UNITED STATES

SECURITIES 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 fiscal year ended February 28,
2013                                                                                                                         
|OR                                                                                                                                                              
|[  ]                                                                                                                                                             |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|For the transition period from ____ to ______                                                                                                                   
|OR                                                                                                                                                              
|[  ]                                                                                                                                                             |  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|Date of event requiring this shell company report:                                                                                                              
|                                                                                                                                                                
|Commission file number: 000-30084                                                                                                                               
|                                                                                                                                                                
|Linux Gold Corp.                                                                                                                                                
|(Exact name of Registrant as specified in its charter)                                                                                                          
|N/A                                                                                                                                                             
|(Translation of Registrant’s name into English)                                                                                                                 
|                                                                                                                                                                
|British Columbia, Canada                                                                                                                                        
|(Jurisdiction of incorporation or organization)                                                                                                                 
|                                                                                                                                                                
|240-11780 Hammersmith Way, Richmond, British Columbia V7A 5E9, Canada                                                                                           
|(Address of principal executive offices)                                                                                                                        
|                                                                                                                                                                
|John Robertson, President                                                                                                                                       
|240-11780 Hammersmith Way, Richmond, British
        Columbia V7A 5E9, Canada
        Phone: 604-278-5996 Fax 604-278-3409                                      
|(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)                                                                         
|                                                                                                                                                                
|Securities registered or to be registered pursuant
        to Section 12(b) of the Act.
        None                                                            
|                                                                                                                                                                
|Securities registered or to be registered pursuant to Section 12(g) of the Act.                                                                                 
|                                                                                                                                                                
|Common Shares, No Par Value                                                                                                                                     
|(Title of Class)                                                                                                                                                
|                                                                                                                                                                
|Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.                                                                      
|                                                                                                                                                                
|Not Applicable                                                                                                                                                  
|(Title of Class)                                                                                                                                                
|                                                                                                                                                                
|Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
|99,593,825 Common Shares outstanding as of February 28, 2013                                                                                                    



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



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

[  ] Yes [X] No



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



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

[X] Yes [  ] No



Indicate by check mark whether
the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required
to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post such files).

[X]  Yes [  ] No



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



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



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



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



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

Item 17. [  ] Item 18. [X]



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


















TABLE OF CONTENTS



|                    |  | Page                                                                        
|------------------- |  | ----------------------------------------------------------------------------
|                    |  |                                                                             
|GENERAL INFORMATION |  | 3                                                                           
|                    |  |                                                                             
|GLOSSARY            |  | 3                                                                           
|                    |  |                                                                             
|PART I              |  |                                                                             
|                    |  |                                                                             
|ITEM
    1.         |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                       
|                    |  |                                                                             
|ITEM
    2.         |  | OFFER STATISTICS AND EXPECTED TIMETABLE                                     
|                    |  |                                                                             
|ITEM
    3.         |  | KEY INFORMATION                                                             
|                    |  |                                                                             
|ITEM
    4.         |  | INFORMATION ON THE COMPANY                                                  
|                    |  |                                                                             
|ITEM
    4A.        |  | UNRESOLVED STAFF COMMENTS                                                   
|                    |  |                                                                             
|ITEM
    5.         |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                
|                    |  |                                                                             
|ITEM
    6.         |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                  
|                    |  |                                                                             
|ITEM
    7.         |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                           
|                    |  |                                                                             
|ITEM
    8.         |  | FINANCIAL INFORMATION                                                       
|                    |  |                                                                             
|ITEM
    9.         |  | THE OFFER AND LISTING                                                       
|                    |  |                                                                             
|ITEM
    10.        |  | ADDITIONAL INFORMATION                                                      
|                    |  |                                                                             
|ITEM
    11.        |  | quantitative and qualitative disclosures about market risk                  
|                    |  |                                                                             
|ITEM
    12.        |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                      
|                    |  |                                                                             
|PART II             |  |                                                                             
|                    |  |                                                                             
|ITEM
    13.        |  | DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES                              
|                    |  |                                                                             
|ITEM
    14.        |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|                    |  |                                                                             
|ITEM
    15.        |  | CONTROLS AND PROCEDURES                                                     
|                    |  |                                                                             
|ITEM
    15T.       |  | CONTROLS AND PROCEDURES                                                     
|                    |  |                                                                             
|ITEM
    16A.       |  | AUDIT COMMITTEE FINANCIAL EXPERT                                            
|                    |  |                                                                             
|ITEM
    16B.       |  | CODE OF ETHICS                                                              
|                    |  |                                                                             
|ITEM
    16C.       |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                      
|                    |  |                                                                             
|ITEM
    16D.       |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                  
|                    |  |                                                                             
|ITEM
    16E.       |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS      
|                    |  |                                                                             
|ITEM
    16F.       |  | CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT                                
|                    |  |                                                                             
|ITEM
    16G.       |  | CORPORATE GOVERNANCE                                                        
|                    |  |                                                                             
|PART III            |  |                                                                             
|                    |  |                                                                             
|ITEM
    17         |  | FINANCIAL STATEMENTS                                                        
|                    |  |                                                                             
|ITEM
    18.        |  | FINANCIAL STATEMENTS                                                        
|                    |  |                                                                             
|ITEM
    19.        |  | EXHIBITS                                                                    



2







GENERAL INFORMATION:



All references in this annual report on Form
20-F to the terms “we”, “our”, “us”, and “the Company” refer to Linux Gold Corp.



Unless otherwise indicated, all references
herein are to Canadian dollars.



Linux Gold Corp. and its subsidiaries is required
under Canadian law (National Instrument 43-101 Standards Of Disclosure For Mineral Projects (“NI 43-101”) to
calculate and categorize “mineral reserve”, “proven mineral reserve”, “probable mineral reserve”,
“mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred
mineral resource” under the Canadian Institute of Mining Metallurgy and Petroleum (“CIM”) Standards on
Mineral Resources and Reserves - Definitions and Guidelines dated December 11, 2005. These standards establish definitions and
guidelines for the reporting of exploration information, mineral resources and mineral reserves in Canada. Canadian law also requires
disclosure of mineral resources that equate to measured, indicated and inferred resources. These definitions have not been adopted
for use in the United States by the Securities and Exchange Commission (the “SEC”) under Industry Guide 7 (“SEC
Guide 7”) promulgated under U.S. Securities laws. See Item 3D. - Risk Factors – Differences in United
States and Canadian reporting of reserves and resources.



GLOSSARY



The following is a glossary of geological and technical terms used
in this annual report:



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



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



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



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



Gold deposit - means a mineral deposit mineralized with gold



Intrusive -cuts across (is intrusive into)



Mafic – said of a dark-colored, iron and magnesium
rich igneous rock



Mineral claim or mining claim -the portion of mining
ground held under law by a claimant



Mineralization -implication that the rocks contain sulphide
minerals and that these could be related to ore



NSR – net smelter royalty, being 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- a troy ounce or 20 pennyweights or 480 grains or
31.103 grams



Placer -a place where gold is obtained by washing; an alluvial
or glacial deposit, as of sand or gravel, containing particles of gold or other valuable minerals including gemstones



Pluton – an igneous rock or body formed at depth within
the earth



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



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



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



All monetary figures are in terms of Canadian dollars unless otherwise
indicated.



3







Forward Looking Statements



This annual report contains forward-looking
statements that are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and under
Canadian securities laws that involve a number of risks and uncertainties. Such statements are based on our current expectations,
estimates and projections about the industry, management’s beliefs and certain assumptions made by it. We use words such
as “expect,” “anticipate,” “project,” “believe,” “plan,” “intend,”
“seek,” “should,” “estimate,” “future” and other similar expressions to identify
forward-looking statements. Our actual results could differ materially and adversely from those expressed in any forward-looking
statements as a result of various factors.



Statements about future property acquisitions,
expected completion dates of acquisitions/transactions, feasibility studies, are not guarantees of future performance and are subject
to certain risks, uncertainties and assumptions that are difficult to predict. Therefore, our actual results could differ materially
and adversely from those expressed in any forward-looking statements as a result of various factors. You should not place undue
reliance on these forward-looking statements.



Information relating to the magnitude or quality
of mineral deposits is deemed to be forward-looking information. The reliability of such information is affected by, among other
things, uncertainty involving geology of mineral deposits; uncertainty of estimates of their size or composition; uncertainty of
projections relating to costs of production or estimates of market prices for the mineral; the possibility of delays in mining
activities; changes in plans with respect to exploration, development projects or capital expenditures; and various other risks
including those relating to health, safety and environmental matters.



We caution that the list of factors set forth
above is not exhaustive. Some of the risks, uncertainties and other factors which negatively affect the reliability of forward-looking
information are discussed in our public filings with the Canadian securities regulatory authorities, including our most recent
annual report, quarterly reports, material change reports and press releases, and filings with the SEC. In particular, your attention
is directed to the risks detailed in “Item 3. Key Information - Risk Factors” and similar discussions in our
other SEC and Canadian regulatory filings concerning some of the important risk factors that may affect our business, results
of operations and financial conditions. You should carefully consider those risks, in addition to the other information in this
annual report and in our other filings and the various public disclosures before making any business or investment decisions involving
our company and our securities.



We undertake no obligation to revise or update
any forward-looking statement, or any other information contained or referenced in this annual report to reflect future events
and circumstances for any reason. In addition, any forecasts or guidance provided by us are based on the beliefs, estimates and
opinions of our management as at the date of this annual report and, accordingly, they involve a number of risks and uncertainties.
Consequently, there can be no assurances that such statements will prove to be accurate and actual results and future events could
differ materially from those anticipated in such statements. We undertake no obligation to update such projections if management’s
beliefs, estimates or opinions, or other factors should change.



BUSINESS OF LINUX GOLD CORP.



We are in the business of acquiring mineral
properties and carrying out exploration and development work on our properties. The recoverability of amounts shown for investments,
mineral properties and the related deferred expenditures are dependent upon the existence of economically recoverable reserves,
the ability to obtain the necessary financing to complete the exploration, or our ability to dispose of those assets on a profitable
basis. Our ongoing operation is dependent upon cash flow from successful operations and equity financing. We have incurred a net
income of $5,658 in the year ended February 28, 2013 (2012 - net loss of $181,841; 2011 - net loss of $36,594). Our consolidated
financial statements do not include adjustments that would be necessary should it be determined that we may be unable to continue
as a going concern.



FINANCIAL AND OTHER INFORMATION



In this annual report, unless otherwise specified,
all dollar amounts are expressed in Canadian Dollars (“Cdn.$” or “$”). The Government of Canada permits
a floating exchange rate to determine the value of the Canadian dollar against the U.S. dollar (US$).



4







PART I



|ITEM 1. |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS
|------- |  | -----------------------------------------------------



Not applicable.



|ITEM 2. |  | OFFER STATISTICS AND EXPECTED TIMETABLE
|------- |  | ---------------------------------------



Not applicable.



|ITEM 3. |  | KEY INFORMATION
|------- |  | ---------------



|A. | SELECTED FINANCIAL DATA
|-- | -----------------------



The summary consolidated financial information
set forth below should be read in conjunction with, and is qualified in its entirety by reference to, the consolidated financial
statements, as of and for the years ended February 28, 2013, February 29, 2012 and February 28, 2011, together with the notes thereto,
which appear elsewhere in this annual report. The consolidated financial statements as of and for the years ended February 28,
2013, February 29, 2012 and February 28, 2011 have been audited by A Chan and Company LLP (formerly, “ACAL Group”),
Chartered Accountants. The consolidated financial statements are prepared in accordance with U.S. GAAP. See Note 2 of the Notes
to Consolidated Financial Statements.



The selected financial data set forth in the
following table is expressed in Canadian dollars. Since June 1, 1970, the Government of Canada has permitted a floating exchange
rate to determine the value of the Canadian dollar as compared to the United States dollar. At February 28, 2013, US$1.00 was equal
to approximately Cdn.$1.0259.



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



|                                                            |  | 2013
$ |          |   | 2012
$ |  |          | 2011
$ |  |  | 2010 (Restated) $ |   |  | 2009
$ |         
|----------------------------------------------------------- |  | ------ | -------- | - | ------ |  | -------- | ------ |  |  | ----------------- | - |  | ------ | --------
|Net Revenue                                                 |  |        | -        |   |        |  | -        |        |  |  | -                 |   |  |        | -       
|Income (loss) from continuing operations                    |  |        | 5,658    |   |        |  | (181,841 | )      |  |  | (36,594           | ) |  |        | (65,985 
|Income (loss) from discontinued operations                  |  |        | -        |   |        |  | -        |        |  |  | -                 |   |  |        | -       
|Income (loss) from continuing operations per Common Share   |  |        | 0.00     |   |        |  | (0.00    | )      |  |  | (0.00             | ) |  |        | (0.00   
|Income (loss) from discontinued operations per Common Share |  |        | -        |   |        |  | -        |        |  |  | -                 |   |  |        | -       
|Total Assets                                                |  |        | 33,226   |   |        |  | 39,562   |        |  |  | 118,829           |   |  |        | 206,244 
|Working Capital (deficit)                                   |  |        | (493,019 | ) |        |  | (553,954 | )      |  |  | (485,596          | ) |  |        | (273,760
|Shareholders’ Equity (deficit)                              |  |        | (489,854 | ) |        |  | (549,856 | )      |  |  | (480,270          | ) |  |        | (742,232
|Cash dividends per common share                             |  |        | 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. e 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 27, 2013, the average rate by OANDA was Cdn.$1.0491 to US$ 1.00. The following tables
set forth rates for US dollars for the periods indicated.



5







The following table reflects the monthly high
and low exchange rates for US$1.00 to the Canadian dollar for each of the last six months, based on the noon buying rate for US
dollars published by the Bank of Canada.



|Month    |  |  | Year |      |  | High (Cdn.$) |  |        | Low (Cdn.$) | 
|-------- |  |  | ---- | ---- |  | ------------ |  | ------ | ----------- | 
|December |  |  |      | 2012 |  |              |  | 0.9969 |             | 
|January  |  |  |      | 2013 |  |              |  | 1.0078 |             | 
|February |  |  |      | 2013 |  |              |  | 1.0285 |             | 
|March    |  |  |      | 2013 |  |              |  | 1.0314 |             | 
|April    |  |  |      | 2013 |  |              |  | 1.0270 |             | 
|May      |  |  |      | 2013 |  |              |  | 1.0371 |             | 



The following table lists the average exchange
rate for US$1.00 to the Canadian dollar for cable transfers in Canadian dollars as certified for customs purposes by the Federal
Reserve Bank of New York, or by the Bank of Canada, for the five most recent financial years based on the average month-end exchange
rates:



|Year |  |  | Average |        |  | Low ($Cdn.) |  |        | High |  |  | February 29/28 ($Cdn.) | 
|---- |  |  | ------- | ------ |  | ----------- |  | ------ | ---- |  |  | ---------------------- | 
|2013 |  |  |         | 0.9988 |  |             |  | 0.9710 |      |  |  | 1.0418                 | 
|2012 |  |  |         | 0.9914 |  |             |  | 0.9449 |      |  |  | 1.0604                 | 
|2011 |  |  |         | 1.0205 |  |             |  | 0.9739 |      |  |  | 1.0778                 | 
|2010 |  |  |         | 1.1116 |  |             |  | 1.0251 |      |  |  | 1.3000                 | 
|2009 |  |  |         | 1.1414 |  |             |  | 0.9840 |      |  |  | 1.2971                 | 



|B. | CAPITALIZATION AND INDEBTEDNESS
|-- | -------------------------------



Not applicable.



|C. | REASON FOR THE OFFER AND USE OF PROCEEDS
|-- | ----------------------------------------



Not applicable.



|D. | RISK FACTORS
|-- | ------------



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



RISK FACTORS RELATED TO OUR BUSINESS



We have a limited and changing operating
history.



We initially focused our business on the exploration
and development of natural resource properties. 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 so we have returned our focus to mining and exploration of natural resource properties.



We may not be able to secure the financing
necessary to explore, develop and produce our mineral properties.



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



6







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



As noted in our audited consolidated financial
statements for the year ended February 28, 2013 we have incurred significant operating losses and have an accumulated deficit during
the exploration stage of $7,184,515 at February 28, 2013. Furthermore, we had working capital deficit of $493,019 as at February
28, 2013, which is not sufficient to achieve our planned business objectives.



Our ability to continue as a going concern
is dependent on continued financial support from our shareholders and other related parties, our ability to raise equity capital
financing, and the attainment of profitable operations, external financings and further share issuance to satisfy working capital
and operating needs. The auditors’ report on our February 28, 2013 consolidated financial statements includes additional
comments for U.S. readers that states that conditions exist that raise substantial doubt about our ability to continue as a going
concern. The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty
(see Item 5.B. Liquidity and Capital Resources).



We expect to incur significant losses
for the foreseeable future.



We expect to incur significant losses for the
foreseeable future and cannot be certain when or if we will achieve profitability. Failure to become and remain profitable will
adversely affect the value of our common shares and our ability to raise capital and continue operations (see Item 5.B. Liquidity
and Capital Resources).



Our business may be affected by such
matters as changes in general economic conditions, changes in laws, regulations, and other factors.



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



Certain of our directors and officers
are also directors and/or officers and/or shareholders of our potential competitors, giving rise to potential conflicts of interest.



Several of our directors and officers are also
directors, officers or shareholders of other companies. In particular, Mr. John Robertson, Ms. El-Khatib and Mrs. Robertson are
directors and/or officers of Teryl Resources Corp. (“Teryl”), a Canadian publicly reporting natural resource
exploration company that shares office space and administrative staff with our company. We had an option agreement with Teryl whereby
Teryl effectively earned 100% of our 50% interest in the Fish Creek claim (see Item 4.D – Mineral Properties, Fish Creek
Claims, Alaska)on March 6, 2013. In addition, Susanne Robertson and John Robertson are directors and officers of SMR Investments
Ltd., a private company wholly-owned by Susanne Robertson. They own a total of 7.75% of our common shares (see Item 6.A - Directors
and Senior Management, and Item 6.E - Share Ownership).



Some of our directors and officers are engaged
and will continue to be engaged in the search for additional business opportunities on behalf of other corporations, and situations
may arise where these directors and officers will be in direct competition with our company. Such associations may give rise to
conflicts of interest from time to time (see Item 7.B - Related Party Transactions). Such a conflict poses the risk that
we may enter into a transaction on terms which could place us in a worse position than if no conflict existed. Conflicts, if any,
will be dealt with in accordance with the relevant provisions of the British Columbia Business Corporations Act (“BCBCA”).
The Board has resolved that any transaction involving a related party to our company is required to be reviewed and approved by
our Audit Committee. Our directors are required by law to act honestly and in good faith with a view to our best interests and
to disclose any interest which they many have in any project or opportunity in respect of which we are proposing to enter into
a transaction.



7







U.S. investors may not be able to enforce
their civil liabilities against us or our directors, controlling persons and officers.



We are organized under the laws of the Province
of British Columbia, Canada. All of our directors, controlling persons and officers are residents of Canada. As a result, it may
be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to
realize in the United States upon judgments rendered against them. In addition, you should not assume that the courts of Canada
(i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions
of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities
against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States. However, U.S. laws
would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign
penal laws or laws that deal with taxation or the taking of property by a foreign government and provided they are in compliance
with applicable Canadian legislation regarding the limitation of actions. Also, a judgment obtained in a U.S. court would generally
be recognized by a Canadian court except, for example: where the U.S. court where the judgment was rendered had no jurisdiction
according to applicable Canadian law; the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial
proceeding which renders the judgment not final, or enforceable under the laws of the applicable state) or not final, conclusive
or enforceable under the laws of the applicable state; the judgment was obtained by fraud or in any manner contrary to natural
justice or rendered in contravention of fundamental principles of procedure; a dispute between the same parties, based on the same
subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment
meets the necessary conditions for recognition in a Canadian court; the outcome of the judgment of the U.S. court was inconsistent
with Canadian public policy; the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation
or the taking of property by a foreign government; or there has not been compliance with applicable Canadian law dealing with the
limitation of actions.



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



Significant and increasing competition exists
for mineral opportunities in Canada and the United States. There are a number of large established mineral companies with substantial
capabilities and greater financial and technical resources than us. We may be unable to acquire additional attractive mineral properties
on terms we consider acceptable. Accordingly, our exploration programs may not will yield any reserves or result in any commercial
mineral operations (see Item 4B. - Competition).



There are differences in United States and Canadian reporting
of reserves and resources.



The disclosure in this annual report uses terms
that comply with reporting standards in Canada. In addition, the terms “mineral resource”, “measured mineral
resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required
to be used by us by NI 43-101; however, these terms are not defined terms under SEC Guide 7 and normally are not permitted to be
used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral
deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount
of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part
of the measured mineral resources, indicated mineral resources, or inferred mineral resources will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility, pre-feasibility
studies or other economic studies, except in rare cases.



Accordingly, information contained in this
annual report containing descriptions of our mineral deposits may not be comparable to similar information made public by United
States companies.



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



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



8







Our management team has no significant
minerals exploration technical training.



No member of our management team has significant
technical training in minerals exploration or mining and starting and operating a mine. Due to these factors, our management may
not be fully aware of many of the specific requirements related to working within his industry, that their decisions may not take
into account standard engineering or managerial approaches mineral exploration companies commonly use. This risk is that our operations,
earnings and ultimate financial success could suffer due to management’s lack of experience in this industry.



RISK FACTORS RELATED TO THE NATURAL RESOURCE
INDUSTRY



We face risks related to the exploration
and potential development of our properties.



The exploration and development of mineral
deposits involves significant risks. It is impossible to ensure that the current and future exploration programs and/or feasibility
studies on our existing mineral properties will establish reserves, or whether any of our exploration stage properties can be brought
into production. Few properties that are explored are ultimately developed into producing mines. At present, none of our properties
have defined ore bodies with reserves and resources, and our proposed exploration programs are an exploratory search for ore. Whether
an ore body will become commercially viable depends on many factors, including: the characteristics of the deposit, such as size,
grade and proximity to infrastructure; metal prices, which cannot be predicted and which have been highly volatile in the past;
mining, processing and transportation costs; and the willingness of lenders and investors to provide project financing; labour
costs and possible labour strikes; and governmental regulations, including, without limitation, regulations relating to prices,
taxes, royalties, land tenure, land use, importing and exporting materials, foreign exchange, environmental protection, employment,
worker safety, transportation, and reclamation and closure obligations.



We are also subject to the risks normally encountered
in the mining industry, such as: unusual or unexpected geological formations; natural disasters; power outages and water shortages;
cave-ins, landslides, and other similar mining hazards; inability to obtain suitable or adequate machinery, equipment, or labour;
and other known and unknown risks involved in the operation of mines and the conduct of exploration.



Substantial expenditures are required to establish
reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing
facilities and infrastructure at any site chosen for mining. Depending on the price of minerals, we may determine that it is impractical
to commence, or, if commenced, continue exploration into commercial production. Such a decision would negatively affect our profits
and may affect the value of our equity.



