves and resources, and our proposed exploration programs are an exploratory search for ore. Whether an ore body will become commercially viable depends on many factors, including: the characteristics of the deposit, such as size, grade and proximity to infrastructure; metal prices, which cannot be predicted and which have been highly volatile in the past; mining, processing and transportation costs; and the willingness of lenders and investors to provide project financing; labour costs and possible labour strikes; and governmental regulations, including, without limitation, regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment, worker safety, transportation, and reclamation and closure obligations. The Company is also subject to the risks normally encountered in the mining industry, such as: unusual or unexpected geological formations; natural disasters; power outages and water shortages; cave-ins, land slides, and other similar mining hazards; inability to obtain suitable or adequate machinery, equipment, or labour; and other known and unknown risks involved in the operation of mines and the conduct of exploration. Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Depending on the price of minerals, the Company may determine that it is impractical to commence, or, if commenced, continue exploration into commercial production. Such a decision would negatively affect the Companys profits and may affect the value of its equity. We have no current mining operations and if we ever commence mining operations we face certain risks, any of which could result in our ceasing operations. We have no current mining operations and no revenue from mining operations. If we ever commence actual mining operations, such operations would face the risk of changing circumstances, including but not limited to: failure of production to achieve metal recovery levels indicated by pre-production testing of drill core and bulk samples; estimates of reserves being adversely affected by encountering unexpected or unusual geological formations; production costs being adversely affected by unforeseen factors such as substantial adverse changes in exchange rates or changes in environmental protection requirements, breakdowns and other technical difficulties, slides, cave-ins or other natural disasters, work interruptions or labor strikes; the grade of ore actually mined being lower than that indicated by drilling results; persistently lower market prices of the products mined than those used to determine the feasibility of mining a mineral occurrence; adverse changes in interest rates that may apply to project development debt. In addition, we have no experience in developing mining properties into production and its ability to do so will be dependent upon securing the services of appropriately experienced personnel or entering into agreements with other major mining companies which can provide such expertise. 13


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Our estimates of any mineral deposits on our properties may not change. Our estimates of any mineral deposits on our properties may not change. We have prepared all figures with respect to the size and grade of mineralized deposits included herein, or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only and any identified mineralized deposit may not ever qualify as a commercially viable mineable ore body that can be legally and economically exploited. The prices of precious and base minerals and metals fluctuate widely and may not produce enough revenue to cover the Companys costs. Even if commercial quantities of mineral deposits are discovered, a profitable market may not exist for the sale of the metals produced. The Companys long-term viability and profitability depend, in large part, upon the market price of metals which have experienced significant movement over short periods of time, and are affected by numerous factors beyond the Companys control, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. The supply and demand for metals is affected by various factors, including political events, economic conditions and production costs in major producing regions. The price of any minerals produced from the Companys properties may not be sufficient such that any such deposits can be mined at a profit. The seasonality in Alaska can be extreme and can cause interruptions or delays in our activities. Certain of our properties are located in Alaska. The weather during the colder seasons in these areas can be extreme and can cause interruptions or delays in our activities. As a result, our activities in these regions are seasonal and the preferred time for work is limited to the spring and summer when costs are more reasonable and access to the properties is easier (see Item 4.B.). The Companys properties may be subject to unregistered agreements; transfers, or claims and title may be adversely affected. Our title opinions do not validate that we have good and marketable title to all of our properties. We follow the usual industry practice in obtaining title opinions with respect to our lands. No examination has been made of the ground to determine if any of our mineral claims have been staked or assessment work carried out. The Companys properties may be subject to unregistered agreements, transfers or claims and title may be adversely affected by such undetected defects. If title is disputed, the Company may have to defend its ownership through the courts, and the Company cannot guarantee that a favourable judgment will be obtained. In the event of an adverse judgment with respect to any of its mineral properties, the Company could lose its property rights and may be required to cease its exploration and development activities on that property. Mineral operations are subject to government and regulatory approvals. Our operations require the procurement of numerous permits and compliance with an extensive number of codes and regulations. Mining, exploration and exploitation permits are required. Failure to comply with regulatory requirements could result in permits being withdrawn or suspended which would adversely affect our operations. We are subject to extensive and changing environmental legislation, regulation and actions. We are subject to extensive and changing environmental legislation, regulation and actions in connection with our operations and properties. We cannot predict what environmental legislation, regulation or policy will be enacted or adopted in the future or how future laws and regulations will be administered or interpreted. The recent trend in environmental legislation and regulation, generally, is toward stricter standards and this trend is likely to continue in the future. This recent trend includes, without limitation, laws and regulations relating to air and water quality, mine reclamation, waste handling and disposal, the protection of certain species and the preservation of certain lands. These regulations may require the acquisition of permits or other authorizations for certain activities. These laws and regulations may also limit or prohibit activities on certain lands. Compliance with more stringent laws and regulations, as well as potentially more vigorous enforcement policies or stricter interpretation of existing laws, may necessitate significant capital outlays, may materially affect the Companys results of operations and business, or may cause material changes or delays in the Companys intended activities. 14


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We may have no direct contractual relationship in certain mineral properties that have been granted by third parties. Our rights to acquire interests in certain mineral properties have been granted by third parties who themselves hold only an option to acquire such properties. As a result, we may have no direct contractual relationship with the underlying property holder. UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES There is only a limited public market for our common shares on the OTC Bulletin Board and that market is extremely volatile. There is only a limited public market for our common shares on the OTC Bulletin Board, 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 OTC Bulletin Board 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 worldwide economic and market conditions, as well as changes in industry conditions, such as regulatory and environment rules. 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, 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 penny stock rules to the extent our stock price on the OTC Bulletin Board is less Than $5.00. Since the common shares are not listed on a national stock exchange or quoted on the NASDAQ Market within the United States, trading in the common shares on the OTC Electronic Bulletin Board is subject, to the extent the market price for the common shares is less than $5.00 per share, to a number of regulations known as the "penny stock rules". The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document prepared by the SEC, to provide the customer with additional information including current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market value of each penny stock held in the customer's account, and to make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser's written agreement to the transaction. To the extent these requirements may be applicable they will reduce the level of trading activity in the secondary market for the common shares and may severely and adversely affect the ability of broker-dealers to sell the common shares. 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. 15


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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 200,000,000 common shares. Subject to compliance with applicable corporate and securities laws, we may issue these shares under such circumstances and in such manner and at such times, prices, amounts and purposes as our board of directors may, in their discretion, determine to be necessary and appropriate. Your proportionate ownership and voting rights as a common shareholder could be adversely affected by the issuance of additional common shares, including a substantial dilution in your net tangible book value per share. ITEM 4.
        INFORMATION ON THE COMPANY
  A.
        HISTORY AND DEVELOPMENT OF THE COMPANY
  The Company was incorporated on February 27, 1979 under a perpetual charter pursuant to the British Columbia Company Act by registration of its Memorandum and Articles and was extra-provincially registered in the Province of Alberta on October 12, 1995 under the name Flame Petro-Minerals Corp. At an extraordinary general meeting held on March 15, 2000, our shareholders approved the change of name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc, which name change was effected on March 21, 2000. At our annual meeting of shareholders on February 20, 2003, our shareholders approved the change of name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp., which name change was effected March 18, 2003. Our authorized capital consists of 200,000,000 Common Shares without par value. Of these, 92,650,825 shares were issued and outstanding as of February 28, 2010 and 92,650,825 shares were issued and outstanding as of the date of this annual report. Our head office is located at #240 -11780 Hammersmith Way, Richmond, B.C., V7A 5E9. On February 20, 2003 we held a shareholders meeting at which our shareholders voted to change our name from LinuxWizardry Systems, Inc. to Linux Gold Corp. and obtained a new OTC BB trading symbol LNXGF. We believe our new name, Linux Gold Corp. more closely represents our true business activities. 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. In accordance with the BCA, we were required to transition ("Transition") to the BCA and amend our Articles or Notice of Articles upon Transition to the BCA. We filed a transition application with the Registrar of Companies British Columbia and completed the Transition on June 11, 2004. On August 16, 2004, at the Annual General Meeting of shareholders, our shareholders passed a special resolution replace our Articles in their entirety pursuant to the Business Corporations Act(British Columbia). Our Incorporation Number is BC0187279. Our Articles do not restrict the nature of the business that may be carried on by the Company. During the three fiscal years ending in February 2010, we have been involved in mineral property exploration. We have investigated several mineral properties in Canada and the United States. Our current plans are to joint venture and explore our mineral properties. We have interests in six properties in Alaska. We hold a 50% interest in the Fish Creek property, which is optioned to Teryl Resources Corp. We also hold 33 quarter-section State of Alaska mining claims at several locations near Granite Mountain on the eastern Seward Peninsula of Alaska. We hold 12 mining claims (3 square-miles) called the Dime Creek Claim Block located about 15 miles to the south of Granite Mountain, and 6,400 acres of mineral exploration claims staked in the Livengood-Tolovana Mining District. Linux Gold Corp is 100% owner of the claims. We also recently acquired the option to enter into a lease agreement with the owner of 11 claims named Trout Claims located in the Fairbanks Recording District, Alaska, and an option to enter into a lease agreement with the owner of 10 claims named Coho Claims located in the Fairbanks Recording District, Alaska. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined for the above properties. We also own a 1.277% net working interest in an oil well located in Fayette County, Texas. To date, we have received no revenues from our mining property activities, and have received no revenue from our interest in the Fayette County oil well during the past five fiscal years. As a result, we wrote off our interest in the oil well located in Fayette County. We have no current plans to pursue further activities in either the oil or gas business. 16


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We are currently in the exploration stage and 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. Exploration Expenditures During fiscal 2010, the Company incurred $50,975, including $41,016 on staking and recording fees and $9,959 on geological work done on the Companys properties. During fiscal 2009, the Company incurred $61,885, including $47,401 on staking and recording fees and $14,484 on geological work done on the Companys properties. During fiscal 2008, the Company incurred $170,663, including $96,344 on staking and recording fees and $74,319 on geological work done on the Companys properties. B.
        BUSINESS OVERVIEW
  Nature of the Companys Operations We are an exploration stage company and there is no assurance that a commercially viable mineral deposit exists on any of our properties. Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined. If we complete our current exploration programs and if we are successful in identifying a mineral deposit, we will have to spend substantial funds on further drilling and engineering studies before we will know if we have a commercially viable mineral deposit or reserve on any of our properties. We will seek equity financing to provide working capital and to meet exploration commitments on all our properties. Plan of Operations The following contains forward-looking statements relating to revenues, expenditures and sufficiency of capital resources. Actual results may differ from those projected in the forward-looking statements for a number of reasons, including those described in this 20-F. Source of Funds for Fiscal 2010/2011 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. In the event that 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 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. 17


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We had a working capital deficit of $264,821 on February 28, 2010, compared to a deficit of $296,083 on February 28, 2009, and a deficit of $219,213 at February 29, 2008. Use of Funds for Fiscal 2009/2010 During Fiscal 2010/2011, we estimate that we will expend approximately $250,000 on general and administrative expenses. During Fiscal 2010/2011 we plan to expend approximately $100,000 on property exploration and development expenses. Description of the Markets in Which the Company Competes The Company does not have a market in which it competes, as it operates in an extractive industry. However, the mining industry in which the Company is engaged is highly competitive due to significant and increasing competition for exploration opportunities. (see Competition below, and Risk Factors, page 9). Competition Significant and increasing competition exists for mining exploration opportunities available in North America and elsewhere in the world. Competitors include well-capitalized mining companies, independent mining companies and other companies having financial and other resources far greater than those of the Company. Seasonality Due to the northern climate, exploration work in some areas of Alaska can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work is limited to May through September and surface drilling from March through November (see Risk Factors commencing on page 9). Availability of Raw Materials The Company does not have a reliance on raw materials, as it operates in an extractive industry. Marketing Strategy We do not have any plans for a marketing strategy at this time. Dependence on Certain Commercial Agreements or Intellectual Property 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. 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 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. 18


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C.
        ORGANIZATIONAL STRUCTURE
  For a list of our significant subsidiaries, see Item 10  Additional Information  Subsidiary Information. D.
        PROPERTY, PLANTS AND EQUIPMENT
  We do not own any properties. 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 Company will pay monthly rent and office space operating cost of $1,118. We have occupied these facilities since November 1, 2006. These facilities are believed to be adequate for meeting our needs for the immediate future. If required in the future, we do not anticipate that we will have any difficulty in obtaining additional space at favorable rates. There are no current plans to purchase or otherwise acquire any properties in the near future. Since our inception and during the three fiscal years ending in February 2010, we had been involved in oil and gas exploration/production and mineral property exploration and development. Mineral Properties Fish Creek Claims, Alaska We currently own a 50% joint venture interest in 30 state of Alaska mining claims, comprising 1,032 acres, known as the Fish Creek Prospect, located in the Fairbanks Mining District in Alaska. These claims are subject to an option agreement with Teryl Resources Corp., a company with common directors and officers. Teryl Resources Corp. may purchase the 5% net royalty for $500,000 U.S. within 1 year after production on a 25% working interest, or retain a 5% NSR. Teryl also agrees to expend a minimum of $500,000 U.S. after three years from the date of the agreement. The claims are legally maintained by recording an affidavit of annual labor for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130 per claim ($3,900 total). All mechanized exploration activity must be permitted by the Alaska Division of Mining, Alaska Department of Fish and Game, and the U.S. Corps of Engineers. Water can be withdrawn from Fish Creek to support exploration activities with oversight from the Alaska Department of Conservation. Currently, we are permitted to conduct exploration by drilling. To the best of our knowledge, we are operating in compliance with all applicable environmental regulations. There currently are no unusual social, political or environmental encumbrances to mining on the project. We currently hold a valid exploration permit on the project. Additional permits for future work will be acquired from the Division of Mining, Alaska Department of Fish and Game, and the U.S. Corps of Engineers on an as-needed basis. The Fish Creek project is located 25 miles north of Fairbanks in an important mining district with permissive land status and excellent road access to the property. Currently, there are only primitive trails developed within the property to access exploration sites. The project is located within metamorphic and plutonic host rocks that are similar in composition and age to rock units that contain commercially viable mineralization elsewhere in the Fairbanks Mining District. The property is also located on a drainage that was mined extensively for alluvial gold in the past both upstream and downstream of the Fish Creek project. Limited exploration conducted between 1992 and 2003 did not reveal significant bedrock exposures of mineralization, however, very widely spaced placer drilling over a large area of the property conducted in 1996 indicated the presence of placer gold in the alluvial deposits. More extensive and closer spaced placer gold drilling conducted in 2004 confirmed the presence of significant concentrations of placer gold on the claims. Two independent technical consultants are utilized by the Company for work on the Fish Creek property. Evaluations for alluvial (placer) gold are managed by Jeff Keener of NordWand Enterprize, P.O. Box 82811, Fairbanks, Alaska, 99708, USA. Mr. Keener is a graduate of the University of Alaska, with a B.S. degree in Geology (1991). Mr. Keener is a member of the Alaska Miners Association and has applied for membership with the American Institute of Professional Geologists. From 1986 to the present he has been actively employed in various capacities in the mining industry in numerous locations in Alaska, Nevada, Arizona, and California and is recognized as an expert in the field of placer examination. For lode gold exploration we utilize Avalon Development Corp. of Fairbanks, Alaska, to conduct any proposed exploration work on the Fish Creek Property. Mr. Curt Freeman is the President of Avalon Development Corporation, P.O. Box 80268, Fairbanks, Alaska, 99708, USA. Mr. Freeman is a graduate of the College of Wooster, Ohio, with a B.A. degree in Geology (1978), and a graduate of the University of Alaska with an M.S. degree in Economic Geology (1980). Mr. Freeman is a licensed geologist in Alaska (AA#159) and is a member of the American Institute of Professional Geologists (CPG#6901), the Society of Economic Geologists, the Geological Society of Nevada, the Alaska Miners Assoc. and the Prospectors and Developers Assoc. of Canada. From 1980 to the present, he has been actively employed in various capacities in the mining industry in numerous locations in North America, Central America, South America, New Zealand and Africa. 19


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P.O. Box 80268, Fairbanks, Alaska, 99708, USA. Mr. Freeman is a graduate of the College of Wooster, Ohio, with a B.A. degree in Geology (1978), and a graduate of the University of Alaska with an M.S. degree in Economic Geology (1980). Mr. Freeman is a licensed geologist in Alaska (AA#159) and is a member of the American Institute of Professional Geologists (CPG#6901), the Society of Economic Geologists, the Geological Society of Nevada, the Alaska Miners Assoc. and the Prospectors and Developers Assoc. of Canada. From 1980 to the present, he has been actively employed in various capacities in the mining industry in numerous locations in North America, Central America, South America, New Zealand and Africa. The following map shows the location of and access to our property.  In the 2004 drilling program, samples were collected every five feet. Placer samples were concentrated on-site with a small hydraulic concentrator and panned to extract the visible gold. The placer gold particles were dried and weighed with a precision Haigis balance and retained in glass sample vials. Placer analysis was performed by Mr. Keener, who also is storing the gold samples and concentrate reject in his office located in Fairbanks, Alaska. Bedrock samples were collected in large sample bags and transported to the Kinross rock core storage facility in Fox, Alaska where they were subsequently transferred to Alaska Assay Laboratory for splitting and preparation. Reduced samples were sent to Nevada Assay Laboratory of Reno, Nevada to be analyzed for 69 elements by ICP-MS techniques and for gold by fire assay. The pulps and rejects are being stored by Alaska Assay Laboratory at their facility in Fairbanks, Alaska. Bedrock chip samples, collected every five feet from the two lode holes, are retained in conventional chip trays and are being stored in Mr. Keeners Fairbanks office. Curt Freeman, MS, PGeo, Certified Professional Geologist, the author of the technical report, Summary Report For The Fish Creek Gold Property, Fairbanks Mining District, Alaska compliant with NI 43-101, dated March 7, 2005, recommended a two phase program as follows: 20


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Infill Reverse Circulation Drilling: Infill drilling using large diameter reverse circulation methods is warranted on the property to better define the placer gold mineralization outlined in 2004. Previous experience by Keener and other operators within the Fish Creek drainage has shown that drilling is an effective method of sampling and valuating the placer deposit and provides predictable estimates of subsequent production. Previous work suggests that drilling to obtain samples with volumes of 0.05 cubic yards each are adequate to estimate the volume and value of the placer gold deposit. Sampling procedures similar to those utilized in 2004 should be followed except that the volume of each sample should be measured to provide a more accurate estimate of the gold grades and to evaluate the recovery of the drilling system. Additionally, all holes should be continued into bedrock for at least 25 feet to test for the presence of lode gold mineralization. The primary goal of this program would be to enable industry acceptable mineral resources to be calculated between the two lines of drilling completed in 2004. A secondary goal would be to determine if significant lode gold mineralization exists in the area drilled. Recommended future work on the Fish Creek property should include drilling 20 reverse circulation drill holes (8 diameter) for a total of 1,600 feet of drilling. Construction of an all-weather creek crossing for off-road vehicles, near the mouth of Odden Creek, will facilitate this work. The estimated cost of such work is $50,000. Fieldwork will take about one to two weeks, whereas sample analysis and reporting will take an additional two to four weeks. Step-out Reverse Circulation Drilling: if results of the phase 1 infill drilling are encouraging, step-out drilling using large diameter reverse circulation methods is warranted on the property to expand on the placer gold mineralization outlined in 2004. Sampling procedures similar to those utilized in 2004 should be followed except that the volume of each sample should be measured to provide a more accurate estimate of the gold grades and to evaluate the recovery of the drilling system. Additionally, all holes should be continued into bedrock for at least 25 feet to test for the presence of lode gold mineralization. The primary goal of this program would be to enable industry compliant mineral resources to be calculated for areas of the property that lie up and downstream from the 2004 drill lines. A secondary goal would be to determine if significant lode gold mineralization exists in the area drilled. Recommended future work on the Fish Creek property should include drilling 55 reverse circulation drill holes (8 diameter) for a total of 4,400 feet of drilling. Construction of an all-weather creek crossing for off-road vehicles, near the mouth of Odden Creek, will facilitate this work. The estimated cost of such work is $150,000. Fieldwork will take about two to three weeks, whereas sample analysis and reporting will take an additional four to six weeks. In June, 2005, we commenced an auger drilling program near Too Much Gold Creek to collect soil samples from the top of bedrock. An auger track rig was used to drill 36 holes to a maximum depth of 60 feet on lines spaced 500 feet apart where holes were spaced 200 feet apart. No significant mineralization was found in the 2005 soil sampling program. Soil samples were transferred to Alaska Assay Laboratory in Fairbanks, Alaska, for preparation and were analyzed by ICP-MS for 69 elements and fire assay for gold by Reno Assay Laboratory in Reno, Nevada. Pulps and rejects are being stored by Alaska Assay Laboratory at their Fairbanks facility. The total cost for the 2005 soil sampling program was $16,000. In October 2006, six new geophysical targets were located on the Fish Creek property. An interpretive report titled Proposed Drill Sites, Fish Creek Gold Property, Fairbanks Mining District, Alaska. Fugro Airborne Survey, Inc., under contract to Fairbanks Gold Mining, Inc./Kinross Gold, initiated an HEM Airborne geophysical area and identified six main targets on the Fish Creek property. The following interpreted targets are based on linear resistivity features inferring regional structural trends. Conductive gradients at depth or along a structure suggest areas of higher fracture density. The high magnetic anomalies with good depth extent are interpreted as intrusives and the linear magnetic highs may be calc-silicates. Proposed Drill Site 01: Interpreted Target  Conductive Shear / High Fracture Density 
    Proposed Drill Site 02: Interpreted Target  Conductive Shear / High Fracture Density 
    Proposed Drill Site 03: Interpreted Target  Calc-silicate / High Fracture Density 
    Proposed Drill Site 04: Interpreted Target  Calc-silicate / High Fracture Density 
    Proposed Drill Site 05: Interpreted Target  Intrusive Contact / High Fracture Density 
    Proposed Drill Site 06: Interpreted Target  Manto Type Magnetic Anomaly Together with Teryl Resources Corp., we planned to implement an exploration program during the 2006/7 winter on the Fish Creek gold property. We received permits to conduct exploration drilling to drill up to seven holes (3,500 ft) on geophysical targets identified from the Fugro survey. In January 2008 we commenced arrangements for a drill program to test several gold geophysical anomalies. This drilling would be conducted as part of the Phase I exploration program recommended in our Technical Report on the Fish Creek Property, dated March 7, 2005, prepared under National Instrument 43-101. The drill program proposes to RVC drill approximately 2,000 feet, during this exploration season. The cost to complete this phase of work is estimated to be approximately US$200,000. However, due to the location of the proposed drill holes (wet, boggy), increased exploration activities in the State of Alaska, and due to the Company being a junior mining company requiring small-scale work competing for equipment with many larger companies, we have had difficulty obtaining equipment to conduct the exploration drilling. Although it is our intent to complete the drilling as soon as a drill is available, subject to financing, and the weather permits, we have been unable to do so due to challenging market conditions. 21


