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 the fiscal year ended February 28, 2009




OR




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




For the fiscal year ended:  n/a











□
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: n/a




Commission File Number 000-30084





Linux Gold Corp.


(Exact name of Registrant as specified in its charter)


(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 pursuant to Section 12(g) of the Act:


Common Stock, no par value


(Title of Class)




Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:




None




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


Title of Each Class
Outstanding at February 28, 2009Common Shares, no par value
87,650,825


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.
 
 Yes x

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 by the International Accounting Standards Board

□ Other
 
 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 ____      Nox












TABLE OF CONTENTS





PART I
5ITEM 1.
IDENTITY OF DIRECTORS , SENIOR MANAGEMENT AND ADVISORS
5ITEM 2.
OFFER STATISTICS AND EXPECTED TIMETABLE
5ITEM 3.
KEY INFORMATION
6A.
SELECTED FINANCIAL DATA
6B.
CAPITALIZATION AND INDEBTEDNESS
7C.
REASON FOR THE OFFER AND USE OF PROCEEDS
7D.
RISK FACTORS
8ITEM 4.
INFORMATION ON THE COMPANY
13A.
HISTORY AND DEVELOPMENT OF THE COMPANY
13B.
BUSINESS OVERVIEW
14C.
ORGANIZATIONAL STRUCTURE
25D.
PROPERTY, PLANTS AND EQUIPMENT
25ITEM 4A.
UNRESOLVED STAFF COMMENTS
26ITEM 5.
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
26A.
OPERATING RESULTS
27B.
LIQUIDITY AND CAPITAL RESOURCES
27C.
RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC
29D.
TREND INFORMATION
29E.
OFF-BALANCE SHEET ARRANGEMENTS
29F.
TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
29G.
SAFE HARBOR
30ITEM 6.
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
31A.
DIRECTORS AND SENIOR MANAGEMENT
31B.
COMPENSATION
32C.
BOARD PRACTICES
38D.
EMPLOYEES
38E.
SHARE OWNERSHIP
38ITEM 7.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
39A.
MAJOR SHAREHOLDERS
39B.
RELATED PARTY TRANSACTIONS
39C.
INTERESTS OF EXPERTS AND COUNSEL
39ITEM 8.
FINANCIAL INFORMATION
39A.
CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
39B.
SIGNIFICANT CHANGES
39ITEM 9.
THE OFFER AND LISTING
39ITEM 10.
ADDITIONAL INFORMATION
40A.
SHARE CAPITAL
40B.
MEMORANDUM AND ARTICLES OF ASSOCIATION
40C.
MATERIAL CONTRACTS
41D.
EXCHANGE CONTROLS
42E.
TAXATION
42F.
DIVIDENDS AND PAYING AGENTS
43G.
STATEMENT BY EXPERTS
43H.
DOCUMENTS ON DISPLAY
43I.
SUBSIDIARY INFORMATION
43ITEM 11.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
43ITEM 12.
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
44PART II
44ITEM 13.
DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES
44ITEM 14.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.
44A.
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS
44B.
USE OF PROCEEDS
44ITEM 15.
CONTROLS AND PROCEDURES
44ITEM 15T.
CONTROLS AND PROCEDURES
45ITEM 16.
[Reserved]
45ITEM 16A.
Audit Committee Financial Expert
45ITEM 16B.
Code of Ethics
45ITEM 16C.
Principal Accountant Fees and Services
46ITEM 16D.
Exemptions from the Listing Standards for Audit Committees
47ITEM 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
47PART III
47ITEM 17
FINANCIAL STATEMENTS
47ITEM 18
FINANCIAL STATEMENTS
47ITEM 19.
EXHIBITS
47SIGNATURE PAGE
49










GLOSSARY OF MINING TERMS





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




$/yd3– dollars per cubic yard.Alluvial - a term used to identify particular types of, or minerals found associated with, deposits made by flowing water, such as alluvial goldArsenopyrite -a major ore of arsenic, Arsenopyite can contain a small amount of gold as an impurityAssay – a precise and accurate analysis of the metal contents in an ore or rock sampleAu - gold.Auger drill – a handheld machine that produces small, continuous core samples in unconsolidated materialsBiotite – dark-colored mica rich in iron, magnesium, and potassiumBreccia –a fragmental rock; any rock formation essentially composed of uncemented, or loosely consolidated, small angularColluvium - A loose deposit of rock debris accumulated through the action of gravity at the base of a cliff or slope.Conglomerate – a sedimentary rock composed of rounded fragments larger than 2 mm in diameter.Contained gold – total measurable gold in grams or ounces estimated to be contained within a mineral deposit.  Makes no allowance for economic criteria, mining dilution or recovery losses.Diamond drill – a large machine that produces a more or less continuous core sample of the rock or material being drilled.Dike- a tabular igneous intrusion that cuts across the layering of the country rock.Feasibility study – a detailed report assessing the feasibility, economics and engineering of placing a mineral deposit into commercial productionFoliated– said of a rock in which mineral grains have been aligned in a planar fabric by shearing or metamorphism.Fracture -the general term to include any kind of discontinuity in a body of rock if produced by mechanical process such as shear stress or tensile stressgm/mt  or gpt- grams per metric tonne.Gold deposit - means a mineral deposit mineralised with gold.Gold resource – see geological or mineral resourceGrams per cubic meter - alluvial mineralisation measured by grams of gold contained per cubic meter of material, a measure of gold content by volume not by weight.Graphite - a allotropic form of carbon found in natureGreenstone – a rock in which the original igneous minerals are replaced by dark green metamorphic minerals.Inferred mineral resource -that part of a mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity. The estimate is based on limited information
and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holesHornblende – a dark a dark-colored, prismatic or needle-shaped mineral rich in iron, magnesium, sodium and calcium.Indicated mineral resource -that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support
mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumedIntrusive -cuts across (is intrusive into)Listwanite -(carbonate altered serpentinite) is associated with gold mineralization.Lode mining – mining of gold bearing rocks, typically in the form of veins or stockworksMafic – said of a dark-colored, iron and magnesium rich igneous rock.Measured resourcemeans that part of a mineral resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters,
to support production planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.Mineral 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.Net profit interest (NPI) – effectively a royalty based on the net profits generated after recovery of all costsNet smelter royalty or NSR - a royalty based on the gross proceeds received from the sale of minerals less the cost of smelting, refining, freight and other related costs.Ore – a naturally occurring rock or material from which economic minerals can be extracted at a profitOunce or oz. - a troy ounce or 20 pennyweights or 480 grains or 31.103 grams.Oz/yd3–ounces per cubic yard.opt– troy ounces per short tonPlacer - a place where gold is obtained by washing; an alluvial or glacial deposit, as of sand or gravel, containing particles of gold or other valuable minerals including gemstones.Pluton – an igneous rock or body formed at depth within the earth.Probable reserve- the economically mineable part of an indicated, and in some circumstances a measured resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors
that demonstrate, at the time of reporting, that economic extraction can be justified.Prospect – an area prospective for economic minerals based on geological, geophysical, geochemical and other criteriaProven reservemeans the economically mineable part of a measured resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of
reporting, that economic extraction is justified.Pyrite – an iron sulfide mineral.Quartz monzonite - a light-colored intrusive rock composed of quartz and feldspar with moderately abundant biotite and hornblende crystalsReserve -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 drilledSilicic – said of a light colored rock composed primarily of silica and aluminum.Skarn -a finegrained metamorphic rock that is usually coloured green or red, ocassionally grey, black, brown or white. It forms through thermal metamorphism as the mineralogical, chemical and crystallographic changes in a solid-state rock, i.e. without melting, in response
to new conditions of pressure and/or temperature, and/or introduction of fluids.Slickensides -  a polished, striated rock surface caused by one rock mass sliding over another in a fault planeStockwork -small veins of mineralization that have so penetrated a rock mass that the whole rock mass can be considered mineralizedSyenite – Potassium-rich intrusive rock; at Granite Mountain the syenite commonly has an abundance of mafic minerals.Ton- short ton (2,000 pounds).Tonne- metric tonne (2,204.6 pounds).Trenching – the surface excavation of a linear trench to expose mineralization for samplingVein – a tabular body of rock typically of narrow thickness and often mineralized occupying a fault, shear, fissure or fracture crosscutting another pre-existing rock





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





1 mile
= 1.609 kilometres
2,204 pounds
= 1 tonne1 yard
= 0.9144 meter
2,000 pounds/1 short ton
= 0.907 tonne1 acre
= 0.405 hectare
1 troy ounce
= 31.103 grams





Unless the context otherwise requires, all references to the “Registrant” or the “Company” or “Linux” refer to Linux Gold Corp.  All monetary figures are in terms of Canadian dollars unless otherwise indicated.













BUSINESS OF LINUX GOLD CORP.





We make expenditures on acquiring mineral properties and carrying out exploration work.  The recoverabilityof 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, 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. The Company has incurred a loss of $536,201 in the year ended February 28, 2009 (2008 - 2,260,291; 2007 - $3,571,183). These consolidated financial statements do not include adjustments that would be necessary should
it be determined that we may be unable to continue as a going concern.





