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**UNITED STATESSECURITIES AND EXCHANGE COMMISSION** Washington, D.C. 20549

FORM 20-F /A**AMENDMENT NO.
  1**

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

OR

x  ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 - For the fiscal year ended February 28, 2005



 ̈  TRANSITION
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-30084 Linux Gold Corp.
    (Exact name of registrant as specified in its charter) British Columbia, Canada
    (Jurisdiction of incorporation or organization)


1103-11871 Horseshoe WayRichmond, British Columbia V7A 5H5, Canada
  (Address of principal executive offices)

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

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

Indicate the number of outstanding shares of each of the issuer's
  class of capital or common stock 
  as of the close of the period covered by the annual report.

|Title of Each Class         | Outstanding at February 28, 2005
|--------------------------- | --------------------------------
|Common Shares, no par value | 64,951,523                      

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

Indicate by check mark which financial statement the registrant
  has elected to follow.  
  Item 17.  ̈    Item
  18. x

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TABLE OF CONTENTS

|PART I   |                                                                                                   | 7 
|-------- | ------------------------------------------------------------------------------------------------- | --
|ITEM 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
      AND ADVISORS                                       | 7 
|ITEM 2.  | OFFER AND STATISTICS AND EXPECTED TIMETABLE                                                       | 7 
|ITEM 3.  | KEY INFORMATION                                                                                   | 7 
|A.       | SELECTED FINANCIAL DATA                                                                           | 7 
|B.       | CAPITALIZATION AND INDEBTEDNESS                                                                   | 9 
|C.       | REASON FOR THE OFFER AND USE OF PROCEEDS                                                          | 9 
|D.       | RISK FACTORS                                                                                      | 9 
|ITEM 4.  | INFORMATION ON THE COMPANY                                                                        | 14
|A.       | HISTORY AND DEVELOPMENT                                                                           | 14
|B.       | BUSINESS OVERVIEW                                                                                 | 15
|C.       | ORGANIZATIONAL STRUCTURE                                                                          | 23
|D.       | PROPERTY, PLANT AND EQUIPMENT                                                                     | 23
|ITEM 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                                      | 29
|A.       | OPERATING RESULTS                                                                                 | 29
|B.       | LIQUIDITY AND CAPITAL RESOURCES                                                                   | 31
|C.       | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES,
      ETC.                                        | 32
|D.       | TREND INFORMATION                                                                                 | 32
|ITEM 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                        | 34
|A.       | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                        | 34
|B.       | COMPENSATION                                                                                      | 35
|C.       | BOARD PRACTICES                                                                                   | 36
|D.       | EMPLOYEES                                                                                         | 36
|E.       | SHARE OWNERSHIP                                                                                   | 37
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                                 | 37
|A.       | MAJOR SHAREHOLDERS                                                                                | 37
|B.       | RELATED PARTY TRANSACTIONS                                                                        | 38
|C.       | INTERESTS OF EXPERTS AND COUNSEL                                                                  | 38
|ITEM 8.  | FINANCIAL INFORMATION                                                                             | 38
|A.       | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
      INFORMATION                                     | 38
|B.       | SIGNIFICANT CHANGES                                                                               | 38
|ITEM 9.  | THE OFFER AND LISTING                                                                             | 38
|ITEM 10. | ADDITIONAL INFORMATION                                                                            | 39
|A.       | SHARE CAPITAL                                                                                     | 39
|B.       | MEMORANDUM AND ARTICLES OF ASSOCIATION                                                            | 40
|C.       | MATERIAL CONTRACTS                                                                                | 40
|D.       | EXCHANGE CONTROLS                                                                                 | 42
|E.       | TAXATION                                                                                          | 42
|F.       | DIVIDENDS AND PAYING AGENTS                                                                       | 43
|G.       | STATEMENT BY EXPERTS                                                                              | 43
|H.       | DOCUMENTS ON DISPLAY                                                                              | 43
|I.       | SUBSIDIARY INFORMATION                                                                            | 43
|ITEM 11. | QUANTITATIVE AND QUALITATIVE DISCLOSURES
      ABOUT MARKET RISK                                  | 43
|ITEM 12. | DESCRIPTION OF SECURITIES OTHER THAN EQUITY
      SECURITIES                                      | 43
|PART II  |                                                                                                   | 44
|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES                                                    | 44
|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS AND USE OF PROCEEDS                | 44
|         |                                                                                                   |   
|A.       | MATERIAL MODIFICATIONS TO THE RIGHTS OF
      SECURITY HOLDERS                                    | 44
|B.       | USE OF PROCEEDS                                                                                   | 44
|ITEM 15. | CONTROLS AND PROCEDURES                                                                           | 44
|ITEM 16. | AUDIT COMMITTEE FINANCIAL EXPERT, CODE
      OF ETHICS AND PRINCIPAL ACCOUNTANT FEES AND SERVICES | 44
|A.       | AUDIT COMMITTEE FINANCIAL EXPERT                                                                  | 44

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|B.             | CODE OF ETHICS                         | 45
|-------------- | -------------------------------------- | --
|C.             | PRINCIPAL ACCOUNTANT FEES AND SERVICES | 45
|PART III       |                                        | 45
|ITEM 17.       | FINANCIAL STATEMENTS                   | 45
|ITEM 18.       | FINANCIAL STATEMENTS                   | 45
|ITEM 19.       | EXHIBITS                               | 46
|SIGNATURE PAGE | 48                                    

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GLOSSARY OF MINING TERMS

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

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

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

assay – a precise and accurate analysis of the
  metal contents in an ore or rock sample

Au - gold.

auger drill – a handheld machine that produces
  small, continuous core samples in unconsolidated materials

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

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

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

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

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/mt
  or gpt - grams per metric tonne.

geological resource – a body of mineralized material
  which has not yet been determined to be ore, and the potential for mining of
  which has not yet been determined. Geological resources are categorized as possible,
  probable and proven, according to the degree of certainty with which their grade
  and tonnage are known; geological resources are sometimes referred to as a “
  mineral resource” or “ mineral inventory”.

gm/mt gpt


gold deposit - means a mineral deposit mineralised with
  gold.

gold resource


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

inferred mineral resource:That part of a mineral resource
  for which quantity and grade or quality can be estimated

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on the basis of geological evidence and limited sampling and
  reasonably assumed, but not verified, geological and grade continuity. The estimate
  is based on limited information and sampling gathered through appropriate techniques
  from locations such as outcrops, trenches, pits, workings and drill holes

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

intrusive:cuts across (is intrusive into)

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

lode mining – mining of gold bearing rocks, typically
  in the form of veins or stockworks

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

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

mineral reservemeans the economically mineable part
  of a measured or indicated 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. A mineral reserve includes diluting
  materials and allowances for losses that may occur when the material is mined.

mineral resourcemeans a concentration or occurrence
  of natural, solid, inorganic or fossilized organic material in or on the Earth’s
  crust in such form and quantity and of such a grade or quality that it has reasonable
  prospects for economic extraction. The location, quantity, grade, geological
  characteristics and continuity of a mineral resource are known, estimated or
  interpreted from specific geological evidence and knowledge.

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

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

net smelter royalty or NSR - a royalty based
  on the gross proceeds received from the sale of minerals less the cost of smelting,
  refining, freight and other related costs. ore – a naturally occurring
  rock or material from which economic minerals can be extracted at a profit

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

opt
  –


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

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

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

proven reservemeans the economically mineable part
  of a measured resource demonstrated by at least a

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preliminary feasibility study. This study must include adequate
  information on mining, processing, metallurgical, economic, and other relevant
  factors that demonstrate, at the time of reporting, that economic extraction
  is justified.

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

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

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.

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

ton- short ton (2,000 pounds).

tonne- metric tonne (2,204.6 pounds).

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

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

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

|1 mile | =  1.609  kilometres | 2,204  pounds             | =  1 tonne     
|------ | -------------------- | ------------------------- | ---------------
|1 yard | =  0.9144 meter      | 2,000  pounds/1 short ton | =  0.907 tonne 
|1 acre | =  0.405  hectare    | 1 troy ounce              | =  31.103 grams

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 United States
  dollars unless otherwise indicated.

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Foreign Private Issuer Status

Foreign Private Issuer Status:

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



ITEM 1.            IDENTITY
  OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

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

ITEM 2.            OFFER
  STATISTICS AND EXPECTED TIMETABLE

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

ITEM 3.            KEY
  INFORMATION

A.            SELECTED
  FINANCIAL DATA

The summary consolidated financial information set forth below
  should be read in conjunction with, and is qualified in its entirety by reference
  to, the Consolidated Financial Statements, as of and for the years ended February
  28, 2005 and February 29, 2004, together with the notes thereto, which appear
  elsewhere in this annual report. The Consolidated Financial Statements as of
  and for the years ended February 28, 2005 and February 29, 2004 have been audited
  by Manning Elliott. 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, 2005, US$1.00
  was equal to approximately C$1.2314.

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:

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Fiscal Years Ended February 28/29

|                                                                                    | 2005      | 2004      | 2003      | 2002        | 2001       
|----------------------------------------------------------------------------------- | --------- | --------- | --------- | ----------- | -----------
|Net Revenue                                                                         | $ - -     | $ - -     | $ -       | $ -         | $146,429   
|Income (loss)  
      from continuing  
      operations                            | (842,092) | (475,447) | (125,020) | (420,261)   | (1,357,802)
|Income (loss)  
      from discontinued  
      operations                          | -         | 369,213   | (25,000)  | (366,448)   | (1,971,861)
|Income (loss)  
      from continuing  
      operations per  
      Common Share   | (0.01)    | (0.01)    | -         | (0.02)      | (0.10)     
|Income (loss)  
      from discontinued  
      operations per  
      Common Share | -         | (0.01)    | -         | (0.01)      | (0.14)     
|Total Assets                                                                        | 544,708   | 322,610   | 92,719    | 11,240      | 216,934    
|Working Capital  
      (deficit)                                                   | 98,204    | (91,924)  | (514,235) | (1,549,592) | (1,695,634)
|Shareholders’  
      Equity (deficit)                                              | 118,729   | (85,924)  | (514,233) | (1,542,141) | (1,621,612)
|Cash 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.



We publish our financial statements in Canadian dollars. Unless
  otherwise indicated, monetary amounts referred to in this annual report are
  in Canadian dollars. Unless otherwise indicated, all translations from Canadian
  dollars to US dollars have been made at a rate of CDN$ 1.2314 to US$
  1.00, the noon buying rate as certified for customs purposes by the Federal
  Reserve Bank of New York (the "Noon Buying Rate") on February 28, 2005. 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 23, 2005, the Noon Buying Rate was CDN$
  1.2311 to US$ 1.00. The following table sets forth noon buying rate for
  US dollars in New York City for cable transfers in Canadian dollars as certified
  for customs purposes by the Federal Reserve Bank of New York for the periods
  indicated:

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

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|Month    | Year | High (CAD$) | Low (CAD$)
|-------- | ---- | ----------- | ----------
|November | 2004 | 1.227       | 1.1774    
|December | 2004 | 1.2413      | 1.1858    
|January  | 2005 | 1.2421      | 1.1987    
|February | 2005 | 1.2566      | 1.2299    
|March    | 2005 | 1.2462      | 1.2019    
|April    | 2005 | 1.2569      | 1.2147    
|May      | 2005 | 1.2704      | 1.2372    

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

|Year | Average | Low/High       | February 29/28
|---- | ------- | -------------- | --------------
|2005 | 1.2888  | 1.1774/1.3968  | 1.2314        
|2004 | 1.3667  | 1.269 / 1.4905 | 1.3405        
|2003 | 1.5438  | 1.5995 / 1.488 | 1.4880        
|2002 | 1.5625  | 1.5102/1.6128  | 1.6049        
|2001 | 1.4954  | 1.4470/1.5600  | 1.5320        

B.            CAPITALIZATION
  AND INDEBTEDNESS

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

C.            REASON
  FOR THE OFFER AND USE OF PROCEEDS

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



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

RISK FACTORS RELATED TO OUR BUSINESS

Our 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.

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

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




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There is no assurance we will be successful in obtaining the
  required financing, the lack of which could result in the loss or substantial
  dilution of our interests (as existing or as proposed to be acquired) in our
  properties as disclosed herein. In addition, we have no experience in developing
  mining properties into production and its ability to do so will be dependent
  upon securing the services of appropriately experienced personnel or entering
  into agreements with other major mining companies which can provide such expertise.

As noted in our audited consolidated financial statements
  for the year ended February 28, 2005 we have incurred significant operating
  losses and have an accumulated deficit of $8,393,078 at February 28, 2005.
  Furthermore, we had working capital deficit of $98,204 as at February 28,
  2005, which is not sufficient to achieve our planned business objectives. Our
  ability to continue as a going concern is dependent on continued financial support
  from our shareholders and other related parties, the ability of the Registrant
  to raise equity financing, and the attainment of profitable operations, external
  financings and further share issuances to meet our liabilities as they become
  payable.

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,
  2005 consolidated financial statements include 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.

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

Volatility of The Over-the-Counter Bulletin Board (“OTC
  BB”) may adversely affect the price of the Common Stock.Certain
  stocks listed on the OTC BB have recently experienced significant price and
  volume fluctuations and decreases which have adversely affected the market price
  of our and other stocks listed on the OTC BB without any regard to the underlying
  fundamentals of such stocks. These broad market fluctuations, which may occur
  in the future may continue to adversely affect the market price of the Common
  Stock.

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

Potential lack of attractive investment targets.Continued
  volatility of stock prices on the OTC BB may have a material adverse effect
  on our ability to raise capital on the OTC BB or by private investment, and
  the price of our common stock could fluctuate substantially.

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

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

- 10 -

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

A limited number of shareholders will collectively continue
  to own a majority of our common shares after this offering and may act, or prevent
  corporate actions, to the detriment of other shareholders. Our principal shareholders,
  including entities affiliated with members of our management team, will own
  more than 13.6% of our outstanding common shares. Accordingly, these shareholders
  may, if they act together, exercise significant influence over all matters requiring
  shareholder approval, including the election of a majority of the directors
  and the determination of significant corporate actions after this offering.
  This concentration could also have the effect of delaying or preventing a change
  in control that could be otherwise beneficial to our shareholders.

U.S. Investors May Not Be Able To Enforce Their Civil
  Liabilities Against Us or Our Directors, Controlling Persons and Officers.We
  are organized under the laws of Canada. All of our directors, controlling persons
  and officers are residents of Canada and all or a substantial portion of their
  assets and substantially all of our assets are located outside of the United
  States. As a result, it may be difficult for U.S. holders of our common shares
  to effect service of process on these persons within the United States or to
  realize in the United States upon judgments rendered against them. In addition,
  you should not assume that the courts of Canada (i) would enforce judgments
  of U.S. courts obtained in actions against us or such persons predicated upon
  the civil liability provisions of the U.S. federal securities laws or other
  laws of the United States, or (ii) would enforce, in original actions, liabilities
  against us or such persons predicated upon the U.S. federal securities laws
  or other laws of the United States.

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.                                                                                                                                                                                                         

Changes to Economic Policies in China.We are
  currently exploring our property in China. We could be adversely affected if
  China changes its economic policies. As part of its economic reform, China has
  designated certain areas as Special Economic Zones. Foreign enterprises in these
  areas benefit from greater economic autonomy and more favorable tax treatment
  than enterprises in other parts of China. Changes in the policies or laws governing
  Special Economic Zones could have a material adverse effect




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on us. Moreover, economic reforms and growth in China have
  been more successful in certain provinces than others, and the continuation
  or increase of these disparities could affect the political or social stability
  of China.

RISK FACTORS RELATED TO THE NATURAL RESOURCE INDUSTRY

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

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

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

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

Regulatory Approvals. Our operations
  require the procurement of numerous permits and compliance with an extensive
  number of codes and regulations. Mining, exploration and exploitation permits
  are required. While we believe that all requirements in this regard have been
  met, failure to comply with regulatory requirements




---

could result in permits being withdrawn or suspended. Further,
  changes in these regulations or in their application may adversely affect our
  operations.

Environmental Issues. We must comply with environmental
  laws and regulations. There can be no assurance that violations will not occur.
  In the event of a future violation of environmental laws we could be held liable
  for damages and for the costs of remedial actions. Environmental laws could
  become more stringent over time imposing greater compliance costs and increasing
  risks and penalties associated with a violation.

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

UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES

There is only a limited public market for our common
  shares on the 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 changes in interest rates and worldwide
  economic and market conditions, as well as changes in industry conditions, such
  as changes in oil and natural gas prices, oil and natural gas inventory levels,
  regulatory and environment rules, and announcements of technology innovations
  or new products by other companies. Examples of internal factors, which can
  generally be described as factors that are directly related to our consolidated
  financial condition or results of operations, would include release of reports
  by securities analysts and announcements we may make from time-to-time relative
  to our operating performance, drilling results, advances in technology or other
  business developments.

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

You will be subject to the 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.

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

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 extraprovincially 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, 64,951,523shares were issued and outstanding as of February 28, 2005 and 64,951,523
  shares were issued and outstanding as of the date of this Form 20-F. Our head
  office is located at #1103 -11871 Horseshoe Way, Richmond, B.C., V7A 5H5.