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There currently are no resources or reserves on the Fish Creek property that comply with the Canadian Institute of Mining and Metallurgy (CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by CIM Council on August 20, 2000. While encouraging in its results, the drill hole density of the 2004 placer drilling campaign at Fish Creek was not sufficient to allow estimation of CIM compatible resources or reserves. Additional work on the Fish Creek property will be based on results from the previous drilling programs. Each successive phase of exploration is dependent on generation of encouraging results from the previous programs and the increasing potential for delineation of commercially viable resources on the project. Granite Mountain Property, Seward Peninsula, Alaska The following is a summary of information on our Granite Mountain property. For detailed information please see the Technical Report GM06 43-101  Geologic Report on the Granite Mountain Project, Koyuk Mining District, Candle B-5 and C-5 Quadrangles, West-central Alaska prepared for Linux Gold Corp. by David D. Adams, P.Geo., dated March 20, 2007, (the Granite Mountain Report) filed on SEDAR on February 7, 2008. PROPERTY SUMMARY AND DESCRIPTION The current Granite Mountain Property consists of 33 State of Alaska MTRSC quarter-section mining claims (160 acres each), within one contiguous claim block, recorded in the Cape Nome Recording District. The original claims were staked during two campaigns: 136 claims were staked in March 2005, and an additional 140 claims were staked in August 2006. These claims covered approximately 179 sq. km. (approximately 44,160 acres). The current claim block (33 claims) covers 8.25 square miles (approximately 5,280 acres). The Property is located in western Alaska, at the east edge of the Seward Peninsula, approximately 240km (150mi) east-northeast of Nome, and approximately 640 km (400 mi) west of Fairbanks, Alaska. The 2008 assessment work was filed for 176 claims. The balance of the claims did not contain significant mineralization, therefore a portion of these claims were lapsed by not filing assessment work and not paying the rental for these claims. The 2009 assessment work was filed for 33 claims. The balance of the claims did not have significant mineralization therefore an additional portion of these claims were lapsed by not filing assessment work and not paying the rental for these claims. The remaining 33 claims are 100 % owned by the Company and are in good standing. Mineral rights in this part of Alaska are administered by the State of Alaska Department of Natural Resources. Annual assessment must be performed by September 1st of each assessment year and recorded by November 30th of each year. Annual mining claim rents vary according to claim size and age and are due and payable by November 30th of each year. The total annual labor commitment for 2009 was $13,200 (i.e., $400 per 160acre claim x 33 claims); an Annual Labor Affidavit for the 2008-2009 assessment year was filed on November 24, 2009. The total annual claim rent paid in 2009 for the Granite Mountain Claims was $8,400 for 33 claims. Annual labor amounts spent in excess of the required commitment may be banked forward for up to four years into the future as per current regulations regarding Alaska State mining claims. The work completed in 2006 is sufficient to bank forward and cover annual labor commitments to at least to the 2010 assessment year. As of November 24, 2009 a balance of $129,000 has been carried forward. All of the claims comprising the Granite Mountain Property are currently in good standing. All State of Alaska mining claims are subject to a production royalty of 3% of net income from a mining operation beginning 3.5 years following commencement of commercial production. There currently are no unusual social, political or environmental encumbrances to mining on the project. No known mineral closures exist within or adjacent to the property. None of the claims covering the Granite Mountain project have been surveyed by a registered land or mineral surveyor and there are no State or Federal laws or regulations requiring such surveying. In 2006 a multi-year APMA permit was obtained from the Alaska Department of Natural Resources Division of Mining to conduct drilling on the property. This permit is reviewed by the Corps of Engineers other governmental agencies before approval. Amendments to this permit, and additional permits, will be required for future ground disturbing exploration activities on the property, including drilling or trenching. Other miscellaneous permits (fuel storage, etc.) may be required from the Arctic Northwest Borough. 22


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Most of the work on the property has focused on four prospects, including the Saddle, Gossan, Gusty and Peace River prospects. The Saddle prospect is located within the K claim block and on the divide between the headwaters of the Kiwalik River and the headwaters of south fork of Quartz Creek. The Gossan prospect is located within the K claim block and on the south end of Gossan Ridge, just east of where the Kiwalik River makes a sharp bend to the north. The Gusty prospect is located within the K claim block and on the west bank of the upper Kiwalik River, approximately 3.2km north of the Gossan prospect. The Peace River prospect is located within the PR claim block and on the north bank of the uppermost Peace River.   23


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ACCESS, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY Access to the Property is by fixed-wing aircraft or helicopter. The nearest population center is Nome, Alaska (population approximately 4,000), which lies on the southwest coast of the Seward Peninsula, approximately 240 km (150 mi) west-southwest of the Property. An all weather road extends from Nome to the village of Council, located approximately 130 km (80 mi) west of the property. Koyuk, located approximately 56 km (35 mi) to the south, at the mouth of the Koyuk River, is the nearest village. Buckland, another small village, is located approximately 48 km (30 mi) to the north, on the Buckland River near its mouth. Several winter trails extend towards the Property from Koyuk, Council and Kiwalik Lagoon. These may be used for winter equipment travel, with appropriate permits from regulatory agencies. There is also a fifty foot easement along the Koyuk River, passing through private lands, and extending from Koyuk to Dime Landing. There is a well-established, ridgeline tractor trail on part of the project, extending from lower Bear Creek to the headwaters of Quartz Creek. Several airstrips, largely maintained by local miners, provide potential points of access to the Property. There is a 762 m (2,500 ft) airstrip on Bear Creek, near the mouth of Bob Creek, approximately 16 km (10 mi) from the central portion of the Property. This airstrip was the location of the exploration base camp for the 2006 field season. The Property is characterized by tundra and talus covered hills and ridges with very limited outcrop. Elevations vary from a minimum of 450 ft along the Kiwalik River to a maximum of 2,100 ft just north of Granite Mountain. Valley floors are narrow, and drainages are believed to have been initiated by the most recent alpine glaciation. In some cases drainages appear to be controlled by regional scale fault structures. The climate is semi-arid with short moderate summers and long cold winters, typical of sub-arctic, interior Alaska. The area is typically covered with snow from mid-September until mid- June. The Property is above tree line with little or no vegetation other than typical alpine tundra on the slopes and ridgelines, and minor alder and willows along some stream banks. GEOLOGIC SETTING This portion of Alaska, and the Property in general, is comprised largely of Cretaceous volcanic rocks locally intruded by mid to late Cretaceous plutons. Metamorphic rocks become increasingly abundant west of the Property, within the Seward Peninsula proper, and un-metamorphosed sedimentary rocks predominate east of the Property, within the Koyukuk basin on mainland Alaska. Early Cenezoic volcanic rocks are also prevalent in the region, although these are not common within the Property. 24


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The Property lies entirely within an isolated portion of the Koyukuk terrane (KT) which is surrounded by widespread Early Cenezoic basalt fields with no terrane affinity. The property lies less than 5 km east of a major tectonic boundary with the Seward terrane (ST). DEPOSIT TYPES AND MINERALIZATION Mineralization on the Property is believed to be plutonic hydrothermal in origin, and related to emplacement of the Granite Mountain pluton (GMP), the Quartz Creek pluton (QCP), the Peace River stock (PRS), and possibly other intrusive bodies at depth. These are mid-Cretaceous-age, zoned, multi-phase intrusions with calc-alkaline cores (quartz monzonite) which grade outward to alkaline/sub-alkaline margins (syenite-monzonite) and intrude lower Cretaceous continental volcanic and volcaniclastic rocks. Mineralization on the Property occurs in several styles which collectively suggest the possibility of multiple episodes of mineralization. Polymetallic (Pb-Zn-Sb-Cu-Mo-Ag-Au) mineralization is hosted within both the felsic plutonic rocks and the adjacent volcanic rocks. Polymetallic mineralization within the Property occurs at numerous locations on the property and in several distinct styles. Extremely limited outcrop exposures have made it difficult to assess the surface extent of mineralization at these locations. Significant lode and placer occurrences known to date are located on the western portion of the Property, within a broad north-northwest trending mineralization-alteration zone known as the Kiwalik trend. This zone was first recognized as being spatially associated with the QCP and several northwest trending fault structures. Alteration, which defines this zone, includes widespread propylitic alteration of volcanic rocks and local intense quartz-sericite, carbonate, and tourmaline alteration. Polymetallic mineralization, found on the eastern portion of the Property, associated with the PRS, has a slightly different style and geochemical signature. EXPLORATION 2005 Exploration During August 2005 a three-week reconnaissance exploration program was conducted utilizing a five-person crew to complete reconnaissance mapping and rock, soil and stream sediment/pan concentrate sampling. This work was conducted from a camp located on the southwest flank of Granite Mountain, near the Granite Mountain airstrip, which was used for fixed-wing support out of Nome. A Robinson R-44 helicopter was used for some logistical support, and ATVs were used extensively. The crew consisted of Jeff Keener, Diane Minehane, Robert Murray, Peter Williams and Robert Grunditz. A total of 93 rock samples, 115 soil samples, 35 stream sediment samples and 21 pan concentrate samples were collected. Reconnaissance grab rock sampling was completed on several previously known prospects and new occurrences discovered during the program. Soil sampling was completed using shovels to dig shallow pits approximately 1  2 ft deep. Reconnaissance soil sampling was completed along several ridgelines, and two soil sample grids were completed. The Gossan soil grid (76 samples) was established using sample and line spacings of 100m. The Peace River soil grid (33 samples) was established using sample spacing of 100m and line spacing of 200m. Stream sediment samples were collected on upper tributaries of the Kiwalik River at spacings of approximately 800m; pan concentrate samples were collected at some of the stream sediment sample sites where hydraulic conditions appeared amenable to heavy mineral accumulation. 2006 Exploration During August and September 2006, additional work was completed by contractors during a six week field program which included geochemical sampling, geologic mapping, geophysical surveys and exploratory drilling. This program was completed by a 12-person crew based out of a camp located at the airstrip on lower Bear Creek, just north of Bob Creek. The field crew consisted of soil samplers and field assistants, geologists and drillers. A Hughes 500 helicopter contracted from Last Frontier Helicopters, of Palmer, Alaska, was used to transport the crew to and from the project and to support drilling operations. Bering Air was used for charter fixed-wing support to and from Nome, including supplies and fuel delivery, using either a Caravan or Cessna 207. 2006 Reconnaissance Exploration Reconnaissance exploration on the Property during 2006 consisted of geologic mapping, rock sampling (58 samples), and grid-based soil sampling (580 samples). Very little time was spent on reconnaissance mapping and rock sampling since drilling was the main emphasis of the program. Rock sampling and geologic mapping was completed at the Saddle prospect, at the Peace River prospect, and at several other locations along the south fork of Quartz Creek and elsewhere on the property. Soil sampling (148 samples) was completed on an extension of the previously established Gossan grid, on the newly established Gusty grid (166 samples), and on the newly established Saddle grid (288 samples). All three grids utilized sample and line spacings of 100m. Soil sampling was completed using a Tanaka power auger equipped with a 3.5 ft flight and specialized bit designed for soil sampling. 25


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2006 Exploratory Drilling Exploratory drilling commenced on the Property during 2006. This drilling consisted of diamond core drilling of 2,971 ft (905.6m) in 4 drill holes at three prospects, including the Saddle, Gossan and Gusty prospects. One drill hole (KW06-03) was completed on the Saddle prospect to a depth of 499ft (152.1m). Two drill holes (KW06-1 and KW06-04) were completed on the Gossan prospect to depths of 880ft (268.2m) and 825ft (251.5m). One drill hole (KW06-02) was completed on the Gusty prospect to a depth of 767ft (233.8m). 2006 Geophysical Surveys Three ground magnetometer survey lines were completed on the Property in 2006, including one line on the Saddle prospect and two lines on the Gusty prospect. DRILLING Drilling during 2006 consisted of diamond core drilling of 905.6m (2,971ft) in four drill holes at the Gossan, Gusty and Saddle prospects. Core recovery and rock quality data for the 2006 drilling program verifies the very poor ground conditions, particularly at lower elevations. Three drill sections were constructed to interpret the results of the 2006 diamond core drilling. Section A-A, at the Gossan prospect, shows drill holes KW0601 and KW0604; Section B-B, at the Gusty prospect, shows drill hole KW0602; and Section C-C, at the Saddle prospect, shows drill hole KW0603. 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. There currently are no unusual social, political or environmental encumbrances to mining on the project. Linux currently holds a valid 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. SAMPLING METHOD AND APPROACH Approximately 148 rock samples, 663 soil samples, 45 stream sediment samples, and 21 pan concentrate samples have been collected on the Property during 2005-2006, and most of these were collected during 2006. Rock and soil sampling was completed both years, and stream sediment and pan concentrate sampling were completed only during 2005. Sample descriptions were recorded at the sample sites in either a standard field notebook or on pre-printed note cards, and location data was gathered using either a Garmin or Trimble GPS handheld unit. Field notes were scanned and GPS location data were downloaded into the computer at base camp on a regular basis. Location data were plotted in camp using GIS software to determine precise map locations and facilitate field mapping. Location data and summarized sample descriptions were later incorporated into a master GIS database. Rock Sampling Method: The same rock sampling method was used during both 2005 and 2006. Rock grab samples consisted of 10-30kg of material, and were collected from outcrop when possible, however, due to poor exposure, many of the rock samples represent rubble. All samples were collected in 7.5 x 12 in cotton canvas or olefin sample bags at the sample site, and later in base camp were organized into woven polypropylene bags for transit. Rock sample data was recorded on site on sample cards or in standard field books, including lithology, alteration and mineralization. 2005 Soil Sampling Method: Soil samples collected during 2005 were obtained by using a pick and shovel to dig a hole approximately 12ft deep and collecting soil from of the C-horizon. This material was screened on-site using a -8 mesh stainless steel sieve to obtain an approximately 1 kg sample, which was placed into a Hubco Sentry sand bag, which was then placed in a sealed ziplock plastic bag. Rock chips were collected from the oversize material and kept for later inspection. The pits were then reclaimed to their natural state, and the sampling tools were wiped clean to prevent contamination of subsequent samples. Soil sample data included notes on location, soil stratigraphy and rock chip lithology. 26


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2006 Soil Sampling Method: Soil sampling during 2006 was completed using a Tanaka power auger equipped with a 3.5ft flight and specialized bit designed for soil sampling. Above the break in slope and on the ridges sampling conditions were relatively good, with each site requiring only 12 attempts to obtain sufficient sample material, and average depths ranging from 23ft. The sampling conditions were poor in the Kiwalik River valley below the break in slope, with each site requiring 48 attempts to locate sufficient sample material, due to abundant organics and poorly developed soils. These sites also experienced extremely wet ground conditions, causing additional problems due to the samples washing off of the flight before extraction from the drill hole. Grid-based soil sampling during 2005 and 2006 utilized 100m sample and line spacings, and ridge-line traverses utilized approximately 200m spacings or random selected locations. Soil sample data included notes on location, soil stratigraphy and rock chip lithology. Stream Sediment Sampling Method: Stream sediment sampling on the Granite Mountain property during 2005 was conducted on first order streams on approximately one quarter mile spacing. The samples were obtained using an aluminum scoop to collect material from the active channels of streams where silt was observed. The samples were wet-screened on-site using -20 mesh and 100 mesh stainless steel sieve screens placed over a bucket. The slurry was allowed to stand approximately 30 minutes, the water decanted, and the silt sample carefully retrieved from the bucket and placed into a Hubco Sentry sand bag. The sand bags were then placed into a sealed ziplock plastic bag. In some locations where silt was unavailable, moss was collected. Silt material was extracted from the moss by shaking and rinsing over a bucket, and then recovered as described previously. Stream sediment sample notes included width and depth of the active channel and relative proportions of different size material in the sample. Pan Concentrate Sampling Method: Pan concentrate samples were collected during 2005 on the Granite Mountain property at stream sediment sample sites on 2nd and 3rd order streams, where sand and gravel existed in the stream bed. Coarse material was dug from a depth of approximately 2ft in the stream bed, typically a gravel or point bar. A 16 inch plastic gold pan was heaped with coarse material and panned down to a smaller volume of material which was washed into a 10 inch gold pan. The process was repeated a total of 3 times before the accumulated material in the 10 inch gold pan was panned down to remove light minerals and form a heavy mineral concentrate, which was then retrieved and bagged by the same methods described above for stream sediment samples. Any fine placer gold particles present in the final pan were counted and removed from the sample before bagging. Core Sampling Method: All core from the 2006 program was logged at the Bear Creek base camp by DLM. The core sample intervals were indicated by wooden blocks placed at the end of the sample interval and labeled with the sample number. Digital photographs of the core boxes were taken and archived. Drill samples were obtained by splitting the core in the field using a Haley hydraulic-driven diamond saw powered by a Honda gasoline engine. One half of the core was used for the sample and the other half was put in its original position in the original core box. The split core is currently being stored at MIs facility in Fox, Alaska. SAMPLE PREPARATION, ANALYSES AND SECURITY All geochemical samples from both the 2005 and 2006 field programs were prepared by Acme Analytical Laboratories. The samples were placed in double, woven polypropylene shipping sacks, secured with wire ties, and shipped by charter air service from the Granite Mountain project base camp to Nome, and thence from Nome to Fairbanks by Frontier Flying Service. Chain of custody was then transferred to MI, who transported the samples by truck to their facility in Fox, Alaska where they were stored temporarily in a locked garage until the chain of custody was transferred to a courier for Alaska Assay Labs. Alaska Assay Labs did all sample prep for 2005-2006. MIs personnel sorted the samples and prepared the lab submittal forms. While in MIs possession, the sample bags and shipping bags were inspected for integrity and found to be in good condition. The entirety of each rock sample was crushed to 70% passing 2 millimeter (10 mesh) and a 250 gram split was taken and pulverized to +85% passing 75 microns (200 mesh). Samples were analyzed for Au by fire assay by American Assay, in Reno, Nevada (2005), and by Alaska Assay Laboratories, in Fairbanks, Alaska (2006). All rock samples were analyzed for Au using standard 30 gram lead collection fire assay techniques with an inductively coupled plasma (ICP) finish. Then the samples were analyzed for a suite of elements by using a four acid digestion procedure followed by ICP techniques with an atomic emission spectrographic finish. The 2005 samples were analyzed for a suite of 49 elements by ALS Chemex. The 2006 samples were analyzed for a suite of 40 elements by Acme Analytical Laboratories. Analytical results in both digital and paper copy format were sent to LGC and MI immediately on completion of the analyses, and certificated copies of those results followed thereafter. All rejects are being stored by Alaska Assay Labs; 2005 pulps are being retained by MI, and 2006 pulps are currently in possession of Alaska Assay Labs. 27