FINANCIAL AND OTHER INFORMATION




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







FORWARD-LOOKING STATEMENTS




Certain statements in this document constitute “forward-looking statements”. Some, but not all, forward-looking statements can be identified by the use of words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” and “intend,” statements that
an action or event “may,” “might,” “could,” “should,” or “will” be taken or occur, or other similar expressions. Although we have attempted to identify important factors that could cause actual results to differ materially from expected results, such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different
from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, the following risks: the risks associated with outstanding litigation, if any, risks associated with project development; the need for additional financing; operational risks associated with mining and mineral exploration; fluctuations in metal prices; title matters; uncertainties and risks related to carrying on business in foreign countries; environmental liability
claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters with certain other projects; the absence of dividends; currency fluctuations; competition; dilution; the volatility of our common share price and volume; and tax consequences to U.S. Shareholders. We are obligated to keep our information current and revise any forward-looking statements because of new information, future events or otherwise.







PART I





ITEM 1.                IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS





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





ITEM 2.                OFFER STATISTICS AND EXPECTED TIMETABLE





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












ITEM 3.                KEY INFORMATION





A.         SELECTED FINANCIAL DATA





The summary consolidated financial information set forth below should be read in conjunction with, and is qualified in its entirety by reference to, the Consolidated Financial Statements, as of and for the years ended February 28, 2009, February 29, 2008 and February 28, 2007, together with the notes thereto, which appear elsewhere in this
annual report. The Consolidated Financial Statements as of and for the year ended February 28, 2009 have been audited by James Stafford, Inc., Chartered Accountants, and for the years ended February 29, 2008 and February 28, 2007 by Smythe Ratcliffe LLP Chartered Accountants. The Consolidated Financial Statements are prepared in accordance with U.S.  GAAP. See Note 2 of the Notes to Consolidated Financial Statements.





The selected financial data set forth in the following table is expressed in Canadian dollars.  Since June 1, 1970, the Government of Canada has permitted a floating exchange rate to determine the value of the Canadian dollar as compared to the United States dollar.  At February 27, 2009 US$1.00 was equal to approximately
C$0.7870.





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:





Fiscal
Years Ended February 28/29





2009


2008


2007
(Re-stated)


2006


2005Net Revenue

$
-


$
-


$
-


$
-


$
-Income (loss) from continuing operations


(536,201
)


(2,260,291
)


(3,571,183
)


(810,105
)


(748,369
)Income (loss) from discontinued operations


-



-



-



-



-Income (loss) from continuing operations per Common Share


(0.01
)


(0.03
)


(0.05
)


(0.01
)


(0.01
)Income (loss) from discontinued operations per Common Share


-



-



-



-



-Total Assets


112,942



328,923



737,837



669,057



650,625Working Capital (deficit)


(296,083
)


(219,213
)


(651,053
)


69,670



128,204Shareholders’ Equity (deficit)


(286,985
)


(207,248
)


(334,974
)


206,262



254,646Cash Dividends per common share

nil


nil


nil


nil


nil


















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





Currencies and Exchange Rates:





We publish our financial statements in Canadian dollars. Unless otherwise indicated, monetary amounts referred to in this annual report are in Canadian dollars.  Unless otherwise indicated, all translations from Canadian dollars to US dollars have been made at a rate of C$0.7870 to US$ 1.00, the noon rate published by the Bank
of Canada on February 27, 2009. We do not represent that Canadian dollar or US dollar amounts could be converted into US dollars or Canadian dollars, as the case may be, at any particular rate, the rates below or at all. On August 17, 2009, the noon rate by the Bank of Canada was CDN$ 0.9026 to US$ 1.00. The following tables set forth noon buying rate for US dollars in New York City for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York, or by the Bank
of Canada, for the periods indicated:





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





Month (1)
Year

High  (CAD$)


Low  (CAD$)March
2009


1.3000



1.2245April
2009


1.2643



1.1940May
2009


1.1872



1.0961June
2009


1.1625



1.0872July
2009


1.1655



1.0790August
2009


1.1079



1.0686


(1) noon buying rate for US dollars published by the Bank of Canada





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





Year

Average


Low/High (CAD$)


February 29/28 (CAD$)2009 (1)


1.1441



0.984/1.2971



0.78702008 (2)


1.0470



0.9168 / 1.181



0.97962007 (2)


1.1374



1.0989 /1.1852



1.172006 (2)


1.1992



1.1379 / 1.2425



1.13792005 (2)


1.2888



1.1774 / 1.3968



1.2314


(1) noon buying rate for US dollars published by the Bank of Canada


(2) noon buying rate for US dollars in New York City for cable transfers in Canadian dollars as certified for customs purposes by the Federal Reserve Bank of New York








B.         CAPITALIZATION AND INDEBTEDNESS





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





C.         REASON FOR THE OFFER AND USE OF PROCEEDS





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









D.         RISK FACTORS





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





RISK FACTORS RELATED TO OUR BUSINESS





We have a limited and changing operating history.





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





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





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





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





As noted in our audited consolidated financial statements for the year ended February 28, 2009 we have incurred significant operating losses and have an accumulated deficit since inception of $15,454,032 at February 28, 2009. Furthermore, we had working capital deficit of $296,083 as at February 28, 2009, which is not sufficient to achieve
our planned business objectives.





Our ability to continue as a going concern is dependent on continued financial support from our shareholders and other related parties, our ability to raise equity capital financing, and the attainment of profitable operations, external financings and further share issuance to satisfy working capital and operating needs.  The auditors’
report on the February 28, 2009 consolidated financial statements includes additional comments for U.S. readers that states that conditions exist that  raise substantial doubt about our ability to continue as a going concern.  The consolidated financial statements do not include adjustments that might result from the outcome of this uncertainty (see Item 5.B. Liquidity and Capital Resources).





We expect to incur significant losses for the foreseeable future.





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





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





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





Certain of the Company’s directors and officers are also directors and/or officers and/or shareholders of potential competitors of the Company, giving rise to potential conflicts of interest.





Several of the Company’s directors and officers are also directors, officers or shareholders of other companies.  In particular, Mr. Robertson, Ms. Lorette, Mrs. Robertson and Ms. van Oord are directors and/or officers of Teryl Resources Corp., a public natural resource exploration company that shares office space and administrative
staff with the









Company.  We entered into an agreement with Teryl Resources Corp. whereby Teryl could earn up to 50% of the Fish Creek claim (see Item 4.D.).  In addition, Mrs. Robertson and Mr. Robertson are directors and officers of SMR Investments Ltd. which holds approximately 6.2% of the Common Shares of the Company, and together,
our directors and officers hold 8.2% of the Common Shares of the Company (see the biographical sketches of our directors and officers at Item 6.A, and Share Ownership at Item 6.E).  Some of our directors and officers are engaged and will continue to be engaged in the search for additional business opportunities on behalf of other corporations, and situations may arise where these directors and officers will be in direct competition with the Company.  Such associations may give rise to conflicts
of interest from time to time (see Item 7.B.).  Such a conflict poses the risk that the Company may enter into a transaction on terms which could place the Company in a worse position than if no conflict existed.  Conflicts, if any, will be dealt with in accordance with the relevant provisions of the BCA.  The Board has resolved that any transaction involving a related party to the Company is required to be reviewed and approved by the Company’s Audit Committee. The Company’s directors
are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest which they many have in any project or opportunity in respect of which the Company is proposing to enter into a transaction.





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





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





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





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





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





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








Our management team has no significant minerals exploration technical training.




9





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








RISK FACTORS RELATED TO THE NATURAL RESOURCE INDUSTRY





The Company faces risks related to the exploration and potential development of its properties.





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





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





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





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





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





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





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









The prices of precious and base minerals and metals fluctuate widely and may not produce enough revenue to cover the Company’s costs.





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





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





Certain of our properties are located in Alaska. The weather during the colder seasons in these areas can be extreme and can cause interruptions or delays in our activities. As a result, our activities in these regions are seasonal and the preferred time for work is limited to the spring and summer when costs are more reasonable and access
to the properties is easier (see Item 4.B.).





The Company’s properties may be subject to unregistered agreements; transfers, or claims and title may be adversely affected.





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





Mineral operations are subject to government and regulatory approvals.





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





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





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





Our operations may require additional analysis in the future including environmental and social impact and other related studies.  We may not be able to obtain or maintain all necessary permits that may be required to continue our operation or our exploration of our properties or, if feasible, to commence development, construction
or operation of mining facilities at such properties on terms which enable operations to be conducted at economically justifiable costs.









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





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





UNCERTAINTIES AND RISKS RELATING TO COMMON SHARES





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





There is only a limited public market for our common shares on the OTC Bulletin Board, and there is a risk that that a broader or more active public trading market for our common shares will never develop or be sustained, or that current trading levels will not be sustained.





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





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





You will be subject to the penny stock rules to the extent our stock price on the OTC Bulletin Board is less Than $5.00.





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





You should not expect to receive dividends.





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












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





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





ITEM4.