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



We have no current mining operations and no
revenue from mining operations. If we ever commence actual mining operations, such operations would face the risk of changing circumstances,
including but not limited to: failure of production to achieve metal recovery levels indicated by pre-production testing of drill
core and bulk samples; estimates of reserves being adversely affected by encountering unexpected or unusual geological formations;
production costs being adversely affected by unforeseen factors such as substantial adverse changes in exchange rates or changes
in environmental protection requirements, breakdowns and other technical difficulties, slides, cave-ins or other natural disasters,
work interruptions or labor strikes; the grade of ore actually mined being lower than that indicated by drilling results; persistently
lower market prices of the products mined than those used to determine the feasibility of mining a mineral occurrence; adverse
changes in interest rates that may apply to project development debt. In addition, we have no experience in developing mining properties
into production and our ability to do so will be dependent upon securing the services of appropriately experienced personnel or
entering into agreements with other major mining companies which can provide such expertise.



9







Our estimates of any mineral deposits
on our properties may not change.



Our estimates of any mineral deposits on our
properties may not change. We have prepared all figures with respect to the size and grade of mineralized deposits included herein,
or, in some instances have been prepared, reviewed or verified by independent mining experts, these amounts are estimates only
and any identified mineralized deposit may not ever qualify as a commercially viable mineable ore body that can be legally and
economically exploited.



The prices of precious and base minerals
and metals fluctuate widely and may not produce enough revenue to cover our costs.



Even if commercial quantities of mineral deposits
are discovered, a profitable market may not exist for the sale of the metals produced. Our long-term viability and profitability
depend, in large part, upon the market price of metals which have experienced significant movement over short periods of time,
and are affected by numerous factors beyond our control, including international economic and political trends, expectations of
inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and
increased production due to improved mining and production methods. The supply and demand for metals is affected by various factors,
including political events, economic conditions and production costs in major producing regions. The price of any minerals produced
from our properties may not be sufficient such that any such deposits can be mined at a profit.



The seasonality in Alaska can be extreme
and can cause interruptions or delays in our activities.



Certain of our properties are located in Alaska.
The weather during the colder seasons in these areas can be extreme and can cause interruptions or delays in our activities. As
a result, our activities in these regions are seasonal and the preferred time for work is limited to the spring and summer when
costs are more reasonable and access to the properties is easier.



Our properties may be subject to unregistered
agreements, transfers or claims and title may be adversely affected.



Our title opinions do not validate that we
have good and marketable title to all of our properties. We follow the usual industry practice in obtaining title opinions with
respect to our lands. No examination has been made of the ground to determine if any of our mineral claims have been staked or
assessment work carried out. Our properties may be subject to unregistered agreements, transfers or claims and title may be adversely
affected by such undetected defects. If title is disputed, we may have to defend our ownership through the courts, and we cannot
guarantee that a favourable judgment will be obtained. In the event of an adverse judgment with respect to any of our mineral properties,
we could lose our property rights and may be required to cease our exploration and development activities on that property.



Mineral operations are subject to government
and regulatory approvals.



Our operations require the procurement of numerous
permits and compliance with an extensive number of codes and regulations. Mining, exploration and exploitation permits are required.
Failure to comply with regulatory requirements could result in permits being withdrawn or suspended which would adversely affect
our operations.



We are subject to extensive and changing
environmental legislation, regulation and actions.



We are subject to extensive and changing environmental
legislation, regulation and actions in connection with our operations and properties. We cannot predict what environmental legislation,
regulation or policy will be enacted or adopted in the future or how future laws and regulations will be administered or interpreted.
The recent trend in environmental legislation and regulation, generally, is toward stricter standards and this trend is likely
to continue in the future. This recent trend includes, without limitation, laws and regulations relating to air and water quality,
mine reclamation, waste handling and disposal, the protection of certain species and the preservation of certain lands. These regulations
may require the acquisition of permits or other authorizations for certain activities. These laws and regulations may also limit
or prohibit activities on certain lands. Compliance with more stringent laws and regulations, as well as potentially more vigorous
enforcement policies or stricter interpretation of existing laws, may necessitate significant capital outlays, may materially affect
our results of operations and business, or may cause material changes or delays in our intended activities.



10







We may have no direct contractual relationship
in certain mineral properties that have been granted by third parties.



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



UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES



There is only a limited public
market for our common shares on the OTC Bulletin Board and that market is extremely volatile.



There is only a limited public market for our
common shares on the Over-The-Counter Bulletin Board (“OTCBB”), and there is a risk that a broader or more active
public trading market for our common shares will never develop or be sustained, or that current trading levels will not be sustained.



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



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



You will be subject to the penny stock
rules to the extent our stock price on the OTCBB is less than $5.00.



Since our common shares are not listed on a
national stock exchange or quoted on the NASDAQ Market within the United States, trading in common shares on the OTCBB is subject,
to the extent the market price for the common shares is less than $5.00 per share, to a number of regulations known as the
“penny stock rules”. The penny stock rules require a broker-dealer to deliver a standardized risk disclosure document
prepared by the SEC, to provide the customer with additional information including current bid and offer quotations for the penny
stock, the compensation of the broker-dealer and its salesperson in the transaction, monthly account statements showing the market
value of each penny stock held in the customer’s account, and to make a special written determination that the penny stock is a
suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction. To the extent these requirements
may be applicable they will reduce the level of trading activity in the secondary market for our common shares and may severely
and adversely affect the ability of broker-dealers to sell our common shares.



You should not expect to receive dividends.



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



11







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



We are authorized under our Articles of Incorporation
to issue 200,000,000 common shares. Subject to compliance with applicable corporate and securities laws, we may issue these shares
under such circumstances and in such manner and at such times, prices, amounts and purposes as our board of directors may, in their
discretion, determine to be necessary and appropriate. Your proportionate ownership and voting rights as a common shareholder could
be adversely affected by the issuance of additional common shares, including a substantial dilution in your net tangible book value
per share.



|ITEM 4. |  | INFORMATION ON THE COMPANY
|------- |  | --------------------------



|A. | HISTORY AND DEVELOPMENT OF THE COMPANY
|-- | --------------------------------------



We were incorporated on February 27, 1979 in
the Province of British Columbia and were extra-provincially registered in the Province of Alberta on October 12, 1995 under the
name Flame Petro-Minerals Corp. We changed our name to LinuxWizardry Systems, Inc., on March 21, 2000, and subsequently
changed our name to Linux Gold Corp. on March 18, 2003.



Our authorized capital consists of 200,000,000
common shares without par value.Of these, 99,593,825 common shares were issued and outstanding
as of February 28, 2013 and as of the date of this annual report.



Our head office is located at #240 -11780 Hammersmith
Way, Richmond, B.C., V7A 5E9.



During the three fiscal years ended February
28, 2013, February 29, 2012 and February 28, 2011, we have been involved in mineral property exploration and development. We have
investigated several mineral properties in Canada and the United States. Our current plans are to joint venture and explore our
mineral properties.



We currently have interests in two mineral
properties in Alaska. We hold a 100% interest in the Dime Creek claim block consisting of 12 mining claims located near Nome and
6,400 acres of 13 mineral exploration claims staked in the Livengood-Tolovana Mining District.



During the year ended February 28, 2013 we
terminated our lease option agreement on Trout mineral claims located in the Fairbanks Recording District.



Effective March 6, 2013, we sold our 50% interest
in the Fish Creek property, consisting of 30 mineral claims located in the Fairbanks Mining Division. We retain a 5% net royalty
up to $2,000,000. Teryl has the right to purchase the 5% net royalty for consideration of $500,000 from the Company within one
year of production.



Further exploration will be required before
a final evaluation as to the economic and legal feasibility is determined for the above properties. To date, we have received no
revenues from our mining property activities.



Effective April 5, 2013 we signed a teaming
agreement to produce gold from a placer mining technology with a 45 day option for consideration of US$1,000 which was subsequently
extended to July 15, 2013. The teaming agreement is earned by the Company funding the gold extraction technology for total cost
of US$32,000.



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



Exploration Expenditures



During fiscal 2013, we incurred $13,194, including
$12,660 on staking and recording fees and $534 on transportation.



During fiscal 2012, we incurred $50,110 in
assaying, geological consulting and staking and recording fees on our mineral properties.



During fiscal 2011, we incurred $54,276 in
assaying, geological consulting and staking and recording fees on our mineral properties.



12







|B. |  | BUSINESS OVERVIEW
|-- |  | -----------------



Nature of the Company’s Operations



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



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



We will seek equity financing to provide working
capital and to meet exploration commitments on all our properties.



Plan of Operations



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



Source of Funds for Fiscal 2013



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



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



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



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



We had a working capital deficit of $493,019
as of February 28, 2013 compared to a working capital deficit of $553,954 on February 29, 2012, and compared to a deficit of $485,596
on February 28, 2011.



Use of Funds for Fiscal 2014



During fiscal 2014, we estimate that we will
expend approximately $150,000 on general and administrative expenses. Expenditures for future exploration during fiscal 2014 work
cannot be specifically confirmed as of the date of this annual report, as our requisite cash requirements for exploration work
are dependent upon the ability to raise capital and secure permits and equipment to conduct our exploration drilling on our mineral
properties in Alaska.



Description of the Markets in Which
the Company Competes



We do not have a market in which we compete,
as we operate in an extractive industry. However, the mining industry in which we are engaged is highly competitive due to significant
and increasing competition for exploration opportunities. (see Competition below and Risk Factors above).



13







Competition



Significant and increasing competition exists
for mining exploration opportunities available in North America and elsewhere in the world. Competitors include well-capitalized
mining companies, independent mining companies and other companies having financial and other resources far greater than our resources.



Seasonality



Due to the northern climate, exploration work
in some areas of Alaska can be limited due to excessive snow cover and cold temperatures. In general, surface sampling work is
limited to May through September and surface drilling from March through November(see Risk
Factors).



Availability of Raw Materials



We not have a reliance on raw materials, as
we operate in an extractive industry.



Marketing Strategy



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



Dependence on Certain Commercial Agreements
or Intellectual Property



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



Material effects of Government Regulation



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



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



|C. |  | ORGANIZATIONAL STRUCTURE
|-- |  | ------------------------



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



|D. |  | PROPERTY, PLANTS AND EQUIPMENT
|-- |  | ------------------------------



We do not own any properties. Our executive
offices are located in rented premises in a commercial business park located in Richmond, British Columbia, Canada, a suburb of
Vancouver. The space is shared with several other companies which share common management. We have occupied these facilities since
November 1, 2006. These facilities are believed to be adequate for meeting our needs for the immediate future. If required in the
future, we do not anticipate that we will have any difficulty in obtaining additional space at favorable rates. There are no current
plans to purchase or otherwise acquire any properties in the near future.



Since our inception and during the three fiscal
years ending in February 2013, we had been involved in natural resource property exploration and development.



14







Mineral Properties



Fish Creek Claims, Alaska



We owned a 50% joint venture interest in 30
State of Alaska mining claims, comprising 1,032 acres, known as the Fish Creek Prospect, located 25 miles north of Fairbanks in
the Fairbanks Mining District in Alaska. Effective March 6, 2013, we sold these claims in accordance with an option agreement with
Teryl, a company with common directors and officers. We retain a 5% net royalty up to $2,000,000. Teryl has the right to purchase
the 5% net royalty, for consideration of $500,000 from the Company within one year of production. Linux has an option to convert
its 5% royalty to a 25% working interest in the Fish Creek property one year after production.



All mechanized exploration activity must be
permitted by the Alaska Division of Mining, Alaska Department of Fish and Game, and the U.S. Corps of Engineers. Water can be withdrawn
from Fish Creek to support exploration activities with oversight from the Alaska Department of Conservation. Currently, exploration
by drilling is permitted for Fish Creek claims. To the best of our knowledge, all exploration on the property has been in compliance
with all applicable environmental regulations. There currently are no unusual social, political or environmental encumbrances to
mining on the project.



The Fish Creek project is located in an important
mining district with permissive land status and excellent road access to the property. Currently, there are only primitive trails
developed within the property to access exploration sites. The project is located within metamorphic and plutonic host rocks that
are similar in composition and age to rock units that contain commercially viable mineralization elsewhere in the Fairbanks Mining
District. The property is also located on a drainage that was mined extensively for alluvial gold in the past both upstream and
downstream of the Fish Creek project. Limited exploration conducted between 1992 and 2003 did not reveal significant bedrock exposures
of mineralization, however, very widely spaced placer drilling over a large area of the property conducted in 1996 indicated the
presence of placer gold in the alluvial deposits. More extensive and closer spaced placer gold drilling conducted in 2004 confirmed
the presence of significant concentrations of placer gold on the claims.



Dime Creek Property, Seward Peninsula,
Alaska



The Dime Creek Claim Block is located about
15 miles to the south of Granite Mountain. The 12 mining claims, covering three square miles, were staked by us in May 2006.



The placer gold-platinum deposits on Dime Creek
were discovered in 1910, but it wasn’t until 1915 that rich pay was found, setting off a stampede to the area. By 1917, about
12,500 ounces of gold and platinum were recovered from shoveling-in on the creek placer and from underground drifting on several
bench placers (Harrington, 1917, USGS B-692). The placer gold is unusually pure with a fineness of 960 and occurs in placer concentrates
in a ratio to native platinum particles of 25:1 to 10:1. In later years, a small bucket-ladder dredge operated on the valley bottom
from 1928 to 1941 while small open-cut and drifting operations continued on the benches until at least 1955.



Thomas Bundtzen of Pacific Rim Geological Consulting,
Inc., our consultant for our Alaska properties, completed a summary report, on the Dime Creek property, dated April 25, 2009. The
summary report estimates one million cubic yards of auriferous pay remain in several defined areas within the Dime Creek basin.
In addition, lode targets for platinum and possibly gold have been outlined by an auger soil survey carried out by past investigators
and from historical notations in published literature. Additional data on platinum lode targets can be acquired with follow-up
drilling concurrent with placer gold exploration and is a recommended course of action for future exploration work.



Mr. Bundtzen recommends that the placer resource
areas should be drill tested prior to any decisions to develop them. Placer ground in the upper portion of the basin above Haycock
is relatively shallow (<20 feet) and drill testing could be accomplished with a track-mounted auger drill similar to that used
to conduct soil sampling in 2001.



A 100 hole, 3,000 foot drill program is recommended
to begin the due diligence on the placer resource north of Haycock. This data could initiate production planning for the placer
resource and open the door for a second phase of drilling in the following year south of Haycock.



In November, 2009 extensive data compilation
was completed for the Dime Creek property. The data compilation, produced by Thomas Bundtzen of Pacific Rim Geological Consulting,
Inc., is to be used to facilitate future lode and placer exploration programs on the property. Mr. Bundtzen managed and designed
the exploration programs that took place in the 1990s, 2000, and 2001.



15







The compilation from Dime Creek and nearby
gold-bearing stream basins included:



| | 1. | Detailed microprobe analyses of placer platinum and gold recovered from six locations;
| | -- | --------------------------------------------------------------------------------------



| | 2. | Mineralogical analysis of bulk heavy mineral concentrate samples (17 samples);
| | -- | ------------------------------------------------------------------------------



| | 3. | Rock chip sample program (33 samples);
| | -- | --------------------------------------



| | 4. | Detailed motorized auger soil sample program (404 samples);
| | -- | -----------------------------------------------------------



| | 5. | Ground magnetic survey;
| | -- | -----------------------



| | 6. | An extensive review of past mineral production and mine activity records from U.S. Geological Survey,
the Alaska Territorial Department of Mines, the U.S. Bureau of Mines, and mint return records as found in unpublished Archival
records.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Highlights of the overall data analysis are
summarized:



|● | Dime
                                                                                                                                                                                                                 Creek
                                                                                                                                                                                                                 has
                                                                                                                                                                                                                 historically
                                                                                                                                                                                                                 produced
                                                                                                                                                                                                                 an
                                                                                                                                                                                                                 estimated
                                                                                                                                                                                                                 68,464
                                                                                                                                                                                                                 ounces
                                                                                                                                                                                                                 of
                                                                                                                                                                                                                 gold
                                                                                                                                                                                                                 and
                                                                                                                                                                                                                 198
                                                                                                                                                                                                                 ounces
                                                                                                                                                                                                                 of
                                                                                                                                                                                                                 byproduct
                                                                                                                                                                                                                 platinum.
                                                                                                                                                                                                                 Dime
                                                                                                                                                                                                                 Creek
                                                                                                                                                                                                                 has
                                                                                                                                                                                                                 not
                                                                                                                                                                                                                 been
                                                                                                                                                                                                                 systematically
                                                                                                                                                                                                                 mined
                                                                                                                                                                                                                 with
                                                                                                                                                                                                                 modern
                                                                                                                                                                                                                 mechanized
                                                                                                                                                                                                                 techniques.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | Multiple
                                                                                                                                                                                                                                                      bench
                                                                                                                                                                                                                                                      and
                                                                                                                                                                                                                                                      modern
                                                                                                                                                                                                                                                      stream
                                                                                                                                                                                                                                                      gold-platinum
                                                                                                                                                                                                                                                      placers
                                                                                                                                                                                                                                                      occur
                                                                                                                                                                                                                                                      on
                                                                                                                                                                                                                                                      our
                                                                                                                                                                                                                                                      property.
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | The
                                                                                                                                                                                                                 second
                                                                                                                                                                                                                 tier
                                                                                                                                                                                                                 and
                                                                                                                                                                                                                 higher
                                                                                                                                                                                                                 benches
                                                                                                                                                                                                                 in
                                                                                                                                                                                                                 upper
                                                                                                                                                                                                                 Dime
                                                                                                                                                                                                                 Creek
                                                                                                                                                                                                                 valley
                                                                                                                                                                                                                 are
                                                                                                                                                                                                                 interpreted
                                                                                                                                                                                                                 by
                                                                                                                                                                                                                 Bundtzen
                                                                                                                                                                                                                 to
                                                                                                                                                                                                                 be
                                                                                                                                                                                                                 ancestral
                                                                                                                                                                                                                 marine
                                                                                                                                                                                                                 strandline
                                                                                                                                                                                                                 (beach)
                                                                                                                                                                                                                 gold-platinum
                                                                                                                                                                                                                 placer
                                                                                                                                                                                                                 deposits
                                                                                                                                                                                                                 similar
                                                                                                                                                                                                                 to
                                                                                                                                                                                                                 the
                                                                                                                                                                                                                 placers
                                                                                                                                                                                                                 exploited
                                                                                                                                                                                                                 both
                                                                                                                                                                                                                 onshore
                                                                                                                                                                                                                 and
                                                                                                                                                                                                                 offshore
                                                                                                                                                                                                                 at
                                                                                                                                                                                                                 Cape
                                                                                                                                                                                                                 Nome.
                                                                                                                                                                                                                 This
                                                                                                                                                                                                                 suggests
                                                                                                                                                                                                                 that
                                                                                                                                                                                                                 marine
                                                                                                                                                                                                                 deposits
                                                                                                                                                                                                                 should
                                                                                                                                                                                                                 be
                                                                                                                                                                                                                 explored
                                                                                                                                                                                                                 for
                                                                                                                                                                                                                 gold
                                                                                                                                                                                                                 and
                                                                                                                                                                                                                 PGE
                                                                                                                                                                                                                 along
                                                                                                                                                                                                                 strike
                                                                                                                                                                                                                 for
                                                                                                                                                                                                                 several
                                                                                                                                                                                                                 kilometers.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | Microprobe analysis of the platinum mineralization indicates a rhodium-enriched type of isoferroplatinum
that averages 88.59 percent platinum, 8.98 percent iron, about 1.0 percent rhodium, and only minor amounts of other PGE metals.
When combined with accompanying gangue mineral identifications; i.e., chrome-rich diopside, the lode source is probably a Ural-Alaska
intrusion complex.
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | The gold in Dime creek is of exceptionally high fineness, averaging about 960 fine (or 96% gold),
even exceeding average high fineness placer gold found in Alaska. It contains traces of quartz, muscovite, and feldspar which suggest
an origin in granitic rocks.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | Soils collected during a detailed soil survey on two bench levels of Dime Creek contained up to
160 ppb gold, 174 ppb platinum, and 144 ppb palladium as well as threshold levels of copper, chromium, and nickel.
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



|● | Results from the 2000 soil sampling program, coupled with the magnetic signatures of mafic intrusions
and granitic signature of gold (as interpreted from microprobe work) suggest lode and placer target locations.
|- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We believe that the data compilation constitutes
an important information source that will be utilized during the design of a placer and lode exploration program on the Dime Creek
claims. A previous report by Mr. Bundtzen recommended a 100 hole, 3,000 feet drilling program to begin the due diligence on the
placer resource and drill 2 to 4 holes on the Platinum lode targets.



The mineral data described above for the Dime
Creek claims was prepared by Thomas K. Bundtzen, P. Geo., BS, MS, CPG-10912, ABSLN#279639, President of Pacific rim Geological
Consulting, Inc., of Fairbanks, Alaska, who is independent of our company as defined in NI43-101. Bundtzen is a Certified Professional
Geologist (CPG) with the American Institute of Professional Geologists (AIPG). Bundtzen is a Qualified Person as defined in National
Instrument 43-101 and also qualifies under the rules stated by the SEC, and has verified the data for accuracy.



16







Trout Claims, Alaska



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



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

| | - | Annual work commitment of US$10,000 (paid for 2011);
| | - | ----------------------------------------------------
| |   |                                                     

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

| | ● | 2011: Cash payment of US$5,000 (paid)
| | - | -------------------------------------
| |   |                                      

| | ● | 2012: Cash payment of US$10,000 ($5,000 paid)
| | - | ---------------------------------------------
| |   |                                              

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

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

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



During the year ended February 28, 2013, Trout Claims Lease Option
Agreement was terminated.



Livengood Property, Alaska



We have a total of 13 mining claims located
in the Livengood-Tolovana Mining District, Alaska, USA, known as the Livengood Claims, which are in good standing.



|ITEM 4A. |  | UNRESOLVED STAFF COMMENTS
|-------- |  | -------------------------



Not applicable.



|ITEM 5. |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|------- |  | --------------------------------------------



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



The following discussion should be read in
conjunction with the consolidated financial statements and notes thereto included elsewhere herein. The consolidated financial
statements have been prepared in accordance with US GAAP. Audited consolidated financial statements for the fiscal years ended
February 28, 2013, February 29, 2012 and February 28, 2011, respectively, are included in this annual report.