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
  British Columbia Company Act (“Former Act”) , which is the statute
  under which we were previously governed. Under the BCA, we have two years within
  which to transition ("Transition") under the new statute. In accordance with
  the BCA, we cannot amend our Articles or Notice of Articles until the Transition
  to the BCA is completed. We filed a transition application with the Registrar
  of Companies British Columbia and completed the Transition on June 11, 2004.

Concurrent with the completion of the Transition, we were
  required in accordance with the BCA to incorporate certain provisions known
  as the "Pre-Existing Company Provisions" (the "Pre-Existing Company Provisions")
  into our Notice of Articles, which replaced the existing Memorandum . The Company
  is a “pre-existing company” under the BCA (that is, a company in
  existence at the time the BCA came into force). The Pre-Existing Company Provisions
  provide our company with certain default provisions in case certain provisions
  which are required to be included in the Articles under the BCA are not included
  in our Articles.

- 14 -

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We filed our Notice of Articles with the Registrar of Companies
  which contains basic information relating to the Company, including our name,
  the particulars of the directors and the authorized capital. This was a mandatory
  requirement for transition to the BCA.

On August 16, 2004, at the Annual General Meeting of shareholders,
  our shareholders passed a special resolution that the Notice of Articles, filed
  September 15, 2005, be altered to remove the Pre-existing Company Provisions
  set forth in Part 16 of the Regulations to the Business Corporations Act (British
  Columbia); and delete and replace our Articles in their entirety and no longer
  apply to Linux Gold Corp. The New Articles, among other things, incorporate
  and amend certain of the information required by the Pre-Existing Company Provisions.

Our Incorporation Number is BC0187279. Our Articles do not
  restrict the nature of the business that may be carried on by the Company.

Since our inception and during the three fiscal years ending
  in February 2005, we had been involved in oil and gas exploration/production
  and mineral property exploration. We have investigated several mineral properties
  in Canada, the United States, China and Chile.

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 negligible net revenues after operating
  costs 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.

Our current plans are to joint venture and explore our mineral
  properties in Northern B.C., Alaska and China. The Company has acquired a 100%
  interest in the TY and ORO properties in B.C. and has a 50% interest in the
  Fish Creek property in Alaska, which is optioned to Teryl Resources Corp., and
  an option on a private company, which has an option to earn up to 85% of a mining
  property in Hebei Province, China.

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.

B.            BUSINESS
  OVERVIEW

Nature of the Company’s Operations

Mineral Properties

Fish Creek Claims, Alaska

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.




---

We currently
  own a 50% joint venture interest in 30 mining claims known as the Fish Creek
  Prospect, located in the Fairbanks Mining Division in Alaska. These claims are
  subject to an option agreement with Teryl Resources Corp. Teryl Resources Corp.
  may purchase the 5% net royalty for $500,000 U.S. within 1 year after production
  on a 25% working interest. Teryl also agrees to expend a minimum of $500,000
  U.S. after three years from the date of the agreement.

The Fish
  Creek claims are adjacent to the Teryl/Kinross joint venture Gil claims. After
  five years of intensive exploration on the Gil claim group the joint venture
  has been reported to contain a drill indicated/inferred gold deposit of 10,000,000
  tons of .04 gold per ton (400,000 ounces au).

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

In February
  2003, we announced that the exploration permit had been submitted to the Alaska
  Department of Mines to drill the Fish Creek Claims, and that Teryl Resources
  Corp. had commenced drilling on the Fish Creek Claims to test several magnetic
  anomalies for a potential lode and placer gold deposit.

The drill
  fence planned to extend NW-SE approximately parallel to Too Much Gold Creek
  and consist of 6 drill holes to an estimated depth of 200 feet. The current
  budget allowed an additional 300 feet of drilling as needed to deepen planned
  holes or drill additional holes. The targets selected tested for both lode and
  placer gold mineralization.

At least
  one hole targeted a coincident magnetic high on the left limit bench of Fish
  Creek opposite the mouth of Too Much Gold Creek in an area where previous drilling
  indicated $10/yd3 values (gold price used unknown). All of the holes that
  intersect gravel will be tested for alluvial gold as well as lode gold.

The second
  target to be tested was the potential for skarn-hosted gold-arsenic-bismuth
  mineralization similar to that on the adjacent Gil claims. Once each hole had
  reached the gravel-bedrock interface, drilling extended 50 to 100 feet into
  bedrock to determine its potential for lode mineralization. The rig geologist
  was on-site full-time to make this appropriate determinations.

Samples
  were collected on five-foot centers, bagged on-site and shipped directly to
  XRAL Laboratories’ sample preparation facility in Fairbanks, Alaska. All
  samples were analyzed for gold via fire assay techniques plus a multi-element
  suite via ICP-MS methods.

On March
  19, 2003 we announced the completion of the Fish Creek reverse circulation drilling
  program. A total of five holes were drilled to test several magnetic anomalies
  for potential placer and lode gold mineralization. Hard rock samples were submitted
  to Chemex Labs, in Fairbanks, Alaska, for assays and the placer samples were
  bagged and stored in our warehouse awaiting warmer weather to process them.
  Additional core drilling will be recommended on the Phase II exploration program
  based on favorable results from the current drilling program.

A ground
  magnetic survey was completed on the Fish Creek property on November 20, 2003
  on the right limit (east) side of Fish Creek Valley, approximately 600 –
  700 feet down-valley from the toe of the Fort Knox mine fresh water supply dam.
  Extremely high grade gold placer accumulations were encountered in a narrow
  right-limit channel during excavation of the Fort Knox mine fresh water dam
  site but their extent and grade downstream on the Fish Creek property has never
  been explored. A two-person crew, consisting of James Munsell, from Avalon Development
  and equipment operator, Kerry Adler from On-Line Exploration Services, Inc.
  conducted the survey. This was an orientation survey to test the right limit
  bench for a suspected buried placer gold-bearing channel east of Fish Creek.
  Surveys of this type have been successful in locating elevated magnetic field
  intensities associated with the heavy, magnetic mineral concentrations often
  associated with placer gold accumulations. The field survey consisted of two
  lines with 200-foot line spacing and 10-foot station spacing, which appears
  to provide sufficient detail to extrapolate magnetic data between lines. Total
  field and vertical gradient magnetic data have a good correlation, suggestive
  of adequate base station data. Signatures from the two traverses are interpreted
  to cross five features, of which three have the possibility of being associated
  with alluvial concentrations of various characteristics.




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



In September
  2002, we received confirmation that the original 30 State of Alaska mining claims
  comprising the Fish Creek property had been successfully converted to a State
  Upland Mining Lease.. The main advantage of the Upland Mining Lease is that
  any past or future claim ownership disputes have been eliminated. This mining
  lease clearly delineates Linux Gold’s holdings and assures the companies
  tenure to the claims and any mineral discovered or mined therefrom.

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

In February 2003, we announced
  that the exploration permit had been submitted to the Alaska Department of Mines
  to drill the Fish Creek Claims, and that Teryl Resources Corp. had commenced
  drilling on the Fish Creek Claims to test several magnetic anomalies for a potential
  lode and placer gold deposit.

The drill fence planned
  to extend NW-SE approximately parallel to Too Much Gold Creek and consist of
  6 drill holes to an estimated depth of 200 feet. The current budget allowed
  an additional 300 feet of drilling as needed to deepen planned holes or drill
  additional holes. The targets selected tested for both lode and placer gold
  mineralization.

At least one hole targeted
  a coincident magnetic high on the left limit (northwest side) bench of Fish
  Creek opposite the mouth of Too Much Gold Creek in an area where previous drilling
  indicated $10 in gold per cubic yard of gravel (gold price used unknown). All
  of the holes that intersect gravel were analyzed for alluvial gold as well as
  lode gold.

17 -

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The second
  target to be tested was the potential for skarn-hosted gold-arsenic-bismuth
  mineralization similar to that on the adjacent Gil claims. Once each hole had
  reached the gravel-bedrock interface, drilling extended 50 to 100 feet into
  bedrock to determine its potential for lode mineralization. The rig geologist
  was on-site full-time to determine when each drill hole should be terminated.

Samples were collected on
  five-foot centers, bagged on-site and shipped directly to XRAL Laboratories’
  sample preparation facility in Fairbanks, Alaska. All samples were analyzed
  for gold via fire assay techniques plus a multi-element suite via inductively
  coupled plasma – mass spectrography (ICP-MS) methods.

On March 19, 2003 we announced
  the completion of the Fish Creek reverse circulation drilling program. A total
  of five holes were drilled to test several magnetic anomalies for potential
  placer and lode gold mineralization. Hard rock samples were submitted to Chemex
  Labs, in Fairbanks, Alaska, for assays and the placer samples were bagged and
  stored in our warehouse awaiting warmer weather to process them.

A ground magnetic survey
  was completed on the Fish Creek property on November 20, 2003 on the right limit
  (southeast) side of Fish Creek Valley, approximately 600 – 700 feet down-valley
  from the toe of the Fort Knox mine fresh water supply dam. This program was
  an orientation survey to test the right limit bench of Fish Creek for a suspected
  buried placer gold-bearing channel. High grade gold placer accumulations were
  encountered in a narrow right-limit channel during excavation of the Fort Knox
  mine fresh water dam site but their extent and grade downstream on the Fish
  Creek property has never been explored. Magnetic surveys of this type have been
  successful in locating elevated magnetic field intensities associated with the
  heavy, magnetic mineral concentrations often associated with placer gold accumulations.
  The field survey consisted of two lines with 200-foot line spacing and 10-foot
  station spacing, which appears to provide sufficient detail to extrapolate magnetic
  data between lines. Total field and vertical gradient magnetic data have a good
  correlation, suggestive of adequate base station data. Signatures from the two
  traverses are interpreted to cross five features, of which three have the possibility
  of being associated with alluvial concentrations of various characteristics.

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

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

In July 2004 a total of
  20 soil samples were collected near Odden Creek with a hand held power auger
  to depths from 2 to 7.5 feet. These holes were placed on a grid pattern with
  hole spacings of 200 feet to test for metal anomalies and to examine bedrock
  chips in proximity to intrusive colluvium found on the surface. Several groupings
  of holes were weakly anomalous in gold pathfinder elements and identified as
  prospective lode gold targets. Total cost of this program was $1,800.

In September and October
  2004 a 22 hole (1,506 feet) reverse circulation drilling program was completed
  on the property. Twenty holes were drilled on two widely spaced lines to test
  the placer gold potential while two deeper holes were drilled to test an intrusive-related
  lode gold target (Keener, 2005b). Six of the twenty placer holes returned intervals
  with gold values in excess of 0.01 ounces of gold per cubic yard. Values ranged
  from 0.0108 to 0.0629 ounces per cubic yard over widths of 5 to 8 feet. These
  values suggest potential for commercially viable alluvial gold resources may
  exist on the Fish Creek project. Total cost of the combined placer and lode
  drilling program was approximately $54,000.

---

After completing the placer
  drilling, two lode gold exploration holes totaling 405 feet of drilling were
  completed on the south side of Odden Creek. Samples were collected every five
  feet, but did not result in any significant concentrations of metals or other
  pathfinder elements. The best values for gold were 0.038 ppm and 0.040 ppm,
  found in T04RC01 at 195 feet and 200 feet, respectively.

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. A two phase program has been
  recommended as follows:

|1. | 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.
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|2  | 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.                                                                                                                                                                                                                                                                                                                                                       

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TY
  Gold Property, Bralorne Mining District, British Columbia

The Ty
  and ORO properties are located adjacent to one another and roughly 6 miles east
  of Goldbridge, British Columbia. Access to the property from either Goldbridge
  (10 km west) or Lillooet (96 km east) is readily gained by way of a gravel highway,
  which runs along the north side of Carpenter Lake. Since the property is situated
  close to the coast of British Columbia and lies between 640 and 1040 meters
  altitude, it has reasonably long, warm summers and short, crisp winters.

The Alpha zone is situated
  in a 20 meter wide shear zone in massive green and purple volcanics. It strike
  N80E and dips vertically. The Beta zone is not explosed over its full width
  due to bedrock depths at both ends of the backhoe trenches being beyond the
  digging range of a backhoe. The zone strikes NE/SW and dips 30° - 50°
  NW. It is bounded on the hanging wall by a 3 – 5 cm wide, rusty shear
  which shows well developed slickensides and graphite (the footwall side was
  not exposed because the bedrock surface slopes off too steeply and is beyond
  digging range).

The Beta zone may have a
  hanging wall and footwall vein – as is typical of gold systems in the
  Bridge River area and many other vein gold districts (ie the Motherlode system
  of California). This would explain the presence of two intersections in some
  of the holes. The geology of the zone is not yet understood, as rotary drill
  cuttings are not as informative as drill core.

On May 2, 2003 we announced
  that we had acquired an option to a 100% interest in 21 units in the Bralorne/Lillooet
  mining division in British Columbia, called the TY Gold Property. We will pay
  $30,000 over three years and 150,000 common shares. The TY Gold Property is
  subject to a 2% net smelter interest (NSR). We have an option to purchase each
  1% NSR for $1,000,000 prior to production. The TY Gold Property is adjacent
  to our newly acquired ORO Property. We now have a total of 41 units in the Bralorne
  area.

Previous drilling completed
  on the TY Gold Property on the Beta zone encountered values up to 5 feet of
  5.86 oz/ton silver and 1.129 oz/ton gold. Additional drilling has been recommended
  by Sampson Engineering Inc. to further explore the Beta zone.

In June 2003, we completed
  laying 1,800 feet of grid lines over the Beta Gold zone on its TY Gold prospect,
  in preparation for a drill program. Previous drilling on the Beta Gold zone
  encountered significant gold grades, with the highest value in hole 87-8, which
  encountered 15 feet of 0.93 ounces of gold per ton with 3.5 ounces of silver
  from 65-80 feet from the surface (a five foot intersection of 1.7 ounces of
  gold per ton is included in this intersection). Hole 87-9 encountered 10 feet
  of 0.69 ounces per ton gold including a five-foot intersection of 1.13 ounces
  of gold per ton.

The Beta Gold zone remains
  open down dip to the west and the 1,800 foot grid crosses over two additional
  known gold zones.

In August 2003, we completed
  a phase I drill program. Four diamond drill holes of approximately 200 feet
  each in length were drilled in the Beta Gold zone to confirm the high-grade
  results of drilling in 1987.

All four holes drilled have
  encountered extensive stockwork zones and listwanite alteration, favourable
  geology for hosting Bralorne-type gold deposits. The core was split and assayed
  for gold and silver. Soil sampling is also underway to ascertain the strike
  length and surface extent of the Beta zone. Based on drill results, a phase
  II, 3,000 foot diamond drilling program will be recommended to explore the western
  side of the Beta zone.

On September 2, 2003, we
  announced that additional units had been staked surrounding the Company’s
  TY Gold property and in several strategic locations in the Bralorne Mining District.
  Four diamond drill holes




---

have been
  completed on the TY Gold property to confirm the high-grade results. Results
  from the 4 holes are expected in early September.

In September 2003, we continued
  a second phase of drilling on the TY Gold property. The purpose of the program
  was to confirm high-grade results encountered by previous drilling on the property.

On November 6, 2003, we
  announced that diamond drilling results from Holes 3TD-1 through 6. Gold values
  were mixed though generally low-grade with slightly elevated lead/zinc values
  over minor intervals. The highest gold value seen (1.48 g/t – hole 3TD
  1:84’-89’) occurred within a highly stockworked, altered volcanic
  breccia.

While favorable gold indicators
  such as listwanite alteration, abundant stockworking and arsenopyrite mineralization
  were frequently encountered gold values were somewhat lower than anticipated.
  The drill program is to be extended for additional holes in an attempt to intercept
  higher-grade, known mineralization encountered by previous drilling in the 1980’s.

We will continue exploration
  work on the TY Gold property and will meet the terms of the acquisition agreement
  unless the Company decides to not continue due to poor results or economic reasons.

There currently are no resources
  or reserves on the Ty 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 previous drilling at Ty was not sufficient to allow estimation
  of CIM compatible resources or reserves

Additional work on the Ty
  property will be based on results from the previous exploration 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.

Duna Choapa Norte Orebody and La Barca Orebody, Chile

On April
  28, 2003, we announced that the Company acquired a non-exclusive option to participate
  in a 60% interest in two heavy mineral/gold sands deposits in Chile, S.A., subject
  to a 5% net profit interest. The terms were an option payment of US$600,000
  and financing a pilot mill for estimated costs of US$2,000,000. We also agreed
  to fund a complete 7,200 ton per day production plant within 12 months from
  the production date of the prototype mill The option agreement has been terminated
  due to expiration of the option agreement date.

ORO Property, Lillooet Mining Division, British Columbia

The Ty
  and ORO properties are located adjacent to one another and roughly 6 miles east
  of Goldbridge, British Columbia. Access to the property from either Goldbridge
  (10 km west) or Lillooet (96 km east) is readily gained by way of a gravel highway,
  which runs along the north side of Carpenter Lake. Since the property is situated
  close to the coast of British Columbia and lies between 640 and 1040 meters
  altitude, it has reasonably long, warm summers and short, crisp winters.

