UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 20-F

(Amendment No. 1)

(Amending Item 8)



|[  ]                                                                                                                                                             |  | 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 fiscal year ended February 28, 2011                                                                                                                         
|OR                                                                                                                                                              
|[  ]                                                                                                                                                             |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|For the transition period from ____ to ______                                                                                                                   
|OR                                                                                                                                                              
|[  ]                                                                                                                                                             |  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|Date of event requiring this shell company report:                                                                                                              
|                                                                                                                                                                
|Commission file number: 000-30084                                                                                                                               
|                                                                                                                                                                
|Linux Gold Corp.                                                                                                                                                
|(Exact name of Registrant as specified in its charter)                                                                                                          
|                                                                                                                                                                
|N/A                                                                                                                                                             
|(Translation of Registrant’s name into English)                                                                                                                 
|                                                                                                                                                                
|British Columbia, Canada                                                                                                                                        
|(Jurisdiction of incorporation or organization)                                                                                                                 
|                                                                                                                                                                
|240-11780 Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada                                                                                           
|(Address of principal executive offices)                                                                                                                        
|                                                                                                                                                                
|John Robertson, President                                                                                                                                       
|240-11780 Hammersmith Way, Richmond, British
        Columbia V7A 5E9, Canada
        Phone: 604-278-5996 Fax 604-278-3409                                      
|(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)                                                                         
|                                                                                                                                                                
|Securities registered or to be registered pursuant to Section 12(b) of the Act.                                                                                 
|None                                                                                                                                                            
|                                                                                                                                                                
|Securities registered or to be registered pursuant to Section 12(g) of the Act.                                                                                 
|                                                                                                                                                                
|Common Shares, No Par Value                                                                                                                                     
|(Title of Class)                                                                                                                                                
|                                                                                                                                                                
|Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.                                                                      
|                                                                                                                                                                
|Not Applicable                                                                                                                                                  
|(Title of Class)                                                                                                                                                
|                                                                                                                                                                
|Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
|97,893,825 Common Shares outstanding as of February 28, 2011                                                                                                    



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



If this report is an annual or transition report,
indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.

[  ] Yes [X] No



Note – Checking the box above will not relieve
any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations
under those Sections.



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

[X] Yes [  ] No



Indicate by check mark whether the registrant
is a large accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer”
in Rule 12b-2 of the Exchange Act.



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



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



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



If “Other” has been checked in response
to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

Item 17. [  ] Item 18. [X]



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
















PART I



ITEM 8.   FINANCIAL
INFORMATION



|A. |  | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
|-- |  | -------------------------------------------------------



Our consolidated financial statements and the
accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”)
and are presented in Canadian dollars. These financial statements have been prepared in accordance with the FASB ASC 915 “Development-Stage
Entities”. A development-stage enterprise is one in which planned principal operations have not commenced or if its operations
have commenced, there has been no significant revenue therefrom. Development-stage companies report cumulative loss from the inception
of its development-stage activities. These consolidated financial statements for the fiscal year ended February 28, 2011, contain:



|- |  | Report of Independent Registered Public Accounting Firm dated June 28, 2011 of ACAL
Group, Chartered Accountants
|- |  | ----------------------------------------------------------------------------------------------------------------

|- |  | Consolidated Balance Sheets as at February 28, 2011 and February 28, 2010 (Restated)
|- |  | ------------------------------------------------------------------------------------

|- |  | Consolidated Statements of Operations and Comprehensive Loss as at February 28, 2011,
February 28, 2010 (Restated) and February 28, 2009
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|- |  | Consolidated Statements of Cash Flows as at February 28, 2011, February 28, 2010 and
February 28, 2009
|- |  | ------------------------------------------------------------------------------------------------------

|- |  | Consolidated Statements of Stockholders’ Deficit, March 1, 2003 to February 28,
2011
|- |  | ------------------------------------------------------------------------------------

|- |  | Notes to the Consolidated Financial Statements as at February 28, 2011 and 2010
|- |  | -------------------------------------------------------------------------------



Legal Proceedings and Regulatory Actions



During the fiscal year ended February 28, 2011,
we were not and are not currently a party to, nor are any of our properties the subject of, any legal proceedings for which the
outcome could have a material adverse affect on our company, nor, to our knowledge, are we to be a party to any contemplated legal
proceedings, the outcome of which could have a material adverse affect on our company.



There have been no penalties or sanctions imposed
against us by a court relating to securities legislation or by a securities regulatory authority during the fiscal year ended February
28, 2011, or any other time that would likely be considered important to a reasonable investor making an investment decision in
our company, and we have during the fiscal year ended February 28, 2011.



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.



2







ITEM 19.   EXHIBITS



|EXHIBIT # |                                                                                                                                                                                                                                                                                                                                                 |     
|--------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|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.                                                                                                                                                                                  | (3) 
|1.4       | Altered memorandum and special resolution dated February 20, 2003 changing the name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp.                                                                                                                                                                                         | (5) 
|1.5       | Memorandum and articles of incorporation amended effective September 15, 2004                                                                                                                                                                                                                                                                   | (7) 
|2.1       | Specimen copy of Registrant’s common share certificate                                                                                                                                                                                                                                                                                          | (2) 
|4.1       | Commitment by John G. Robertson dated July 16, 1999 to provide financing to the Registrant as required for ongoing operations                                                                                                                                                                                                                   | (2) 
|4.2       | Share Purchase Agreement dated January 7, 2000 between Flame Petro-Minerals Corp. and Mike Carpenter and LinuxWizardry, Inc.                                                                                                                                                                                                                    | (3) 
|4.3       | Purchase order dated May 22, 2000 between LinuxWizardry, Inc. and Motorola, Inc., Personal Communications Sector                                                                                                                                                                                                                                | (4) 
|4.4       | License Agreement dated June 30, 2000 between LinuxWizardry Systems, Inc. and LinuxWizardry, Inc. and Lineo, Inc                                                                                                                                                                                                                                | (4) 
|4.5       | Vendor Agreement dated January 5, 2001 between Merrimack Services Corporation d/b/a PC Connection  and LinuxWizardry Systems, Inc.                                                                                                                                                                                                              | (4) 
|4.6       | Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2002                                                                                                                                                                                                                                                  | (5) 
|4.7       | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated November 4, 2002                                                                                                                                                                                                                                  | (5) 
|4.8       | Edward Skoda Purchase Agreement – TY Gold Property                                                                                                                                                                                                                                                                                              | (6) 
|4.9       | Edward Skoda Purchase Agreement – ORO Mineral Claims                                                                                                                                                                                                                                                                                            | (6) 
|4.10      | Property Option Agreement – Peter Tse                                                                                                                                                                                                                                                                                                           | (6) 
|4.11      | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2007                                                                                                                                                                                                                                     | (8) 
|4.12      | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2009                                                                                                                                                                                                                                     | (11)
|4.13      | Premises Lease Agreement between Linux Gold Corp. and Pensionfund Realty Limited dated November 1, 2009                                                                                                                                                                                                                                         | (11)
|4.14      | Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Coho Claims, Alaska                                                                                                                                                                                                                    | (11)
|4.15      | Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Trout Claims, Alaska                                                                                                                                                                                                                   | (11)
|4.16      | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2010                                                                                                                                                                                                                                     | (11)
|11.1      | Code of Business Conduct and Ethics                                                                                                                                                                                                                                                                                                             | (12)
|12.1      | Certification of CEO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                | (13)
|12.2      | Certification of CFO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                | (13)
|13.1      | Certification of CEO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                | (13)
|13.2      | Certification of CFO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                | (13)
|15.1      | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                        | (13)



|(1) |  | incorporated by reference to our Registration Statement on Form 20-F filed on June
4, 1999 with the SEC
|--- |  | -------------------------------------------------------------------------------------------------------

|(2) |  | incorporated by reference to our Amendment No. 1 to the Registration Statement
dated July 22, 1999
|--- |  | --------------------------------------------------------------------------------------------------

|(3) |  | incorporated by reference to our annual report on Form 20-F filed on September
14, 2000
|--- |  | ---------------------------------------------------------------------------------------

|(4) |  | incorporated by reference to our annual report on Form 20-F filed on July 14, 2001
|--- |  | ----------------------------------------------------------------------------------

|(5) |  | incorporated by reference to our annual report on Form 20-F filed on August 25,
2003
|--- |  | ------------------------------------------------------------------------------------

|(6) |  | incorporated by reference to our annual report on Form 20-F filed on July 19, 2004
|--- |  | ----------------------------------------------------------------------------------

|(7) |  | incorporated by reference to our annual report on Form 20-F filed on July 19, 2005
|--- |  | ----------------------------------------------------------------------------------

|(8) |  | incorporated by reference to our annual report on Form 20-F filed on July 23, 2007
|--- |  | ----------------------------------------------------------------------------------

|(9) |  | incorporated by reference to our annual report on Form 20-F filed on September
2, 2008
|--- |  | --------------------------------------------------------------------------------------

|(10) |  | incorporated by reference to our annual report on Form 20-F filed on September
14, 2009
|---- |  | ---------------------------------------------------------------------------------------

|(11) |  | incorporated by reference to our annual report on Form 20-F filed on June 6, 2010
|---- |  | ---------------------------------------------------------------------------------

|(12) |  | incorporated by reference to our Form 6-K filed on March 16, 2011
|---- |  | -----------------------------------------------------------------

|(13) |  | filed
                                                                                        herewith in this amended annual report
                                                                                        on Form 20-F
|---- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



3







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: May 11, 2012 | By: | /s/ John G. Robertson                        
|                    |     | John G. Robertson                            
|                    |     | President, Chairman of the Board and Director



4











Linux Gold Corp.