Overview



We are a mineral exploration company engaged
in the acquisition and exploration of mineral properties. Our expenditures are made acquiring mineral properties and carrying out
exploration work. We do not have any producing mineral properties at this time. The recoverability of amounts shown for investments,
mineral properties, and the related deferred expenditures is dependent upon the existence of economically recoverable reserves,
the ability to obtain the necessary financing to complete the exploration, the profitability of future production or our ability
to dispose of those assets on a profitable basis. Our ongoing operation is dependent upon cash flow from successful operations
and equity financing. We have incurred a net income of $5,658 in the year ended February 28, 2013 (2012 - net loss of $181,841;
2011 - net loss of $36,594). We have no revenue from our mining operations. (See Item 3.D. - Risk Factors).



| | A. | OPERATING RESULTS
| | -- | -----------------



Fiscal Year Ended February 28, 2013 compared to Fiscal year Ended
February 29, 2012



During the fiscal years ended February 28,
2013 and February 29, 2012, we received no revenues from operations.



Administrative expenses excluding mineral property
exploration and development costs in 2013 totaled $152,673 compared to $287,578 in 2012.



During 2013 we recorded recovery of exploration
costs of $141,354 resulting from Teryl’s cash payment in lieu of exploration expenditures in accordance with Fish Creek Property
option agreement. In 2012 we recorded recovery of exploration costs of $75,000 for such cash payment. During 2013 we incurred $12,660
on exploration and development of our mining properties compared to $50,110 in 2012.



17







Consulting and subcontract expenses were
$13,486 in 2013 decreased from $105,188 in 2012. Professional fees totaled $29,660 reduced from $29,948 in 2012. Office and
general administrative expenses decreased from $35,673 in 2012 to $3,094. Costs incurred on regulatory compliances increased
to $13,018 in 2013 from $12,448 in 2012. All decreases resulted from the Company’s continuing effort in streamlining
the operations.



Travel and promotion decreased to $1,781 in
2013 from $15,118 in 2012 as a result of reduced fund raising activities that require meetings with investors and potential investors.



Management fees remain unchanged at $30,000
from 2012.



Imputed interest calculated on the balances
due to related parties remains constant at $56,664 in 2013 from $55,944 in 2012. Imputed interest at 15% was recorded to operations
based on the advances from related parties and treated as donated capital, as they are not payable to the related parties.



We had anticipated that we would spend approximately
$150,000 during fiscal 2013 on field sampling, mapping and geological consulting. However, due to the difficulty raising funds
in the equity market we decided to postpone the exploration until it becomes cost effective again after the market recovery.



In 2013 we had a foreign exchange loss of $4,037
compared to a loss of $2,031 in 2012.



In 2013 we did not record any gain or loss
on sale of our marketable security; in 2012 we incurred a net loss of $37,810 on the sales.



In 2012 we recorded an impairment of $20,919
based on the continued decline in the value of these marketable securities; we did no record impairment in 2013.



We recorded fair value adjustment of our derivate
liability of $29,637 in 2013 compared to $139,576 in 2012. The derivate liability represents the warrants priced in the United
States dollars, which is not our functional currency (Canadian dollar).



Fiscal Year Ended February 29, 2012 compared to Fiscal year Ended
February 28, 2011



During the fiscal years ended February 29,
2012 and February 28, 2011, we received no revenues from operations.



Administrative expenses excluding mineral property
exploration and development costs in 2012 totaled $287,578 compared to $331,663 in 2011.



During 2012 we recorded recovery of exploration
costs of $75,000 resulting from Teryl’s cash payment in lieu of exploration expenditures in accordance with the Fish Creek
Property option agreement. During 2012 we incurred $50,110 on exploration and development of our mining properties compared to
$54,276 in 2011.



Consulting and subcontract expenses were $105,188
in 2012 decreased from $137,398 in 2011. Professional fees totaled $29,948 reduced from $34,456 in 2011. Office and general administrative
expenses decreased from $38,759 in 2011 to $35,673. Costs incurred on regulatory compliances reduced to $12,448 in 2012 from $13,261
in 2011. All decreases resulted from the Company’s continuing effort in streamlining the operations.



Travel and promotion decreased to $15,118 in
2012 from $23,570 in 2011 as a result of reduced fund raising activities that require meetings with investors and potential investors.



Management fees remain unchanged at $30,000
from 2011.



Imputed interest calculated on the balances
due to related parties remains constant at $55,944 in 2012 from $55,536 in 2011. Imputed interest at 15% was recorded to operations
based on the advances from related parties and treated as donated capital, as they are not payable to the related parties.



We had anticipated that we would spend approximately
$300,000 during fiscal 2012 on field sampling, mapping and geological consulting. However, due to the difficulty raising funds
in the equity market we decided to postpone the exploration until it becomes cost effective again after the market recovery.





18







In 2012 we had a foreign exchange loss of $2,031
compared to a gain of $2,938 in 2011.



In 2012 we recorded net realized loss of $37,810
on sale of our marketable security; in 2011 we incurred a net loss of $32,206 on the sales.



In 2011 we recorded an impairment of $57,837
based on the continued decline in their value, which was recorded at $20,919 in 2012.



We recorded fair value adjustment of our derivate
liability of $139,576 in 2012 compared to $439,388 in 2011. The derivate liability represents the warrants priced in the United
States dollars, which is not our functional currency (Canadian dollar).



Fiscal Year Ended February 28, 2011 compared to Fiscal year Ended
February 28, 2010



Results of Operations



During the fiscal years ended February 28,
2011 and February 28, 2010, we received no revenues from operations.



General and administrative expenses in 2011
totaled $385,939 compared to $406,622 in 2010 (restated). Consulting and subcontract expenses of $137,398 in 2011 were substantively
unchanged from $137,281 in 2010. Professional fees totaled $34,456, compared to a comparable amount of $37,323 in 2010. Travel
and promotion was $23,570, decreased from $77,825 in 2010 as a result of reduced fund raising activities. Office, rent and telephone
expenses of $38,759 decreased marginally from $39,167 in 2010. Management fees of $40,000 remain unchanged from $30,000 from 2010.
Imputed interest calculated on the balances due to related parties rose to $55,536 from $39,069 in 2010, resulting from an increase
in related party advances received. Imputed interest at 15% was charged to operations based on the advances from related parties
and treated as donated capital, as they are not payable to the related parties.



On December 6, 2010, we raised gross proceeds
of $141,433 (US$138,500) by a private placement of 2,770,000 units at US$0.05 per unit. Each unit consisted of one common share
and one share purchase warrant, with each warrant entitling the holder thereof to purchase one additional common shares at an exercise
price of US$0.075 per share until December 6, 2011.



On November 9, 2010, we raised gross proceeds
of $126,377 (US$123,650) by a private placement of 2,473,000 units at US$0.05 per unit. Each unit consisted of one common share
and one share purchase warrant, with each share purchase warrant entitling the holder thereof to purchase one additional common
shares at an exercise price of US$0.075 per share until November 9, 2011.



| | B. | LIQUIDITY AND CAPITAL RESOURCES
| | -- | -------------------------------



Our authorized capital consists of 200,000,000
common shares without par value. At February 28, 2013 and as of the date of this annual report we had 99,593,825 issued and outstanding
common shares (February 29, 2012 - 99,593,825; February 28, 2011 – 97,893,825). We have adopted an incentive stock option
plan pursuant to which options may be granted for a number of shares up to 10% of our issued and outstanding shares from time to
time.



The audited consolidated financial statements
have been prepared assuming that we will continue as a going-concern. As discussed in Note 1 to the consolidated financial statements,
we have no revenues and limited capital, which together raise substantial doubt about our ability to continue as a going-concern.
Management plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.



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



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



19







In the event that no other sources of capital
were available to us in the future, on a reasonable financial basis, we 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.



The total amount owing to related parties is
$339,197 or 64.85% of total current liabilities as at February 28, 2013. The balances owing to related parties are non-interest
bearing, unsecured and repayable on demand.



We anticipate that our estimated cash requirements
for the fiscal year ending February 28, 2014 will be approximately $150,000 for working capital. We do not foresee any material
changes to our corporate operations. Expenditures for future exploration during fiscal 2014 work cannot be specifically confirmed
as of the date of this annual report, as our requisite cash requirements for exploration work are dependent upon the ability to
raise capital and secure permits and equipment to conduct our exploration drilling on our mineral properties in Alaska.



Fiscal Year Ended February 29, 2013



During 2013 we generated $133 from operating
activities and did not have any financing or investing activities.



Our cash position increased from $7 at February
29, 2012 to $140 at February 28, 2013 and we had a working capital deficit of $493,019 at February 28, 2013 compared to $553,954
at February 29, 2012.



Fiscal Year Ended February 29, 2012



During 2012 we financed our operations primarily
by the issue of 1,700,000 common shares of the Company for gross cash proceeds of $85,000. We also raised $15,422 from the sale
of our marketable securities. We spent $100,625 of these funds on operating activities including exploration expenditures on our
properties.



Our cash position decreased from $2,210 at
February 28, 2011 to $7 at February 29, 2012 and we had a working capital deficit of $553,954 at February 29, 2012 compared to
$485,596 at February 28, 2011.



Fiscal Year Ended February 28, 2011



During the year ended February 28, 2011, we
financed our operations primarily by the issue of 5,243,000 common shares for gross cash proceeds of $267,810. We also raised $75,719
from the sale of marketable securities owned by us. During fiscal 2011, we spent $333,014 on operating activities, compared to
$296,256 in the year ended February 28, 2010.



Our cash position increased by $2,082 from
$182 as at February 28, 2010 to $2,210. We had a working capital deficit as at February 28, 2011 of $485,596.



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



During the past three years ended February
28, 2013, February 29, 2012 and February 28, 2011 we did not incur any research and development expenditures. We do not hold any
patents, trademarks or copyrights.



| | D. | TREND INFORMATION
| | -- | -----------------



We are a mineral exploration company and, consequently,
we have no production, sales, or inventory in the conventional sense. Our financial success will be dependent upon the extent to
which we can discover mineralization and the economic viability of developing such properties. Such development, if initiated,
may take years to complete and the amount of resulting income, if any, is difficult to determine with any certainty. We have no
mineral reserves and to date have not produced any revenues. The sales value of any mineralization discovered by us is largely
dependent upon factors beyond our control such as the market value of the metals produced.



Since the second half of 2008, there has been
a negative trend with regard to the market for metal commodities and related products as a result of global economic uncertainty,
reduced confidence in financial markets, bank failures and credit availability concerns. These macroeconomic events have negatively
affected the mining and minerals sectors in general. Although these circumstances will likely improve over the longer term, the
short term impact upon our liquidity and our ability to raise the capital required to execute our business plan going forward was
affected. As a result, we were unable to complete our anticipated plans during fiscal 2012. We will consider our plans and options
carefully in fiscal 2014.



20







During the year ended February 28, 2013, we
spent $12,660 in staking and recording fees and exploration and development costs (2012 - $50,110).



Other than as disclosed herein, we are not
aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have a material effect upon our
net sales or revenues, income from continuing operations, profitability, liquidity or capital resources, or that would cause reported
financial information not necessarily to be indicative of future operating results or financial condition.



| | E. | OFF-BALANCE SHEET ARRANGEMENTS
| | -- | ------------------------------



We do not have any material off balance sheet
arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.



| | F. | TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
| | -- | ---------------------------------------------



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



|                                                                                   |  |  | Payments due by period
|---------------------------------------------------------------------------------- |  |  | ----------------------
|Contractual Obligations                                                            |  |  | Total$                
|Mineral Property Obligations                                                       |  |  | -                     
|Long-term debt obligations                                                         |  |  | -                     
|Capital (Finance) Lease obligations                                                |  |  | -                     
|Operating lease obligations                                                        |  |  | -                     
|Purchase Obligations                                                               |  |  | -                     
|Other Long-term liabilities reflected on the Company’s Balance sheet under US GAAP |  |  | -                     
|Total                                                                              |  |  | -                     



| | 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 SEC filings.



21







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



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



|ITEM 6. |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|------- |  | ------------------------------------------



| | A. | DIRECTORS AND SENIOR MANAGEMENT
| | -- | -------------------------------



As of the date of this document, our Board
of Directors consists of five directors, three of whom are independent non-executive directors. The term of office of each of the
present directors expires at each annual meeting of shareholders or until their successors are elected or appointed. Our Board
of Directors annually appoints the officers.



The names, positions held and terms of office
of each director and officer as of the date of this document, are as follows:



|Name, Province or State and Country of Residence (1) |  | Position with the Company                             |  | Director Since   
|---------------------------------------------------- |  | ----------------------------------------------------- |  | -----------------
|                                                     |  |                                                       |  |                  
|John G. Robertson
British Columbia, Canada           |  | President, CEO and Chairman of the Board and Director |  | March 5, 1979    
|                                                     |  |                                                       |  |                  
|Susanne Robertson
British Columbia, Canada           |  | Director                                              |  | August 28, 2001  
|                                                     |  |                                                       |  |                  
|Thomas Robertson
British Columbia, Canada            |  | Director                                              |  | November 27, 2012
|                                                     |  |                                                       |  |                  
|Suzan El-Khatib
British Columbia, Canada             |  | Director                                              |  | April 14, 2011   
|                                                     |  |                                                       |  |                  
|Jane He
British Columbia, Canada                     |  | Chief Financial Officer                               |  | February 25, 2011



| | (1) | The information as to province, state and country of residence and principal occupation has
been furnished by the respective directors individually.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------



Business Experience, Function and Area of
Experience for the Past Five Years



John G. Robertson. Mr. Robertson is
the Chairman of the Board, CEO and founder and has been a director since inception. Mr. Robertson has been the Chairman, President
and Chief Executive Officer of REGI U.S., Inc., an Oregon corporation traded on the OTCBB, since July 1992, a U.S. public company
engaged in the development of a rotary engine/compressor (“Rand Cam Engine”). Since October 1984, Mr. Robertson
has been President and a director of Reg Technologies Inc. (TSX.V: RRE) (OTCBB: REGRF), a British Columbia corporation that has
financed the research on the Rand Cam Engine since 1986. Mr. Robertson has been the President and a director of IAS Energy, Inc.
since its formation in December 1994, an Oregon public company quoted on the OTC Pink Sheets under symbol “IASCA.PK”.
Mr. Robertson is also the President and founder of Teryl Resources Corp. (TSX.V: TRC) (OTCBB: TRYLF), a British Columbia company
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 President
and a director of the following private companies: JGR Petroleum, Inc. (since July 1991), Access Information Services, Ltd. (since
September 1993), 394754 B.C. Ltd., dba SOVO Computer Centre (since October 1990), Pavlik Travel Services Ltd. (since November 2000),
International Diamond Syndicate Ltd. (since May 1993), KLR Enterprises Inc. (since 1999), Rainbow Networks Inc. (since 2000), Rand
Energy Group Inc. (since 1993), 540330 B.C Ltd. (since April 1997), Minewest Silver and Gold Inc. (since 2010).



Susanne Robertson - Ms. Robertson was
appointed as a director in August 2001. She has been a director of Teryl Resources Corp. since 1990, a director of Reg Technologies
Inc. since 1984 and a director of Minewest Silver and Gold Inc. since 2010. Since 1979, Ms. Robertson is a principal of SMR Investments,
Ltd.



22







Suzan El-Khatib – Ms. El-Khatib
has been a director since April, 2011. Ms. El-Khatib began her career at Bull, Housser Tupper LLP and moved on to a boutique firm
before joining Wiebe Douvelos Wittmann LLP. She advises and acts for both individual and corporate clients on a broad variety of
matters including corporate governance and commercial litigation. Ms. El-Khatib has experience as a corporate solicitor and as
a litigator, appearing at all levels of court. She is a current member of the Law Society of British Columbia, the Canadian Bar
Association, and the Trial Lawyers Association of British Columbia. Ms. El-Khatib has been a director of Teryl Resources Corp.
since April, 2011 and a director of Reg Technologies Inc. since April, 2011.



Thomas Robertson–
Mr. Roberson has been a director since November 27, 2012. Mr. Robertson has been an investor relations consultant with Molycor
Gold Corp., a TSX.V issuer, since January 2005; previously he was a corporate development and investor relations consultant with
several TSX.V issuers, being Strike Zone Minerals (2004), Auterra Ventures Inc. (2004), and Toba Industries (2003/2004. He was
also an investor relations consultant with two OTC BB companies, being Tital Consolidated Inc. (2003/2004), Timber Resources International
Inc. (2003). Mr. Robertson has been a director of Teryl Resources Corp. since April, 2011 and a director of Reg Technologies
Inc. since January, 2010.



Jane He – Ms.
He has been the CFO since February 25, 2011. She has more than ten years’ experience in fund accounting in the financial
industry. She is in charge of daily business transactions and accounting for the Company. She has been the CFO of Minewest Silver
and Gold Inc. since October, 2010 and the CFO of Teryl Resources Corp. since April, 2011.



Cease Trade Orders



On December 3, 2007, the British Columbia Securities
Commission (“BCSC”) issued a cease trade order (“CTO”) against us for failure to file a technical
report and non-compliant disclosure. The BCSC found that the technical report filed on the System for Electronic Document Analysis
and Retrieval (“SEDAR”) on February 22, 2006 was not prepared by a “qualified person”,
as that term is defined under Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects. The BCSC
also found that our disclosure in the offering memorandum dated April 5, 2007 did not disclose repayment of debt to related parties.
We filed the required documents on SEDAR to comply with the requirements to rectify the continuous disclosure deficiencies and
the CTO was revoked on February 8, 2008. On January 27, 2010, the BCSC issued a CTO against us for failure to file an annual information
form. We filed the requisite annual information form in the form of a Form 20-F Annual Report and the CTO was revoked on January
29, 2010.



On September 4, 2009, the BCSC issued a CTO
against IAS Energy, Inc. (“IAS”), a company with related directors and officers, for failure to file its annual
audited financial statements and related MD&A. The CTO was revoked on September 16, 2009 following filing of its annual financial
statements and related MD&A. On October 2, 2009, a CTO was issued by the BCSC against IAS for failure to file its interim unaudited
financial statements for the three months ended July 31, 2009. The CTO was revoked on November 30, 2009 following filing of its
annual financial statements and related MD&A. On January 6, 2010, a CTO was issued by the BCSC against IAS for failure to file
its interim unaudited financial statements for the six months ended October 31, 2009. The CTO was revoked on January 18, 2010 following
filing of its interim financial statements and related MD&A. On September 7, 2010, the BCSC issued a CTO against IAS for failure
to file its annual audited financial statements and related MD&A. The CTO was revoked on October 8, 2010 following filing of
its annual financial statements and related MD&A. On September 4, 2011, the BCSC issued a CTO against IAS for failure to file
its annual audited financial statements and related MD&A.



On September 4, 2009 the BCSC issued a CTO
against Reg Technologies Inc. (“Reg”), a company with related directors and officers, for failure to file its
annual audited financial statements and related MD&A. The CTO was revoked on September 15, 2009 following the filing of its
annual financial statements and related MD&A. Additionally, Reg received notification from the TSX Venture Exchange (“TSX.V”)
that it had suspended trading in Reg’s shares as a result of the CTO. The TSX.V concluded its reinstatement review to ensure
Reg had satisfactorily complied with its requirements and reinstated Reg’s shares for trading on September 21, 2009. On September
9, 2008, the BCSC issued a CTO against Reg for failure to file its annual audited financial statements and related MD&A. Reg
filed the required documents on SEDAR on September 22, 2008, and the CTO was revoked on September 24, 2008. Additionally, Reg Technologies
received notification from the TSX.V that it had suspended trading in Reg Technologies’ shares as a result of the cease trade
order. The TSX.V concluded its reinstatement review to ensure Reg Technologies had satisfactorily complied with the TSX.V requirements
and Reg’s shares were reinstated for trading on October 7, 2008.



23







On December 6, 2011 the BCSC issued a CTO against
Teryl Resources Corp. (“Teryl”), a company with related directors and officers, for failure to file its interim
unaudited financial statements and related MD&A. The CTO was revoked on December 12, 2012 following the filing of its interim
financial statements and related MD&A. Additionally, Teryl received notification from the TSX Venture Exchange (“TSX.V”)
that it had suspended trading in Teryl’s shares as a result of the CTO. The TSX.V concluded its reinstatement review to ensure
Teryl had satisfactorily complied with its requirements and reinstated Teryl’s shares for trading on January 27, 2012.



Other than as disclosed above, to our knowledge,
no director or officer of our company is or has been, within the preceding ten years, a director or officer of any other issuer
that, while that person was acting in that capacity:



| | (a) | was the subject of a cease trade order or similar order or an order that denied the other issuer
access to any exemptions for a period of more than 30 consecutive days, or
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or
was subject to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or
trustee appointed to hold its assets.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Penalties or Sanctions



No director or officer is or has, within the
past ten years:



| | (a) | been subject to any penalties or sanctions imposed by a court relating to Canadian securities legislation
or Canadian securities regulatory authority or has entered into a settlement agreement with a Canadian securities regulatory authority,
or
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | been subject to any other penalties or sanctions imposed by a court or regulatory body that would
be likely to be considered important to a reasonable investor making an investment decision.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Individual Bankruptcies



No director or officer is or has, within the
preceding 10 years, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or been subject
to or instituted any proceedings, arrangement, or compromise with creditors or had a receiver, receiver manager or trustee appointed
to hold the assets of that individual.



Family Relationships



Susanne Robertson, a director, is the spouse
of John Robertson, our President and Chief Executive Officer. Thomas Robertson, a director, is a son of John Robertson.



Other Relationships



Except as disclosed in Item 7B – Related
Party Transactions, there are no arrangements or understandings between any major shareholder, customer, supplier or others,
pursuant to which any of the above-named persons were selected as directors or members of senior management.



Conflicts of Interest



Other than as disclosed in Item 3D - Risk
Factors, there are no existing or potential conflicts of interest among our company, and our directors, officers or promoters.



24







| | B. | COMPENSATION
| | -- | ------------



The table below sets forth the compensation
paid to or earned by our directors and members of our administrative, supervisory or management bodies during the financial years
ended February 28, 2013, and February 29, 2012 and February 28, 2011:



|                                       |  |  |                    |  |  |                      |  |                         |  |                          |  | Non-equity incentive plan compensation 
($) |  |                           |  |                   | 
|-------------------------------------- |  |  | ------------------ |  |  | -------------------- |  | ----------------------- |  | ------------------------ |  | ------------------------------------------- |  | ------------------------- |  | ----------------- | 
|Name and Principal Position            |  |  | Year Ended Feb. 28 |  |  | Salary ($)           |  | Share- based Awards ($) |  | Option- Based Awards ($) |  | Annual incentive plans ($)                  |  | Long-term incentive plans |  | Pension value ($) | 
|John Robertson President & CEO (1) (2) |  |  | 2013 2012 2011     |  |  | 12,000 12,000 12,000 |  | Nil Nil Nil             |  | Nil Nil Nil              |  | Nil Nil Nil                                 |  | Nil Nil Nil               |  | Nil Nil Nil       | 
|                                       |  |  |                    |  |  |                      |  |                         |  |                          |  |                                             |  |                           |  |                   | 
|Jane He CFO                            |  |  | 2013 2012 2011     |  |  | Nil Nil Nil          |  | Nil Nil Nil             |  | Nil 1,052 Nil            |  | Nil Nil Nil                                 |  | Nil Nil Nil               |  | Nil Nil Nil       | 
|                                       |  |  |                    |  |  |                      |  |                         |  |                          |  |                                             |  |                           |  |                   | 
|Donna Moroney Director                 |  |  | 2013 2012 2011     |  |  | Nil Nil Nil          |  | Nil Nil Nil             |  | Nil Nil Nil              |  | Nil Nil Nil                                 |  | Nil Nil Nil               |  | Nil Nil Nil       | 
|                                       |  |  |                    |  |  |                      |  |                         |  |                          |  |                                             |  |                           |  |                   | 
|Susanne Robertson (1) Director         |  |  | 2013 2012 2011     |  |  | Nil Nil Nil          |  | Nil Nil Nil             |  | Nil Nil Nil              |  | Nil Nil Nil                                 |  | Nil Nil Nil               |  | Nil Nil Nil       | 





|(1) | Mr. Robertson is President and a director, and Mrs. Robertson is a director of SMR Investments
Ltd., which company is to receive or accrue $2,500 per month ($30,000 per year) for management services.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Mr. Robertson is entitled to receive or accrue $12,000 per year for director’s fees
|--- | -----------------------------------------------------------------------------------



We do not have a share-based awards plan, annual
incentive plan, long-term incentive plan or pension or retirement plan for its directors, other than our stock option plan; therefore,
no amounts were set aside or accrued by us or our subsidiary to provide pension, retirement or similar benefits to any of the directors
or members of our administrative, supervisory or management bodies.