The Alpha zone is situated
  in a 20 meter wide shear zone in massive green and purple volcanics. It strike
  N80E and dips vertically. The Beta zone is not explosed over its full width
  due to bedrock depths at both ends of the backhoe trenches being beyond the
  digging range of a backhoe. The zone strikes NE/SW and dips 30° - 50°
  NW. It is bounded on the hanging wall by a 3 – 5 cm wide, rusty shear
  which shows well developed slikensides and graphite (the footwall side was not
  exposed because the bedrock surface slopes off too steeply and is beyond digging
  range).

The Beta zone may have a
  hanging wall and footwall vein – as is typical of gold systems in the
  Bridge River




---

area and
  many other vein gold districts (ie the Motherloade system of California). This
  would explain the lower intersection in some of the holes. The geology of the
  zone is not yet understood, as rotary drill cuttings are not as informative
  as drill core.

In April 2003, we acquired
  a 100% interest in 20 mineral claim units, subject to a 2% net smelter return,
  called the ORO property in the Lillooet Mining Division, BC, for $10,000 and
  100,000 shares of Linux Gold Corp. We have the option to purchase back each
  1% NSR return for $1,000,000 prior to production. Several Very Low Frequency
  – Electromagnetic (VLF-EM) conductive zones have been located on the ORO
  property. The magnetic survey shows the entire property is underlain with sediments
  and volcanics, which are important in the placement of gold bearing quartz veins.

The Company has met the terms and conditions of the acquisition agreement by
  issuing 25,000 of its shares to the vendor during the nine months ended November
  30, 2004. This was the final requirement of the purchase agreement. The vendor
  retains a 2% net smelter return interest.

We will continue exploration
  work on the ORO Gold property and will meet the terms of the acquisition agreement
  unless the Company decides to not continue due to poor results or economic reasons.

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

Additional work on the ORO
  property will be based on results from the previous exploration 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.



BLN Gold Property, Hebei Province, China


The Bo
  Luo Nuo (“BLN”) covers an area of 161km2. It is connected by road
  to Beijing (about 4 hours drive). The elevation of this mountainous area is
  between 750-900 meters. The highest point is the peak of Mount Guang Ling which
  is 1,434 meters high and consists of Mesozoic granite. The climate is cool continental.
  The maximum annual temperature ranges between 35.7°C and -28.3°C.

BLN is located at the northern
  edge of the Northern China Platform, which is mainly composed of Archean crystallized
  basement. The most common rocks in this area are Archean metamorphic rocks including
  schist, gneiss, granulite, plagioamphibolite, marble, quartzite, and migmatite
  Locally, the outcrops of the Jurassic sedimentary and volcanic rocks can be
  seen, which include shale, sandstone, basalt and andesite.

Faults and folds are also
  well developed in the area. There are three groups of structures in the area.
  NNE, NNW and EW faults. The former two are the vital ore-host structures in
  the area.

The strike of the mineralization
  bodies in the north half part of the BLN is different from that of those in
  the southern part. The NNW or NW strike of the mineralization bodies in the
  north appears to have a dip to the NE while the NNE strike of mineralization
  bodies in the south have a dip to the SE. This may imply that the gold mineralization
  bodies are controlled by at least two different groups of faults.

The gold mineralization
  can be divided into two types: brown oxidized mineralizations and primary quartz-sulphide
  mineralization. The Oxided mineralization mainly consist of gold, quartz, hematite
  and limonite. Primary mineralization mineral assemblage is mainly gold, quartz
  cubic pyrite, galena, sphalerite, magnetite, chalcopyrite and chlorite. There
  is almost no difference about the mineral assemblage of primary mineralization
  in the various mines in the area.

On January 20, 2004 the Company acquired an option to purchase 100% of the
  shares of Ginyen Recovery Inc.

- 20 -

---

Ginyen Recovery Inc. has an 85% interest in a co-operative joint venture with
  Bo Luo Neo Wang Yuan Gold Mine Company (“BLN Gold”) of Heibei Province,
  China. BLN Gold holds an operational gold recovery mill; option to acquire the
  and license to operate all existing small mines in the district; the option
  to explore, develop and produce gold and silver in the district and options
  to expand to other districts. The Company can earn a 100% interest in the private
  company, subject to a 5% net profits interest, by issuing 200,000 shares of
  Linux Gold Corp. in four stages and paying $50,000 cash, and expending a total
  of $500,000 in a three-phase work program.

We entered into a consulting agreement with Jim Yin, Ph.D., consulting geologist.
  Mr. Yin completed his Ph.D. of Science at the China University of Geosciences,
  Beijing, China. Mr. Yin has previously supervised four joint ventures as the
  project representative for mining exploration in China and completed a preliminary
  investigation report on the Linux Gold optioned property in December 2002.

In April, 2004 we announced
  assay results indicating high grade gold and silver on the Tuo Dao Gou gold
  zone, one of many prospects on the Bo Luo Nuo property in China. The Tuo Dao
  Gou gold zone reported 5.5 ounces of gold per ton with 9 ounces of silver by
  Acme Analytical Laboratories on April 1, 2004. The Lan Ying has the highest
  results, with one sample which assayed 11.75 ounces of gold and 5.75 ounces
  of silver per ton. The average grade from 15 grab? samples on the Ge Di Gou
  was 23.36 grams per ton. The third important zone is the Tuo Dao Gou, which
  was a gold producer zone with stable higher grade gold. The average grade from
  18 samples was 11.58 grams per ton gold.

A total of 118 samples were
  collected from 12 different known gold zones for gold and silver and 32 samples
  were collected from the platinum, palladium prospect .

The gold zones/veins should be the main targets to follow up in the next exploration
  program to develop economic high grade gold reserves to feed the 50 ton a day
  mill.

On June 9, 2004 we announced that Bisheng Liu, of Beijing, China, has been
  appointed Vice President Corporate Administrator for our gold mining interests
  in the Peoples Republic of China. Mr. Bisheng is a resident of Beijing, the
  Peoples Republic of China, educated in the Tianjin’s Institute of Foreign
  Trade and received a Bachelor of Economics degree in China. Previous jobs included
  a position with the Ministry of Foreign Trade in Beijing and also work with
  the Chinese Embassy in Singapore for a three year period as Third Secretary
  for the commercial office. Mr. Liu is currently working as project manager with
  Cirque Du Soleil. The board of directors is very pleased to have a representative
  in China, such as Bisheng Liu, which is the fastest growing economy in the world
  today, and look forward to a successful relationship with our projects in China.

On October 12, 2004 we announced that we had received confirmation of approval
  for exploration for Wang Yuan Mine, an additional permit for exploration is
  to be submitted on the nearby Lan Ying Mine. The objective of this year’s
  exploration program is to develop sufficient gold reserves to feed the 50 ton
  per day mill, which is located on our optioned property. An exploration program
  has commenced on the Wang Yuan mine to dewater the mine and commence a sampling
  program on the known gold zone.

In November 2004, we announced
  that the exploration license for the Dong Gou Gold project has been negotiated
  by Bisheng Liu, of Beijing, China, our Vice President Corporate Administrator
  for this project. The terms and conditions are pursuant to the co-operative
  joint venture company agreement that has an option on mineral exploration rights
  in Hebei Province, China, covering an area of 161 kilometres.

The Dong Gou Gold project
  consists of 5.12 square kilometres. This area has had three small mines operating
  in the last seven years, which were mined mainly by hand by the Chinese farmers
  in the area. One of the past producing mines, the Lan Ying Mine, appears to
  be the best organized mine in the area. About 90,000 tons of mineralization
  has been mined out by hand in the past, at rates of 35 tons of ore per day,
  grading 11 grams (? of an ounce) of gold per tonne.

The exploration goal for
  this property, together with the adjacent Wang Yuan Gold project, is to develop
  sufficient economic gold reserves for the 50 ton per day mill, which is on the
  property. The sampling program on the Wang Yuan property known gold zones completed
  and the assays were completed in February 2005.

---

The term of the license is effective until a production decision
  is made by the Company.

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

Additional work on the BLN
  property will be based on results from the previous exploration 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.

Mailprotek.com


On March 27, 2002 we announced that a secure email solution
  has been licensed from www.mailprotek.com for the United States rights. The
  service for MailProtek is currently on hold due to unfavourable interest in
  the technology.

Corporate Finance

During the year ended February 28, 2005:

| | a) | During the year ended February 28, 2005, the Company
        issued 25,000 common shares at a value of $0.10 per share pursuant
        to the mineral Oro mineral property option agreement .                                                                                                                                                                                                                                                                                                                                                              
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) | During the year ended February 28, 2005, the Company
        issued 50,000 common shares at a value of $0.39 per share and issued
        50,000 common shares as a finder’s fee pursuant to the BLN Gold
        Property option agreement .                                                                                                                                                                                                                                                                                                               
|
| | c) | During the year ended February 28, 2005, the Company
        completed a private placement and issued 2,777,777 units at a price of
        US$0.18 per unit for proceeds of $620,850 (US$500,000) before
        issue costs of $2,185. Each unit consisted of one common share and
        one warrant. One whole warrant entitles the holder to purchase one share
        at a price of US$0.18 per share for a two year period. The Company
        issued 208,333 shares as a finder’s fee in connection with this
        private placement offering.
|
| | d) | During the year ended February 28, 2005, the Company
        completed a private placement and issued 1,219,500 units at a price of
        US$0.15 per unit for proceeds of $241,424 (US$182,925). Each
        unit consisted of one common share and one-half warrant. One whole warrant
        entitles the holder to purchase one share at a price of US$0.20 per
        share in the first year and US$0.25 per share in the second year.                                                                                                           

Additionally, 87,500 stock options were exercised.

- 21 -

---

During the year ended February 28, 2004:

| | e) | During the year ended February 29, 2004, the Company
        completed a private placement and issued 875,000 units at a price of US$0.20
        per unit for proceeds of US$175,000. Each unit consisted of one common
        share and one-half warrant. One whole warrant entitles the holder to purchase
        one additional common share at a price of US$0.20 per share for a
        one year period.                                                
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | f) | During the year ended February 29, 2004, the Company
        issued 175,000 common shares at a value of $0.10 pursuant to the BLN
        property option agreement .                                                                                                                                                                                                                                                                                            
|
| | g) | During the year ended February 29, 2004, the Company
        issued 1,000,000 shares pursuant to a consulting agreement for services
        beginning April 2, 2003 for a period of six months. The Company was also
        obligated to issue 100,000 shares per month starting May 2, 2003. On July
        11, 2003, the Company terminated this agreement due to non-performance
        and has demanded return of the 1,000,000 shares previously issued.
|
| | h) | The Company issued 200,000 shares to settle a prior
        year’s rental agreement.                                                                                                                                                                                                                                                                                                                                                                             

During the year ended February 28, 2003:

| | i) | On February 20, 2003, the Company issued 675,000
        units at $0.10 per unit for proceeds of $67,500. Each unit consisted
        of one share and one warrant. Each warrant can be exercised at $0.12
        per share in the first year and at $0.15 per share in the second year.
        These warrants were all exercised in fiscal 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | j) | On November 28, 2002, the Company issued 3,000,000
        common shares in exchange for a license for a secure email solution
        from Mailprotek.com (a related company). Mailprotek.com has developed
        a complete solution to filter out viruses, worms and spamming. Mailprotek.com
        will retain 25% of all revenues and pay 75% to the Company. The consideration
        of 3,000,000 common shares was issued to Mailprotek.com’s subsidiary
        Imaging Technologies, Inc. and the market value of the shares was $238,800
        but the asset was recorded at the transferor’s cost of $25,000
        and the difference recorded as a deemed dividend. The cost amount was
        originally recorded as an intangible asset. The License was written-off
        to operations due to the lack of historical cash flow of the License and
        lack of market to resell the License.
|
| | k) | On November 12, 2002, the Company issued 19,295,567
        common shares in exchange for the extinguishment of US$578,867 in
        debt (US$0.03 per share). The market value of the shares on the date
        of exchange was $964,778.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                

Shareholder approval for the granting and exercise of incentive
  stock options was obtained at the Company’s annual general meeting held
  on August 16, 2004.

Description of the Markets in Which the Company Competes

This is no longer applicable due to the discontinuance of
  the business operations of our wholly-owned subsidiary.

- 22 -

---

Competition

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

Seasonality


We believe that there is no seasonality which affects our
  business.

Availability of Raw Materials

We do not manufacture any products directly.

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.



For a list of our significant subsidiaries, see “Item
  10 – Additional Information – Subsidiary Information”.

D.            PROPERTY,
  PLANT AND EQUIPMENT

We do not own any properties. We currently utilize office
  space in a commercial business park building located in Richmond, British Columbia,
  Canada, a suburb of Vancouver. The space is shared with several other companies
  which share common management. The monthly rent for its portion of this 1,500
  square foot space is $500.00. The present 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 2005, we had been involved in oil and gas exploration/production
  and more recently, mineral property exploration and development.

Please refer
  to section 4.B. BUSINESS OVERVIEW, Nature of the Company’s Operations,
  Mineral Properties for a description of our mineral properties.



Discontinued Operations

During fiscal 2002, we discontinued the business operations
  of our wholly-owned subsidiary, LinuxWizardry, Inc.

Continuing Operations


Fiscal Year Ended February 28, 2005 compared to Fiscal
  year Ended February 28, 2004

Results of Operations


During fiscal 2005, we received no revenues from operations as compared to
  $nil revenues in 2004.




---

Administrative expenses in 2005 totaled $659,000 as compared
  to $354,000 in 2004. The expenses increased from the prior year due to the
  increased activity of the Company. Office, rent and telephone totaled $200,000
  compared to $65,000 in 2004. A significant portion of the increase relates
  to the increase in advertising and promotion costs of $111,000 in 2005 as
  compared to $23,000 in 2004, which are included in office, rent and telephone
  costs. Website hosting costs of $10,000 are also included in 2005, as compared
  to $nil in 2004. Professional fees totaled $42,000 compared to $28,000
  in 2004. We also incurred an imputed interest charge of $35,000 compared
  to $23,500 in 2004. Imputed interest at 15% was charged to operations based
  on the advances from related parties and treated as donated capital. This amount
  increased during 2005 due to the additional advances received in the first three
  fiscal quarters of 2005, before being paid down in the last fiscal quarter of
  2005. Consulting and subcontract expenses increased to $234,000 in 2005
  from $174,000 in 2004. This increase was due to the inclusion of stock-based
  compensation of $100,000 recognized from the granting of stock options.

We paid $183,000 for mining acquisitions and related exploration
  work in 2005 as compared to $122,000 in 2004.

Fiscal Year Ended February 28, 2004 compared to Fiscal
  year Ended February 28, 2003

Results of Operations


During fiscal 2004, we received no revenues from operations
  as compared to $nil revenues in 2003.

Administrative expenses in 2004 totaled $354,000 as compared
  to $201,000 in 2003. The expenses increased from the prior year due to the
  increased activity of the Company. Office, rent and telephone totaled $65,000
  compared to $13,000 in 2003. Professional fees totaled $28,000 compared
  to $16,000 in 2003. We also incurred an imputed interest charge of $23,000
  compared to $90,00 in 2003. Imputed interest at 15% was charged to operations
  based on the advances from related parties and treated as donated capital. This
  amount decreased during 2004 due to the settlement of debt in 2003. Filing and
  regulatory expenses increased due to increased reporting activities. Consulting
  and subcontract expenses increased to $174,000 in 2004 from $17,000
  in 2003. This increase was due to a payment of $100,000 to Barry Clarke
  and a payment of $30,000 to Capital Research for financing consulting.

In 2003 we recorded an option payment of $80,000 which
  represented the 200,000 shares we received pursuant to the joint venture agreement
  with Teryl Resources Corp. We paid $122,000 for mining acquisitions and
  related exploration work as compared to $6,000 in 2003. In 2003 we issued
  3,000,000 shares to purchase a license from Mailprotek.com. The license value
  was valued at $238,000 but Mailprotek.com’s was $25,000 which
  resulted in a deemed dividend of $213,800.

Fiscal Year Ended February 28, 2003 compared to Fiscal
  year Ended February 28, 2002

Results of Operations


During fiscal 2003, we received no revenues from operations
  as compared to $1,078 revenues in 2002.

Administrative expenses in 2003 totaled $226,000 as compared
  to $416,000 in 2002. The expenses decreased from the prior year due to the
  inactivity of the Company. There were no financing costs compared to $25,000
  in 2002. There was a foreign exchange gain of $34,000 compared to a foreign
  exchange loss of $4,000 in 2002. There was no interest on convertible debentures
  as compared to $7,000 in 2002. Office, rent and telephone totaled $13,000
  compared to $25,000 in 2002. Professional fees totaled $16,000 compared
  to $71,000 in 2002. In 2002, we wrote off obsolete inventory of $49,000.
  We also incurred an imputed interest charge of $90,500 compared to $115,000
  in 2003. Imputed interest at 15% was charged to operations based on the advances
  from related parties and treated as donated capital.

In 2003 we recorded an option payment of $80,000 which
  represented the 200,000 shares we received pursuant to the joint venture agreement
  with Teryl Resources Corp. In 2003 we issued 3,000,000 shares to




---

purchase a license from Mailprotek.com. The license value
  was valued at $238,000 but Mailprotek.com’s was $25,000 which
  resulted in a deemed dividend of $213,800.