(An Exploration Stage Company)



Amended
Consolidated Financial Statements

(Expressed in Canadian Dollars)

28 February 2011



5









1066 WEST HASTINGS STREET

VANCOUVER, BC V6E 3X2



|T: 604.683.3850
        F: 604.688.8479 | ACAL GROUP
        CHARTEREDACCOUNTANTS
        PCAOB & CPAB Registrant
|--------------------------------------- | -----------------------------------------------------------------------



REPORT
ON INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



|To: | the Board of Directors and Stockholders of     
|--- | -----------------------------------------------
|    | Linux Gold Corp. (An Exploration Stage Company)



We have audited the accompanying
consolidated balance sheets of Linux Gold Corp. (the “Company”) (An Exploration Stage Company) as of February 28,
2011 and 2010, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit),
and cash flows for the years ended February 28, 2011 and 2010. These financial statements are the responsibility of the Company’s
management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. The consolidated
financial statements of the Company for the year ended February 28, 2009 were reported upon by other auditors whose report, dated
June 15, 2009, expressed an unqualified opinion on those statements and included an explanatory paragraph regarding the Company’s
ability to continue as a going concern. The other auditors’ report have been furnished to us, and our opinion, insofar as
it relates to amounts included for such prior periods, is based solely on the report of such other auditors.



We conducted our audits in accordance with
the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits
included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.



In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of February 28, 2011 and 2010, and the results of its operations and its cash flows for the years ended February 28, 2011 and
2010 in conformity with accounting principles generally accepted in the United States of America.



The accompanying
consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in
Note 1 to the consolidated financial statements, the Company has not generated revenues since inception, has incurred losses in
developing its business, and further losses are anticipated. The Company requires additional funds to meet its obligations and
the costs of its operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern.
Management’s plans in this regard are described in Note 1. The consolidated financial statements do not include any adjustments
that might result from the outcome of this uncertainty.



As described
in Note 15, the consolidated financial statements for the year ended February 28, 2010 have been restated.



As
described in Note 16, the consolidated statements of operations and comprehensive loss and cash flows for the period from inception
of exploration stage on March 1, 2003 through February 28, 2011, and the consolidated statements of stockholders’ equity
(deficit) for the period from March 1, 2003 through February 28, 2008 with the related disclosures in the Notes have been marked
as “Unaudited”.



| | “ACAL Group”         
| | ---------------------
| | Chartered Accountants

Vancouver, British Columbia

June 28, 2011,
(except as to Note 16 which is as of May 10, 2012)



F-1







|Linux Gold Corp.               
|-------------------------------
|(An Exploration Stage Company) 
|Consolidated Balance Sheets    
|(Expressed in Canadian Dollars)



|                                                  |  | As at  28 February 2011 $ |            |   | As at  28 February 2010 (Restated Note 15) $ | 
|------------------------------------------------- |  | ------------------------- | ---------- | - | -------------------------------------------- | 
|Assets                                            |  |                           |            |   |                                              | 
|Current                                           |  |                           |            |   |                                              | 
|Cash and cash equivalents                         |  |                           | 2,210      |   |                                              | 
|Goods and services tax receivable                 |  |                           | 5,300      |   |                                              | 
|Marketable securities (Note 3)                    |  |                           | 102,255    |   |                                              | 
|Prepaid expenses and deposits                     |  |                           | 3,738      |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|                                                  |  |                           | 113,503    |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|Property and equipment(Note 4)                    |  |                           | 5,326      |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|                                                  |  |                           | 118,829    |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|Liabilities                                       |  |                           |            |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|Current                                           |  |                           |            |   |                                              | 
|Accounts payable (Note 6)                         |  |                           | 90,170     |   |                                              | 
|Accrued liabilities                               |  |                           | 19,500     |   |                                              | 
|Due to related parties (Note 7)                   |  |                           | 350,964    |   |                                              | 
|Current derivative liabilities (Note 13)          |  |                           | 138,465    |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|                                                  |  |                           | 599,099    |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|Non-current derivative liabilities(Note 13)       |  |                           | -          |   |                                              | 
|                                                  |  |                           |            |   |                                              | 
|Stockholders’ deficit                             |  |                           |            |   |                                              | 
|Capital stock (Note 9)                            |  |                           |            |   |                                              | 
|Authorized                                        |  |                           |            |   |                                              | 
|200,000,000 common shares without par value       |  |                           |            |   |                                              | 
|Issued and outstanding                            |  |                           |            |   |                                              | 
|28 February 2011 –  97,893,825 common shares      |  |                           |            |   |                                              | 
|28 February 2010 –  92,650,825 common shares      |  |                           | 13,573,641 |   |                                              | 
|Donated capital                                   |  |                           | 478,566    |   |                                              | 
|Accumulated other comprehensive loss              |  |                           | -          |   |                                              | 
|Deficit, accumulated from prior operations        |  |                           | (7,524,145 | ) |                                              | 
|Deficit, accumulated during the exploration stage |  |                           | (7,008,332 | ) |                                              | 
|                                                  |  |                           |            |   |                                              | 
|                                                  |  |                           | (480,270   | ) |                                              | 
|                                                  |  |                           |            |   |                                              | 
|                                                  |  |                           | 118,829    |   |                                              | 



Nature and Continuance of Operations(Note 1), Commitments (Note 10) and Subsequent Events(Note
14)



On behalf of the Board:



|“John Robertson” |  | Director | “Jennifer Lorette” |  | Director
|---------------- |  | -------- | ------------------ |  | --------



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



F-2







|Linux Gold Corp.                                            
|------------------------------------------------------------
|(An Exploration Stage Company)                              
|Consolidated Statements of Operations and Comprehensive Loss
|(Expressed in Canadian Dollars)                             



|                                                                          |  | Cumulative from inception of exploration stage on
    1 March 2003 to 28 February 2011  (Unaudited) |            |   | For the year ended 28 February 2011 |  |            | For the year ended 28 February 2010 (Restated –Note 15) |  |  | For the year ended 28 February 2009 |  
|------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------------------------- | ---------- | - | ----------------------------------- |  | ---------- | ------------------------------------------------------- |  |  | ----------------------------------- | -
|                                                                          |  | $                                                                                                   |            |   | $                                   |  |            | $                                                       |  |  | $                                   |  
|General and administrative expenses                                       |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Amortization of debt issue costs                                          |  |                                                                                                     | 205,242    |   |                                     |  | -          |                                                         |  |  | -                                   |  
|Amortization of property and equipment                                    |  |                                                                                                     | 30,668     |   |                                     |  | 1,621      |                                                         |  |  | 2,151                               |  
|Bad debt expense                                                          |  |                                                                                                     | 84,952     |   |                                     |  | -          |                                                         |  |  | -                                   |  
|Consulting and subcontracts                                               |  |                                                                                                     | 1,692,480  |   |                                     |  | 137,398    |                                                         |  |  | 137,281                             |  
|Filing and regulatory fees                                                |  |                                                                                                     | 172,075    |   |                                     |  | 13,261     |                                                         |  |  | 18,841                              |  
|Foreign exchange loss (gain)                                              |  |                                                                                                     | (38,470    | ) |                                     |  | (2,938     | )                                                       |  |  | (26,010                             | )
|Imputed interest (Note 7)                                                 |  |                                                                                                     | 273,066    |   |                                     |  | 55,536     |                                                         |  |  | 39,069                              |  
|Interest expense                                                          |  |                                                                                                     | 2,302,583  |   |                                     |  | -          |                                                         |  |  | -                                   |  
|Management fees (Note 8)                                                  |  |                                                                                                     | 244,750    |   |                                     |  | 30,000     |                                                         |  |  | 30,000                              |  
|Mineral property exploration and development costs (Note 5)               |  |                                                                                                     | 1,920,338  |   |                                     |  | 54,276     |                                                         |  |  | 50,975                              |  
|Office, rent and telephone                                                |  |                                                                                                     | 735,601    |   |                                     |  | 38,759     |                                                         |  |  | 39,167                              |  
|Professional fees                                                         |  |                                                                                                     | 448,943    |   |                                     |  | 34,456     |                                                         |  |  | 37,323                              |  
|Travel and promotion                                                      |  |                                                                                                     | 981,096    |   |                                     |  | 23,570     |                                                         |  |  | 77,825                              |  
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Net loss before other items                                               |  |                                                                                                     | (9,053,324 | ) |                                     |  | (385,939   | )                                                       |  |  | (406,622                            | )
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Other items                                                               |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Realized gain (loss) on sale of marketable security                       |  |                                                                                                     | 56,146     |   |                                     |  | (1,306     | )                                                       |  |  | 57,452                              |  
|Realized (loss) on reallocation from Accumulated Other Comprehensive Loss |  |                                                                                                     | (91,303    | ) |                                     |  | (30,900    | )                                                       |  |  | (60,403                             | )
|Impairment on available-for-sale investments                              |  |                                                                                                     | (57,837    | ) |                                     |  | (57,837    | )                                                       |  |  | -                                   |  
|Fair value adjustment of derivative liabilities                           |  |                                                                                                     | 1,807,110  |   |                                     |  | 439,388    |                                                         |  |  | 343,588                             |  
|Mineral property acquisition costs written off                            |  |                                                                                                     | (126,417   | ) |                                     |  | -          |                                                         |  |  | -                                   |  
|Accounts payable written off                                              |  |                                                                                                     | 46,281     |   |                                     |  | -          |                                                         |  |  | -                                   |  
|Income from discontinued operations                                       |  |                                                                                                     | 369,213    |   |                                     |  | -          |                                                         |  |  | -                                   |  
|Interest income                                                           |  |                                                                                                     | 41,799     |   |                                     |  | -          |                                                         |  |  | -                                   |  
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Net loss for the period                                                   |  |                                                                                                     | (7,008,332 | ) |                                     |  | (36,594    | )                                                       |  |  | (65,985                             | )
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Basic and diluted net loss per share                                      |  |                                                                                                     |            |   |                                     |  | (0.00      | )                                                       |  |  | (0.00                               | )
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Weighted average number of common shares used in per share calculations   |  |                                                                                                     |            |   |                                     |  | 94,040,367 |                                                         |  |  | 89,464,012                          |  
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Comprehensive loss                                                        |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Net loss for the period                                                   |  |                                                                                                     | (7,008,332 | ) |                                     |  | (36,594    | )                                                       |  |  | (65,985                             | )
|Loss realized on investments disposal transferred to earning              |  |                                                                                                     | 91,303     |   |                                     |  | 30,900     |                                                         |  |  | 60,403                              |  
|Unrealized holding gain (loss) on available-for-sale investments          |  |                                                                                                     | (91,303    | ) |                                     |  | 45,787     |                                                         |  |  | 130,910                             |  
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Comprehensive income (loss)                                               |  |                                                                                                     | (7,008,332 | ) |                                     |  | 40,093     |                                                         |  |  | 125,328                             |  
|                                                                          |  |                                                                                                     |            |   |                                     |  |            |                                                         |  |  |                                     |  
|Comprehensive loss per share                                              |  |                                                                                                     |            |   |                                     |  | (0.00      | )                                                       |  |  | (0.00                               | )



