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

FORM 20-F

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

**x******ANNUAL
  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
  EXCHANGE ACT OF 1934 - For the fiscal year ended February 28, 2004

OR

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

Commission File Number 000-30084

LINUX GOLD CORP.
  (Exact name of registrant as specified in its charter)

British Columbia, Canada
  (Jurisdiction of incorporation or organization)

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

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

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

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

| | Title of Each Class         | Outstanding at February 29, 2004 | 
| | --------------------------- | -------------------------------- | 
| | Common Shares, no par value | 60,283,413                       | 

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

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

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TABLE OF CONTENTS

|PART I   |                                                                                                   | 7 
|-------- | ------------------------------------------------------------------------------------------------- | --
|ITEM 1.  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS                                             | 7 
|ITEM 2.  | OFFER AND STATISTICS AND EXPECTED TIMETABLE                                                       | 7 
|ITEM 3.  | KEY INFORMATION                                                                                   | 7 
|A.       | SELECTED FINANCIAL DATA                                                                           | 7 
|B.       | CAPITALIZATION AND INDEBTEDNESS                                                                   | 9 
|C.       | REASON FOR THE OFFER AND USE OF PROCEEDS                                                          | 9 
|D.       | RISK FACTORS                                                                                      | 9 
|ITEM 4.  | INFORMATION ON THE COMPANY                                                                        | 11
|A.       | HISTORY AND DEVELOPMENT                                                                           | 11
|B.       | BUSINESS OVERVIEW                                                                                 | 13
|C.       | ORGANIZATIONAL STRUCTURE                                                                          | 19
|D.       | PROPERTY, PLANT AND EQUIPMENT                                                                     | 19
|ITEM 5.  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                                      | 24
|A.       | OPERATING RESULTS                                                                                 | 24
|B.       | LIQUIDITY AND CAPITAL RESOURCES                                                                   | 24
|C.       | RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.                                              | 25
|D.       | TREND INFORMATION                                                                                 | 25
|ITEM 6.  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                        | 26
|A.       | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                                        | 27
|B.       | COMPENSATION                                                                                      | 28
|C.       | BOARD PRACTICES                                                                                   | 29
|D.       | EMPLOYEES                                                                                         | 29
|E.       | SHARE OWNERSHIP                                                                                   | 29
|ITEM 7.  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                                 | 30
|A.       | MAJOR SHAREHOLDERS.                                                                               | 30
|B.       | RELATED PARTY TRANSACTIONS                                                                        | 30
|C.       | INTERESTS OF EXPERTS AND COUNSEL                                                                  | 30
|ITEM 8.  | FINANCIAL INFORMATION                                                                             | 31
|A.       | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION                                           | 31
|B.       | SIGNIFICANT CHANGES                                                                               | 31
|ITEM 9.  | THE OFFER AND LISTING                                                                             | 31
|ITEM 10. | ADDITIONAL INFORMATION                                                                            | 32
|A.       | SHARE CAPITAL                                                                                     | 32
|B.       | MEMORANDUM AND ARTICLES OF ASSOCIATION                                                            | 32
|C.       | MATERIAL CONTRACTS                                                                                | 32
|D.       | EXCHANGE CONTROLS.                                                                                | 34
|E.       | TAXATION.                                                                                         | 34
|F.       | DIVIDENDS AND PAYING AGENTS                                                                       | 34
|G.       | STATEMENT BY EXPERTS.                                                                             | 35
|H.       | DOCUMENTS ON DISPLAY                                                                              | 35
|I.       | SUBSIDIARY INFORMATION.                                                                           | 35
|ITEM 11  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISK                                  | 35
|ITEM 12  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                                            | 35
|PART II  |                                                                                                   | 36
|ITEM 13. | DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES                                                    | 36
|ITEM 14. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
      AND USE OF PROCEEDS.               | 36
|A.       | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS                                          | 36
|B.       | USE OF PROCEEDS                                                                                   | 36
|ITEM 15. | CONTROLS AND PROCEDURES                                                                           | 36
|ITEM 16. | AUDIT COMMITTEE FINANCIAL EXPERT, CODE OF ETHICS AND
      PRINCIPAL ACCOUNTANT FEES AND SERVICES | 36
|A.       | AUDIT COMMITTEE FINANCIAL EXPERT                                                                  | 36
|B.       | CODE OF ETHICS                                                                                    | 37
|C.       | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                            | 37
|PART III |                                                                                                   | 37
|ITEM 17. | FINANCIAL STATEMENTS                                                                              | 37

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|ITEM 18.       | FINANCIAL STATEMENTS | 37
|-------------- | -------------------- | --
|ITEM 19.       | EXHIBITS             | 37
|SIGNATURE PAGE | 40                  

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GLOSSARY OF MINING TERMS

We are required under Canadian law (National Instrument 43-101
  Standards Of Disclosure For Mineral Projects) (NI 43-101) to calculate
  and categorize mineral reserve, proven mineral reserve,
  probable mineral reserve, mineral resource, measured
  mineral resource, indicated mineral resource and inferred
  mineral resource under the Canadian Institute of Mining Metallurgy and
  Petroleum (CIM) Standards on Mineral Resources and Reserves - Definitions
  and Guidelines adopted by the CIM in August 2000. These standards establish
  definitions and guidelines for the reporting of exploration information, mineral
  resources and mineral reserves in Canada. These definitions have not been adopted
  for use in the United States of America by the Securities and Exchange Commission.
  Under these guidelines, the CIM definitions of proven and probable reserves
  equate to the definitions of proven and probable reserves as set out in Guide
  7 of the Securities Act Industry Guides. In addition, Canadian law requires
  disclosure of mineral resources that equate to measured, indicated and inferred
  resources.

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

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

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

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

Au - gold.

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

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

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

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

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

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

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

gm/mtor gpt- grams per tonne.

gold deposit - means a mineral deposit mineralised with
  gold.

gold resource  see geological or mineral resource

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

graphite: A allotropic form of carbon found in nature

ICP-MS:Inductively Coupled Plasma Mass Spectrometry

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

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

intrusive:cuts across (is intrusive into)

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

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

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

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

mineral reservemeans the economically mineable part
  of a measured or indicated resource demonstrated by at least a preliminary feasibility
  study. This study must include adequate information on mining, processing, metallurgical,
  economic and other relevant factors that demonstrate, at the time of reporting,
  that economic extraction can be justified. A mineral reserve includes diluting
  materials and allowances for losses that may occur when the material is mined.

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

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

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

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

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

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

opt troy ounces per ton

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

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

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

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

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

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

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

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

ton- short ton (2,000 pounds).

tonne- metric tonne (2,204.6 pounds).

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

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

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

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

Unless the context otherwise requires, all references to the
  Registrant or the Company or Linux refer
  to Linux Gold Corp. All monetary figures are in terms of United States dollars
  unless otherwise indicated.

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Foreign Private Issuer Status

Foreign Private Issuer Status:

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

PART I

ITEM 1.           IDENTITY
  OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

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

ITEM 2.           OFFER
  AND STATISTICS AND EXPECTED TIMETABLE

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

ITEM 3.           KEY
  INFORMATION

A.           SELECTED
  FINANCIAL DATA

The summary consolidated financial information set forth below
  should be read in conjunction with, and is qualified in its entirety by reference
  to, the Consolidated Financial Statements, as of and for the years ended February
  29, 2004 and February 28, 2003, together with the notes thereto, which appear
  elsewhere in this annual report. The Consolidated Financial Statements as of
  and for the years ended February 29, 2004 and February 28, 2003 have been audited
  by Manning Elliott. The Consolidated Financial Statements are prepared in accordance
  with U.S. GAAP. See Note 2 of the Notes to Consolidated Financial Statements.

The selected financial data set forth in the following table
  is expressed in Canadian dollars. Since June 1, 1970, the Government of Canada
  has permitted a floating exchange rate to determine the value of the Canadian
  dollar as compared to the United States dollar. At February 27, 2004, US$1.00
  was equal to approximately C$1.3401.

The following represents our selected financial data for each
  of the past five fiscal years, ending on February 29/28. The data presented
  is prepared in accordance with generally accepted accounting principles in the
  United States:

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Fiscal Years Ended February 29/28

|                                                                  | 2004      | 2003       | 2002        | 2001        | 2000       
|----------------------------------------------------------------- | --------- | ---------- | ----------- | ----------- | -----------
|Net Revenue                                                       | $ -       | $ -        | $ -         | $146,429    | $ -        
|Income (loss) from continuing operations                          | (106,234) | (150,020)  | (420,261)   | (1,357,802) | (1,390,772)
|Income (loss) from discontinued operations                        | -         | -          | (366,448)   | (1,971,861) | -          
|Income (loss) from continuing operations
      per Common Share   | -         | (.01)      | (.02)       | (0.10)      | (013)      
|Income (loss) from discontinued operations
      per Common Share | -         | -          | (.01)       | (.14)       | -          
|Total Assets                                                      | 278,610   | 92,719     | 11,240      | 216,934     | 543,404    
|Working Capital (deficit)                                         | (135,924) | (514,2350) | (1,549,592) | (1,695,634) | 451,376    
|Shareholders Equity (deficit)                                    | (129,924) | (514,2330) | (1,542,141) | (1,621,612) | 455,947    
|Cash Dividends per common share                                   | $ nil     | $ nil      | $ nil       | $ nil       | $ nil      

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

Currencies and Exchange Rates:

We publish our financial statements in Canadian dollars. Unless
  otherwise indicated, monetary amounts referred to in this annual report are
  in Canadian dollars. Unless otherwise indicated, all translations from Canadian
  dollars to US dollars have been made at a rate of CDN$ 1.3405 to US$ 1.00, the
  noon buying rate as certified for customs purposes by the Federal Reserve Bank
  of New York (the "Noon Buying Rate") on February 27, 2004. We do not represent
  that Canadian dollar or US dollar amounts could be converted into US dollars
  or Canadian dollars, as the case may be, at any particular rate, the rates below
  or at all. On June 30, 2004, the Noon Buying Rate was CDN$ 1.3407 to US$ 1.00.
  The following table sets forth noon buying rate for US dollars in New York City
  for cable transfers in Canadian dollars as certified for customs purposes by
  the Federal Reserve Bank of New York for the periods indicated:

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

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|Month    | Year | High (CAD$) | Low (CAD$)
|-------- | ---- | ----------- | ----------
|December | 2003 | 1.3405      | 1.2923    
|January  | 2004 | 1.334       | 1.269     
|February | 2004 | 1.3442      | 1.3108    
|March    | 2004 | 1.348       | 1.308     
|April    | 2004 | 1.3711      | 1.3095    
|May      | 2004 | 1.397       | 1.374     
|June     | 2004 | 1.3772      | 1.3407    

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

|Year | Average | Low/High       | February 29/28
|---- | ------- | -------------- | --------------
|2004 | 1.3667  | 1.269 / 1.4905 | 1.3405        
|2003 | 1.5438  | 1.5995 / 1.488 | 1.4880        
|2002 | 1.5625  | 1.5102/1.6128  | 1.6049        
|2001 | 1.4954  | 1.4470/1.5600  | 1.5320        
|2000 | 1.4737  | 1.4956/1.4475  | 1.4498        

B.           CAPITALIZATION
  AND INDEBTEDNESS

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

C.           REASON
  FOR THE OFFER AND USE OF PROCEEDS

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

D.           RISK
  FACTORS

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

Our Limited and Changing Operating History.We initially focused the business of the Company on natural resource development.
  We changed direction becoming involved in the information technology industry
  to take advantage of the booming technology sector and the declining precious
  metals markets. We were not successful in that industry segment. We have returned
  our focus on mining and exploration.