B.           
  LIQUIDITY AND CAPITAL RESOURCES

Liquidity and Capital Resources

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

We have been successful in the past in acquiring capital through
  the issuance of shares of our Common Stock, and through advances from related
  parties. Although we intend to continue utilizing these sources, there has been
  no assurance in the past that these sources and methods would continue to be
  available in the future. On July 16, 1999, we received from John G. Robertson,
  its then President, currently the Chairman of the Board, a "Commitment to Provide
  Financing to Flame Petro-Minerals Corp. as Required for Ongoing Operations".
  In substance, the Commitment states that if we are not able to obtain funds
  required for maintaining our ongoing operations and status as a publicly traded
  company, from other sources, Mr. Robertson agrees and commits to provide, and/or
  arrange for any such funds for us on either a loan, equity, or combination basis,
  on mutually agreeable terms, and which comply with any regulatory rules and
  regulations applicable to such transactions. Mr. Robertson further states that
  such maintenance funding requirements are estimated at approximately $50,000
  per year and that he is capable of arranging for such funding and/or is able
  to generate net earnings from revenues which will sustain our ongoing operations.

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

Liquidity


Fiscal Year Ended February 28, 2005 compared to Fiscal
  year Ended February 28, 2004

During 2005 we financed our operations by the issue of 4,543,110
  common shares for cash proceeds of $908,195. This consists of the issue
  of 4,205,610 common shares pursuant to private placement offerings completed
  during the year to raise cash proceeds of $860,089 after issue costs, the
  issue of 87,500 common shares pursuant to the exercise of stock options for
  cash proceeds of $10,606, and the issue of 250,000 shares pursuant to the
  exercise of share purchase warrants for cash proceeds of $37,500.

During 2005, we spent $665,000 of these funds on operating
  activities as discussed above under Results of Operation for the Year Ended
  February 28, 2005 as compared to $154,000 the year ended February 28, 2004.

Our cash position has increased by $247,000 to $398,000
  and our working capital as at February 28, 2005 was $98,000.

Fiscal Year Ended February 28, 2004 compared to Fiscal
  year Ended February 28, 2003

Liquidity


During 2004 we financed our operations and received $479,000
  by:

| | (i)  | receiving financial support from companies affiliated
        with the President of the Company in the amount of $179,000. These
        amounts are unsecured, non-interest bearing and due on demand;
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) | issuing shares for $301,000.                                                                                                                                                                           




---

During 2004, we spent $154,000 of these funds on operating
  activities as discussed above under Results of Operation for the Year Ended
  February 29, 2004 as compared to $144,000 the Year Ended February 28, 2003.

Our cash position has increased by $141,000 to $152,000
  and our working capital deficit, as at February 29, 2004 was $92,000.

Fiscal Year Ended February 28, 2003 compared to Fiscal
  year Ended February 28, 2002

Liquidity


During 2003 we financed our operations and received $152,000
  by:

| | (i)  | receiving financial support from companies affiliated
        with the President of the Company in the amount of $84,000. These
        amounts are unsecured, non-interest bearing and due on demand; and
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (ii) | issuing shares for $67,500.                                                                                                                                                                               

During 2003, we spent $144,000 of these funds on operating
  activities as discussed above under Results of Operation for the Year Ended
  February 28, 2003 as compared to $363,000 the Year Ended February 29, 2002.

Our cash position increased by $8,000 to $11,000 and
  our working capital deficit, as at February 28, 2003 was $514,000.

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

Our aggregate research and development expenditures over the
  past three years ended February 28, 2003, February 29, 2004 and February 28,
  2005 amount to $63,729, $nil and $nil respectively. We do not hold
  any patents, trademarks or copyrights.



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



There are no known off-balance sheet arrangements other than
  those disclosed in this Form 20-F and in our audited consolidated financial
  statements for the year ended February 28, 2005.

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.

- 32 -

---

|                                                                                         | Payments due by period     
|---------------------------------------------------------------------------------------- | ---------------------------
|Contractual Obligations                                                                  | Total                      
|Mineral Property Obligations                                                             | $555,000 and 200,000 shares
|Long-term debt obligations                                                               | -                          
|Capital (Finance) Lease obligations                                                      | -                          
|Operating lease obligations                                                              | $28,395                    
|Purchase Obligations                                                                     | $25,000                    
|Other Long-term liabilities reflected on the Company’s
      Balance sheet under US GAAP | -                          
|Total                                                                                    | $608,395 and 200,000 shares

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

|Property                                 | Calendar   Year | Option/Advance   Royalty Payment | Expenditure   Commitment | Number of  Shares
|---------------------------------------- | --------------- | -------------------------------- | ------------------------ | -----------------
|TY, BC, Canada                           | 2005            | $ -                              | $ -                      | 50,000           
|                                         | 2006            | $ -                              | $ -                      | -                
|ORO, BC, Canada                          | 2005            | $ -                              | $ -                      | -                
|                                         | 2006            | $ -                              | $ -                      | -                
|BLN Gold Property, Hebei Province, China | 2005- 2006      | $55,000                          | $500,000                 | 150,000          

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

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,
  SENIOR MANAGEMENT AND EMPLOYEES

As of February 28, 2005, our Board of Directors consisted
  of four Directors, two of whom are independent (or “outside”) non-executive
  Directors. The following table provides certain information about the members
  of our Board of Directors as of February 28, 2005.

|Name              | Position with Registrant                                                                | Term of Office                      | Office Held Since
|----------------- | --------------------------------------------------------------------------------------- | ----------------------------------- | -----------------
|John G. Robertson | President, CEO and Chairman of the
      Board and Director, and Director of Subsidiary | Annual Shareholders Meeting in 2003 | 3/05/79          
|Jennifer Lorette  | Director                                                                                | Annual Shareholders Meeting in 2003 | 6/01/94          
|Susanne Robertson | Director                                                                                | Annual Shareholders Meeting in 2003 | 8/28/02          
|Monique van Oord  | Chief Financial Officer  and Corporate
      Secretary                                  | Annual Shareholders Meeting in 2004 | 8/16/04          

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”) and hydrogen separator
  technology. Since October 1984 Mr. Robertson has been President and a Director
  of Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
  Exchange that has financed the research on the Rand Cam Engine since 1986. REGI
  U.S. is ultimately controlled by Reg Technologies Inc. Mr. Robertson has been
  the President and Principal Executive Officer and a Director of




---

IAS Communications, Inc. since its formation in December 1994,
  a U.S. public company which is developing and marketing proprietary antenna
  technology. Since June 1997 Mr. Robertson has been President, Principal Executive
  Officer and a Director of Information Highway.com, Inc., a Florida corporation.
  Mr. Robertson is also the President and founder of Teryl Resources Corp., a
  British Columbia company trading on the TSX Venture Exchange 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., BlueCrow
  Internet Co. Ltd., 394754 B.C. Ltd., dba SOVO Computer Centre, Pavlik Travel
  Services Ltd., World Tel-Internet (Toronto) Ltd., International Diamond Syndicate
  Ltd., Argon Investment Corporation, and Airstream Communications, Inc. Mr. Robertson
  is a citizen and resident of Canada.

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 Vice President of Administration for
  Reg Technologies, Inc., a British Columbia corporation listed on the TSX Venture
  Exchange. REGI U.S. is ultimately controlled by Reg Technologies Inc. Since
  June 1997 Ms. Lorette has been Secretary/Treasurer, and a Director of Information
  Highway.com, Inc., a Florida corporation. Ms. Lorette is a founder, and has
  been Secretary/Treasurer of IAS Communications, Inc. since February 1995. 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.
  and owns SMR Investments Ltd. a company providing management services to public
  companies. Ms. Robertson is a citizen and resident of Canada.

Monique van Oord – Ms. van Oord was elected a
  director of the Company in August 2004. She is the Company’s Chief Financial
  Officer and Secretary. She is also a director of Teryl Resources Corp. Ms. van
  Oord is a citizen and resident of Canada.



For the fiscal year ended February 29, 2005 the Company and
  its subsidiaries paid $48,000 in compensation to directors, officers and
  related companies as a group. This amount was not paid, but was accrued.

SMR Investments Ltd., a company owned by Susanne M. Robertson,
  wife of John G. Robertson, receives, in accordance with a management agreement
  $2,500 per month for management fees provided to the Company and $500
  per month for rent. A further $1,000 per month is paid to the Chairman of
  the Board of the Company, John G. Robertson, as a director's fee. John G. Robertson
  is also president and a director of SMR Investments Ltd.

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

During the fiscal year ended February 28, 2005 stock options
  were granted on a total of 900,000 common shares pursuant to stock option plans,
  87,500 options were exercised and 800,000 options were cancelled (expired)(see
  Note 9 to our Financial Statements).

Total options currently exercisable at the date of this 20-F
  are 3,562,500. All exercise prices are US dollars. Of those, 1,987,500 are exercisable
  at $0.10 expiring on dates ranging from February 21, 2008 to October 20,
  2008. 300,000 options are exercisable at $0.18 and expire on September 17,
  2007, 225,000 are exercisable at $0.30 expiring between June 9, 2006 and
  April 22, 2009, and 50,000 options are exercisable at $0.20 and expire on
  November 9, 2009. 1,000,000 options are exercisable at $0.05 and expire
  on April 1, 2006. Please




---

see Note 8 to the financial statements.

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

|NAME OF OPTIONEE       | NUMBER OF OPTIONS | EXERCISE PRICE  (US $) | EXPIRY DATE      
|---------------------- | ----------------- | ---------------------- | -----------------
|John G. Robertson      | 1,000,000         | $0.10                  | February 21, 2008
|Jennifer Lorette       | 150,000           | $0.10                  | February 21, 2008
|Monique van Oord       | 50,000            | $0.30                  | April 22, 2009   
|Monique van Oord       | 25,000            | $0.10                  | February 21, 2008
|Susanne Robertson      | 300,000           | $0.10                  | February 25, 2008
|TOTAL HELD AS A GROUP: | 1,525,000         |                        |                  

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

|Name of Optionee       | No. of Optioned Shares | Exercise Price Per Share | Expiry Date       
|---------------------- | ---------------------- | ------------------------ | ------------------
|James Vandeberg        | 100,000                | $0.10US                  | February 21, 2008 
|Bruce Bragagnolo       | 50,000                 | $0.10US                  | February 25, 2008 
|James Kerr             | 100,000                | $0.10US                  | February 25, 2008 
|Arnie Winrob           | 37,500                 | $0.10US                  | February 25, 2008 
|James Kerr             | 100,000                | $0.10US                  | September 17, 2008
|Peter Zihlmann         | 125,000                | $0.10US                  | October 20, 2008  
|Jillian Thow           | 300,000                | US$0.18                  | Sept. 17, 2007    
|Arnie Winrob           | 25,000                 | US$0.30                  | April 22, 2009    
|Wazmakay Charlwood     | 150,000                | US$0.30                  | June 9, 2006      
|Jagdish Singh          | 25,000                 | US$0.20                  | November 9, 2009  
|Cindy Broad            | 25,000                 | US$0.20                  | November 9, 2009  
|Hal Clark              | 1,000,000              | US$0.05                  | April 1, 2006     
|TOTAL HELD AS A GROUP: | 2,037,500              |                          |                   

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.



We employed no employees during any of the years ended February
  28, 2005, February 29, 2004 and February 28, 2003. Our legal, accounting, marketing
  and administrative functions are, and have been during the last three fiscal
  years, contracted out to consultants.




---

We have no employees; as such, no directors 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.



The following table sets forth the ownership of our common
  shares by our Directors and Officers as at June 23, 2005:

|Shareholder       | Number of shares issued and outstanding | Percentage ownership (1)
|----------------- | --------------------------------------- | ------------------------
|John G. Robertson | 2,309,656(2)                            | 3.56%                   
|Jennifer Lorette  | 258,100(3)                              | *                       
|Monique van Oord  | 60,000(4)                               | *                       
|Susanne Robertson | 7,673,408                               | 11.81%                  

|(1) | as at June 23, 2005, there were 64,951,523 issued
        and outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | includes 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 150,000 options that are currently exercisable.
        Ms. Lorette's address is the same as our address.                                                                                                                                                                                                                                                                                                                                                                                                                             
|(4) | Includes 50,000 options that are currently exercisable.
        Ms. van Oord’s address is the same as the Company’s.                                                                                                                                                                                                                                                                                                                                                                                                                           
|(5) | includes 6,587,158 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 of June 23, 2005, 64,951,523 Common Shares were outstanding.
  At such date, we are aware of one shareholder who owns 5% or greater of the
  voting shares of the Company. Sue Robertson, our director, owns 7,373,408 of
  our issued and outstanding common shares. Of these, 6,587,158 shares are registered
  in the name of SMR Investments Ltd., a corporate controlled by Ms. Robertson.
  Mrs. Robertson does not have any different voting rights.

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 2005, 2004 and 2003, and rent of $6,000
  in each of fiscal years 2005, 2004 and 2003. SMR is a private company owned
  by Susanne M. Robertson, the wife of John G. Robertson.

We paid a director's fee of $12,000 to John G. Robertson,
  our Chairman of the Board, during each of fiscal years 2005, 2004 and 2003.

We had related party advances outstanding of $188,156
  at the February 2005 year-end, compared to $230,630 at the end of our previous
  fiscal year. These were unsecured, non-interest bearing and with no fixed terms
  of repayment.

Also refer to “Liquidity and Capital Resources”
  regarding the "Commitment to Provide Financing to Flame Petro-Minerals Corp.
  as Required for Ongoing Operations" by John Robertson.

C.           
  INTERESTS OF EXPERTS AND COUNSEL.

Not applicable.

ITEM 8.            FINANCIAL
  INFORMATION

A.            CONSOLIDATED
  STATEMENTS AND OTHER FINANCIAL INFORMATION

See page F-1 to F-20 following Item 19. 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:

- 38 -

---

|Year | High   | Low       | Close   
|---- | ------ | --------- | --------
|2005 | $0.35  | $0.12     | $0.19   
|2004 | $0.455 | $0.04     | $0.30   
|2003 | $0.094 | $0.011    | $ 0.07  
|2002 | $0.14  | $0.01     | $0.013  
|2001 | $4.375 | $ 0.09375 | $0.09375
|2000 | $3.625 | $ 0.08    | $2.875  

The following table shows the quarterly high and low 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  | Volume    
|----------------- | ----- | ------ | ------ | ----------
|2005  Q4 2/28/05  | $0.35 | $ 0.12 | $0.19  |           
|Q3 11/30/04       | 0.20  | 0.12   | 0.185  | 6,986,354 
|Q2 8/31/04        | 0.24  | 0.12   | 0.19   | 10,631,057
|Q1 5/31/04*       | $0.35 | $0.20  | $0.21  | 12,924,713
|2004  Q1 5/31/03* | $0.08 | $0.04  | $0.05  | 5,055,400 
|Q2 8/31/03*       | $0.10 | $0.04  | $0.077 | 9,792,900 
|Q3 11/30/03*      | $0.28 | $0.053 | $0.265 | 26,849,789
|Q4 2/29/04*       | $0.45 | $0.20  | $0.30  | 32,438,989

(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*  
|-------------- | ------ | ------
|2005, May      | $0.13  | $0.10 
|2005, April    | $0.185 | $0.10 
|2005, March    | $0.23  | $0.17 
|2005, February | $0.23  | $0.15 
|2005, January  | $0.22  | $0.165
|2004, December | $0.295 | $0.16 




(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.

- 39 -

---

B.            MEMORANDUM
  AND ARTICLES OF ASSOCIATION

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. Under the BCA, we have two years within which to transition
  ("Transition") under the new statute. In accordance with the BCA, we cannot
  amend our Articles or Notice of Articles until the Transition to the BCA is
  completed. We filed a transition application with the Registrar of Companies
  British Columbia and completed the Transition on June 11, 2004.

Concurrent with the completion of the Transition, we were
  required in accordance with the BCA to incorporate certain provisions known
  as the "Pre-Existing Company Provisions" (the "Pre-Existing Company Provisions")
  into our Notice of Articles, which replaced the existing Memorandum . The Company
  is a “pre-existing company” under the BCA (that is, a company in
  existence at the time the BCA came into force). The Pre-Existing Company Provisions
  provide our company with certain default provisions in case certain provisions
  which are required to be included in the Articles under the BCA are not included
  in our Articles.

We filed our Notice of Articles with the Registrar of Companies
  which contains basic information relating to the Company, including our name,
  the particulars of the directors and the authorized capital. This was a mandatory
  requirement for transition to the BCA.

On August 16, 2004, at the Annual General Meeting of shareholders,
  our shareholders passed a special resolution that the Notice of Articles, once
  filed, be altered to remove the Pre-existing Company Provisions set forth in
  Part 16 of the Regulations to the Business Corporations Act(British
  Columbia); and delete and replace our Articles in their entirety and no longer
  apply to Linux Gold Corp.

The New Articles, among other things, incorporate and amend
  certain of the information required by the Pre-Existing Company Provisions.

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, 2005 and February
  29, 2004, we entered into the following material contracts.