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



F-3







|Linux Gold Corp.                     
|-------------------------------------
|(An Exploration Stage Company)       
|Consolidated Statements of Cash Flows
|(Expressed in Canadian Dollars)      



|                                                                       |  | Cumulative frominception of exploration stageon 1 March 2003to 28 February
    2011  (Unaudited) |            |   | For the year ended 28 February 2011 |  |          | For the year ended 28 February 2010 |  |  | For the year ended 28 February 2009 |  
|---------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------ | ---------- | - | ----------------------------------- |  | -------- | ----------------------------------- |  |  | ----------------------------------- | -
|                                                                       |  | $                                                                                                |            |   | $                                   |  |          | $                                   |  |  | $                                   |  
|Cash flows used in operating activities                                |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Net loss for the period                                                |  |                                                                                                  | (7,008,332 | ) |                                     |  | (36,594  | )                                   |  |  | (65,985                             | )
|Adjustments to reconcile loss to net cash used by operating activities |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Amortization of debt issue costs                                       |  |                                                                                                  | 205,242    |   |                                     |  | -        |                                     |  |  | -                                   |  
|Amortization of property and equipment                                 |  |                                                                                                  | 30,668     |   |                                     |  | 1,621    |                                     |  |  | 2,151                               |  
|Receipt of marketable securities for property                          |  |                                                                                                  | (16,000    | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Accretion of discount on convertible debt                              |  |                                                                                                  | 2,291,794  |   |                                     |  | -        |                                     |  |  | -                                   |  
|Bad debt expense                                                       |  |                                                                                                  | 84,952     |   |                                     |  | -        |                                     |  |  | -                                   |  
|Imputed interest                                                       |  |                                                                                                  | 273,066    |   |                                     |  | 55,536   |                                     |  |  | 39,069                              |  
|Accounts payable written off                                           |  |                                                                                                  | (46,281    | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Mineral property acquisition costs written off                         |  |                                                                                                  | 126,417    |   |                                     |  | -        |                                     |  |  | -                                   |  
|Stock-based compensation                                               |  |                                                                                                  | 269,845    |   |                                     |  | 505      |                                     |  |  | 790                                 |  
|Shares issued for services                                             |  |                                                                                                  | 120,000    |   |                                     |  | -        |                                     |  |  | -                                   |  
|Shares issued for settlement of rent obligation                        |  |                                                                                                  | 19,200     |   |                                     |  | -        |                                     |  |  | -                                   |  
|Impairment on investments                                              |  |                                                                                                  | 57,837     |   |                                     |  | 57,837   |                                     |  |  | -                                   |  
|Fair value adjustment of derivative liabilities                        |  |                                                                                                  | (1,807,110 | ) |                                     |  | (439,388 | )                                   |  |  | (343,588                            | )
|Net loss on sale of marketable securities                              |  |                                                                                                  | 35,157     |   |                                     |  | 32,206   |                                     |  |  | 2,951                               |  
|Income from discontinued operations                                    |  |                                                                                                  | (369,213   | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Changes in operating assets and liabilities                            |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Goods and Services Tax receivable                                      |  |                                                                                                  | 39,605     |   |                                     |  | (1,378   | )                                   |  |  | 4,016                               |  
|Prepaid expenses and deposits                                          |  |                                                                                                  | (3,247     | ) |                                     |  | 125      |                                     |  |  | 149                                 |  
|Accounts payable and accrued liabilities                               |  |                                                                                                  | (169,209   | ) |                                     |  | (40,958  | )                                   |  |  | (38,159                             | )
|Due to related parties                                                 |  |                                                                                                  | 293,384    |   |                                     |  | 37,474   |                                     |  |  | 102,350                             |  
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|                                                                       |  |                                                                                                  | (5,572,225 | ) |                                     |  | (333,014 | )                                   |  |  | (296,256                            | )
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Cash flows used in investing activities                                |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Mineral interest acquisition costs                                     |  |                                                                                                  | (66,417    | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Disposal (purchase) of marketable securities                           |  |                                                                                                  | (99,249    | ) |                                     |  | 75,719   |                                     |  |  | 75,032                              |  
|Purchase of property and equipment                                     |  |                                                                                                  | (35,994    | ) |                                     |  | -        |                                     |  |  | -                                   |  
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|                                                                       |  |                                                                                                  | (201,660   | ) |                                     |  | 75,719   |                                     |  |  | 75,032                              |  
|Cash flows from financing activities                                   |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Advances from related parties                                          |  |                                                                                                  | 16,238     |   |                                     |  | -        |                                     |  |  | -                                   |  
|Debt issue costs                                                       |  |                                                                                                  | (205,242   | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Proceeds from convertible debt                                         |  |                                                                                                  | 2,226,251  |   |                                     |  | -        |                                     |  |  | -                                   |  
|Repayment of debt                                                      |  |                                                                                                  | (153,400   | ) |                                     |  | -        |                                     |  |  | -                                   |  
|Proceeds from issuance of common shares                                |  |                                                                                                  | 3,921,971  |   |                                     |  | 267,810  |                                     |  |  | 207,512                             |  
|Share subscriptions received                                           |  |                                                                                                  | 52,277     |   |                                     |  | -        |                                     |  |  | -                                   |  
|Share issue costs                                                      |  |                                                                                                  | (93,134    | ) |                                     |  | (8,487   | )                                   |  |  | -                                   |  
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|                                                                       |  |                                                                                                  | 5,764,961  |   |                                     |  | 259,323  |                                     |  |  | 207,512                             |  
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Increase (decrease) in cash and cash equivalents                       |  |                                                                                                  | (8,924     | ) |                                     |  | 2,028    |                                     |  |  | (13,712                             | )
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Cash and cash equivalents, beginning of period                         |  |                                                                                                  | 11,134     |   |                                     |  | 182      |                                     |  |  | 13,894                              |  
|                                                                       |  |                                                                                                  |            |   |                                     |  |          |                                     |  |  |                                     |  
|Cash and cash equivalents, end of period                               |  |                                                                                                  | 2,210      |   |                                     |  | 2,210    |                                     |  |  | 182                                 |  



Supplemental Disclosures with Respect to Cash Flows(Note
11)



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



F-4







|Linux Gold Corp.                                                       
|-----------------------------------------------------------------------
|(An Exploration Stage Company)                                         
|Consolidated Statements of Changes in Stockholders’ Equity (Deficit)   
|(Expressed in Canadian Dollars)                                        
|(with
    the period from March 1, 2003 to February 28, 2008 unaudited)