INFORMATION ON THE COMPANY





A.         HISTORY AND DEVELOPMENT OF THE COMPANY





The Company was incorporated on February 27, 1979 under a perpetual charter pursuant to the British Columbia Company Act by registration of its Memorandum and Articles and was extra-provincially registered in the Province of Alberta on October 12, 1995 under the name Flame Petro-Minerals Corp. At an extraordinary general meeting held on
March 15, 2000, our shareholders approved the change of name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc, which name change was effected on March 21, 2000. At our annual meeting of shareholders on February 20, 2003, our shareholders approved the change of name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp., which name change was effected March 18, 2003. Our authorized capital consists of 200,000,000 Common Shares without par value. Of these, 83,095,825
shares were issued and outstanding as of February 28, 2009 and 87,650,825 shares were issued and outstanding as of the date of this Form 20-F. Our head office is located at #240 -11780 Hammersmith Way, Richmond, B.C., V7A 5E9.





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





On March 29, 2004, the new British Columbia Business Corporations Act (the "BCA") came into force in British Columbia and replaced the former Company Act (“Former Act”) , which is the statute under which we were previously governed. In accordance with the BCA, we were required to transition ("Transition") to the BCA and amend
our Articles or Notice of Articles upon Transition to the BCA. We filed a transition application with the Registrar of Companies British Columbia and completed the Transition on June 11, 2004.   On August 16, 2004, at the Annual General Meeting of shareholders, our shareholders passed a special resolution replace our Articles in their entirety pursuant to the Business Corporations Act(British Columbia).  Our Incorporation Number
is BC0187279.  Our Articles do not restrict the nature of the business that may be carried on by the Company.





During the three fiscal years ending in February 2009, we have been involved in mineral property exploration. We have investigated several mineral properties in Canada, the United States, and China. Our current plans are to joint venture and explore our mineral properties.





We have interests in four properties in Alaska.   We hold a 50% interest in the Fish Creek property, which is optioned to Teryl Resources Corp.  We also hold 276 quarter-section State of Alaska mining claims at several locations near Granite Mountain on the eastern Seward Peninsula of Alaska.  We hold
12 mining claims (3 square-miles) called the Dime Creek Claim Block located about 15 miles to the south of Granite Mountain. In May of 2006, the Company staked 6,400 acres of mineral exploration claims in the Livengood-Tolovana Mining District. Linux Gold Corp is 100% owner of the claims.


Further exploration will be required before a final evaluation as to the economic and legal feasibility is determined for the above properties.





We also own a 1.277% net working interest in an oil well located in Fayette County, Texas.  To date, we have received no revenues from our mining property activities, and have received no revenue from our interest in the Fayette County oil well during the past five fiscal years.  As a result, we wrote off our interest
in the oil well located in Fayette County. We have no current plans to pursue further activities in either the oil or gas business.










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





B.         BUSINESS OVERVIEW





Nature of the Company’s Operations





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.





Mineral Properties





Fish Creek Claims, Alaska





We currently own a 50% joint venture interest in 30 state of Alaska mining claims, comprising 1,032 acres, known as the Fish Creek Prospect, located in the Fairbanks Mining District in Alaska.  These claims are subject to an option agreement with Teryl Resources Corp., a company with common directors and officers.  Teryl
Resources Corp. may purchase the 5% net royalty for $500,000 U.S. within 1 year after production on a 25% working interest.  Teryl also agrees to expend a minimum of $500,000 U.S. after three years from the date of the agreement. The claims are legally maintained by recording an affidavit of annual labor for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130 per claim ($3,900 total). All mechanized exploration activity must
be permitted by the Alaska Division of Mining, Alaska Department of Fish and Game, and the U.S. Corps of Engineers. Water can be withdrawn from Fish Creek to support exploration activities with oversight from the Alaska Department of Conservation. Currently, we are permitted to conduct exploration by drilling. To the best of our knowledge, we are operating in compliance with all applicable environmental regulations. There currently are no unusual social, political or environmental encumbrances to mining on the
project. We currently hold a valid exploration permit on the project. Additional permits for future work will be acquired from the Division of Mining, Alaska Department of Fish and Game, and the U.S. Corps of Engineers on an as-needed basis.





The Fish Creek project is located 25 miles north of Fairbanks in an important mining district with permissive land status and excellent road access to the property.  Currently, there are only primitive trails developed within the property to access exploration sites. The project is located within metamorphic and plutonic host
rocks that are similar in composition and age to rock units that contain commercially viable mineralization elsewhere in the Fairbanks Mining District. The property is also located on a drainage that was mined extensively for alluvial gold in the past both upstream and downstream of the Fish Creek project.  Limited exploration conducted between 1992 and 2003 did not reveal significant bedrock exposures of mineralization, however, very widely spaced placer drilling over a large area of the property conducted
in 1996 indicated the presence of placer gold in the alluvial deposits. More extensive and closer spaced placer gold drilling conducted in 2004 confirmed the presence of significant concentrations of placer gold on the claims.





Two independent technical consultants are utilized by the Company for work on the Fish Creek property. Evaluations for alluvial (placer) gold are managed by Jeff Keener of NordWand Enterprize, P.O. Box 82811, Fairbanks, Alaska, 99708, USA. Mr. Keener is a graduate of the University of Alaska, with a B.S. degree in Geology (1991). Mr. Keener
is a member of the Alaska Miners Association and has applied for membership with the American Institute of Professional Geologists. From 1986 to the present he has been actively employed in various capacities in the mining industry in numerous locations in Alaska, Nevada, Arizona, and California and is recognized as an expert in the field of placer examination.





For lode gold exploration we utilize Avalon Development Corp. of Fairbanks, Alaska, to conduct any proposed exploration work on the Fish Creek Property.  Mr. Curt Freeman is the President of Avalon Development Corporation, P.O. Box 80268, Fairbanks, Alaska, 99708, USA.  Mr. Freeman is a graduate of the College of Wooster,
Ohio, with a









B.A. degree in Geology (1978), and a graduate of the University of Alaska with an M.S. degree in Economic Geology (1980).  Mr. Freeman is a licensed geologist in Alaska (AA#159) and is a member of the American Institute of Professional Geologists (CPG#6901), the Society of Economic Geologists, the Geological Society of Nevada,
the Alaska Miners Assoc. and the Prospectors and Developers Assoc. of Canada. From 1980 to the present, he has been actively employed in various capacities in the mining industry in numerous locations in North America, Central America, South America, New Zealand and Africa.





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





A ground magnetic survey was completed on the Fish Creek property on November 20, 2003 on the right limit (southeast) side of Fish Creek Valley, approximately 600 – 700 feet down-valley from the toe of the Fort Knox mine fresh water supply dam. This program was an orientation survey to test the right limit bench of Fish Creek for
a suspected buried placer gold-bearing channel.  Magnetic surveys of this type have been successful in locating elevated magnetic field intensities associated with the heavy, magnetic mineral concentrations often associated with placer gold accumulations. The field survey consisted of two lines with 200-foot line spacing and 10-foot station spacing, which appears to provide sufficient detail to extrapolate magnetic data between lines. Signatures from the two traverses are interpreted to cross five features,
of which three have the possibility of being associated with alluvial concentrations of various characteristics. A program of additional ground magnetics surveying followed by trenching and/or large-diameter auger drilling to evaluate the two most promising alluvial gold targets was recommended for early 2004.





In the 2004 drilling program, samples were collected every five feet. Placer samples were concentrated on-site with a small hydraulic concentrator and panned to extract the visible gold. The placer gold particles were dried and weighed with a precision Haigis balance and retained in glass sample vials. Placer analysis was performed by Mr.
Keener, who also is storing the gold samples and concentrate reject in his office located in Fairbanks, Alaska. Bedrock samples were collected in large sample bags and transported to the Kinross rock core storage facility in Fox, Alaska where they were subsequently transferred to Alaska Assay Laboratory for splitting and preparation. Reduced samples were sent to Nevada Assay Laboratory of Reno, Nevada to be analyzed for 69 elements by ICP-MS techniques and for gold by fire assay. The pulps and rejects are being
stored by Alaska Assay Laboratory at their facility in Fairbanks, Alaska. Bedrock chip samples, collected every five feet from the two lode holes, are retained in conventional chip trays and are being stored in Mr. Keener’s Fairbanks office.





Curt Freeman, MS, PGeo, Certified Professional Geologist, the author of the technical report, “Summary Report For The Fish Creek Gold Property, Fairbanks Mining District, Alaska” compliant with NI 43-101, dated March 7, 2005, recommended a two phase program as follows:





Infill Reverse Circulation Drilling: Infill drilling using large diameter reverse circulation methods is warranted on the property to better define the placer gold mineralization outlined in 2004.  Previous experience by Keener and other operators within the Fish
Creek drainage has shown that drilling is an effective method of sampling and valuating the










placer deposit and provides predictable estimates of subsequent production. Previous work suggests that drilling to obtain samples with volumes of 0.05 cubic yards each are adequate to estimate the volume and value of the placer gold deposit. Sampling procedures similar to those utilized in 2004 should be followed except that the volume
of each sample should be measured to provide a more accurate estimate of the gold grades and to evaluate the recovery of the drilling system. Additionally, all holes should be continued into bedrock for at least 25 feet to test for the presence of lode gold mineralization. The primary goal of this program would be to enable industry acceptable mineral resources to be calculated between the two lines of drilling completed in 2004.  A secondary goal would be to determine if significant lode gold mineralization
exists in the area drilled. Recommended future work on the Fish Creek property should include drilling 20 reverse circulation drill holes (8” diameter) for a total of 1,600 feet of drilling.  Construction of an all-weather creek crossing for off-road vehicles, near the mouth of Odden Creek, will facilitate this work.  The estimated cost of such work is $50,000. Fieldwork will take about one to two weeks, whereas sample analysis and reporting will take an additional two to four weeks.