Property Option Agreement – Peter Tse


Ginyen Recovery Inc. (“Ginyen”) has a license
  to mine the Bo Luonuo (the “BLN Project”) District of Hebei Province
  in China. Peter Tse own 100% of Ginyen. Tse granted Linux the sole, exclusive
  and irrevocable option to purchase up to 100% of the rights, title and interest
  in and to 100% of all the outstanding shares of Ginyen, subject to the grant
  of a 5% Net Profits royalty in the BLN Project.

Linux exercised an option as to 25% of the Optioned Shares
  by paying to Tse, $10,000 and issuing 50,000 Linux Shares to Tse and causing
  to be carried out the Phase I mining exploration and/or development work in
  respect of the BLN and expending in connection therewith the total sum of $160,000.




---

Linux may exercise the option as to a further 35% of the Optioned
  Shares following the completion of the Phase I Program by (i) paying the additional
  sum of $15,000 and issuing a further 50,000 Linux Shares to Tse; and (ii)
  causing to be carried out the Phase II mining exploration and/or development
  work in respect of the BLN Project or such other secondary work program as shall
  be recommended by a qualified engineer or geologist acceptable to the parties
  hereto (the "Phase II Program") and expending in connection therewith the total
  sum of $130,000.

Provided that Linux has previously exercised the 35% Option
  we may exercise the option as to a further 25% of the Optioned Shares following
  the completion of the Phase II Program by (i) paying the additional sum of $15,000
  and issuing a further 50,000 Linux Shares to Tse; and (ii) causing to be carried
  out the Phase III mining exploration and/or development work in respect of the
  BLN Project or such other continuing work program as shall be recommended by
  a qualified engineer or geologist acceptable to the parties hereto (the "Phase
  III Program") and expending in connection therewith the total sum of $210,000.
  Provided that Linux has previously exercised the above mentioned options, we
  may exercise the Option as to the final 5% of the Optioned Shares, following
  the completion of the Phase III Program by (i) issuing a further 50,000 Linux
  Shares to Tse; and (ii) entering into a Royalty Agreement which grants to Tse
  a Net Profits Royalty in the BLN Project.

If and when the option is exercised in full, 100% of all right,
  title and interest in and to the Optioned Shares shall vest in Linux free and
  clear of all charges, encumbrances and claims.

During the fiscal year, we issued Mr. Tse $10,000 and
  50,000 shares pursuant to the agreement.

Edward Skoda Purchase Agreement – ORO Mineral Claims

On April 9, 2003 Mr. Skoda sold his rights, title and interest
  in and to the ORO Mineral Claims situated in the Lillooet Mining Division, B.C.,
  subject to a 2% net smelter return interest.

As consideration for this transaction Linux paid Mr. Skoda
  $10,000 and issued 75,000 shares for completion of Phases I and II and has
  issued a further 25,000 shares upon completion of Phase III.

Edward Skoda Purchase Agreement – TY Gold Property

On May 1, 2003 Mr. Skoda sold his rights, title and interest
  in and to the TY Gold, TY Gold 2 & 3 Mineral Claims situated in the Lillooet
  Mining Division, B.C., subject to a 2% net smelter return interest.

As consideration for this transaction Linux paid Mr. Skoda
  $10,000 and issued 100,000 shares upon signing the agreement. Linux agreed
  to pay Mr. Skoda $10,000 for completion of Phase I, which has been paid);
  $10,000 upon completion of Phase II and will issue a further 50,000 shares
  upon completion of Phase III, but in any event, no later than December 1, 2005.

Mr. Skoda also executed a Bill of Sale upon payment by Linux
  of CDN$5,000

Fish Creek Joint Venture Agreement


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




---

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

In
  March 2005, the joint venture agreement was extended until March 5, 2007. Other
  than the extension, all other terms remain the same. Subject to regulatory approval,
  Teryl shall issue 100,000 shares of its common stock to Linux Gold Corp. as
  consideration for the extension.



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.

Withholding

Generally, cash dividends paid by Canadian corporations to
  nonresident shareholders are subject to a withholding tax of 25 percent. However,
  pursuant to Article X[2 of the Canada-United States tax treaty, dividends paid
  to a resident if a company of the United States are only subject to a 15 percent
  withholding tax. Further, if the United states resident owns 10 percent or more
  of the voting shares of the Canadian company paying the dividends, the withholding
  tax is reduced to 10 percent. In addition to dividend withholding, interest
  paid to United States residents is subject to a 15 percent withholding tax pursuant
  to Article XI[2 of the Canada-United States tax treaty.

Capital Gains


A nonresident purchaser who holds shares of the Company as
  capital property will not be subject to tax on capital gains realized on the
  disposition of such shares unless such shares are "taxable Canadian property"
  within the meaning of the Income Tax Act (Canada) and no relief is afforded
  under any applicable tax treaty. The shares of the Company would be taxable
  Canadian property of a nonresident purchaser if the nonresident purchaser used
  the shares in carrying on a business in Canada or if at any time during the
  five-year period immediately preceding the disposition not less than 25 percent
  of the issued shares of any class of the Company belonged to the particular
  purchaser, persons with whom the purchaser did not deal at arm's length or any
  combination thereof.

Holders of Common Shares of the Company should seek independent
  advice from their own professional tax advisors with respect to the Canadian
  Income Tax consequences arising from the holding of Common Shares of the Company.

- 42 -

---

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. Any statement in this annual report about any
  of our contracts or other documents is not necessarily complete. If the contract
  or document is filed as an exhibit to the Registration Statement, the contract
  or document is deemed to modify the description contained in this annual report.
  You must review the exhibits themselves for a complete description of the contract
  or documents.

You may inspect and copy our registration statements, including
  their exhibits and schedules, and the reports and other information we file
  with the Securities and Exchange Commission in accordance with the Exchange
  Act at the public reference facilities maintained by the Securities and Exchange
  Commission at Judiciary Plaza, 450 Fifth Street, Room 1024, N.W., Washington,
  D.C. 20549 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
  Illinois 60661. You may also inspect the registration statements, including
  their exhibits and schedules, at the office of the New York Stock Exchange,
  Wall Street, New York, New York 10005. Copies of such material may also be obtained
  from the Public Reference Section of the Securities and Exchange Commission
  at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. You
  may obtain information regarding the Washington D.C. Public Reference Room by
  calling the Securities and Exchange Commission at 1-800-SEC-0330 or by contacting
  the Securities and Exchange Commission over the Internet at its website at http://www.sec.gov.



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

In June 1998, the Financial Accounting Standards Board issued
  SFAS No. 133. "Accounting For Derivative Instruments and Hedging Activities."
  This statement establishes accounting and reporting standards for derivative
  instruments, including certain derivative instruments embedded in other contracts,
  and for hedging activities. SFAS No. 133 was effective for our fiscal year beginning
  March 1, 2004. The Company believes that it does not have any material exposure
  to interest or commodity risks. The Company does not own any derivative instruments,
  does not engage in any hedging transactions and does not have any outstanding
  long-term debt. Because we are not involved in any activities covered by SFAS
  No. 133, the adoption of SFAS No. 133 is not expected to have a material effect
  on our financial position or results of operations.

ITEM 12.          DESCRIPTION
  OF SECURITIES OTHER THAN EQUITY SECURITIES




- 43 -

---

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

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

Changes in Internal Controls over Financial Reporting.

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

ITEM 16.         
  [Reserved]

ITEM 16A.       Audit Committee
  Financial Expert

We do not currently have a financial expert in our audit committee
  due to our relatively small size. In 2005, we had no employees and we relied
  upon the services of a chartered accounting firm in Vancouver, BC, Canada, to
  prepare our interim unaudited quarterly consolidated financial statements. Also,
  we retained the audit services of Manning Elliott Chartered Accountants to perform
  the audit on our year-end consolidated financial statements.

- 44 -

---

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

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



We have not adopted a formal written code of ethics given
  our relatively small size, whereby we had no employees in 2005.

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:




|                          | 2005        | 2004       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year

|(a) Audit Fees                                                | US$16,500 | US$12,000
|------------------------------------------------------------- | --------- | ---------
|                                                              |           |          
|(b) Audit-Related Fees        (eg.
      review of Form 20-F) | $nil      | $nil     
|                                                              |           |          
|(c) Tax Fees                                                  | $500      | $500     
|                                                              |           |          
|(d) All Other Fees                                            | $nil      | $nil     

PART III

ITEM 17.         FINANCIAL
  STATEMENTS

The Company has elected to provide financial statements pursuant
  to Item 18.



Reference is made to Item 19 for a list of all financial statements
  filed as part of this annual report.

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 as required
  under Item 18 are included immediately following the text of this Report.




---

ITEM 19.         EXHIBITS

(a) The following consolidated financial statements, together
  with the report of Manning, Elliott, on the annual financial statements referred
  to below, are filed as part of this annual report, and are included immediately
  following the text of this 20-F:




(b) Documents filed as exhibits to this annual report:

|Number | Description                                                                                                                                                                                                                                                                                                                                                                             |    
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|       |                                                                                                                                                                                                                                                                                                                                                                                         |    
|1.1    | 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.                                                                                                                                                                                                          |    
|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)

- 46 -

---

|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)
|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) | (7)
|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)  | (7)
|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) | (7)
|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)  | (7)
|14.1 | Consent
        of Independent Auditors                                                                                                                                       | (7)
|99.1 | Consent
      of Curt Freeman                                                                                                                                                 | (7)

|(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) | attached hereto.                                                                                                                                                      

- 47 -

---

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: October
      26, 2005 | By: | /s/ John G. Robertson         
|----------------------------- | --- | ------------------------------
|                              |     | John G. Robertson             
|                              |     | Chairman of the Board/Director

- 48 -

---

|LINUX GOLD CORP.                 
|---------------------------------
|(An Exploration Stage Company)   
|                                 
|CONSOLIDATED FINANCIAL STATEMENTS
|                                 
|                                 
|FEBRUARY 28, 2005                
|(Stated in Canadian Dollars)     

F-1

---




Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors of 
  Linux Gold Corp.

We have audited the accompanying consolidated balance sheets
  of Linux Gold Corp. (An Exploration Stage Company) as at February 28, 2005 and
  February 29, 2004 and the consolidated statements of operations and deficit,
  cash flows and stockholders equity for the period from March 1, 2002 to
  February 28, 2005 and for the years ended February 28, 2005, February 29, 2004
  and February 28, 2003. 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 audits.

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

In our opinion, the financial statements referred to above present
  fairly, in all material respects, the financial position of the Company as at
  February 28, 2005 and February 29, 2004 and the results of its operations and
  its cash flows for the period from March 1, 2002 to February 28, 2005 and for
  the years ended February 28, 2005, February 29, 2004 and February 28, 2003 in
  accordance with generally accepted accounting principles used in the United
  States.

The accompanying consolidated financial statements have been
  prepared assuming the Company will continue as a going concern. As discussed
  in Note 1 to the consolidated financial statements, the Company has not generated
  profitable operations since inception. These factors raise substantial doubt
  about the Companys ability to continue as a going concern. Managements
  plans in regard to these matters are also discussed in Note 1. These consolidated
  financial statements do not include any adjustments, which might result from
  the outcome of these uncertainties.

|/s/ Manning Elliott
|---------------------
|                     
|CHARTERED ACCOUNTANTS
|Vancouver, Canada    
|July 15, 2005        

F-2

---

|LINUX GOLD CORP.              
|------------------------------
|(An Exploration Stage Company)
|CONSOLIDATED BALANCE SHEETS   
|(Stated in Canadian Dollars)  

|                                                           |   | February 28 |  
|---------------------------------------------------------- | - | ----------- | -
|                                                           |   | 2005        |  
|                                                           |   |             |  
|                                                           |   |             |  
|ASSETS                                                     |   |             |  
|Current                                                    |   |             |  
|Cash and cash equivalents                                  | $ | 398,433     |  
|Amounts receivable                                         |   | 49,550      |  
|Marketable securities                                      |   | 70,000      |  
|Prepaid expenses and deposits                              |   | 6,200       |  
|Total Current Assets                                       |   | 524,183     |  
|Property and Equipment (Note 3)                            |   | 20,525      |  
|                                                           |   |             |  
|Total Assets                                               | $ | 544,708     |  
|                                                           |   |             |  
|LIABILITIES                                                |   |             |  
|Current                                                    |   |             |  
|Accounts payable                                           | $ | 100,868     |  
|Accrued liabilities                                        |   | 32,395      |  
|Accrued liabilities to related parties
      (Note 6(a))   |   | 104,560     |  
|Due to related parties
      (Note 6(b))                   |   | 188,156     |  
|Total Liabilities                                          |   | 425,979     |  
|                                                           |   |             |  
|Commitments (Note 11)                                      |   |             |  
|Subsequent Events (Note 15)                                |   |             |  
|                                                           |   |             |  
|STOCKHOLDERS EQUITY (DEFICIT)                             |   |             |  
|                                                           |   |             |  
|Common Stock (Note 7)                                      |   |             |  
|Authorized:                                                |   |             |  
|200,000,000 common shares without par value                |   |             |  
|                                                           |   |             |  
|Issued:                                                    |   |             |  
|64,951,523 common shares at February 28, 2005 and          |   |             |  
|60,283,413 at February 29, 2004                            |   | 8,044,675   |  
|                                                           |   |             |  
|Additional Paid-in Capital (Note 7(i))                     |   | 213,659     |  
|                                                           |   |             |  
|Donated Capital (Note 6(b))                                |   | 263,473     |  
|                                                           |   |             |  
|Accumulated Other Comprehensive Income (Loss)              |   | (10,000     | )
|                                                           |   |             |  
|Losses Prior to the Exploration Stage                      |   | (7,080,932  | )
|                                                           |   |             |  
|Deficit Accumulated During the Exploration
      Stage     |   | (1,312,146  | )
|Total Stockholders Equity (Deficit)                       |   | 118,729     |  
|                                                           |   |             |  
|Total Liabilities
      and Stockholders Equity (Deficit) | $ | 544,708     |  

|Approved on Behalf of the Board: |  |                           
|-------------------------------- |  | --------------------------
|                                 |  |                           
|                                 |  |                           
|                                 |  |                           
|John Robertson, Director         |  | Jennifer Lorette, Director

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

F-3

---

|LINUX GOLD CORP.                           
|-------------------------------------------
|(An Exploration Stage Company)             
|CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT
|(Stated in Canadian Dollars)               

|                                                 |  | March 1, 2002      |   |  |              |   |  |                   |   |  |              |  
|------------------------------------------------ |  | ------------------ | - |  | ------------ | - |  | ----------------- | - |  | ------------ | -
|                                                 |  | (Date of inception |   |  |              |   |  |                   |   |  |              |  
|                                                 |  | of exploration     |   |  |              |   |  |                   |   |  |              |  
|                                                 |  | stage) to          |   |  |              |   |  | Years
      Ended |   |  |              |  
|                                                 |  | February 28,       |   |  | February 28, |   |  | February 29,      |   |  | February 28, |  
|                                                 |  | 2005               |   |  | 2005         |   |  | 2004              |   |  | 2003         |  
|                                                 |  | $                  |   |  | $            |   |  | $                 |   |  | $            |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Revenue                                          |  |                   |   |  |             |   |  |                  |   |  |             |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|General and Administrative Expenses              |  |                    |   |  |              |   |  |                   |   |  |              |  
|Amortization of property and equipment           |  | 12,795             |   |  | 5,346        |   |  |                  |   |  | 7,449        |  
|Amortization of discount on convertible          |  |                    |   |  |              |   |  |                   |   |  |              |  
|debentures                                       |  | 90,452             |   |  | 30,152       |   |  | 30,150            |   |  | 30,150       |  
|Consulting and subcontract (1)                   |  | 424,736            |   |  | 233,789      |   |  | 173,555           |   |  | 17,392       |  
|Filing and regulatory fees                       |  | 64,214             |   |  | 26,103       |   |  | 26,113            |   |  | 11,998       |  
|Foreign exchange                                 |  | (65,231            | ) |  | 6,877        |   |  | (38,254           | ) |  | (33,854      | )
|Imputed interest (Note 6(b))                     |  | 148,473            |   |  | 35,013       |   |  | 22,960            |   |  | 90,500       |  
|Investor relations                               |  | 5,895              |   |  |             |   |  |                  |   |  | 5,895        |  
|Management and directors
      fees (Note 6(a)) |  | 127,750            |   |  | 42,250       |   |  | 43,500            |   |  | 42,000       |  
|Office, rent and telephone (Note 6(a)) (1)       |  | 277,809            |   |  | 199,522      |   |  | 64,839            |   |  | 13,448       |  
|Professional fees                                |  | 85,864             |   |  | 42,235       |   |  | 27,662            |   |  | 15,967       |  
|Travel                                           |  | 43,752             |   |  | 39,750       |   |  | 3,902             |   |  | 100          |  
|Write down of obsolete inventory                 |  |                    |   |  |             |   |  |                  |   |  |             |  
|Less: Interest income                            |  | (2,527             | ) |  | (1,858       | ) |  | (624              | ) |  | (45          | )
|                                                 |  | 1,213,982          |   |  | 659,179      |   |  | 353,803           |   |  | 201,000      |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Natural Resources                                |  |                    |   |  |              |   |  |                   |   |  |              |  
|Exploration costs                                |  | 198,640            |   |  | 137,342      |   |  | 61,298            |   |  |             |  
|Mineral claims acquisition costs
      (1)       |  | 109,937            |   |  | 45,571       |   |  | 60,346            |   |  | 4,020        |  
|Less: Option payments                            |  | (80,000            | ) |  |             |   |  |                  |   |  | (80,000      | )
|                                                 |  | 228,577            |   |  | 182,913      |   |  | 121,644           |   |  | (75,980      | )
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Loss from Continuing Operations                  |  | (1,442,559         | ) |  | (842,092     | ) |  | (475,447          | ) |  | (125,020     | )
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Income (Loss) from Discontinued Operations       |  | 344,213            |   |  |             |   |  | 369,213           |   |  | (25,000      | )
|Net Loss for the Year                            |  | (1,098,346         | ) |  | (842,092     | ) |  | (106,234          | ) |  | (150,020     | )
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Deficit, Beginning of Year                       |  |                    |   |  | (7,550,986   | ) |  | (7,444,752        | ) |  | (7,080,932   | )
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Deemed Dividend (Note 6(a) (iv))                 |  | (213,800           | ) |  |             |   |  |                  |   |  | (213,800     | )
|Deficit, End of Year                             |  | (1,312,146         | ) |  | (8,393,078   | ) |  | (7,550,986        | ) |  | (7,444,752   | )
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Basic and Diluted Loss Per Share                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|- From continuing operations                     |  |                    |   |  | (0.01        | ) |  | (0.01             | ) |  |             |  
|- From discontinued operations                   |  |                    |   |  |             |   |  | 0.01              |   |  |             |  
|                                                 |  |                    |   |  | (0.01        | ) |  |                  |   |  |             |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|Weighted Average Number Of Shares                |  |                    |   |  |              |   |  |                   |   |  |              |  
|Outstanding                                      |  |                    |   |  | 61,345,000   |   |  | 58,664,000        |   |  | 40,968,000   |  
|                                                 |  |                    |   |  |              |   |  |                   |   |  |              |  
|(1) Stock-based compensation is included in      |  |                    |   |  |              |   |  |                   |   |  |              |  
|the following:                                   |  |                    |   |  |              |   |  |                   |   |  |              |  
|Consulting
      and subcontract                 |  | 182,000            |   |  | 82,000       |   |  | 100,000           |   |  |             |  
|Office,
      rent and telephone                 |  | 19,200             |   |  |             |   |  | 19,200            |   |  |             |  
|Mineral claims acquisition costs                 |  | 39,500             |   |  | 22,000       |   |  | 17,500            |   |  |             |  