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DATA VERIFICATION A total of 81 standards and 98 blanks were used during the 2006 field program to verify the quality of the analytical results. For the soil samples, one standard and one blank were inserted into the sample stream on a 3 pair per 100 sample basis. Three standards and one blank were distributed randomly in the rock samples. For the drill samples, Alaska Assay Laboratories inserted one standard and one high blank into the sample stream on a 1 pair per 18 sample basis. These standards included one high standard (approximately 1,010ppb) and one low standard (approximately 415ppb). Additional standards, including one high standard (approximately 200ppb Au) and one low standard (approximately 90ppb Au) were inserted into the drill sample stream by LGC, on a 3 pair per 100 sample basis. Blanks were also inserted at the beginning and end of each drill hole. Commercially prepared gold standards were used. Blank samples consisted of basalt from the Browns Hill Quarry near Fairbanks. This material is ideal because of its hardness, which helps scour the crusher plates and grinders, and because of its consistent chemical signature which is void of gold and other elements typically used as gold pathfinders. Examination of the assay results for standards and blanks indicates no unusual or spurious sample results. RECOMMENDATIONS The Granite Mountain Reports author proposes that further exploration on the Property be conducted in two phases. These phases include a surface exploration program (Phase 1, estimated $504,064 CAN$), and, contingent on encouraging results, a follow-up exploration drilling program (Phase 2, estimated 325,238 CAN$). The total estimated cost of the proposed programs is $829,302 (CAN$). The Phase 1 program consists of surface exploration which includes rock sampling and geologic mapping of the known prospects, grid base auger drilling, soil sampling, trenching and rock chip sampling, airborne geophysical survey and additional ground geophysical surveys. Phase 2 consists of conducting a 6 hole diamond drill program of 3,600 ft (1,097 meters) to test several known mineralized areas and newly discovered drill targets from the Phase 1 surface exploration program. We plan to commence work pursuant to the recommendations in the Phase 1 surface exploration program upon receipt of required permits and raising sufficient capital, however, we have been unable to do so due to challenging market conditions. Dime Creek Property, Seward Peninsula, Alaska The Dime Creek Claim Block is located about 15 miles to the south of Granite Mountain and is composed of 12 mining claims (3 square-miles). The placer gold-platinum deposits on Dime Creek were discovered in 1910, but it wasnt until 1915 that rich pay was found, setting off a stampede to the area. By 1917, about 12,500 ounces of gold and platinum were recovered from shoveling-in on the creek placer and from underground drifting on several bench placers (Harrington, 1917, USGS B-692). The placer gold is unusually pure with a fineness of 960 and occurs in placer concentrates in a ratio to native platinum particles of 25:1 to 10:1. In later years, a small bucket-ladder dredge operated on the valley bottom from 1928 to 1941 while small open-cut and drifting operations continued on the benches until at least 1955. Total production is not known, but incomplete historical data shows production to be at least 25,000 ounces of gold and platinum. The placer deposit is considered to be highly prospective for significant additional placer reserves, as well as for lode sources of the placer gold and platinum. Tom Bundtzen, our Geological Consultant for our Alaska Properties, completed a summary report, on the Dime Creek property, dated April 25, 2009. The summary report estimates one million cubic yards of auriferous pay remain in several defined areas within the Dime Creek basin. In addition, lode targets for platinum and possibly gold have been outlined by an auger soil survey carried out by past investigators and from historical notations in published literature. Additional data on platinum lode targets can be acquired with follow-up drilling concurrent with placer gold exploration and is a recommended course of action for future exploration work. Mr. Bundtzen recommends that the placer resource areas should be drill tested prior to any decisions to develop them. Placer ground in the upper portion of the basin above Haycock is relatively shallow (<20 feet) and drilltesting could be accomplished with a track-mounted auger drill similar to that used to conduct soil sampling in 2001. A 100 hole, 3,000 foot drill program is recommended to begin the due diligence on the placer resource north of Haycock. This data could initiate production planning for the placer resource and open the door for a second phase of drilling in the following year south of Haycock. 28


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Exploration by previous operators in 2000-2001 located elevated PGE values within the Linux Gold claim block. These anomalies already define potential PGE-bearing lode drill targets for Linux Gold Corp and Mr. Bundtzen recommends initial testing by 2 to 4 drill holes. These test holes could be completed in conjunction with the placer resource exploration program. In November, 2009 extensive data compilation was completed for the Dime Creek property. The data compilation, produced by Thomas Bundtzen of Pacific Rim Geological Consulting, Inc., is to be used to facilitate future lode and placer exploration programs on the property. Mr. Bundtzen managed and designed the exploration programs that took place in the 1990s, 2000, and 2001. The compilation from Dime Creek and nearby gold-bearing stream basins included: 1.
      Detailed microprobe analyses of placer platinum and gold recovered from six locations;2.
      Mineralogical analysis of bulk heavy mineral concentrate samples (17 samples);3.
      Rock chip sample program (33 samples);4.
      Detailed motorized auger soil sample program (404 samples);5.
      Ground magnetic survey;6.
      An extensive review of past mineral production and mine activity records from U.S. Geological Survey, the Alaska Territorial Department of Mines, the U.S. Bureau of Mines, and mint return records as found in unpublished Archival records. Highlights of the overall data analysis are summarized: •
        Dime Creek has historically produced an estimated 68,464 ounces of gold and 198 ounces of byproduct platinum. Dime Creek has not been systematically mined with modern mechanized techniques.•
        Multiple bench and modern stream gold-platinum placers occur on the Linux property.•
        The second tier and higher benches in upper Dime Creek valley are interpreted by Bundtzen to be ancestral marine strandline (beach) gold-platinum placer deposits similar to the placers exploited both onshore and offshore at Cape Nome. This suggests that marine deposits should be explored for gold and PGE along strike for several kilometers.•
        Microprobe analysis of the platinum mineralization indicates a rhodium-enriched type of isoferroplatinum that averages 88.59 percent platinum, 8.98 percent iron, about 1.0 percent rhodium, and only minor amounts of other PGE metals. When combined with accompanying gangue mineral identifications; i.e., chrome-rich diopside, the lode source is probably a Ural-Alaska intrusion complex.•
        The gold in Dime creek is of exceptionally high fineness, averaging about 960 fine (or 96% gold), even exceeding average high fineness placer gold found in Alaska. It contains traces of quartz, muscovite, and feldspar which suggest an origin in granitic rocks.•
        Soils collected during a detailed soil survey on two bench levels of Dime Creek contained up to 160 ppb gold, 174 ppb platinum, and 144 ppb palladium as well as threshold levels of copper, chromium, and nickel.•
        Results from the 2000 soil sampling program, coupled with the magnetic signatures of mafic intrusions and granitic signature of gold (as interpreted from microprobe work) suggest lode and placer target locations.
  The Company believes that the data compilation constitutes an important information source that will be utilized during the design of a placer and lode exploration program on the Dime Creek claims. A previous report by Mr. Bundtzen recommends a 100 hole, 3000 feet drilling program to begin the due diligence on the placer resource and drill 2 to 4 holes on the Platinum lode targets, as set out in our news release dated May 5, 2009. The mineral data described above for the Dime Creek claims was prepared by Thomas K. Bundtzen, P. Geo., BS, MS, CPG-10912, ABSLN#279639, President of Pacific rim Geological Consulting, Inc., of Fairbanks, Alaska, who is independent of the Company as defined in NI43-101. Bundtzen is a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists (AIPG). Bundtzen is a Qualified Person as defined in National Instrument 43-101 and also qualifies under the rules stated by the U.S. Securities and Exchange Commission (SEC), and has verified the data for accuracy. Trout Claims, Alaska As of January 20, 2010, the Company entered into an exploration rights agreement for consideration of $7,500 with Peter S. Frantz for the right to explore eleven unpatented mining claims recorded as the Trout Claims, located in the Fairbanks recording district, State of Alaska, under the following terms and conditions: Initial non-refundable payment of US$1,500 at signing of the lease agreement; 29


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Annual work commitment of US$10,000;Consideration to the Owner on August 1 of each of the five years: 2011: Cash payment of US$5,0002012: Cash payment of US$10,0002013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Trout Claims The Trout Claims are located in the western edge of the Livengood quadrangle approximately 70 miles northwest of Fairbanks, Alaska. The Trout claims are underlain by the geochemically reduced, magnetically subdued, Wolverine Mountain intrusive complex, which is the same age as the Fort Knox, Pogo, Livengood, and other important gold-bearing intrusions in the Tintina Gold Province. Past productive placer gold deposits occur immediately downstream from the Trout Claims held by the Company. The junior company International Tower Hill Mines Ltd. (ITH) has calculated Ni 43-101 compliant resources of 12.5 million ounces gold at a 0.5 g/t gold cutoff at their Money Knob deposit in the Livengood mining district, which is approximately 30 miles east of the Trout Claims. The mineral data described above for the Trout Claims was prepared by Thomas K. Bundtzen, P. Geo., BS, MS, CPG-10912, ABSLN#279639, President of Pacific Rim Geological Consulting, Inc., of Fairbanks, Alaska, who is independent of the Company as defined in NI 43-101. Bundtzen is a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists (AIPG). Bundtzen is a Qualified Person as defined in NI 43-101 and also qualifies under the rules stated by the U.S. Securities and Exchange Commission (SEC), and has verified the data for accuracy. Coho Claims, Alaska As of January 20, 2010, the Company entered into an exploration rights agreement for consideration of $7,500 with Peter S. Frantz for the right to explore ten unpatented mining claims recorded as the Coho Claims, located in the Fairbanks recording district, State of Alaska, under the following terms and conditions: Initial non-refundable payment of US$1,500 at signing of the lease agreement;Annual work commitment of US$10,000;Consideration to the Owner on August 1 of each of the five years: 2011: Cash payment of US$5,0002012: Cash payment of US$10,0002013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Coho Claims The Coho Claims are located 30 miles northeast of the Pogo gold mine and 100 miles east of Fairbanks, Alaska. The Pogo gold mine, which is owned and operated by Sumitomo Corporation, produced 358,000 ounces gold in 2009, making it Alaskas largest gold producer. The Coho claims occur in an area explored by Sumitomo and their field operators prior to their discovery of the Pogo gold deposit in 1995. On the Coho claims, gold-bismuth-copper anomalies (maximum values of 1,024 ppb Au; 71 ppm Bi; 499 ppm Cu) have been detected in rocks collected near a geochemically reduced, Cretaceous-Tertiary intrusive complex that intrudes phyllite and schist equivalent to the Keevy Peak Formation. This geological-geochemical association is common within gold-bearing intrusions of the Tintina Gold province. The mineral data described above for the Coho Claims was prepared by Thomas K. Bundtzen, P. Geo., BS, MS, CPG-10912, ABSLN#279639, President of Pacific Rim Geological Consulting, Inc., of Fairbanks, Alaska, who is independent of the Company as defined in NI 43-101. Bundtzen is a Certified Professional Geologist (CPG) with the American Institute of Professional Geologists (AIPG). Bundtzen is a Qualified Person as defined in NI 43-101 and also qualifies under the rules stated by the U.S. Securities and Exchange Commission (SEC), and has verified the data for accuracy. 30


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ITEM 4A.
        UNRESOLVED STAFF COMMENTS
  Not applicable. 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. The following discussion should be read in conjunction with the Consolidated Financial Statements and Notes thereto included elsewhere herein. The Consolidated Financial Statements have been prepared in accordance with US GAAP. Audited consolidated financial statements for the fiscal years ended February 28, 2010, February 28, 2009, and February 29, 2008, respectively, are included in this annual report. Overview We are a mineral exploration company engaged in the acquisition and exploration of 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. The recoverability of amounts shown for investments, mineral properties, and the related deferred expenditures is dependent upon the existence of economically recoverable reserves, the ability to obtain the necessary financing to complete the exploration, the profitability of future production or our ability to dispose of those assets on a profitable basis. Our ongoing operation is dependent upon cash flow from successful operations and equity financing. We have incurred a loss of $409,573 in the year ended February 28, 2010 (2009 - $536,201; 2008 -$2,260,291). We have no revenue from our mining operations. (see Item 3.D., Risk Factors, page 9). A.
        OPERATING RESULTS
  Fiscal Year Ended February 28, 2010 compared to Fiscal year Ended February 28, 2009 Results of Operations During the fiscal years ended February 28, 2010 and February 28, 2009, we received no revenues from operations. Administrative expenses in 2010 totaled $355,647 compared to $474,316 in 2009. Consulting and subcontract expenses increased to $137,281 in 2010 from $124,751 in 2009 as the result of increased consulting work on internet marketing strategies to increase awareness of the Company. Professional fees totaled $37,323 compared to $79,189 in 2009 due to an overall decline in activities that require legal advice and the Companys effort in further streamlining professional services on financial reporting. Travel decreased from $104,249 in 2009 to $77,825 in 2010 as a result of reduced fund raising activities due to the world economy. Office and general administrative expenses decreased from $57,228 in 2009 to $39,167 in 2010 as a result of decreased operations. Management fees remain unchanged at $30,000 from 2009. Imputed interest calculated on the balances due to related parties rose to $39,069 from $26,143 in the prior year, resulting from an increase in related party advances received. Imputed interest at 15% was charged to operations based on the advances from related parties and treated as donated capital, as they are not payable to the related parties. Fiscal Year Ended February 28, 2009 compared to Fiscal year Ended February 29, 2008 Results of Operations During the fiscal years ended February 28, 2009 and February 29, 2008, we received no revenues from operations. Administrative expenses in 2009 totaled $474,316 compared to $1,963,211 in 2008. Consulting and subcontract expenses decreased to $124,751 in 2009 from $210,313 in 2008 as the result of a decrease in staffing and a decline in stock-based compensation expenses in 2009. Professional fees totaled $79,189 compared to $94,132 in 2008 due to an overall decline in activities related to Alaskan exploration and financing efforts. Travel decreased from $262,766 in 2008 to $104,249 in 2009 due to decreased operations. Amortization, bad debts, filing fees, foreign exchange, interest income, management fees and office charges totaled $139,984 in 2009, compared with $171,946 in 2008 as a result of decreased operations. Charges for imputed interest rose to $26,143 from $8,966 in the prior year, resulting from an increase in related party advances received. Imputed interest at 15% was charged to operations based on the advances from related parties and treated as donated capital. Interest expense declined from $1,041,913 in 2008 to $nil in 2009 as the Companys convertible debt was retired in the 2008 fiscal year. 31


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Fiscal Year Ended February 29, 2008 compared to Fiscal year Ended February 28, 2007 Results of Operations During fiscal 2008, we received no revenues from operations as compared to $nil revenues in 2007. Administrative expenses in 2008 totaled $1,963,211 as compared to $2,542,594 in 2007. Professional fees totaled $94,132 compared to $79,037 in 2007 due to increased activity in Alaska. We also incurred an imputed interest charge of $8,966 compared to $53,659 in 2007. Imputed interest at 15% was charged to operations based on the advances from related parties and treated as donated capital. This amount decreased during 2008 due to the additional advances received in 2008. Consulting and subcontract expenses decreased to $210,313 in 2008 from $541,483 in 2007. This decrease was due to the inclusion of stock-based compensation of $109,228 recognized from the granting of stock options in 2007. Travel decreased from $445,132 in 2007 to $262,766 in 2008 due to decreased operations. Office, rent and telephone totaled $35,406 compared to $110,824 in 2007. B.
        LIQUIDITY AND CAPITAL RESOURCES
  Our authorized capital consists of 200,000,000 common shares without par value. At February 28, 2010 we had 92,650,825 issued and outstanding common shares (February 28, 2009 - 87,650,825, February 29, 2008  83,095,825), and at the date of this annual report we had 92,650,825 issued and outstanding common shares. The directors of the Company adopted the Linux Gold Corp. Stock Option Plan (the Plan), and received shareholder approval of same March 15, 2000. 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. The audited consolidated financial statements have been prepared assuming that the Company will continue as a going-concern. As discussed in Note 1 to the consolidated financial statements, the Company has no revenues and limited capital, which together raise substantial doubt about its ability to continue as a going-concern. Management plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. In the past, we have derived most of our development and operating capital primarily from the issuance of capital stock. Minor amounts were derived from interest. We have been successful in the past in acquiring capital through the issuance of shares of our Common Stock, and through advances from related parties. Although we intend to continue utilizing these sources, there has been no assurance in the past that these sources and methods would continue to be available in the future. 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. We received funding in 2010 from our affiliated companies (common officers and directors). The total amount owing to related parties is $313,490 or 67.54% of total current liabilities as at February 28, 2010. The balances owing to related parties are non-interest bearing, unsecured and repayable on demand. We anticipate that our estimated cash requirements for the fiscal year ending February 28, 2011 will be approximately $500,000 for operational expenses. We do not foresee any material changes to our corporate operations. Expenditures for future exploration during fiscal 2010 work cannot be specifically confirmed as of the date of this 20-F, as our requisite cash requirements for exploration work are dependent upon the ability to raise capital and secure permits and equipment to conduct our exploration drilling on the Granite Mountain property 32


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In the event that no other sources of capital were available to us in the future, on a reasonable financial basis, it would face the same obstacles as many small, undercapitalized companies do, and, in the worst case, we could be forced to reorganize or liquidate, either of which consequence would likely have an adverse financial effect upon our shareholders. Fiscal Year Ended February 28, 2010 compared to Fiscal year Ended February 28, 2009 During 2010 we financed our operations primarily by the issue of 5,000,000 common shares of the Company for cash proceeds of $207,512, as well as advances from related parties of $102,350. During 2010, we spent $296,256 of these funds on operating activities as discussed above under Results of Operations for the Year Ended February 28, 2010 as compared to $632,663 in the year ended February 28, 2009. Our cash position decreased by $13,712 to $182 and we had a working capital deficit as at February 28, 2010 of $264,821. Fiscal Year Ended February 28, 2009 compared to Fiscal year Ended February 29, 2008 During 2009 we financed our operations primarily by the issue of 4,555,000 common shares for cash proceeds of $638,321, net of share subscriptions of $40,062 received in the prior year and share issuance costs of $35,459. During 2009, we spent $632,663 of these funds on operating activities as discussed above under Results of Operations for the Year Ended February 28, 2009 as compared to $850,665 in the year ended February 29, 2008. Our cash position increased by $5,658 to $13,894 and we had a working capital deficit as at February 28, 2009 of $296,083. Fiscal Year Ended February 29, 2008 compared to Fiscal year Ended February 28, 2007 During 2008 we financed our operations by the issue of 3,467,500 common shares for cash proceeds of $748,316. This consists of the issue of 212,500 common shares pursuant to the exercise of stock options for cash proceeds of $24,020, and the issue of 430,000 shares pursuant to the exercise of share purchase warrants for cash proceeds of $109,101. We also received subscriptions of 615,195 pursuant to a private placement. During 2008, we spent $850,665 of these funds on operating activities as discussed above under Results of Operation for the Year Ended February 29, 2008 as compared to $2,003,397 the year ended February 28, 2007. Our cash position decreased by $118,631 to $8,236 and we have a working capital deficit as at February 29, 2008 of $219,213. C.
        RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
  Our aggregate research and development expenditures over the past three years ended February 28, 2010, February 28, 2009 and February 29, 2008 amounted to $nil, $nil and $nil respectively. We do not hold any patents, trademarks or copyrights. D.
        TREND INFORMATION
  We are a mineral exploration company. Consequently, we have no production, sales, or inventory in the conventional sense. Our financial success will be dependent upon the extent to which we can discover mineralization and the economic viability of developing such properties. Such development, if initiated, may take years to complete and the amount of resulting income, if any, is difficult to determine with any certainty. We have no mineral reserves and to date have not produced any revenues. The sales value of any mineralization discovered by us is largely dependent upon factors beyond our control such as the market value of the metals produced. Since the second half of 2008, there has been a negative trend with regard to the market for metal commodities and related products as a result of global economic uncertainty, reduced confidence in financial markets, bank failures and credit availability concerns. These macroeconomic events have negatively affected the mining and minerals sectors in general. Although these circumstances will likely improve over the longer term, the short term impact upon the Companys liquidity and its ability to raise the capital required to execute its business plan going forward was affected. As a result, the Company was unable to complete its anticipated plans during fiscal 2010. The Company will consider its plans and options carefully in fiscal 2010. 33


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In 2010 we spent $50,975 in staking, exploration and development costs during the year ended February 28, 2010 ($61,885 - 2009). We had anticipated that we would spend approximately $300,000 during fiscal 2010 on field sampling, mapping and geological consulting. However, due to the difficulty raising funds in the equity market we decided to postpone the exploration until it becomes cost effective again after the market recovery. The major factors that caused significant reduction in net loss from 2009 to 2010 were: Instead of foreign exchange loss of $29,459 in 2009, we had a foreign exchange gain of $26,010 in 2010. We had a gain in 2010 because the Company has net liabilities denominated in US dollar which depreciated against Canadian dollar from 2009.In 2010 we reduced the operations due to the world market condition resulting in significantly reduced office expenses and legal fees, and further streamlined our financial reporting system resulting in significantly lowered accounting and audit fees. Other than as disclosed herein, we are not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect upon our net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported financial information not necessarily to be indicative of future operating results or financial condition. E.
        OFF-BALANCE SHEET ARRANGEMENTS
  The Company does not have any material off balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Companys financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. 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
        $
        -
        
        $
        -
        
        $
        -
        
        $
        -
        
        $
        -Long-term debt obligations
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Capital (Finance) Lease obligations
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Operating lease obligations (1)
        