Step-out Reverse Circulation Drilling: if results of the phase 1 infill drilling are encouraging, step-out drilling using large diameter reverse circulation methods is warranted on the property to expand on the placer gold mineralization outlined in 2004.  Sampling
procedures similar to those utilized in 2004 should be followed except that the volume of each sample should be measured to provide a more accurate estimate of the gold grades and to evaluate the recovery of the drilling system. Additionally, all holes should be continued into bedrock for at least 25 feet to test for the presence of lode gold mineralization. The primary goal of this program would be to enable industry compliant mineral resources to be calculated for areas of the property that lie up and downstream
from the 2004 drill lines.  A secondary goal would be to determine if significant lode gold mineralization exists in the area drilled. Recommended future work on the Fish Creek property should include drilling 55 reverse circulation drill holes (8” diameter) for a total of 4,400 feet of drilling.  Construction of an all-weather creek crossing for off-road vehicles, near the mouth of Odden Creek, will facilitate this work.  The estimated cost of such work is $150,000. Fieldwork
will take about two to three weeks, whereas sample analysis and reporting will take an additional four to six weeks.





In June, 2005, we commenced an auger drilling program near Too Much Gold Creek to collect soil samples from the top of bedrock. An auger track rig was used to drill 36 holes to a maximum depth of 60 feet on lines spaced 500 feet apart where holes were spaced 200 feet apart. No significant mineralization was found in the 2005 soil sampling
program. Soil samples were transferred to Alaska Assay Laboratory in Fairbanks, Alaska, for preparation and were analyzed by ICP-MS for 69 elements and fire assay for gold by Reno Assay Laboratory in Reno, Nevada. Pulps and rejects are being stored by Alaska Assay Laboratory at their Fairbanks facility. The total cost for the 2005 soil sampling program was $16,000.





In October 2006, six new geophysical targets were located on the Fish Creek property.  An interpretive report titled “Proposed Drill Sites, Fish Creek Gold Property, Fairbanks Mining District, Alaska.” Fugro Airborne Survey, Inc., under contract to Fairbanks Gold Mining, Inc./Kinross Gold, initiated an HEM Airborne
geophysical area and identified six main targets on the Fish Creek property.  The following interpreted targets are based on linear resistivity features inferring regional structural trends. Conductive gradients at depth or along a structure suggest areas of higher fracture density. The high magnetic anomalies with good depth extent are interpreted as intrusives and the linear magnetic highs may be calc-silicates.





Proposed Drill Site 01: Interpreted Target – Conductive Shear / High Fracture Density


Proposed Drill Site 02: Interpreted Target – Conductive Shear / High Fracture Density


Proposed Drill Site 03: Interpreted Target – Calc-silicate / High Fracture Density


Proposed Drill Site 04: Interpreted Target – Calc-silicate / High Fracture Density


Proposed Drill Site 05: Interpreted Target – Intrusive Contact / High Fracture Density


Proposed Drill Site 06: Interpreted Target – Manto Type Magnetic Anomaly





Together with Teryl Resources Corp., we planned to implement an exploration program during the 2006/7 winter on the Fish Creek gold property. We received permits to conduct exploration drilling to drill up to seven holes (3,500 ft) on geophysical targets identified from the Fugro survey.





In January 2008 we commenced arrangements for a drill program to test several gold geophysical anomalies. This drilling would be conducted as part of the Phase I exploration program recommended in our Technical Report on the Fish Creek Property, dated March 7, 2005, prepared under National Instrument 43-101.  The drill program
proposes to RVC drill approximately 2,000 feet, during this exploration season. The cost to complete this phase of work is estimated to be approximately US$200,000.  However, due to the location of the proposed drill holes (wet, boggy), increased exploration activities in the State of Alaska, and due to the Company being a junior mining company requiring small-scale work









competing for equipment with many larger companies, we have had difficulty obtaining equipment to conduct the exploration drilling.  It is our intent to complete the drilling as soon as a drill is available and the weather permits.





There currently are no resources or reserves on the Fish Creek property that comply with the Canadian Institute of Mining and Metallurgy (CIM) Standards on Mineral Resources and Reserves Definitions and Guidelines adopted by CIM Council on August 20, 2000. While encouraging in its results, the drill hole density of the 2004 placer drilling
campaign at Fish Creek was not sufficient to allow estimation of CIM compatible resources or reserves.





Additional work on the Fish Creek property will be based on results from the previous drilling programs.  Each successive phase of exploration is dependent on generation of encouraging results from the previous programs and the increasing potential for delineation of commercially viable resources on the project.





Granite Mountain Property, Seward Peninsula, Alaska





The following is a summary of information on our Granite Mountain property.  For detailed information please see the “Technical Report GM06 43-101 – Geologic Report on the Granite Mountain Project, Koyuk Mining District, Candle B-5 and C-5 Quadrangles, West-central Alaska” prepared for Linux Gold Corp. by David
D. Adams, P.Geo., dated March 20, 2007, (the “Granite Mountain Report”) filed on SEDAR on February 7, 2008.





PROPERTY SUMMARY AND DESCRIPTION





The Property consists of 176 State of Alaska MTRSC quarter-section mining claims (160acres each), within seven contiguous claim blocks, recorded in the Cape Nome Recording District. The claims were staked during two campaigns: 136 claims were staked in March 2005, and an additional 140 claims were staked in August 2006. These claims cover
approximately 179sqkm (approximately 44,160acres). The Property is located in western Alaska, at the east edge of the Seward Peninsula, approximately 240km (150mi) east-northeast of Nome, and approximately 640 km (400 mi) west of Fairbanks, Alaska (Figure 1). The 2008 assessment work was filed for 176 claims. The balance of the claims did not have any mineralization therefore these claims were lapsed by not filing assessment work and paying the rental for these claims. All of these claims are 100 % owned by the
Company and are in good standing. All of these claims are 100 % owned by the Company and are in good standing.





Mineral rights in this part of Alaska are administered by the State of Alaska Department of Natural Resources. Annual mining claim rents vary according to claim size and age and are due and payable by November 30th of each year. The total annual claim rent paid for 2008 was $32,800 for 328 claims  (2007 - $13,600).  The
total annual labor commitment is $110,400 (i.e., $400 per 160acre claim x 276 claims); an Annual Labor Affidavit for the 2006-2007 assessment year was filed on November 27, 2007. Annual amounts spent in excess of this commitment may be banked forward for up to four years into the future as per current regulations regarding Alaska State mining claims. The work completed in 2005 and 2006 is sufficient to bank forward and cover annual labor commitments at least  through the 2007-2008 assessment year.   As
at November 27, 2007 a balance of $212,600 has been carried forward.  All of the claims comprising the Property are in good standing.





All State of Alaska mining claims are subject to a production royalty of 3% of net income from a mining operation beginning 3.5 years following commencement of commercial production. There currently are no unusual social, political or environmental encumbrances to mining on the project. No known mineral closures exist within or adjacent
to the property. None of the claims covering the Granite Mountain project have been surveyed by a registered land or mineral surveyor and there are no State or Federal laws or regulations requiring such surveying. In 2006 a multi-year APMA permit was obtained from the Alaska Department of Natural Resources Division of Mining to conduct drilling on the property. This permit is reviewed by the Corps of Engineers other governmental agencies before approval. Amendments to this permit, and additional permits, will
be required for future ground disturbing exploration activities on the property, including drilling or trenching. Other miscellaneous permits (fuel storage, etc.) may be required from the Arctic Northwest Borough.





Most of the work on the property has focused on four prospects, including the Saddle, Gossan, Gusty and Peace River prospects.





The Saddle prospect is located within the “K” claim block and on the divide between the headwaters of the Kiwalik River and the headwaters of south fork of Quartz Creek. The Gossan prospect is located within the “K” claim block and on the south end of Gossan Ridge, just east of where the Kiwalik River makes a sharp
bend to the north. The Gusty prospect is located within the “K” claim block and on the west bank of the upper Kiwalik River, approximately 3.2km north of the









Gossan prospect. The Peace River prospect is located within the “PR” claim block and on the north bank of the uppermost Peace River.
























ACCESS, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY





Access to the Property is by fixed-wing aircraft or helicopter. The nearest population center is Nome, Alaska (population approximately 4,000), which lies on the southwest coast of the Seward Peninsula, approximately 240 km (150 mi) west-southwest of the Property. An all weather road extends from Nome to the village of Council, located
approximately 130 km (80 mi) west of the property. Koyuk, located approximately 56 km (35 mi) to the south, at the mouth of the Koyuk River, is the nearest village. Buckland, another small village, is located approximately 48 km (30 mi) to the north, on the Buckland River near its mouth.