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

F-4

---

LINUX GOLD CORP.
  (An Exploration Stage Company)
  CONSOLIDATED STATEMENTS OF CASH FLOWS
  (Stated in Canadian Dollars)

|                                                         |  | March 1, 2002 |   |  |              |   |  |                   |   |  |              |  
|-------------------------------------------------------- |  | ------------- | - |  | ------------ | - |  | ----------------- | - |  | ------------ | -
|                                                         |  | (Date of      |   |  |              |   |  |                   |   |  |              |  
|                                                         |  | inception of  |   |  |              |   |  |                   |   |  |              |  
|                                                         |  | exploration   |   |  |              |   |  |                   |   |  |              |  
|                                                         |  | stage) to     |   |  |              |   |  | Years
      Ended |   |  |              |  
|                                                         |  | February 28,  |   |  | February 28, |   |  | February 29,      |   |  | February 28, |  
|                                                         |  | 2005          |   |  | 2005         |   |  | 2004              |   |  | 2003         |  
|                                                         |  | $             |   |  | $            |   |  | $                 |   |  | $            |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Cash Flows To Operating Activities                       |  |               |   |  |              |   |  |                   |   |  |              |  
|Net loss for the year                                    |  | (1,098,346    | ) |  | (842,092     | ) |  | (106,234          | ) |  | (150,020     | )
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Adjustments to reconcile net loss to net cash
      used |  |               |   |  |              |   |  |                   |   |  |              |  
|in operating activities:                                 |  |               |   |  |              |   |  |                   |   |  |              |  
|Amortization of property and equipment                   |  | 12,795        |   |  | 5,346        |   |  |                  |   |  | 7,449        |  
|Amortization of discount on convertible debentures       |  | 90,452        |   |  | 30,152       |   |  | 30,150            |   |  | 30,150       |  
|Imputed interest                                         |  | 148,473       |   |  | 35,013       |   |  | 22,960            |   |  | 90,500       |  
|Stock-based compensation                                 |  | 82,000        |   |  | 82,000       |   |  |                  |   |  |             |  
|Shares received for option payment                       |  | (80,000       | ) |  |             |   |  |                  |   |  | (80,000      | )
|Shares issued for services                               |  | 100,000       |   |  |             |   |  | 100,000           |   |  |             |  
|Shares issued for mineral properties                     |  | 39,500        |   |  | 22,000       |   |  | 17,500            |   |  |             |  
|Shares issued for settlement of rent obligation          |  | 19,200        |   |  |             |   |  | 19,200            |   |  |             |  
|License written off                                      |  | 25,000        |   |  |             |   |  |                  |   |  | 25,000       |  
|Write-off of subsidiarys accounts payable               |  | (369,213      | ) |  |             |   |  | (369,213          | ) |  |             |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Changes in operating assets and liabilities              |  |               |   |  |              |   |  |                   |   |  |              |  
|Accounts receivable                                      |  | (48,741       | ) |  | (41,981      | ) |  | (5,986            | ) |  | (774         | )
|Prepaid expenses                                         |  | (6,200        | ) |  | 27,009       |   |  | (33,209           | ) |  |             |  
|Accounts payable and accrued liabilities                 |  | (118,514      | ) |  | 3,359        |   |  | (55,777           | ) |  | (66,096      | )
|Accrued liabilities to related parties                   |  | 104,560       |   |  | 56,560       |   |  | 48,000            |   |  |             |  
|Due to related parties                                   |  | 220,545       |   |  | (42,474      | ) |  | 178,574           |   |  | 84,445       |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Net Cash Used In Operating Activities                    |  | (878,489      | ) |  | (665,108     | ) |  | (154,035          | ) |  | (59,346      | )
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Cash Flows To Investing Activities                       |  |               |   |  |              |   |  |                   |   |  |              |  
|Purchase of property and equipment                       |  | (25,871       | ) |  | (19,871      | ) |  | (6,000            | ) |  |             |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Net Cash Used In Investing Activities                    |  | (25,871       | ) |  | (19,871      | ) |  | (6,000            | ) |  |             |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Cash Flows From Financing Activities                     |  |               |   |  |              |   |  |                   |   |  |              |  
|Common stock issued                                      |  | 1,299,813     |   |  | 931,580      |   |  | 300,733           |   |  | 67,500       |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Net Cash Provided by Financing Activities                |  | 1,299,813     |   |  | 931,580      |   |  | 300,733           |   |  | 67,500       |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Increase in Cash and Cash Equivalents                    |  | 395,453       |   |  | 246,601      |   |  | 140,698           |   |  | 8,154        |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Cash and Cash Equivalents, Beginning of Year             |  | 2,980         |   |  | 151,832      |   |  | 11,134            |   |  | 2,980        |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Cash and Cash Equivalents, End of Year                   |  | 398,433       |   |  | 398,433      |   |  | 151,832           |   |  | 11,134       |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|SUPPLEMENTAL DISCLOSURES                                 |  |               |   |  |              |   |  |                   |   |  |              |  
|                                                         |  |               |   |  |              |   |  |                   |   |  |              |  
|Interest paid                                            |  |               |   |  |             |   |  |                  |   |  |             |  
|Income taxes paid                                        |  |               |   |  |             |   |  |                  |   |  |             |  

NON-CASH FINANCING AND INVESTING ACTIVITIES (Note 10)

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

F-5

---

|LINUX GOLD CORP.                 
|---------------------------------
|(An Exploration Stage Company)   
|STATEMENT OF STOCKHOLDERS EQUITY
|(Stated in Canadian Dollars)     

|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  | Deficit       |   |  |            |  
|------------------- |  | ------------ |  |  | --------- |  |  | ----------------- |  |  | ------- |  |  | ------------- |  |  | ------------ |  |  | ----------- | - |  | ------------- | - |  | ---------- | -
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  | Accumulated  |  |  | Losses      |   |  | Accumulated   |   |  | Total      |  
|                    |  |              |  |  |           |  |  | Common Additional |  |  |         |  |  | Other         |  |  | Prior to the |  |  | During the  |   |  | Stockholders |  
|                    |  | Common Stock |  |  | Stock     |  |  | Paid in           |  |  | Donated |  |  | Comprehensive |  |  | Exploration  |  |  | Exploration |   |  | Equity        |  
|                    |  | Shares       |  |  | Amount    |  |  | Subscribed        |  |  | Capital |  |  | Capital       |  |  | Gain/(Loss)  |  |  | Stage       |   |  | Stage         |   |  | (Deficit)  |  
|                    |  | #            |  |  | $         |  |  | $                 |  |  | $       |  |  | $             |  |  | $            |  |  | $           |   |  | $             |   |  | $          |  
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|Balance  February  |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|28, 2002            |  | 34,487,846   |  |  | 5,382,584 |  |  |                  |  |  | 41,207  |  |  | 115,000       |  |  |             |  |  | (7,080,932  | ) |  |              |   |  | (1,542,141 | )
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|Deemed dividend     |  |             |  |  |          |  |  |                  |  |  |        |  |  |               |  |  |             |  |  |            |   |  | (213,800      | ) |  | (213,800   | )
|Amortization of     |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|discount on         |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|convertible         |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|debentures          |  |             |  |  |          |  |  |                  |  |  | 30,150  |  |  |               |  |  |             |  |  |            |   |  |              |   |  | 30,150     |  
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|Imputed interest    |  |             |  |  |          |  |  |                  |  |  |        |  |  | 90,500        |  |  |             |  |  |            |   |  |              |   |  | 90,500     |  
|Stock issued for    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|cash pursuant to a  |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|private placement   |  | 675,000      |  |  | 67,500    |  |  |                  |  |  |        |  |  |               |  |  |             |  |  |            |   |  |              |   |  | 67,500     |  
|Stock issued to     |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|settle debt         |  | 19,295,567   |  |  | 964,778   |  |  |                  |  |  |        |  |  |               |  |  |             |  |  |            |   |  |              |   |  | 964,778    |  
|Stock issued on     |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|purchase of license |  | 3,000,000    |  |  | 238,800   |  |  |                  |  |  |        |  |  |               |  |  |             |  |  |            |   |  |              |   |  | 238,800    |  
|                    |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|Net loss            |  |             |  |  |          |  |  |                  |  |  |        |  |  |               |  |  |             |  |  |            |   |  | (150,020      | ) |  | (150,020   | )
|Balance  February  |  |              |  |  |           |  |  |                   |  |  |         |  |  |               |  |  |              |  |  |             |   |  |               |   |  |            |  
|28, 2003            |  | 57,458,413   |  |  | 6,653,662 |  |  |                  |  |  | 71,357  |  |  | 205,500       |  |  |             |  |  | (7,080,932  | ) |  | (363,820      | ) |  | (514,233   | )

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

F-6

---

LINUX GOLD CORP.
  (An Exploration Stage Company)
  STATEMENT OF STOCKHOLDERS EQUITY 
  (Stated in Canadian Dollars)

|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  | Deficit     |   |  |               |  
|---------------------- |  | ------------ |  |  | --------- |  |  | ---------- |  |  | ------------- |  |  | ----------- |  |  | ------------ | - |  | ----------- | - |  | ------------- | -
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  | Losses       |   |  | Accumulated |   |  | Total         |  
|                       |  |              |  |  |           |  |  | Additional |  |  |               |  |  | Accumulated |  |  | Prior to the |   |  | During the  |   |  | Stockholders |  
|                       |  | Common Stock |  |  | Paid in   |  |  | Donated    |  |  | Comprehensive |  |  | Exploration |  |  | Exploration  |   |  | Equity      |  
|                       |  | Shares       |  |  | Amount    |  |  | Capital    |  |  | Capital       |  |  | Gain/(Loss) |  |  | Stage        |   |  | Stage       |   |  | (Deficit)     |  
|                       |  | #            |  |  | $         |  |  | $          |  |  | $             |  |  | $           |  |  | $            |   |  | $           |   |  | $             |  
|Balance  February     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|28, 2003               |  | 57,458,413   |  |  | 6,653,662 |  |  | 71,357     |  |  | 205,500       |  |  |            |  |  | (7,080,932   | ) |  | (363,820    | ) |  | (514,233      | )
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Imputed interest       |  |             |  |  |          |  |  |           |  |  | 22,960        |  |  |            |  |  |             |   |  |            |   |  | 22,960        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued           |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|pursuant to mineral    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|property option        |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|agreements             |  | 175,000      |  |  | 17,500    |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 17,500        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued for       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|services               |  | 1,000,000    |  |  | 100,000   |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 100,000       |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued to        |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|settle rent obligation |  | 200,000      |  |  | 19,200    |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 19,200        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued for       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|cash pursuant to       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|options exercised      |  | 150,000      |  |  | 19,811    |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 19,811        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued for       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|cash pursuant to       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|warrants exercised     |  | 425,000      |  |  | 53,702    |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 53,702        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Stock issued for       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|cash pursuant to a     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|private placement      |  | 875,000      |  |  | 227,220   |  |  |           |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 227,220       |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Amortization of        |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|discount on            |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|convertible            |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|debentures             |  |             |  |  |          |  |  | 30,150     |  |  |              |  |  |            |  |  |             |   |  |            |   |  | 30,150        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Unrealized gain on     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|investment             |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|securities             |  |             |  |  |          |  |  |           |  |  |              |  |  | 44,000      |  |  |             |   |  |            |   |  | 44,000        |  
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Net loss               |  |             |  |  |          |  |  |           |  |  |              |  |  |            |  |  |             |   |  | (106,234    | ) |  | (106,234      | )
|                       |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|Balance  February     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |  |  |              |   |  |             |   |  |               |  
|28, 2004               |  | 60,283,413   |  |  | 7,091,095 |  |  | 101,507    |  |  | 228,460       |  |  | 44,000      |  |  | (7,080,932   | ) |  | (470,054    | ) |  | (85,924       | )

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

F-7

---

|LINUX GOLD CORP.                 
|---------------------------------
|(An Exploration Stage Company)   
|STATEMENT OF STOCKHOLDERS EQUITY
|(Stated in Canadian Dollars)     

|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  | Deficit     |   |  |               |  
|------------------- |  | ------------ |  |  | --------- |  |  | ---------- |  |  | ------------- |  |  | ----------- | - |  | ------------ | - |  | ----------- | - |  | ------------- | -
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  | Losses       |   |  | Accumulated |   |  | Total         |  
|                    |  |              |  |  |           |  |  | Additional |  |  |               |  |  | Accumulated |   |  | Prior to the |   |  | During the  |   |  | Stockholders |  
|                    |  | Common Stock |  |  | Paid in   |  |  | Donated    |  |  | Comprehensive |  |  | Exploration |   |  | Exploration  |   |  | Equity      |  
|                    |  | Shares       |  |  | Amount    |  |  | Capital    |  |  | Capital       |  |  | Gain/(Loss) |   |  | Stage        |   |  | Stage       |   |  | (Deficit)     |  
|                    |  | #            |  |  | $         |  |  | $          |  |  | $             |  |  | $           |   |  | $            |   |  | $           |   |  | $             |  
|Balance  February  |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|28, 2004            |  | 60,283,413   |  |  | 7,091,095 |  |  | 101,507    |  |  | 228,460       |  |  | 44,000      |   |  | (7,080,932   | ) |  | (470,054    | ) |  | (85,924       | )
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Imputed interest    |  |             |  |  |          |  |  |           |  |  | 35,013        |  |  |            |   |  |             |   |  |            |   |  | 35,013        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Stock issued        |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|pursuant to mineral |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|property option     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|agreements          |  | 125,000      |  |  | 45,384    |  |  |           |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 45,384        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Stock issued for    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|cash pursuant to    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|private placement,  |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|net of issue costs  |  | 4,205,610    |  |  | 860,089   |  |  |           |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 860,089       |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Stock issued for    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|cash pursuant to    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|options exercised   |  | 87,500       |  |  | 10,607    |  |  |           |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 10,607        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Stock issued for    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|cash pursuant to    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|warrants exercised  |  | 250,000      |  |  | 37,500    |  |  |           |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 37,500        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Amortization of     |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|discount on         |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|convertible         |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|debentures          |  |             |  |  |          |  |  | 30,152     |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 30,152        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Stock-based         |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|compensation        |  |             |  |  |          |  |  | 82,000     |  |  |              |  |  |            |   |  |             |   |  |            |   |  | 82,000        |  
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Unrealized loss on  |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|investment          |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|securities          |  |             |  |  |          |  |  |           |  |  |              |  |  | (54,000     | ) |  |             |   |  |            |   |  | (54,000       | )
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Net loss            |  |             |  |  |          |  |  |           |  |  |              |  |  |            |   |  |             |   |  | (842,092    | ) |  | (842,092      | )
|                    |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|Balance  February  |  |              |  |  |           |  |  |            |  |  |               |  |  |             |   |  |              |   |  |             |   |  |               |  
|28, 2005            |  | 64,951,523   |  |  | 8,044,675 |  |  | 213,659    |  |  | 263,473       |  |  | (10,000     | ) |  | (7,080,932   | ) |  | (1,312,146  | ) |  | 118,729       |  