        8,947
        
        
        8,947
        
        
        -
        
        
        -
        
        
        -Purchase Obligations
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Other Long-term liabilities reflected on the Companys Balance sheet under US
          GAAP
        
        -
        
        
        -
        
        
        -
        
        
        -
        
        
        -Total
        $
        8,947
        
        $
        8,947
        
        $
        -
        
        
        -
        
        
        - (1) On September 17, 2009 the Company entered into an office rent agreement for the duration of November 1, 2009 to October 31, 2010 at monthly rate of $3,355. The Company shares the office space and rent fees equally with two related parties. As at February 28, 2010 the Company is committed to eight months rent charge of $26,840 of which $17,893 will be reimbursed by the two related parties.
 34


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G.
        SAFE HARBOR
  This annual report includes "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements may include conclusions of prefeasibility and feasibility studies, estimates of future production, capital and operating costs, prices of silver and gold and other known and unknown risks. These and other factors and uncertainties may cause material differences from future results as expressed or implied by these forward looking statements. These risks, uncertainties and other factors include but are not limited to the risks involved in the exploration, development and mining business. All statements, other than statements of historical facts, included in this annual report that address activities, events or developments which we expect or anticipate will or may occur in the future are forward-looking statements. The words "believe", "intend", "expect", "anticipate", "project", "estimate", "predict" and similar expressions are also intended to identify forward-looking statements. Our estimated or anticipated future results or other non-historical facts are forward-looking and reflect our current perspective of existing trends and information. These statements involve risks and uncertainties that cannot be predicted or quantified, and consequently actual results may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, among others, the success of our exploration and development activities, environmental and other regulatory requirements, foreign exchange issues, mineral deposit estimates and mineral prices, competition by other mining companies, financing risks, mineral title issues, insider conflicts of interest, political stability issues, and other risks and uncertainties detailed in this report and from time to time in our other Securities and Exchange Commission (SEC) filings. Consequently, all of the forward-looking statements made in this annual report are qualified by these cautionary statements. We cannot assure you that the actual results or developments anticipated by us will be realized or, even if substantially realized, that they will have the expected effect on us or our business or operations. Forward-looking statements are subject to a variety of risks and uncertainties in addition to the risks referred to in Risk Factors under Item 3.D above. ITEM 6.
        DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
  A.
        DIRECTORS AND SENIOR MANAGEMENT
  The names, positions held with the Company and terms of office of each director and officer of the Company as of the date of this annual report, are as follows: As of February 28, 2010, our Board of Directors consisted of four Directors, two of whom are independent (or outside) non-executive Directors. The term of office of each of the present directors expires at each annual meeting of shareholders. The following table provides certain information about the members of our Board of Directors as of February 28, 2010, and also as at the date of this annual report. Name and Province or Stateand Country ofResidence(1)
        Position with Registrant
        Term of Office
        Office Held SinceJohn G. Robertson
          British Columbia, Canada
        President, CEO and Chairman of the Board and Director, and Director Subsidiary
        Annual Shareholders Meeting in 2010
        3/05/79Jennifer Lorette(2)
          British Columbia, Canada
        Director
        Annual Shareholders Meeting in 2010
        6/01/94Susanne Robertson(2)
          British Columbia, Canada
        Director
        Annual Shareholders Meeting in 2010
        8/28/02Monique van Oord(2)
          British Columbia, Canada
        Chief Financial Officer and Corporate Secretary
        Annual Shareholders Meeting in 2010
        8/16/04
  35


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(1)
      The information as to province, state and country of residence and principal occupation, not being within the knowledge of the Company, has been furnished by the respective directors individually.(2)
      Denotes member of Audit Committee. John G. Robertson. Mr. Robertson is the Chairman of the Board, CEO and founder of the Company and a Director of the Company since its inception. Mr. Robertson has been the Chairman, President and Chief Executive Officer of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin board, since July 1992, a U.S. public company engaged in the development of a rotary engine/compressor (Rand Cam Engine). Since October 1984 Mr. Robertson has been President and a Director of Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture Exchange and the OTC bulletin board that has financed the research on the Rand Cam Engine since 1986. Mr. Robertson has been the President and Principal Executive Officer and a Director of IAS Energy, Inc. since its formation in December 1994, a U.S. public company. Mr. Robertson is also the President and founder of Teryl Resources Corp., a British Columbia company trading on the TSX Venture Exchange and the OTC bulletin board involved in mineral exploration. 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. (since July 1991), Access Information Services, Ltd. (since September 1993), 394754 B.C. Ltd., dba SOVO Computer Centre (since October 1990), Pavlik Travel Services Ltd. (since November 2000), International Diamond Syndicate Ltd. (since May 1993), KLR Enterprises Inc. (since 1999), Rainbow Networks Inc. (since 2000), Rand Energy Group Inc. (since 1993), and 540330 B.C Ltd. (since April 1997). Mr. Robertson is a citizen and resident of Canada (see Item 7.B.  Related Party Transactions). Jennifer Lorette- Ms. Lorette has held several positions with the Company since June 1994. Also, 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 a director for Reg Technologies, Inc., a British Columbia corporation listed on the TSX Venture Exchange and traded on the OTC BB. Ms. Lorette has been a director of Teryl Resources Corp. since 2001, a British Columbia corporation listed on the TSX Venture Exchange and trading on the OTC BB engaged in exploration and development of mineral properties. Ms. Lorette is a citizen and resident of Canada. Susanne Robertson- Ms. Robertson was elected a director of the Company in August 2001. She is also a director of Teryl Resources Corp. since 1990, a British Columbia corporation listed on the TSX Venture Exchange and trading on the OTC BB engaged in exploration and development of mineral properties. Ms. Robertson is also a director of Reg Technologies Inc. since 1984, a British Columbia corporation listed on the TSX Venture Exchange and traded on the OTC BB. Ms. Robertson is a principal of SMR Investments, Ltd., a private business and financial consulting company providing management services to public companies, since 1979. Ms. Robertson is a citizen and resident of Canada (see Item 7.B.  Related Party Transactions). Monique van OordMs. van Oord is Chief Financial Officer (since August 2004), and a Director (since February 2004) of the Company. Ms van Oord was a Director and Chief Financial Officer of Teryl Resources Corp., from January 2003 until January 2010. Ms. van Oord has also acted as an Administrator for several public and private companies from 2002 to date. Ms. van Oord is a citizen and resident of Canada. The Senior Management serves at the pleasure of the Board of Directors. 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. Conflicts of Interest There are no existing or potential conflicts of interest among the Company, its directors, officers or promoters as a result of their outside business interests with the exception that certain of the Companys directors, officers and promoters serve as directors, officers and promoters of other companies, and, therefore, it is possible that a conflict may arise between their duties as a director, officer or promoter of the Company and their duties as a director or officer of such other companies. The directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and the Company will rely upon such laws in respect of any directors or officers conflicts of interest or in respect of any breaches of duty by any of its directors or officers. All such conflicts will be disclosed by such directors or officers in accordance with the BCBCA, and they will govern themselves in respect thereof to the best of their ability in accordance with the obligations imposed upon them by law. 36


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Other than Ms. van Oord who is only a director of the Company, all of the Companys directors are also directors, officers or shareholders of other companies that are engaged in the business of acquiring, developing and exploiting natural resource properties including properties in countries where the Company is conducting its activities. Such associations may give rise to conflicts of interest from time to time. Such a conflict poses the risk that the Company may enter into a transaction on terms which place the Company in a worse position than if no conflict existed. The directors of the Company are required by law to act honestly and in good faith with a view to the best interest of the Company and to disclose any interest which they may have in any project or opportunity of the Company. However, each director has a similar obligation to other companies for which such director serves as an officer or director. The Company has no specific internal policy governing conflicts of interest. See Item 3. Key Information - Risk Factors. Cease Trade Orders On December 3, 2007 the British Columbia Securities Commission (BCSC) issued a Cease Trade Order for Linux Gold Corp. citing a failure to file a technical report and non-compliant disclosure. The commission staff found that the technical report filed on SEDAR on February 22, 2006 was not prepared by a qualified person. The commission staff also found that our disclosure in the offering memorandum dated April 5, 2007 did not disclose repayment of debt to related parties. We filed the required documents on SEDAR to comply with the requirements to rectify the continuous disclosure deficiencies and the Cease Trade Order was revoked by the BCSC on February 8, 2008. On January 27, 2010, the BCSC issued a Cease Trade Order for Linux Gold Corp. citing a failure to file an annual information form. The Company file the requisite annual information form and the Cease Trade Order was revoked by the BCSC on January 29, 2010. Mr. Robertson is currently a director and officer of IAS Energy, Inc. (IAS), and Ms. Lorette was a director of IAS until July 2009. On September 4, 2009, the BCSC issued a Cease Trade Order for IAS citing a failure to file interim financial statements and related documents. On September 16, 2009 the Cease Trade Order was revoked by the BCSC. On October 2, 2009, the BCSC issued a Cease Trade Order for IAS citing a failure to file interim financial statements and related documents. On November 30, 2009 the Cease Trade Order was revoked by the BCSC. On January 6, 2010, the BCSC issued a Cease Trade Order for IAS citing a failure to file interim financial statements and related documents. On January 18, 2010 the Cease Trade Order was revoked by the BCSC. Mr. Robertson is a director and officer, and Ms. Lorette is a director of Reg Technologies Inc. (Reg Technologies). On September 4, 2009 the British Columbia Securities Commission (BCSC) issued a Cease Trade Order for Reg Technologies citing a failure to file its annual audited financial statements and its annual management and discussion. Reg Technologies filed the required documents on SEDAR on September 11, 2009, to comply with the requirements to rectify the continuous disclosure deficiencies and the Cease Trade Order was revoked by the BCSC on September 15, 2009. Additionally, Reg Technologies received notification from the TSX Venture Exchange that it had suspended trading in Reg Technologies shares as a result of the cease trade order. Reinstatement to trading can occur only when the cease trade order is revoked and the Exchange has concluded its reinstatement review to ensure Reg Technologies had satisfactorily complied with the Exchange requirements. The TSX Venture Exchange reinstated Reg Technologies shares for trading on September 21, 2009. On September 9, 2008 the British Columbia Securities Commission (BCSC) issued a Cease Trade Order for Reg Technologies citing a failure to file its annual audited financial statements and its annual management and discussion. Reg Technologies filed the required documents on SEDAR on September 22, 2008, to comply with the requirements to rectify the continuous disclosure deficiencies and the Cease Trade Order was revoked by the BCSC on September 24, 2008. Additionally, Reg Technologies received notification from the TSX Venture Exchange that it had suspended trading in Reg Technologies shares as a result of the cease trade order. Reinstatement to trading can occur only when the cease trade order is revoked and the Exchange has concluded its reinstatement review to ensure Reg Technologies had satisfactorily complied with the Exchange requirements. The TSX Venture Exchange reinstated Reg Technologies shares for trading on October 7, 2008. 37


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Other than as disclosed herein, no director or officer of the Company is or has been, within the preceding ten years, a director or officer of any other issuer that, while that person was acting in that capacity: (a)
      was the subject of a cease trade order or similar order or an order that denied the other issuer access to any exemptions for a period of more than 30 consecutive days, or(b)
      became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets. Penalties or Sanctions No director or officer of the Company is or has, within the past ten years: (a)
      been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation or Canadian securities regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory authority, or(b)
      been subject to any other penalties or sanctions imposed by a court or regulatory body that would be likely to be considered important to a reasonable investor making an investment decision. Individual Bankruptcies No director or officer of the Company is or has, within the preceding 10 years, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or been subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold the assets of that individual. There is a family relationship between two of the Directors or Senior Management. John Robertson and Susanne Robertson are husband and wife. Please refer to Item 7.B.  Related Party Transactions. There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management. B.
        COMPENSATION
  STATEMENT OF EXECUTIVE COMPENSATION The Company is required, under applicable securities legislation in Canada, to disclose to its Shareholders details of compensation paid to its directors and officers. The following fairly reflects all material information regarding compensation paid by the Company to its directors and officers, which information has been disclosed to the Company's Shareholders in accordance with applicable Canadian law. Executive Compensation Compensation Discussion and Analysis The Companys executive officers make recommendations to the board of directors regarding compensation policies and the compensation of senior officers. The Company does not have a Compensation Committee. The compensation of the senior executives comprises two components; namely, a base salary or consulting fees and the grant of stock options pursuant to the Companys stock option plan which is more particularly outlined below under the Option-based Awardssection. These forms of compensation are chosen to attract, retain and motivate the performance of selected directors, officers, employees or consultants of the Company of high caliber and potential. Each senior executive is employed for his or her skills to perform specific tasks and the base salary and number of options is fixed accordingly. The following information provides details of the compensation paid by the Company to its directors and officers during the fiscal year ended February 28, 2010, which has been prepared by the Company in accordance with the regulations (the Regulations) made under the Securities Act (British Columbia). 38


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Summary Compensation Table Named Executive Officers (NEOs) mean the Chief Executive Officer (CEO), the Chief Financial Officer (CFO) of the Company, or persons acting in a similar capacity or function, regardless of the amount of compensation of those individuals and each of the Companys three most highly compensated executive officers, other than the CEO and CFO, or three most highly compensated individuals acting in similar capacities, who were serving as executive officers, or in a similar capacity, at the end of the most recent financial year and whose compensation exceeds $150,000, and such individuals who would be an NEO but for the fact that they were not serving as an executive officer or in a similar capacity at the end of that financial year. During the Companys last completed financial year ended February 28, 2010, the Company had two Named Executive Officers: Mr. John Robertson, President and CEO, and Ms. Monique van Oord, CFO. The following table (presented in accordance with Form 51-102F6  Statement of Executive Compensation under National Instrument 51-102  Continuous Disclosure Obligations) sets forth all annual, long term and other compensation for services in all capacities to the Company and its subsidiaries payable to the NEOs for the three financial years ended February 28, 2010, 2009 and 2008 (to the extent required by the Regulations) in respect of the Named Executive Officers: Non-equity incentiveplan compensation **($)**Name andPrincipalPosition
     YearEndedFebruary28
     Salary($)
     Share- basedAwards($)
     Option-BasedAwards($)(8)
     Annualincentiveplans($)
     Long-termincentiveplans
     Pensionvalue ($)
     All otherCompensation($)(6)(7)
     Totalcompensation($)John
Robertson
President and
CEO (1)(2)(3)
     2010
2009
2008
     Nil
Nil
Nil
     Nil
Nil
Nil
     Nil
Nil
77,923
     Nil
Nil
Nil
     Nil
Nil
Nil
     Nil
Nil
Nil
     30,000
30,000
30,000
     30,000
30,000
107,923Monique van
Oord CFO(4)
     2010
2009
2008
     Nil
Nil
Nil
     Nil
Nil
Nil
     273
Nil
Nil
     Nil
Nil
Nil
     Nil
Nil
Nil
     Nil
Nil
Nil
     Nil
Nil
Nil
     273
Nil
Nil
  (1)
      Mr. Robertson is also a director and receives compensation in that capacity. See Director Compensation  Narrative Discussion.(2)
      Mr. Robertson is a director of SMR Investments Ltd., which received or is to receive $2,500 per month from the Company for management services provided to the Company. See Management Contracts.(3)
      Mr. Robertsons option-based awards granted during 2008 consisted of 1,000,000 stock options which were previously granted on February 21, 2003. These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.(4)
      Ms. van Oord is also a director but does not receive any compensation in that capacity.(5)
      Ms. van Oords option-based awards granted during 2010 consisted of 50,000 stock options which were previously granted on April 22, 2004. These options were due to expire on April 22, 2009and were extended until April 22, 2014 at an exercise price of CDN$0.10 and fair value of CDN$0.022 per share.25% of the options vested in 2010.(6)
      The value of perquisites received by each of the NEOs, including property or other personal benefits provided to the NEOs that are not generally available to all employees, were not, in the aggregate, greater than $50,000 or 10% of the NEOs total salary for the financial year.(7)
      Additionally, a directors fee of $12,000 is payable, but has been accrued. See Director Compensation.(8)
      The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend yield. Narrative Discussion The Company does not have a share-based award plan other than the stock option plan referred to above. The Company also does not have a pension plan or a long term incentive plan. Other than John Robertson, as described below in the Narrative Description  Directorsreported in the Directors Compensationtable below, no directors, who were not NEOs of the Company were compensated during the financial year ended February 28, 2010 for services in their capacity as directors. 39


---

A management fee was payable, but accrued to SMR Investments Ltd., a company controlled by Susanne Robertson, a director of the Company. Mr. Robertson is the President and a director of SMR. Other than as herein set forth, the Company did not pay any compensation to its directors or Named Executive Officers. Employment Contracts and Termination of Employment There are no employment agreements or other compensating plans or arrangements with regard to any of the Named Executive Officers which provide for specific compensation in the event of resignation, retirement, other termination of employment or from a change of control of the Issuer or from a change in a Named Executive Officers responsibilities following a change in control. Pursuant to the Companys stock option plan, in the event the optionees employment by or engagement with (as a director or otherwise) the Company is terminated by the Company for any reason other than death before exercise of the options granted hereunder, the stock option granted to the Participant shall immediately expire and all rights to purchase shares thereunder shall immediately cease and expire and be of no further force or effect. In the event the Participant resigns as an employee, the Participant shall have thirty (30) days from the date of such resignation to exercise such of the optioned shares in respect of which such option has not been previously exercised, and thereafter his option shall expire and all rights to purchase shares hereunder shall cease and expire and be of no further force or effect. Refer also to the Compensation Discussion and Analysissection above. Incentive Plan AwardsNarrative Discussion As reported above under the Summary Compensation Table,the Company does not have a share-based award plan or a long term incentive plan. Information with respect to the grant of stock options is more particularly described above in the Option-based Awardsand Compensation Discussion and Analysissections. Outstanding Option-Based Awards and Share-Based Awards The grant of option-based awards to the senior executives is determined by the recommendation of executive officers to the board of directors pursuant to the terms of the stock option plan referred to below. Previous grants of option-based awards are taken into account when considering new grants. The options are always granted at or above market price. The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions: weighted average risk free rate, weighted average expected life, expected volatility and dividend yield. The following table sets forth information concerning stock options granted to the Named Executive Officers during the most recently completed fiscal year: Name
        SecuritiesUnder OptionsGranted(1)(#)
        % of TotalOptions Granted**in Financial Year(2)**(%)
        Exercise orBase Price(3)($/Security)
        Market Value ofSecurities UnderlyingOptions on Date ofGrant($/Security)
        Expiration DateMonique van Oord
        50,000
        50%
        $0.10
        $0.10
        Apr.22, 2014  (1)
        All options are for the Companys Common Shares.(2)
        Percentage of all options granted in the year.(3)
        The exercise price of the option is set at not less than the market value of the Companys Common Shares on the date of grant, less a discount allowed by the TSX-V. The exercise price may be adjusted under certain circumstances, subject to regulatory acceptance.
 During the year ended February 28, 2010, Mr. Robertson received no option-based awards. Ms. van Oords option-based awards granted during 2010 consisted of 50,000 stock options which were previously granted on April 22, 2004. These options were due to expire on April 22, 2009and were extended until April 22, 2014 at an exercise price of US$0.10 and fair value of CDN$0.022 per share. 40


---

The following table sets out the option-based awards that are currently outstanding as at the end of the most recently completed financial year. Option-based Awards
        Stock-based AwardsName
        Number ofsecuritiesunderlyingunexercised options(#)
        Optionexerciseprice($)
        Optionexpirationdate
        Value ofunexercisedin-the-moneyoptions($)
        Number ofshares orunits ofshares thathave notvested(#)
        Market or payout value ofshare-basedawards thathave not vested($)John
          Robertson
        1,000,000
        0.10
        February 21,
          2013
        N/A
        N/A
        N/AMonique van
          Oord
        50,000
        0.10
        April 22,
          2014
        N/A
        N/A
        N/A
  Incentive Plan Awards  value vested or earned during the year Ms. van Oord received option-based awards during 2010 which consisted of 50,000 stock options which were previously granted on April 22, 2004. These options were due to expire on April 22, 2009and were extended until April 22, 2014 at an exercise price of US$0.10 and fair value of CDN$0.022 per share. No incentive stock options vested during the year ended February 28, 2010 which were held by the NEOs. During the year ended February 28, 2010, neither of the two NEOs exercised or sold options. There were 1,050,000 unexercised options at the financial year end held by the NEOs, none of which were in-the-money. Pension Plan Benefits As reported under the Summary Compensation Table, the Company does not maintain a Pension Plan and therefore no benefits were received. Termination of Employment or Change of Control Other than as described in the Narrative Discussionsection under the Summary Compensation Table, the Company has no plans or arrangements with respect to remuneration received or that may be received by the Named Executive Officers during the Companys most recently completed financial year or current financial year in view of compensating such officers in the event of termination of employment (as a result of resignation, retirement, change of control, etc.) or a change in responsibilities following a change of control, where the value of such compensation exceeds $150,000 per executive officer. Director Compensation The Company does not have a share-based award plan for the directors other than the stock option plan referred to in the Share Ownership section below, details of which are provided below under Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation for Directors.The Company also does not have a pension plan or a non-equity incentive plan for its directors. Other than John Robertson, as described below in the Narrative Descriptionand reported in the table below, no directors, who were not NEOs of the Company were compensated during the financial year ended February 28, 2010 for services in their capacity as directors, other than the grant of stock options. 41