|                                                                           |  | Shares of common stock issued |            |  | Common stock and paid-in capital |  |            | Subscriptionsreceived, net |  |  | Donated capital |   |  | Deficit accumulate from prior operations |         |  | Deficit accumulate during the exploration stage |  |            | Accumulated other comprehensiveincome (loss) |  |  | Total stockholders’equity (deficit) |  
|-------------------------------------------------------------------------- |  | ----------------------------- | ---------- |  | -------------------------------- |  | ---------- | -------------------------- |  |  | --------------- | - |  | ---------------------------------------- | ------- |  | ----------------------------------------------- |  | ---------- | -------------------------------------------- |  |  | ----------------------------------- | -
|                                                                           |  |                               |            |  | $                                |  |            | $                          |  |  | $               |   |  | $                                        |         |  | $                                               |  |            | $                                            |  |  | $                                   |  
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance from prior operations at 1 March 2003                              |  |                               | 57,458,413 |  |                                  |  | 6,804,412  |                            |  |  | -               |   |  |                                          | 205,500 |  |                                                 |  | (7,524,145 | )                                            |  |  | -                                   |  
|Common stock issued for mineral property                                   |  |                               | 175,000    |  |                                  |  | 17,500     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for services                                           |  |                               | 1,000,000  |  |                                  |  | 100,000    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for settlement of rent obligation                      |  |                               | 200,000    |  |                                  |  | 19,200     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Options exercised                                                          |  |                               | 150,000    |  |                                  |  | 19,812     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Warrants exercised                                                         |  |                               | 1,300,000  |  |                                  |  | 280,922    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 22,960  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                      |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (3,738                              | )
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 29 February 2004                                                |  |                               | 60,283,413 |  |                                  |  | 7,241,846  |                            |  |  | -               |   |  |                                          | 228,460 |  |                                                 |  | (7,524,145 | )                                            |  |  | (3,738                              | )
|Common stock issued for mineral property                                   |  |                               | 125,000    |  |                                  |  | 45,384     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for cash                                               |  |                               | 4,205,610  |  |                                  |  | 860,089    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Options exercised                                                          |  |                               | 87,500     |  |                                  |  | 10,606     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Warrants exercised                                                         |  |                               | 250,000    |  |                                  |  | 37,500     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 35,013  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                   |  |                               | -          |  |                                  |  | 82,000     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                      |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (748,369                            | )
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 29 February 2005                                                |  |                               | 64,951,523 |  |                                  |  | 8,277,425  |                            |  |  | -               |   |  |                                          | 263,473 |  |                                                 |  | (7,524,145 | )                                            |  |  | (752,107                            | )
|Common stock issued for mineral property                                   |  |                               | 50,000     |  |                                  |  | 20,500     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for cash                                               |  |                               | 3,100,000  |  |                                  |  | 715,127    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Options exercised                                                          |  |                               | 93,750     |  |                                  |  | 10,838     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Warrants exercised                                                         |  |                               | 92,500     |  |                                  |  | 21,825     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Share issue costs                                                          |  |                               | -          |  |                                  |  | (42,571    | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 31,722  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                   |  |                               | -          |  |                                  |  | 2,280      |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                      |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (810,105                            | )
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 28 February 2006                                                |  |                               | 68,287,773 |  |                                  |  | 9,005,424  |                            |  |  | -               |   |  |                                          | 295,195 |  |                                                 |  | (7,524,145 | )                                            |  |  | (1,562,212                          | )
|Subscriptions received                                                     |  |                               | -          |  |                                  |  | -          |                            |  |  | 52,277          |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for debt                                               |  |                               | 2,586,076  |  |                                  |  | 644,749    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Options exercised                                                          |  |                               | 323,750    |  |                                  |  | 75,670     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Warrants exercised                                                         |  |                               | 52,500     |  |                                  |  | 15,329     |                            |  |  | (14,600         | ) |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Share issue costs                                                          |  |                               | -          |  |                                  |  | (2,613     | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 53,657  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Intrinsic value of beneficial conversion feature of convertible debentures |  |                               | -          |  |                                  |  | 963,670    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Fair value of warrants issued with convertible debentures                  |  |                               | -          |  |                                  |  | 1,262,580  |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                   |  |                               | -          |  |                                  |  | 109,228    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                      |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (3,571,183                          | )
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 28 February 2007                                                |  |                               | 71,250,099 |  |                                  |  | 12,074,037 |                            |  |  | 37,677          |   |  |                                          | 348,852 |  |                                                 |  | (7,524,145 | )                                            |  |  | (5,133,395                          | )
|Subscriptions received                                                     |  |                               | -          |  |                                  |  | -          |                            |  |  | 40,062          |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for debt redemption                                    |  |                               | 8,378,226  |  |                                  |  | 1,493,911  |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Common stock issued for cash                                               |  |                               | 2,825,000  |  |                                  |  | 615,195    |                            |  |  | (52,277         | ) |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Options exercised                                                          |  |                               | 212,500    |  |                                  |  | 24,020     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Warrants exercised                                                         |  |                               | 430,000    |  |                                  |  | 94,501     |                            |  |  | 14,600          |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Share issue costs                                                          |  |                               | -          |  |                                  |  | (4,003     | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 8,966   |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                   |  |                               | -          |  |                                  |  | 75,042     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                           |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                      |  |                               | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (2,260,291                          | )
|                                                                           |  |                               |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 29 February 2008                                                |  |                               | 83,095,825 |  |                                  |  | 14,372,703 |                            |  |  | 40,062          |   |  |                                          | 357,818 |  |                                                 |  | (7,524,145 | )                                            |  |  | (7,393,686                          | )



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



F-5







|Linux Gold Corp.                                                               
|-------------------------------------------------------------------------------
|(An Exploration Stage Company)                                                 
|Consolidated Statements of Changes in Stockholders’ Equity (Deficit), continued
|(Expressed in Canadian Dollars)                                                
|(with
    the period from March 1, 2003 to February 28, 2008 unaudited)        



|                                                                             |  | Shares of common stockissued |            |  | Common stock and paid-in capital |  |            | Subscriptionsreceived, net |  |  | Donated capital |   |  | Deficit accumulate from prior operations |         |  | Deficit accumulate during the exploration stage |  |            | Accumulated other comprehensiveincome (loss) |  |  | Total stockholders’equity (deficit) |  
|---------------------------------------------------------------------------- |  | ---------------------------- | ---------- |  | -------------------------------- |  | ---------- | -------------------------- |  |  | --------------- | - |  | ---------------------------------------- | ------- |  | ----------------------------------------------- |  | ---------- | -------------------------------------------- |  |  | ----------------------------------- | -
|                                                                             |  |                              |            |  | $                                |  |            | $                          |  |  | $               |   |  | $                                        |         |  | $                                               |  |            | $                                            |  |  | $                                   |  
|                                                                             |  |                              |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 29 February 2008                                                  |  |                              | 83,095,825 |  |                                  |  | 14,372,703 |                            |  |  | 40,062          |   |  |                                          | 357,818 |  |                                                 |  | (7,524,145 | )                                            |  |  | (7,393,686                          | )
|Common stock issued for cash                                                 |  |                              | 4,555,000  |  |                                  |  | 507,867    |                            |  |  | (40,062         | ) |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Fair value of warrants issued with common shares                             |  |                              | -          |  |                                  |  | 205,975    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Share issue costs                                                            |  |                              | -          |  |                                  |  | (35,459    | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                             |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 26,143  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Unrealized holding loss on available-for-sale investment                     |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year                                                        |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (536,201                            | )
|                                                                             |  |                              |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 28 February 2009                                                  |  |                              | 87,650,825 |  |                                  |  | 15,051,086 |                            |  |  | -               |   |  |                                          | 383,961 |  |                                                 |  | (7,524,145 | )                                            |  |  | (7,929,887                          | )
|Cumulative effect related to the adoption of ASC 815-40 (Note 15)            |  |                              | -          |  |                                  |  | (1,568,889 | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | 1,024,134                           |  
|Common stock issued for cash                                                 |  |                              | 5,000,000  |  |                                  |  | 85,277     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Fair value of warrants issued with common shares                             |  |                              | -          |  |                                  |  | 122,235    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Transfer derivative liabilities for warrants issued and extended in the year |  |                              | -          |  |                                  |  | (283,191   | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                             |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 39,069  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                     |  |                              | -          |  |                                  |  | 790        |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Realized loss reallocated on disposal of investments                         |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                             |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the year (Restated – Note 15)                                   |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (65,985                             | )
|                                                                             |  |                              |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 28 February 2010(Restated – Note 15)                              |  |                              | 92,650,825 |  |                                  |  | 13,407,308 |                            |  |  | -               |   |  |                                          | 423,030 |  |                                                 |  | (7,524,145 | )                                            |  |  | (6,971,738                          | )
|                                                                             |  |                              |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Common stock issued for cash                                                 |  |                              | 5,243,000  |  |                                  |  | 165,828    |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Fair value of warrants issued with common shares                             |  |                              | -          |  |                                  |  | 93,495     |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Transfer derivative liabilities for warrants issued in the year              |  |                              | -          |  |                                  |  | (93,495    | )                          |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Imputed interest                                                             |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | 55,536  |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Stock-based compensation                                                     |  |                              | -          |  |                                  |  | 505        |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Realized loss reallocated on disposal of investments                         |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Marketable securities adjustment                                             |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | -                                   |  
|Net loss for the period                                                      |  |                              | -          |  |                                  |  | -          |                            |  |  | -               |   |  |                                          | -       |  |                                                 |  | -          |                                              |  |  | (36,594                             | )
|                                                                             |  |                              |            |  |                                  |  |            |                            |  |  |                 |   |  |                                          |         |  |                                                 |  |            |                                              |  |  |                                     |  
|Balance at 28 February 2011                                                  |  |                              | 97,893,825 |  |                                  |  | 13,573,641 |                            |  |  | -               |   |  |                                          | 478,566 |  |                                                 |  | (7,524,145 | )                                            |  |  | (7,008,332                          | )



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



F-6







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|1. |  | Nature and Continuance of Operations
|-- |  | ------------------------------------



Linux
Gold Corp. (the “Company”) was incorporated on 27 February 1979 in Canada under the British Columbia Company Act and
was extra-provincially registered in the Province of Alberta on 12 October 1995. The Company’s stock trades on the Over
the Counter Bulletin Board in the United States under the symbol “LNXGF”.



On
20 February 2003, the shareholders approved a change of name to Linux Gold Corp. and increased the authorized share capital to
200,000,000 common shares without par value. The Company had been previously pursuing various business opportunities and, effective
1 March 2003, the Company changed its principal operations to mineral exploration. Accordingly, as of 1 March 2003, the Company
is considered to be an exploration stage company.



The
Company’s consolidated financial statements as at 28 February 2011 and for the year then ended have been prepared on a going
concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course
of business. The Company has a loss of $36,594 for the year ended 28 February 2011 (28 February 2010 – $65,985) and has
a working capital deficit of $485,596 at 28 February 2011 (28 February 2010 – $273,760).



Management
cannot provide assurance that the Company will ultimately achieve profitable operations or become cash flow positive, or raise
additional debt and/or equity capital. Management believes that the Company’s capital resources should be adequate to continue
operating and maintaining its business strategy. However, if the Company is unable to raise additional capital in the near future,
due to the Company’s liquidity problems, management expects that the Company will need to curtail operations, liquidate
assets, seek additional capital on less favorable terms and/or pursue other remedial measures. These consolidated financial statements
do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of
liabilities that might be necessary should the Company be unable to continue as a going concern.



At
28 February 2011, the Company has suffered losses from exploration stage activities to date. Although management is currently
seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors
raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty.



|2. |  | Significant Accounting Policies
|-- |  | -------------------------------



Basis
of accounting



These
consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States
(“GAAP”) and are presented in Canadian dollars. The accompanying financial statements have
been prepared in accordance with the FASB ASC 915 "Development-Stage Entities". A development-stage enterprise is one
in which planned principle operations have not commenced or if its operations have commenced, there has been no significant revenue
there from. Development-stage companies report cumulative loss from the inception of its development stage activities.



F-7







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Principles
of consolidation



These
consolidated financial statements include the accounts of the Company and its inactive wholly-owned subsidiary LinuxWizardry Inc.,
a United States corporation. All significant inter-company balances and transactions have been eliminated.



Foreign
currency translation



The
Company’s functional and reporting currency is the Canadian dollar. The consolidated financial statements of the Company
are translated to Canadian dollars in accordance with FASB ASC 830 “Foreign Currency Matters”. Foreign currency transactions
are primarily undertaken in U.S. dollars. Monetary assets and liabilities denominated in U.S. dollars are translated using the
exchange rate prevailing at the balance sheet date. Gains and losses arising on translation or settlement of foreign currency
denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated
financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.