(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
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|1. | NATURE OF OPERATIONS AND CONTINUANCE OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company was incorporated February 27, 1979 in Canada
        under the British Columbia Company Act and was extraprovincially registered
        in the Province of Alberta on October 12, 1995.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company voluntarily delisted from the Canadian Venture
        Exchange on December 14, 1999. The Companys stock currently trades
        on the Over the Counter Bulletin Board in the United States under the
        symbol LNXGF.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | On February 20, 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 is engaged
        in mineral exploration in Northern British Columbia and Alaska.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   | The Company is currently in the exploration stage and
        equity financing is required to provide working capital and to meet exploration
        commitments. As a result of the uncertainty that is typical in an exploration
        stage company, mounting losses, and the severe working capital deficiency,
        there is substantial doubt about the companys ability to continue
        as going concern. The continuation of the Company as a going concern is
        dependent upon the continued financial support from its shareholders,
        the ability of the Company to obtain necessary equity financing to continue
        operations and to determine the existence, discovery and successful exploitation
        of economically recoverable reserves in its resource properties, confirmation
        of the Companys interest in the underlying properties, and the attainment
        of profitable operations. These consolidated financial statements have
        been prepared on a going concern basis.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

| | a) | Basis of Accounting                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | These consolidated financial statements are prepared
        in conformity with accounting principles generally accepted in the United
        States and are presented in Canadian dollars. There are no consolidated
        financial statements prepared using Canadian generally accepted accounting
        principles. See Note 14 for a reconciliation of U.S. and Canadian generally
        accepted accounting principles. The Company is an Exploration Stage Company,
        as defined by Statement of Financial Accounting Standard (SFAS)
        No.7 Accounting and Reporting by Development Stage Enterprises.
        These financial statements include the accounts of the Company and its
        inactive wholly-owned U.S. subsidiary, LinuxWizardry, Inc.                                                                                                 
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | b) | Foreign Currency Translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The companys functional and reporting currency
        is the Canadian dollar. The financial statements of the Company are translated
        to Canadian dollars in accordance with Statement of Financial Accounting
        Standards (SFAS) No. 52 Foreign Currency Translation.
        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 financial statements, entered
        into derivative instruments to offset the impact of foreign currency fluctuations.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | c) | Use of Estimates                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| |    | The preparation of financial statements in conformity
        with U.S. generally accepted accounting principles 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 amounts of revenues
        and expenses during the reporting period. Actual results could differ
        from those estimates.                                                                                                                                                                                                                                                                                                                                                                                  

F-9

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | d)                                        
|   |                                           
|   |                                           
|   |                                           
|   | e)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           

| |  |                                 |  |              |  |  | Year
      ended |  |  |              | 
| |  | ------------------------------- |  | ------------ |  |  | ---------------- |  |  | ------------ | 
| |  |                                 |  | February 28, |  |  | February 29,     |  |  | February 28, | 
| |  |                                 |  | 2005         |  |  | 2004             |  |  | 2003         | 
| |  |                                 |  | $            |  |  | $                |  |  | $            | 
| |  |                                 |  |              |  |  |                  |  |  |              | 
| |  | Risk-free interest rate         |  | 3.38%        |  |  | 5.80%            |  |  | 5.80%        | 
| |  | Expected volatility             |  | 154%         |  |  | 50%              |  |  | 50%          | 
| |  | Expected dividends              |  |             |  |  |                 |  |  |             | 
| |  | Expected option life (in years) |  | 3            |  |  | 0.50             |  |  | 0.50         | 

| |  | If compensation expense had been determined pursuant to SFAS 123, the
      Companys net loss and net loss per share for the years ended February
      28, 2005, 2004 and 2003 would have been as follows:
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                            |  |              |   |  | Year
      ended |   |  |              |  
| |  | ---------------------------------------------------------- |  | ------------ | - |  | ---------------- | - |  | ------------ | -
| |  |                                                            |  | February 28, |   |  | February 29,     |   |  | February 28, |  
| |  |                                                            |  | 2005         |   |  | 2004             |   |  | 2003         |  
| |  |                                                            |  | $            |   |  | $                |   |  | $            |  
| |  |                                                            |  |              |   |  |                  |   |  |              |  
| |  | Net loss  as reported                                     |  | (842,092     | ) |  | (106,234         | ) |  | (150,020     | )
| |  | Add: Stock-based compensation expense included in net loss |  |              |   |  |                  |   |  |              |  
| |  |  as reported                                              |  | 82,000       |   |  |                 |   |  |             |  
| |  | Deduct: Stock-based compensation expense determined        |  |              |   |  |                  |   |  |              |  
| |  | under fair value method                                    |  | (96,000      | ) |  | (9,186           | ) |  | (125         | )
| |  |                                                            |  |              |   |  |                  |   |  |              |  
| |  | Net loss  pro forma                                       |  | (856,092     | ) |  | (115,420         | ) |  | (150,145     | )
| |  |                                                            |  |              |   |  |                  |   |  |              |  
| |  | Net loss per share (basic and diluted) 
      as reported |  | (0.01        | ) |  |                 |   |  |             |  
| |  | Net loss per share (basic and diluted)  pro forma         |  | (0.01        | ) |  |                 |   |  |             |  

F-10

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | f)                                        
|   |                                           
|   |                                           
|   |                                           
|   | g)                                        
|   |                                           
|   |                                           
|   |                                           
|   | h)                                        
|   |                                           
|   |                                           
|   |                                           
|   | i)                                        
|   |                                           
|   |                                           
|   |                                           
|   | j)                                        
|   |                                           
|   |                                           
|   |                                           
|   | k)                                        
|   |                                           
|   |                                           

F-11

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | m)                                        
|   |                                           
|   |                                           

| |  |                                               |   | February 28, |   |   | February 29, |   |   | February 28, |  
| |  | --------------------------------------------- | - | ------------ | - | - | ------------ | - | - | ------------ | -
| |  |                                               |   | 2005         |   |   | 2004         |   |   | 2003         |  
| |  | Net loss for the year                         | $ | (842,092     | ) | $ | (106,234     | ) | $ | (150,020     | )
| |  | Other comprehensive income (loss)             | $ |             |   | $ |             |   | $ |             |  
| |  | Unrealized holding gain (loss) on investments |   | (54,000      | ) |   | 34,000       |   |   | 10,000       |  
| |  | Comprehensive loss for the year               | $ | (896,092     | ) | $ | (72,234      | ) | $ | (140,020     | )

| | n) | Property and Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Property and equipment consists of office furniture,
        computer equipment and vehicle, which are recorded at cost. Office furniture
        is amortized on a declining balance basis at 20% per annum, computer equipment
        is amortized on a straight-line basis over three years, and the vehicle
        is amortized on a declining balance basis at 30% per annum.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | o) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | Financial instruments, which include cash, amounts receivable,
        marketable securities, accounts payable, accrued liabilities, and due
        to related parties, were estimated to approximate their carrying values
        due to the immediate or short-term maturity of these financial instruments.
        The Companys operations in Canada and China and virtually all of
        its assets and liabilities are giving rise to significant exposure to
        market risks from changes in foreign currency rates. The financial risk
        is the risk to the Companys operations that arise from fluctuations
        in foreign exchange rates and the degree of volatility of these rates.
        Currently, the Company does not use derivative instruments to reduce its
        exposure to foreign currency risk.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | p) | Concentration of Risk                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | The Company maintains its cash account in primarily
        one commercial bank in Vancouver, British Columbia, Canada. The Companys
        cash accounts are mainly two uninsured business checking accounts maintained
        in U.S. and Canadian dollars, which totaled $398,433 on February 28, 2005.
        At February 28, 2005 the Company has not engaged in any transactions that
        would be considered derivative instruments on hedging activities.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | q) | Recent Accounting Pronouncements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| |    | In December 2004, the Financial Accounting Standards
        Board (FASB) issued SFAS No. 153, Exchanges of Nonmonetary
        Assets - An Amendment of APB Opinion No. 29. The guidance in
        APB Opinion No. 29, Accounting for Nonmonetary Transactions,
        is based on the principle that exchanges of nonmonetary assets should
        be measured based on the fair value of the assets exchanged. The guidance
        in that Opinion, however, included certain exceptions to that principle.
        SFAS No. 153 amends Opinion No. 29 to eliminate the exception for nonmonetary
        exchanges of similar productive assets and replaces it with a general
        exception for exchanges of nonmonetary assets that do not have commercial
        substance. A nonmonetary exchange has commercial substance if the future
        cash flows of the entity are expected to change significantly as a result
        of the exchange. The provisions of SFAS No. 153 are effective for nonmonetary
        asset exchanges occurring in fiscal periods beginning after June 15, 2005.
        Early application is permitted and companies must apply the standard prospectively.
        The adoption of this standard is not expected to have a material effect
        on the Companys results of operations or financial position.

F-12

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars               

|2. | SIGNIFICANT ACCOUNTING POLICIES(Continued)
|-- | ------------------------------------------
|   |                                           
|   | q)                                        
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|   |                                           
|3. | PROPERTY AND EQUIPMENT                    

| |                   |  |        |  |  |              |  |  | February 28, |  |  | February 29, | 
| | ----------------- |  | ------ |  |  | ------------ |  |  | ------------ |  |  | ------------ | 
| |                   |  |        |  |  |              |  |  | 2005         |  |  | 2004         | 
| |                   |  |        |  |  | Accumulated  |  |  | Net Carrying |  |  | Net Carrying | 
| |                   |  | Cost   |  |  | Amortization |  |  | Value        |  |  | Value        | 
| |                   |  | $      |  |  | $            |  |  | $            |  |  | $            | 
| |                   |  |        |  |  |              |  |  |              |  |  |              | 
| | Computer hardware |  | 25,021 |  |  | 18,323       |  |  | 6,698        |  |  | 6,000        | 
| | Office furniture  |  | 1,408  |  |  | 782          |  |  | 626          |  |  |             | 
| | Vehicle           |  | 15,531 |  |  | 2,330        |  |  | 13,201       |  |  |             | 
| |                   |  |        |  |  |              |  |  |              |  |  |              | 
| |                   |  | 41,960 |  |  | 21,436       |  |  | 20,525       |  |  | 6,000        | 

|4. | MINERAL PROPERTIES
|-- | ------------------
|   |                   
|   | a)                
|   |                   
|   |                   

F-13

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|4. | MINERAL PROPERTIES(Continued)
|-- | -----------------------------
|   |                              
|   | b)                           
|   |                              
|   |                              
|
|   |                              
|   |                              
|
|
|
|   |                              
|   |                              
|
|
|   |                              
|   |                              
|
|   |                              
|   |                              
|
|   |                              
|   |                              
|
|   |                              
|   |                              
|   |                              
|   |                              
|
|   |                              
|   |                              
|
|
|
|   |                              
|   | c)                           
|   |                              
|   |                              
|
|
|
|
|   |                              
|   |                              
|   |                              
|   |                              
|
|
|   |                              
|   |                              
|
|
|   |                              
|   |                              

F-14

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|4. | MINERAL PROPERTIES (Continued)
|-- | ------------------------------

| |                                    |   |          |  |   | British    |  |   |          |  |   |              | 
| | ---------------------------------- | - | -------- |  | - | ---------- |  | - | -------- |  | - | ------------ | 
| |                                    |   | Alaska   |  |   | Columbia   |  |   | China    |  |   | Total        | 
| |                                    |   | Mineral  |  |   | Mineral    |  |   | Mineral  |  |   | February 28, | 
| |                                    |   | Property |  |   | Properties |  |   | Property |  |   | 2005         | 
| |                                    |   |          |  |   |            |  |   |          |  |   |              | 
| | Exploration and development costs: |   |          |  |   |            |  |   |          |  |   |              | 
| | Field supplies and other           | $ | 99       |  | $ |           |  | $ | 5,901    |  | $ | 6,000        | 
| | Assaying                           |   |         |  |   | 1,059      |  |   | 7,603    |  |   | 8,662        | 
| | Staking and recording fees         |   | 2,264    |  |   | 4,066      |  |   | 26,602   |  |   | 32,932       | 
| | Geological consulting              |   |         |  |   | 4,560      |  |   | 46,555   |  |   | 51,115       | 
| | Travel                             |   |         |  |   |           |  |   | 27,796   |  |   | 27,796       | 
| |                                    |   |          |  |   |            |  |   |          |  |   |              | 
| |                                    |   | 2,363    |  |   | 9,685      |  |   | 114,457  |  |   | 126,505      | 
| |                                    |   |          |  |   |            |  |   |          |  |   |              | 
| | Acquisition costs                  |   | 1,023    |  |   | 16,385     |  |   | 39,000   |  |   | 56,408       | 
| |                                    |   |          |  |   |            |  |   |          |  |   |              | 
| | Incurred during the year           | $ | 3,386    |  | $ | 26,070     |  | $ | 153,457  |  | $ | 182,913      | 

|5. | PETROLEUM PROPERTIES                                                                                                                                                                                                       
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                            
|   | The Company owns a 1.277% net working interest
        in one well in Fayette County, Texas, which has been capped and is no
        longer in production. The Company wrote off its carrying costs in fiscal
        2004.
|   |                                                                                                                                                                                                                            
|6. | RELATED PARTY TRANSACTIONS                                                                                                                                                                                                 
|   |                                                                                                                                                                                                                            
|   | a)                                                                                                                                                                                                                         
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   |                                                                                                                                                                                                                            
|   | b)                                                                                                                                                                                                                         

F-15

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|6. | RELATED PARTY TRANSACTIONS (continued)
|-- | --------------------------------------

| |                                   |   | February 29 |   |   | Advances/    |   |   | February 28 |  
| | --------------------------------- | - | ----------- | - | - | ------------ | - | - | ----------- | -
| |                                   |   | 2004        |   |   | (Repayments) |   |   | 2005        |  
| |                                   |   |             |   |   |              |   |   |             |  
| | 394754 B.C. Ltd.                  | $ | (1,580      | ) | $ | 1,580        |   | $ |            |  
| | Access Information Services, Inc. |   | 45,787      |   |   | 2,500        |   |   | 48,287      |  
| | IAS Communications Inc.           |   | (3,151      | ) |   |             |   |   | (3,151      | )
| | Imaging Technologies Inc.         |   | (4,587      | ) |   | 4,587        |   |   |            |  
| | Information Highway.com, Inc.     |   | 900         |   |   | (900         | ) |   |            |  
| | JGR Petroleum, Inc.               |   | 64,599      |   |   |             |   |   | 64,599      |  
| | John Robertson, President and CEO |   | 31,906      |   |   | (31,906      | ) |   |            |  
| | Rainbow Network                   |   | 53,662      |   |   | 6,139        |   |   | 59,801      |  
| | Rand Energy                       |   | 16,783      |   |   | (16,783      | ) |   |            |  
| | Reg Technologies Inc.             |   | (13,498     | ) |   | 13,498       |   |   |            |  
| | REGI U.S., Inc.                   |   | (38         | ) |   |             |   |   | (38         | )
| | SMR Investments Ltd.              |   | 21,951      |   |   | (3,293       | ) |   | 18,658      |  
| | Pavlik Travel Services Ltd.       |   | 1,762       |   |   | (1,762       | ) |   |            |  
| | Teryl Resources Corp.             |   | 9,726       |   |   | (9,726       | ) |   |            |  
| | Robertson Family Trust            |   | 6,408       |   |   | (6,408       | ) |   |            |  
| |                                   |   |             |   |   |              |   |   |             |  
| |                                   | $ | 230,630     |   | $ | (42,474      | ) | $ | 188,156     |  

|7. | COMMON STOCK
      Authorized:
      200,000,000 common shares without par value.
      Issued:
|-- | -----------------------------------------------------------------------------------------------

| |                                                                          |  | NUMBER OF  |  |   |           | 
| | ------------------------------------------------------------------------ |  | ---------- |  | - | --------- | 
| |                                                                          |  | SHARES     |  |   | AMOUNT    | 
| |                                                                          |  |            |  |   |           | 
| | Balance, February 28, 2003                                               |  | 57,458,413 |  | $ | 6,653,662 | 
| |                                                                          |  |            |  |   |           | 
| | Issued during the year:                                                  |  |            |  |   |           | 
| | Pursuant to mineral property option
      agreements (Note 4(b))         |  | 175,000    |  |   | 17,500    | 
| | For services rendered                                                    |  | 1,000,000  |  |   | 100,000   | 
| | For settlement of rent obligation                                        |  | 200,000    |  |   | 19,200    | 
| | For cash by exercise
      of options                                    |  | 150,000    |  |   | 19,812    | 
| | For cash by exercise of warrants                                         |  | 1,300,000  |  |   | 280,922   | 
| |                                                                          |  |            |  |   |           | 
| | Balance, February 29, 2004                                               |  | 60,283,413 |  |   | 7,091,096 | 
| |                                                                          |  |            |  |   |           | 
| | Issued during the year:                                                  |  |            |  |   |           | 
| | Pursuant to mineral
      property option agreements (Note 4(b) and (c)) |  | 125,000    |  |   | 45,384    | 
| | For cash by private placements,
      net of issue costs                 |  | 4,205,610  |  |   | 860,089   | 
| | For cash by exercise
      of options                                    |  | 87,500     |  |   | 10,606    | 
| | For cash by exercise of warrants                                         |  | 250,000    |  |   | 37,500    | 
| |                                                                          |  |            |  |   |           | 
| | Balance, February 28, 2005                                               |  | 64,951,523 |  | $ | 8,044,675 | 