---

Non-equity incentiveplan compensation($)Name and Principal Position
        Year Ended
          February
          28/29
        Salary
          ($)
        Share-
          based
          Awards
          ($)
        Option-
          Based
          Awards
          ($)(8)
        Annual
          incentive
          plans
          ($)
        Long- term
          incentive plans
        Pension value
          ($)
        All other
          Compen-sation
          ($)
        Total
          compensation
          ($)John G.
          Robertson,
          CEO(1)(2)(3)
        201020092008
        12,00011,00012,000
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        12,00011,00012,000Monique van
          Oord, CFO(4)
        201020092008
        NilNilNil
        NilNilNil
        276NilNil
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        276NilNilJennifer
          Lorette (5)
        201020092008
        NilNilNil
        NilNilNil
        NilNil11,688
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        NilNil11,688Susanne
          Robertson
          (6)(7)
        201020092008
        NilNilNil
        NilNilNil
        NilNil23,377
        NilNilNil
        NilNilNil
        NilNilNil
        NilNilNil
        NilNil23,377
  (1)
      Mr. Robertson is also an NEO and indirectly receives or accrues compensation in that capacity. See Executive Compensation  Narrative Discussion.(2)
      Mr. Robertson received directors fees from the Company. As of February28, 2010 and the date of this report $15,000 of the fees is payable to Mr. Robertson See Narrative Discussion below. Additionally, Mr. Robertson is President and a director of SMR Investments Ltd., which received or is to receive $2,500 per month from the Company for management services provided to the Company. See Executive Compensation  Narrative Discussion, and Management Contracts.(3)
      Mr. Robertson did not receive option-based awards in his capacity as a director.(4)
      Ms. van Oord does not receive any compensation in her capacity as a director, nor any option-based awards in her capacity as a director.(5)
      Ms. Lorettes option-based awards granted during 2008 consisted of 150,000 stock options which were previously granted on February 21, 2003. These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.(6)
      Ms. Robertson does not receive any compensation in her capacity as a director. However, Ms. Robertson is the majority shareholder of SMR Investments Ltd., which received or is to receive $2,500 per month from the Company for management services provided to the Company. See Executive Compensation  Narrative Discussion, and Management Contracts.(7)
      Ms. Robertsons option-based awards granted during 2008 consisted of 300,000 stock options which were previously granted on February 21, 2003. These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.(8)
      The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend yield. Narrative Description Directors of the Company who are not also NEOs are not compensated for their services in their capacity as directors, although directors of the Company are reimbursed for their expenses incurred in connection with their services as directors. Other than a directors fee of $12,000 paid to the President and CEO of the Company in 2010 (2009-$11,000; 2008-$12,000), there was no other cash compensation paid to directors by the Company for services rendered in their capacities as directors for the year ended February 28, 2010. A management fee was payable, but accrued to SMR Investments Ltd., a company controlled by Susanne Robertson, a director of the Company. Mr. Robertson is the President and a director of SMR. Other than as herein set forth, the Company did not pay any compensation to its directors or Named Executive Officers. Information with respect to grants of options to the directors is reported below under the Narrative Descriptionin the section below entitled Outstanding Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation. Other than as described above, no directors of the Company were compensated by the Company during the financial year ended February 28, 2010 for services as consultants or experts. 42


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Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation for Directors As disclosed under Director Compensation,the Company does not have a share-based award plan, a pension plan or a non-equity incentive plan for its directors except for its stock option plan. Option-based awards to the directors are granted pursuant to the terms of the Companys stock option plan. The options are always granted at market price. The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend yield. Directors generally receive a grant of stock options upon their appointment. The following table shows the options held by the directors (and officers) at the financial year ended February 28, 2010: Option-based Awards
        Stock-based AwardsName
        Number ofsecuritiesunderlyingunexercised options(#)
        Optionexerciseprice($)
        Optionexpiration date
        Value ofunexercisedin-the-moneyoptions($)
        Number ofshares or unitsof shares thathave not vested(#)
        Market orpayout value ofshare-basedawards thathave not vested($)John G. Robertson
        1,000,000
        $0.10
        Feb. 21, 2013
        Nil
        Nil
        NilJennifer Lorette
        150,000
        $0.10
        Feb. 21, 2013
        Nil
        Nil
        NilMonique van Oord
        50,000
        $0.10
        Apr. 22, 2014
        Nil
        Nil
        NilSusanne Robertson
        300,000
        $0.10
        Feb. 21, 2013
        Nil
        Nil
        Nil
  Non-Cash Compensation No stock options were granted by the Company during the financial year ended February 28, 2010 to the directors who are not a Named Executive Officer of the Company. There were no exercises of stock options during the financial year ended February 28, 2010 by the directors who are not the Named Executive Officer, and the financial year end value of vested and unexercised options was $22,679. There were 450,000 unexercised options at the financial year end held by two directors who are not a Named Executive Officer, none of which were in-the-money. Incentive Plan Awards No incentive stock options, which were held by the non-executive directors, vested during the 2010 year. Option Grants The following table sets forth information concerning stock options granted to directors, as a group, who are not Named Executive Officers during the most recently completed fiscal year: Name
        SecuritiesUnder OptionsGranted(1)(#)
        % of TotalOptions Grantedin FinancialYear(2)(%)
        Exercise orBase Price(3)($/Security)
        Market Value ofSecurities UnderlyingOptions on Date ofGrant($/Security)
        Expiration DateDirectors as a group who are not Named Executive Officers
        Nil
        Nil%
        $nil
        $nil
        n/a
  (1)
      All options are for the Companys Common Shares.(2)
      Percentage of all options granted in the year.(3)
      The exercise price of the option is set at not less than the market value of the Companys Common Shares on the date of grant, less a discount allowed by the TSX-V. The exercise price may be adjusted under certain circumstances, subject to regulatory acceptance. 43


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C.
        BOARD PRACTICES
  Under section 224 of the Business Corporations Act,S.B.C. 2002, c. 57, the directors of a company must, at their first meeting on or after each annual reference date, elect an audit committee, to hold office until the next annual reference date. The audit committee must be composed of at least 3 directors, and a majority of the members of the committee must not be officers or employees of the company or of an affiliate of the company. The members must elect a chair from among their number and determine their own procedures. The auditor of a company must be given reasonable notice of, and has the right to appear before and to be heard at each meeting of the companys audit committee and must appear before the audit committee when request to do so by the committee and after being given reasonable notice to do so. Our Board of Directors established an Audit Committee which members consist of Monique van Oord, Susanne Robertson and Jennifer Lorette. The Directors are elected by the shareholders to hold office for a term of one year or until re-elected at the next annual general meeting. Audit Committee The Companys Audit Committee must be comprised of at least three directors, the majority of whom are not employees, control persons or members of management of the Company or any of its associates or affiliates. The board of directors of the Company, after each annual shareholders meeting must appoint or re-appoint an audit committee. As of the date of this annual report, the members of the Audit Committee are Jennifer Lorette, Susanne Robertson and Monique van Oord. Ms. Lorette and Mrs. Robertson are independent directors who are not officers or employees of the Company or its affiliates; Ms. van Oord is the Companys Chief Financial Officer. The Audit Committee must review the annual financial statements of the Company before they are approved by the board of directors of the Company. The board of directors of the Company must review, and if considered appropriate, approve the annual financial statements of the Company before presentation to the shareholders of the Company. D.
        EMPLOYEES
  We employed no employees during any of the years ended February 28, 2010, February 28, 2009 and February 28, 2008. Our legal, accounting, marketing and administrative functions are, and have been during the last three fiscal years, contracted out to consultants who work closely with the Company. We have no employees; as such, no directors of 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 June 25, 2010: Shareholder
        Number of shares issued and outstanding
        Percentage ownership (1)John G. Robertson
        2,427,638 (2)
        2.62%Jennifer Lorette
        238,100 (3)
        *Monique van Oord
        225,000 (4)
        *Susanne Robertson
        6,513,772 (5)
        7.03%
  (1)
      as at June 25, 2010, there were 92,650,825 issued and outstanding common shares.(2)
      Includes 1,418,556 common shares directly owned, 8,482 shares registered in the name of Access Information Services, Ltd., a corporation controlled by the Robertson Family Trust, and 1,000,000 options 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 88,100 common shares and 150,000 options that are currently exercisable. Ms. Lorette's address is the same as our address. 44


---

(4)
      Includes 110,000 common shares directly owned, 50,000 options that are currently exercisable, and 65,000 warrants. Ms. van Oords address is the same as the Companys.(5)
      includes 797,000 common shares directly owned, 5,416,772 shares registered in the name of SMR Investments Ltd., and 300,000 options that are currently exercisable. Ms. Robertson's address is the same as the Companys. * Beneficially owns less than one percent of our common shares. For information regarding the ownership of stock options to acquire our common shares which are held by our Directors and Officers, and also by our employees, please refer to Item 6.B above Stock Options Granted to Employees, Directors and Senior Managers. 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. As at June 25, 2010, there were 92,650,825 issued and outstanding common shares. At such date, we are aware of one shareholder who owns or directs 5% or greater of the voting shares of the Company. Susanne Robertson, our director, owns or directs 6,213,772 of our issued and outstanding common shares. Of these, 5,416,772 shares are registered in the name of SMR Investments Ltd., a corporate controlled by Mrs. Robertson. Mrs. Robertson does not have any voting rights different from all other common shareholders. Over the past three years, there has not been a significant change in the percentage ownership held by any major shareholder. We do not know of any arrangements which could result in a change in control of the Company. B.
        RELATED PARTY TRANSACTIONS.
  We are a party to a management services agreement with SMR Investment Ltd. (SMR) under which SMR incurred management fees of $30,000 in each of fiscal years 2010, 2009, and 2008. SMR is a private company owned by Susanne M. Robertson, the wife of John G. Robertson, the Companys president, who is also a Director of SMR. We paid or accrued director's fees of $12,000 to John G. Robertson, our President, during the fiscal year ended February 28, 2010 (2009 - $11,000; 2008 - $12,000). We had related party advances outstanding of $313,490 at the February 2010 year-end, compared to $211,140 at the end of our previous fiscal year. These were unsecured, non-interest bearing and with no fixed terms of repayment. C.
        INTERESTS OF EXPERTS AND COUNSEL.
  Not applicable. 45


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ITEM 8.
        FINANCIAL INFORMATION
  A.
        CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
  Financial Statements Description
        PageConsolidated Financial Statements for the Years Ended February 28, 2010, 2009 and 2008.
        F-1 - F-26
  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
  Not applicable, except for Item 9.A.4 and Item 9.C. Our shares traded solely on the Alberta Stock Exchange (the "ASE") between November, 1995 and December 14, 1999, at which time it voluntarily delisted from the ASE. The Company's stock currently trades on the Over the Counter Bulletin Board under the symbol LNXGF. The following table shows the annual high and low closing prices of our stock traded on the OTC Bulletin Board during the last five fiscal years as follows: Year
        High
        Low
        Close2010
        $0.10
        $0.05
        $0.072009
        $0.24
        $0.04
        $0.062008
        $0.32
        $0.14
        $0.242007
        $0.54
        $0.21
        $0.272006
        $0.50
        $0.11
        $0.35
  The following table shows the quarterly high, low and closing prices of our stock traded on the OTC Bulletin Board during the last two fiscal years, for each quarter as follows: Period
        High
        Low
        Close
        Volume2010
          Q4 2/28/10
        $0.08
        $0.06
        $0.07
        2,670,200Q3 11/30/09
        $0.10
        $0.06
        $0.07
        10,892,500Q2 8/31/09
        $0.08
        $0.05
        $0.06
        4,349,700Q1 5/31/09
        $0.06
        $0.05
        $0.05
        3,099,0002009
          Q4 2/28/09
        $0.08
        $0.04
        $0.06
        3,765,300Q3 11/30/08
        $0.11
        $0.04
        $0.06
        4,128,500Q2 8/31/08
        $0.15
        $0.08
        $0.11
        4,184,100Q1 5/31/08
        $.29
        $0.13
        $0.14
        5,627,400
  all prices in US$
  46


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(Information provided by the Over The Counter Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions.) The following table shows the high and low closing prices of our stock traded on the OTC Bulletin Board during the most recent six months, for each month as follows: Month
        High*
        Low*2010, May
        $0.06
        $0.052010, April
        $0.06
        $0.052010, March
        $0.07
        $0.052010, February
        $0.07
        $0.062010, January
        $0.08
        $0.072009, December
        $0.07
        $0.06
  * All prices are in U.S. dollars.
  (Information provided by the Over The Counter Bulletin Board. The quotations reflect inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions.) ITEM 10.
        ADDITIONAL INFORMATION
  A.
        SHARE CAPITAL
  Not applicable. B.
        MEMORANDUM AND ARTICLES OF ASSOCIATION
  The Company was incorporated on February 27, 1979 under a perpetual charter pursuant to the British Columbia Company Act by registration of its Memorandum and Articles and was extra-provincially registered in the Province of Alberta on October 12, 1995 under the name Flame Petro-Minerals Corp. At an extraordinary general meeting held on March 15, 2000, our shareholders approved the change of name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc, which name change was effected on March 21, 2000. At our annual meeting of shareholders on February 20, 2003, our shareholders approved the change of name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp., which name change was effected March 18, 2003. We believe our new name, Linux Gold Corp. more closely represents our true business activities. The Memorandum and Articles of the Company are incorporated by reference to the information in our registration statement on Form 20-F filed with the Securities and Exchange Commission, in Washington, D.C. on June 4, 1999, which became effective August 3, 1999, to which our Articles of Incorporation and Memorandum were filed as exhibits. 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. In accordance with the BCA, we were required to transition ("Transition") to the BCA and amend our Articles or Notice of Articles upon Transition to the BCA. We filed a transition application with the Registrar of Companies British Columbia and completed the Transition on June 11, 2004. On August 16, 2004, at the Annual General Meeting of shareholders, our shareholders passed a special resolution replace our Articles in their entirety pursuant to the Business Corporations Act(British Columbia). Our Incorporation Number is BC0187279. Our Articles do not restrict the nature of the business that may be carried on by the Company. C.
        MATERIAL CONTRACTS
  During the past two years ended February 28, 2010 and February 28, 2009, we entered into the following material contracts. 47


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Fish Creek Joint Venture Agreement On March 5, 2002, we optioned a 50% interest in the 30 Fish Creek Claims to Teryl Resources Corp. (Teryl) (a related company with common directors and officers). Under the terms of the agreement, Teryl issued 200,000 common shares to Linux at a fair value of $80,000 and must expend $500,000 over three years. Linux retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest. Linux entered into an amending agreement with Teryl to extend the term of the original agreement until March 7, 2007, in which Teryl issued 100,000 common shares to the Company, and also agreed to expend a minimum of US$500,000 within two years from the date of that amending agreement. All other terms of the original agreement remain the same. Subsequently, Linux entered into a further amending agreement with Teryl to extend the term of the original agreement until March 5, 2009 and a further amendment amending the original agreement until March 5, 2010 and extended until March 5, 2011, in which all other terms of the original agreement remain the same. The claims are legally maintained by recording an affidavit of annual labour for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130 per claim ($3,900 total). Trout Claims Option/Lease/Mining Agreement On January 27, 2010 the Company entered into a mining agreement with the 100% owner (the Owner) of eleven mining claims named Trout Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance with the mining agreement, upon payment of US$7,500 (paid) to the Owner the Company obtains the option to execute the five year lease by August 1, 2010. The terms of the lease option are as follows: Initial non-refundable payment of US$1,500 at signing of the lease agreement;Annual work commitment of US$10,000;Consideration to the Owner on August 1 of each of the five years: 2011: Cash payment of US$5,0002012: Cash payment of US$10,0002013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Trout Claims Coho Claims Exploration Rights Agreement On January 27, 2010 the Company entered into a mining agreement with the 100% owner (the Owner) of ten mining claims named Coho Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance with the mining agreement, upon payment of US$7,500 (not paid) to the Owner the Company obtains the option to execute the five year lease by August 1, 2010. The terms of the lease option are as follows: Initial non-refundable payment of US$1,500 at signing of the lease agreement;Annual work commitment of US$10,000;Consideration to the Owner on August 1 of each of the five years: 2011: Cash payment of US$5,0002012: Cash payment of US$10,0002013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Coho Claims Corporate On September 17, 2009 the Company entered into an office rent agreement for the duration of November 1, 2009 to October 31, 2010 at monthly rate of $3,355. The Company shares the office space and rent fees equally with two related parties. As at February 28, 2010 the Company is committed to eight months rent charge of $26,840 of which $17,893 will be reimbursed by the two related parties. 48


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D.
        EXCHANGE CONTROLS.
  There are no governmental laws, decrees or regulations in Canada relating to restrictions on the export of capital affecting the remittance of interest, dividends or other payments to nonresident holders of the Registrant's shares. Any such remittances, however, are subject to withholding tax. See Item 10.E, "Taxation". There are no limitations under the laws of Canada, the Province of British Columbia or in the charter or any other constituent documents of the Company on the right of foreigners to hold or vote the shares of the Company. However, under the provisions of the Investment Canada Act, when control of a Canadian business is acquired by a non- Canadian, the transaction may be reviewable in certain circumstances by Investment Canada, an agency of the federal government of Canada. Reviewable transactions are those in which a non-Canadian acquires the assets of a Canadian business or the voting shares of a Canadian corporation the value of which assets or shares exceeds $5 million (Canadian). Also, certain transactions are specifically exempted from review. E.
        TAXATION.
  Certain Canadian Federal Income Tax Consequences The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of our common stock for a shareholder of ours who is not a resident of Canada but is a resident of the U.S. and who will acquire and hold our common shares as capital property for the purposes of the Income Tax Act(Canada) (the Canadian Tax Act). This summary does not apply to a shareholder who carries on business in Canada through a permanent establishment situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholders holding in Linux Gold 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 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. 49


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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.
  Not applicable. H.
        DOCUMENTS ON DISPLAY.
  We filed a registration statement on Form 20-F filed the Securities and Exchange Commission in Washington, D.C. (Registration No. 000-30084) on June 4, 1999, which became effective August 3, 1999. The Registration Statement contains exhibits and schedules. Material contracts and publicly available corporate records may be viewed at our registered and records office located at Suite 240, 11780 Hammersmith Way, Richmond, British Columbia. The Company files annual reports and furnishes other information with the SEC. You may read and copy any document that we file at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549 or by accessing the Commissions website (http://www.sec.gov). The Company also files its annual reports and other information with the Canadian Securities Administrators via SEDAR (www.sedar.com). 50


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I.
        SUBSIDIARY INFORMATION.
  We hold a 100% interest in LinuxWizardry, Inc., a private Florida corporation which is currently inactive. ITEM 11.
        QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  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 DELIQUENCIES
  None. ITEM 14.
        MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.
  A.
        MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
  None. B.
        USE OF PROCEEDS.
  Not applicable. ITEM 15.
        CONTROLS AND PROCEDURES
  Disclosure Controls and Procedures Disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), are controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Companys management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. As required by Rule 13a-15 under the Exchange Act, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of February 28, 2010, being the date of the Companys most recently completed fiscal year end. This evaluation was carried out under the supervision and with the participation of the Companys management, including Mr. John Robertson, the Companys Chief Executive Officer, and Ms. Monique van Oord the Companys Chief Financial Officer. As of February 28, 2010, management conducted an evaluation of our disclosure controls and procedures pursuant to the Securities Exchange Act of 1934. Based upon that evaluation, management has concluded that our current disclosure controls and procedures are not effective as of February 28, 2010. The conclusion that our disclosure controls and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as identified below. Management anticipates that such disclosure controls and procedures will not be effective until the material weaknesses are remediated. Our Company intends to remediate the material weaknesses as set out below. 51


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Managements Annual Report on Internal Control over Financial Reporting The Companys board of directors and audit committee are responsible for establishing and maintaining adequate internal control over financial reporting. The Companys internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of its consolidated financial statements for external purposes in accordance with generally accepted accounting principles. The Companys Chief Executive Officer, Mr. John Robertson, and the Companys Chief Financial Officer, Ms. Monique van Oord, assessed the effectiveness of the Companys internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-(f) promulgated under the Exchange Act) as of February 28, 2010. Based on managements evaluation, we concluded our internal control over financial reporting was not effective as at February 28, 2010 due to inadequate segregation of duties and effective risk assessment. We plan to take steps to enhance and improve the design of our internal controls over financial reporting. During the period covered by this annual report, we have not been able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to appoint additional qualified personnel to address inadequate segregation of duties and ineffective risk management, and adopt sufficient written policies and procedures for accounting and financial reporting. These remediation efforts are largely dependent upon securing additional financing to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may be adversely affected. Notwithstanding the foregoing, all internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only managements report in this annual report. Attestation Report on Internal Control Over Financial Reporting This annual report does not include an attestation report of the Companys registered public accounting firm regarding internal control over financial reporting. Managements report was not subject to attestation by the Companys registered public accounting firm pursuant to temporary rules of the SEC that permit the Company to provide only managements report in this annual report. Changes in Internal Control Over Financial Reporting During the fiscal year ended February 28, 2010, there were no changes in the Companys internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting. ITEM 15T.
        CONTROLS AND PROCEDURES
  Not applicable. ITEM 16.
        [RESERVED]
  52