Use
of estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily
requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses
during the reporting period. Significant areas requiring the use of management estimates include the determination of rates for
amortization, the impairment of marketable securities, fair value of imputed interest and the assumptions used in computing the
fair value of stock-based compensation and warrants. Actual results could differ from those estimates.



Basic
and diluted net loss per share



The
Company computes net loss per share in accordance with FASB ASC 260, “Earnings per Share”, which requires presentation
of both basic and diluted earnings per share (“EPS”) on the face of the income statement. Basic EPS is computed by
dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the
treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock
price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or
warrants. Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.



F-8







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Stock-based
compensation



The
Company records stock-based compensation in accordance with FASB ASC 718 “Compensation – Stock Compensation”
which establishes accounting for stock-based payment transactions for employee services and goods and services received from non-employees.



The
Company uses the fair-value based method to account for all stock-based payments to employees and non-employees granted by measuring
the compensation cost of the stock-based payments using the Black-Scholes option-pricing model. Stock options which vest immediately
are recorded at the date of grant. Stock options that vest over time are recorded over the vesting period using the straight line
method. Stock options issued to outside consultants that vest over time are valued at the grant date and subsequently re-valued
on each vesting date. The fair value of the stock-based compensation is recorded as a charge to net earnings based on the vesting
period with a credit to contributed surplus. Upon exercise of the stock options, consideration paid by the option holder, together
with the amount previously recognized in contributed surplus, is recorded as an increase to share capital. In calculating compensation
to be recognized for employees, it is required to estimate forfeitures while, in general, estimated forfeitures for non-employees
equal to the entire term of options.



Cash
and cash equivalents



The
Company considers all highly liquid investments with a maturity of three months or less at the time of issuance to be cash equivalents.



Marketable
securities



The
Company reports investments in debt and marketable equity securities at fair value based on quoted market prices or, if quoted
prices are not available, discounted expected cash flows using market rates commensurate with credit quality and maturity of the
investment. All investment securities are designated as available-for-sale with unrealized gains and losses included in stockholders’
equity. Unrealized losses that are other than temporary are recognized in earnings. Realized gains and losses are accounted for
on the specific identification method.



Mineral
exploration expenditures



The
Company is primarily engaged in the acquisition, exploration and development of mineral properties.



Mineral
property acquisition costs are capitalized when management has determined that probable future benefits consisting of a contribution
to future cash inflows have been identified and adequate financial resources are available or are expected to be available as
required to meet the terms of property acquisition and budgeted exploration and development expenditures. Mineral property acquisition
costs are expensed as incurred if the criteria for capitalization are not met. In the event that mineral property acquisition
costs are paid with Company shares, those shares are recorded at the estimated fair value at the time the shares are due in accordance
with the terms of the property agreements.



F-9







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Mineral
exploration expenditures (continued)



Mineral
property exploration costs are expensed as incurred.



When
it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves
and pre feasibility, the costs incurred to develop such property are capitalized.



Estimated
future removal and site restoration costs, when determinable are provided over the life of proven reserves on a units-of-production
basis. Costs, which include production equipment removal and environmental remediation, are estimated each period by management
based on current regulations, actual expenses incurred, and technology and industry standards. Any charge is included in exploration
expense or the provision for depletion and depreciation during the period and the actual restoration expenditures are charged
to the accumulated provision amounts as incurred.



As
of the date of these consolidated financial statements, the Company has incurred only exploration costs which have been expensed.



To
date the Company has not established any proven or probable reserves on its mineral properties.



Asset
retirement obligation



The
basis of this policy is the recognition of a legal liability for obligations related to the retirement of property, plant and
equipment and obligations arising from the acquisition, construction, development or normal operations of those assets. Such asset
retirement costs must be recognized at fair value when a reasonable estimate of fair value can be estimated, and accretion expense
is recognized over time as the discounted fair value is accreted to the expected settlement value. A corresponding increase to
the carrying amount of the related asset, when one is identifiable, is recorded and amortized over the life of the asset. Where
a related future value is not easily identifiable with a liability, the change in fair value over the course of the year is expensed.
The amount of the liability is subject to re-measurement at each reporting period. The estimates are based principally on legal
and regulatory requirements.



It
is possible that the Company’s estimates of its ultimate reclamation and closure liabilities could change as a result of
changes in regulations, changes in the extent of environmental remediation required, changes in the means of reclamation, or changes
in cost estimates. Changes in estimates are accounting for prospectively commencing in the period the estimate is revised. To
date, the Company has not recognized any asset retirement obligations as a reasonable estimate cannot be made at this time.



Long-lived
assets



Long-lived
assets, including property and equipment and the carrying value of intangible assets are reviewed on a regular basis for the existence
of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted
future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the
carrying amount of the asset over its estimated fair value.



F-10







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Property
and equipment



Property
and equipment consists of office furniture and vehicle, which are recorded at cost. Office furniture is amortized on a declining-balance
basis at 20% per annum and the vehicle is amortized on a declining-balance basis at 30% per annum.



Financial
instruments



Fair
Value

The
carrying values of the Company’s financial instruments, consisting of cash and cash equivalents, marketable securities,
amounts due to related parties and accounts payable approximate their fair values because of the short-term maturity of these
financial instruments.



Interest
Rate Risk

The
Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary assets and liabilities.



Credit
Risk

The
Company’s financial asset that is exposed to credit risk consists primarily of cash. To manage the risk, cash is placed
with major financial institutions.



Currency
Risk

The
Company’s functional and reporting currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign
currencies are translated using the exchange rate prevailing at the balance sheet date. Gains and losses arising on translation
or settlement of foreign currency denominated transactions or balances are included in the determination of income. Foreign currency
transactions are primarily undertaken in U.S. dollars. The Company has not, to the date of these consolidated financial statements,
entered into derivative instruments to offset the impact of foreign currency fluctuations.



Fair
value measurement

The
Company adopted FASB ASC 820-10-50, “Fair Value Measurements”. This guidance defines fair value, establishes a three-level
valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measures. The
three levels are defined as follows:



-	Level
1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.



-	Level
2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that
are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instrument.



-	Level
3 inputs to valuation methodology are unobservable and significant to the fair measurement.



All
of the Company’s financial instruments measured at fair value are applied using Level 1 inputs.



F-11







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Income
taxes



The
Financial Accounting Standards Board (FASB) has issued FASB ASC 740-10. FASB ASC 740-10 clarifies the accounting for uncertainty
in income taxes recognized in an enterprise’s financial statements in accordance with prior literature FASB Statement No.
109, Accounting for Income Taxes. This standard requires a company to determine whether it is more likely than not that a tax
position will be sustained upon examination based upon the technical merits of the position. If the more likely than not threshold
is met, a company must measure the tax position to determine the amount to recognize in the financial statements. As a result
of the implementation of this standard, the Company performed a review of its material tax positions in accordance with recognition
and measurement standards established by FASB ASC 740-10.



Deferred
taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating
loss and tax credit carry-forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.



Comprehensive
loss



FASB
ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its
components in the financial statements. As at 28 February 2011 and 2010, the Company’s only component of other comprehensive
loss was unrealized holding gains and losses on available-for-sale securities.



Recent
accounting pronouncements



In
June 2009, the FASB issued FASB ASC 105, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted
Accounting Principles – a replacement of FASB Statement No. 162”. Under FASB ASC 105 the “FASB Accounting
Standards Codification” (“Codification”) will become the source of authoritative US GAAP to be applied by nongovernmental
entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. The Codification became effective for financial statements
issued for interim and annual periods ending after September 15, 2009. On the effective date, the Codification will supersede
all then-existing non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounting literature not included
in the Codification will become non-authoritative. The Company changed the Company’s references to U.S. GAAP accounting
standards but did not impact the Company’s results of operations, financial position or cash flows.



F-12







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|2. |  | Significant Accounting Policies (continued)
|-- |  | -------------------------------------------



Recent
accounting pronouncements (continued)



In
June 2009, the Securities and Exchange Commission’s Office of the Chief Accountant and Division of Corporation Finance announced
the release of Staff Accounting Bulletin (SAB) No. 112. This staff accounting bulletin amends or rescinds portions of the interpretive
guidance included in the Staff Accounting Bulletin Series in order to make the relevant interpretive guidance consistent with
current authoritative accounting and auditing guidance and Securities and Exchange Commission rules and regulations. Specifically,
the staff is updating the Series in order to bring existing guidance into conformity with recent pronouncements by the Financial
Accounting Standards Board, namely, Statement of Financial Accounting Standards No. 141 (revised 2007) (ASC Topic 805), Business
Combinations, and Statement of Financial Accounting Standards No. 160 (ASC Topic 810), Non-controlling Interests in Consolidated
Financial Statements. The statements in staff accounting bulletins are not rules or interpretations of the Commission, nor are
they published as bearing the Commission's official approval. They represent interpretations and practices followed by the Division
of Corporation Finance and the Office of the Chief Accountant in administering the disclosure requirements of the Federal securities
laws.



In
April 2009, an update was made to the FASB ASC 820, “Fair Value Measurements and Disclosures”, that provides additional
guidance for estimating fair value when the volume and level of activity for the assets or liability have significantly decreased.
This update is effective for interim and annual periods ending after June 15, 2009 with early adoption permitted for periods ending
after March 15, 2009. The adoption of this guidance did not impact the Company’s results of operations, financial position
or cash flows.



In
April 2009, an update was made to FASB ASC 825, “Financial Instruments”, which requires a publicly traded company
to include disclosures about the fair value of its financial instruments whenever it issues summarized financial information for
interim reporting periods. This update is effective for interim reporting periods ending after June 15, 2009, with early adoption
permitted for periods ending after March 15, 2009. The adoption of this guidance did not impact the Company’s results of
operations, financial position or cash flows.