Option-based awards to our
directors and members of our administrative, supervisory or management bodies are granted pursuant to our stock option plan. The
options are always granted at market price. The valuation of the stock options at the time of grant is based on the Black-Scholes
model and includes the following assumptions: weighted average risk free rate, weighted average expected life, expected volatility
and dividend yield.



Directors generally receive a grant of stock options
upon their appointment. See Item 6E – Share Ownership which sets out the number, exercise price, date of grant and
expiry of stock options granted to our directors and members of our administrative, supervisory or management bodies.



| | C. | BOARD PRACTICES
| | -- | ---------------



Term of Office



An election of directors takes place at each
annual meeting of shareholders and all the directors then in office retire but, if qualified, are eligible for re-election. A director
retains office only until the election of his successor. The number of directors to be elected at such meeting is the number of
directors then in office, unless the directors or the shareholders otherwise determine. The election is by ordinary resolution
of shareholders. If an election of directors is not held at the proper time, the incumbent directors continue in office until their
successors are elected.



Termination Benefits



We do not have any contract with any director
that provides benefits upon termination of employment.



Pursuant to our stock option plan, in the event
an optionee’s employment by or engagement with (as a director or otherwise) our company is terminated by us for any reason
other than death before exercise of the options granted thereunder, the stock options granted to the optionee shall immediately
expire and all rights to purchase shares thereunder shall immediately cease and expire and be of no further force or effect.



25







In the event the optionee resigns as an employee
(director or otherwise), the optionee shall have thirty days from the date of such resignation to exercise such of the optioned
shares in respect of which such option has not been previously exercised, and thereafter his option shall expire and all rights
to purchase shares hereunder shall cease and expire and be of no further force or effect.



Committees



We have one standing committee, being the Audit
Committee.



Under section 224 of the BCBCA, the directors
of a company must, at their first meeting or on or after each annual shareholders meeting, elect an audit committee, to hold office
until the next annual meeting date. The audit committee must be composed of at least three 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.



As of the date of this annual report, the members
of the Audit Committee are Susanne Robertson, Suzan El-Khatib and Thomas Robertson. Members of the Audit Committee are not officers
or employees.



Our Audit Committee assists the Board in fulfilling
its responsibilities relating to our corporate accounting and reporting practices. The Audit Committee is responsible for ensuring
that management has established appropriate processes for monitoring our systems and procedures for financial reporting and controls,
reviewing all financial information in disclosure documents; monitoring the performance and fees and expenses of our external auditors
and recommending external auditors for appointment by shareholders. The Audit Committee is also responsible for reviewing our annual
financial statements prior to approval by the Board and release to the public.



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 our 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.



The Audit Committee’s mandate requires
that all of the members be financially literate and at least one member have accounting or related financial management expertise.



The mandate of the Audit Committee empowers
it to retain legal, accounting and other advisors.



| | D. | EMPLOYEES
| | -- | ---------



We did not have any employees during any of
the years ended February 28, 2013, February 29, 2012 and February 28, 2011. Our legal, accounting, marketing and administrative
functions are, and have been during the last three fiscal years, contracted out to consultants who work closely with us.



| | E. | SHARE OWNERSHIP
| | -- | ---------------



The following table sets forth the share ownership
of those individuals in Item 6.A - Directors and Senior Management above and indicates the percentage of ownership for each.
The voting rights attached to the common shares owned by our directors, officers and senior management do not differ from those
voting rights attached to shares owned by people who are not directors, officers or senior management of our company.



26







|                                          |  | Stock Options                                           |         | Warrants |                           |  |         |                        |  |                                                         |  |  |                                  | 
|----------------------------------------- |  | ------------------------------------------------------- | ------- | -------- | ------------------------- |  | ------- | ---------------------- |  | ------------------------------------------------------- |  |  | -------------------------------- | 
|Name and Title                            |  | Number of securities underlying unexercised options (#) |         |          | Option exercise price ($) |  |         | Option expiration date |  | Number of securities underlying unexercised warrants(1) |  |  | Common Shares Beneficially Owned | 
|                                          |  |                                                         |         |          |                           |  |         |                        |  |                                                         |  |  |                                  | 
|John G. RobertsonPresident & CEO Director |  |                                                         | 0       |          |                           |  | NA      |                        |  | NA                                                      |  |  | 0                                | 
|                                          |  |                                                         |         |          |                           |  |         |                        |  |                                                         |  |  |                                  | 
|Susanne RobertsonDirector                 |  |                                                         | 0       |          |                           |  | NA      |                        |  | NA                                                      |  |  | 0                                | 
|                                          |  |                                                         |         |          |                           |  |         |                        |  |                                                         |  |  |                                  | 
|Thomas RobertsonDirector                  |  |                                                         | 0       |          |                           |  | NA      |                        |  | NA                                                      |  |  | 0                                | 
|                                          |  |                                                         |         |          |                           |  |         |                        |  |                                                         |  |  |                                  | 
|Suzan El-Khatib Director                  |  |                                                         | 150,000 |          |                           |  | US$0.10 |                        |  | Apr 14, 2016                                            |  |  | 0                                | 
|                                          |  |                                                         |         |          |                           |  |         |                        |  |                                                         |  |  |                                  | 
|Jane He CFO                               |  |                                                         | 100,000 |          |                           |  | US$0.10 |                        |  | Apr 14, 2016                                            |  |  | 0                                | 



|(1) | As at June 28, 2012, there were 99,593,825 issued and outstanding common shares.
|--- | --------------------------------------------------------------------------------
|    |                                                                                 

|(2) | Beneficially owns less than 1% of our common shares.
|--- | ----------------------------------------------------
|    |                                                     

|(3) | Includes 797,000 common shares directly owned, 3,268,234 common shares registered in the name
of SMR Investments Ltd., a private company controlled by Mrs. Robertson.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------



Stock Option Plan



We have a stock option plan to issue up to
10% of our issued and outstanding common shares, from time to time, to certain directors and employees. All options granted under
the plan are for a term of five years and are subject to the following exercise schedule:



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



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



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



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



|ITEM 7. |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|------- |  | -------------------------------------------------



| | A. | MAJOR SHAREHOLDERS
| | -- | ------------------



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



Based upon our review of the records
maintained by Computer share Trust Company of Canada, our registrar and transfer agent, and insider reports filed with the
System for Electronic Disclosure by Insiders (SEDI), as at June 27, 2013, there were no shareholder who beneficially owned,
directly or indirectly, or exercised control or direction over, shares carrying more than 5% of the voting rights attached to
all outstanding common shares of the Company.



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



We do not know of any arrangements which could
result in a change in control of our company.



27







| | B. | RELATED PARTY TRANSACTIONS.
| | -- | ---------------------------



Other than as disclosed below or elsewhere
in this annual report, to the best of our knowledge, there have been no material transactions or loans from since the beginning
of our preceding three financial years up to the date of this annual report between our company and: (a) enterprises that directly
or indirectly through one or more intermediaries, control or are controlled by, or are under common control with, our company;
(b) associates; (c) individuals owning, directly or indirectly, an interest in the voting power of our company that gives
them significant influence over our company, and close members of any such individual’s family; (d) our key management personnel,
including directors and senior management and close members of such individuals’ families; and (e) enterprises in which a substantial
interest in the voting power is owned, directly or indirectly, by any person described in (c) or (d) or over which such a person
is able to exercise significant influence.



|                                                                                          |  | For the Year Ended |                  
|----------------------------------------------------------------------------------------- |  | ------------------ | -----------------
|                                                                                          |  |                    | February 28, 2013
|Management fees paid or accrued to a company controlled by director Susanne Robertson (1) |  | $                  | 30,000           
|                                                                                          |  |                    |                  
|Director’s fees paid to John G. Robertson, our President, CEO and a director              |  | $                  | 12,000           
|                                                                                          |  |                    |                  

| | (1) | We entered into a management services agreement with SMR Investment Ltd. (“SMR”)
pursuant to which SMR incurred management fees as set forth in the table above. SMR is a private company owned by Susanne Robertson,
a director and the wife of John G. Robertson, our President, who is also a director of SMR. As at the fiscal year ended February
28, 2013, we had an outstanding balance of $141,450 owing to SMR.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



We had related party advances outstanding of
$339,197 as of February 28, 2013, compared to $396,112 as of February 29, 2012. These amounts were unsecured, non-interest bearing
and with no fixed terms of repayment.



| | C. | INTERESTS OF EXPERTS AND COUNSEL.
| | -- | ---------------------------------



Not applicable.



|ITEM 8. |  | FINANCIAL INFORMATION
|------- |  | ---------------------



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



Our consolidated financial statements and the
accompanying notes have been prepared in conformity with accounting principles generally accepted in the United States (“GAAP”)
and are presented in Canadian dollars. These financial statements have been prepared in accordance with the FASB ASC 915 “Development-Stage
Entities”. A development-stage enterprise is one in which planned principal operations have not commenced or if its operations
have commenced, there has been no significant revenue therefrom. Development-stage companies report cumulative loss from the inception
of its development-stage activities. These consolidated financial statements for the fiscal year ended February 28, 2013, contain:



|- |  | Report of Independent Registered Public Accounting Firm dated June 28, 2013 of A Chan
and Company LLP Chartered Accountants
|- |  | ---------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                            

|- |  | Consolidated Balance Sheets as at February 28, 2013 and February 29, 2012
|- |  | -------------------------------------------------------------------------
|  |  |                                                                          

|- |  | Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years
Ended February 28, 2013, February 29, 2012 and February 28, 2011
|- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                                                     

|- |  | Consolidated Statements of Cash Flows for the Years Ended February 28, 2013, February
29, 2012 and February 28, 2011
|- |  | --------------------------------------------------------------------------------------------------------------------
|  |  |                                                                                                                     

|- |  | Consolidated Statements of Stockholders’ Deficit, March 1, 2003 to February
28, 2013
|- |  | ------------------------------------------------------------------------------------
|  |  |                                                                                     

|- |  | Notes to the Consolidated Financial Statements as at February 28, 2013
|- |  | ----------------------------------------------------------------------



28







Legal Proceedings and Regulatory Actions



During the fiscal year ended February 28, 2013,
we were not and are not currently a party to, nor are any of our properties the subject of, any legal proceedings for which the
outcome could have a material adverse affect on our company, nor, to our knowledge, are we to be a party to any contemplated legal
proceedings, the outcome of which could have a material adverse affect on our company.



There have been no penalties or sanctions imposed
against us by a court relating to securities legislation or by a securities regulatory authority during the fiscal year ended February
28, 2013, or any other time that would likely be considered important to a reasonable investor making an investment decision in
our company, and we have during the fiscal year ended February 28, 2013.



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
|------- |  | ---------------------



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, which information
reflects inter-dealer prices, without retail mark-up, markdown, or commission and may not represent actual transactions:



|Year |  |  | High (US$) |       |  | Low (US$) | 
|---- |  |  | ---------- | ----- |  | --------- | 
|2013 |  |  |            | 0.04  |  |           | 
|2012 |  |  |            | 0.06  |  |           | 
|2011 |  |  |            | 0.106 |  |           | 
|2010 |  |  |            | 0.10  |  |           | 
|2009 |  |  |            | 0.239 |  |           | 



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



|Period                                 |  |  | High |       |  | Low | 
|-------------------------------------- |  |  | ---- | ----- |  | --- | 
|Fiscal 2013                            |  |  |      | (US$) |  |     | 
|Fourth Quarter ended February 28, 2013 |  |  |      | 0.02  |  |     | 
|Third Quarter ended November 30, 2012  |  |  |      | 0.04  |  |     | 
|Second Quarter ended August 31, 2012   |  |  |      | 0.04  |  |     | 
|First Quarter ended May 31, 2012       |  |  |      | 0.04  |  |     | 
|Fiscal 2012                            |  |  |      |       |  |     | 
|Fourth Quarter ended February 29, 2012 |  |  |      | 0.05  |  |     | 
|Third Quarter ended November 30, 2011  |  |  |      | 0.05  |  |     | 
|Second Quarter ended August 31, 2011   |  |  |      | 0.06  |  |     | 
|First Quarter ended May 31, 2011       |  |  |      | 0.05  |  |     | 



29







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



|Month         |  |  | High (US$) |      |  | Low (US$) | 
|------------- |  |  | ---------- | ---- |  | --------- | 
|June 2013     |  |  |            | 0.03 |  |           | 
|May 2013      |  |  |            | 0.04 |  |           | 
|April 2013    |  |  |            | 0.04 |  |           | 
|March 2013    |  |  |            | 0.04 |  |           | 
|February 2013 |  |  |            | 0.04 |  |           | 
|January 2013  |  |  |            | 0.05 |  |           | 



|ITEM 10. |  | ADDITIONAL INFORMATION
|-------- |  | ----------------------



| | A. | SHARE CAPITAL
| | -- | -------------



Not applicable.



| | B. | MEMORANDUM AND ARTICLES OF ASSOCIATION
| | -- | --------------------------------------



We were incorporated on February 27, 1979 in
the Province of British Columbia and were extra-provincially registered in the Province of Alberta on October 12, 1995 under the
name Flame Petro-Minerals Corp. Effective March 21, 2000, our name was changed to LinuxWizardry Systems, Inc., and
on March 18, 2003 we subsequently changed our name to Linux Gold Corp.



Our Memorandum and Articles are incorporated
by reference to the information in our registration statement on Form 20-F filed with the SEC, 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. There are
no restrictions on the type of business which may be carried out by us in our memorandum and articles and our objects and purposes
are not set out in our memorandum and articles.



Powers of Directors



Approval and Voting



A director or senior officer who holds a disclosable
interest (as that term is used in the BCBCA) in a contract or transaction into which we have entered or propose to enter is:



| | - | liable to account to us for any profit that accrues to the director or senior officer under or
as a result of the contract or transaction only if and to the extent provided in the BCBCA.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | not entitled to vote on any directors’ resolution to approve that contract or transaction,
unless all the directors have a disclosable interest in that contract or transaction, in which case any or all of those directors
may vote on such resolution.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | and who is present at the meeting of directors at which the contract or transaction is considered
for approval may be counted in the quorum at the meeting whether or not the director votes on any or all of the resolutions considered
at the meeting.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



A director or senior officer who holds any
office or possesses any property, right or interest that could result, directly or indirectly, in the creation of a duty or interest
that materially conflicts with that individual’s duty or interest as a director or senior officer, must disclose the nature
and extent of the conflict as required by the BCBCA.



Remuneration and Expenses



The directors are entitled to the remuneration
for acting as directors, if any, as the directors may from time to time determine. If the directors so decide, the remuneration
of the directors, if any, will be determined by the shareholders. That remuneration may be in addition to any salary or other remuneration
paid to any officer or employee as such, who is also a director.



30







Borrowing



If authorized by the directors, we may:



| | 1. | borrow money in the manner and amount, on the security, from the
sources and on the terms and conditions that we consider appropriate;
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



| | 2. | issue bonds, debentures and other debt obligations either outright
or as security for any liability or obligation or any other person and at such discounts or premiums and on such other terms as
we consider appropriate;
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3. | guarantee the repayment of money by any other person or the performance
of any obligation of any other person; and
| | -- | ------------------------------------------------------------------------------------------------------------------



| | 4. | mortgage, charge, whether by way of specific or floating charge,
grant a security interest in, or give other security on, the whole or any part of our present and future assets and undertaking.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Any bonds, debentures or other debt obligations
may be issued at a discount, premium or otherwise, and with any special privileges as to redemption, surrender, drawings, allotment
of or conversion into or exchange for shares or other securities, attending and voting at our general meetings, appointment of
directors or otherwise and may by their terms be assignable free from any equities between us and the person to whom they were
issued or any subsequent holder thereof, all as the directors may determine.



Qualification



A director is not required to hold a share
in our capital as qualification for his or her office but must be qualified as required by the BCBCA to become, act or continue
to act as a director.



The BCBCA states that



| | 1. | A person must not become or act as a director of a company unless
that person is an individual who is qualified to do so.
| | -- | -------------------------------------------------------------------------------------------------------------------------



| | 2. | An individual is not qualified to become or act as a director of
a company if that individual is
| | -- | ------------------------------------------------------------------------------------------------



| | (a) | under the age of 18 years,
| | --- | --------------------------



| | (b) | found by a court, in Canada or elsewhere, to be incapable of managing the individual’s own
affairs,
| | --- | ---------------------------------------------------------------------------------------------------



| | (c) | an undischarged bankrupt, or
| | --- | ----------------------------



| | (d) | convicted in or out of British Columbia of an offence in connection with the promotion, formation
or management of a corporation or unincorporated business, or of an offence involving fraud, unless
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (i) | the court orders otherwise,
| | --- | ---------------------------



| | (ii) | 5 years have elapsed since the last to occur of
| | ---- | -----------------------------------------------



| | (A) | the expiration of the period set for suspension of the passing of sentence without a sentence having
been passed,
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (B) | the imposition of a fine,
| | --- | -------------------------



| | (C) | the conclusion of the term of any imprisonment, and
| | --- | ---------------------------------------------------



| | (D) | the conclusion of the term of any probation imposed, or
| | --- | -------------------------------------------------------



| | (iii) | a pardon was granted or issued under the Criminal Records Act (Canada).
| | ----- | -----------------------------------------------------------------------



31







| | 3. | A director who ceases to be qualified to act as a director of a company
must promptly resign.
| | -- | ---------------------------------------------------------------------------------------------



Annual and Extraordinary General Meetings



Unless an annual general meeting is deferred
or waived in accordance with the BCBCA, we must hold an annual general meeting at least once in each calendar year and not more
than 15 months after the last annual general meeting at such time and place as may be determined by the directors.



Notice of Meetings



We must send notice of the date, time and location
of any meeting of shareholders, in the manner provided in our Articles, or in such other manner, if any, as may be prescribed by
directors’ resolution (whether previous notice of the resolution has been given or not), to each shareholder entitled to
attend the meeting, to each director and to our auditor, unless our Articles otherwise provide, at least the following number of
days before the meeting:



| | 1. | if and for so long as we are a public company, 21 days;
| | -- | -------------------------------------------------------



| | 2. | otherwise, 10 days.
| | -- | -------------------



Description of Securities



Common Shares



We are authorized to issue 200,000,000 common
shares without nominal or par value of which, 99,593,825 Common Shares were issued and outstanding as fully paid and non-assessable
as of February 28, 2013 and the date of this annual report.



The holders of the common shares are entitled
to vote at all meetings of shareholders, are entitled to vote, and on every poll taken at every such meeting, or adjourned meeting,
every holder of common shares shall be entitled to one vote in respect of each common share held.



| | C. | MATERIAL CONTRACTS
| | -- | ------------------



We entered into the following material contracts
during the previous two years:



Fish Creek Mineral Claims



On March 5, 2010, we entered into an amendment
agreement to the joint venture agreement dated March 5, 2002 with Teryl Resources Corp. (“Teryl”), a related
company with common directors and officers, to extend the term of the original agreement from March 5, 2009 until March 5, 2011.
Under the terms of the agreement, Teryl issued 200,000 common shares to Linux at a fair value of $80,000 and must expend $500,000
over three years. We retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working
interest. We entered into an amending agreement with Teryl to extend the term of the original
agreement until March 7, 2007, in which Teryl issued 100,000 common shares, and also agreed to expend a minimum of US$500,000 within
two years from the date of that amending agreement.Subsequently, we entered into a further amending agreement with Teryl
to extend the term of the original agreement until March 5, 2009. The claims are legally maintained
by recording an affidavit of annual labour for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental
to the State of Alaska in the amount of $130 per claim ($3,900 total).



On December 1, 2011 the Company and Teryl further
amended the agreement to include the following terms:



| | - | Teryl applies $75,000 owed by the Company to Teryl towards the above stated minimum exploration
budget of US$500,000;
| | - | ---------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                      

| | - | Teryl has an option to pay the expenditures for the Fish Creek property in cash in lieu of the
exploration costs to the Company; and
| | - | ------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                     

| | - | The term of the agreement is extended to March 5, 2013.
| | - | -------------------------------------------------------
| |   |                                                        

Teryl exercised its option to pay the expenditures
in cash in lieu of the exploration costs to the Company. As a result, $75,000 advanced to the Company by Teryl was applied as
a recovery of exploration costs for the year ended February 29, 2012. As at March 6, 2013 Teryl acquired the 50% interest in Fish
Creek from the Company pursuant to this agreement. The Company retains a 5% net royalty up to $2,000,000. Teryl has the right
to purchase the 5% net royalty form the Company within one year of production.



32







Trout Mineral Claims



On January 27, 2010, we entered into a mining
agreement with the 100% owner of the eleven Trout mineral claims, located in the Fairbanks Recording District, Alaska, for a five
year lease. In accordance with the mining agreement, upon payment of US$7,500 (paid) we acquired an option to enter into a five
year lease by August 1, 2010. The terms of the lease option are as follows:



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

| | - | Annual work commitment of US$10,000 (paid for 2011);
| | - | ----------------------------------------------------
| |   |                                                     

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

| | ● | 2011: Cash payment of US$5,000 (paid),
| | - | --------------------------------------
| |   |                                       

| | ● | 2012: Cash payment of US$10,000 ($5,000 paid),
| | - | ----------------------------------------------
| |   |                                               

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

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

| | ● | 2015: Cash payment of US$500,000 and issuance of our common shares valued at US$500,000 to a maximum
of one million common shares and granting of 4% Net Smelter Return in exchange for 100% ownership in the Trout mineral claims.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Trout Mineral Claims agreement was terminated during the year ended
February 28, 2013.