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ITEM 16A.
        AUDIT COMMITTEE FINANCIAL EXPERT
  The Board of directors has determined that it does not have a member that qualifies as an audit committee financial expert as defined in Form 20-F of the U.S. Securities and Exchange Commission. We have been unable to retain the services of a person who qualifies as an audit committee financial expert. Until we appoint such a person, we believe that the members of our Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding internal controls and procedures for financial reporting. Moreover, the audit committee is comprised of seasoned business professionals, whereby two members have many 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 adopted a Code of Ethics which sets forth legal and ethical standards of conduct for employees, officers, directors and consultants that render material activities on behalf of the Company and its subsidiaries, including the Company's principal executive officer and its senior financial officers (principal financial officer and controller or principal accounting officer, or persons performing similar functions). This Code is intended to deter wrongdoing and to promote the conduct of all Company business in accordance with high standards of integrity and in compliance with all applicable laws and regulations. This Code applies to the Company and all of its subsidiaries and other business entities controlled by it worldwide. Additionally, Directors are subject to the laws of the Province of British Columbia, Canada, whereby they are required to act honestly, in good faith and in the best interests of the Company. ITEM 16C.
        PRINCIPAL ACCOUNTANT FEES AND SERVICES
  The following table discloses accounting fees and services of the Registrant: (Stated in terms of Canadian dollars) Type of Services Rendered
        2010 Fiscal Year
        2009 Fiscal Year(a) Audit Fees
        15,000
        $18,099(b) Audit-Related Fees
        $nil
        $nil(c) Tax Fees
        $nil
        $nil(d) All Other Fees
        $nil
        $nil
  Our Audit Committee assists the Board in fulfilling its responsibilities relating to the Companys corporate accounting and reporting practices. The Audit Committee is responsible for ensuring that management has established appropriate processes for monitoring the Companys systems and procedures for financial reporting and controls, reviewing all financial information in disclosure documents; monitoring the performance and fees and expenses of the Companys external auditors and recommending external auditors for appointment by shareholders. The Audit Committee is also responsible for reviewing the Companys annual financial statements prior to approval by the Board and release to the public. Currently the members are Jennifer Lorette, Monique van Oord and Susanne Robertson. Upon recommendation of our Audit Committee, our board of directors appointed James Stafford, Inc., Chartered Accountants, as our principal accountant to audit our consolidated financial statements for the fiscal year ended February 28, 2009. On July 8, 2009, James Stafford, Inc., Chartered Accountants, resigned as the Companys principal accountants. On August 6, 2009 the Board of Directors appointed Dale Matheson Carr-Hilton Labonte LLP, Chartered Accountants. On May 10, 2010 the Board of Directors appointed ACAL Group Chartered Accountants. 53


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Subject to the requirements in Canada under National Instrument 52-110 (Audit Committees) (NI 52-110), the Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services, however, as provided for under NI 52-110, the Audit Committee must pre-approve all non-audit services to be provided to the Company or its subsidiaries, unless otherwise permitted by NI 52-110. Our Audit Committee pre-approved all non-audit services (audit-related services, tax services, and all other services) provided to the Company prior to the commencement of the services. In the table above, and the disclosure below, audit fees are fees billed by the Companys external auditor for services provided in auditing the Companys annual financial statements for the subject year. Audit-related fees are fees not included in audit fees that are billed by the auditor for assurance and related services that are reasonably related to the performance of the audit or review of the Companys financial statements. Tax fees are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. All other fees are fees billed by the auditor for products and services not included in the foregoing categories. Audit FeesThe aggregate fees estimated by ACAL Group Chartered Accountants for professional services rendered for the audit of our annual consolidated financial statements for the fiscal year ended February 28, 2010 was $15,000. The aggregate fees billed by James Stafford, Inc., Chartered Accountants for professional services rendered for the audit of our annual consolidated financial statements for the fiscal year ended February 28, 2009 was $18,099. For Audit Fees incurred during fiscal 2010 and 2009, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services. The percentage of Audit Fees pre-approved by our Audit Committee during fiscal 2010 and 2009 was 100%. Audit Related FeesThe aggregate fees billed for assurance and related services, as applicable, relating to the performance of the audit of our consolidated financial statements for the fiscal year ended February 28, 2010 by ACAL Group Chartered Accountants; and by James Stafford, Inc., Chartered Accountants for the fiscal year ended February 28, 2009, which are not reported under the heading "Audit Fees" above, were $Nil and $Nil, respectively. Had there been any Audit Related Fees incurred during fiscal 2010 and 2009, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services. All Other FeesThe aggregate fees billed for products and services other than the services set out above, as applicable, for the fiscal year ended February 28, 2010 by ACAL Group Chartered Accountants was $Nil; and by James Stafford, Inc., Chartered Accountants for the fiscal year ended February 28, 2009, were $Nil. Had there been any Other Fees incurred during fiscal 2010 and 2009, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services. ITEM 16D.
        EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
  Not applicable. ITEM 16E.
        PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
  Not applicable. 54


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ITEM 16F.
        CHANGE IN REGISTRANTS CERTIFYING ACCOUNTANT
  Effective July 8, 2009, James Stafford, Inc., Chartered Accountants (Stafford), the Companys then independent accountant previously engaged as the principal accountant to audit the Companys financial statements, resigned as the Companys auditor. On the recommendation of the Audit Committee, the Board of Directors of the Company approved a proposal to engage the accounting firm of Dale, Matheson, Carr-Hilton Labonte LLP Chartered Accountants (DMCL) as auditors of the Company for the financial year ending February 28, 2010, effective August 6, 2009. The shareholders of the Company ratified the appointment of DMCL at the annual and special meeting of the shareholders of the Company on January 4, 2010. Effective May 10, 2010, at the request of the Company, DMCL, the Companys then independent accountant previously engaged as the principal accountant to audit the Companys financial statements, was asked by the Company to, and did, resign as the Companys auditor. On the recommendation of the Audit Committee, the Board of Directors of the Company approved a proposal to engage the accounting firm of ACAL Group Chartered Accountants (ACAL) as auditors of the Company for the financial year ending February 28, 2010, effective May 10, 2010. The Company's decision to change accountants was made on the recommendation of the Audit Committee. The shareholders of the Company will be asked to ratify the appointment of ACAL at the annual meeting of the shareholders of the Company scheduled to be held on August 11, 2010, or amended date or adjournment thereof. No audit report was prepared by DMCL during its appointment. DMCL was the auditor of the Company since August 6, 2009 and from such date until its termination, there were no disagreements with DMCL on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to the satisfaction of DMCL, would have caused it to make reference to the subject matter of the disagreement in its audit report and there have been no reportable events as described in Item 16F(a)(1)(v) of Form 20-F. During the two fiscal years ended February 28, 2009 and 2008, prior to the engagement of Stafford, the Company did not consult with DMCL with regard to (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements; and further, DMCL have not provided written or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event (as described in Item 16F(a)(1)(v) of Form 20-F). The decision to engage DMCL as the Companys new principal auditor was recommended and approved by the Company's Board of Directors as of August 6, 2009. DMCLfurnished a letter addressed to the Securities and Exchange Commission stating it agreed with the information contained above, which letter is filed as Exhibit 15.3 to this Form 20-F. During the two fiscal years ended February 28, 2010 and 2009, prior to the engagement of ACAL, the Company did not consult with ACAL with regard to (i) the application of accounting principles to a specific completed or contemplated transaction, or the type of audit opinion that might be rendered on the Company's financial statements; and further, ACAL have not provided written or oral advice to the Company that was an important factor considered by the Company in reaching a decision as to any accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a disagreement or a reportable event (as described in Item 16F(a)(1)(v) of Form 20-F). The decision to engage ACAL as the Companys new principal auditor was recommended and approved by the Company's Board of Directors as of May 10, 2010. ACAL furnished a letter addressed to the Securities and Exchange Commission stating it agreed with the information contained above, which letter is filed as Exhibit 15.4 to this Form 20-F. 55


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ITEM 16G.
        CORPORATE GOVERNANCE.
  Not applicable. PART III ITEM 17.
        FINANCIAL STATEMENTS
  The Company has elected to provide financial statements pursuant to Item 18. ITEM 18.
        FINANCIAL STATEMENTS
  PageAudited Financial Statements for the Years Ended February 28, 2010, 2009 and 2008
        F-1  F-26
  Our consolidated financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP). The consolidated financial statements, together with the reports of ACAL Group, Chartered Accountants, and James Stafford, Inc. Chartered Accountants on the annual consolidated financial statements referred to below, are filed as part of this annual report, and are included immediately following this text and include: Report of Registered Public Accounting Firm dated June 22, 2010 of ACAL Group, Chartered Accountants 
  Report of Registered Public Accounting Firm dated June 15, 2009 of James Stafford, Inc., Chartered Accountants 
  Consolidated Balance Sheets as at February 28, 2010 and February 28, 2009 
  Consolidated Statements of Operations and Comprehensive Loss as at February 28, 2010, February 28, 2009 and February 29, 2008 
  Consolidated Statements of Stockholders Deficit, March 1, 2003 to February 28, 2010 
  Consolidated Statements of Cash Flows as at February 28, 2010, February 28, 2009 and February 29, 2008 
  Notes to the Consolidated Financial Statements as at February 28, 2010, February 28, 2009 and February 29, 2008 56


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Linux Gold Corp.(An Exploration Stage Company) Consolidated Financial Statements 
(Expressed in Canadian Dollars)28 February 2010 **** F-1


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1066 WEST HASTINGS STREETVANCOUVER, BC V6E 3X2T: 604.683.3850
     ACAL GROUPF: 604.688.8479
     CHARTEREDACCOUNTANTSPCAOB & CPAB Registrant
  REPORT ON INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To:
     the Board of Directors and Stockholders of 
Linux Gold Corp. (An Exploration Stage Company)
  We have audited the accompanying consolidated balance sheet of Linux Gold Corp. (the Company) (An Exploration Stage Company) as of February 28, 2010, and the related consolidated statements of operations and comprehensive loss, stockholders equity (deficit), and cash flows for the year ended February 28, 2010 and the period from inception of exploration stage on March 1, 2003 through February 28, 2010. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. The consolidated financial statements of the Company for the year ended February 28, 2009 and the period from inception of exploration stage on March 1, 2003 through February 28, 2009 were reported upon by other auditors whose report, dated June 15, 2009, expressed an unqualified opinion on those statements and included an explanatory paragraph regarding the Companys ability to continue as a going concern. The consolidated financial statements of the Company for the period from inception of exploration stage on March 1, 2003 through February 28, 2009 reflect a net loss of $7,929,887 of the accumulated deficit as of February 28, 2010. The other auditors report have been furnished to us, and our opinion, insofar as it relates to amounts included for such prior periods, is based solely on the report of such other auditors. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the companys internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of February 28, 2010, and the results of its operations and its cash flows for the year ended February 28, 2010 and the period from inception of exploration stage on March 1, 2003 through February 28, 2010 in conformity with accounting principles generally accepted in the United States of America. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and the costs of its operations. These factors raise substantial doubt about the Companys ability to continue as a going concern. Managements plans in this regard are described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. ACAL Group Chartered Accountants Vancouver, British Columbia 
June 28, 2010 F-2


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JAMESSTAFFORDJames Stafford, Inc.Chartered AccountantsSuite 350  1111 Melville StreetVancouver, British ColumbiaCanada V6E 3V6Telephone +1 604 669 0711Facsimile +1 604 669 0754
  Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of 
Linux Gold Corp.(An Exploration Stage Company) We have audited the consolidated balance sheet of Linux Gold Corp.(the Company) as at 28 February 2009 and the related consolidated statements of operations, cash flows and changes in stockholders equity (deficiency) for the year ended 28 February 2009. These consolidated financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audit to obtain reasonable assurance about 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. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 28 February 2009 and the results of its operations, cash flows and changes in stockholders equity (deficiency) for the year ended 28 February 2009 in conformity with accounting principles generally accepted in the United States of America. The consolidated balance sheet of the Company as at 29 February 2008 and the related consolidated statements of operations, cash flows and changes in stockholders equity (deficiency) for the years ended 29 February 2008 and 28 February 2007 were audited by other auditors whose report dated 18 June 2008 expressed an unqualified opinion. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, conditions exist which raise substantial doubt about the Companys ability to continue as a going concern unless it is able to generate sufficient cash flows to meet its obligations and sustain its operations. Managements plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ James StaffordVancouver, Canada
     Chartered Accountants15 June 2009
  F-3


---

Linux Gold Corp.(An Exploration Stage Company)Consolidated Balance Sheets(Expressed in Canadian Dollars)
  As at
     
     
     As at28 February
     
     
     28 February2010
     
     
     2009$
     
     
     $AssetsCurrentCash and cash equivalents
     182
     
     
     13,894Goods and services tax receivable
     3,922
     
     
     7,938Marketable securities (Note 3)
     191,330
     
     
     78,000Prepaid expenses and deposits
     3,863
     
     
     4,012199,297
     
     
     103,844Property and equipment(Note 4)
     6,947
     
     
     9,098206,244
     
     
     112,942LiabilitiesCurrentAccounts payable (Note 6)
     131,628
     
     
     156,330Accrued liabilities
     19,000
     
     
     32,457Due to related parties (Note 7)
     313,490
     
     
     211,140464,118
     
     
     399,927Stockholders deficitCapital stock(Note 9)Authorized200,000,000 common shares without par valueIssued and outstanding28 February 2010  92,650,825 common shares28 February 2009  87,650,825 common shares
     15,259,388
     
     
     15,051,086Donated capital
     423,030
     
     
     383,961Accumulated other comprehensive loss
     (76,687
     )
     
     (268,000
     )Deficit, accumulated from prior operations
     (7,524,145
     )
     
     (7,524,145
     )Deficit, accumulated during the exploration stage
     (8,339,460
     )
     
     (7,929,887
     )(257,874
     )
     
     (286,985
     )206,244
     
     
     112,942
  Nature and Continuance of Operations(Note 1), Commitments(Note 10) and Subsequent Events(Note 13) On behalf of the Board: John Robertson
     Director
     Jennifer Lorette
     Director
  The accompanying notes are an integral part of these consolidated financial statements.
F-4


---

Linux Gold Corp.(An Exploration Stage Company)Consolidated Statements of Operations and Comprehensive Loss(Expressed in Canadian Dollars)
  Cumulativefrom inceptionof explorationstage on1 March 2003
     
     
     
     For theyearended
     
     
     
     For theyearended
     
     
     
     For theyearendedto 28 February
     
     
     
     28 February
     
     
     
     28 February
     
     
     
     29 February2010
     
     
     
     2010
     
     
     
     2009
     
     
     
     2008$
     
     
     
     $
     
     
     
     $
     
     
     
     $General and administrative expensesAmortization of debt issue costs
     
     205,242
     
     
     
     -
     
     
     
     -
     
     
     
     173,175Amortization of property and equipment
     
     29,047
     
     
     
     2,151
     
     
     
     2,867
     
     
     
     4,852Bad debt expense
     
     84,952
     
     
     
     -
     
     
     
     -
     
     
     
     84,952Consulting and subcontracts
     
     1,555,082
     
     
     
     137,281
     
     
     
     124,751
     
     
     
     210,313Filing and regulatory fees
     
     158,814
     
     
     
     18,841
     
     
     
     22,034
     
     
     
     24,319Foreign exchange loss (gain)
     
     (35,532
     )
     
     
     (26,010
     )
     
     
     29,459
     
     
     
     (7,130
     )Imputed interest (Note 7)
     
     217,530
     
     
     
     39,069
     
     
     
     26,143
     
     
     
     8,966Interest expense
     
     2,302,583
     
     
     
     -
     
     
     
     -
     
     
     
     1,041,913Management fees (Note 8)
  
  214,750
  
  
  
  30,000
  
  
  
  30,000
  
  
  
  30,000Mineral property exploration and development costs (Note 5)
  
  1,866,062
  
  
  
  50,975
  
  
  
  61,885
  
  
  
  170,663Office, rent and telephone
     
     696,842
     
     
     
     39,167
     
     
     
     57,228
     
     
     
     35,406Professional fees
     
     414,487
     
     
     
     37,323
     
     
     
     79,189
     
     
     
     94,132Travel and promotion
     
     957,526
     
     
     
     77,825
     
     
     
     104,249
     
     
     
     262,766Net loss before other items
     
     (8,667,385
     )
     
     
     (406,622
     )
     
     
     (537,805
     )
     
     
     (2,134,327
     )Other itemsRealized gain on sale of marketable security
     
     57,452
     
     
     
     57,452
     
     
     
     -
     
     
     
     -Realized loss on reallocation fromAccumulated Other Comprehensive Loss
     
     (60,403
     )
     
     
     (60,403
     )
     
     
     -
     
     
     
     -Mineral property acquisition costs written off
     
     (126,417
     )
     
     
     -
     
     
     
     -
     
     
     
     (126,417
     )Accounts payable written off
     
     46,281
     
     
     
     -
     
     
     
     -
     
     
     
     -Income from discontinued operations
     
     369,213
     
     
     
     -
     
     
     
     -
     
     
     
     -Interest income
     
     41,799
     
     
     
     -
     
     
     
     1,604
     
     
     
     453Net loss for the period
     
     (8,339,460
     )
     
     
     (409,573
     )
     
     
     (536,201
     )
     
     
     (2,260,291
     )Basic and diluted net loss per share
     
     
     
     
     
     (0.01
     )
     
     
     (0.01
     )
     
     
     (0.03
     )Weighted average number of commonshares used in per share calculations
     
     
     
     
     
     89,464,012
     
     
     
     86,536,209
     
     
     
     78,776,000Comprehensive lossNet loss for the period
     
     (8,339,460
     )
     
     
     (409,573
     )
     
     
     (536,201
     )
     
     
     (2,260,291
     )Loss realized on investments disposal transferred to earning
     
     60,403
     
     
     
     60,403
     
     
     
     -
     
     
     
     -Unrealized holding gain (loss) on available-for-sale investments
     
     (137,090
     )
     
     
     130,910
     
     
     
     (208,000
     )
     
     
     78,000Comprehensive loss
     
     (8,416,147
     )
     
     
     (218,260
     )
     
     
     (744,201
     )
     
     
     (2,182,291
     )Comprehensive loss per share
     
     
     
     
     
     (0.00
     )
     
     
     (0.01
     )
     
     
     (0.03
  )
  The accompanying notes are an integral part of these consolidated financial statements.
F-5


---

Linux Gold Corp.(An Exploration Stage Company)Consolidated Statements of Cash Flows(Expressed in Canadian Dollars)
  Cumulative frominception ofexploration stageon 1 March 2003
     
     
     
     For theyear ended
     
     
     
     For theyear ended
     
     
     
     For theyear endedto 28 February
     
     
     
     28 February
     
     
     
     28 February
     
     
     
     29 February2010
     
     
     
     2010
     
     
     
     2009
     
     
     
     2008$
     
     
     
     $
     
     
     
     $
     
     
     
     $Cash flows used in operating activitiesNet loss for the period
     
     (8,339,460
     )
     
     
     (409,573
     )
     
     
     (536,201
     )
     
     
     (2,260,291
     )Adjustments to reconcile loss to net cash used by operating activitiesAmortization of debt issue costs
     
     205,242
     
     
     
     -
     
     
     
     -
     
     
     
     173,175Amortization of property and equipment
     
     29,047
     
     
     
     2,151
     
     
     
     2,867
     
     
     
     4,852Receipt of marketable securities for property
     
     (16,000
     )
     
     
     -
     
     
     
     -
     
     
     
     -Accretion of discount on convertible debt
     
     2,291,794
     
     
     
     -
     
     
     
     -
     
     
     
     1,093,413Bad debt expense
     
     84,952
     
     
     
     -
     
     
     
     -
     
     
     
     84,952Imputed interest
     
     217,530
     
     
     
     39,069
     
     
     
     26,143
     
     
     
     8,966Accounts payable written off
     
     (46,281
     )
     
     
     -
     
     
     
     -
     
     
     
     -Mineral property acquisition costs written off
     
     126,417
     
     
     
     -
     
     
     
     -
     
     
     
     126,417Stock-based compensation
     
     269,340
     
     
     
     790
     
     
     
     -
     
     
     
     75,042Shares issued for services
     
     120,000
     
     
     
     -
     
     
     
     -
     
     
     
     -Shares issued for settlement of rent obligation
     
     19,200
     
     
     
     -
     
     
     
     -
     
     
     
     -Net loss on sale of marketable securities
     
     2,951
     
     
     
     2,951
     
     
     
     -
     
     
     