Several winter trails extend towards the Property from Koyuk, Council and Kiwalik Lagoon. These may be used for winter equipment travel, with appropriate permits from regulatory agencies. There is also a fifty foot easement along the Koyuk River, passing through private lands, and extending from Koyuk to Dime Landing. There is a well-established,
ridgeline tractor trail on part of the project, extending from lower Bear Creek to the headwaters of Quartz Creek.





Several airstrips, largely maintained by local miners, provide potential points of access to the Property. There is a 762 m (2,500 ft) airstrip on Bear Creek, near the mouth of Bob Creek, approximately 16 km (10 mi) from the central portion of the Property. This airstrip was the location of the exploration base camp for the 2006 field season.





The Property is characterized by tundra and talus covered hills and ridges with very limited outcrop. Elevations vary from a minimum of 450 ft along the Kiwalik River to a maximum of 2,100 ft just north of Granite Mountain. Valley floors are narrow, and drainages are believed to have been initiated by the most recent alpine glaciation.
In some cases drainages appear to be controlled by regional scale fault structures. The climate is semi-arid with short moderate summers and long cold winters, typical of sub-arctic, interior Alaska. The area is typically covered with snow from mid-September until mid- June. The Property is above tree line with little or no vegetation other than typical alpine tundra on the slopes and ridgelines, and minor alder and willows along some stream banks.





GEOLOGIC SETTING





This portion of Alaska, and the Property in general, is comprised largely of Cretaceous volcanic rocks locally intruded by mid to late Cretaceous plutons. Metamorphic rocks become increasingly abundant west of the Property, within the Seward Peninsula proper, and un-metamorphosed sedimentary rocks predominate east of the Property, within
the Koyukuk basin on mainland Alaska. Early Cenezoic volcanic rocks are also prevalent in the region, although these are not common within the Property.









The Property lies entirely within an isolated portion of the Koyukuk terrane (KT) which is surrounded by widespread Early Cenezoic basalt fields with no terrane affinity. The property lies less than 5 km east of a major tectonic boundary with the Seward terrane (ST).





DEPOSIT TYPES AND MINERALIZATION





Mineralization on the Property is believed to be plutonic hydrothermal in origin, and related to emplacement of the Granite Mountain pluton (“GMP”), the Quartz Creek pluton (“QCP”), the Peace River stock (“PRS”), and possibly other intrusive bodies at depth. These are mid-Cretaceous-age, zoned, multi-phase
intrusions with calc-alkaline cores (quartz monzonite) which grade outward to alkaline/sub-alkaline margins (syenite-monzonite) and intrude lower Cretaceous continental volcanic and volcaniclastic rocks. Mineralization on the Property occurs in several styles which collectively suggest the possibility of multiple episodes of mineralization. Polymetallic (Pb-Zn-Sb-Cu-Mo-Ag-Au) mineralization is hosted within both the felsic plutonic rocks and the adjacent volcanic rocks.





Polymetallic mineralization within the Property occurs at numerous locations on the property and in several distinct styles. Extremely limited outcrop exposures have made it difficult to assess the surface extent of mineralization at these locations. Significant lode and placer occurrences known to date are located on the western portion
of the Property, within a broad north-northwest trending mineralization-alteration zone known as the “Kiwalik trend”.  This zone was first recognized as being spatially associated with the QCP and several northwest trending fault structures. Alteration, which defines this zone, includes widespread propylitic alteration of volcanic rocks and local intense quartz-sericite, carbonate, and tourmaline alteration.  Polymetallic mineralization, found on the eastern portion of the Property,
associated with the PRS, has a slightly different style and geochemical signature.





EXPLORATION





2005 Exploration





During August 2005 a three-week reconnaissance exploration program was conducted utilizing a five-person crew to complete reconnaissance mapping and rock, soil and stream sediment/pan concentrate sampling. This work was conducted from a camp located on the southwest flank of Granite Mountain, near the Granite Mountain airstrip, which was
used for fixed-wing support out of Nome. A Robinson R-44 helicopter was used for some logistical support, and ATVs were used extensively. The crew consisted of Jeff Keener, Diane Minehane, Robert Murray, Peter Williams and Robert Grunditz. A total of 93 rock samples, 115 soil samples, 35 stream sediment samples and 21 pan concentrate samples were collected. Reconnaissance grab rock sampling was completed on several previously known prospects and new occurrences discovered during the program. Soil sampling was
completed using shovels to dig shallow pits approximately 1 – 2 ft deep. Reconnaissance soil sampling was completed along several ridgelines, and two soil sample grids were completed. The Gossan soil grid (76 samples) was established using sample and line spacings of 100m. The Peace River soil grid (33 samples) was established using sample spacing of 100m and line spacing of 200m. Stream sediment samples were collected on upper tributaries of the Kiwalik River at spacings of approximately 800m; pan concentrate
samples were collected at some of the stream sediment sample sites where hydraulic conditions appeared amenable to heavy mineral accumulation.





2006 Exploration





During August and September 2006, additional work was completed by contractors during a six week field program which included geochemical sampling, geologic mapping, geophysical surveys and exploratory drilling. This program was completed by a 12-person crew based out of a camp located at the airstrip on lower Bear Creek, just north of
Bob Creek. The field crew consisted of soil samplers and field assistants, geologists and drillers.  A Hughes 500 helicopter contracted from Last Frontier Helicopters, of Palmer, Alaska, was used to transport the crew to and from the project and to support drilling operations. Bering Air was used for charter fixed-wing support to and from Nome, including supplies and fuel delivery, using either a Caravan or Cessna 207.





2006 Reconnaissance Exploration





Reconnaissance exploration on the Property during 2006 consisted of geologic mapping, rock sampling (58 samples), and grid-based soil sampling (580 samples). Very little time was spent on reconnaissance mapping and rock sampling since drilling was the main emphasis of the program. Rock sampling and geologic mapping was completed at the
Saddle prospect, at the Peace River prospect, and at several other locations along the south fork of Quartz Creek and elsewhere on the property. Soil sampling (148 samples) was completed on an extension of the previously established “Gossan grid”, on the newly established “Gusty grid” (166 samples), and on the newly established “Saddle grid” (288 samples). All three









grids utilized sample and line spacings of 100m. Soil sampling was completed using a Tanaka power auger equipped with a 3.5 ft flight and specialized bit designed for soil sampling.





2006 Exploratory Drilling





Exploratory drilling commenced on the Property during 2006. This drilling consisted of diamond core drilling of 2,971 ft (905.6m) in 4 drill holes at three prospects, including the Saddle, Gossan and Gusty prospects. One drill hole (KW06-03) was completed on the Saddle prospect to a depth of 499ft (152.1m). Two drill holes (KW06-1 and KW06-04)
were completed on the Gossan prospect to depths of 880ft (268.2m) and 825ft (251.5m). One drill hole (KW06-02) was completed on the Gusty prospect to a depth of 767ft (233.8m).





2006 Geophysical Surveys





Three ground magnetometer survey lines were completed on the Property in 2006, including one line on the Saddle prospect and two lines on the Gusty prospect.





DRILLING





Drilling during 2006 consisted of diamond core drilling of 905.6m (2,971ft) in four drill holes at the Gossan, Gusty and Saddle prospects. Core recovery and rock quality data for the 2006 drilling program verifies the very poor ground conditions, particularly at lower elevations. Three drill sections were constructed to interpret the results
of the 2006 diamond core drilling. Section A-A’, at the Gossan prospect, shows drill holes KW0601 and KW0604; Section B-B’, at the Gusty prospect, shows drill hole KW0602; and Section C-C’, at the Saddle prospect, shows drill hole KW0603.





Exploration and development activities require permits from various foreign, federal, state and local governmental authorities. To the best of our knowledge, we are operating in compliance with all applicable environmental regulations. There currently are no unusual social, political or environmental encumbrances to mining on the project.
Linux currently holds a valid Hardrock Exploration Permit on the project. Additional permits for future work will be acquired from the Alaska Department of Natural Resources on an as-needed basis.





SAMPLING METHOD AND APPROACH





Approximately 148 rock samples, 663 soil samples, 45 stream sediment samples, and 21 pan concentrate samples have been collected on the Property during 2005-2006, and most of these were collected during 2006. Rock and soil sampling was completed both years, and stream sediment and pan concentrate sampling were completed only during 2005.
Sample descriptions were recorded at the sample sites in either a standard field notebook or on pre-printed note cards, and location data was gathered using either a Garmin or Trimble GPS handheld unit. Field notes were scanned and GPS location data were downloaded into the computer at base camp on a regular basis. Location data were plotted in camp using GIS software to determine precise map locations and facilitate field mapping.





Location data and summarized sample descriptions were later incorporated into a master GIS database. Rock Sampling Method: The same rock sampling method was used during both 2005 and 2006. Rock grab samples consisted of 10-30kg of material, and were collected from outcrop when possible, however, due to poor exposure, many of the rock samples
represent rubble. All samples were collected in 7.5 x 12 in cotton canvas or olefin sample bags at the sample site, and later in base camp were organized into woven polypropylene bags for transit. Rock sample data was recorded on site on sample cards or in standard field books, including lithology, alteration and mineralization.