In
May 2009, the FASB announced the issuance of FASB ASC 855, “Subsequent Events”, formerly referenced as SFAS No. 165,
Subsequent Events. FASB ASC 855 should not result in significant changes in the subsequent events that an entity reports. Rather,
FASB ASC 855 introduces the concept of financial statements being available to be issued. Financial statements are considered
available to be issued when they complete in a form and format that complies with generally accepted accounting principles (GAAP)
and all approvals necessary for issuance have been obtained. The Company has already adopted this policy and its full disclosure
is included in Note 14.



In
April 2010, the FASB issued Accounting Standards Update 2010-13, “Compensation – Stock Compensation (ASC 718)”,
which addresses the classification of an employee share-based payment award with an exercise price denominated in the currency
of a market in which the underlying equity security trades. The Update provides guidance on the classification of a share-based
payment award as either equity or a liability. A share-based payment award that contains a condition that is not a market, performance,
or service condition is required to be classified as a liability. The amendments in this Update are effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December 15, 2010. The Company is currently evaluating the
impact of this update on the financial statements.



F-13







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|3. |  | Marketable Securities
|-- |  | ---------------------





|                                                                              |  | 28 February 2011 |         |  | 28 February 2010 | 
|----------------------------------------------------------------------------- |  | ---------------- | ------- |  | ---------------- | 
|                                                                              |  | Cost             |         |  | Fair value       | 
|                                                                              |  | $                |         |  | $                | 
|                                                                              |  |                  |         |  |                  | 
|601,500 (28 February 2010 – 1,007,000) common shares of Teryl Resources Corp. |  |                  | 160,092 |  |                  | 





During
the year ended 28 February 2011 a total of 405,500 (2010 – 293,000) shares of Teryl Resources Corp. were sold for total
proceeds of $75,720 (2010 - $75,032) with total cost of $107,925.



|4. |  | Property and Equipment
|-- |  | ----------------------



|                 |  |      |        |  |                          |  |        | Net book value   | 
|---------------- |  | ---- | ------ |  | ------------------------ |  | ------ | ---------------- | 
|                 |  | Cost |        |  | Accumulated Amortization |  |        | 28 February 2011 | 
|                 |  | $    |        |  | $                        |  |        | $                | 
|                 |  |      |        |  |                          |  |        |                  | 
|Office furniture |  |      | 11,194 |  |                          |  | 7,493  |                  | 
|Vehicle          |  |      | 15,531 |  |                          |  | 13,906 |                  | 
|                 |  |      |        |  |                          |  |        |                  | 
|                 |  |      | 26,725 |  |                          |  | 21,399 |                  | 



During
the year ended February 28, 2011, total additions to property, plant and equipment were $nil (2010 - $nil).



|5. |  | Mineral Properties
|-- |  | ------------------



Alaska
Mineral Properties



Dime
Creek Property



The
Company has 12 mining claims in Dime Creek, which are located near Nome in the State of Alaska.



Livengood
Property



The
Company has a total of 13 mining claims located in the Livengood-Tolovana Mining District, Alaska, USA, known as the Livengood
Claims.



F-14







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|5. |  | Mineral Properties
|-- |  | ------------------



Fish
Creek Property



The
Company has a 50% joint lease interest in 30 claims located in the Fairbanks Mining Division, Alaska, USA, known as the Fish Creek
Claims. During fiscal 2003, the Company optioned a 50% interest in the lease to Teryl Resources Corp. (“Teryl”), a
related company (Note 8). Under the terms of the agreement, Teryl issued 200,000 common shares to the Company at a fair value
of $80,000 and must expend $500,000 over three years.



The
Company retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest.
The Company entered into an amending agreement with Teryl to extend the term of the original agreement until 7 March 2007, in
which Teryl issued 100,000 common shares to the Company, and also agreed to expend a minimum of US$500,000 within two years from
the date of that amending agreement. All other terms of the original agreement remain the same. Subsequently, the Company entered
into a further agreement with Teryl to extend the term of the original agreement until 5 March 2012.



Trout
Claims



On
January 27, 2010 the Company entered into a mining agreement with the 100% owner (the “Owner”) of eleven mining claims
named Trout Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance
with the mining agreement, upon payment of US$7,500 (paid) to the Owner the Company obtained the option to execute the five year
lease. The terms of the lease option are as follows:



|- |  | Initial non-refundable payment of US$1,500 at signing of the lease agreement (paid);
|- |  | ------------------------------------------------------------------------------------

|- |  | Annual work commitment of US$10,000;
|- |  | ------------------------------------

|- |  | Consideration to the Owner on August 1 of each of the five years:
|- |  | -----------------------------------------------------------------

|§ |  | 2011: Cash payment of US$5,000
|- |  | ------------------------------

|§ |  | 2012: Cash payment of US$10,000
|- |  | -------------------------------

|§ |  | 2013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company
|- |  | -----------------------------------------------------------------------------------

|§ |  | 2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company
|- |  | -----------------------------------------------------------------------------------

|§ |  | 2015: Cash payment of US$500,000 and issuance of the Company’s common shares
valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100%
ownership in Trout Claims
|- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Coho
Claims



On
January 27, 2010 the Company entered into a mining agreement with the 100% owner (the “Owner”) of ten mining claims
named Coho Claims located in the Fairbanks Recording District, Alaska, for an option to execute a five year lease. In accordance
with the mining agreement, upon payment of US$7,500 (paid) to the Owner the Company obtained the option to execute the five year
lease. The terms of the lease option are as follows:



F-15







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|5. |  | Mineral Properties (continued)
|-- |  | ------------------------------



Coho
Claims (continued)



|- |  | Initial non-refundable payment of US$1,500 at signing of the lease agreement (paid);
|- |  | ------------------------------------------------------------------------------------

|- |  | Annual work commitment of US$10,000;
|- |  | ------------------------------------

|- |  | Consideration to the Owner on August 1 of each of the five years:
|- |  | -----------------------------------------------------------------

|§ |  | 2011: Cash payment of US$5,000
|- |  | ------------------------------

|§ |  | 2012: Cash payment of US$10,000
|- |  | -------------------------------

|§ |  | 2013: Cash payment of US$15,000 and issuance of 10,000 common shares of the Company
|- |  | -----------------------------------------------------------------------------------

|§ |  | 2014: Cash payment of US$15,000 and issuance of 50,000 common shares of the Company
|- |  | -----------------------------------------------------------------------------------

|§ |  | 2015: Cash payment of US$500,000 and issuance of the Company’s common shares
valued at US$500,000 to a maximum of one million shares and granting of 4% Net Smelter Return to the Owner in exchange for 100%
ownership in Coho Claims
|- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The
following is a summary of mineral property expenditures related to the Alaska Mineral Properties for years ended February 28,
2011 and 2010:



|                                  |  | For the Year EndedFebruary 28, 2011 |        |  | For the Year Ended February 28, 2010 |  |        | For the Year Ended February 28, 2009 | 
|--------------------------------- |  | ----------------------------------- | ------ |  | ------------------------------------ |  | ------ | ------------------------------------ | 
|                                  |  | $                                   |        |  | $                                    |  |        | $                                    | 
|Exploration and development costs |  |                                     |        |  |                                      |  |        |                                      | 
|Assaying                          |  |                                     | 16,046 |  |                                      |  | 1,910  |                                      | 
|Field supplies and other          |  |                                     | -      |  |                                      |  | 212    |                                      | 
|Geological consulting             |  |                                     | 3,041  |  |                                      |  | 7,837  |                                      | 
|Staking and recording fees        |  |                                     | 35,189 |  |                                      |  | 41,016 |                                      | 
|Transportation                    |  |                                     | -      |  |                                      |  | -      |                                      | 
|                                  |  |                                     |        |  |                                      |  |        |                                      | 
|                                  |  |                                     | 54,276 |  |                                      |  | 50,975 |                                      | 



|6. |  | Accounts Payable
|-- |  | ----------------



Accounts
payable are non-interest bearing, unsecured and have settlement dates within one year.



|7. |  | Due to Related Parties
|-- |  | ----------------------



Amounts
due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment. During the year ended February
28, 2011, imputed interest at 15%, totalling $55,536 (2010 - $39,069) was charged to operations and treated as donated capital
(Note 11). As at February 28, 2011, amounts due to related parties consist of advances or repayments to the President, Chief Executive
Officer (“CEO”) and shareholder of the Company and/or companies controlled by the President, CEO and shareholder of
the Company.



F-16







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|7. |  | Due to Related Parties (continued)
|-- |  | ----------------------------------





|                        |  | February 28, 2010 |         |  | Advances (repayments) |  |         | February 28, 2011 | 
|----------------------- |  | ----------------- | ------- |  | --------------------- |  | ------- | ----------------- | 
|                        |  | $                 |         |  | $                     |  |         | $                 | 
|                        |  |                   |         |  |                       |  |         |                   | 
|Access Information      |  |                   | 1,106   |  |                       |  | (1,106  | )                 | 
|Imaging Technologies    |  |                   | 1,018   |  |                       |  | (1,018  | )                 | 
|Information Highway.com |  |                   | 2,500   |  |                       |  | (2,500  | )                 | 
|IAS Energy, Inc.        |  |                   | 1,700   |  |                       |  | (1,700  | )                 | 
|JGR Petroleum, Inc.     |  |                   | 102,760 |  |                       |  | 14,217  |                   | 
|John Robertson          |  |                   | -       |  |                       |  | 10,290  |                   | 
|KLR Petroleum Ltd.      |  |                   | 32,868  |  |                       |  | (10,155 | )                 | 
|Rainbow Networks        |  |                   | 4,369   |  |                       |  | (4,369  | )                 | 
|Reg Technologies Inc.   |  |                   | 1,210   |  |                       |  | (1,210  | )                 | 
|REGI U.S., Inc.         |  |                   | 1,176   |  |                       |  | (1,176  | )                 | 
|SMR Investments Ltd.    |  |                   | 49,450  |  |                       |  | 32,000  |                   | 
|Teryl Resources Corp.   |  |                   | 115,333 |  |                       |  | 4,201   |                   | 
|                        |  |                   |         |  |                       |  |         |                   | 
|                        |  |                   | 313,490 |  |                       |  | 37,474  |                   | 



|8. |  | Related Party Transactions
|-- |  | --------------------------



Pursuant
to a management services agreement, during the year ended February 28, 2011 the Company paid or accrued management fees of $30,000
(2010 - $30,000) to a company of which the President of the Company is a director. At February 28, 2011, the Company had an outstanding
balance of $81,450 (2010 - $49,450) owed to this related party.