     -Income from discontinued operations
     
     (369,213
     )
     
     
     -
     
     
     
     -
     
     
     
     -Changes in operating assets and liabilitiesGoods and Services Tax receivable
     
     40,983
     
     
     
     4,016
     
     
     
     (3,647
     )
     
     
     (32,205
     )Prepaid expenses and deposits
     
     (3,372
     )
     
     
     149
     
     
     
     14,419
     
     
     
     11,422Accounts payable and accrued liabilities
     
     (128,251
     )
     
     
     (38,159
     )
     
     
     (120,587
     )
     
     
     107,757Due to related parties
     
     255,910
     
     
     
     102,350
     
     
     
     (15,657
     )
     
     
     (244,165
     )(5,239,211
     )
     
     
     (296,256
     )
     
     
     (632,663
     )
     
     
     (850,665
     )Cash flows used in investing activitiesMineral interest acquisition costs
     
     (66,417
     )
     
     
     -
     
     
     
     -
     
     
     
     -Disposal (purchase) of marketable securities
     
     (174,968
     )
     
     
     75,032
     
     
     
     -
     
     
     
     -Purchase of property and equipment
     
     (35,994
     )
     
     
     -
     
     
     
     -
     
     
     
     (330
     )(277,379
     )
     
     
     75,032
     
     
     
     -
     
     
     
     (330
     )Cash flows from financing activitiesAdvances from related parties
     
     16,238
     
     
     
     -
     
     
     
     -
     
     
     
     -Debt issue costs
     
     (205,242
     )
     
     
     -
     
     
     
     -
     
     
     
     -Proceeds from convertible debt
     
     2,226,251
     
     
     
     -
     
     
     
     -
     
     
     
     -Repayment of debt
     
     (153,400
     )
     
     
     -
     
     
     
     -
     
     
     
     -Proceeds from issuance of common shares
     
     3,654,161
     
     
     
     207,512
     
     
     
     713,842
     
     
     
     696,305Share subscriptions received
     
     52,277
     
     
     
     -
     
     
     
     (40,062
     )
     
     
     40,062Share issue costs
     
     (84,647
     )
     
     
     -
     
     
     
     (35,459
     )
     
     
     (4,003
     )5,505,638
     
     
     
     207,512
     
     
     
     638,321
     
     
     
     732,364Increase (decrease) in cash and cash equivalents
     
     (10,952
     )
     
     
     (13,712
     )
     
     
     5,658
     
     
     
     (118,631
     )Cash and cash equivalents, beginning of period
     
     11,134
     
     
     
     13,894
     
     
     
     8,236
     
     
     
     126,867Cash and cash equivalents, end of period
     
     182
     
     
     
     182
     
     
     
     13,894
     
     
     
     8,236
  Supplemental Disclosures with Respect to Cash Flows(Note 11) The accompanying notes are an integral part of these consolidated financial statements.
F-6


---

Linux Gold Corp.(An Exploration Stage Company)Consolidated Statements of Changes in Stockholders Equity (Deficit)(Expressed in Canadian Dollars)
  Shares ofcommon stockissued
     
     Commonstock andpaid-incapital
     
     Subscriptionsreceived, net
     
     Donatedcapital
     
     Deficitaccumulated from prioroperations
     
     Deficitaccumulated during theexplorationstage
     
     Accumulatedothercomprehensiveincome(loss)
     
     Totalstockholdersequity(deficit)$
     
     $
     
     $
     
     $
     
     $
     
     $
     
     $Balance from prior operationsat 1 March 2003
     57,458,413
     
     6,804,412
     
     -
     
     205,500
     
     (7,524,145
     )
     -
     
     -
     
     (514,233
     )Common stock issued for mineral property
     175,000
     
     17,500
     
     -
     
     -
     
     -
     
     -
     
     -
     
     17,500Common stock issued for services
     1,000,000
     
     100,000
     
     -
     
     -
     
     -
     
     -
     
     -
     
     100,000Common stock issued for settlement of rent obligation
     200,000
     
     19,200
     
     -
     
     -
     
     -
     
     -
     
     -
     
     19,200Options exercised
     150,000
     
     19,812
     
     -
     
     -
     
     -
     
     -
     
     -
     
     19,812Warrants exercised
     1,300,000
     
     280,922
     
     -
     
     -
     
     -
     
     -
     
     -
     
     280,922Imputed interest
     -
     
     -
     
     -
     
     22,960
     
     -
     
     -
     
     -
     
     22,960Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     44,000
     
     44,000Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (3,738
     )
     -
     
     (3,738
     )Balance at 29 February 2004
     60,283,413
     
     7,241,846
     
     -
     
     228,460
     
     (7,524,145
     )
     (3,738
     )
     44,000
     
     (13,577
     )Common stock issued for mineral property
     125,000
     
     45,384
     
     -
     
     -
     
     -
     
     -
     
     -
     
     45,384Common stock issued for cash
     4,205,610
     
     860,089
     
     -
     
     -
     
     -
     
     -
     
     -
     
     860,089Options exercised
     87,500
     
     10,606
     
     -
     
     -
     
     -
     
     -
     
     -
     
     10,606Warrants exercised
     250,000
     
     37,500
     
     -
     
     -
     
     -
     
     -
     
     -
     
     37,500Imputed interest
     -
     
     -
     
     -
     
     35,013
     
     -
     
     -
     
     -
     
     35,013Stock-based compensation
     -
     
     82,000
     
     -
     
     -
     
     -
     
     -
     
     -
     
     82,000Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     (54,000
     )
     (54,000
     )Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (748,369
     )
     -
     
     (748,369
     )Balance at 29 February 2005
     64,951,523
     
     8,277,425
     
     -
     
     263,473
     
     (7,524,145
     )
     (752,107
     )
     (10,000
     )
     254,646Common stock issued for mineral property
     50,000
     
     20,500
     
     -
     
     -
     
     -
     
     -
     
     -
     
     20,500Common stock issued for cash
     3,100,000
     
     715,127
     
     -
     
     -
     
     -
     
     -
     
     -
     
     715,127Options exercised
     93,750
     
     10,838
     
     -
     
     -
     
     -
     
     -
     
     -
     
     10,838Warrants exercised
     92,500
     
     21,825
     
     -
     
     -
     
     -
     
     -
     
     -
     
     21,825Share issue costs
     -
     
     (42,571
     )
     -
     
     -
     
     -
     
     -
     
     -
     
     (42,571
     )Imputed interest
     -
     
     -
     
     -
     
     31,722
     
     -
     
     -
     
     -
     
     31,722Stock-based compensation
     -
     
     2,280
     
     -
     
     -
     
     -
     
     -
     
     -
     
     2,280Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     2,000
     
     2,000Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (810,105
     )
     -
     
     (810,105
     )Balance at 28 February 2006
     68,287,773
     
     9,005,424
     
     -
     
     295,195
     
     (7,524,145
     )
     (1,562,212
     )
     (8,000
     )
     206,262Subscriptions received
     -
     
     -
     
     52,277
     
     -
     
     -
     
     -
     
     -
     
     52,277Common stock issued for debt
     2,586,076
     
     644,749
     
     -
     
     -
     
     -
     
     -
     
     -
     
     644,749Options exercised
     323,750
     
     75,670
     
     -
     
     -
     
     -
     
     -
     
     -
     
     75,670Warrants exercised
     52,500
     
     15,329
     
     (14,600
     )
     -
     
     -
     
     -
     
     -
     
     729Share issue costs
     -
     
     (2,613
     )
     -
     
     -
     
     -
     
     -
     
     -
     
     (2,613
     )Imputed interest
     -
     
     -
     
     -
     
     53,657
     
     -
     
     -
     
     -
     
     53,657Intrinsic value of beneficial conversion feature of convertible debentures
     -
     
     963,670
     
     -
     
     -
     
     -
     
     -
     
     -
     
     963,670Fair value of warrants issued with convertible debentures
     -
     
     1,262,580
     
     -
     
     -
     
     -
     
     -
     
     -
     
     1,262,580Stock-based compensation
     -
     
     109,228
     
     -
     
     -
     
     -
     
     -
     
     -
     
     109,228Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     (130,000
     )
     (130,000
     )Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (3,571,183
     )
     -
     
     (3,571,183
     )Balance at 28 February 2007
     71,250,099
     
     12,074,037
     
     37,677
     
     348,852
     
     (7,524,145
     )
     (5,133,395
     )
     (138,000
     )
     (334,974
     )Subscriptions received
     -
     
     -
     
     40,062
     
     -
     
     -
     
     -
     
     -
     
     40,062Common stock issued for debt redemption
     8,378,226
     
     1,493,911
     
     -
     
     -
     
     -
     
     -
     
     -
     
     1,493,911Common stock issued for cash
     2,825,000
     
     615,195
     
     (52,277
     )
     -
     
     -
     
     -
     
     -
     
     562,918Options exercised
     212,500
     
     24,020
     
     -
     
     -
     
     -
     
     -
     
     -
     
     24,020Warrants exercised
     430,000
     
     94,501
     
     14,600
     
     -
     
     -
     
     -
     
     -
     
     109,101Share issue costs
     -
     
     (4,003
     )
     -
     
     -
     
     -
     
     -
     
     -
     
     (4,003
     )Imputed interest
     -
     
     -
     
     -
     
     8,966
     
     -
     
     -
     
     -
     
     8,966Stock-based compensation
     -
     
     75,042
     
     -
     
     -
     
     -
     
     -
     
     -
     
     75,042Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     78,000
     
     78,000Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (2,260,291
     )
     -
     
     (2,260,291
     )Balance at 29 February 2008
     83,095,825
     
     14,372,703
     
     40,062
     
     357,818
     
     (7,524,145
     )
     (7,393,686
     )
     (60,000
     )
     (207,248
     )
  The accompanying notes are an integral part of these consolidated financial statements.
F-7


---

Linux Gold Corp.(An Exploration Stage Company)Consolidated Statements of Changes in Stockholders Equity (Deficit), continued(Expressed in Canadian Dollars)
  Shares ofcommon stockissued
     
     Commonstock andpaid-incapital
     
     Subscriptionsreceived, net
     
     Donatedcapital
     
     Deficitaccumulated from prioroperations
     
     Deficitaccumulated during theexplorationstage
     
     Accumulatedothercomprehensiveincome(loss)
     
     Totalstockholdersequity(deficit)$
     
     $
     
     $
     
     $
     
     $
     
     $
     
     $Balance at 29 February 2008
     83,095,825
     
     14,372,703
     
     40,062
     
     357,818
     
     (7,524,145
     )
     (7,393,686
     )
     (60,000
     )
     (207,248
     )Common stock issued for cash
     4,555,000
     
     507,867
     
     (40,062
     )
     -
     
     -
     
     -
     
     -
     
     467,805Fair value of warrants issued with common shares
     -
     
     205,975
     
     -
     
     -
     
     -
     
     -
     
     -
     
     205,975Share issue costs
     -
     
     (35,459
     )
     -
     
     -
     
     -
     
     -
     
     -
     
     (35,459
     )Imputed interest
     -
     
     -
     
     -
     
     26,143
     
     -
     
     -
     
     -
     
     26,143Unrealized holding loss on available-for-sale 
investment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     (208,000
     )
     (208,000
     )Net loss for the year
     -
     
     -
     
     -
     
     -
     
     -
     
     (536,201
     )
     -
     
     (536,201
     )Balance at 28 February 2009
     87,650,825
     
     15,051,086
     
     -
     
     383,961
     
     (7,524,145
     )
     (7,929,887
     )
     (268,000
     )
     (286,985
     )Common stock issued for cash
     5,000,000
     
     85,277
     
     -
     
     -
     
     -
     
     -
     
     -
     
     85,277Fair value of warrants issued with common shares
     -
     
     122,235
     
     -
     
     -
     
     -
     
     -
     
     -
     
     122,235Imputed interest
     -
     
     -
     
     -
     
     39,069
     
     -
     
     -
     
     -
     
     39,069Stock-based compensation
     -
     
     790
     
     -
     
     -
     
     -
     
     -
     
     -
     
     790Realized loss reallocated on disposal of investments
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     60,403
     
     60,403Marketable securities adjustment
     -
     
     -
     
     -
     
     -
     
     -
     
     -
     
     130,910
     
     130,910Net loss for the period
     -
     
     -
     
     -
     
     -
     
     -
     
     (409,573
     )
     -
     
     (409,573
     )Balance at 28 February 2010
     92,650,825
     
     15,259,388
     
     -
     
     423,030
     
     (7,524,145
     )
     (8,339,460
     )
     (76,687
     )
     (257,874
     )
  The accompanying notes are an integral part of these consolidated financial statements.
F-8


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  1.
     Nature and Continuance of Operations
  Linux Gold Corp. (the Company) was incorporated on 27 February 1979 in Canada under the British Columbia Company Act and was extra-provincially registered in the Province of Alberta on 12 October 1995. The Companys stock trades on the Over the Counter Bulletin Board in the United States under the symbol LNXGF. On 20 February 2003, the shareholders approved a change of name to Linux Gold Corp. and increased the authorized share capital to 200,000,000 common shares without par value. The Company had been previously pursuing various business opportunities and, effective 1 March 2003, the Company changed its principal operations to mineral exploration. Accordingly, as of 1 March 2003, the Company is considered to be an exploration stage company. The Companys consolidated financial statements as at 28 February 2010 and for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company has a loss of $409,573 for the year ended 28 February 2010 (28 February 2009  $536,201) and has a working capital deficit of $264,821 at 28 February 2010 (28 February 2009  $296,083). Management cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise additional debt and/or equity capital. Management believes that the Companys capital resources should be adequate to continue operating and maintaining its business strategy. However, if the Company is unable to raise additional capital in the near future, due to the Companys liquidity problems, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These consolidated financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. At 28 February 2010, the Company has suffered losses from exploration stage activities to date. Although management is currently seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. 2.
     Significant Accounting Policies
  Basis of accounting These consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP) and are presented in Canadian dollars. The accompanying financial statements have been prepared in accordance with the FASB ASC 915 "Development-Stage Entities". A development-stage enterprise is one in which planned principle operations have not commenced or if its operations have commenced, there has been no significant revenue there from. Development-stage companies report cumulative loss from the inception of its development stage activities. The accompanying notes are an integral part of these consolidated financial statements.
F-9


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Principles of consolidation These consolidated financial statements include the accounts of the Company and its inactive wholly-owned subsidiary LinuxWizardry Inc., a United States corporation. All significant inter-company balances and transactions have been eliminated. Foreign currency translation The Companys functional and reporting currency is the Canadian dollar. The consolidated financial statements of the Company are translated to Canadian dollars in accordance with FASB ASC 830 Foreign Currency Matters. Foreign currency transactions are primarily undertaken in U.S. dollars. Monetary assets and liabilities denominated in U.S. dollars are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting period. Significant areas requiring the use of management estimates include the determination of rates for amortization, the impairment of marketable securities, fair value of imputed interest and the assumptions used in computing the fair value of stock-based compensation and warrants. Actual results could differ from those estimates. Basic and diluted net loss per share The Company computes net loss per share in accordance with FASB ASC 260, Earnings per Share, which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive. The accompanying notes are an integral part of these consolidated financial statements.
F-10


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Stock-based compensation The Company records stock-based compensation in accordance with FASB ASC 718 Compensation Stock Compensation which establishes accounting for stock-based payment transactions for employee services and goods and services received from non-employees. The Company uses the fair-value based method to account for all stock-based payments to employees and non-employees granted by measuring the compensation cost of the stock-based payments using the Black-Scholes option-pricing model. Stock options which vest immediately are recorded at the date of grant. Stock options that vest over time are recorded over the vesting period using the straight line method. Stock options issued to outside consultants that vest over time are valued at the grant date and subsequently re-valued on each vesting date. The fair value of the stock-based compensation is recorded as a charge to net earnings based on the vesting period with a credit 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. In calculating compensation to be recognized for employees, it is required to estimate forfeitures while, in general, estimated forfeitures for non-employees equal to the entire term of options. Cash and cash equivalents The Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents. Marketable securities The Company reports investments in debt and marketable equity securities at fair value based on quoted market prices or, if quoted prices are not available, discounted expected cash flows using market rates commensurate with credit quality and maturity of the investment. All investment securities are designated as available-for-sale with unrealized gains and losses included in stockholders equity. Unrealized losses that are other than temporary are recognized in earnings. Realized gains and losses are accounted for on the specific identification method. Mineral exploration expenditures The Company is primarily engaged in the acquisition, exploration and development of mineral properties. Mineral property acquisition costs are capitalized when management has determined that probable future benefits consisting of a contribution to future cash inflows have been identified and adequate financial resources are available or are expected to be available as required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance with the terms of the property agreements. The accompanying notes are an integral part of these consolidated financial statements.
F-11


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Mineral exploration expenditures (continued) Mineral property exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves and pre feasibility, the costs incurred to develop such property are capitalized. Estimated future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged to the accumulated provision amounts as incurred. As of the date of these consolidated financial statements, the Company has incurred only exploration costs which have been expensed. To date the Company has not established any proven or probable reserves on its mineral properties. Asset retirement obligation The basis of this policy is the recognition of a legal liability for obligations related to the retirement of property, plant and equipment and obligations arising from the acquisition, construction, development or normal operations of those assets. Such asset retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated, and accretion expense is recognized over time as the discounted fair value is accreted to the expected settlement value. A corresponding increase to the carrying amount of the related asset, when one is identifiable, is recorded and amortized over the life of the asset. Where a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed. The amount of the liability is subject to re-measurement at each reporting period. The estimates are based principally on legal and regulatory requirements. It is possible that the Companys estimates of its ultimate reclamation and closure liabilities could change as a result of changes in regulations, changes in the extent of environmental remediation required, changes in the means of reclamation, or changes in cost estimates. Changes in estimates are accounting for prospectively commencing in the period the estimate is revised. To date, the Company has not recognized any asset retirement obligations as a reasonable estimate cannot be made at this time. Long-lived assets Long-lived assets, including property and equipment and the carrying value of intangible assets are reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. The accompanying notes are an integral part of these consolidated financial statements.
F-12


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Property and equipment Property and equipment consists of office furniture and vehicle, which are recorded at cost. Office furniture is amortized on a declining-balance basis at 20% per annum and the vehicle is amortized on a declining-balance basis at 30% per annum. Financial instruments Fair ValueThe carrying values of the Companys financial instruments, consisting of cash and cash equivalents, marketable securities, amounts due to related parties and accounts payable approximate their fair values because of the short-term maturity of these financial instruments. Interest Rate RiskThe Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities. Credit RiskThe Companys financial asset that is exposed to credit risk consists primarily of cash. To manage the risk, cash is placed with major financial institutions. Currency RiskThe Companys functional and reporting currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency transactions are primarily undertaken in U.S. dollars. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. Fair value measurement The Company adopted FASB ASC 820-10-50, Fair Value Measurements. This guidance defines fair value, establishes a three-level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The three levels are defined as follows: - Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. - Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instrument. - Level 3 inputs to valuation methodology are unobservable and significant to the fair measurement. All of the Companys financial instruments measured at fair value are applied using Level 1 inputs. The accompanying notes are an integral part of these consolidated financial statements.
F-13


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Income taxes The Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10. FASB ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprises financial statements in accordance with prior literature FASB Statement No. 109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more likely than not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition and measurement standards established by FASB ASC 740-10. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Comprehensive loss FASB ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements. As at 28 February 2010 and 2009, the Companys only component of other comprehensive loss was unrealized holding gains and losses on available-for-sale securities. Recent accounting pronouncements In June 2009, the FASB issued FASB ASC 105, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement No. 162.Under FASB ASC 105 the FASB Accounting Standards Codification (Codification) will become the source of authoritative US GAAP to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification became effective for financial statements issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included in the Codification will become non-authoritative. The Company changed the Companys references to U.S. GAAP accounting standards but did not impact the Companys results of operations, financial position or cash flows. The accompanying notes are an integral part of these consolidated financial statements.
F-14


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  2.
     Significant Accounting Policies (continued)
  Recent accounting pronouncements (continued) In June 2009, the Securities and Exchange Commissions Office of the Chief Accountant and Division of Corporation Finance announced the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically, the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007) (ASC Topic 805), Business Combinations, and Statement of Financial Accounting Standards No. 160 (ASC Topic 810), Non-controlling Interests in Consolidated Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities laws. In April 2009, an update was made to the FASB ASC 820, Fair Value Measurements and Disclosures, that provides additional guidance for estimating fair value when the volume and level of activity for the assets or liability have significantly decreased. This update is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending after March 15, 2009. The adoption of this guidance did not impact the Companys results of operations, financial position or cash flows. In April 2009, an update was made to FASB ASC 825, Financial Instruments, which requires a publicly traded company to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for interim reporting periods. This update is effective for interim reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The adoption of this guidance did not impact the Companys results of operations, financial position or cash flows. In May 2009, the FASB announced the issuance of FASB ASC 855, Subsequent Events, formerly referenced as SFAS No. 165, Subsequent Events. FASB ASC 855 should not result in significant changes in the subsequent events that an entity reports. Rather, FASB ASC 855 introduces the concept of financial statements being available to be issued. Financial statements are considered available to be issued when they complete in a form and format that complies with generally accepted accounting principles (GAAP) and all approvals necessary for issuance have been obtained. The Company has already adopted this policy and its full disclosure is included in Note 13. The accompanying notes are an integral part of these consolidated financial statements.
F-15


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  3.
     Marketable Securities
  28 February 2010
     
     28 February 2009Cost
     Fair value
     
     Cost
     Fair value$
     $
     
     $
     $1,007,000 (28 February 2009  1,300,000) common shares of Teryl Resources Corp.
     