Exploration and Development Risks.There is
  no assurance given by the Company that our exploration and development programs
  and properties will result in the discovery, development or production of a
  commercially viable ore body. The business of exploration for minerals and mining
  involves a high degree of risk. Few properties that are explored are ultimately
  developed into producing mines. At present, none of the Registrants properties
  have defined ore bodies with reserves and resources, and the proposed exploration
  programs are an exploratory search for ore. There is no assurance that our mineral
  exploration and development activities will result in any discoveries of bodies
  of commercial ore. Unusual or unexpected geological structures or formations,
  fires, power outages, labour disruptions, floods, explosions, cave-ins, land
  slides and the inability to obtain suitable or adequate machinery, equipment
  or labour are other risks involved in the operation of mines and the conduct
  of exploration programs. We have relied and may continue to rely upon consultants
  and others for construction and operating expertise.

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The economics of developing gold and other mineral properties
  are affected by many factors including capital and operating costs, variations
  of the grade of ore mined, fluctuating mineral markets, costs of processing
  equipment and such other factors as government regulations, including regulations
  relating to royalties, allowable production, importing and exporting of minerals
  and environmental protection. Depending on the price of gold or other minerals
  produced, we may determine that it is impractical to commence or continue commercial
  production. Substantial expenditures are required to establish reserves through
  drilling, to develop metallurgical processes to extract metal from ore and to
  develop the mining and processing facilities and infrastructure at any site
  chosen for mining. No assurance can be given that funds required for development
  can be obtained on a timely basis. The marketability of any minerals acquired
  or discovered may be affected by numerous factors which are beyond our control
  and which cannot be accurately foreseen or predicted, such as market fluctuations,
  the global marketing conditions for precious and base metals, the proximity
  and capacity of milling facilities, mineral markets and processing equipment,
  and such other factors as government regulations, including regulations relating
  to royalties, allowable production, importing and exporting minerals and environmental
  protection.

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

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

As noted in our audited consolidated financial statements
  for the year ended February 29, 2004 we have incurred significant operating
  losses and have an accumulated deficit of $7,550,986 at February 29, 2004. Furthermore,
  we had working capital deficit of $135,924 as at February 29, 2004, which is
  not sufficient to achieve our planned business objectives. Our ability to continue
  as a going concern is dependent on continued financial support from our shareholders
  and other related parties, the ability of the Registrant to raise equity financing,
  and the attainment of profitable operations, external financings and further
  share issuances to meet our liabilities as they become payable.

Our ability to continue as a going concern is dependent on
  continued financial support from our shareholders and other related parties,
  our ability to raise equity capital financing, and the attainment of profitable
  operations, external financings and further share issuance to satisfy working
  capital and operating needs. The auditors report on the February 29, 2004
  consolidated financial statements include additional comments for U.S. readers
  that states that conditions exist that raise substantial doubt about our ability
  to continue as a going concern. The consolidated financial statements do not
  include adjustments that might result from the outcome of this uncertainty.

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 4.           INFORMATION
  ON THE COMPANY

A.           HISTORY
  AND DEVELOPMENT

The Company was incorporated on February 27, 1979 under a
  perpetual charter pursuant to the British Columbia Company Act by registration
  of its Memorandum and Articles and was extraprovincially registered in the Province
  of Alberta on October 12, 1995 under the name Flame Petro-Minerals Corp. At
  an extraordinary general meeting held on March 15, 2000, our shareholders approved
  the change of name of the

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Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems,
  Inc, which name change was effected on March 21, 2000. At our annual meeting
  of shareholders on February 20, 2003, our shareholders approved the change of
  name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp., which
  name change was effected March 18, 2003. Our authorized capital consists of
  200,000,000 Common Shares without par value. Of these, 60,283,413 shares were
  issued and outstanding as of February 29, 2004 and 60,383,413 shares were issued
  and outstanding as of the date of this Form 20-F. Our head office is located
  at #1103 -11871 Horseshoe Way, Richmond, B.C., V7A 5H5.

In November 1995, we made a public offering of 4,500,000 of
  our Common Shares at a price of $0.15 per share to residents of Alberta and
  British Columbia, and following the completion of the offering, our shares were
  listed on the Alberta Stock Exchange.

On November 3, 1999, we announced that we had become a fully
  reporting company to the United States Securities and Exchange Commission and
  our stock commenced trading on the OTC Bulletin Board under the symbol FPMCF.

On December 15, 1999 we announced that as a result of our
  common stock being listed on the OTC BB as a fully reporting company, we voluntarily
  applied for a delisting from the Alberta Stock Exchange (which merged in 2000
  with the Vancouver Stock Exchange to become the Canadian Venture Exchange, and
  has subsequently become the TSX Venture Exchange), which was effective the close
  of business on December 14, 1999.

On January 10, 2000, we acquired all the issued capital stock
  of LinuxWizardry, Inc. for 2,000,000 shares of the Company's restricted common
  stock pursuant to Rule 144 of the SEC. These shares were valued at US$0.375
  per share or Cnd$1,087,500. LinuxWizardry, Inc. was a newly created Florida
  Corporation owned by four individuals. LinuxWizardry, Inc. developed Linux-based
  enterprise software and hardware for end-to-end networking solutions for small
  and medium sized businesses. On June 30, 2001, the business operations of this
  subsidiary were discontinued. It has no assets remaining. Please refer to Note
  1 to our Financial Statements attached hereto.

On March 15, 2000 we held a shareholders meeting at which
  our shareholders voted to change our name from Flame Petro-Minerals Corp. to
  LinuxWizardry Systems, Inc. and selected the new requested symbol LNXWF. Our
  shareholders also approved an amended stock option plan. At that time, our new
  name, LinuxWizardry Systems, Inc. and the new symbol, LNXWF, more closely represented
  our then current business activities.

On February 20, 2003 we held a shareholders meeting at which
  our shareholders voted to change our name from LinuxWizardry Systems, Inc. to
  Linux Gold Corp. and obtained a new OTC BB trading symbol LNXGF. We believe
  our new name, Linux Gold Corp. more closely represents our true business activities.

Since our inception and during the three fiscal years ending
  in February 2004, we had been involved in oil and gas exploration/production,
  development of Linux-based enterprise software and hardware for end-to-end networking
  solutions for small and medium sized businesses and, more recently, returned
  our focus to mineral property development. We have investigated several mineral
  properties in Canada, the United States and more recently in Chile.

We also own a 1.277% net working interest in an oil well located
  in Fayette County, Texas. To date, we have received no revenues from our mining
  property activities, and have received negligible net revenues after operating
  costs from our interest in the Fayette County oil well during the past five
  fiscal years. As a result, we wrote down our interest in the oil well located
  in Fayette County to $1.

We have no current plans to pursue further activities in either
  the oil or gas business.

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

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We are currently in the development stage and equity financing
  is required to continue development and commercial exploitation of the software.
  As a result of the uncertainty that is typical in a development stage company
  there is doubt about our ability to continue as going concern as ultimate success
  will be based on securing adequate equity financing and/or the attainment of
  a commercially profitable business.

B.           BUSINESS
  OVERVIEW

Nature of the Companys Operations

Mineral Properties

Fish Creek Claims, Alaska

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

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

In September 2002, we received confirmation of an approved
  mining lease. The main advantage of the Fairbanks, Alaska mining lease is that
  any past or future claim disputes have been eliminated. This mining lease clearly
  delineates our 30 claims, which were previously overstaked.

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

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

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

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

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

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

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

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

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

In May, 2004 we commenced a closely spaced magnetic survey
  over the previous magnetic targets that were discovered last winter. The magnetic
  survey located two anomalies indicative of a potential buried placer gold bearing
  channel. Extremely high-grade placer gold was encountered during the excavation
  of the Fort Knox mine fresh water dam, immediately upstream of the Fish Creek
  property.

Upon completion of the magnetic data, large diameter auger
  drilling will take place to top off the bedrock to determine the grade and extent
  of placer gold in the channel. The secondary goal is to assay bedrock samples
  to determine if significant lode gold is present in the bedrock areas drilled.

TY Gold Property, Bralorne Mining District, British
  Columbia

On May 2, 2003 we announced that we had acquired an option
  to a 100% interest in 21 units in the Bralorne/Lillooet mining division in British
  Columbia, called the TY Gold Property. We will pay CAD$30,000 over three years
  and 150,000 common shares. The TY Gold Property is subject to a 2% net smelter
  interest (NSR). We have an option to purchase each 1% NSR for CAD$1,000,000
  prior to production. The TY Gold Property is adjacent to our newly acquired
  ORO Property and is located 12 miles from the Bralorne Pioneer Gold Mine, which
  since its discovery has produced 4.1 million ounces of gold. We now have a total
  of 41 units in the Bralorne area.

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

In June 2003, we completed laying 1,800 feet of grid lines
  over the Beta Gold zone on its TY Gold prospect, in preparation for a drill
  program. Previous drilling on the Beta Gold zone encountered significant gold
  grades, with the highest value in hole 87-8, which encountered 15 feet of 0.93
  ounces of gold per ton with 3.5 ounces

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of silver from 65-80 feet from the surface (a five foot intersection
  of 1.7 ounces of gold per ton is included in this intersection). Hole 87-9 encountered
  10 feet of 0.69 ounces per ton gold including a five-foot intersection of 1.13
  ounces of gold per ton.

The Beta Gold zone remains open down dip to the west and the
  1,800 foot grid crosses over two additional known gold zones. A proposed phase
  I drill program will be initiated to confirm previous drill results completed
  in 1987, in a search for a bulk tonnage gold deposit.

In August 2003, we completed a phase I drill program on its
  TY gold property located in the Bralorne Mining District, British Columbia.
  Four diamond drill holes of approximately 200 feet each in length were drilled
  in the Beta Gold zone to confirm the high-grade results of drilling in 1987.

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

Previous drilling on the Beta Gold zone yielded significant
  gold and silver values. The best results were from hole 87-8, which intersected
  15 feet of 0.93 ounces of gold per ton and 3.5 ounces of silver per ton between
  65-80 feet from the surface  including a five foot intersection of 1.70
  oz/ton gold and 5.86 oz/ton silver. Hole 87-9 hit ten feet of 0.69 ounces per
  ton gold including a five-foot intersection of 1.13 ounces of gold per ton for
  ten feet.

The Beta Gold zone remains open down dip to the west and is
  flanked by two other known gold zones. According to a 1987 report by Sampson
  Engineering, the Beta zone may host a hanging wall and footwall vein, which
  is typical of gold systems in the Bralorne District and many other vein-type
  gold camps such as the Motherlode system of California. The TY gold property
  is located 12 miles north of the Bralorne Pioneer Mine, which since its discovery
  produced 4.1 million ounces of gold, and was one of the richest gold mines in
  Western Canada.

On September 2, 2003, we announced that additional units had
  been staked surrounding the Companys TY Gold property and in several strategic
  locations in the Bralorne Mining District. Four diamond drill holes have been
  completed on the TY Gold property to confirm the high-grade results. The previous
  drilling results yielded up to 0.93 ounces of gold per ton over 15 feet. Results
  from the 4 holes are expected in early September.

The additional claims are located 12 miles north of the Bralorne
  Pioneer Mine, which since its discovery produced 4.1 million ounces of gold
  and was one of the richest gold mines in Western Canada.

In September 2003, we continued a second phase of drilling
  on the TY Gold property. The purpose of the program is to confirm high-grade
  results encountered by previous drilling on the property, which produced results
  up to 0.93 ounces of gold per ton over 15 feet, including a 5-foot section of
  1.7 ounces of gold per ton.

On November 6, 2003, we announced that diamond drilling results
  from Holes 3TD-1 through 6 on the TY Gold property in the Goldbridge area, BC.
  Gold values were mixed though generally low-grade with slightly elevated lead/zinc
  values over minor intervals. The highest gold value seen (1.48 g/t  hole
  3TD 1:84-89) occurred within a highly stockworked, altered volcanic
  breccia.

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

The purpose of the drilling program is to confirm high-grade
  gold results, which produced results up to 0.93 ounces of gold per ton on 15
  feet, including a 5-foot section of gold per ton.