Teaming Agreement



Effective April 5, 2013 the Company signed a teaming agreement to
produce gold from a placer mining technology with a 45 day option for consideration of US$1,000 which was subsequently extended
to July 15, 2013. The teaming agreement is earned by the Company funding the gold extraction technology for total cost of US$32,000.



| | 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
| | -- | --------



Canadian Federal Income Tax Considerations



The following is a summary of the material
Canadian federal income tax consequences under the Income Tax Act(Canada) (“Tax Act”) that generally
apply to the acquisition, holding and disposition of our common shares. This summary only applies to a holder of common shares,
who (a) is at all material times a resident of the U.S. for purposes of the Canada-U.S. Income Tax Treaty (1980) (“Treaty”),
(b) is fully entitled to benefits under the Treaty, (c) holds common shares as capital property for purposes of the Tax Act, (d)
deals at arm’s length with us for purposes of the Tax Act and (e) does not have a permanent establishment in Canada, as defined
in the Treaty. Such holders are referred to in this summary as a “US Holder.” Special rules, which are not discussed
below, may apply to “financial institutions,” as defined in the Tax Act, and to non-resident insurers carrying on an
insurance business in Canada and elsewhere.



33







This summary is based on the current provisions
of the Tax Act and its regulations, all proposed amendments to the Tax Act and its regulations announced by the Minister of Finance,
Canada, the current publicly available published administrative practices and assessing policies of the Canada Revenue Agency,
and the provisions of the Treaty. It is assumed that any proposed amendments to the Tax Act and its regulations relevant to this
summary will be enacted in substantially their present form.



The anticipated tax consequences may change,
and any change may be retroactively effective. If so, this summary may be affected. Further, any variation or difference from the
facts or representations recited here, for any reason, might affect the following discussion, perhaps in an adverse manner, and
make this summary inapplicable.



This summary is not exhaustive of all possible
Canadian federal income tax considerations and does not take into account provincial, territorial or foreign tax considerations.
It is not intended to be, nor should it be construed to be, legal or tax advice to any particular holder of common shares. Prospective
purchasers of our common shares are advised to consult with their advisors about the income tax consequences to them of an acquisition
of common shares and to determine whether they are entitled to full benefits under the Treaty.



Dividends on Common Shares



Dividends paid or deemed to be paid to a US
Holder will be subject to Canadian withholding tax that will be withheld by us. Only the net amount will be paid to the US Holder.
Under the Tax Act the rate of withholding for dividends paid to a non-resident of Canada is 25%; however, under Article X of the
Tax Treaty, the rate of tax on dividends paid to a US Holder is generally limited to 15% of the gross dividend (or 5% in the case
of certain corporate shareholders owing at least 10% of our voting shares). Under the Tax Treaty, dividends paid to certain tax-exempt
organizations resident in the U.S. are exempt from Canadian income tax.



Dispositions of Common Shares



A US Holder will not be subject to tax under
the Tax Act in respect of any capital gain realized by such US Holder on a disposition (or deemed disposition) of our common share
unless the common shares are “taxable Canadian property” (as defined in the Tax Act) at the time of disposition and
the holder is not entitled to relief under the Treaty. As long as our common shares are then listed on a designated stock exchange
(which currently includes the CNSX), our common shares generally will not constitute taxable Canadian property to a US Holder,
unless at any time during the 60-month period immediately preceding the disposition, the US Holder, persons with whom the US Holder
did not deal at arm’s length, or the US Holder together with all such persons, owned 25% or more of the issued shares of
any class or series of our shares and, at any time during such 60-month period more than 50% of the fair market value of the common
shares was derived directly or indirectly, from one or any combination of real or immovable property situated in Canada, Canadian
resource property, timber resource property, or any option in respect of, or interest in, such properties (all as defined in or
used for the purposes of the Tax Act).



In certain circumstances, which depend primarily
on how our common shares were acquired by the US Holder, the Tax Act will deem the common shares held by a US Holder to be taxable
Canadian property. However, under the Treaty, a US Holder to whom the common shares are taxable Canadian property will not be subject
to Canadian tax on a gain realized by the US Holder on the disposition or deemed disposition of the common shares unless at the
time of disposition or deemed disposition, the value of our common shares is derived principally from real property situated in
Canada.



If a US Holder disposes of our common shares
to us (unless we acquired the common shares in the open market in the manner in which shares would normally be purchased by any
member of the public), this will result in a deemed dividend to the US Holder equal to the amount by which the consideration we
pay for the common shares exceeds the “paid-up capital” of such common shares. The amount of such dividend will be
subject to Canadian withholding tax as described above.



Certain U.S. Federal Income Tax Considerations



The following is a general discussion of certain
possible U.S. federal income tax considerations, under current law, generally applicable to a U.S. Holder (as hereinafter defined)
of our shares. This discussion is of a general nature only and does not take into account the particular facts and circumstances,
with respect to U.S. federal income tax issues, of any particular U.S. Holder. In addition, this discussion does not cover any
state, local or foreign tax consequences.



34







The following discussion is based upon the
sections of the Internal Revenue Code of 1986, as amended (“Code”), Treasury Regulations, published Internal
Revenue Service (“IRS”) rulings, published administrative positions of the IRS and court decisions that are
currently applicable, any or all of which could be materially and adversely changed, possibly on a retroactive basis, at any time
and which are subject to differing interpretations. This discussion does not consider the potential effects, both adverse and beneficial,
of any proposed legislation which, if enacted, could be applied, possibly on a retroactive basis, at any time.



This discussion is for general information
only and it is not intended to be, nor should it be construed to be, legal or tax advice to any U.S. Holder or prospective U.S.
Holder of shares issued by us, and no opinion or representation with respect to the U.S. federal income tax consequences to any
such U.S. Holder or prospective U.S. Holder is made. Accordingly, U.S. Holders and prospective U.S. Holders of common shares issued
by us should consult their own financial advisor, legal counsel or accountant regarding the U.S. federal, state, local and foreign
tax consequences of purchasing, owning and disposing of shares issued by us.



Circular 230 Disclosure



Any statement made herein regarding any
U.S. federal tax issue is not intended or written to be used, and cannot be used, by any taxpayer for purposes of avoiding any
penalties. Any such statement herein is written in connection with the marketing or promotion of the transaction to which the statement
relates. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.



U.S. Holders



As used herein, a “U.S. Holder”
means a holder of common shares issued by us who is (i) a citizen or individual resident of the U.S., (ii) a corporation created
or organized in or under the laws of the U.S. or of any political subdivision thereof, (iii) an estate whose income is taxable
in the U.S. irrespective of source or (iv) a trust if (A) it is subject to the primary supervision of a court within the U.S. and
control of a U.S. fiduciary as described Section 7701(a)(30) of the Code or (B) the trust was in existence on August 20, 1996 and
has properly elected to be treated as a U.S. person. If a partnership or other “pass-through” entity treated as a partnership
for U.S. federal income tax purposes holds shares issued by us, the U.S. federal income tax treatment of the partners or owners
of such partnership or other pass-through entity generally will depend on the status of such partners or owners and the activities
of such partnership or pass-through entity.



Persons Not Covered



This summary does not address the U.S. federal
income tax consequences to persons (including persons who are U.S. Holders) subject to special provisions of U.S. federal income
tax law, including (i) persons who are tax-exempt organizations, qualified retirement plans, individual retirement accounts and
other tax-deferred accounts, financial institutions, insurance companies, real estate investment trusts, regulated investment companies,
or brokers, dealers or traders in securities, (ii) persons who have a “functional currency” other than the U.S. dollar,
(iii) persons subject to the alternative minimum tax, (xi) persons who own their common shares as part of a straddle, hedging,
conversion transaction, constructive sale or other arrangement involving more than one position, (iv) persons who acquired their
common shares through the exercise of employee stock options or otherwise as compensation for services, (v) persons that own an
interest in an entity that owns common shares, (vi) persons who own, exercise or dispose of any options, warrants or other rights
to acquire common shares, (vii) persons who are partners or owners of partnerships or other pass-through entities or (viii) persons
who own their common shares other than as a capital asset within the meaning of Section 1221 of the Code.



35







Distributions Made by the Corporation to U.S. Holders on
our Common Shares



General Rules. U.S. Holders receiving
distributions (including constructive distributions) with respect to common shares issued by us are required to include in gross
income as a dividend for U.S. federal income tax purposes the gross amount of such distributions (without reduction for any Canadian
income tax withheld from such distributions), equal to the U.S. dollar value of such distributions on the date of receipt (based
on the exchange rate on such date), to the extent that we have current or accumulated earnings and profits. To the extent that
distributions from us exceed our current and accumulated earnings and profits, such distributions will be treated first as a return
of capital, to the extent of the U.S. Holder’s adjusted basis in the shares, and thereafter as gain from the sale or exchange
of the shares. (See more detailed discussion at “Disposition of Shares” below). Any Canadian tax withheld from a distribution
by us may be credited, subject to certain limitations, against the U.S. Holder’s U.S. federal income tax liability or, alternatively,
may be deducted in computing the U.S. Holder’s U.S. federal taxable income by those who itemize deductions. (See more detailed
discussion at “Foreign Tax Credit” below).



Currency Gain or Loss. In the
case of foreign currency received as a distribution that is not converted by the recipient into U.S. dollars on the date of receipt,
a U.S. Holder will have a tax basis in the foreign currency equal to its U.S. dollar value on the date of receipt. Generally any
gain or loss recognized upon a subsequent sale or other disposition of the foreign currency, including the exchange for U.S. dollars,
will be ordinary income or loss. However, an individual whose realized gain does not exceed $200 will not recognize that gain,
to the extent that there are no expenses associated with the transaction that meet the requirements for deductibility as a trade
or business expense (other than travel expenses in connection with a business trip) or as an expense for the production of income.



Dividend may be Eligible for Reduced
Tax Rate. For taxable years beginning after December 31, 2002 and before January 1, 2013, dividends received by U.S. Holders
that are individuals, estates or trusts from “qualified foreign corporations,” as defined in Section 1(h)(11) of the
Code, generally are taxed at the same preferential tax rates applicable to long-term capital gains. Although not free from doubt,
it appears that we would be a “qualified foreign corporation,” as defined in Section 1(h)(11) of the Code pursuant
to the U.S. Canada income tax treaty if we are not a Passive Foreign Investment Company (“PFIC”). A corporation
that is properly described as a PFIC for its taxable year during which it pays a dividend, or for its immediately preceding taxable
year, will not be treated as a “qualifying foreign corporation” and dividends received by U.S. Holders that are individuals,
estates or trusts generally will be subject to U.S. federal income tax at ordinary income tax rates (and not at the preferential
tax rates applicable to long-term capital gains).



Dividends not Eligible for Dividends
Received Deduction. Dividends paid on our Common Shares generally will not be eligible for the “dividends received
deduction” allowed to corporate shareholders receiving dividends from certain U.S. corporations. Under certain circumstances,
a U.S. Holder that is a corporation and that owns shares representing at least 10% of the total voting power and the total value
of shares issued by us may be entitled to a 70% deduction of the “U.S. source” portion of dividends received from us
(unless we qualify as a “Foreign Personal Holding Company” or a “PFIC” as defined below).
The availability of the dividends received deduction is subject to several complex limitations that are beyond the scope of this
discussion, and U.S. Holders of our Common Shares should consult their own financial advisor, legal counsel or accountant regarding
the dividends received deduction.



Dividend Paid to Shareholder who Made
QEF Election may be Exempt from Tax. Generally, shareholders are not subject to additional income taxation on distributions
made by a PFIC to the extent of the shareholder’s basis in the corporation’s shares if a Qualified Electing Fund (“QEF”)
election is in effect. (Please see the QEF election discussion below.) A shareholder’s basis in this situation is usually
equal to the cost of purchasing the shares plus the amount of the corporation’s income that was reported on the shareholder’s
return pursuant to the QEF election less any prior distributions made by the corporation to the shareholder. Again, these rules
are subject to several exceptions that are beyond the scope of this discussion. U.S. Holders of shares issued by us should consult
their own financial advisor, legal counsel or accountant regarding whether dividends paid by us to them will be exempt from federal
income tax if a QEF election is made.



36







Disposition of Common Shares



General Rule. Subject to the
PFIC Rules discussed further below, a U.S. Holder will recognize gain or loss upon the sale or other taxable disposition of shares
issued by us equal to the difference, if any, between (i) the amount of cash plus the fair market value of any property received,
and (ii) the shareholder’s tax basis in the shares. This gain or loss will be capital gain or loss if the common shares are
a capital asset in the hands of the U.S. Holder, which will be long-term capital gain or loss if the shares are held for more than
one year.



Reduced Tax Rate. Under current
law, preferential tax rates apply to long-term capital gains of U.S. Holders that are individuals, estates or trusts. There are
currently no preferential tax rates for long-term capital gains for a U.S. Holder that is a corporation (other than a corporation
subject to Subchapter S of the Code). Deductions for net capital losses are subject to significant limitations. For U.S. Holders
that are not corporations, any unused portion of such net capital loss may be carried over to be used in later tax years until
such net capital loss is thereby exhausted. For U.S. Holders that are corporations (other than corporations subject to Subchapter
S of the Code), an unused net capital loss may be carried back three years and carried forward five years from the loss year to
be offset against capital gains until such net capital loss is thereby exhausted. Sales of PFIC stock are not eligible for the
reduced long-term capital gains rates that are usually applicable to sales of stock unless the shareholder made a QEF election
regarding such shares. As discussed below, we believe we are a PFIC.



The Corporation may be a Passive Foreign Investment Company



General Discussion. We believe
that we qualify as a PFIC, within the meaning of sections 1291 through 1298 of the Code, for the fiscal year ended February 28,
2013, may have qualified as a PFIC in prior years and may qualify as a PFIC in subsequent years. This determination is not binding
on U.S. Holders or the IRS and there can be no assurance that the IRS will not challenge this determination. A U.S. Holder who
holds stock in a foreign corporation during any year in which such corporation qualifies as a PFIC is subject to numerous special
U.S. federal income taxation rules and may elect to be taxed under two alternative tax regimes. The following is a discussion of
these three sets of special rules. In addition, special rules apply if a foreign corporation qualifies as both a PFIC and a “controlled
foreign corporation” (as defined below) and a U.S. Holder owns, actually or constructively, 10 % or more of the total combined
voting power of all classes of stock entitled to vote of such foreign corporation (See more detailed discussion at “Controlled
Foreign Corporation” below).



Definition of PFIC. Section 1297
of the Code defines a PFIC as a corporation that is not formed in the U.S. and, for any taxable year, either (a) 75% or more of
its gross income is “passive income” or (b) the average percentage, by fair market value (or, if the corporation
is not publicly traded and either is a controlled foreign corporation or makes an election, by adjusted tax basis), of its assets
that produce or are held for the production of “passive income” is 50% or more. “Passive income”
includes, for example, dividends, interest, certain rents and royalties, certain gains from the sale of stock and securities, and
certain gains from commodities transactions. However, gains resulting from commodities transactions are generally excluded from
the definition of passive income if “substantially all” of a merchant’s, producer’s or handler’s
business is as an active merchant, producer or handler of such commodities. For purposes of the PFIC income test and the asset
test, if a foreign corporation owns (directly or indirectly) at least 25% by value of the stock of another corporation, such foreign
corporation shall be treated as if it (a) held a proportionate share of the assets of such other corporation, and (b) received
directly its proportionate share of the income of such other corporation. Also, for purposes of such PFIC tests, passive income
does not include any interest, dividends, rents or royalties that are received or accrued from a “related” person to
the extent such amount is properly allocable to the income of such related person which is not passive income. For these purposes,
a person is related with respect to a foreign corporation if such person “controls” the foreign corporation or is controlled
by the foreign corporation or by the same persons that control the foreign corporation. For these purposes, “control”
means ownership, directly or indirectly, of stock possessing more than 50% of the total voting power of all classes of stock entitled
to vote or of the total value of stock of a corporation. As stated above, we believe that under these tests the Corporation would
be classified as a PFIC for the fiscal year ended February 28, 2013.



Generally Applicable PFIC Rules.
If a U.S. Holder does not make a timely election to be taxed in conformity with the Mark-to-Market rules or the QEF rules during
a year in which it holds (or is deemed to have held) shares issued by us while we are a PFIC (a “Non-Electing U.S. Holder”),
then special taxation rules under Section 1291 of the Code will apply to (i) gains realized on the disposition (or deemed to be
realized by reasons of a pledge) of his common shares and (ii) certain “excess distributions” (generally, distributions
received in the current taxable year that are in excess of 125% of the average distributions received during the three preceding
years or, if shorter, the U.S. Holder’s holding period) paid by us.



37







A Non-Electing U.S. Holder generally would
be required to pro rate all gains realized on the disposition of his common shares and all excess distributions on his common shares
over the entire holding period for the common shares. All gains or excess distributions allocated to prior years of the U.S. Holder
would be taxed at the highest tax rate for each such prior year applicable to ordinary income. The Non-Electing U.S. Holder also
would be liable for interest on the foregoing tax liability for each such prior year calculated as if such liability had been due
with respect to each such prior year. A Non-Electing U.S. Holder that is not a corporation must treat this interest charge as “personal
interest” which is wholly non-deductible. The balance of the gain or the excess distribution will be treated as ordinary
income in the year of the disposition or distribution, and no interest charge will be incurred with respect to such balance.



If we are a PFIC for any taxable year during
which a Non-Electing U.S. Holder holds shares issued by us, then we will continue to be treated as a PFIC with respect to such
common shares, even if we cease meeting the definition of a PFIC. A Non-Electing U.S. Holder may terminate this deemed PFIC status
by electing to recognize gain (which will be taxed under the rules discussed above for Non-Electing U.S. Holders) as if such common
shares had been sold on the last day of the last taxable year for which it was a PFIC.



Market-to-Market Election. U.S.
Holders who hold, actually or constructively, marketable stock (as specifically defined in the Treasury Regulations) of a foreign
corporation that qualifies as a PFIC may annually elect to mark such stock to the market (a “market-to-market election”).
If such an election is made, such U.S. Holder will generally not be subject to the special taxation rules of Section 1291 discussed
above. However, if the mark-to-market election is made by a Non-Electing U.S. Holder after the beginning of the holding period
for the PFIC stock, then the Section 1291 rules will apply to certain dispositions of, distributions on and other amounts taxable
with respect to our common shares. A U.S. Holder who makes the mark-to market election will include in income for the taxable year
for which the election was made an amount equal to the excess, if any, of the fair market value of our common shares as of the
close of such tax year over such U.S. Holder’s adjusted basis in such common shares. In addition, the U.S. Holder is allowed
a deduction for the lesser of (i) the excess, if any, of such U.S. Holder’s adjusted tax basis in the common shares over
the fair market value of such shares as of the close of the tax year, or (ii) the excess, if any, of (A) the mark-to-market gains
for our shares included by such U.S. Holder for prior tax years, including any amount which would have been included for any prior
tax year but for the Section 1291 interest on tax deferral rules discussed above with respect to Non-Electing U.S. Holders, over
(B) the mark-to-market losses for shares that were allowed as deductions for prior tax years. A U.S. Holder’s adjusted tax
basis in his shares will be adjusted to reflect the amount included in or deducted from income as a result of a mark-to-market
election. A mark-to-market election applies to the taxable year in which the election is made and to each subsequent taxable year,
unless the shares cease to be marketable, as specifically defined, or the IRS consents to revocation of the election.



QEF Election. A U.S. Holder who
makes a timely QEF election (an “Electing U.S. Holder”) regarding his Common Shares will be subject, under Section
1293 of the Code, to current U.S. federal income tax for any taxable year in which we qualify as a PFIC on his pro rata share of
our (i) “net capital gain” (the excess of net long-term capital gain over net short-term capital loss), which will
be taxed as long-term capital gain to the Electing U.S. Holder and (ii) “ordinary earnings” (the excess of earnings
and profits over net capital gain), which will be taxed as ordinary income to the Electing U.S. Holder, in each case, for the shareholder’s
taxable year in which (or with which) our taxable year ends, regardless of whether such amounts are actually distributed.



The effective QEF election also allows the
Electing U.S. Holder to (i) generally treat any gain realized on the disposition of his common shares (or deemed to be realized
on the pledge of his shares) as capital gain; (ii) treat his share of our net capital gain, if any, as long-term capital gain instead
of ordinary income; and (iii) either avoid interest charges resulting from PFIC status altogether, or make an annual election,
subject to certain limitations, to defer payment of current taxes on his share of our annual realized net capital gain and ordinary
earnings subject, however, to an interest charge. If the Electing U.S. Holder is not a corporation, such an interest charge would
be treated as “personal interest” that is not deductible.



The procedure a U.S. Holder must comply with
in making an effective QEF election, and the U.S. federal income tax consequences of the QEF election, will depend on whether the
year of the election is the first year in the U.S. Holder’s holding period in which we are a PFIC. If the U.S. Holder makes
a QEF election in such first year, i.e., a timely QEF election, then the U.S. Holder may make the QEF election by simply filing
the appropriate QEF election documents at the time the U.S. Holder files his tax return for such first year. However, if we qualified
as a PFIC in a prior year, then in addition to filing the QEF election documents, the U.S. Holder must elect to recognize (i) under
the rules of Section 1291 of the Code (discussed herein), any gain that he would otherwise recognize if the U.S. Holder sold his
stock on the qualification date or (ii) if we are a controlled foreign corporation, the U.S. Holder’s pro rata share of our
earnings and profits as of the qualification date. The qualification date is the first day of our first tax year in which we qualified
as a QEF with respect to such U.S. Holder. The elections to recognize such gain or earnings and profits can only be made if such
U.S. Holder’s holding period for the shares includes the qualification date. By electing to recognize such gain or earnings
and profits, the U.S. Holder will be deemed to have made a timely QEF election. U.S. Holders are urged to consult a tax advisor
regarding the availability of and procedure for electing to recognize gain or earnings and profits under the foregoing rules.
In addition to the above rules, under very limited circumstances, a U.S. Holder may make a retroactive QEF election if such U.S.
Holder failed to file the QEF election documents in a timely manner.



38







A QEF election, once made with respect to our
company, applies to the tax year for which it was made and to all subsequent tax years, unless the election is invalidated or terminated,
or the IRS consents to revocation of the election. If a QEF election is made by a U.S. Holder and we cease to qualify as a PFIC
in a subsequent tax year, the QEF election will remain in effect, although not applicable, during those tax years in which we do
not qualify as a PFIC. Therefore, if we again qualify as a PFIC in a subsequent tax year, the QEF election will be effective and
the U.S. Holder will be subject to the rules described above for Electing U.S. Holders in such tax year and any subsequent tax
years in which we qualify as a PFIC. In addition, the QEF election remains in effect, although not applicable, with respect to
an Electing U.S. Holder even after such U.S. Holder disposes of all of his or its direct and indirect interest in our shares. Therefore,
if such U.S. Holder reacquires an interest in our company, that U.S. Holder will be subject to the rules described above for Electing
U.S. Holders for each tax year in which we qualify as a PFIC.