     268,017
     191,330
     
     346,000
     78,000
  During the year period ended 28 February 2010 a total of 293,000 (2009  nil) shares of Teryl Resources Corp. were sold at prices ranging from $0.14 to $0.34 for total proceeds of $75,032 (2009 -$nil) with average cost of $77,983 and average carrying value of $17,580. 4.
     Property and Equipment
  Net book valueCost
     AccumulatedAmortization
     
     28 February2010
     28 February2009$
     $
     
     $
     $Office furniture
     
     11,194
     6,567
     
     4,627
     5,783Vehicle
     
     15,531
     13,211
     
     2,320
     3,31526,725
     19,778
     
     6,947
     9,098
  During the year ended February 28, 2010, total additions to property, plant and equipment were $nil (2009 - $nil). 5.
     Mineral Properties
  Alaska Mineral PropertiesGranite Mountain Property and Dime Creek Property The Company has a total of 33 mining claims in Granite Mountain and 12 mining claims in Dime Creek, which are located near Nome in the State of Alaska. Livengood Property The Company has a total of 13 mining claims located in the Livengood-Tolovana Mining District, Alaska, USA, known as the Livengood Claims. The accompanying notes are an integral part of these consolidated financial statements.
F-16


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  5.
     Mineral Properties
  Fish Creek Property The Company has a 50% joint lease interest in 30 claims located in the Fairbanks Mining Division, Alaska, USA, known as the Fish Creek Claims. During fiscal 2003, the Company optioned a 50% interest in the lease to Teryl Resources Corp. (Teryl), a related company (Note 8). Under the terms of the agreement, Teryl issued 200,000 common shares to the Company at a fair value of $80,000 and must expend $500,000 over three years. The Company retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest. The Company entered into an amending agreement with Teryl to extend the term of the original agreement until 7 March 2007, in which Teryl issued 100,000 common shares to the Company, and also agreed to expend a minimum of US$500,000 within two years from the date of that amending agreement. All other terms of the original agreement remain the same. Subsequently, the Company entered into a further agreement with Teryl to extend the term of the original agreement until 5 March 2011. Trout Claims On January 27, 2010 the Company entered into a mining agreement with the 100% owner (the Owner) of eleven mining claims named Trout Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance with the mining agreement, upon payment of US$7,500 (paid) to the Owner the Company obtains the option to execute the five year lease by August 1, 2010. The terms of the lease option are as follows: 
     Initial non-refundable payment of US$1,500 at signing of the lease agreement;
     Annual work commitment of US$10,000;
     Consideration to the Owner on August 1 of each of the five years:
 n
     2011: Cash payment of US$5,000n
     2012: Cash payment of US$10,000n
     2013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Companyn
     2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Companyn
     2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Trout Claims
  Coho Claims On January 27, 2010 the Company entered into a mining agreement with the 100% owner (the Owner) of ten mining claims named Coho Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance with the mining agreement, upon payment of US$7,500 (not paid) to the Owner the Company obtains the option to execute the five year lease by August 1, 2010. The terms of the lease option are as follows: The accompanying notes are an integral part of these consolidated financial statements.
F-17


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  5.
     Mineral Properties (continued)
  Coho Claims (continued) 
     Initial non-refundable payment of US$1,500 at signing of the lease agreement;
     Annual work commitment of US$10,000;
     Consideration to the Owner on August 1 of each of the five years:
 n
     2011: Cash payment of US$5,000n
     2012: Cash payment of US$10,000n
     2013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Companyn
     2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Companyn
     2015: Cash payment of US$500,000 and issuance of the Companys common shares valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100% ownership in Coho Claims
  The following is a summary of mineral property expenditures related to the Alaska Mineral Properties for years ended February 28, 2010 and 2009: For the Year EndedFebruary 28, 2010
     
     For the Year EndedFebruary 28, 2009
     
     For the Year EndedFebruary 29, 2008$
     
     $
     
     $Exploration and development costsAssaying
     
     1,910
     
     363
     
     26,357Field supplies and other
     
     212

     
     -
     
     -Geological consulting
     
     7,837
     
     14,121
     
     43,999Staking and recording fees
     
     41,016
     
     47,401
     
     96,344Transportation
     
     -
     
     -
     
     3,96350,975
     
     61,885
     
     170,663
  6.
     Accounts Payable
  Accounts payable are non-interest bearing, unsecured and have settlement dates within one year. 7.
     Due to Related Parties
  Amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment. During the year ended February 28, 2010, imputed interest at 15%, totalling $39,069 (2009 - $26,143) was charged to operations and treated as donated capital (Note 11). As at February 28, 2010, amounts due to related parties consist of advances or repayments to the President, Chief Executive Officer (CEO) and shareholder of the Company and/or companies controlled by the President, CEO and shareholder of the Company. The accompanying notes are an integral part of these consolidated financial statements.
F-18


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  7.
     Due to Related Parties (continued)
  February 28,2009
     
     Advances (repayments)
     
     February 28,2010$
     
     $
     
     $Access Information
     
     -
     
     1,106
     
     1,106Imaging Technologies
     
     -
     
     1,018
     
     1,018Information Highway.com
     
     2,000
     
     500
     
     2,500IAS Energy, Inc.
     
     -
     
     1,700
     
     1,700JGR Petroleum, Inc.
     
     79,733
     
     23,027
     
     102,760KLR Petroleum Ltd.
     
     6,739
     
     26,129
     
     32,868Rainbow Networks
     
     -
     
     4,369
     
     4,369Reg Technologies Inc.
     
     -
     
     1,210
     
     1,210REGI U.S., Inc.
     
     1,176
     
     -
     
     1,176SMR Investments Ltd.
     
     31,500
     
     17,950
     
     49,450Teryl Resources Corp.
     
     89,992
     
     25,341
     
     115,333211,140
     
     102,350
     
     313,490
  8.
     Related Party Transactions
  Pursuant to a management services agreement, during the year ended February 28, 2010 the Company paid or accrued management fees of $30,000 (2009 - $30,000) to a company of which the President of the Company is a director. At February 28, 2010, the Company had an outstanding balance of $49,450 (2009 - $38,239) owed to this related party. During the year ended February 28, 2010, the Company paid or accrued investor relations fees of $3,500 (2009 - $11,000) to a company related to the Company by way of a common director. During the year ended February 28, 2010, the Company paid consulting fees of 14,362 (2009 -$16,067) to a company where the President of the Company is a director. The Company had certain mineral property transactions and a joint venture agreement with related parties (Note 5). Related party transactions incurred during the normal course of the Companys operations and are measured at the exchange amount, which is the amount agreed between the related parties. The accompanying notes are an integral part of these consolidated financial statements.
F-19


---

Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  9.
     Capital Stock
  Authorized The Companys authorized capital is 200,000,000 common shares without par value. Issued and outstanding The total issued and outstanding capital stock is 92,650,825 common shares without par value. On March 27, 2008, the Company issued 500,000 units pursuant to a private placement at a price of US$0.20 per unit for gross proceeds of $99,364 (US$100,000) before finders fees of $3,588. Each unit consisted of one common share and one share purchase warrant, with each warrant entitling the holder to purchase one share at an exercise price of US$0.25 per share for a one year term expiring on March 27, 2009. The Company allocated $77,244 to the common shares and $22,120 to the share purchase warrants based on the relative fair values. On March 27, 2009 the Company extended the expiry date of these share purchase warrants to March 27, 2010, resulting in a further $11,144 allocated to the value of the warrants. The additional fair value of warrants was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.06%, expected life of 1 year, annualized volatility of 189.40% and expected dividend of 0%. On June 1, 2009, the Company extended the expiry date of 1,412,500 warrants granted on June 1, 2008 to June 1, 2010, resulting in a further $26,335 allocated to these warrants. The additional fair value of warrants was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.01%, expected life of 1 year, annualized volatility of 193.40% and expected dividend of 0%. On June 5, 2008 the Company issued 4,055,000 units pursuant to a private placement at a price of US$0.15 per unit for gross proceeds of $614,478 (US$608,250) before finders fees of $31,871. Each unit consisted of one common share and one share purchase warrant, with each warrant entitling the holder to purchase one share at an exercise price of US$0.20 per share for a one year term expiring on June 5, 2009. The Company allocated $430,623 to the common shares and $183,855 to the share purchase warrants based on the relative fair values. On June 5, 2009 the Company extended the expiry date of these share purchase warrants to June 5, 2010, resulting in a further $123,476 allocated to the value of these warrants. The additional fair value of warrants was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.31%, expected life of 1 year, annualized volatility of 194.66% and expected dividend of 0%. On October 19, 2009 the Company issued 5,000,000 units pursuant to a private placement at a price of US$0.04 per unit for gross proceeds of $207,512 (US$200,000). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder to purchase one additional share of common stock at a price of US$0.075 in the first year or at a price of US$0.10 in the second year from the date of issue. The Company allocated $85,277 to the common shares and $122,235 to the share purchase warrants based on the relative fair values. The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  9.
     Capital Stock (continued)
  Warrants The following share purchase warrants were outstanding at February 28, 2010: Expiry date
     Exercise priceUS$
     Numberof warrants
     Remainingcontractual life(years)March, 27, 2010
     0.25
     500,000
     0.07June 1, 2010
     0.30
     1,412,500
     0.25June 5, 2010
     0.20
     4,055,000
     0.26May 8, 2011
     0.20
     9,275,000
     1.19June 28, 2011
     0.20
     3,125,000
     1.33October 19, 2011
     0.075/0.10
     5,000,000
     1.6323,367,500
     1.06
  The following is a summary of the Companys warrant activities during the year ended February 28, 2010: Number ofwarrants
     Weightedaverageexercise priceUS$Outstanding and exercisable at February 28, 2009
     18,367,500
     0.21Issued
     5,000,000
     0.08Outstanding and exercisable at February 28, 2010
     23,367,500
     0.18Weighted average fair value of warrants issued during the year
     -
     0.025
  The weighted average fair value of warrants issued during the year ended February 28, 2010 was $0.025 per warrant. The fair value of each warrant granted was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.62%, expected life of 2 years, annualized volatility of 160% and expected dividend of 0%. Stock Options The Company has a stock option plan to issue up to 10% of the issued common shares to certain directors and employees. All options granted under the plan vest upon date of grant and are subject to the following exercise schedule: The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  9.
     Capital Stock (continued)
  Stock Options i)
     Up to 25% of the options may be exercised at any time during the term of the option (the First Exercise);ii)
     The second 25% of the options may be exercised at any time after 90 days from the date of the First Exercise (the Second Exercise);iii)
     The third 25% of the options may be exercised at any time after 90 days from the date of the Second Exercise (the Third Exercise); andiv)
     The fourth and final 25% of the options may be exercised at any time after 90 days from the date of the Third Exercise. On April 22, 2009, 75,000 stock options exercisable at a price of US$0.30 per common share expired. On April 22, 2009, the Company granted 75,000 stock options to two consultants of the Company. The options are exercisable at a price of US$0.10 per common share for five years expiring on April 22, 2014. On November 9, 2009, 12,500 stock options exercisable at a price of US$0.20 per common share expired. On December 18, 2009 the Company granted 25,000 stock options to a consultant of the Company. The options are exercisable at a price of US$0.10 per common share for five years expiring on December 18, 2014. During the year ended February 28, 2010, the Company recorded stock-based compensation of $791 (2009 - $nil) for options granted. The following stock options were outstanding and exercisable at February 28, 2010: Expiry date
     ExercisepriceUS$
     Numberof optionsoutstanding
     Number ofoptionsexercisable
     Remainingcontractuallife(years)August 9, 2011
     0.35
     1,500,000
     375,000
     1.44November 2, 2011
     0.25
     25,000
     6,250
     1.67December 8, 2011
     0.25
     50,000
     12,500
     1.77November 7, 2012
     0.31
     50,000
     12,500
     2.69February 21, 2013
     0.10
     1,525,000
     381,250
     2.98April 22, 2014
     0.10
     75,000
     18,750
     4.14December 18, 2014
     0.10
     25,000
     6,250
     4.813,250,000
     812,500
     2.28
  The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  9.
     Capital Stock (continued)
  Stock Options The following is a summary of the Companys stock option activities during the year ended February 28, 2010: Number ofoptions
     Weightedaverageexercise priceUS$Outstanding at February 28, 2009
     3,237,500
     0.23Granted
     100,000
     0.10Expired
     (87,500)
     0.30Outstanding at February 28, 2010
     3,250,000
     0.22Exercisable at February 28, 2010
     812,500
     0.22Weighted average fair value of stock options granted during the period
     
     0.01
  The fair value of each option granted was estimated on the date of the grant or modification using the Black-Scholes pricing model with the following assumptions: For theYear endedFebruary 28,2010
     For theYear endedFebruary 28,2009Risk free interest rate
     1.63 - 2.32%
     -Expected life
     4  5 years
     -Annualized volatility
     78.17  124.38%
     -Expected dividends
     -
     -
  Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Companys stock options. The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  10.
     Commitments
  On September 17, 2009 the Company entered into an office rent agreement for the duration of November 1, 2009 to October 31, 2010 at monthly rate of $3,355. The Company shares the office space and rent fees equally with two related parties. As at February 28, 2010 the Company is committed to eight months rent charge of $26,840 of which $17,893 will be reimbursed by the two related parties. 11.
     Supplemental Disclosures With Respect to Cash Flows
  Cumulative frominception ofexploration stage on1 March 2003 toFebruary 28,2010
     
     For the yearendedFebruary 28,2010
     
     For theyear endedFebruary 28,2009
     
     For theyear endedFebruary 29,2008$
     
     $
     
     $Cash paid during the year for interest
     
     -
     
     -
     
     -
     
     -Cash paid during the year for income taxes
     
     -
     
     -
     
     -
     
     -
  During the year ended February 28, 2010, imputed interest at 15% per annum totalling $39,069 (2009 -$26,143) on amounts due to related parties was charged to operations and treated as donated capital (Note 7). 12.
     Income Taxes
  Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings before income taxes. These differences result from the following items: 2010
     
     
     
     2009$
     
     
     
     $Loss before income taxes
     
     (409,573
     )
     
     
     (536,201
     )Canadian federal and provincial income tax rates
     
     29
     %
     
     
     30.75
     %Income tax recovery based on the above rates
     
     (118,777
     )
     
     
     (164,882
     )Increase due to:Non-deductible items and other
     
     13,853
     
     
     
     8,534Losses and temporary differences for which no future income benefit has been recognized
     
     90,451
     
     
     
     127,112Reduction in long-term Canadian income tax rates
     
     14,473
     
     
     
     29,236Income tax recovery
     
     -
     
     
     
     -
  The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  12.
     Income Taxes (continued)
  The components of future income taxes are as follows: 2010
     
     
     
     2009$
     
     
     
     $Future income tax assetsNon-capital losses
     
     860,049
     
     
     
     782,945Mineral property costs
     
     673,852
     
     
     
     661,108Property and equipment
     
     3,548
     
     
     
     3,010Marketable securities and other
     
     26,267
     
     
     
     64,306Total future income tax assets
     
     1,563,716
     
     
     
     1,511,369Valuation allowance
     
     (1,563,716
     )
     
     
     (1,511,369
     )Net future income tax assets
     
     -
     
     
     
     -
  The Company has non-capital loss carry-forwards of approximately $3,440,195 that may be available for tax purposes. The loss carry-forwards are all in respect of Canadian operations and expire as follows: $2011
     
     347,4282015
     
     398,6122026
     
     402,3602027
     
     1,036,7152028
     
     417,6822029
     
     472,2182030
     
     365,1803,440,195
  Additionally, the Company has approximately $2,695,406 of development expenses and exploration expenditures as at February 28, 2010 which, under certain circumstances, may be utilized to reduce taxable income of future years. The potential income tax benefits of these losses have been offset by a full valuation allowance. The accompanying notes are an integral part of these consolidated financial statements.
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Linux Gold Corp.(An Exploration Stage Company)Notes to Consolidated Financial Statements(Expressed in Canadian Dollars)For the Years Ended February 28, 2010 and 2009
  13.
     Subsequent Events
  Stock Options Granted On April 19, 2010 the Company granted to a consultant of the Company 50,000 stock options exercisable into the Companys common shares at a price of $0.10 per share for five years expiring April 19, 2015. Warrants Expired As of the issuance date of these consolidated financial statements, 5,967,500 warrants with exercise prices between $0.20 and $0.30 expired, unexercised. Private Placement As of the issuance date of these consolidated financial statements, two investors have subscribed 492,000 units pursuant to a private placement of the Company, consisting of up to 3,000,000 units for gross proceeds of up to US$150,000, at a price of US$0.05 per unit for gross proceeds of $25,900 (US$24,600). Each unit consisted of one common share and one share purchase warrant, with each warrant entitling the holder to purchase one share at an exercise price of US$0.075 per share for a one year term expiring from date of closing. The Company has evaluated subsequent events through the date of these consolidated financial statements were issued in accordance with FASB ASC 855 and all material subsequent events have been disclosed as stated above. The accompanying notes are an integral part of these consolidated financial statements.
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ITEM 19. EXHIBITS Documents filed as exhibits to this annual report: Number
     Description1.1
     Memorandum and articles of incorporation with bylaws dated February 27, 1979
     (1)1.2
     Altered memorandum and special resolution dated September 20, 1993 increasing the authorized capital to 100,000,000 common shares from 90,000,000 and redesignating Class A Common voting shares without par value as common shares without par value and redesignating Class B Common non-voting shares as common shares without par value
     (1)1.3
     Altered memorandum and special resolution dated March 15, 2000 changing the name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc.
     (3)1.4
     Altered memorandum and special resolution dated February 20, 2003 changing the name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp.
     (5)1.5
     Memorandum and articles of incorporation amended effective September 15, 2004
     (7)2.1
     Specimen copy of Registrants common share certificate
     (2)4.1
     Commitment by John G. Robertson dated July 16, 1999 to provide financing to the Registrant as required for ongoing operations
     (2)4.2
     Share Purchase Agreement dated January 7, 2000 between Flame Petro-Minerals Corp. and Mike Carpenter and LinuxWizardry, Inc.
     (3)4.3
     Purchase order dated May 22, 2000 between LinuxWizardry, Inc. and Motorola, Inc., Personal Communications Sector
     (4)4.4
     License Agreement dated June 30, 2000 between LinuxWizardry Systems, Inc. and LinuxWizardry, Inc. and Lineo, Inc
     (4)4.5
     Vendor Agreement dated January 5, 2001 between Merrimack Services Corporation d/b/a PC Connection and LinuxWizardry Systems, Inc.
     (4)4.6
     Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2002
     (5)4.7
     Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated November 4, 2002
     (5)4.8
     Edward Skoda Purchase Agreement  TY Gold Property
     (6)4.9
     Edward Skoda Purchase Agreement  ORO Mineral Claims
     (6)4.10
     Property Option Agreement  Peter Tse
     (6)4.11
     Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2007
     (8)4.12
     Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2009
     (11)4.13
     Premises Lease Agreement between Linux Gold Corp. and Pensionfund Realty Limited dated November 1, 2009
     (11)4.14
     Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Coho Claims, Alaska
     (11)4.15
     Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Trout Claims, Alaska
     (11)
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4.16
     Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2010
     (11)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)
     (11)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 (Monique van Oord)
     (11)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)
     (11)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 (Monique van Oord)
     (11)15.1
     Consent of Independent Registered Public Accounting Firm
     (11)15.2
     Consent of Independent Registered Public Accounting Firm
     (11)15.3
     Letter to U.S Securities and Exchange Commission from Dale Matheson Carr-Hilton Labonte LLP Chartered Accountants June 28, 2010
     (11)15.4
     Letter to U.S Securities and Exchange Commission from ACAL Group Chartered Accountants
     (11)
  (1)
     incorporated by reference to the Registrants Registration Statement on Form 20-F filed on June 4, 1999 with the US Securities and Exchange Commission(2)
     incorporated by reference to the Registrants Amendment No. 1 to the Registration Statement dated July 22, 1999(3)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on September 14, 2000(4)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on July 14, 2001(5)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on August 25, 2003(6)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on July 19, 2004(7)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on July 19, 2005(8)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on July 23, 2007(9)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on September 2, 2008(10)
     incorporated by reference to the Registrants Annual Report on Form 20-F filed on September 14, 2009(11)
     attached hereto. -58-


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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. LINUX GOLD CORP.REGISTRANT Dated:
     June 28, 2010
     By:
     /s/ John G. RobertsonJohn G. RobertsonPresident, Chairman of the Board/Director
   -59-