During
the year ended February 28, 2011, the Company paid or accrued investor relations fees of $2,500 (2010 - $3,500) to a company related
to the Company by way of a common director.



During
the year ended February 28, 2011, the Company paid consulting fees of $15,190 (2010 - $14,362) to a company where the President
of the Company is a director.



The
Company had certain mineral property transactions and a joint venture agreement with related parties (Note 5).



Related
party transactions incurred during the normal course of the Company’s operations and are measured at the exchange amount,
which is the amount agreed between the related parties.



F-17







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|9. |  | Capital Stock
|-- |  | -------------



Authorized



The
Company’s authorized capital is 200,000,000 common shares without par value.



Issued
and outstanding



The
total issued and outstanding capital stock is 97,893,825 common shares without par value.



On
October 19, 2009 the Company issued 5,000,000 units pursuant to a private placement at a price of US$0.04 per unit for gross proceeds
of $207,512 (US$200,000). Each unit consists of one common share and one share purchase warrant. Each warrant entitles the holder
to purchase one additional share of common stock at a price of US$0.075 in the first year or at a price of US$0.10 in the second
year from the date of issue. The Company allocated $85,277 to the common shares and $122,235 to the share purchase warrants based
on the relative fair values.



On
November 9, 2010 the Company issued 2,473,000 units pursuant to a private placement at a price of US$0.05 per unit for gross proceeds
of $126,377 (US$123,650). Each unit consists of one common share and one share purchase warrant, with each warrant entitling the
holder to purchase one share at an exercise price of US$0.075 per share for a one year term expiring from date of closing. The
Company allocated $84,480 to the common shares and $41,897 to the share purchase warrants based on the relative fair values.



On
December 6, 2010 the Company issued 2,770,000 units pursuant to a private placement at a price of US$0.05 per unit for gross proceeds
of $141,433 (US$138,500). Each unit consists of one common share and one share purchase warrant, with each warrant entitling the
holder to purchase one share at an exercise price of US$0.075 per share for a one year term expiring from date of closing. The
Company allocated $89,835 to the common shares and $51,598 to the share purchase warrants based on the relative fair values.



Warrants



On
June 1, 2009, the Company extended the expiry date of 1,412,500 share purchase warrants issued on June 1, 2008 to June 1, 2010,
resulting in a further $26,335 allocated to these warrants. The additional fair value of warrants was determined using the Black-Scholes
warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.01%, expected life of 1 year,
annualized volatility of 193.40% and expected dividend of 0%.



On
June 5, 2009 the Company extended the expiry date of 4,055,000 share purchase warrants issued on June 5, 2008 to June 5, 2010,
resulting in a further $123,476 allocated to the value of these warrants. The additional fair value of warrants was determined
using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.31%,
expected life of 1 year, annualized volatility of 194.66% and expected dividend of 0%.



F-18







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|9. |  | Capital Stock
                                                                              (continued)
|-- |  | -------------------------------------------------------------------------------------------------------



Warrants
(continued)



The
following share purchase warrants were outstanding at February 28, 2011:



|Expiry date      |  | Exercise price |            |  | Number
of warrants |  |            | Remaining contractual life | 
|---------------- |  | -------------- | ---------- |  | ------------------ |  | ---------- | -------------------------- | 
|                 |  | US$            |            |  |                    |  |            | (years)                    | 
|                 |  |                |            |  |                    |  |            |                            | 
|May 8, 2011*     |  |                | 0.20       |  |                    |  | 9,275,000  |                            | 
|June 28, 2011*   |  |                | 0.20       |  |                    |  | 3,125,000  |                            | 
|October 19, 2011 |  |                | 0.075/0.10 |  |                    |  | 5,000,000  |                            | 
|November 9, 2011 |  |                | 0.075      |  |                    |  | 2,473,000  |                            | 
|December 6, 2011 |  |                | 0.075      |  |                    |  | 2,770,000  |                            | 
|                 |  |                |            |  |                    |  | 22,643,000 |                            | 



*
These warrants were issued with a private placement financing during May, 2006. These warrants were subject to a price adjustment
clause whereby any future equity financing at a share price less than the exercise price of the warrants would result in the re-pricing
of the warrants exercise price to equal the share price of the financing and additional warrants would be issued so that the aggregate
exercise price of the re-priced warrants would equal the aggregate exercise price of the originally issued warrants. Subsequent
to February 28, 2011, these warrants expired (Note 14).



The
following is a summary of the Company’s warrant activities during the year ended February 28, 2011:



|                                                               |  | Number ofwarrants |            |   | Weighted average exercise price | 
|-------------------------------------------------------------- |  | ----------------- | ---------- | - | ------------------------------- | 
|                                                               |  |                   |            |   | US$                             | 
|                                                               |  |                   |            |   |                                 | 
|Outstanding and exercisable at February 28,  2010              |  |                   | 23,367,500 |   |                                 | 
|Issued                                                         |  |                   | 5,243,000  |   |                                 | 
|Expired                                                        |  |                   | (5,967,500 | ) |                                 | 
|                                                               |  |                   |            |   |                                 | 
|Outstanding and exercisable at February 28, 2011               |  |                   | 22,643,000 |   |                                 | 
|                                                               |  |                   |            |   |                                 | 
|Weighted average fair value of warrants issued during the year |  |                   | -          |   |                                 | 



The
weighted average fair value of warrants issued during the year ended February 28, 2011 was $0.018 per warrant. The fair value
of each warrant granted was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions:
risk free interest rate of 1.27%-1.31%, expected life of 1 year, annualized volatility of 149%-154% and expected dividend of 0%.



Stock
Options



The
Company has a stock option plan to issue up to 10% of the issued common shares to certain directors and employees. All options
granted under the plan vest upon date of grant and are subject to the following exercise schedule:



F-19







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|9. |  | Capital Stock
                                                                              (continued)
|-- |  | -------------------------------------------------------------------------------------------------------



Stock
Options (continued)



|i) |  | Up to 25% of the options may be exercised at any time during the term of the option
(the “First Exercise”);
|-- |  | -----------------------------------------------------------------------------------------------------------

|ii) |  | The second 25% of the options may be exercised at any time after 90 days from the
date of the First Exercise (the “Second Exercise”);
|--- |  | -------------------------------------------------------------------------------------------------------------------------------------

|iii) |  | The third 25% of the options may be exercised at any time after 90 days from the date
of the Second Exercise (the “Third Exercise”); and
|---- |  | ----------------------------------------------------------------------------------------------------------------------------------------

|iv) |  | The fourth and final 25% of the options may be exercised at any time after 90 days
from the date of the Third Exercise.
|--- |  | -----------------------------------------------------------------------------------------------------------------------



On
April 22, 2009, 75,000 stock options exercisable at a price of US$0.30 per common share expired.



On
April 22, 2009, the Company granted 75,000 stock options to two consultants of the Company. The options are exercisable at a price
of US$0.10 per common share for five years expiring on April 22, 2014.



On
November 9, 2009, 12,500 stock options exercisable at a price of US$0.20 per common share expired.



On
December 18, 2009 the Company granted 25,000 stock options to a consultant of the Company. The options are exercisable at a price
of US$0.10 per common share for five years expiring on December 18, 2014.



On
April 19, 2010 the Company granted to a consultant of the Company 50,000 stock options exercisable into the Company’s common
shares at a price of $0.10 per share for five years expiring April 19, 2015.



During
the year ended February 28, 2011, the Company recorded stock-based compensation of $505 (2010 - $791) for options granted.



The
following stock options were outstanding and exercisable at February 28, 2011:



|Expiry date       |  | Exercise price |      |  | Number of optionsoutstanding |  |           | Number of options
exercisable |  |  | Remaining contractual life | 
|----------------- |  | -------------- | ---- |  | ---------------------------- |  | --------- | ----------------------------- |  |  | -------------------------- | 
|                  |  | US$            |      |  |                              |  |           |                               |  |  | (years)                    | 
|                  |  |                |      |  |                              |  |           |                               |  |  |                            | 
|August 9, 2011    |  |                | 0.35 |  |                              |  | 1,500,000 |                               |  |  | 375,000                    | 
|November 2, 2011  |  |                | 0.25 |  |                              |  | 25,000    |                               |  |  | 6,250                      | 
|December 8, 2011  |  |                | 0.25 |  |                              |  | 50,000    |                               |  |  | 12,500                     | 
|November 7, 2012  |  |                | 0.31 |  |                              |  | 50,000    |                               |  |  | 12,500                     | 
|February 21, 2013 |  |                | 0.10 |  |                              |  | 1,525,000 |                               |  |  | 381,250                    | 
|April 22, 2014    |  |                | 0.10 |  |                              |  | 75,000    |                               |  |  | 18,750                     | 
|December 18, 2014 |  |                | 0.10 |  |                              |  | 25,000    |                               |  |  | 6,250                      | 
|April 19, 2015    |  |                | 0.10 |  |                              |  | 50,000    |                               |  |  | 12,500                     | 
|                  |  |                |      |  |                              |  |           |                               |  |  |                            | 
|                  |  |                |      |  |                              |  | 3,300,000 |                               |  |  | 825,000                    | 



F-20







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|9. |  | Capital Stock
                                                                              (continued)
|-- |  | -------------------------------------------------------------------------------------------------------



Stock
Options (continued)



The
following is a summary of the Company’s stock option activities during the year ended February 28, 2011:



|                                                                       |  | Number of options |           |  | Weighted average exercise price | 
|---------------------------------------------------------------------- |  | ----------------- | --------- |  | ------------------------------- | 
|                                                                       |  |                   |           |  | US$                             | 
|                                                                       |  |                   |           |  |                                 | 
|Outstanding at February 28, 2010                                       |  |                   | 3,250,000 |  |                                 | 
|                                                                       |  |                   |           |  |                                 | 
|Granted                                                                |  |                   | 50,000    |  |                                 | 
|                                                                       |  |                   |           |  |                                 | 
|Outstanding at February 28, 2011                                       |  |                   | 3,300,000 |  |                                 | 
|                                                                       |  |                   |           |  |                                 | 
|Exercisable at February 28, 2011                                       |  |                   | 825,000   |  |                                 | 
|                                                                       |  |                   |           |  |                                 | 
|Weighted average fair value of stock options granted during the period |  |                   |           |  |                                 | 



The
fair value of each option granted was estimated on the date of the grant or modification using the Black-Scholes pricing model
with the following assumptions:



|                        |  | For the  Year ended  February 28, 2011 |         |   | For the  Year ended  February 28, 2010 | 
|----------------------- |  | -------------------------------------- | ------- | - | -------------------------------------- | 
|                        |  |                                        |         |   |                                        | 
|Risk free interest rate |  |                                        | 3.02    | % |                                        | 
|Expected life           |  |                                        | 5 years |   |                                        | 
|Annualized volatility   |  |                                        | 126.59  | % |                                        | 
|Expected dividends      |  |                                        | -       |   |                                        | 



Option
pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective
input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide
a reliable single measure of the fair value of the Company’s stock options.