2005 Soil Sampling Method: Soil samples collected during 2005 were obtained by using a pick and shovel to dig a hole approximately 1–2ft deep and collecting soil from of the C-horizon. This material was screened on-site using a -8 mesh stainless steel sieve to obtain an approximately 1 kg sample, which was placed into a Hubco Sentry
sand bag, which was then placed in a sealed ziplock plastic bag. Rock chips were collected from the oversize material and kept for later inspection. The pits were then reclaimed to their natural state, and the sampling tools were wiped clean to prevent contamination of subsequent samples. Soil sample data included notes on location, soil stratigraphy and rock chip lithology.





2006 Soil Sampling Method: Soil sampling during 2006 was completed using a Tanaka power auger equipped with a 3.5ft flight and specialized bit designed for soil sampling. Above the break in slope and on the ridges sampling conditions were relatively good, with each site requiring only 1–2 attempts to obtain sufficient sample material,
and average depths ranging from 2–3ft. The sampling conditions were poor in the Kiwalik River valley below the break in slope, with each site requiring 4–8 attempts to locate sufficient sample material, due to abundant organics and poorly developed soils.









These sites also experienced extremely wet ground conditions, causing additional problems due to the samples washing off of the flight before extraction from the drill hole. Grid-based soil sampling during 2005 and 2006 utilized 100m sample and line spacings, and ridge-line traverses utilized approximately 200m spacings or random selected
locations. Soil sample data included notes on location, soil stratigraphy and rock chip lithology.





Stream Sediment Sampling Method: Stream sediment sampling on the Granite Mountain property during 2005 was conducted on first order streams on approximately one quarter mile spacing. The samples were obtained using an aluminum scoop to collect material from the active channels of streams where silt was observed. The samples were wet-screened
on-site using -20 mesh and –100 mesh stainless steel sieve screens placed over a bucket. The slurry was allowed to stand approximately 30 minutes, the water decanted, and the silt sample carefully retrieved from the bucket and placed into a Hubco Sentry sand bag. The sand bags were then placed into a sealed ziplock plastic bag. In some locations where silt was unavailable, moss was collected. Silt material was extracted from the moss by shaking and rinsing over a bucket, and then recovered as described
previously. Stream sediment sample notes included width and depth of the active channel and relative proportions of different size material in the sample.





Pan Concentrate Sampling Method: Pan concentrate samples were collected during 2005 on the Granite Mountain property at stream sediment sample sites on 2nd and 3rd order streams, where sand and gravel existed in the stream bed. Coarse material was dug from a depth of approximately 2ft in the stream bed, typically a gravel or point bar.
A 16 inch plastic gold pan was heaped with coarse material and panned down to a smaller volume of material which was washed into a 10 inch gold pan. The process was repeated a total of 3 times before the accumulated material in the 10 inch gold pan was panned down to remove light minerals and form a heavy mineral concentrate, which was then retrieved and bagged by the same methods described above for stream sediment samples. Any fine placer gold particles present in the final pan were counted and removed from
the sample before bagging.





Core Sampling Method: All core from the 2006 program was logged at the Bear Creek base camp by DLM. The core sample intervals were indicated by wooden blocks placed at the end of the sample interval and labeled with the sample number. Digital photographs of the core boxes were taken and archived. Drill samples were obtained by splitting
the core in the field using a Haley hydraulic-driven diamond saw powered by a Honda gasoline engine. One half of the core was used for the sample and the other half was put in its original position in the original core box. The split core is currently being stored at MI’s facility in Fox, Alaska.





SAMPLE PREPARATION, ANALYSES AND SECURITY





All geochemical samples from both the 2005 and 2006 field programs were prepared by Acme Analytical Laboratories. The samples were placed in double, woven polypropylene shipping sacks, secured with wire ties, and shipped by charter air service from the Granite Mountain project base camp to Nome, and thence from Nome to Fairbanks by Frontier
Flying Service. Chain of custody was then transferred to MI, who transported the samples by truck to their facility in Fox, Alaska where they were stored temporarily in a locked garage until the chain of custody was transferred to a courier for Alaska Assay Labs. Alaska Assay Labs did all sample prep for 2005-2006. MI’s personnel sorted the samples and prepared the lab submittal forms. While in MI’s possession, the sample bags and shipping bags were inspected for integrity and found to be in good
condition.





The entirety of each rock sample was crushed to 70% passing 2 millimeter (10 mesh) and a 250 gram split was taken and pulverized to +85% passing 75 microns (200 mesh). Samples were analyzed for Au by fire assay by American Assay, in Reno, Nevada (2005), and by Alaska Assay Laboratories, in Fairbanks, Alaska (2006). All rock samples were
analyzed for Au using standard 30 gram lead collection fire assay techniques with an inductively coupled plasma (ICP) finish. Then the samples were analyzed for a suite of elements by using a four acid digestion procedure followed by ICP techniques with an atomic emission spectrographic finish. The 2005 samples were analyzed for a suite of 49 elements by ALS Chemex. The 2006 samples were analyzed for a suite of 40 elements by Acme Analytical Laboratories. Analytical results in both digital and paper copy format
were sent to LGC and MI immediately on completion of the analyses, and certificated copies of those results followed thereafter. All rejects are being stored by Alaska Assay Labs; 2005 pulps are being retained by MI, and 2006 pulps are currently in possession of Alaska Assay Labs.





DATA VERIFICATION





A total of 81 standards and 98 blanks were used during the 2006 field program to verify the quality of the analytical results. For the soil samples, one standard and one blank were inserted into the sample stream on a 3 pair per 100 sample basis. Three standards and one blank were distributed randomly in the rock samples. For the drill
samples, Alaska Assay Laboratories inserted one standard and one high blank into the sample stream on a 1 pair per 18 sample basis. These standards included one high standard (approximately 1,010ppb) and one low standard (approximately 415ppb).









Additional standards, including one high standard (approximately 200ppb Au) and one low standard (approximately 90ppb Au) were inserted into the drill sample stream by LGC, on a 3 pair per 100 sample basis. Blanks were also inserted at the beginning and end of each drill hole. Commercially prepared gold standards were used. Blank samples
consisted of basalt from the Browns Hill Quarry near Fairbanks. This material is ideal because of its hardness, which helps scour the crusher plates and grinders, and because of its consistent chemical signature which is void of gold and other elements typically used as gold pathfinders. Examination of the assay results for standards and blanks indicates no unusual or spurious sample results.





RECOMMENDATIONS





The Granite Mountain Report’s author proposes that further exploration on the Property be conducted in two phases. These phases include a surface exploration program (Phase 1, estimated $504,064 CAN$), and, contingent on encouraging results, a follow-up exploration drilling program (Phase 2, estimated 325,238 CAN$). The total estimated
cost of the proposed programs is $829,302 (CAN$).  The Phase 1 program consists of surface exploration which includes rock sampling and geologic mapping of the known prospects, grid base auger drilling, soil sampling, trenching and rock chip sampling, airborne geophysical survey and additional ground geophysical surveys.  Phase 2 consists of conducting a 6 hole diamond drill program of 3,600 ft (1,097 meters) to test several known mineralized areas and newly discovered drill targets from the
Phase 1 surface exploration program.





We plan to commence work pursuant to the recommendations in the Phase 1 surface exploration program upon receipt of required permits and raising sufficient capital.





Dime Creek Property, Seward Peninsula, Alaska





The Dime Creek Claim Block is located about 15 miles to the south of Granite Mountain and is composed of 12 mining claims (3 square-miles). The placer gold-platinum deposits on Dime Creek were discovered in 1910, but it wasn’t until 1915 that rich pay was found, setting off a stampede to the area. By 1917, about 12,500 ounces of gold
and platinum were recovered from shoveling-in on the creek placer and from underground drifting on several bench placers (Harrington, 1917, USGS B-692). The placer gold is unusually pure with a fineness of 960 and occurs in placer concentrates in a ratio to native platinum particles of 25:1 to 10:1. In later years, a small bucket-ladder dredge operated on the valley bottom from 1928 to 1941 while small open-cut and drifting operations continued on the benches until at least 1955. Total production is not known,
but incomplete historical data shows production to be at least 25,000 ounces of gold and platinum. The placer deposit is considered to be highly prospective for significant additional placer reserves, as well as for lode sources of the placer gold and platinum.





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





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





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





Exploration by previous operators in 2000-2001 located elevated PGE values within the Linux Gold claim block. These anomalies already define potential PGE-bearing lode drill targets for Linux Gold Corp and Mr. Bundtzen recommends initial testing by 2 to 4 drill holes. These test holes could be completed in conjunction with the placer resource
exploration program.





Mr. Tom Bundtzen, a Certified Professional Geologist (CPG) #10912 with the American Institute of Professional Geologists, Alaska Business License #279639 – Geological and Technical Services, is a Qualified Person as defined by National Instrument 43-101.










TY Gold Property, Bralorne Mining District, British Columbia





In May 2003 we acquired an option to a 100% interest in 21 units in the Bralorne/Lillooet mining division in British Columbia, called the TY Gold Property.  During fiscal 2004, we staked three additional mineral claims representing a further 35 units, giving us a total of 56 units. The vendor will retain a 2% net smelter return
interest. We may purchase the NSR for $1,000,000 for each 1% prior to commercial production, in shares or in cash. During the year ended February 29, 2008, the Company discontinued active exploration on both British Columbia properties and wrote off its acquisition costs. The Company elected not to file the necessary assessments in 2008, so these mineral claims have now lapsed.