Generally, shareholders do not make a QEF election
unless they have sufficient information to determine their proportionate shares of a corporation’s net capital gain and ordinary
earnings. We have not calculated these amounts for any shareholder and do not anticipate making these calculations in the foreseeable
future. Therefore, U.S. Holders of our common shares should consult their own financial advisor, legal counsel or accountant
regarding the QEF election before making this election.



Other PFIC Rules. Under Section
1291(f) of the Code, the IRS has issued Proposed Treasury Regulations that, subject to certain exceptions, would treat as taxable
certain transfers of PFIC stock by Non-Electing U.S. Holders that are generally not otherwise taxed, such as gifts, exchanges pursuant
to corporate reorganizations, and transfers at death. Generally, in such cases the basis of shares in the hands of the transferee
and the basis of any property received in the exchange for those shares would be increased by the amount of gain recognized. However,
the specific U.S. federal income tax consequences to the U.S. Holder and the transferee may vary based on the manner in which the
common shares are transferred.



Certain special, generally adverse, rules will
apply with respect to shares issued by us while we are a PFIC whether or not it is treated as a QEF. For example under Section
1298(b)(6) of the Code, a U.S. Holder who uses PFIC stock as security for a loan (including a margin loan) will, except as may
be provided in regulations, be treated as having made a taxable disposition of such shares.



Information Filing



Each U.S. Holder generally must file IRS Form
8621 reporting distributions received and gain realized with respect to each PFIC in which the U.S. Holder holds a direct or indirect
interest. In addition, U.S. Holders must file such other annual information as may be required by the U.S. Treasury Department
in subsequent guidance.



The PFIC rules are very complicated, and
U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the PFIC rules, including the advisability
of and procedure for making a QEF election or a mark-to-mark election, and how these rules may impact their U.S. federal income
tax situation.



Controlled Foreign Corporation.
If more than 50% of the total voting power or the total value of our outstanding shares is owned, directly or indirectly, by citizens
or residents of the U.S., U.S. partnerships or corporations, or U.S. estates or trusts (as defined by the Code Section 7701(a)(30)),
each of which own, directly or indirectly, 10% or more of the total voting power of our outstanding shares (each a “10% Shareholder”),
we could be treated as a “Controlled Foreign Corporation” (“CFC”) under Section 957 of the Code.



The classification of our company as a CFC
would affect many complex results, including that 10% Shareholders would generally (i) be treated as having received a current
distribution of our “Subpart F income” and (ii) would also be subject to current U.S. federal income tax on their pro
rata shares of our earnings invested in “U.S. property.” The foreign tax credit may reduce the U.S. federal income
tax on these amounts for such 10% Shareholders (See more detailed discussion at “Foreign Tax Credit” above).
In addition, under Section 1248 of the Code, gain from the sale or other taxable disposition of our common shares by a U.S. Holder
that is or was a 10% Shareholder at any time during the five-year period ending with the sale is treated as a dividend to the extent
of our earnings and profits attributable to the common shares sold or exchanged.



39







If we are classified as both a PFIC and a CFC,
we generally will not be treated as a PFIC with respect to 10% Shareholders. This rule generally will be effective for taxable
years of 10% Shareholders beginning after 1997 and for its taxable years ending with or within such taxable years of 10% Shareholders.



We do not believe that we currently qualify
as a CFC. However, there can be no assurance that we will not be considered a CFC for the current or any future taxable year.



The CFC rules are very complicated, and
U.S. Holders should consult their own financial advisor, legal counsel or accountant regarding the CFC rules and how these rules
may impact their U.S. federal income tax situation.



Foreign Tax Credit



A U.S. Holder who pays (or has withheld from
distributions) Canadian or other foreign income tax with respect to the ownership of shares issued by us may be entitled, at the
option of the U.S. Holder, to either receive a deduction or a tax credit for U.S. federal income tax purposes with respect to such
foreign tax paid or withheld. Generally, it will be more advantageous to claim a credit because a credit reduces U.S. federal income
taxes on a dollar-for-dollar basis, while a deduction merely reduces the taxpayer’s income subject to U.S. federal income
tax. This election is made on a year-by-year basis and applies to all foreign taxes paid by (or withheld from distributions to)
the U.S. Holder during that year.



There are significant and complex limitations
that apply to the foreign tax credit, among which is the general limitation that the credit cannot exceed the proportionate share
of the U.S. Holder’s U.S. income tax liability that the U.S. Holder’s “foreign source” income bears to
his or its worldwide taxable income. In applying this limitation, the various items of income and deduction must be classified
as either “foreign source” or “U.S. source.” Complex rules govern this classification process.
In addition, this limitation is calculated separately with respect to specific classes or “baskets” of income. Under
current law, there are only two baskets, “passive category income” and “general category income.” Dividends
distributed by us will generally constitute “foreign source” income, and will be classified as “passive category
income”.



In addition, U.S. Holders that are corporations
and that own 10% or more of our voting stock may be entitled to an “indirect” foreign tax credit under Section
902 of the Code with respect to the payment of dividends by us under certain circumstances and subject to complex rules and limitations.
The availability of the foreign tax credit and the application of the limitations with respect to the foreign tax credit are
fact specific, and each U.S. Holder of common shares issued by us should consult their own financial advisor, legal counsel or
accountant regarding the foreign tax credit rules.



Information Reporting; Backup Withholding



Certain information reporting and backup withholding
rules may apply with respect to certain payments related to shares issued by us. In particular, a payor or middleman within the
U.S., or in certain cases outside the U.S., will be required to withhold 28% (which rate is scheduled for periodic adjustment)
of any payments to a U.S. Holder regarding dividends paid by us, or proceeds from the sale of, such common shares within the U.S.,
if a U.S. Holder fails to furnish its correct taxpayer identification number (generally on Form W-9) or otherwise fails to comply
with, or establish an exemption from, the backup withholding tax requirements. Backup withholding is not an additional tax. Rather,
the amounts withheld under the U.S. backup withholding tax rules will be allowed as a refund or a credit against the U.S. Holder’s
U.S. federal income tax liability, provided the required information is furnished to the IRS. U.S. Holders should consult their
own financial advisor, legal counsel or accountant regarding the information reporting and backup withholding rules applicable
to our shares.



2010 Legislative Developments



Newly enacted legislation requires certain
U.S. Holders that are individuals, estates or trusts to pay up to an additional 3.8% tax on, among other things, dividends and
capital gains for taxable years beginning after December 31, 2012. In addition, the Company may require U.S. Holders to provide
certain tax and reporting information necessary for the Company to comply with new reporting obligations. If a U.S. Holder does
not provide such information, the U.S. Holder will generally be subject to U.S. withholding tax on payments made by the Company
after January 1, 2013 in accordance with this new legislation.





40







| | F. | DIVIDENDS AND PAYING AGENTS
| | -- | ---------------------------



Not applicable.



| | G. | STATEMENT BY EXPERTS.
| | -- | ---------------------



Not applicable.



| | H. | DOCUMENTS ON DISPLAY.
| | -- | ---------------------



We filed a registration statement on Form 20-F
filed the SEC in Washington, D.C. (Registration No. 000-30084) on June 4, 1999, which became effective August 3, 1999. The Registration
Statement contains exhibits and schedules. Material contracts and publicly available corporate records may be viewed at our registered
and records office located at Suite 240, 11780 Hammersmith Way, Richmond, British Columbia.



The Company files annual reports and furnishes
other information with the SEC. You may read and copy any document that we file at the SEC's Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549 or by accessing the Commission’s website (http://www.sec.gov). The Company also files its annual
reports and other information with the Canadian Securities Administrators via SEDAR (www.sedar.com).



| | I. | SUBSIDIARY INFORMATION.
| | -- | -----------------------



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



|ITEM 11. |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|-------- |  | ----------------------------------------------------------



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



|ITEM 12. |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|-------- |  | ------------------------------------------------------



Not applicable.



PART II



|ITEM 13. |  | DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES
|-------- |  | ----------------------------------------------



There has not been a material default in the
payment of principal, interest, a sinking or purchase fund installment, or any other material default not cured within thirty days,
relating to indebtedness of the Company of any of its significant subsidiaries. There are no payments of dividends by the Company
in arrears, nor has there been any other material delinquency relating to any class of preference shares of the Company.



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



| | A. | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
| | -- | --------------------------------------------------------



Not applicable.



| | B. | USE OF PROCEEDS.
| | -- | ----------------



Not applicable.



41







|ITEM 15. |  | CONTROLS AND PROCEDURES
|-------- |  | -----------------------



Disclosure Controls and Procedures



Disclosure controls and procedures, as defined
in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), are our controls and
other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit
under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules
and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information
required to be disclosed us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as
appropriate to allow timely decisions regarding required disclosure. As required by Rule 13a-15 under the Exchange Act, we carried
out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of February 28,
2013, being the date of our most recently completed fiscal year end. This evaluation was carried out under the supervision and
with the participation of our management, including Mr. John Robertson, our Chief Executive Officer, and Jane He, our Chief Financial
Officer.



As of February 28, 2013, management conducted
an evaluation of our disclosure controls and procedures pursuant to the Exchange Act. Based upon that evaluation, management has
concluded that our current disclosure controls and procedures are not effective as of February 28, 2013.



The conclusion that our disclosure controls
and procedures were not effective was due to the presence of material weaknesses in internal control over financial reporting as
identified below. Management anticipates that such disclosure controls and procedures will not be effective until the material
weaknesses are remediated. We intend to remediate the material weaknesses as set out below.



Management’s Annual Report on Internal
Control over Financial Reporting



Our Board of Directors and Audit Committee
are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system
was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation
of our consolidated financial statements for external purposes in accordance with generally accepted accounting principles.



Our Chief Executive Officer, Mr. John Robertson,
and our Chief Financial Officer, Jane He, assessed the effectiveness of our internal control over financial reporting (as defined
in Rule 13a-15(f) and Rule 15d-(f) promulgated under the Exchange Act) as of February 28, 2013.



Based on management’s evaluation, we
concluded our internal control over financial reporting was not effective as at February 28, 2013 due to inadequate segregation
of duties and effective risk assessment.



We plan to take steps to enhance and improve
the design of our internal controls over financial reporting. During the period covered by this annual report, we have not been
able to remediate the material weaknesses identified above. To remediate such weaknesses, we plan to appoint additional qualified
personnel to address inadequate segregation of duties and ineffective risk management, and adopt sufficient written policies and
procedures for accounting and financial reporting. These remediation efforts are largely dependent upon securing additional financing
to cover the costs of implementing the changes required. If we are unsuccessful in securing such funds, remediation efforts may
be adversely affected.



Notwithstanding the foregoing, all internal
control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective
may not prevent or detect misstatements and can provide only reasonable assurance with respect to financial statement preparation
and presentation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.



Attestation Report on Internal Control over
Financial Reporting



This annual report does not include an attestation
report of our registered public accounting firm regarding internal control over financial reporting. Management’s report
was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to
provide only management’s report in this annual report.



42







Changes in Internal Control over Financial Reporting



During the fiscal year ended February 28, 2013,
there were no changes in our internal control over financial reporting that have materially affected, or are reasonably likely
to materially affect, our internal control over financial reporting.



|ITEM 15T. |  | CONTROLS AND PROCEDURES
|--------- |  | -----------------------



Not applicable.



|ITEM 16. |  | [Reserved]
|-------- |  | ----------



|ITEM 16A. |  | AUDIT COMMITTEE FINANCIAL EXPERT
|--------- |  | --------------------------------



The Board of directors has determined that
it does not have a member that qualifies as an “audit committee financial expert” as defined in Form 20-F of the SEC.



We have been unable to retain the services
of a person who qualifies as an “audit committee financial expert”. Until we appoint such a person, we believe that
the members of our Board of Directors are collectively capable of analyzing and evaluating our financial statements and understanding
internal controls and procedures for financial reporting.



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



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



|ITEM 16B. |  | CODE OF ETHICS
|--------- |  | --------------



We have adopted a Code of Business Conduct
and Ethics which sets forth legal and ethical standards of conduct for employees, officers, directors and consultants that
render material activities on behalf of our company and our subsidiaries, including the principal executive officer and senior
financial officers (principal financial officer and controller or principal accounting officer, or persons performing similar functions).
This code is intended to deter wrongdoing and to promote the conduct of all our business in accordance with high standards of integrity
and in compliance with all applicable laws and regulations. This code applies to us and all of our subsidiaries and other business
entities controlled by us worldwide. A copy of this code was filed with our Form 6-K filed on March 16, 2011 and is posted on our
website (www.linuxgoldcorp.com), can be located under the Company’s profile on SEDAR at www.sedar.com and will be provided
to any person without charge, upon request by mail, but may also be made by telephone, facsimile or other electronic means of communication.



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



|ITEM 16C. |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES
|--------- |  | --------------------------------------



The following table discloses the aggregate
fees billed for each of the last two financial years for professional services rendered by our audit firm for various services.
“Audit fees” are fees billed by our external auditors for services provided in auditing our annual consolidated
financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are
billed by the auditors for assurance and related services that are reasonably related to the performance of the audit or review
of our consolidated financial statements. “Tax fees” are fees billed by the auditors for professional
services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditors
for products and services not included in the foregoing categories.



43







The fees paid by us to our auditors for each
of the last two fiscal years, by category, are as follows:



|Financial Year Ending |  |  | Audit Fees $ |        |  | Audit Related Fees $ |     | Tax Fees $ |   |       | All Other Fees $
|--------------------- |  |  | ------------ | ------ |  | -------------------- | --- | ---------- | - | ----- | ----------------
|February 28, 2013     |  |  |              | 14,000 |  |                      | Nil |            | $ | 1,000 |                 
|February 29, 2012     |  |  |              | 15,000 |  |                      | Nil |            |   | Nil   |                 



From time to time, our management recommends
to and requests approval from the Audit Committee for non-audit services to be provided by our auditors. The Audit Committee routinely
considers such requests at committee meetings, and if acceptable to a majority of the Audit Committee members, pre-approves such
non-audit services by a resolution authorizing management to engage our auditors for such non-audit services, with set maximum
dollar amount for each itemized service. During such deliberations, the Audit Committee assesses, among other factors, whether
the services requested would be considered “prohibited services” as contemplated by the SEC, and whether the services
requested and the fees related to such services could impair the independence of the auditors.



|ITEM 16D. |  | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITEES
|--------- |  | ---------------------------------------------------------



Not applicable.



|ITEM 16E. |  | PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|--------- |  | ----------------------------------------------------------------------



Not applicable.



|Item 16F. |  | Change in Registrant’s Certifying Accountant
|--------- |  | --------------------------------------------



Not applicable.



|Item 16G. |  | Corporate Governance.
|--------- |  | ---------------------



Not applicable.



PART III



|ITEM 17. |  | FINANCIAL STATEMENTS
|-------- |  | --------------------



We have elected to provide financial statements
pursuant to Item 18.



|ITEM 18. |  | FINANCIAL STATEMENTS
|-------- |  | --------------------



Audited Financial Statements for the years

ended February 28, 2013 and February 29, 2012
and February 28, 2011



Our consolidated financial statements are stated
in Canadian Dollars (CDN$) and are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).



The consolidated financial statements, together
with the reports of A Chan and Company LLP (formerly, “ACAL Group”), Chartered Accountants, on the annual consolidated
financial statements referred to below, are filed as part of this annual report, and are included immediately following this text
and include:



| | ● | Report of Independent Registered Public Accounting Firm of A Chang And Company LLP, Chartered Accountants,
dated June 28, 2013
| | - | ------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                               

| | ● | Consolidated Balance Sheets as at February 28, 2013 and February 29, 2012
| | - | -------------------------------------------------------------------------
| |   |                                                                          

| | ● | Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended February
28, 2013, February 29, 2012 and February 28, 2011
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                     

| | ● | Consolidated Statements of Cash Flows for the years ended February 28, 2013, February 29, 2012
and February 28, 2011
| | - | --------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                     

| | ● | Consolidated Statements of Stockholders’ Deficit, March 1, 2003 to February 28, 2013
| | - | ------------------------------------------------------------------------------------
| |   |                                                                                     

| | ● | Notes to the Consolidated Financial Statements as at February 28, 2013, February 29, 2012 and February
28, 2011
| | - | ---------------------------------------------------------------------------------------------------------------



44







|ITEM 19. |  | EXHIBITS
|-------- |  | --------



|EXHIBIT # |  |                                                                                                                                                                                                                                                                                                                                                 |  |     
|--------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|1.1       |  | Memorandum and articles of incorporation with bylaws dated February 27, 1979                                                                                                                                                                                                                                                                    |  | (1) 
|1.2       |  | Altered memorandum and special resolution dated September 20, 1993 increasing the authorized capital to 100,000,000 common shares from 90,000,000 and redesignating Class “A” Common voting shares without par value as common shares without par value and redesignating Class “B” Common non-voting shares as common shares without par value |  | (1) 
|1.3       |  | Altered memorandum and special resolution dated March 15, 2000 changing the name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc.                                                                                                                                                                                  |  | (3) 
|1.4       |  | Altered memorandum and special resolution dated February 20, 2003 changing the name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp.                                                                                                                                                                                         |  | (5) 
|1.5       |  | Memorandum and articles of incorporation amended effective September 15, 2004                                                                                                                                                                                                                                                                   |  | (7) 
|2.1       |  | Specimen copy of Registrant’s common share certificate                                                                                                                                                                                                                                                                                          |  | (2) 
|4.1       |  | Commitment by John G. Robertson dated July 16, 1999 to provide financing to the Registrant as required for ongoing operations                                                                                                                                                                                                                   |  | (2) 
|4.2       |  | Share Purchase Agreement dated January 7, 2000 between Flame Petro-Minerals Corp. and Mike Carpenter and LinuxWizardry, Inc.                                                                                                                                                                                                                    |  | (3) 
|4.3       |  | Purchase order dated May 22, 2000 between LinuxWizardry, Inc. and Motorola, Inc., Personal Communications Sector                                                                                                                                                                                                                                |  | (4) 
|4.4       |  | License Agreement dated June 30, 2000 between LinuxWizardry Systems, Inc. and LinuxWizardry, Inc. and Lineo, Inc                                                                                                                                                                                                                                |  | (4) 
|4.5       |  | Vendor Agreement dated January 5, 2001 between Merrimack Services Corporation d/b/a PC Connection and LinuxWizardry Systems, Inc.                                                                                                                                                                                                               |  | (4) 
|4.6       |  | Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2002                                                                                                                                                                                                                                                  |  | (5) 
|4.7       |  | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated November 4, 2002                                                                                                                                                                                                                                  |  | (5) 
|4.8       |  | Edward Skoda Purchase Agreement – TY Gold Property                                                                                                                                                                                                                                                                                              |  | (6) 
|4.9       |  | Edward Skoda Purchase Agreement – ORO Mineral Claims                                                                                                                                                                                                                                                                                            |  | (6) 
|4.10      |  | Property Option Agreement – Peter Tse                                                                                                                                                                                                                                                                                                           |  | (6) 
|4.11      |  | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2007                                                                                                                                                                                                                                     |  | (8) 
|4.12      |  | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2009                                                                                                                                                                                                                                     |  | (11)
|4.13      |  | Premises Lease Agreement between Linux Gold Corp. and Pensionfund Realty Limited dated November 1, 2009                                                                                                                                                                                                                                         |  | (11)
|4.14      |  | Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Coho Claims, Alaska                                                                                                                                                                                                                    |  | (11)
|4.15      |  | Exploration Rights Agreement between Linux Gold Corp. and Peter S. Frantz dated January 20, 2010 for the Trout Claims, Alaska                                                                                                                                                                                                                   |  | (11)
|4.16      |  | Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2010                                                                                                                                                                                                                                     |  | (11)
|11.1      |  | Code of Business Conduct and Ethics                                                                                                                                                                                                                                                                                                             |  | (12)
|12.1      |  | Certification of CEO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                |  | (13)
|12.2      |  | Certification of CFO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                |  | (13)
|13.1      |  | Certification of CEO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                |  | (13)
|13.2      |  | Certification of CFO pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002                                                                                                                                                                                                |  | (13)
|15.1      |  | Consent of Independent Registered Public Accounting Firm                                                                                                                                                                                                                                                                                        |  | (13)



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

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

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

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

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

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

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

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

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

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

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

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

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



45







SIGNATURE PAGE



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



|                     |     | LINUX GOLD CORP.                             
|-------------------- | --- | ---------------------------------------------
|                     |     | Registrant                                   
|                     |     |                                              
|Dated: June 28, 2013 | By: | /s/ John G. Robertson                        
|                     |     | John G. Robertson                            
|                     |     | President, Chairman of the Board and Director



46







Linux
Gold Corp.

(An
Exploration Stage Company)



Consolidated
Financial Statements

(Expressed
in Canadian Dollars)

February
28, 2013



F-1







|                                                                                                                                                                                                                                                       |  |                                              
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------------------
|                                                                                                                                                                                                                                                       |  |                                              
|SUITE
                                                                                     1850 - 1066
                                                                                     WEST HASTINGS STREET
        VANCOUVER,
        BC V6E 3X2 |  | A
Chan And Company llp

Chartered Accountants



T:
604.683.3850

F: 604.688.8479



REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM



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



We
have audited the accompanying consolidated balance sheets of Linux Gold Corp. (the “Company”) (An Exploration Stage
Company) as of February 28, 2013 and February 29, 2012, and the related consolidated statements of operations and comprehensive
loss, stockholders’ equity (deficit), and cash flows for the year ended February 28, 2013, February 29, 2012 and February
28, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility
is to express an opinion on these consolidated financial statements based on our audits.



We
conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control
over financial reporting as of February 28, 2013. Our audits included consideration of internal control over financial reporting
as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such
opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our opinion.



In
our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company
as of February 28, 2013 and February 29, 2012, and the results of its operations and its cash flows for the year ended February
28, 2013, February 29, 2012 and February 28, 2011 in conformity with accounting principles generally accepted in the United States
of America.



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



| | “A
    Chan & Company LLP”
| | --------------------------
| | Chartered
    Accountants 



Vancouver,
British Columbia

June 28,
2013



F-2







Linux
Gold Corp.