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Duna Choapa Norte Orebody and La Barca Orebody, Chile

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

ORO Property, Lillooet Mining Division, British Columbia

In April 2003, we acquired a 100% interest in 20 mineral claim
  units, subject to a 2% net smelter return, called the ORO property in the Lillooet
  Mining Division, BC, for $10,000 and 100,000 shares of Linux Gold Corp. We have
  the option to purchase back each 1% NSR return for CAD$1,000,000 prior to production.
  These claims are located 12 miles from the Bralorne Pioneer Gold Mine, which
  since its discovery, has produced 4.1 million ounces of gold worth some $1.5
  billion at todays gold prices. Several EMVLF conductive zones have
  been located on the ORO property. The magnetic survey shows the entire property
  is underlain with sediments and volcanics, which are important in the placement
  of gold bearing quartz veins, according to the geophysical report surveyed and
  written by Columbia Airborne Geophysical Services.

BLN Gold Property, Hebei Province, China

In February, 2004, we acquired an option to purchase a 100%
  interest in a private company which holds a Certificate of Approval to do business
  in the Peoples Republic of China. The private company holds an 85% interest
  in a Co-operative Joint Venture with Bo Luo Nuo Wang Yuan Gold Mine Company
  ("BLN Gold ") of Hebei Province, China. The Company can earn a 100% interest
  in the private company, subject to a 5% net profits interest, by issuing 200,000
  shares of Linux Gold Corp. in four stages and paying CAD$50,000 cash, and expending
  a total of CAD$500,000 in a three-phase work program.

The private company has the following assets in China:

(a)
      a "Certificate of Approval
          for the Establishment of Enterprises with Foreign Investment in Peoples
          Republic of China" issued by the Hebei Province Government;(b)
      an 85% interest in the
          Co-operative Joint Venture with BLN Gold which owns the following assets:(i)
      the Hong Shi Li Flotation Plant in
          Hebei Province;(ii)
      the right to lease the operational
          gold recovery mill in the area along with sufficient space for future
          expansion;(iii)
      the right in progressive phases to
          license and operate all of the existing small mines in the district
          and the rights to explore for, develop and produce all minerals therein
          or derived therefrom;(iv)
      the right to explore for, develop
          and produce all minerals elsewhere in the Bo Luo Nuo District; and(v)
      the option to expand the agreement
          to other districts in the Hebei Province.


The joint venture property in Bo Luo Nuo District in China
  covers an area of 161 km2. The Bo Luo Nuo is connected with Beijing (four
  hours drive), the capital of China. Over ten gold zones exist in the district.
  A report completed in May 2002, which was a preliminary investigation report
  of the gold mines in Bo Luo Nuo property, China, indicates possibilities for
  three potential discoveries:

A large or middle-sized deposit with several small deposits
    Several middle-sized deposit


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- Numerous small deposits.

The recommendation in the report is trenching, drilling, geophysical
  survey sampling and underground engineering in the area of the 10 present gold
  zones. Based on the successful initial exploration program the objective for
  the CAD$500,000 exploration program will be to commence an underground mining
  operation producing up to 50 tons per day of ore from the existing operational
  gold recovery mill and increase production to 200 tons per day, for a budget
  of CAD$2,000,000, subject to the successful pilot mill program. Previous sampling
  returned assays of between 10  159 grams of gold per tonne in several
  of the major gold zones.

This seasons exploration program will consist of mapping and
  sampling several of the ten known gold zones including the contact belt of Archean
  metamorphic rock and the Mount Guang Ling granite intrusive, a potential large
  tonnage target for gold exploration.

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

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

The visit to the Hebei Province was supervised by Geologist
  Jim Yin, Ph.D. on behalf of the Company. Dr. Yin directed the sampling of the
  major known gold zones and platinum, palladium properties. A total of 118 samples
  were collected from 12 different known gold zones for gold and silver and 32
  samples were collected from the platinum, palladium deposit.

Assays are currently being completed by the Institute of the
  Beijing General Research Institute of Mining and Metallurgy. The next exploration
  stage recommended by Dr. Yin is to explore the higher grade gold zones, after
  receipt of the assays, in order to provide sufficient ore to feed the existing
  mill on the property. Dr. Jim Yin recommends the gold zones/veins mentioned
  in the above should be the main targets to follow up in the next exploration
  program to develop economic high grade gold reserves to feed the 50 ton a day
  mill. A drilling program will be announced this summer.

Linux-based Router

As of June 30, 2001, we discontinued the business operations
  of our wholly-owned US subsidiary, LinuxWizardry, Inc. due to the depressed
  market conditions for the stock market, the financial condition of the Company
  and refocus of the Companys operations.

Mailprotek.com

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

Corporate Finance

During the year ended February 29, 2004:

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| | a) | On December 9, 2003 the Company completed a private
        placement and issued 875,000 units at a price of US$0.20 per unit for
        proceeds of US$175,000. Each unit consisted of one common share and one
        1⁄2 warrant. Two 1⁄2 warrants entitles the holder to purchase
        one additional common share at a price of US$0.20 per share for a one-year
        period.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | b) | During the year ended February 29, 2004, the Company
        issued 175,000 common shares at a value of $0.10 per share pursuant to
        the mineral property option agreements referred to in Note 3(c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | c) | During the year ended February 29, 2004, the Company
        issued 1,000,000 shares pursuant to a consulting agreement for services
        beginning April 2, 2003 for a period of six months. The Company was also
        obligated to issue 100,000 shares per month starting May 2, 2003. On July
        11, 2003, the Company terminated this agreement due to non-performance
        and has demanded return of the 1,000,000 shares previously issued.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | d) | The Company issued 200,000 shares to settle a prior
        years rental agreement.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | e) | On November 12, 2002, the Company issued 19,295,567
        common shares in exchange for the extinguishment of US$578,867 in debt
        (US$0.03 per share). The market value of the shares on the date of exchange
        was $964,778.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | f) | On November 28, 2002, the Company issued 3,000,000
        common shares in exchange for a license for a secure email solution from
        Mailprotek.com (a related company). Mailprotek.com has developed a complete
        solution to filter out viruses, worms and spamming. Mailprotek.com will
        retain 25% of all revenues and pay 75% to the Company. The consideration
        of 3,000,000 common shares was issued to Mailprotek.coms subsidiary
        Imaging Technologies, Inc. and the market value of the shares was $238,800
        but the asset was recorded at the transferors cost of $25,000 and
        the difference recorded as a deemed dividend. The cost amount was originally
        recorded as an intangible asset. The License was written-off to operations
        due to the lack of historical cash flow of the License and lack of market
        to resell the License.
| |    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | g) | On February 20, 2003, the Company issued 675,000
        units at $0.10 per unit for proceeds of $67,500. Each unit consisted of
        one share and one warrant. Each warrant can be exercised at $0.12 per
        share in the first year and at $0.15 per share in the second year. These
        warrants were all exercised in fiscal 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

Additionally, 150,000 stock options were exercised.

Shareholder approval for the granting and exercise of incentive
  stock options was obtained at the Companys annual general meeting held
  on February 27, 2004.

Description of the Markets in Which the Company Competes

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

Competition

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

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Seasonality

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

Availability of Raw Materials

We do not manufacture any products directly.

Marketing Strategy

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

Dependence on Certain Commercial Agreements

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

Material effects of Government

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

C.           ORGANIZATIONAL
  STRUCTURE

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

D.           PROPERTY,
  PLANT AND EQUIPMENT

We do not own any properties. We currently utilize office
  space in a commercial business park building located in Richmond, British Columbia,
  Canada, a suburb of Vancouver. The space is shared with several other companies
  which share common management. The monthly rent for its portion of this 1,500
  square foot space is $500.00. The present facilities are believed to be adequate
  for meeting our needs for the immediate future. If required in the future, we
  do not anticipate that we will have any difficulty in obtaining additional space
  at favorable rates. There are no current plans to purchase or otherwise acquire
  any properties in the near future.

Since our inception and during the three fiscal years ending
  in February 2004, we had been involved in oil and gas exploration/production
  and more recently, mineral property exploration and development.

Fish Creek Claims, Alaska

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

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

In September 2002, we received confirmation of an approved
  mining lease. The main advantage of the Fairbanks, Alaska mining lease is that
  any past or future claim disputes have been eliminated. This mining lease clearly
  delineates our 30 claims, which were previously overstaked.

On November 4, 2002, we amended the March 5, 2002 agreement
  with Teryl Resources Corp. We agreed that in consideration for receiving a mining
  license which was not disclosed to us at the time of the March 5, 2002

- 19 -

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agreement, both parties agreed to grant Linux a back in working
  interest for a 25% interest in the mining lease after Teryl completes the $500,000
  expenditures.

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

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

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

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

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

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

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

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

- 20 -

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TY Gold Property, Bralorne Mining District, British
  Columbia

On May 2, 2003 we announced that we had acquired an option
  to a 100% interest in 21 units in the Bralorne/Lillooet mining division in British
  Columbia, called the TY Gold Property. We will pay CAD$30,000 over three years
  and 150,000 common shares. The TY Gold Property is subject to a 2% net smelter
  interest (NSR). We have an option to purchase each 1% NSR for CAD$1,000,000
  prior to production. The TY Gold Property is adjacent to our newly acquired
  ORO Property and is located 12 miles from the Bralorne Pioneer Gold Mine, which
  since its discovery has produced 4.1 million ounces of gold. We now have a total
  of 41 units in the Bralorne area.

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

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

The Beta Gold zone remains open down dip to the west and the
  1,800 foot grid crosses over two additional known gold zones. A proposed phase
  I drill program will be initiated to confirm previous drill results completed
  in 1987, in a search for a bulk tonnage gold deposit.

In August 2003, we completed a phase I drill program on its
  TY gold property located in the Bralorne Mining District, British Columbia.
  Four diamond drill holes of approximately 200 feet each in length were drilled
  in the Beta Gold zone to confirm the high-grade results of drilling in 1987.

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

Previous drilling on the Beta Gold zone yielded significant
  gold and silver values. The best results were from hole 87-8, which intersected
  15 feet of 0.93 ounces of gold per ton and 3.5 ounces of silver per ton between
  65-80 feet from the surface  including a five foot intersection of 1.70
  oz/ton gold and 5.86 oz/ton silver. Hole 87-9 hit ten feet of 0.69 ounces per
  ton gold including a five-foot intersection of 1.13 ounces of gold per ton for
  ten feet.

The Beta Gold zone remains open down dip to the west and is
  flanked by two other known gold zones. According to a 1987 report by Sampson
  Engineering, the Beta zone may host a hanging wall and footwall vein, which
  is typical of gold systems in the Bralorne District and many other vein-type
  gold camps such as the Motherlode system of California. The TY gold property
  is located 12 miles north of the Bralorne Pioneer Mine, which since its discovery
  produced 4.1 million ounces of gold, and was one of the richest gold mines in
  Western Canada.

On September 2, 2003, we announced that additional units had
  been staked surrounding the Companys TY Gold property and in several strategic
  locations in the Bralorne Mining District. Four diamond drill holes have been
  completed on the TY Gold property to confirm the high-grade results. The previous
  drilling results yielded up to 0.93 ounces of gold per ton over 15 feet. Results
  from the 4 holes are expected in early September.

The additional claims are located 12 miles north of the Bralorne
  Pioneer Mine, which since its discovery produced 4.1 million ounces of gold
  and was one of the richest gold mines in Western Canada.

- 21 -

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In September 2003, we continued a second phase of drilling
  on the TY Gold property. The purpose of the program is to confirm high-grade
  results encountered by previous drilling on the property, which produced results
  up to 0.93 ounces of gold per ton over 15 feet, including a 5-foot section of
  1.7 ounces of gold per ton.

On November 6, 2003, we announced that diamond drilling results
  from Holes 3TD-1 through 6 on the TY Gold property in the Goldbridge area, BC.
  Gold values were mixed though generally low-grade with slightly elevated lead/zinc
  values over minor intervals. The highest gold value seen (1.48 g/t  hole
  3TD 1:84-89) occurred within a highly stockworked, altered volcanic
  breccia.