F-16

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Unaudited)                               
|(Stated in Canadian Dollars)              

|7. | COMMON STOCK(continued)
|-- | -----------------------
|   |                        
|   | a)                     
|   |                        
|   | b)                     
|   |                        
|   | c)                     
|   |                        
|   | d)                     
|   |                        
|   | e)                     
|   |                        
|   | f)                     
|   |                        
|   | g)                     
|   |                        
|   | h)                     
|   |                        
|   | i)                     

| |                                                                          |   | February 28, |   |   | February 29, |  
| | ------------------------------------------------------------------------ | - | ------------ | - | - | ------------ | -
| |                                                                          |   | 2005         |   |   | 2004         |  
| | Market value of warrants                                                 | $ | 150,750      |   | $ | 150,750      |  
| | Discount on convertible debentures accreted to operations over
      the |   |              |   |   |              |  
| | life of the warrants being five
      years to October 18, 2005          |   | (19,091      | ) |   | (49,243      | )
| | Net carrying value                                                       |   | 131,659      |   |   | 101,507      |  
| | Stock-based compensation                                                 |   | 82,000       |   |   |             |  
| |                                                                          | $ | 213,659      |   | $ | 101,507      |  

F-17

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|8. | WARRANTS                                                                                     
|-- | ---------------------------------------------------------------------------------------------
|   |                                                                                              
|   | A summary of the changes in the Companys share
        purchase warrants is presented below:

| |                            |  | February 28, 2005 |   |  | February 29, 2004 |  
| | -------------------------- |  | ----------------- | - |  | ----------------- | -
| |                            |  |                   |   |  | Weighted          |  
| |                            |  |                   |   |  | Average           |  
| |                            |  |                   |   |  | Exercise          |  
| |                            |  | Number            |   |  | Price             |  
| |                            |  |                   |   |  |                   |  
| | Balance, beginning of year |  | 863,500           |   |  | US$ 0.33          |  
| | Granted                    |  | 3,387,527         |   |  | US$ 0.18          |  
| | Exercised                  |  | (250,000          | ) |  | CDN$ (0.15        | )
| | Forfeited / Expired        |  | (437,500          | ) |  | US$ (0.20         | )
| |                            |  |                   |   |  |                   |  
| | Balance, end of year       |  | 3,563,527         |   |  | US$ 0.21          |  

|9. | STOCK OPTIONS
      The Company has a stock option plan to issue up to 10%
        of the issued common shares to certain directors and employees. A summary
        of the changes in the Companys common share purchase options is
        presented below:
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                            |  | February 28, 2005 |   |  | February 29, 2004 |  
| | -------------------------- |  | ----------------- | - |  | ----------------- | -
| |                            |  |                   |   |  | Weighted          |  
| |                            |  |                   |   |  | Average           |  
| |                            |  |                   |   |  | Exercise          |  
| |                            |  | Number            |   |  | Price             |  
| |                            |  |                   |   |  |                   |  
| | Balance, beginning of year |  | 3,575,000         |   |  | US$ 0.09          |  
| | Granted                    |  | 900,000           |   |  | US$ 0.22          |  
| | Exercised                  |  | (87,500           | ) |  | US$ (0.10         | )
| | Forfeited / Expired        |  | (800,000          | ) |  | US$ (0.14         | )
| |                            |  |                   |   |  |                   |  
| | Balance, end of year       |  | 3,587,500         |   |  | US$ 0.11          |  

| | Additional information regarding options outstanding as at February 28,
      2005 is as follows:
| | -------------------------------------------------------------------------------------------------

| |                   |  |           |  |  | Outstanding  |  |  |          |  |  | Exercisable | 
| | ----------------- |  | --------- |  |  | ------------ |  |  | -------- |  |  | ----------- | 
| |                   |  |           |  |  | Weighted     |  |  |          |  |  |             | 
| |                   |  |           |  |  | average      |  |  | Weighted |  |  |             | 
| |                   |  |           |  |  | remaining    |  |  | average  |  |  |             | 
| |                   |  | Number of |  |  | contractual  |  |  | exercise |  |  | Number of   | 
| | Exercise prices   |  | shares    |  |  | life (years) |  |  | price    |  |  | shares      | 
| |                   |  |           |  |  |              |  |  |          |  |  |             | 
| | US$ 0.00  $ 0.10 |  | 2,987,500 |  |  | 2.57         |  |  | US$ 0.08 |  |  | 2,987,500   | 
| | US$ 0.11  $ 0.20 |  | 375,000   |  |  | 3.00         |  |  | US$ 0.18 |  |  | 375,000     | 
| | US$ 0.21  $ 0.30 |  | 225,000   |  |  | 2.28         |  |  | US$ 0.30 |  |  | 225,000     | 
| |                   |  |           |  |  |              |  |  |          |  |  |             | 
| |                   |  | 3,587,500 |  |  | 2.60         |  |  | US$ 0.11 |  |  | 3,587,500   | 

F-18

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|10. | NON-CASH FINANCING AND INVESTING ACTIVITIES
|--- | -------------------------------------------

| | During the year ended February 28, 2005:
| | ----------------------------------------
| |                                         

| |  | i. 25,000 common shares were issued with a fair value of $4,750 as
        part consideration under the mineral property option agreements described
        in Note 4(b).
      ii. 50,000 common shares were issued with a fair market value of $19,500
        as part consideration under the mineral property option agreement described
        in Note 4(c).
      iii. 50,000 common shares were issued with a fair market value of $19,500
        for finders fees under the mineral property option agreement described
        in Note 4(c).
      iv. 208,333 common shares were issued for finders fees for a private
        placement offering (Note 7 (c)).
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               

| | During the year ended February 29, 2004:
| | ----------------------------------------
| |                                         

| |  | i. 175,000 common shares were issued with a fair value of $17,500 as
        part consideration under the mineral property option agreements described
        in Note 4(b).
      ii. 1,000,000 common shares were issued with a fair value of $100,000
        pursuant to a consulting agreement (Note 7(g)).
      iii. 200,000 common shares were issued with a fair value of $19,200 in
        settlement of a previous rental agreement (Note 7(h)).
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                             

| | During the year ended February 28, 2003:
| | ----------------------------------------
| |                                         

| |  | i. 19,295,567 common shares were issued with a fair value of $964,778
        to settle debt.
      ii. 3,000,000 common shares were issued with a fair value of $238,800
        to purchase a license described in Note 6(a) (iv).
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|11. | COMMITMENTS
|--- | -----------

| |     |                                                                                                                                                                                                                                                                              
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) | The Company entered into a consulting agreement dated January 1, 2005
      for a term of one year to pay consulting fees of US$5,000 per month for
      the first two months, and US$2,500 per month for the remainder of the term.                                        
| |     |                                                                                                                                                                                                                                                                              
| | (b) | The Company entered into a two year lease agreement to rent office space
      commencing April 1, 2004. Basic annual rent is $15,270 with three months
      free basic rent in each of the two years over the term of the lease. The
      future commitment is as follows:

| |                                       |   | 2006   |  |   | 2007  | 
| | ------------------------------------- | - | ------ |  | - | ----- | 
| | Basic rent                            | $ | 11,452 |  | $ | 1,272 | 
| | Property taxes and operating expenses |   | 14,466 |  |   | 1,205 | 
| |                                       | $ | 25,918 |  | $ | 2,477 | 

F-19

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|12. | RESTATEMENT                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | The consolidated balance sheet as at February 29, 2004
        has been restated to reflect the correction in accounting for the unrealized
        holding gains and losses in marketable securities, which is recognized
        in other comprehensive income. Accordingly, the carrying value of marketable
        securities as at February 29, 2004 increased by $44,000, with a corresponding
        increase in accumulated other comprehensive income of $44,000.

| |                                               |  | February 29,  |  |  |             |  |  | February 29,  | 
| | --------------------------------------------- |  | ------------- |  |  | ----------- |  |  | ------------- | 
| |                                               |  | 2004          |  |  |             |  |  | 2004          | 
| |                                               |  | (As Reported) |  |  | Adjustments |  |  | (As Restated) | 
| |                                               |  | $             |  |  | $           |  |  | $             | 
| | Balance Sheet                                 |  |               |  |  |             |  |  |               | 
| | Marketable securities                         |  | 80,000        |  |  | 44,000      |  |  | 124,000       | 
| | Comprehensive Income                          |  |               |  |  |             |  |  |               | 
| | Unrealized holding (loss) gain on investments |  |              |  |  | 44,000      |  |  | 44,000        | 

|    | There was no change to the net loss or basic and diluted loss per share.                                                                                                                                                                                                                                
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                         
|13. | INCOME TAXES                                                                                                                                                                                                                                                                                            
|    |                                                                                                                                                                                                                                                                                                         
|    | Potential benefits of income tax losses are not recognized in the accounts
      until realization is more likely than not. The Company has adopted SFAS
      No. 109 Accounting for Income Taxes as of its inception.
      The Company has incurred Canadian non-capital losses as scheduled below:

Year of
      
      
      
      
      Year ofLoss
      
      Amount
      
      
      Expiration1999
      $
      114,000
      
      
      20062000
      
      164,000
      
      
      20072001
      
      1,223,000
      
      
      20082002
      
      239,000
      
      
      20092003
      
      28,000
      
      
      20102004
      
      347,000
      
      
      20112005
      
      589,000
      
      
      2015$
      2,704,000


| | Pursuant to SFAS 109, the Company is required to compute tax asset benefits
      for non-capital losses carried forward. Potential benefit of non-capital
      losses have not been recognized in these financial statements because the
      Company cannot be assured it is more likely than not it will utilize the
      losses carried forward in future years.
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-20

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|13. | INCOME TAXES(continued)                                                                                                                                                                                                                 
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                         
|    | The components of the net deferred tax asset at the
        end of February 28, 2005 and 2004, and the statutory tax rate, the effective
        tax rate and the elected amount of the valuation allowance are scheduled
        below:

| |                                |   | February 28, |   |   | February 29, |  
| | ------------------------------ | - | ------------ | - | - | ------------ | -
| |                                |   | 2005         |   |   | 2004         |  
| | Non-capital losses accumulated | $ | 2,704,000    |   | $ | 2,214,000    |  
| | Statutory tax rate             |   | 36%          |   |   | 36%          |  
| | Effective tax rate             | $ |             |   | $ |              |  
| | Deferred tax asset             |   | 973,000      |   |   | 797,000      |  
| | Valuation allowance            |   | (973,000     | ) |   | (797,000     | )
| | Net deferred tax asset         | $ |             |   | $ |             |  

|    | The Company also has a Canadian net capital loss of
        $2,773,000 which is a result of writing off its investment in its U.S.
        subsidiary. This loss can be used to offset future years taxable
        gains and has no expiry. The Company has U.S. net operating losses of
        approximately US$1,320,000. These losses expire between 2015 and 2017
        and can only be used against taxable U.S. income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|14. | RECONCILIATION OF UNITED STATES AND CANADIAN GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (US GAAP and Canadian
        GAAP)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | The consolidated financial statements have been prepared
        in accordance with generally accepted accounting principles in the United
        States (US GAAP), which differ in certain respects from those
        principles and practices that the Company would have followed had its
        consolidated financial statements been prepared in accordance with generally
        accepted accounting principles in Canada (Canadian GAAP).
        The following summarizes the significant differences between US GAAP and
        Canadian GAAP:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Stock based compensation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|    | As described in Note 9, the Company has granted stock
        options to certain directors and employees. These options are granted
        for services provided to the Company. For US GAAP purposes, SFAS No. 123
        (SFAS 123) requires that an enterprise recognize, or at its
        option, disclose the impact of the fair value of stock options and other
        forms of stock-based compensation in the determination of income. The
        Company has elected under SFAS 123 to continue to measure compensation
        cost on the intrinsic value basis set out in APB Opinion No. 25. As stock
        options are granted at exercise prices based on the market price of the
        Companys shares at the date of grant, no compensation cost is recognized.
        However, under SFAS 123, the impact on net income and income per share
        of the fair value must be measured and disclosed on a fair value based
        method on a pro forma basis. For Canadian GAAP purposes, the Company is
        required to recognize the fair value of all stock options and all other
        forms of stock-based compensation in the determination of income.
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|    | Comprehensive Income (Loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|    | US GAAP requires disclosure of comprehensive income,
        which comprises income and other components of comprehensive income. Other
        comprehensive income includes items that cause changes in shareholders
        equity but are not related to share capital or net earnings which, for
        the Company, comprises currency translation adjustments. Under Canadian
        GAAP, there is no requirement to report comprehensive income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

F-21

---

|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|14. | RECONCILIATION OF CANADIAN AND UNITED STATES GENERALLY
        ACCEPTED ACCOUNTING PRINCIPLES (Canadian GAAP and US
        GAAP)(Continued)
      If compensation expense had been determined in accordance
        with Canadian GAAP, the Companys net loss and net loss per share
        for fiscal 2005, 2004 and 2003 would have been as follows:
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |                                                                    |  |              |   |  | Year
      ended |   |  |              |  
| | ------------------------------------------------------------------ |  | ------------ | - |  | ---------------- | - |  | ------------ | -
| |                                                                    |  | February 28, |   |  | February 29,     |   |  | February 28, |  
| |                                                                    |  | 2005         |   |  | 2004             |   |  | 2003         |  
| |                                                                    |  | $            |   |  | $                |   |  | $            |  
| |                                                                    |  |              |   |  |                  |   |  |              |  
| | Net loss  as reported under US GAAP                               |  | (842,092     | ) |  | (106,234         | ) |  | (150,020     | )
| | Add: Stock-based compensation expense included in net loss
       |  |              |   |  |                  |   |  |              |  
| | as reported                                                        |  | 82,000       |   |  |                 |   |  |             |  
| | Deduct: Stock-based compensation expense determined                |  |              |   |  |                  |   |  |              |  
| | under fair value method                                            |  | (96,000      | ) |  | (9,186           | ) |  | (125         | )
| |                                                                    |  |              |   |  |                  |   |  |              |  
| | Net loss  as reported under Canadian GAAP                         |  | (856,092     | ) |  | (115,420         | ) |  | (150,145     | )
| |                                                                    |  |              |   |  |                  |   |  |              |  
| | Net loss per share (basic and diluted)                             |  |              |   |  |                  |   |  |              |  
| |  as reported under US GAAP                                        |  | (0.01        | ) |  |                 |   |  |             |  
| |                                                                    |  |              |   |  |                  |   |  |              |  
| | Net loss per share (basic and diluted)                             |  |              |   |  |                  |   |  |              |  
| |  as reported under Canadian GAAP                                  |  | (0.01        | ) |  |                 |   |  |             |  

| |                                                                               |  | February 28, |   |  | February 28, |  
| | ----------------------------------------------------------------------------- |  | ------------ | - |  | ------------ | -
| |                                                                               |  | 2005         |   |  | 2004         |  
| |                                                                               |  | $            |   |  | $            |  
| | Marketable securities:                                                        |  |              |   |  |              |  
| | - As reported under US GAAP                                                   |  | 70,000       |   |  | 124,000      |  
| | - Less: unrealized
      holding gains and losses                             |  | 10,000       |   |  | (44,000      | )
| | - As reported under Canadian GAAP                                             |  | 80,000       |   |  | 80,000       |  
| | Total Assets  as reported under US GAAP                                      |  | 539,922      |   |  | 322,610      |  
| | - Less: unrealized holding gains and losses                                   |  | 10,000       |   |  | (44,000      | )
| | Total Assets 
      as reported under Canadian GAAP                          |  | 549,922      |   |  | 278,610      |  
| | Accumulated Other Comprehensive Income (Loss):                                |  |              |   |  |              |  
| | - As reported under US GAAP                                                   |  | (10,000      | ) |  | 44,000       |  
| | -
      Less: Foreign currency translation                                    |  | 10,000       |   |  | (44,000      | )
| | - As reported under
      Canadian GAAP                                       |  |             |   |  |             |  
| |                                                                               |  |              |   |  |              |  
| | Total Liabilities and Stockholders Deficit  as
      reported under US GAAP |  | 539,922      |   |  | 322,610      |  
| | -
      Less: Accumulated Other Comprehensive Income (Loss)                   |  | 10,000       |   |  | (44,000      | )
| | - As reported under
      Canadian GAAP                                       |  | 549,922      |   |  | 278,610      |  

F-22

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|LINUX GOLD CORP.                          
|------------------------------------------
|(An Exploration Stage Company)            
|                                          
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|                                          
|FEBRUARY 28, 2005                         
|(Stated in Canadian Dollars)              

|15. | SUBSEQUENT EVENTS
|--- | -----------------
|    |                  
|    | (a)              
|    |                  
|    |                  
|    |                  
|    | (b)              

F-23

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