(An
Exploration Stage Company)

Consolidated
Balance Sheets

(Expressed
in Canadian Dollars)








|                                                                     |  | As
    at            |            |   | As
    at            | 
|-------------------------------------------------------------------- |  | -------------------- | ---------- | - | -------------------- | 
|                                                                     |  | 28
    February 2013 |            |   | 29
    February 2012 | 
|                                                                     |  | $                    |            |   | $                    | 
|Assets                                                               |  |                      |            |   |                      | 
|Current                                                              |  |                      |            |   |                      | 
|Cash
    and cash equivalents                                        |  |                      | 140        |   |                      | 
|Goods and
    services tax receivable                                |  |                      | 976        |   |                      | 
|Marketable
    securities (Note 3)                                   |  |                      | 24,090     |   |                      | 
|Prepaid expenses
    and deposits                                    |  |                      | 3,615      |   |                      | 
|Due
    from related party (Note 7)                                  |  |                      | 1,240      |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|                                                                     |  |                      | 30,061     |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|Property
    and equipment(Note 4)                                   |  |                      | 3,165      |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|                                                                     |  |                      | 33,226     |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|Liabilities                                                          |  |                      |            |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|Current                                                              |  |                      |            |   |                      | 
|Bank overdraft                                                       |  |                      | -          |   |                      | 
|Accounts payable
    (Note 6)                                        |  |                      | 165,383    |   |                      | 
|Accrued liabilities                                                  |  |                      | 18,500     |   |                      | 
|Due to related
    parties (Note 7)                                  |  |                      | 339,197    |   |                      | 
|Derivative
    liabilities (Note 13)                                 |  |                      | -          |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|                                                                     |  |                      | 523,080    |   |                      | 
|                                                                     |  |                      |            |   |                      | 
|Stockholders’
    deficit                                            |  |                      |            |   |                      | 
|Capital
    stock (Note 9)                                           |  |                      |            |   |                      | 
|Authorized                                                           |  |                      |            |   |                      | 
|200,000,000 common shares without
    par value                      |  |                      |            |   |                      | 
|Issued and
    outstanding                                           |  |                      |            |   |                      | 
|February 28, 2013 & February
    29, 2012 - 99,593,825 common shares |  |                      | 13,631,647 |   |                      | 
|Donated
    capital                                                  |  |                      | 591,174    |   |                      | 
|Accumulated
    other comprehensive loss                             |  |                      | (4,015     | ) |                      | 
|Deficit,
    accumulated from prior operations                       |  |                      | (7,524,145 | ) |                      | 
|Deficit,
    accumulated during the exploration stage                |  |                      | (7,184,515 | ) |                      | 
|                                                                     |  |                      |            |   |                      | 
|                                                                     |  |                      | (489,854   | ) |                      | 
|                                                                     |  |                      |            |   |                      | 
|                                                                     |  |                      | 33,226     |   |                      | 



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



On behalf
of the Board:



|“John
    Robertson” |  | Director |  | ”
    Suzan El-Khatib “ |  | Director
|-------------------- |  | -------- |  | ----------------------- |  | --------



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



F-3







Linux
Gold Corp.

(An
Exploration Stage Company)

Consolidated
Statements of Operations and Comprehensive Income (Loss)

(Expressed
in Canadian Dollars)








|                                                                              |  | Cumulative
    from  |            |   |                  |  |            |                  |  |  |                  |  
|----------------------------------------------------------------------------- |  | -------------------- | ---------- | - | ---------------- |  | ---------- | ---------------- |  |  | ---------------- | -
|                                                                              |  | inception
    of     |            |   |                  |  |            |                  |  |  |                  |  
|                                                                              |  | exploration stage on |            |   | For
    the      |  |            | For
    the      |  |  | For
    the      |  
|                                                                              |  | 1
    March 2003 to  |            |   | year
    ended   |  |            | year
    ended   |  |  | year
    ended   |  
|                                                                              |  | 28
    February 2013 |            |   | 28 February 2013 |  |            | 29 February 2012 |  |  | 28 February 2011 |  
|                                                                              |  | (Unaudited)          |            |   |                  |  |            |                  |  |  |                  |  
|                                                                              |  | $                    |            |   | $                |  |            | $                |  |  | $                |  
|General
    and administrative expenses                                       |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Amortization
    of debt issue costs                                          |  |                      | 205,242    |   |                  |  | -          |                  |  |  | -                |  
|Amortization
    of property and equipment                                    |  |                      | 32,829     |   |                  |  | 933        |                  |  |  | 1,228            |  
|Bad debt expense                                                              |  |                      | 84,952     |   |                  |  | -          |                  |  |  | -                |  
|Consulting
    and subcontracts                                               |  |                      | 1,811,154  |   |                  |  | 13,486     |                  |  |  | 105,188          |  
|Filing and
    regulatory fees                                                |  |                      | 197,541    |   |                  |  | 13,018     |                  |  |  | 12,448           |  
|Foreign exchange
    loss (gain)                                              |  |                      | (32,402    | ) |                  |  | 4,037      |                  |  |  | 2,031            |  
|Imputed interest
    (Note 7)                                                 |  |                      | 385,674    |   |                  |  | 56,664     |                  |  |  | 55,944           |  
|Interest expense                                                              |  |                      | 2,302,583  |   |                  |  | -          |                  |  |  | -                |  
|Management
    fees (Note 8)                                                  |  |                      | 304,750    |   |                  |  | 30,000     |                  |  |  | 30,000           |  
|Mineral property
    exploration costs (Note 5)                               |  |                      | 1,983,642  |   |                  |  | 12,660     |                  |  |  | 50,110           |  
|Recovery of
    exploration costs (Note 5)                                    |  |                      | (216,354   | ) |                  |  | (141,354   | )                |  |  | (75,000          | )
|Office, rent
    and telephone                                                |  |                      | 774,368    |   |                  |  | 3,094      |                  |  |  | 35,673           |  
|Professional
    fees                                                         |  |                      | 508,551    |   |                  |  | 29,660     |                  |  |  | 29,948           |  
|Travel and
    shareholder communication                                      |  |                      | 997,461    |   |                  |  | 1,781      |                  |  |  | 15,118           |  
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Net
    loss before other income (loss)                                       |  |                      | (9,339,991 | ) |                  |  | (23,979    | )                |  |  | (262,688         | )
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Other
    income (loss)                                                       |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Realized gain
    (loss) on sale of marketable security                       |  |                      | 18,336     |   |                  |  | -          |                  |  |  | (37,810          | )
|Realized (loss)
    on reallocation from Accumulated Other Comprehensive Loss |  |                      | (91,303    | ) |                  |  | -          |                  |  |  | -                |  
|Impairment
    on available-for-sale investments                              |  |                      | (78,756    | ) |                  |  | -          |                  |  |  | (20,919          | )
|Fair value
    adjustment of derivative liabilities                           |  |                      | 1,976,323  |   |                  |  | 29,637     |                  |  |  | 139,576          |  
|Mineral property
    acquisition costs written off                            |  |                      | (126,417   | ) |                  |  | -          |                  |  |  | -                |  
|Accounts payable
    written off                                              |  |                      | 46,281     |   |                  |  | -          |                  |  |  | -                |  
|Income from
    discontinued operations                                       |  |                      | 369,213    |   |                  |  | -          |                  |  |  | -                |  
|Interest income                                                               |  |                      | 41,799     |   |                  |  | -          |                  |  |  | -                |  
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Net
    income (loss) for the period                                          |  |                      | (7,184,515 | ) |                  |  | 5,658      |                  |  |  | (181,841         | )
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Basic
    and diluted net loss per share                                      |  |                      |            |   |                  |  | 0.00       |                  |  |  | (0.00            | )
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Weighted
    average number of common shares used in per share calculations   |  |                      |            |   |                  |  | 99,593,825 |                  |  |  | 98,061,038       |  
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Comprehensive
    income (loss)                                               |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Net income
    (loss) for the period                                          |  |                      | (7,184,515 | ) |                  |  | 5,658      |                  |  |  | (181,841         | )
|Loss realized
    on investments disposal transferred to earning              |  |                      | 91,303     |   |                  |  | -          |                  |  |  | -                |  
|Unrealized
    holding gain (loss) on available-for-sale investments          |  |                      | (95,318    | ) |                  |  | (4,015     | )                |  |  | -                |  
|                                                                              |  |                      |            |   |                  |  |            |                  |  |  |                  |  
|Comprehensive
    income (loss)                                               |  |                      | (7,188,530 | ) |                  |  | 1,643      |                  |  |  | (181,841         | )



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



F-4







Linux
Gold Corp.

(An
Exploration Stage Company)

Consolidated
Statements of Cash Flow

(Expressed
in Canadian Dollars)



|                                                                           |  | Cumulative
    from  |            |   |                  |  |         |                  |  |  |                  |  
|-------------------------------------------------------------------------- |  | -------------------- | ---------- | - | ---------------- |  | ------- | ---------------- |  |  | ---------------- | -
|                                                                           |  | inception
    of     |            |   |                  |  |         |                  |  |  |                  |  
|                                                                           |  | exploration stage on |            |   | For
    the      |  |         | For
    the      |  |  | For
    the      |  
|                                                                           |  | 1
    March 2003 to  |            |   | year
    ended   |  |         | year
    ended   |  |  | year
    ended   |  
|                                                                           |  | 28
    February 2013 |            |   | 28 February 2013 |  |         | 29 February 2012 |  |  | 28 February 2011 |  
|                                                                           |  | (Unaudited)          |            |   |                  |  |         |                  |  |  |                  |  
|                                                                           |  | $                    |            |   | $                |  |         | $                |  |  | $                |  
|Cash
    flows used in operating activities                                |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Net
    income (loss) for the period                                       |  |                      | (7,184,515 | ) |                  |  | 5,658   |                  |  |  | (181,841         | )
|Adjustments
    to reconcile loss to net cash used by operating activities |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Amortization
    of debt issue costs                                       |  |                      | 205,242    |   |                  |  | -       |                  |  |  | -                |  
|Amortization
    of property and equipment                                 |  |                      | 32,829     |   |                  |  | 933     |                  |  |  | 1,228            |  
|Receipt of
    marketable securities for property                          |  |                      | (16,000    | ) |                  |  | -       |                  |  |  | -                |  
|Accretion of
    discount on convertible debt                              |  |                      | 2,291,794  |   |                  |  | -       |                  |  |  | -                |  
|Bad debt expense                                                           |  |                      | 84,952     |   |                  |  | -       |                  |  |  | -                |  
|Imputed interest                                                           |  |                      | 385,674    |   |                  |  | 56,664  |                  |  |  | 55,944           |  
|Accounts payable
    written off                                           |  |                      | (46,281    | ) |                  |  | -       |                  |  |  | -                |  
|Mineral property
    acquisition costs written off                         |  |                      | 126,417    |   |                  |  | -       |                  |  |  | -                |  
|Recovery of
    exploration costs                                          |  |                      | (75,000    | ) |                  |  | -       |                  |  |  | (75,000          | )
|Stock-based compensation                                                   |  |                      | 275,598    |   |                  |  | 1,695   |                  |  |  | 4,058            |  
|Shares issued
    for services                                             |  |                      | 120,000    |   |                  |  | -       |                  |  |  | -                |  
|Shares issued
    for settlement of rent obligation                        |  |                      | 19,200     |   |                  |  | -       |                  |  |  | -                |  
|Impairment
    on investments                                              |  |                      | 78,756     |   |                  |  | -       |                  |  |  | 20,919           |  
|Fair value
    adjustment of derivative liabilities                        |  |                      | (1,976,323 | ) |                  |  | (29,637 | )                |  |  | (139,576         | )
|Net loss on
    sale of marketable securities                              |  |                      | 72,967     |   |                  |  | -       |                  |  |  | 37,810           |  
|Income from
    discontinued operations                                    |  |                      | (369,213   | ) |                  |  | -       |                  |  |  | -                |  
|Changes in
    operating assets and liabilities                            |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Goods and Services
    Tax receivable                                      |  |                      | 43,929     |   |                  |  | 2,762   |                  |  |  | 1,562            |  
|Prepaid expenses
    and deposits                                          |  |                      | (3,124     | ) |                  |  | -       |                  |  |  | 123              |  
|Bank overdraft                                                             |  |                      | -          |   |                  |  | (1,344  | )                |  |  | 1,344            |  
|Accounts payable
    and accrued liabilities                               |  |                      | (94,995    | ) |                  |  | 21,557  |                  |  |  | 52,657           |  
|Receivable
    from related party                                          |  |                      | (1,240     | ) |                  |  | (1,240  | )                |  |  | -                |  
|Due to related
    parties                                                 |  |                      | 356,616    |   |                  |  | (56,915 | )                |  |  | 120,147          |  
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|                                                                           |  |                      | (5,672,717 | ) |                  |  | 133     |                  |  |  | (100,625         | )
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Cash
    flows provided by/(used in) investing activities                  |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Mineral interest
    acquisition costs                                     |  |                      | (66,417    | ) |                  |  | -       |                  |  |  | -                |  
|Disposal (purchase)
    of marketable securities                           |  |                      | (83,827    | ) |                  |  | -       |                  |  |  | 15,422           |  
|Purchase of
    property and equipment                                     |  |                      | (35,994    | ) |                  |  | -       |                  |  |  | -                |  
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|                                                                           |  |                      | (186,238   | ) |                  |  | -       |                  |  |  | 15,422           |  
|Cash
    flows from financing activities                                   |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Advances from
    related parties                                          |  |                      | 16,238     |   |                  |  | -       |                  |  |  | -                |  
|Debt issue
    costs                                                       |  |                      | (205,242   | ) |                  |  | -       |                  |  |  | -                |  
|Proceeds from
    convertible debt                                         |  |                      | 2,226,251  |   |                  |  | -       |                  |  |  | -                |  
|Repayment of debt                                                          |  |                      | (153,400   | ) |                  |  | -       |                  |  |  | -                |  
|Proceeds from
    issuance of common shares                                |  |                      | 4,006,971  |   |                  |  | -       |                  |  |  | 85,000           |  
|Share subscriptions received                                               |  |                      | 52,277     |   |                  |  | -       |                  |  |  | -                |  
|Share issue costs                                                          |  |                      | (95,134    | ) |                  |  | -       |                  |  |  | (2,000           | )
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|                                                                           |  |                      | 5,847,961  |   |                  |  | -       |                  |  |  | 83,000           |  
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Increase
    (decrease) in cash and cash equivalents                       |  |                      | (10,994    | ) |                  |  | 133     |                  |  |  | (2,203           | )
|Cash
    and cash equivalents, beginning of period                         |  |                      | 11,134     |   |                  |  | 7       |                  |  |  | 2,210            |  
|                                                                           |  |                      |            |   |                  |  |         |                  |  |  |                  |  
|Cash
    and cash equivalents, end of period                               |  |                      | 140        |   |                  |  | 140     |                  |  |  | 7                |  



Supplemental
Disclosures with Respect to Cash Flows(Note 11)



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



F-5





Linux
Gold Corp.

(An
Exploration Stage Company)

Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)

(Expressed
in Canadian Dollars)

(with
the period from March 1, 2003 to February 28, 2009 - unaudited)








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



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



F-6





Linux
Gold Corp.

(An
Exploration Stage Company)

Consolidated
Statements of Changes in Stockholders’ Equity (Deficit)

(Expressed
in Canadian Dollars)

(with
the period from March 1, 2003 to February 28, 2009 - unaudited)








|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  | Deficit        |  |            | Accumulated   |  |  |               |  
|-------------------------------------------------------------------------------- |  | ------------- | ---------- |  | ------------- |  | ---------- | ----------------- |  |  | ------- | - |  | ----------- | ------- |  | -------------- |  | ---------- | ------------- |  |  | ------------- | -
|                                                                                 |  |               |            |  | Common        |  |            |                   |  |  |         |   |  | Deficit     |         |  | accumulated    |  |            | other         |  |  | Total         |  
|                                                                                 |  | Shares
    of |            |  | stock
    and |  |            |                   |  |  |         |   |  | accumulated |         |  | during
    the |  |            | comprehensive |  |  | stockholders’ |  
|                                                                                 |  | common stock  |            |  | paid-in       |  |            | Subscriptions     |  |  | Donated |   |  | from prior  |         |  | exploration    |  |            | income        |  |  | equity        |  
|                                                                                 |  | issued        |            |  | capital       |  |            | received,
    net |  |  | capital |   |  | operations  |         |  | stage          |  |            | (loss)        |  |  | (deficit)     |  
|                                                                                 |  |               |            |  | $             |  |            | $                 |  |  | $       |   |  | $           |         |  | $              |  |            | $             |  |  | $             |  
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 29 February
    2008                                                  |  |               | 83,095,825 |  |               |  | 14,372,703 |                   |  |  | 40,062  |   |  |             | 357,818 |  |                |  | (7,524,145 | )             |  |  | (7,393,686    | )
|Common stock issued for cash                                                     |  |               | 4,555,000  |  |               |  | 507,867    |                   |  |  | (40,062 | ) |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Fair value of warrants issued with common
    shares                             |  |               | -          |  |               |  | 205,975    |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Share issue costs                                                                |  |               | -          |  |               |  | (35,459    | )                 |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Imputed interest                                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | 26,143  |  |                |  | -          |               |  |  | -             |  
|Unrealized holding loss on available-for-sale
    investment                     |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Net loss for the
    year                                                        |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | (536,201      | )
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 28 February 2009                                                      |  |               | 87,650,825 |  |               |  | 15,051,086 |                   |  |  | -       |   |  |             | 383,961 |  |                |  | (7,524,145 | )             |  |  | (7,929,887    | )
|Cumulative effect related to the adoption
    of ASC 815-40                      |  |               | -          |  |               |  | (1,568,889 | )                 |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | 1,024,134     |  
|Common stock issued for cash                                                     |  |               | 5,000,000  |  |               |  | 85,277     |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Fair value of warrants issued with common
    shares                             |  |               | -          |  |               |  | 122,235    |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Transfer derivative liabilities for warrants
    issued and extended in the year |  |               | -          |  |               |  | (283,191   | )                 |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Imputed interest                                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | 39,069  |  |                |  | -          |               |  |  | -             |  
|Stock-based compensation                                                         |  |               | -          |  |               |  | 790        |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Realized loss reallocated on disposal of
    investments                         |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Marketable securities adjustment                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Net loss for the
    year (Restated – Note 15)                                   |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | (65,985       | )
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 28 February 2010                                                      |  |               | 92,650,825 |  |               |  | 13,407,308 |                   |  |  | -       |   |  |             | 423,030 |  |                |  | (7,524,145 | )             |  |  | (6,971,738    | )
|Common stock issued for cash                                                     |  |               | 5,243,000  |  |               |  | 165,828    |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Fair value of warrants issued with common
    shares                             |  |               | -          |  |               |  | 93,495     |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Transfer derivative liabilities for warrants
    issued in the year              |  |               | -          |  |               |  | (93,495    | )                 |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Imputed interest                                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | 55,536  |  |                |  | -          |               |  |  | -             |  
|Stock-based compensation                                                         |  |               | -          |  |               |  | 505        |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Realized loss reallocated on disposal of
    investments                         |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Marketable securities adjustment                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Net loss for the
    period                                                      |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | (36,594       | )
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 28 February 2011                                                      |  |               | 97,893,825 |  |               |  | 13,573,641 |                   |  |  | -       |   |  |             | 478,566 |  |                |  | (7,524,145 | )             |  |  | (7,008,332    | )
|Common stock issued for cash                                                     |  |               | 1,700,000  |  |               |  | 52,253     |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Fair value of warrants issued with common
    shares                             |  |               | -          |  |               |  | 30,747     |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Transfer derivative liabilities for warrants
    issued in the year              |  |               | -          |  |               |  | (30,747    | )                 |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Imputed interest                                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | 55,944  |  |                |  | -          |               |  |  | -             |  
|Stock-based compensation                                                         |  |               | -          |  |               |  | 4,058      |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Net loss for the
    period                                                      |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | (181,841      | )
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 29 February 2012                                                      |  |               | 99,593,825 |  |               |  | 13,629,952 |                   |  |  | -       |   |  |             | 534,510 |  |                |  | (7,524,145 | )             |  |  | (7,190,173    | )
|Imputed interest                                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | 56,664  |  |                |  | -          |               |  |  | -             |  
|Stock-based compensation                                                         |  |               | -          |  |               |  | 1,695      |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|Net income (loss) for the period                                                 |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | 5,658         |  
|Unrealized holding
    loss on available-for-sale investment                     |  |               | -          |  |               |  | -          |                   |  |  | -       |   |  |             | -       |  |                |  | -          |               |  |  | -             |  
|                                                                                 |  |               |            |  |               |  |            |                   |  |  |         |   |  |             |         |  |                |  |            |               |  |  |               |  
|Balance at 28
    February 2013                                                  |  |               | 99,593,825 |  |               |  | 13,631,647 |                   |  |  | -       |   |  |             | 591,174 |  |                |  | (7,524,145 | )             |  |  | (7,184,515    | )



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



F-7







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



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



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



The
Company’s consolidated financial statements as at February 28, 2013 and for the year then ended have been prepared on a
going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal
course of business. The Company has a net income of $5,658 for the year ended February 28, 2013 (2012 – net loss $181,841)
and has a working capital deficit of $493,019 at February 28, 2013 (February 29, 2012 – $553,954).



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



At
February 28, 2013, the Company has suffered losses from exploration stage activities to date. Although management is currently
seeking additional sources of equity or debt financing, there is no assurance these activities will be successful. These factors
raise substantial doubt about the ability of the Company to continue as a going concern. The consolidated financial statements
do not include any adjustments that might result from the outcome of this uncertainty.



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



Basis
of accounting



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



F-8







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Principles
of consolidation



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



Foreign
currency translation



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



Use
of estimates



The
preparation of financial statements in conformity with accounting principles generally accepted in the United States necessarily
requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure
of contingent assets and liabilities at the date of the financial statements, and the reported amount of expenses during the reporting
period. Actual results could differ from those estimates.



Basic
and diluted net loss per share



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



F-9







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Stock-based
compensation



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



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



Cash
and cash equivalents



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



Marketable
securities



The
Company reports investments and marketable equity securities at fair value based on quoted market prices. All investment securities
are designated as available-for-sale with unrealized gains and losses included in stockholders’ equity. Unrealized losses
that are other than temporary are recognized in earnings. Realized gains and losses are accounted for on the specific identification
method.



Mineral
exploration expenditures



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



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



F-10







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Mineral
exploration expenditures (continued)



Mineral
property exploration costs are expensed as incurred.



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



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



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



Long-lived
assets



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



Comprehensive
loss



FASB
ASC 220, “Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its
components in the financial statements. As at 28 February 2013 and 29 February 2012, the Company’s only component of other
comprehensive loss was unrealized holding gains and losses on available-for-sale securities.



Property
and equipment



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



F-11







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Financial
instruments



Interest
Rate Risk



The
Company has interest-bearing debt with imputed interest rate at 15% with related parties (Notes 7). It is management’s opinion
that the Company is not exposed to significant interest rate risk arising from these financial instruments.



Credit
Risk



The
Company’s financial asset that is exposed to credit risk consists primarily of cash and investment. To manage the risk,
cash is placed with major financial institutions. All transactions executed by the Company in listed securities are settled or
paid for upon delivery using approved brokers. The risk of default is considered minimal, as delivery of securities sold is only
made once the broker has received payment. Management believes that the credit risk concentration with respect to financial instruments
above is remote.