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

The purpose of the drilling program is to confirm high-grade
  gold results, which produced results up to 0.93 ounces of gold per ton on 15
  feet, including a 5-foot section of gold per ton.

Duna Choapa Norte Orebody and La Barca Orebody, Chile

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

ORO Property, Lillooet Mining Division, British Columbia

In April 2003, we acquired a 100% interest in 20 mineral claim
  units, subject to a 2% net smelter return, called the ORO property in the Lillooet
  Mining Division, BC, for $10,000 and 100,000 shares of Linux Gold Corp. We have
  the option to purchase back each 1% NSR return for CAD$1,000,000 prior to production.
  These claims are located 12 miles from the Bralorne Pioneer Gold Mine, which
  since its discovery, has produced 4.1 million ounces of gold worth some $1.5
  billion at todays gold prices. Several EMVLF conductive zones have
  been located on the ORO property. The magnetic survey shows the entire property
  is underlain with sediments and volcanics, which are important in the placement
  of gold bearing quartz veins, according to the geophysical report surveyed and
  written by Columbia Airborne Geophysical Services.

BLN Gold Property, Hebei Province, China

In February, 2004, we acquired an option to purchase a 100%
  interest in a private company which holds a Certificate of Approval to do business
  in the Peoples Republic of China. The private company holds an 85% interest
  in a Co-operative Joint Venture with Bo Luo Nuo Wang Yuan Gold Mine Company
  ("BLN Gold ") of Hebei Province, China. The Company can earn a 100% interest
  in the private company, subject to a 5% net profits interest, by issuing 200,000
  shares of Linux Gold Corp. in four stages and paying CAD$50,000 cash, and expending
  a total of CAD$500,000 in a three-phase work program.

The private company has the following assets in China:

|(a) | a "Certificate of Approval for the Establishment
        of Enterprises with Foreign Investment in Peoples Republic of China" issued
        by the Hebei Province Government;
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                               
|(b) | an 85% interest in the Co-operative
        Joint Venture with BLN Gold which owns the following assets:                                                                      

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| | (vi)  | the Hong Shi Li Flotation Plant in Hebei
        Province;                                                                                                                                                                                                                                                                                                     
| | ----- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |       |                                                                                                                                                                                                                                                                                                                                                                
| | (vii) | the right to lease the operational gold
        recovery mill in the area along with sufficient space for future expansion;
        (viii) the right in progressive phases to license and operate all of the
        existing small mines in the district and the rights to explore for, develop
        and produce all minerals therein or derived therefrom;
| |       |                                                                                                                                                                                                                                                                                                                                                                
| | (ix)  | the right to explore for, develop and
        produce all minerals elsewhere in the Bo Luo Nuo District; and                                                                                                                                                                                                                                                   
| |       |                                                                                                                                                                                                                                                                                                                                                                
| | (x)   | the option to expand the agreement to
        other districts in the Hebei Province.                                                                                                                                                                                                                                                                           

The joint venture property in Bo Luo Nuo District in China
  covers an area of 161 km2. The Bo Luo Nuo is connected with Beijing (four
  hours drive), the capital of China. Over ten gold zones exist in the district.
  A report completed in May 2002, which was a preliminary investigation report
  of the gold mines in Bo Luo Nuo property, China, indicates possibilities for
  three potential discoveries:

A large or middle-sized deposit with several small deposits
    Several middle-sized deposits.
    Numerous small deposits.


The recommendation in the report is trenching, drilling, geophysical
  survey sampling and underground engineering in the area of the 10 present gold
  zones. Based on the successful initial exploration program the objective for
  the CAD$500,000 exploration program will be to commence an underground mining
  operation producing up to 50 tons per day of ore from the existing operational
  gold recovery mill and increase production to 200 tons per day, for a budget
  of CAD$2,000,000, subject to the successful pilot mill program. Previous sampling
  returned assays of between 10  159 grams of gold per tonne in several
  of the major gold zones.

This seasons exploration program will consist of mapping and
  sampling several of the ten known gold zones including the contact belt of Archean
  metamorphic rock and the Mount Guang Ling granite intrusive, a potential large
  tonnage target for gold exploration.

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

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

The visit to the Hebei Province was supervised by Geologist
  Jim Yin, Ph.D. on behalf of the Company. Dr. Yin directed the sampling of the
  major known gold zones and platinum, palladium properties. A total of 118 samples
  were collected from 12 different known gold zones for gold and silver and 32
  samples were collected from the platinum, palladium deposit.

Assays are currently being completed by the Institute of the
  Beijing General Research Institute of Mining and Metallurgy. The next exploration
  stage recommended by Dr. Yin is to explore the higher grade gold zones, after
  receipt of the assays, in order to provide sufficient ore to feed the existing
  mill on the property. Dr. Jim Yin recommends the gold zones/veins mentioned
  in the above should be the main targets to follow up in the next exploration
  program to develop economic high grade gold reserves to feed the 50 ton a day

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mill. A drilling program will be announced this summer.

We have no current plans to pursue further activities in either
  the linux-technology business or the oil and gas business, although we plan
  to retain our current property interests based on the potential that they may
  have some value in the future. The Company will be focused on developing its
  gold properties in B.C., Alaska and China.

ITEM 5.           OPERATING
  AND FINANCIAL REVIEW AND PROSPECTS

The following discussion should be read in conjunction with
  the Consolidated Financial Statements and Notes thereto included elsewhere herein.
  The Consolidated Financial Statements have been prepared in accordance with
  US GAAP.

A.           OPERATING
  RESULTS

Discontinued Operations

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

Continuing Operations

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

Administrative expenses in 2004 totaled $354,000as compared
  to $226,000 in 2003. The expenses increased from the prior year due to the increased
  activity of the Company. Office, rent and telephone totaled $65,000compared
  to $13,000 in 2003. Professional fees totaled $28,000 compared to $16,000 in
  2003. We also incurred an imputed interest charge of $23,000 compared to $90,500
  in 2003. Imputed interest at 15% was charged to operations based on the advances
  from related parties and treated as donated capital. This amount decreased during
  3004 due to the settlement of debt in 2003. Filing and regulatory expenses increased
  due to increased reporting activities. Consulting and subcontract expenses increased
  to $174,000 in 2004 from $17,000 in 2003. This increase was due to a payment
  of $100,000 to Barry Clarke and a payment of $30,000 to Capital Research for
  financing consulting.

In 2003 we recorded an option payment of $80,000 which represented
  the 200,000 shares we received pursuant to the joint venture agreement with
  Teryl Resources Corp. We paid $122,000 for mining acquisitions and related exploration
  work as compared to $4,000 in 2003. In 2003 we issued 3,000,000 shares to purchase
  a license from Mailprotek.com. The license value was valued at $238,000 but
  Mailprotek.com’s were $25,000 which resulted in a deemed dividend of $213,800.

B.           LIQUIDITY
  AND CAPITAL RESOURCES

Liquidity and Capital Resources

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

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

- 24 -

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from revenues which will sustain our ongoing operations.

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

Liquidity

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

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

During 2004, we spent $333,000 of these funds on operating
  activities as discussed above under Results of Operation for the Year Ended
  February 29, 2004 as compared to $144,000 the Year Ended February 28, 2003.

Our cash position has increased by $141,000 to $152,000 and
  our working capital deficit, as at February 29, 2004 is $136,000.

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

Our aggregate research and development expenditures over the
  past three years ended February 28, 2002, February 28, 2003 and February 29,
  2004 amount to $63,729, $nil and $nil respectively. We do not hold any patents,
  trademarks or copyrights.

D.           TREND
  INFORMATION

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

E.           OFF-BALANCE
  SHEET ARRANGEMENTS

There are no known significant off-balance sheet arrangements
  other than those disclosed in this Form 20-F and in our audited consolidated
  financial statements for the year ended February 29, 2004.

F.           TABULAR
  DISCLOSURE OF CONTRACTUAL OBLIGATIONS

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

- 25 -

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|Property                                       | Year             | Option/Advance
      Royalty Payment | Expenditure
      Commitment | Number of Shares
|---------------------------------------------- | ---------------- | ------------------------------------ | ---------------------------- | ----------------
|                                               |                  |                                      |                              |                 
|TY, BC, Canada                                 | 2004             | 10,000                               | $ -                          | -               
|                                               | 2005             | -                                    | $ -                          | 50,000          
|                                               | 2006             |                                      |                              |                 
|ORO, BC, Canada                                | 2004             | -                                    | $ -                          | 25,000          
|                                               | 2005             | -                                    | $ -                          | -               
|                                               | 2006             |                                      |                              |                 
|BLN Gold Property, Hebei
      Province, China | 2004             | 10,000                               |                              | 50,000          
|                                               | 2005-
      2006 | 45,000                               | 500,000                      | 150,000         

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

G.           Safe
  Harbor

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

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

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

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

Forward-looking statements are subject to a variety of risks
  and uncertainties in addition to the risks referred to in Risk Factors
  under Item 3.D above.

ITEM 6.           DIRECTORS,
  SENIOR MANAGEMENT AND EMPLOYEES

- 26 -

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A.           DIRECTORS,
  SENIOR MANAGEMENT AND EMPLOYEES

As of February 29, 2004, our Board of Directors consisted
  of four Directors, two of whom are independent (or outside) non-executive
  Directors. The following table provides certain information about the members
  of our Board of Directors as of February 29, 2004.

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

John G. Robertson. Mr. Robertson is the Chairman of
  the Board, CEO and founder of the Company and a Director of the Company since
  its inception. Mr. Robertson has been the Chairman, President and Chief Executive
  Officer of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
  board, since July 1992, a U.S. public company engaged in the development of
  a rotary engine/compressor (Rand Cam Engine) and hydrogen separator
  technology. Since October 1984 Mr. Robertson has been President and a Director
  of Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture
  Exchange that has financed the research on the Rand Cam Engine since 1986. REGI
  U.S. is ultimately controlled by Reg Technologies Inc. Mr. Robertson has been
  the President and Principal Executive Officer and a Director of IAS Communications,
  Inc. since its formation in December 1994, a U.S. public company which is developing
  and marketing proprietary antenna technology. Since June 1997 Mr. Robertson
  has been President, Principal Executive Officer and a Director of Information
  Highway.com, Inc., a Florida corporation. Mr. Robertson is also the President
  and founder of Teryl Resources Corp., a British Columbia company trading on
  the TSX Venture Exchange involved in mineral exploration. Since May 1977 Mr.
  Robertson has been President and a member of the Board of Directors of SMR Investments
  Ltd., a private British Columbia corporation engaged in management of public
  companies. Mr. Robertson is also the President and Director of the following
  private companies: JGR Petroleum, Inc., BlueCrow Internet Co. Ltd., 394754 B.C.
  Ltd., dba SOVO Computer Centre, Pavlik Travel Services Ltd., World Tel-Internet
  (Toronto) Ltd., International Diamond Syndicate Ltd., Argon Investment Corporation,
  and Airstream Communications, Inc. Mr. Robertson is a citizen and resident of
  Canada.

Jennifer Lorette - Ms. Lorette has held several positions
  with the Company since June 1994. Also, since June 1994 Ms. Lorette, has been
  Vice President of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
  board. Since April 1994 she has also been Vice President of Administration for
  Reg Technologies, Inc., a British Columbia corporation listed on the TSX Venture
  Exchange. REGI U.S. is ultimately controlled by Reg Technologies Inc. Since
  June 1997 Ms. Lorette has been Secretary/Treasurer, and a Director of Information
  Highway.com, Inc., a Florida corporation. Ms. Lorette is a founder, and has
  been Secretary/Treasurer of IAS Communications, Inc. since February 1995. Ms.
  Lorette is a citizen and resident of Canada.

Susanne Robertson - Ms. Robertson was elected a director
  of the Company in August 2001. She is also a director of Teryl Resources Corp.
  and owns SMR Investments Ltd. a company providing management services to public
  companies. Ms. Robertson is a citizen and resident of Canada.