ORO Property, Lillooet Mining Division, British Columbia





In April 2003, we acquired a 100% interest in 20 mineral claim units called the ORO property in the Lillooet Mining Division, BC.  In September 2003, we staked an additional mineral claim, representing five (5) additional units, giving us a total of 25 mineral claim units. Thevendor
will retain a 2% net smelter return interest. We may purchase the NSR for $1,000,000 for each 1% prior to commercial production, in shares or in cash.





During the year ended February 29, 2008, the Company discontinued active exploration on both British Columbia properties and wrote off its acquisition costs. The Company elected not to file the necessary assessments in 2008, so these mineral claims have now lapsed.





Corporate Finance





During the year ended February 28, 2009:





a)
The Company issued 4,055,000common shares pursuant to a private placement at a price of $0.15 per unit for proceeds of $614,478 (US$608,250)
before finders’ fees of $31,871.


b)
The Company issued 500,000 common shares pursuant to a private placement at a price of $0.20 per unit for proceeds of $99,364 (US$100,000)before finders’ fee of $3,588.





During the year ended February 29, 2008:





a)
the Company issued 8,378,226 common shares upon the conversion of debentures with a principal amount of US$1,403,518.


b)
the Company issued 212,500 common sharespursuant to the exercise of stock options for proceeds of US$21,250.


c)
the Company issued 430,000 common sharespursuant to the exercise of share purchase warrants for proceeds of US$102,500.


d)
The Company issued 2,825,000 common shares pursuant to a private placement at a price of $0.20 per unit for proceeds of US$565,000 before finders’ fee of $4,003.




During the year ended February 28, 2007:




a)
the Company issued 2,586,076 common shares upon the conversion of debentures with a principal amount of $644,749.


b)
the Company issued 323,750 common shares at a value of US$0.10-US$0.30 per sharepursuant to the exercise of stock options.


c)
the Company issued 52,500 common shares at a value of US$0.25 per sharepursuant to the exercise of share purchase warrants.





Description of the Markets in Which the Company Competes





The Company does not have a market in which it competes, as it operates in an extractive industry.   However, the mining industry in which the Company is engaged is highly competitive due to significant and increasing competition for exploration opportunities.  (see Competition below, and Risk Factors, page 9).





Competition





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












Seasonality





Due to the northern climate, exploration work is some areas of Alaska can be limited due to excessive snow cover and cold temperatures.  In general, surface sampling work is limited to May through September and surface drilling from March through November (see Risk Factors commencing on page 9).





Availability of Raw Materials





The Company does not have a reliance on raw materials, as it operates in an extractive industry.





Marketing Strategy





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





Dependence on Certain Commercial Agreements or Intellectual Property





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




Material effects of Government Regulation





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





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





C.         ORGANIZATIONAL STRUCTURE




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





D.         PROPERTY, PLANTS AND EQUIPMENT




We do not own any properties.  Our executive offices are located in rented premises in a commercial business park located in Richmond, British Columbia, Canada, a suburb of Vancouver. The space is shared with several other companies which share common management.  The Company will pay monthly rent of $1,833 plus a proportionate
share of operating costs.  On November 30, 2007, the monthly rent increased to $2,017, and on November 30, 2008 the monthly rent increased to $2,200.  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 2009, we had been involved in oil and gas exploration/production and mineral property exploration and development.





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





Plan of Operations





The following contains forward-looking statements relating to revenues, expenditures and sufficiency of capital resources. Actual results may differ from those projected in the forward-looking statements for a number of reasons, including those described in this 20-F.





Source of Funds for Fiscal 2009/2010




25





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





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





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





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





We had a working capital deficit of $296,083 on February 28, 2009 compared to a deficit of $219,213 at February 29, 2008 and a deficit of $651,053 at February 28, 2007.





Use of Funds for Fiscal 2009/2010





During Fiscal 2009/2010, we estimate that we will expend approximately $500,000 on general and administrative expenses. During Fiscal 2009/2010 we estimate that we  plan to expend approximately $300,000 on property exploration and development expenses.





Anticipated Changes to Facilities/Employees





We anticipate there will not be any changes to either facilities or employees in the near future.





ITEM4A.  UNRESOLVED STAFF COMMENTS





This section is not applicable as we are not an accelerated filer or a large accelerated filer, as defined in Rule 12b-2 of the Exchange Act, or a well-known seasoned issuer as defined in Rule 405 of the Securities Act.





ITEM5.                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 20-F.





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, 2009, February 29,
2008, and February 28, 2007, respectively, are included in this 20-F.





Overview





We are a mineral exploration company engaged in the acquisition and exploration of mineral properties. Our expenditures are made acquiring mineral properties and carrying out exploration work. We do not have any producing mineral properties at this time. The recoverability of amounts shown for investments, mineral properties, and the related
deferred expenditures is dependent upon the existence of economically recoverable reserves, the ability to obtain the necessary financing to complete the exploration, the profitability of future production or our ability to dispose of those assets on a profitable basis. Our ongoing operation is dependent upon cash flow from successful operations and equity financing. We have incurred a loss of $536,201 in the year ended February 28, 2009 (2008 - $2,260,291; 2007 - $3,571,183).  We have no revenue from
our mining operations.  (see Item 3.D., Risk Factors, page 9).












A.         OPERATING RESULTS





Continuing Operations






Fiscal Year Ended February 28, 2009 compared to Fiscal year Ended February 29, 2008




Results of Operations





During the fiscal years ended February 28, 2009 and February 29, 2008, we received no revenues from operations.





Administrative expenses in 2009 totaled $474,316 compared to $1,963,211 in 2008. Consulting and subcontract expenses decreased to $124,751 in 2009 from $210,313 in 2008 as the result of a decrease in staffing and a decline in stock-based compensation expenses in 2009. Professional fees totaled $79,189 compared to $94,132 in 2008 due to
an overall decline in activities related to Alaskan exploration and financing efforts. Travel decreased from $262,766 in 2008 to $104,249


in 2009 due to decreased operations. Amortization, bad debts, filing fees, foreign exchange, interest income, management fees and office charges totaled $139,984 in 2009, compared with $86,994 in 2008 as a result of decreased operations. Charges for imputed interest rose to $26,143 from $8,966 in the prior year, resulting from an increase
in related party advances received. Imputed interest at 15% was charged to operations based on the advances from related parties and treated as donated capital. Interest expense declined from $1,041,913 in 2008 to $nil in 2009 as the Company’s convertible debt was retired in the 2008 fiscal year.







Fiscal Year Ended February 29, 2008 compared to Fiscal year Ended February 28, 2007




Results of Operations




During fiscal 2008, we received no revenues from operations as compared to $nil revenues in 2007.






Administrative expenses in 2008 totaled $1,963,211 as compared to $2,542,594 in 2007. Professional fees totaled $94,132 compared to $79,037 in 2007 due to increased activity in Alaska. We also incurred an imputed interest charge of $8,966 compared to $53,659 in 2007. Imputed interest at 15% was charged to operations based on the advances
from related parties and treated as donated capital. This amount decreased during 2008 due to the additional advances received in 2008. Consulting and subcontract expenses decreased to $210,313 in 2008 from $541,483 in 2007. This decrease was due to the inclusion of stock-based compensation of $109,228 recognized from the granting of stock options in 2007.  Travel decreased from $445,132 in 2007 to $262,766 in 2008 due to decreased operations. Office, rent, foreign exchange and telephone totaled $35,406
compared to $110,824 in 2007.






Fiscal Year Ended February 28, 2007 compared to Fiscal year Ended February 28, 2006




Results of Operations




During fiscal 2007, we received no revenues from operations as compared to $nil revenues in 2006.






Administrative expenses in 2007 totaled $2,542,594 as compared to $501,014 in 2006. The expenses increased from the prior year due to the increased activity of the Company. Professional fees totaled $79,037 compared to $54,909 in 2006. We also incurred an imputed interest charge of $53,657 compared to $31,722 in 2006. Imputed interest at
15% was charged to operations based on the advances from related parties and treated as donated capital. This amount increased during 2007 due to the additional advances received in 2007. Consulting and subcontract expenses increased to $541,483 in 2007 from $133,953 in 2006. This increase was due to the inclusion of stock-based compensation of $109,228 recognized from the granting of stock options and increased consulting due to increased activity. Travel increased from $23,902 in 2006 to $445,132 in 2007 due
to increased operations. Interest expense increased to $1,260,670 from $nil in 2006 due to financing acquired in 2007. Office, rent, foreign exchange and telephone totaled $103,883 compared to $205,263 in 2006.






We paid $1,074,870 for mining exploration work in 2007 as compared to $309,091 (re-stated) in 2006.