Currency
Risk



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



Fair
value measurement



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



| | – |  | Level
    1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.                                                                                                                                                      
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |  |                                                                                                                                                                                                                                                                                            
| | – |  | Level
    2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs
    that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial
    instrument.
| |   |  |                                                                                                                                                                                                                                                                                            
| | – |  | Level
    3 inputs to valuation methodology are unobservable and significant to the fair measurement.                                                                                                                                                                                      



F-12







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Income
taxes



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



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



Recent
accounting pronouncements



In
February 2013, the FASB issued Accounting Standards Update (“ASU”) 2013-02, Reporting of Amounts Reclassified Out
of Accumulated Other Comprehensive Income, an amendment to FASB ASC Topic 220. The update requires disclosure of amounts reclassified
out of accumulated other comprehensive income by component. In addition, an entity is required to present either on the face of
the statement of operations or in the notes, significant amounts reclassified out of accumulated other comprehensive income by
the respective line items of net income but only if the amount reclassified is required to be reclassified to net income in its
entirety in the same reporting period. For amounts not reclassified in their entirety to net income, an entity is required to
cross-reference to other disclosures that provide additional detail about those amounts. This ASU is effective prospectively for
the Company fiscal years, and interim periods within those years beginning after December 15, 2012. The Company will comply with
the disclosure requirements of this ASU for the quarter ending May 31, 2013. The Company does not expect the impact of adopting
this ASU to be material to the Company’s financial position, results of operations or cash flows.



F-13







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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







| |                                                                                 |  | February
    28, 2013 |         |  | February
    29, 2012 | 
| | ------------------------------------------------------------------------------- |  | --------------------- | ------- |  | --------------------- | 
| |                                                                                 |  | Cost                  |         |  | Fair
    value        | 
| |                                                                                 |  |                       | $       |  |                       | 
| |                                                                                 |  |                       |         |  |                       | 
| | 401,500 (29
    February 2012 – 401,500) common shares of Teryl Resources Corp. |  |                       | 106,861 |  |                       | 





During
the year ended February 28, 2013 the company had no sale or purchase of common shares of Teryl Resources Corp. During the year
ended February 29, 2012 a total of 200,000 shares of Teryl Resources Corp. were sold for total proceeds of $15,421 with total
cost of $53,261.



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



| |                      |  |      |        |  |                              |  |        | Net
    book value | 
| | -------------------- |  | ---- | ------ |  | ---------------------------- |  | ------ | ------------------ | 
| |                      |  | Cost |        |  | Accumulated
    Amortization |  |        | February 28, 2013  | 
| |                      |  | $    |        |  | $                            |  |        | $                  | 
| |                      |  |      |        |  |                              |  |        |                    | 
| | Office
    furniture |  |      | 11,194 |  |                              |  | 8,825  |                    | 
| | Vehicle              |  |      | 15,531 |  |                              |  | 14,735 |                    | 
| |                      |  |      |        |  |                              |  |        |                    | 
| |                      |  |      | 26,725 |  |                              |  | 23,560 |                    | 



During
the year ended February 28, 2013, total additions to property, plant and equipment were $nil (2012 - $nil).



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



Alaska
Mineral Properties



Dime
Creek Property



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



Livengood
Property



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



F-14







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Fish
Creek Property



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



The
Company retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest.
The Company entered into an amending agreement with Teryl to extend the term of the original agreement until 7 March 2007, in
which Teryl issued 100,000 common shares to the Company, and also agreed to expend a minimum of US$500,000 within two years from
the date of that amending agreement. All other terms of the original agreement remain the same. During March, 2011, the Company
entered into a further agreement with Teryl to extend the term of the original agreement until 5 March 2012. On December 1, 2011
the Company and Teryl further amended the agreement to include the following terms:



| | – |  | Teryl
    applies $75,000 owed by the Company to Teryl towards the above stated minimum exploration budget of US$500,000;                   
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------
| |   |  |                                                                                                                                             
| | – |  | Teryl
    has an option to pay the expenditures for the Fish Creek property in cash in lieu of the exploration costs to the Company;
    and
| |   |  |                                                                                                                                             
| | – |  | The
    term of the agreement is extended to March 5, 2013.                                                                                 



Teryl
exercised its option to pay the expenditures in cash in lieu of the exploration costs to the Company. As a result, $75,000 advanced
to the Company by Teryl was applied as a recovery of exploration costs for the year ended February 29, 2012.



During
the year ended February 28, 2013, Teryl elected to apply an additional balance owed by the Company of $ 7,517 and cash payment
of $134,000 to the Company in lieu of exploration expenditures on the Fish Creek Property. Cash proceeds from Teryl in lieu of
exploration expenditures are recorded as recovery of exploration costs.



As
at February 28, 2013, Teryl expended a total of $409,127 of the minimum exploration budget of $500,000 on exploration on Fish
Creek property and cash payments made in lieu of exploration.



Refer
to Note 14 for subsequent event note.



F-15







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Trout
Claims



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



| | – |  | Initial
    non-refundable payment of US$1,500 at signing of the lease agreement (paid);
| | - |  | ----------------------------------------------------------------------------------------
| |   |  |                                                                                         
| | – |  | Annual
    work commitment of US$10,000 (paid for 2011);                                
| |   |  |                                                                                         
| | – |  | Consideration
    to the Owner on August 1 of each of the five calendar years:          
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       



During
the year ended February 28, 2013, Trout Claims Lease Option Agreement was terminated.



Coho
Claims



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



| | – |  | Initial
    non-refundable payment of US$1,500 at signing of the lease agreement (paid);
| | - |  | ----------------------------------------------------------------------------------------
| |   |  |                                                                                         
| | – |  | Annual
    work commitment of US$10,000;                                                
| |   |  |                                                                                         
| | – |  | Consideration
    to the Owner on August 1 of each of the five years:                   
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       
| |   |  |                                                                                         
| |   |  | ●                                                                                       



During
the year ended February 29, 2012, Coho Claims lease option was terminated.



F-16







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



The
following is a summary of mineral property expenditures related to the Alaska Mineral Properties for the years ended February
28, 2013 and February 29, 2012:



| |                                       |  | For
    the Year Ended |         |  | For
    the Year Ended |  |       
| | ------------------------------------- |  | ---------------------- | ------- |  | ---------------------- |  | ------
| |                                       |  | February
    28, 2013  |         |  | February
    29, 2012  |  |       
| |                                       |  | $                      |         |  | $                      |  |       
| | Exploration
    and development costs |  |                        |         |  |                        |  |       
| | Assaying                              |  |                        | -       |  |                        |  | 26,853
| | Geological
    consulting             |  |                        | -       |  |                        |  | 1,680 
| | Staking and
    recording fees        |  |                        | 12,660  |  |                        |  | 21,577
| |                                       |  |                        |         |  |                        |  |       
| |                                       |  |                        | 12,660  |  |                        |  | 50,110
| |                                       |  |                        |         |  |                        |  |       
| | Recovery
    of exploration costs     |  |                        | 141,354 |  |                        |  | 75,000



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



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



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



Amounts
due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment. During the year ended February
28, 2013, imputed interest at 15%, totaling $56,664 (2012 - $55,944) was charged to operations and treated as donated capital
(Note 11). As at February 28, 2013, amounts due to related parties consist of advances or repayments to the President, Chief Executive
Officer (“CEO”) and shareholder of the Company and/or companies controlled by the President, CEO and shareholder of
the Company.



F-17







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



| |                                   |  | February
    29, 2012 |         |  | Advances
    (Repayment) |  |         | February
    28, 2013 | 
| | --------------------------------- |  | --------------------- | ------- |  | ------------------------ |  | ------- | --------------------- | 
| |                                   |  | $                     |         |  | $                        |  |         | $                     | 
| |                                   |  |                       |         |  |                          |  |         |                       | 
| | Reg
    Technologies Inc.         |  |                       | 1,317   |  |                          |  | (2,557  | )                     | 
| | Minewest Silver
    and Gold Inc. |  |                       | 1,189   |  |                          |  | (1,189  | )                     | 
| | IAS Energy
    Group              |  |                       | -       |  |                          |  | 3,371   |                       | 
| | JGR Petroleum,
    Inc.           |  |                       | 116,977 |  |                          |  | -       |                       | 
| | John Robertson                    |  |                       | 28,110  |  |                          |  | 381     |                       | 
| | KLR Petroleum
    Ltd.            |  |                       | 129,552 |  |                          |  | (80,644 | )                     | 
| | SMR Investments
    Ltd.          |  |                       | 111,450 |  |                          |  | 30,000  |                       | 
| | Teryl
    Resources Corp.         |  |                       | 7,517   |  |                          |  | (7,517  | )                     | 
| |                                   |  |                       |         |  |                          |  |         |                       | 
| |                                   |  |                       | 396,112 |  |                          |  | (58,155 | )                     | 



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



Pursuant
to a management services agreement, during the year ended February 28, 2013 the Company paid or accrued management fees of $30,000
(2012 - $30,000) to a company of which the President of the Company is a director. At February 28, 2013, the Company had an outstanding
balance of $141,450 (2012 - $111,450) owed to this related party.



During
the year ended February 28, 2013, the Company paid consulting fees of $855 (2012 - $13,666) to a company where the President of
the Company is a director.



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



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



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



Authorized



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



Issued
and outstanding



The
total issued and outstanding capital stock is 99,593,825 common shares without par value.



F-18







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Issued
and outstanding (continued)



On
January 24, 2012 the Company issued 1,700,000 units pursuant to a private placement at a price of US$0.05 per unit for gross proceeds
of $85,000 (US$85,000). Each unit consists of one common share and one share purchase warrant, with each warrant entitling the
holder to purchase one share at an exercise price of US$0.10 per share for a one year term expiring from the date of closing.
The Company allocated $54,253 to the common shares and $30,747 to the share purchase warrants based on the relative fair values.



Warrants



The
following is a summary of the Company’s warrant activities during the year ended February 28, 2013:



| |                                                      |  |               |             |   | Weighted           |  |     
| | ---------------------------------------------------- |  | ------------- | ----------- | - | ------------------ |  | ----
| |                                                      |  | Number
    of |             |   | average            |  |     
| |                                                      |  | warrants      |             |   | exercise
    price |  |     
| |                                                      |  |               |             |   | US$                |  |     
| |                                                      |  |               |             |   |                    |  |     
| | Outstanding
    and exercisable at February 28, 2011 |  |               | 22,643,000  |   |                    |  | 0.16
| | Issued                                               |  |               | 1,700,000   |   |                    |  | 0.10
| | Expired                                              |  |               | (22,643,000 | ) |                    |  | 0.16
| | Outstanding
    and exercisable at February 29, 2012 |  |               | 1,700,000   |   |                    |  | 0.10
| | Expired                                              |  |               | (1,700,000  | ) |                    |  | 0.10
| | Outstanding
    and exercisable at February 28, 2013 |  |               | 1,700,000   |   |                    |  | 0.10



As
at February 28, 2013 the Company had no warrants outstanding, and did not issue any warrants during the year ended February 28,
2013.



The
weighted average fair value of warrants issued during the year ended February 29, 2012 was $0.017 per warrant. The fair value
of each warrant granted was determined using the Black-Scholes warrant pricing model using the following weighted average assumptions:
risk free interest rate of 0.99%, expected life of 1 year, annualized volatility of 226% and expected dividend of 0%.



F-19







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Stock
Options



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



| | i)   |  | Up
    to 25% of the options may be exercised at any time during the term of the option (the “First Exercise”);                                 
| | ---- |  | ------------------------------------------------------------------------------------------------------------------------------------------------
| |      |  |                                                                                                                                                 
| | ii)  |  | The
    second 25% of the options may be exercised at any time after 90 days from the date of the First Exercise (the “Second
    Exercise”);   
| |      |  |                                                                                                                                                 
| | iii) |  | The
    third 25% of the options may be exercised at any time after 90 days from the date of the Second Exercise (the “Third
    Exercise”); and
| |      |  |                                                                                                                                                 
| | iv)  |  | The
    fourth and final 25% of the options may be exercised at any time after 90 days from the date of the Third Exercise.                     



As
the Company believes that it is not probable that any options would vest except the first 25% of the options that vested immediately
upon a date of grant, the fair value of the first 25% of the options that vested were charged to the consolidated statements of
operations and comprehensive loss.



During
the year ended February 28, 2013, the Company recorded stock-based compensation of $1,695 (2012 - $4,508) for options vested and
re-priced options.



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



On
May 15, 2012, the Company re-priced 2,025,000 outstanding options with initial exercise prices between $0.10 and $0.31 to the
exercise price of $0.05 per share.



On
May 15, 2012, the Company granted to an employee of the Company 25,000 options exercisable into the Company’s common shares at a price of $0.05 for five years expiring May 15, 2017.



The
following stock options were outstanding and exercisable at February 28, 2013:



| |                 |  | Exercise |      |  | Number
    of |  |         | Number
    of |  |  | Remaining        | 
| | --------------- |  | -------- | ---- |  | ------------- |  | ------- | ------------- |  |  | ---------------- | 
| |                 |  | price    |      |  | options       |  |         | options       |  |  | contractual      | 
| | Expiry
    date |  | US$      |      |  | outstanding   |  |         | exercisable   |  |  | life
    (years) | 
| | April 22, 2014  |  |          | 0.05 |  |               |  | 25,000  |               |  |  | 6,250            | 
| | April 19, 2015  |  |          | 0.05 |  |               |  | 50,000  |               |  |  | 12,500           | 
| | April 14, 2016  |  |          | 0.05 |  |               |  | 250,000 |               |  |  | 62,500           | 
| | May 15, 2017    |  |          | 0.05 |  |               |  | 25,000  |               |  |  | 6,250            | 
| |                 |  |          |      |  |               |  | 350,000 |               |  |  | 87,500           | 



F-20







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Stock
Options (continued)



The
following is a summary of the Company’s stock option activities during the year ended February 28, 2013:



| |                                                                            |  |               |            |   | Weighted           |  
| | -------------------------------------------------------------------------- |  | ------------- | ---------- | - | ------------------ | -
| |                                                                            |  | Number
    of |            |   | average            |  
| |                                                                            |  | options       |            |   | exercise
    price |  
| |                                                                            |  |               |            |   | US$                |  
| |                                                                            |  |               |            |   |                    |  
| | Outstanding at February
    28, 2011                                       |  | $             | 3,250,000  |   |                    | $
| | Granted                                                                    |  |               | 400,000    |   |                    |  
| | Expired/forfeited                                                          |  |               | (1,625,000 | ) |                    |  
| |                                                                            |  |               |            |   |                    |  
| | Outstanding at February 29,
    2012                                       |  |               | 2,025,000  |   |                    |  
| | Re-priced                                                                  |  |               | (2,025,000 | ) |                    |  
| | Re-priced                                                                  |  |               | 2,025,000  |   |                    |  
| | Expired/forfeited
    without exercised                                    |  |               | (1,700,000 | ) |                    |  
| | Granted                                                                    |  |               | 25,000     |   |                    |  
| |                                                                            |  |               |            |   |                    |  
| | Outstanding at February 28,
    2013                                       |  |               | 350,000    |   |                    |  
| | Exercisable at February 28,
    2013                                       |  |               | 87,500     |   |                    |  
| |                                                                            |  |               |            |   |                    |  
| | Weighted average fair value
    of stock options granted during the period |  |               |            |   |                    |  



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



| |                             |  | For
    the           |                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | For
    the           |  |                                                                                                                                              
| | --------------------------- |  | --------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | - | --------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------
| |                             |  | Year
    ended        |                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | Year
    ended        |  |                                                                                                                                              
| |                             |  | February
    28, 2013 |                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | February
    29, 2012 |  |                                                                                                                                              
| |                             |  |                       |                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                       |  |                                                                                                                                              
| | Risk
    free interest rate |  |                       | 1.10
                                                                                                                                                 –
                                                                                                                                                 1.46                                                                                                                    | % |                       |  | 2.84                                                                                                                                         
| | Expected life               |  |                       | 0.48
                                                                                                                                      –
                                                                                                                                      5
                                                                                                                                      years |   |                       |  | 5
                                                                                                                                      years
| | Annualized
    volatility   |  |                       | 173.18
                                                                                                                                      –
                                                                                                                                      239.63                                                                                                                                      | % |                       |  | 138.96                                                                                                                                       
| | Expected dividends          |  |                       | -                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                       |  | -                                                                                                                                            



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



F-21







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



On
September 17, 2009 the Company entered into an office rent agreement for the period from November 1, 2009 to October 31, 2010
at monthly rate of $3,355. The Company shares the office space and rent fees equally with two related parties. The agreement was
renewed for one year at $3,690 per month for the duration of November 1, 2010 to October 31, 2011 and further extended to October
31, 2012 at $1,970 per month. The office rent agreement was not renewed and terminated on October 31, 2012.



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



| |                                                  |  |  | Cumulative
                                                                                                                                                         from |  |  |  |                                                                                                                                                                                                                                                                                                                                     |  |  |  |                                                                                                                                                                     |  | 
| | ------------------------------------------------ |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  |  |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  |  |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | 
| |                                                  |  |  | inception of exploration                                                                                                                                                 |  |  |  | For
                                                                                                                                                         the                                                                                                                                                                    |  |  |  | For
                                                                                                                                                         the    |  | 
| |                                                  |  |  | stage on March 1, 2003                                                                                                                                                   |  |  |  | Year
                                                                                                                                                         ended                                                                                                                                                                 |  |  |  | Year
                                                                                                                                                         ended |  | 
| |                                                  |  |  | to February 28, 2013                                                                                                                                                     |  |  |  | February
                                                                                                                                                         28,
                                                                                                                                                         2013 |  |  |  | February 29, 2012                                                                                                                                                   |  | 
| |                                                  |  |  | $                                                                                                                                                                        |  |  |  | $                                                                                                                                                                                                                                                                                                                                   |  |  |  | $                                                                                                                                                                   |  | 
| |                                                  |  |  |                                                                                                                                                                          |  |  |  |                                                                                                                                                                                                                                                                                                                                     |  |  |  |                                                                                                                                                                     |  | 
| | Cash
    paid during the period for interest     |  |  | -                                                                                                                                                                        |  |  |  | -                                                                                                                                                                                                                                                                                                                                   |  |  |  | -                                                                                                                                                                   |  | 
| | Cash paid
    during the period for income taxes |  |  | -                                                                                                                                                                        |  |  |  | -                                                                                                                                                                                                                                                                                                                                   |  |  |  | -                                                                                                                                                                   |  | 



During
the year ended February 28, 2013, imputed interest at 15% per annum totalling $56,664 (2012 - $55,944) on amounts due to related
parties was charged to operations and treated as donated capital (Note 7).



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



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



| |                                                      |  | 2013 |         |   | 2012 | 
| | ---------------------------------------------------- |  | ---- | ------- | - | ---- | 
| |                                                      |  | $    |         |   | $    | 
| |                                                      |  |      |         |   |      | 
| | Loss
    before income taxes                         |  |      | 5,658   |   |      | 
| | Canadian federal
    and provincial income tax rates |  |      | 25      | % |      | 
| |                                                      |  |      |         |   |      | 
| | Income tax
    recovery based on the above rates     |  |      | 1,414   |   |      | 
| |                                                      |  |      |         |   |      | 
| | Increase due
    to:                                 |  |      |         |   |      | 
| | Non-deductible
    and deductible items              |  |      | 10,306  |   |      | 
| | Change in
    valuation allowance                    |  |      | (11,720 | ) |      | 
| | Change in
    statutory tax rates                    |  |      | -       |   |      | 
| |                                                      |  |      |         |   |      | 
| | Income tax
    recovery                              |  |      | -       |   |      | 



F-22







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



The
components of future income taxes are as follows:



| |                                     |  | 2013 |            |   | 2012 |   |           
| | ----------------------------------- |  | ---- | ---------- | - | ---- | - | ----------
| |                                     |  | $    |            |   | $    |   |           
| |                                     |  |      |            |   |      |   |           
| | Future income
    tax assets        |  |      |            |   |      |   |           
| |                                     |  |      |            |   |      |   |           
| | Non-capital losses                  |  | $    | 1,151,835  |   |      | $ | 1,129,251 
| | Mineral property
    costs          |  |      | 488,493    |   |      |   | 520,533   
| | Property and
    equipment          |  |      | 3,099      |   |      |   | 2,866     
| | Marketable
    securities and other |  |      | 15,727     |   |      |   | 18,224    
| |                                     |  |      |            |   |      |   |           
| | Total future
    income tax assets  |  |      | 1,659,154  |   |      |   | 1,670,874 
| | Valuation
    allowance             |  |      | (1,659,154 | ) |      |   | (1,670,874
| |                                     |  |      |            |   |      |   |           
| | Net
    future income tax assets    |  |      | -          |   |      |   | -         



The
Company has non-capital loss carry-forwards of approximately $4,607,338 that may be available for tax purposes. The loss carry-forwards
are all in respect of Canadian operations and expire as follows:



| |      | $         | 
| | ---- | --------- | 
| |      |           | 
| | 2015 | 398,612   | 
| | 2026 | 402,360   | 
| | 2027 | 1,036,715 | 
| | 2028 | 417,682   | 
| | 2029 | 472,218   | 
| | 2030 | 392,771   | 
| | 2031 | 1,151,052 | 
| | 2032 | 235,235   | 
| | 2033 | 100,693   | 
| |      |           | 
| |      | 4,607,338 | 



Additionally,
the Company has approximately $1,953,973 of development expenses and exploration expenditures as at February 28, 2013 which, under
certain circumstances, may be utilized to reduce taxable income of future years. The Company also has approximately $37,810 of
capital losses that may be carried forward and applied against future capital gains. The potential income tax benefits of these
losses have been offset by a full valuation allowance.



F-23







Linux
Gold Corp.

(An
Exploration Stage Company)

Notes to
Consolidated Financial Statements

For the
Years Ended February 28, 2013 and February 29, 2012

(Expressed
in Canadian Dollars)



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



Derivate
liabilities consist of warrants that were originally issued in private placements that have exercise prices denominated in United
States dollars, which differs from the Company’s functional currency (Canadian dollars) (Note 9 and 15). The fair value
of these warrants as at February 28, 2013 was $nil (2012 - $29,637) after their expiration during the current year. The fair value
of warrants as at February 29, 2012 was determined using the Black-Scholes warrant pricing model using the following weighted
average assumptions: risk free interest rate of 1.12%, expected life of 0.90, volatility of 245.12% and expected dividend of 0%.



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



Teryl
made cash payments of $90,873 to the Company in lieu of exploration expenditures on the Fish Creek Property (Note 5). Effective
March 6, 2013 Teryl acquired the 50% working interest in the Fish Creek property from the Company pursuant to an agreement disclosed
in Note 5. The Company will retain a 5% net royalty up to $2,000,000. Teryl has the right to purchase the 5% net royalty, for
consideration of $500,000 from the Company within one year of production.



Effective
April 5, 2013 the Company signed a teaming agreement to produce gold from a placer mining technology with a 45 day option for
consideration of US$1,000 which was subsequently extended to July 15, 2013. The teaming agreement is earned by the Company funding
the gold extraction technology for total cost of US$32,000.





F-24