- 27 -

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James Vandeberg  Mr. Vandeberg became a Director
  August 2002. Mr. Vandeberg is an attorney in Sammamish, Washington. He has served
  as our legal counsel since 1996. Mr. Vandeberg's practice focuses on corporate
  finance, with an emphasis on securities and acquisitions. Mr. Vandeberg was
  previously general counsel and secretary of two NYSE companies and is a director
  of Information-Highway.com, Inc., a Florida corporation traded on the OTC bulletin
  board. He is also a director of IAS Communications, Inc. an Oregon corporation
  traded on the OTC bulletin board since November 1998. Mr. Vandeberg is also
  a director of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin
  board. Mr. Vandeberg is also a director of Cyber Merchants Exchange, Inc. since
  May 2001. He is a member and former director of the American Society of Corporate
  Secretaries. He became a member of the Washington Bar Association in 1969 and
  of the California Bar Association in 1973. Mr. Vandeberg graduated cum laude
  from the University of Washington with a Bachelor of Arts degree in accounting
  in 1966, and from New York University School of Law in 1969, where he was a
  Root-Tilden Scholar.

B.           COMPENSATION

For the fiscal year ended February 29, 2004 the Company and
  its subsidiaries paid $48,000 in compensation to directors and officers as a
  group. This amount was not paid, but was accrued.

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

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

During the fiscal year ended February 29, 2004 stock options
  were granted on a total of 350,000 common shares pursuant to stock option plans,
  150,000 options were exercised and no options were cancelled (see Note 7(g)
  to our Financial Statements).

Total options currently exercisable at the date of this 20-F
  are 2,600,000. Of those, 2,075000 are exercisable at $0.10 expiring on dates
  ranging from October 30, 2005 to February 25, 2008. 300,000 options are exercisable
  at $0.21 and expire on April 9, 2006, and 225,000 are exercisable at $0.30 expiring
  between June 9, 2006 and April 22, 2009. Please see Note 8 to the financial
  statements.

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

|NAME OF OPTIONEE       | NUMBER OF OPTIONS | EXERCISE PRICE(1) | EXPIRY DATE      
|---------------------- | ----------------- | ----------------- | -----------------
|John G. Robertson      | 1,000,000         | $0.10             | February 21, 2008
|Jennifer Lorette       | 150,000           | $0.10             | February 21, 2008
|James Vandeberg        | 100,000           | $0.10             | February 21, 2008
|Susanne Robertson      | 300,000           | $0.10             | February 25, 2008
|TOTAL HELD AS A GROUP: | 1,650,000         |                   |                  

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

- 28 -

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|Name of Optionee   | No. of Optioned Shares | Exercise Price Per Share | Expiry Date       
|------------------ | ---------------------- | ------------------------ | ------------------
|Monique Van Oord   | 25,000                 | $0.10 US                 | February 21, 2008 
|Bruce Bragagnolo   | 75,000                 | $0.10 US                 | February 25, 2008 
|James Kerr         | 100,000                | $0.10 US                 | February 25, 2008 
|Arnie Winrob       | 37,500                 | $0.10 US                 | February 25, 2008 
|James Kerr         | 100,000                | $0.10 US                 | September 17, 2008
|Peter Zihlmann     | 187,500                | $0.10 US                 | October 20, 2008  
|Jillian Thow       | 300,000                | US$0.21                  | April 19, 2006    
|Monique van Oord   | 50,000                 | US$0.30                  | April 22, 2009    
|Arnie Winrob       | 25,000                 | US$0.30                  | April 22, 2009    
|Wazmakay Charlwood | 150,000                | US$0.30                  | June 9, 2006      
|TOTAL:             | 1,050,000              |                          |                   

C.           BOARD
  PRACTICES

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

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

D.           EMPLOYEES

As of February 29, 2004, we employed no employees. Our legal,
  accounting, marketing and administrative functions are contracted out to consultants.

Our employees do not belong to any labor unions. We have not
  been subject to any strikes or other labor disturbances that have interfered
  with our operations.

E.           SHARE
  OWNERSHIP

The following table sets forth the ownership of our common
  shares by our Directors and Officers as at June 30, 2004:

|Shareholder       | Number of shares issued
      and outstanding | Percentage ownership (1)
|----------------- | --------------------------------------------- | ------------------------
|John G. Robertson | 1,318,138(2)                                  | 2.19%                   
|Jennifer Lorette  | 258,100(3)                                    | *                       
|James Vandeberg   | 100,000(4)                                    | *                       
|Susanne Robertson | 8,446,963                                     | 14.01%                  

- 29 -

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| | (1) | as at June 30, 2004, there were 60,383,413
        issued and outstanding common shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (2) | includes 8,482 shares registered in
        the name of Access Information Services, Ltd., a corporation controlled
        by the Robertson Family Trust, and 1,000,000 options that are currently
        exercisable. Mr. Robertson is one of three trustees of the Robertson Family
        Trust, which acts by the majority vote of the three trustees. Mr. Robertson
        disclaims beneficial ownership of the shares owned or controlled by the
        Robertson Family Trust. Mr. Robertson's address is the same as our address.
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (3) | Includes 150,000 options that are currently
        exercisable. Ms. Lorette's address is the same as our address.                                                                                                                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (4) | Includes 100,000 options that are currently
        exercisable. Mr. Vandeberg's address is 22344 NE 31st Street, Sammamish,
        WA 98074.                                                                                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (5) | includes 7,565,713 shares registered
        in the name of SMR Investments Ltd., and 300,000 options that are currently
        exercisable. Ms. Robertson's address is the same as the Companys.                                                                                                                                                                                                                                                                                                                                            

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

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

ITEM 7.           MAJOR
  SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A.           MAJOR
  SHAREHOLDERS.

To the best of our knowledge, we are not indirectly owned
  or controlled by any other corporation or foreign government.

As of June 30, 2004, 60,283,413 Common Shares were outstanding.
  At such date, we are aware of Sue Robertson, our director, owner more than 10%
  of our issued and outstanding common shares.

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

B.           RELATED
  PARTY TRANSACTIONS.

We are a party to a management services agreement with SMR
  Investment Ltd. (SMR) under which SMR incurred management fees of
  $30,000 in each of fiscal years 2004, 2003 and 2002, and rent of $6,000 in each
  of fiscal years 2004, 2003 and 2002. SMR is a private company owned by Susanne
  M. Robertson, the wife of John G. Robertson.

We paid a director's fee of $12,000 to John G. Robertson,
  our Chairman of the Board, during each of fiscal years 2004, 2003 and 2002.

We had related party advances outstanding of $230,630 at the
  February 2004 year-end, compared to $52,056 at the end of our previous fiscal
  year. These were unsecured, non-interest bearing and with no fixed terms of
  repayment.

We issued shares for the repayment of debt during the year
  ended February 28, 2003. Please refer to Note 8A of the financial statements.

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

C.           INTERESTS
  OF EXPERTS AND COUNSEL.

Not applicable.

- 30 -

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ITEM 8.           FINANCIAL
  INFORMATION

A.           CONSOLIDATED
  STATEMENTS AND OTHER FINANCIAL INFORMATION

See page F-1 to F-13 following Item 19.

Legal Proceedings

We are not a party to any material legal proceedings.

Dividend Distribution Policy

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

B.           SIGNIFICANT
  CHANGES

None.

ITEM 9.           THE
  OFFER AND LISTING

Not applicable, except for Item 9.A.4 and Item 9.C.

Our shares traded solely on the Alberta Stock Exchange (the
  "ASE") between November, 1995 and December 14, 1999, at which time it voluntarily
  delisted from the ASE. The Company's stock currently trades on the Over the
  Counter Bulletin Board under the symbol LNXGF.

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

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

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

|Period                       | High   | Low    | Close  | Volume    
|---------------------------- | ------ | ------ | ------ | ----------
|2005 
      Q1      5/31/04* | $0.35  | $0.20  | $0.21  | 12,924,713
|2004Q1      5/31/03 *        | $0.08  | $0.04  | $0.05  | 5,055,400 
|Q2      8/31/03 *            | $0.10  | $0.04  | $0.077 | 9,792,900 
|Q3      11/30/03*            | $0.28  | $0.053 | $0.265 | 26,849,789
|Q4      2/29/04*             | $0.45  | $0.20  | $0.30  | 32,438,989
|2003                         |        |        |        |           
|Q1      5/31/02 *            | $0.09  | $0.012 | $0.038 | 15,517,700
|Q2      8/31/02 *            | $0.05  | $0.011 | $0.027 | 6,405,600 
|Q3      11/30/02*            | $0.034 | $0.011 | $0.022 | 3,648,100 
|Q4      2/29/03*             | $0.094 | $0.015 | $0.07  | 9,997,700 

___________________________
  *Prices in US$

- 31 -

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(Information provided by The Over The Counter Bulletin Board.
  The quotations reflect inter-dealer prices, without retail mark-up, markdown,
  or commission and may not represent actual transactions.)

The following table shows the high and low closing prices
  of our stock traded on the OTC Bulletin Board during the most recent six months,
  for each month as follows:

|Month          | High*  | Low* 
|-------------- | ------ | -----
|2004, June     | $0.22  | $0.15
|2004, May      | $0.29  | $0.20
|2004, April    | $0.35  | $0.23
|2004, March    | $0.32  | $0.22
|2004, February | $0.39  | $0.27
|2004, January  | $0.455 | $0.25

___________________________

* All prices are in U.S. dollars.

(Information provided by The Over The Counter Bulletin Board.
  The quotations reflect inter-dealer prices, without retail mark-up, markdown,
  or commission and may not represent actual transactions.)

ITEM 10.           ADDITIONAL
  INFORMATION

A.           SHARE
  CAPITAL

Not applicable.

B.           MEMORANDUM
  AND ARTICLES OF ASSOCIATION

The Memorandum and Articles of the Company are incorporated
  by reference to the information in our registration statement on Form 20-F filed
  with the Securities and Exchange Commission, in Washington, D.C. on June 4,
  1999, which became effective August 3, 1999, to which our Articles of Incorporation
  and Memorandum were filed as exhibits.

C.           MATERIAL
  CONTRACTS

During the past two years ended February 29, 2004 and February
  28, 2003, we entered into the following material contracts.

Gisbex Listing Agreement

In July, 2003 we applied for a listing on the GISBeX and announced
  in August 2003 the commencement of trading.

The listing on the Global Internet Stock Brokerage Exchange
  (GISEBeX) provides a second trading market for the Companys shares. The
  new listing increases Linuxs exposure to international markets and access
  to investment capital worldwide.

Property Option Agreement  Peter Tse

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

- 32 -

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

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

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

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

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

Edward Skoda Purchase Agreement  ORO Mineral Claims

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

As consideration for this transaction Linux paid Mr. Skoda
  CDN$10,000 and issued 75,000 shares for completion of Phases I and II and will
  issue a further 25,000 shares upon completion of Phase III, but in any event,
  no later than June 30, 2004.

Edward Skoda Purchase Agreement  TY Gold Property

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

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

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

Teryl Agreement

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

- 33 -

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Fish Creek Joint Venture Agreement

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

D.           EXCHANGE
  CONTROLS.

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

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

E.           TAXATION.

Withholding

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

Capital Gains

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

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

F.           DIVIDENDS
  AND PAYING AGENTS

Not applicable.

- 34 -

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G.           STATEMENT
  BY EXPERTS.

Not applicable.

H.           DOCUMENTS
  ON DISPLAY.

We filed a registration statement on Form 20-F filed the Securities
  and Exchange Commission in Washington, D.C. (Registration No. 000-30084) on
  June 4, 1999, which became effective August 3, 1999. The Registration Statement
  contains exhibits and schedules. Any statement in this annual report about any
  of our contracts or other documents is not necessarily complete. If the contract
  or document is filed as an exhibit to the Registration Statement, the contract
  or document is deemed to modify the description contained in this annual report.
  You must review the exhibits themselves for a complete description of the contract
  or documents.

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

I.           SUBSIDIARY
  INFORMATION.

We hold a 100% interest in LinuxWizardry, Inc., a private
  Florida corporation which is currently inactive.