F-21







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|10. |  | Commitments
|--- |  | -----------



On
September 17, 2009 the Company entered into an office rent agreement for the duration of November 1, 2009 to October 31, 2010
at monthly rate of $3,355. The Company shares the office space and rent fees equally with two related parties. The agreement is
renewed for one year at $3,690 per month for the duration of November 1, 2010 to October 31, 2011.



|11. |  | Supplemental
                                                                               Disclosures With Respect to Cash Flows
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------



|                                           |  |  | Cumulative from inception of exploration stage on 1 March 2003 to February 28, 2011 (Unaudited) |  |  |  | For the year ended February 28, 2011 |  |  |  | For the year ended February 28, 2010 |  |  |  | For the year ended February 28, 2009 | 
|------------------------------------------ |  |  | ----------------------------------------------------------------------------------------------- |  |  |  | ------------------------------------ |  |  |  | ------------------------------------ |  |  |  | ------------------------------------ | 
|                                           |  |  | $                                                                                               |  |  |  | $                                    |  |  |  | $                                    |  |  |  | $                                    | 
|                                           |  |  |                                                                                                 |  |  |  |                                      |  |  |  |                                      |  |  |  |                                      | 
|Cash paid during the year for interest     |  |  | -                                                                                               |  |  |  | -                                    |  |  |  | -                                    |  |  |  | -                                    | 
|Cash paid during the year for income taxes |  |  | -                                                                                               |  |  |  | -                                    |  |  |  | -                                    |  |  |  | -                                    | 



During
the year ended February 28, 2011, imputed interest at 15% per annum totalling $55,536 (2010 - $39,069) on amounts due to related
parties was charged to operations and treated as donated capital (Note 7).



|12. |  | Income Taxes
|--- |  | ------------



Income
tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings
before income taxes. These differences result from the following items:



|                                                 |  | 2011
$ |         |   | 2010
$ | 
|------------------------------------------------ |  | ------ | ------- | - | ------ | 
|                                                 |  |        |         |   |        | 
|Loss before income taxes                         |  |        | (36,594 | ) |        | 
|Canadian federal and provincial income tax rates |  |        | 28      | % |        | 
|                                                 |  |        |         |   |        | 
|Income tax recovery based on the above rates     |  |        | (10,246 | ) |        | 
|                                                 |  |        |         |   |        | 
|Increase due to:                                 |  |        |         |   |        | 
|Non-deductible and deductible items              |  |        | 21,198  |   |        | 
|Expiry of non-capital losses                     |  |        | 86,857  |   |        | 
|Change in valuation allowance                    |  |        | (96,696 | ) |        | 
|Change in statutory tax rates                    |  |        | (1,113  | ) |        | 
|                                                 |  |        |         |   |        | 
|Income tax recovery                              |  |        | -       |   |        | 



F-22







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|12. |  | Income Taxes (continued)
|--- |  | ------------------------



The
components of future income taxes are as follows:



|                                |  | 2011
$ |            |   | 2010
$ | 
|------------------------------- |  | ------ | ---------- | - | ------ | 
|                                |  |        |            |   |        | 
|Future income tax assets        |  |        |            |   |        | 
|                                |  |        |            |   |        | 
|Non-capital losses              |  |        | 758,377    |   |        | 
|Mineral property costs          |  |        | 687,421    |   |        | 
|Property and equipment          |  |        | 3,953      |   |        | 
|Marketable securities and other |  |        | 17,269     |   |        | 
|                                |  |        |            |   |        | 
|Total future income tax assets  |  |        | 1,467,020  |   |        | 
|Valuation allowance             |  |        | (1,467,020 | ) |        | 
|                                |  |        |            |   |        | 
|Net future income tax assets    |  |        | -          |   |        | 



The
Company has non-capital loss carry-forwards of approximately $3,033,509 that may be available for tax purposes. The loss carry-forwards
are all in respect of Canadian operations and expire as follows:



|     |  | $ |          
|---- |  | - | ---------
|     |  |   |          
|2015 |  |   | 311,763  
|2026 |  |   | 402,360  
|2027 |  |   | 1,036,715
|2028 |  |   | 417,682  
|2029 |  |   | 472,218  
|2030 |  |   | 392,771  
|     |  |   |          
|     |  |   | 3,033,509



Additionally,
the Company has approximately $2,749,683 of development expenses and exploration expenditures as at February 28, 2011 which, under
certain circumstances, may be utilized to reduce taxable income of future years. The Company also has approximately $35,157 of
capital losses that may be carried forward and applied against future capital gains. The potential income tax benefits of these
losses have been offset by a full valuation allowance.



F-23







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|13. |  | Derivative Liabilities
|--- |  | ----------------------



Derivate
liabilities consist of warrants that were originally issued in private placements that have exercise prices denominated in United
States dollars, which differs from the Company’s functional currency (Canadian dollars) (Note 15). The fair value of these
warrants as at February 28, 2011 is $138,465 (2010 - $484,358). The fair value of warrants as at February 28, 2011 was determined
using the Black-Scholes warrant pricing model using the following weighted average assumptions: risk free interest rate of 1.00%-1.27%
(2010 – 0.19-1.12% ), expected life of 0.19 year-0.77 year (2010 – 0.07-1.63 years), volatility of 167.66% (2010 –
131.81%) and expected dividend of 0% (2010 – 0%).



|14. |  | Subsequent Events
|--- |  | -----------------



Stock
Options Granted



On
April 14, 2011 the Company granted to a consultant of the Company 400,000 stock options exercisable into the Company’s common
shares at a price of US$0.10 per share for five years expiring April 14, 2016.



Warrants
Expired



As
of the issuance date of these consolidated financial statements, 12,400,000 warrants with exercise prices of $0.20 expired, unexercised.



The
Company has evaluated subsequent events through the date of these consolidated financial statements were issued in accordance
with FASB ASC 855 and all material subsequent events have been disclosed as stated above.



|15. |  | Restatement
|--- |  | -----------



The
consolidated financial statements for the year ended February 28, 2010 have been restated to account for the accounting for warrants
that were issued in connection with a previous private placement. The exercise price of these warrants is denominated in United
States dollars, which differs from the Company’s functional currency (Canadian dollars) and therefore these warrants cannot
be considered to be indexed to the Company’s own stock. Accordingly the fair value of the warrants must be accounted for
as a derivative liability with changes in fair value recorded in the consolidated statement of operations.



The
effect of the resulting adjustments on the company’s consolidated financial statements for the year ended February 28, 2010
is as follows:



F-24







|Linux Gold Corp.                              
|----------------------------------------------
|(An Exploration Stage Company)                
|Notes to Consolidated Financial Statements    
|(Expressed in Canadian Dollars)               
|For the Years Ended February 28, 2011 and 2010



|15. |  | Restatement (Continued)
|--- |  | -----------------------



|                                                                                               |  | As previously reported |            |   | Adjustment |   |            | As Restated | 
|---------------------------------------------------------------------------------------------- |  | ---------------------- | ---------- | - | ---------- | - | ---------- | ----------- | 
|Consolidated Balance Sheet as at February 28, 2010                                             |  |                        |            |   |            |   |            |             | 
|Current derivative liabilities                                                                 |  | $                      | -          |   |            | $ | 8,939      |             | 
|Non-current derivative liabilities                                                             |  |                        | -          |   |            |   | 475,419    |             | 
|Capital stock                                                                                  |  |                        | 15,259,388 |   |            |   | (1,852,080 | )           | 
|Deficit, accumulated during the exploration stage                                              |  |                        | (8,339,460 | ) |            |   | 1,367,722  |             | 
|                                                                                               |  |                        |            |   |            |   |            |             | 
|Consolidated Statement of Operations and Comprehensive Loss for the year end February 28, 2010 |  |                        |            |   |            |   |            |             | 
|Fair value adjustment of derivative liabilities                                                |  |                        | -          |   |            |   | (343,588   | )           | 
|Net loss                                                                                       |  |                        | (409,573   | ) |            |   | 343,588    |             | 
|Loss per share                                                                                 |  |                        | (0.01      | ) |            |   | 0.01       |             | 



The
fair value adjustment on derivative liabilities has no effect on the Company’s consolidated statement of cash flows for
the year end February 28, 2010.



|16. |  | Amendment
|--- |  | ---------



The
consolidated statements of operations and comprehensive loss and cash flows for the period from inception of exploration stage
on March 1, 2003 through February 28, 2011, and the consolidated statements of stockholders’ equity (deficit) for the period
from March 1, 2003 through February 28, 2008 with the related disclosures in the Notes have been marked as “Unaudited”.



F-25