ITEM 11.           QUANTITATIVE
  AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

In June 1998, the Financial Accounting Standards Board issued
  SFAS No. 133. "Accounting For Derivative Instruments and Hedging Activities."
  This statement establishes accounting and reporting standards for derivative
  instruments, including certain derivative instruments embedded in other contracts,
  and for hedging activities. SFAS No. 133 was effective for our fiscal year beginning
  March 1, 2000. The Company believes that it does not have any material exposure
  to interest or commodity risks. The Company does not own any derivative instruments,
  does not engage in any hedging transactions and does not have any outstanding
  long-term debt. Because we are not involved in any activities covered by SFAS
  No. 133, the adoption of SFAS No. 133 is not expected to have a material effect
  on our financial position or results of operations.

ITEM 12.           DESCRIPTION
  OF SECURITIES OTHER THAN EQUITY SECURITIES

Not applicable.

- 35 -

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PART II

ITEM 13.           DEFAULTS,
  DIVIDEND ARREARAGES AND DELIQUENCIES

None.

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

A.           MATERIAL
  MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS

None.

B.           USE
  OF PROCEEDS.

Not applicable

ITEM 15.           CONTROLS
  AND PROCEDURES

In compliance with Section 302 of the United States Sarbanes-Oxley
  Act of 2002 and the United States Securities Exchange Act of 1934, the Company
  evaluated the effectiveness of the design and operation of the Companys
  disclosure controls and procedures as of February 29, 2004, in order to ensure
  that all material information, both financial and non-financial, required to
  be disclosed in the Linux Annual Report on Form 20-F for the year ended February
  29, 2004 was identified, recorded, processed, summarized and reported to the
  Companys senior management within the required timeframe. This evaluation
  was undertaken under the supervision and with the participation of the Companys
  senior management, including the Companys Chief Executive Officer and
  Chief Financial Officer. Based on that evaluation, it was concluded that the
  Companys disclosure controls and procedures were effective as of February
  29, 2004, and that subsequently there have been no significant changes in the
  Companys internal controls or in other factors that could affect those
  controls.

The Company will review and evaluate the design and effectiveness
  of disclosure controls and procedures on an on-going basis and continue to improve
  controls and procedures over time and correct any deficiencies that may be discovered
  in the future. The Companys objective is to ensure that its senior management
  has timely access to all material financial and non-financial information concerning
  the business. Whilst the Company believes that the present design of the disclosure
  controls and procedures is effective to achieve this objective, future events
  affecting the business may cause the Company to significantly modify the disclosure
  controls and procedures. Further, in designing and evaluating the disclosure
  controls and procedures, the Company recognized that any controls and procedures,
  no matter how well designed and operated, can provide only reasonable assurance
  of achieving the desired controls objectives, and management necessarily was
  required to apply its judgment in evaluating the cost-benefit relationship of
  possible controls and procedures.

ITEM 16.           [Reserved]

ITEM 16A.           Audit
  Committee Financial Expert

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

Moreover, the audit committee is comprised of seasoned business
  professionals, whereby one member has over 25 years of experience in the investment
  business and is a board member of several corporations.

- 36 -

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

ITEM 16B.           Code
  of Ethics

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

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

ITEM 16C.           Principal
  Accountant Fees and Services

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

(Stated in terms of Canadian dollars)

|                          | 2004        | 2003       
|------------------------- | ----------- | -----------
|Type of Services Rendered | Fiscal Year | Fiscal Year
|                          | (CAD$)      | (CAD$)     

|(a)    Audit Fees                                                | $16,000 | $16,850
|---------------------------------------------------------------- | ------- | -------
|                                                                 |         |        
|(b)   Audit-Related Fees         (eg.
      review of Form 20-F) | $nil    | $nil   
|                                                                 |         |        
|(c)    Tax Fees                                                  | $nil    | $nil   
|                                                                 |         |        
|(d)    All Other Fees                                            | $nil    | $nil   

PART III

ITEM 17.           
  FINANCIAL STATEMENTS

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

ITEM 18.           FINANCIAL
  STATEMENTS

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

Our consolidated financial statements are stated in Canadian
  Dollars (CDN$) and are prepared in accordance with U.S. Generally Accepted Accounting
  Principles (GAAP). The consolidated financial statements as required under Item
  18 are included immediately following the text of this Report.

ITEM 19.           EXHIBITS

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

Index to Consolidated Financial Statements

- 37 -

---

Independent Auditors Report 
  Consolidated Balance Sheets 
  Consolidated Statements of Loss and Deficit 
  Consolidated Statements of Cash Flows 
  Notes to the Consolidated Financial Statements

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

|Number | Description                                                                                                                                                                                                                                                                                                                                                                             |    
|------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|       |                                                                                                                                                                                                                                                                                                                                                                                         |    
|1.1    | Memorandum and articles
        of incorporation with bylaws dated February 27, 1979                                                                                                                                                                                                                                                                                                    | (1)
|1.2    | Altered memorandum and
        special resolution dated September 20, 1993 increasing the authorized
        capital to 100,000,000 common shares from 90,000,000 and redesignating
        Class A Common voting shares without par value as common shares
        without par value and redesignating Class B Common non-voting
        shares as common shares without par value | (1)
|1.3    | Altered memorandum and
        special resolution dated March 15, 2000 changing the name of the Company
        from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc.                                                                                                                                                                                                          |    
|1.4    | Altered memorandum and
        special resolution dated February 20, 2003 changing the name of the Company
        from LinuxWizardry Systems, Inc. to Linux Gold Corp.                                                                                                                                                                                                                 | (5)
|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)
|12.1   | Certification
        pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002 (John G. Robertson)                                                                                                                                                                                                           | (6)
|12.2   | Certification
        pursuant to Title 18, United States Code, Section 1350 as adopted pursuant
        to Section 302 of the Sarbanes-Oxley Act of 2002 (James Vandeberg)                                                                                                                                                                                                             | (6)

- 38 -

---

|13.1 | Certification pursuant
      to Title 18, United States Code, Section 1350 as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 (John G. Robertson) | (6)
|---- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---
|13.2 | Certification pursuant
      to Title 18, United States Code, Section 1350 as adopted pursuant to Section
      906 of the Sarbanes-Oxley Act of 2002 (James Vandeberg)   | (6)
|14.1 | Consent of Independent
      Auditors                                                                                                                                     | (6)

| | (1) | incorporated by reference to the Registrants Registration
      Statement on Form 20-F filed on June 4, 1999 with the US Securities and
      Exchange Commission
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) | incorporated by reference to the Registrants Amendment
      No. 1 to the Registration Statement dated July 22, 1999                                             
| | (3) | incorporated by reference to the Registrants Annual
      Report on Form 20-F filed on September 14, 2000                                                        
| | (4) | incorporated by reference to the Registrants Annual
      Report on Form 20-F filed on July 14, 2001                                                             
| | (5) | incorporated by reference to the Registrants Annual
      Report on Form 20-F filed on August 25, 2003                                                           
| | (6) | attached hereto.                                                                                                                                                  

- 39 -

---

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: July 15, 2004 | By: | /s/
      John G. Robertson   
|-------------------- | --- | ------------------------------
|                     |     | John G. Robertson             
|                     |     | Chairman of the Board/Director

- 40 -

---



LINUX GOLD CORP.

CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004 
  (Stated in Canadian Dollars)



---

Independent Auditors'
          Report
        To the Stockholders and Board of Directors of 
          Linux Gold Corp.
        We have audited the accompanying consolidated balance
          sheets of Linux Gold Corp. as at February 29, 2004 and February 28,
          2003 and the consolidated statements of operations and deficit, and
          cash flows for the years then ended. These consolidated financial statements
          are the responsibility of the Company's management. Our responsibility
          is to express an opinion on these consolidated financial statements
          based on our audits.
        We conducted our audits in accordance with the standards
          of the Public Company Accounting Oversight Board in the United States
          of America and generally accepted auditing standards used in Canada.
          Those standards require that we plan and perform an audit to obtain
          reasonable assurance whether the financial statements are free of material
          misstatement. An audit includes examining, on a test basis, evidence
          supporting the amounts and disclosures in the financial statements.
          An audit also includes assessing the accounting principles used and
          significant estimates made by management as well as evaluating the overall
          financial statement presentation. We believe that our audits provide
          a reasonable basis for our opinion.
        In our opinion, these consolidated financial statements
          present fairly, in all material respects, the financial position of
          the Company as at February 29, 2004 and February 28, 2003 and the results
          of its operations and its cash flows for the years then ended in accordance
          with generally accepted accounting principles used in the United States.
          As required by the British Columbia Company Act we report that, in our
          opinion, these principles have been applied on a consistent basis.
        The accompanying consolidated financial statements
          have been prepared assuming the Company will continue as a going concern.
          As discussed in Note 1 to the consolidated financial statements, the
          Company has not generated profitable operations since inception. These
          factors raise substantial doubt about the Company's ability to continue
          as a going concern. Management's plans in regard to these matters are
          also discussed in Note 1. These consolidated financial statements do
          not include any adjustments, which might result from the outcome of
          these uncertainties.
        
        /s/ "Manning Elliott"
        
        CHARTERED ACCOUNTANTS
        Vancouver, Canada
        May 26, 2004


---

LINUX GOLD CORP.

CONSOLIDATED BALANCE SHEETS(Stated in Canadian Dollars)

|                                                         |   | February 29, |   |   | February 28, |  
|-------------------------------------------------------- | - | ------------ | - | - | ------------ | -
|                                                         |   | 2004         |   |   | 2003         |  
|                                                         |   |              |   |   |              |  
|ASSETS                                                   |   |              |   |   |              |  
|Current                                                  |   |              |   |   |              |  
|Cash and cash equivalents                                | $ | 151,832      |   | $ | 11,134       |  
|Amounts receivable                                       |   | 7,569        |   |   | 1,583        |  
|Marketable securities (Note 3(a))                        |   | 80,000       |   |   | 80,000       |  
|Prepaid expenses and deposits                            |   | 33,209       |   |   |             |  
|                                                         |   | 272,610      |   |   | 92,717       |  
|Equipment                                                |   | 6,000        |   |   |             |  
|Mineral Properties(Notes 3 and 5(b))                     |   |             |   |   | 2            |  
|                                                         |   |              |   |   |              |  
|                                                         | $ | 278,610      |   | $ | 92,719       |  
|                                                         |   |              |   |   |              |  
|LIABILITIES                                              |   |              |   |   |              |  
|Current                                                  |   |              |   |   |              |  
|Accounts payable (Note 4)                                | $ | 115,146      |   | $ | 538,778      |  
|Accrued liabilities                                      |   | 14,758       |   |   | 16,118       |  
|Accrued liabilities to related
      parties (Note 5(b)) |   | 48,000       |   |   |             |  
|Due to related parties (Note 5(a))                       |   | 230,630      |   |   | 52,056       |  
|                                                         |   | 408,534      |   |   | 606,952      |  
|                                                         |   |              |   |   |              |  
|STOCKHOLDERS' DEFICIT                                    |   |              |   |   |              |  
|                                                         |   |              |   |   |              |  
|Common Stock(Note 7)                                     |   |              |   |   |              |  
|Authorized:                                              |   |              |   |   |              |  
|200,000,000
      common shares without par value        |   |              |   |   |              |  
|                                                         |   |              |   |   |              |  
|Issued:                                                  |   |              |   |   |              |  
|60,283,413
      common shares at February 29, 2004 and  |   |              |   |   |              |  
|57,458,413
      at February 28, 2003                    |   | 7,091,095    |   |   | 6,653,662    |  
|                                                         |   |              |   |   |              |  
|Donated capital (Note 5(a))                              |   | 228,460      |   |   | 205,500      |  
|                                                         |   |              |   |   |              |  
|Additional paid-in capital (Note
      7(h))             |   | 101,507      |   |   | 71,357       |  
|                                                         |   | 7,421,062    |   |   | 6,930,519    |  
|Deficit                                                  |   | (7,550,986   | ) |   | (7,444,752   | )
|                                                         |   | (129,924     | ) |   | (514,233     | )
|                                                         |   |              |   |   |              |  
|                                                         | $ | 278,610      |   | $ | 92,719       |  

|Approved by the Directors:   |  |                     
|---------------------------- |  | --------------------
|                             |  |                     
|/s/ J. Robertson             |  | /s/ J. Lorette      
|J. Robertson,
      Director |  | J. Lorette, Director

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

---

LINUX GOLD CORP.

CONSOLIDATED STATEMENTS OF LOSS AND DEFICIT (Stated in Canadian Dollars)

|                                                         |   | Years Ended  |  
|-------------------------------------------------------- | - | ------------ | -
|                                                         |   | February 29, |  
|                                                         |   | 2004         |  
|                                                         |   |              |  
|General And Administrative Expenses                      |   |              |  
|Amortization of property,
      plant and equipment      | $ |             |  
|Amortization of discount
      on convertible debentures |   | 30,150       |  
|Consulting and subcontract                               |   | 173,555      |  
|Filing and regulatory
      fees                         |   | 26,113       |  
|Foreign exchange                                         |   | (38,254      | )
|Imputed interest
      (Note 5(a))                       |   | 22,960       |  
|Investor relations                                       |   |             |  
|Management and directors
      fees (Note 5(b))          |   | 43,500       |  
|Office, rent and
      telephone (Note 5(b))             |   | 64,839       |  
|Professional fees                                        |   | 27,662       |  
|Travel                                                   |   | 3,902        |  
|Write down of license
      (Note 5(b)(iv))              |   |             |  
|Less: Interest income                                    |   | (624         | )
|                                                         |   | 353,803      |  
|Natural Resources                                        |   |              |  
|Exploration, drilling
      and annual lease costs       |   | 61,298       |  
|Mineral acquisition
      costs                          |   | 60,346       |  
|Less: Option payments
      (Note 3(a))                  |   |             |  
|                                                         |   | 121,644      |  
|                                                         |   |              |  
|Other                                                    |   |              |  
|Write-off of subsidiary's
      accounts payable         |   | (369,213     | )
|                                                         |   |              |  
|Net Loss For The Year                                    |   | (106,234     | )
|                                                         |   |              |  
|Deficit, Beginning Of Year                               |   | (7,444,752   | )
|                                                         |   |              |  
|Deemed Dividend(Note 5(b)(iv))                           |   |             |  
|                                                         |   |              |  
|Deficit, End Of Year                                     | $ | (7,550,986   | )
|                                                         |   |              |  
|Basic And Diluted Loss Per Share                         | $ |             |  
|                                                         |   |              |  
|Weighted Average Number Of Shares Outstanding            |   | 58,664,000   |  

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

---

LINUX GOLD CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Stated in Canadian Dollars)

|                                                         |   | Years Ended  |  
|-------------------------------------------------------- | - | ------------ | -
|                                                         |   | February 29, |  
|                                                         |   | 2004         |  
|                                                         |   |              |  
|Cash Flows To Operating Activities                       |   |              |  
|Net loss for the year                                    | $ | (106,234     | )
|                                                         |   |              |  
|Adjustments To Reconcile Net Loss To Cash                |   |              |  
|Amortization of property, plant
      and equipment      |   |             |  
|Amortization of discount on convertible
      debentures |   | 30,150       |  
|Imputed interest                                         |   | 22,960       |  
|Shares issued for services                               |   | 100,000      |  
|Shares received for option payment                       |   |             |  
|Shares issued for mineral properties                     |   | 17,500       |  
|License written off                                      |   |             |  
|Shares issued for settlement of
      rent obligation    |   | 19,200       |  
|Write-off of subsidiary's accounts
      payable         |   | (369,213     | )
|                                                         |   | (285,637     | )
|Change in non-cash working capital
      items           |   | (46,972      | )
|                                                         |   |              |  
|                                                         |   | (332,609     | )
|Cash Flows To Investing Activities                       |   |              |  
|Additions to equipment                                   |   | (6,000       | )
|                                                         |   |              |  
|Cash Flows From Financing Activities                     |   |              |  
|Advances from related parties                            |   | 178,574      |  
|Capital stock issued                                     |   | 300,733      |  
|                                                         |   | 479,307      |  
|Increase In Cash And Cash Equivalents During The Year    |   | 140,698      |  
|                                                         |   |              |  
|Cash And Cash Equivalents, Beginning Of Year             |   | 11,134       |  
|                                                         |   |              |  
|Cash And Cash Equivalents, End Of Year                   | $ | 151,832      |  

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES:

|     |                                                                                                                                                                          
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|i)   | 175,000 common shares were issued with a fair value
        of $17,500 as part consideration under the mineral property option agreements
        described in Note 3(c).
|ii)  | 1,000,000 common shares were issued with a fair value of $100,000 pursuant
      to a consulting agreement.                                                              
|iii) | 200,000 common shares were issued with a fair value of $19,200 in settlement
      of a previous rental agreement.                                                       
|    

|    |                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------
|i)  | 19,295,567 shares were issued with a fair value of $964,778 to settle
      debt.                             
|ii) | 3,000,000 shares were issued with a fair value of $238,800 to purchase
      a license described in Note 5(b).

|                  |  |   |  |  
|----------------- |  | - |  | -
|Income taxes paid |  |  |  | 
|Interest paid     |  |  |  | 
|                  |  |   |  |  

(The Accompanying Notes are an Integral Part of These Financial
  Statements)

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|1. | NATURE OF OPERATIONS AND CONTINUANCE
        OF BUSINESS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | The Company was incorporated February
        27, 1979 in Canada under the British Columbia Company Act and was extraprovincially
        registered in the Province of Alberta on October 12, 1995.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|  
|   | The Company voluntarily delisted from
        the Canadian Venture Exchange on December 14, 1999. The Company's stock
        currently trades on the Over the Counter Bulletin Board in the United
        States under the symbol "LNXWF".                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | On February 20, 2003, the shareholders
        approved a change of name to Linux Gold Corp. and increased the authorized
        share capital to 200,000,000 common shares without par value. The Company's
        principal business is the acquisition and exploration of various gold
        mineral resources. The Company is confining its activities to areas from
        which gold has been previously produced or to properties, which are contiguous
        to such areas and have demonstrated mineralization.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | The Company is currently in the exploration
        stage and equity financing is required to provide working capital and
        to meet exploration commitments. As a result of the uncertainty that is
        typical in an exploration stage company, mounting losses, and the severe
        working capital deficiency, there is substantial doubt about the company's
        ability to continue as going concern. The continuation of the Company
        as a going concern is dependent upon the continued financial support from
        its shareholders, the ability of the Company to obtain necessary equity
        financing to continue operations and to determine the existence, discovery
        and successful exploitation of economically recoverable reserves in its
        resource properties, confirmation of the Company's interests in the underlying
        properties, and the attainment of profitable operations. These financial
        statements have been prepared on a going concern basis.
|  
|2. | SIGNIFICANT ACCOUNTING POLICIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | a)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | c)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | ------------------------------------------
|  
|   | d)                                        
|  
|   |                                           
|  
|   | e)                                        
|  
|   |                                           
|  
|   | f)                                        
|  
|   |                                           
|  
|   | g)                                        
|  
|   |                                           
|  
|   | h)                                        
|  
|   |                                           

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | ------------------------------------------
|  
|   | i)                                        
|  
|   |                                           
|  
|   | j)                                        
|  
|   |                                           
|  
|   | k)                                        
|  
|   |                                           
|  
|   | l)                                        
|  
|   |                                           
|  
|   |                                           



|YEAR OF |  |   |           |  | YEAR OF   
|------- |  | - | --------- |  | ----------
|LOSS    |  |   | AMOUNT    |  | EXPIRATION
|        |  |   |           |  |           
|1998    |  | $ | 99,000    |  | 2005      
|1999    |  |   | 114,000   |  | 2006      
|2000    |  |   | 164,000   |  | 2007      
|2001    |  |   | 1,223,000 |  | 2008      
|2002    |  |   | 239,000   |  | 2009      
|2003    |  |   | 28,000    |  | 2010      
|2004    |  |   | 347,000   |  | 2011      
|        |  |   |           |  |           
|        |  | $ | 2,214,000 |  |           

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

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | ------------------------------------------
|  
|   | l)                                        
|  
|   |                                           

| |  |                        |   | February 29, |   |   | February 28, |  
| |  | ---------------------- | - | ------------ | - | - | ------------ | -
| |  |                        |   | 2004         |   |   | 2003         |  
| |  |                        |   |              |   |   |              |  
| |  | Non-capital loss       | $ | 347,000      |   | $ | 28,000       |  
| |  | Statutory tax rate     |   | 34%          |   |   | 34%          |  
| |  |                        |   |              |   |   |              |  
| |  | Effective tax rate     | $ |             |   |   |             |  
| |  | Deferred tax asset     |   | 118,000      |   |   | 9,000        |  
| |  | Valuation allowance    |   | (118,000     | ) |   | (9,000       | )
| |  |                        |   |              |   |   |              |  
| |  | Net deferred tax asset | $ |             |   | $ |             |  



| |    | The Company also has a Canadian net capital loss
        of $2,773,000, which is a result of writing off its investment in its
        US subsidiary. This loss can be used to offset future years taxable gains
        and has no expiry.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | The Company has US net operating losses of approximately
        US$1,320,000. These losses expire between 2015 and 2017 and can only be
        used against taxable US income.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | m) | Comprehensive Loss                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |    | SFAS No. 130, "Reporting Comprehensive Income,"
        establishes standards for the reporting and display of comprehensive loss
        and its components in the financial statements. As at February 29, 2004,
        the Company has no items that represent a comprehensive loss and, therefore,
        has not included a schedule of comprehensive loss in the financial statements.                                                                                                                                                                                                                                                                                                                                                                                                   
|
| | n) | Equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |    | Equipment consists of computer equipment recorded
        at cost and will be amortized on a straight- line basis over a three year
        period once they are installed and operating in the new office premises.
        Refer to Note 8(c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | o) | Financial Instruments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |    | Financial instruments, which include cash, accounts
        payable, accrued liabilities, and due to related parties, were estimated
        to approximate their carrying values due to the immediate or short-term
        maturity of these financial instruments. The Company's operations are
        in Canada and China and virtually all of its assets and liabilities are
        giving rise to significant exposure to market risks from changes in foreign
        currency rates. The financial risk is the risk to the Company's operations
        that arise from fluctuations in foreign exchange rates and the degree
        of volatility of these rates. Currently, the Company does not use derivative
        instruments to reduce its exposure to foreign currency risk.

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|2. | SIGNIFICANT ACCOUNTING POLICIES(continued)
|-- | ------------------------------------------
|  
|   | p)                                        
|  
|   |                                           
|  
|3. | MINERAL PROPERTIES                        
|  
|   | a)                                        
|  
|   |                                           
|  
|   |                                           
|  
|   |                                           
|  
|   | b)                                        
|  
|   |                                           
|  
|   | c)                                        
|  
|   |                                           
|  
|   |                                           
|  
|   |                                           
|  
|   |                                           

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|3. | MINERAL PROPERTIES(continued)
|-- | -----------------------------
|  

| | c) | British Columbia Mineral Properties (continued)
      During the year, the Company staked an additional three
        mineral claims representing 35 units. The Company incurred acquisition
        costs of $32,844, which was charged to operations, as the property has
        no proven or probable reserves.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | ii)                                                                                                                                                                                                                                                                                                                
|
| |    |                                                                                                                                                                                                                                                                                                                    
|
| |    |                                                                                                                                                                                                                                                                                                                    
|
| |    |                                                                                                                                                                                                                                                                                                                    
|

| |    | During the year, the Company staked an
        additional mineral claim representing 5 units. The Company incurred acquisition
        costs of $17,500, which was charged to operations, as the property has
        no proven or probable reserves.                                                                                                                                                                                                                                                                                                                          
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |    | The President of the Company is the registered
        owner of the mineral properties. The Company is preparing a trust agreement
        stating that these mineral claims are held in trust on behalf of the Company.                                                                                                                                                                                                                                                                                                                                                       
|
| | d) | China Mineral Property                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |    | On January 20, 2004 the Company acquired
        an option to purchase 100% of the shares of Ginyen Recovery Inc. Ginyen
        Recovery Inc. has an 85% interest in a co-operative joint venture with
        Bo Luo Neo Wang Yuan Gold Mine Company ("BLN Gold") of Heibei Province,
        China. BLN Gold holds an operational gold recovery mill; the right and
        license to operate all existing small mines in the district; the right
        to explore, develop and produce gold and silver in the district and options
        to expand to other districts.
|
| |    | During the year, the Company incurred acquisition
        costs of $10,000, which was charged to operations, as the property has
        no proven or probable reserves.                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |    | To complete the option agreement the Company must:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |    | i)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|
| |    | ii)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|3. | MINERAL PROPERTIES(continued)                                                                                                                                                                                                                        
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | d)                                                                                                                                                                                                                                                   
|  
|   |                                                                                                                                                                                                                                                      
|  
|4. | ACCOUNTS PAYABLE                                                                                                                                                                                                                                     
|  
|   | Included in accounts payable is US$38,726
        (CDN$51,726) owing to creditors of the Company's US subsidiary which discontinued
        operations on June 30, 2001. On February 29, 2004 the Company wrote off
        US$276,419 (CDN$369,213).
|  
|5. | RELATED PARTY BALANCES/TRANSACTIONS                                                                                                                                                                                                                  
|  
|   | a)                                                                                                                                                                                                                                                   
|  
|   |                                                                                                                                                                                                                                                      

| |  |                                   |   | February 28, |   |   |          |   |   | February 29, |  
| |  | --------------------------------- | - | ------------ | - | - | -------- | - | - | ------------ | -
| |  |                                   |   | 2003         |   |   | Advances |   |   | 2004         |  
| |  |                                   |   |              |   |   |          |   |   |              |  
| |  | 394754 B.C. Ltd.                  | $ | (1,580       | ) | $ |         |   | $ | (1,580       | )
| |  | Access Information Services, Inc. |   | 10,812       |   |   | 34,975   |   |   | 45,787       |  
| |  | IAS Communications Inc.           |   | (3,151       | ) |   |         |   |   | (3,151       | )
| |  | Imaging Technologies Inc.         |   | (4,587       | ) |   |         |   |   | (4,587       | )
| |  | Information Highway.com, Inc.     |   | 900          |   |   |         |   |   | 900          |  
| |  | JGR Petroleum, Inc.               |   | 10,425       |   |   | 54,174   |   |   | 64,599       |  
| |  | John Robertson, President and CEO |   | 29,630       |   |   | 2,276    |   |   | 31,906       |  
| |  | Rainbow Network                   |   | (3,245       | ) |   | 56,907   |   |   | 53,662       |  
| |  | Rand Energy                       |   |             |   |   | 16,783   |   |   | 16,783       |  
| |  | Reg Technologies Inc.             |   | 3,285        |   |   | (16,783  | ) |   | (13,498      | )
| |  | REGI U.S., Inc.                   |   | (38          | ) |   | -        |   |   | (38          | )
| |  | SMR Investments Ltd.              |   | 3,826        |   |   | 18,125   |   |   | 21,951       |  
| |  | Pavlik Travel Services Ltd.       |   | 1,762        |   |   |         |   |   | 1,762        |  
| |  | Teryl Resources Corp.             |   | 4,017        |   |   | 5,709    |   |   | 9,726        |  
| |  | Robertson Family Trust            |   |             |   |   | 6,408    |   |   | 6,408        |  
| |  |                                   |   |              |   |   |          |   |   |              |  
| |  |                                   | $ | 52,056       |   | $ | 178,574  |   | $ | 230,630      |  



---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|5. | RELATED PARTY BALANCES/TRANSACTIONS(continued)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | b)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|  
|6. | CONVERTIBLE DEBENTURES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|  
|   | The Company had offered a private placement
        of convertible debentures and had secured a commitment thereto for up
        to US$1,100,000. During fiscal 2001, the Company drew down US$800,000
        in two tranches and during fiscal 2002 the Company drew down a further
        US$80,000. By the end of fiscal 2002 the convertible debentures were all
        converted into 19,558,532 shares. The Company also issued the following
        warrants in connection with the issuance of the convertible debentures:

|#       |  | $    |  | Expiry Date     
|------- |  | ---- |  | ----------------
|        |  |      |  |                 
|55,000  |  | 1.08 |  | October 18, 2005
|55,000  |  | 1.17 |  | October 18, 2005
|25,000  |  | .20  |  | October 18, 2005
|25,000  |  | .22  |  | October 18, 2005
|8,000   |  | .072 |  | July 6, 2006    
|8,000   |  | .078 |  | July 6, 2006    
|176,000 |  |      |  |                 

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

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

| |                                                                  | Number of  |  |   |          
| | ---------------------------------------------------------------- | ---------- |  | - | ---------
| |                                                                  | Shares     |  |   | Amount   
| |                                                                  |            |  |   |          
| | Balance, February 28, 2002                                       | 34,487,846 |  | $ | 5,382,584
| |                                                                  |            |  |   |          
| | Issued during the year:                                          |            |  |   |          
| | Settlement of debt (d) below                                     | 19,295,567 |  |   | 964,778  
| | Purchase of license
      (Note 5(b)) (e) below                  | 3,000,000  |  |   | 238,800  
| | Cash pursuant to a private placement
      (f) below             | 675,000    |  |   | 67,500   
| |                                                                  |            |  |   |          
| | Balance, February 28, 2003                                       | 57,458,413 |  |   | 6,653,662
| |                                                                  |            |  |   |          
| | Issued during the year:                                          |            |  |   |          
| | Pursuant to mineral
      property option agreements (Note 3(c)) | 175,000    |  |   | 17,500   
| | For services rendered (c) below                                  | 1,000,000  |  |   | 100,000  
| | For settlement
      of rent obligation (c) below                | 200,000    |  |   | 19,200   
| | For cash                                                         |            |  |   |          
| | exercise of options                                              | 150,000    |  |   | 19,812   
| | exercise of warrants (f) below                                   | 425,000    |  |   | 53,702   
| | private placement (a) below                                      | 875,000    |  |   | 227,220  
| |                                                                  |            |  |   |          
| | Balance, February 29, 2004                                       | 60,283,413 |  | $ | 7,091,096

| | a) | On December 9, 2003 the Company completed a private
        placement and issued 875,000 units at a price of US$0.20 per unit for
        proceeds of US$175,000. Each unit consisted of one common share and one
        1⁄2 warrant. Two 1⁄2 warrants entitles the holder to purchase
        one additional common share at a price of US$0.20 per share for a one-year
        period.                                                                           
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | b) | During the year ended February 29, 2004, the Company
        issued 175,000 common shares at a value of $0.10 per share pursuant to
        the mineral property option agreements referred to in Note 3(c).                                                                                                                                                                                                                                                     
|
| | c) | During the year ended February 29, 2004, the Company
        issued 1,000,000 shares pursuant to a consulting agreement for services
        beginning April 2, 2003 for a period of six months. The Company was also
        obligated to issue 100,000 shares per month starting May 2, 2003. On July
        11, 2003, the Company terminated this agreement due to non-performance
        and has demanded return of the 1,000,000 shares previously issued.
|
| |    | The Company issued 200,000 shares to settle a prior
        year's rental agreement.                                                                                                                                                                                                                                                                                                                                                                             
|
| | d) | On November 12, 2002, the Company issued 19,295,567
        common shares in exchange for the extinguishment of US$578,867 in debt
        (US$0.03 per share). The market value of the shares on the date of exchange
        was $964,778.                                                                                                                                                                                                                     

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|7. | COMMON STOCK(continued)
|-- | -----------------------
|  
|   | e)                     
|  
|   | f)                     
|  
|   | g)                     
|  
|   |                        
|  
|   |                        

| |  |  |                   |            |   |   |          |   | Weighted 
| |  |  | ----------------- | ---------- | - | - | -------- | - | ---------
| |  |  |                   |            |   |   | Weighted |   | Average  
| |  |  |                   | Number of  |   |   | Average  |   | Remaining
| |  |  |                   | Shares     |   |   | Option   |   | Life of  
| |  |  |                   | Under      |   |   | Price    |   | Options  
| |  |  |                   | Option     |   |   | (us $)   |   | (months) 
| |  |  |                   |            |   |   |          |   |          
| |  |  | February 28, 2002 | 3,200,000  |   | $ | 0.08     |   | 43       
| |  |  |                   |            |   |   |          |   |          
| |  |  | Granted           | 1,350,000  |   |   | 0.10     |   |          
| |  |  | Cancelled         | (1,175,000 | ) |   | (0.13    | ) |          
| |  |  |                   |            |   |   |          |   |          
| |  |  | February 28, 2003 | 3,375,000  |   |   | 0.09     |   | 48       
| |  |  |                   |            |   |   |          |   |          
| |  |  | Granted           | 350,000    |   |   | 0.10     |   |          
| |  |  | Exercised         | (150,000   | ) |   | (0.10    | ) |          
| |  |  |                   |            |   |   |          |   |          
| |  |  | February 29, 2004 | 3,575,000  |   | $ | 0.09     |   | 40       



---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|7. | COMMON STOCK(continued)
|-- | -----------------------
|  
|   | g)                     
|  
|   |                        
|  
|   |                        
|  
|   |                        

| |  |  |                          |   | 2004    |  |   | 2003    | 
| |  |  | ------------------------ | - | ------- |  | - | ------- | 
| |  |  |                          |   |         |  |   |         | 
| |  |  | Net loss                 |   |         |  |   |         | 
| |  |  | As reported              | $ | 475,447 |  | $ | 150,020 | 
| |  |  | Pro-forma                | $ | 484,633 |  | $ | 150,145 | 
| |  |  |                          |   |         |  |   |         | 
| |  |  | Basic net loss per share |   |         |  |   |         | 
| |  |  | As reported              | $ | 0.01    |  | $ | 0.01    | 
| |  |  | Pro-forma                | $ | 0.01    |  | $ | 0.01    | 



| | h) | Additional paid-in capital represents the fair market value of 176,000
      warrants issued with the convertible debentures less a discount on the convertible
      debentures.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| |  |                                                                      |   | 2004    |   |   | 2003    |  
| |  | -------------------------------------------------------------------- | - | ------- | - | - | ------- | -
| |  |                                                                      |   |         |   |   |         |  
| |  | Market value of warrants (Note 6)                                    | $ | 150,750 |   | $ | 150,750 |  
| |  | Discount on convertible debentures accreted to operations
      over |   |         |   |   |         |  
| |  | the life of the warrants being five years
      to October 18, 2005  |   | (49,243 | ) |   | (79,393 | )
| |  |                                                                      |   |         |   |   |         |  
| |  | Net carrying value                                                   | $ | 101,507 |   | $ | 71,357  |  



|8. | SUBSEQUENT EVENTS               
|-- | --------------------------------
|  
|   | Subsequent to February 29, 2004:
|  
|   | a)                              
|  
|   | b)                              

---

LINUX GOLD CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

FEBRUARY 29, 2004(Stated in Canadian Dollars)

|8. | SUBSEQUENT EVENTS(continued)
|-- | ----------------------------
|  
|   | c)                          

| |  |                                       |   | 2005   |  |   | 2006   |  |   | 2007  | 
| |  | ------------------------------------- | - | ------ |  | - | ------ |  | - | ----- | 
| |  | Basic rent                            | $ | 10,180 |  | $ | 11,452 |  | $ | 1,272 | 
| |  | Property taxes and operating expenses |   | 13,260 |  |   | 14,466 |  |   | 1,205 | 
| |  |                                       | $ | 23,440 |  | $ | 25,918 |  | $ | 2,477 | 



---