B.         LIQUIDITY AND CAPITAL RESOURCES





Liquidity and Capital Resources





Our authorized capital consists of 200,000,000 common shares without par value. At February 28, 2009 we had 87,650,825 issued and outstanding common shares (February 29, 2008– 83,095,825, February 28, 2007 – 71,250,099),









and at September 2, 2009 we had 87,650,825 issued and outstanding common shares. The directors of the Company adopted the Linux Gold Corp. Stock Option Plan (the “Plan”), and received shareholder approval of same March 15, 2000. The Company has adopted a type of plan under which options may be granted for a number of shares
up to 10% of the issued and outstanding shares of the Company from time to time.





The audited consolidated financial statements have been prepared assuming that the Company will continue as a going-concern.  As discussed in note 2 to the consolidated financial statements, the Company has no revenues and limited capital, which together raise substantial doubt about its ability to continue as a going-concern.  Management
plans in regard to these matters are also described in note 2.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





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





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





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





We received funding in 2009 from our affiliated companies (common officers and directors). The total amount owing to related parties is $211,140 or 52.8% of total current liabilities as at February 28, 2009. The balances owing to related parties are non-interest bearing, unsecured and repayable on demand. Our affiliated companies have indicated
that they will not be demanding repayment of these funds during the next fiscal year and will advance, or pay expenses on behalf of the Company if further funds are needed.





We anticipate that our estimated cash requirements for the fiscal year ending February 28, 2010 will be approximately $500,000 for operational expenses.   We do not foresee any material changes to our corporate operations.  Expenditures for future exploration during fiscal 2010 work cannot be specifically confirmed
as of the date of this 20-F, as our requisite cash requirements for exploration work are dependent upon the ability to secure permits and equipment to conduct our exploration drilling on the Granite Mountain property.   However, preliminary budgeting estimates indicate that we may expend approximately $300,000 on property exploration and development expenses on the Granite Mountain property.





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





Liquidity





Fiscal Year Ended February 28, 2009 compared to Fiscal year Ended February 29, 2008





During 2009 we financed our operations primarily by the issue of 4,555,000 common shares for cash proceeds of $638,321, net of share subscriptions of $40,062 received in the prior year and share issuance costs of $35,459.  During 2009, we spent $632,663 of these funds on operating activities as discussed above under Results of
Operations for the Year Ended February 28, 2009 as compared to $850,665 in the year ended February 29, 2008.





Our cash position increased by $5,658 to $13,894 and we had a working capital deficit as at February 28, 2009 of $296,083.





Fiscal Year Ended February 29, 2008 compared to Fiscal year Ended February 28, 2007




During 2008 we financed our operations by the issue of 3,467,500 common shares for cash proceeds of $748,316. This consists of the issue of 212,500 common shares pursuant to the exercise of stock options for cash proceeds of $24,020, and the issue of 430,000 shares pursuant to the exercise of share purchase warrants for cash proceeds of
$109,101.  We also received subscriptions of 615,195 pursuant to a private placement. During 2008, we spent $850,665 of these funds











on operating activities as discussed above under Results of Operation for the Year Ended February 29, 2008 as compared to $2,003,397 the year ended February 28, 2007.






Our cash position decreased by $118,631 to $8,236 and we have a working capital deficit as at February 29, 2008 of $219,213.







Fiscal Year Ended February 28, 2007 compared to Fiscal year Ended February 28, 2006




During 2007 we financed our operations by the issue of 376,250 common shares for cash proceeds of $76,399. This consists of the issue of 323,750 common shares pursuant to the exercise of stock options for cash proceeds of $75,670, and the issue of 52,500 shares pursuant to the exercise of share purchase warrants for cash proceeds of $729.
An additional $14,600 was subsequently received. We also received subscriptions of $52,277 pursuant to a private placement. We further received proceeds of $1,864,995, net of debt issue costs and repayment of debt, pursuant to the issue of convertible notes.






During 2007, we spent $2,003,397 of these funds on operating activities as discussed above under Results of Operation for the Year Ended February 28, 2007 as compared to $703,504 during the year ended February 28, 2006.






Our cash position decreased by $269,182 to $126,867 and we have a working capital deficit as at February 28, 2007 of $651,053.







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





Our aggregate research and development expenditures over the past three years ended February 28, 2007, February 29, 2008 and February 29, 2009 amounted to $nil, $nil and $nil  respectively. We do not hold any patents, trademarks or copyrights.





D. TREND INFORMATION





As the Company is a mineral exploration company with no currently producing properties, the information required by this section is not applicable.





E. OFF-BALANCE SHEET ARRANGEMENTS





There are no known off-balance sheet arrangements other than those disclosed in this Form 20-F and in our audited consolidated financial statements for the year ended February 28, 2009.





F. TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS





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





Payments due by periodContractual Obligations

Total


Less than 1 year


1-3 years


3-5 years


More than 5 yearsMineral Property Obligations (1)

$
39,700


$
39,700


$
-


$
-


$
-Long-term debt obligations


-



-



-



-



-Capital (Finance) Lease obligations


-



-



-



-



-Operating lease obligations (2)


27,280



27,280



-



-



-Purchase Obligations


-



-



-



-



-Other Long-term liabilities reflected on the Company’s Balance sheet under US GAAP


-



-



-



-



-Total

$
66,980


$
66,980


$
-



-



-










(1)
Mineral Property Obligations:




Alaska Mineral Properties




Fish Creek Property: The Company owns a 50% joint venture 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 30 Fish Creek Claims to Teryl Resources Corp.
(“Teryl”) (a related company). 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 March 7, 2007, in which Teryl issued 100,000 common shares to the Company, and
also agreed to expend a minimum of US$500,000 within two years from the date of this amending agreement. All other terms of the original agreement remain the same. Subsequently, the Company entered into a further amending agreement with Teryl to extend the term of the original of the original agreement until March 5, 2009, with a further amendment extending the agreement to March 5, 2010, in which all other terms of the original agreement remain the same.  The claims are legally maintained by recording
an affidavit of annual labor for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130 per claim ($3,900 total).





Granite Mountain Property: The Company owns 276 State of Alaska MTRSC quarter-section mining claims (160 acres each), within seven contiguous claim blocks, located in western Alaska, at the east edge of the Seward Peninsula, approximately 240km (150mi) east-northeast of Nome,
and approximately 640 km (400 mi) west of Fairbanks, Alaska, in the Cape Nome Recording District. The claims were staked during two campaigns: 136 claims were staked in March 2005, and an additional 140 claims were staked in August 2006.





Annual mining claim rents vary according to claim size and age and are due and payable by November 30th of each year. The total annual claim rent paid for 2008 was $32,800 for 328 claims (2007 - $13,600).  The total annual labor commitment is $110,400 (i.e., $400 per 160acre claim x 276 claims); an Annual Labor Affidavit for the
2006-2007 assessment year was filed on November 27, 2007. Annual amounts spent in excess of this commitment may be banked forward for up to four years into the future as per current regulations regarding Alaska State mining claims. The work completed in 2005 and 2006 is sufficient to bank forward and cover annual labor commitments at least through the 2007-2008 assessment year.   As at November 27, 2007 a balance of $212,600 has been carried forward.  All of the claims comprising the
Property are in good standing.





(2)         The Company entered into a lease agreement dated September 7, 2006 for a term of three years commencing November 1, 2006 to October 31, 2009. Under the terms of the agreement, the Company will pay monthly rent of $1,833 plus a proportionate share of operating costs. On November 30,
2007, the monthly rent increased to $2,017 and on November 30, 2008 the monthly rent increased to $2,200. The Company shares the rentable area with related parties who reimburse the Company for 2/3 of the total monthly rental fee. The future commitment is as follows:


Fiscal year ending February 28, 2010

$
27,280$
27,280





G.     SAFE HARBOR





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





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





Our estimated or anticipated future results or other non-historical facts are forward-looking and reflect our current perspective of existing trends and information.  These statements involve risks and uncertainties that cannot be predicted or quantified, and consequently actual results may differ materially from those expressed or
implied by such forward









looking statements.  Such risks and uncertainties include, among others, the success of our exploration and development activities, environmental and other regulatory requirements, foreign exchange issues, mineral deposit estimates and mineral prices, competition by other mining companies, financing risks, mineral title issues, insider
conflicts of interest, political stability issues, and other risks and uncertainties detailed in this report and from time to time in our other Securities and Exchange Commission (“SEC”) filings.





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





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





ITEM6.                DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES





A.         DIRECTORS AND SENIOR MANAGEMENT





As of February 28, 2009, our Board of Directors consisted of four Directors, two of whom are independent (or “outside”) non-executive Directors.  The term of office of each of the present directors expires at each annual meeting of shareholders.  The following table provides certain information about the
members of our Board of Directors as of February 28, 2009.





Name
Position with Registrant
Term of Office
Office Held SinceJohn G. Robertson
President, CEO and Chairman of the Board and Director, and Director Subsidiary
Annual Shareholders Meeting in 2009
3/05/79Jennifer Lorette
Director
Annual Shareholders Meeting in 2009
6/01/94Susanne Robertson
Director
Annual Shareholders Meeting in 2009
8/28/02Monique van Oord
Chief Financial Officer and Corporate Secretary
Annual Shareholders Meeting in 2009
8/16/04





John G. Robertson.    Mr. Robertson is the Chairman of the Board, CEO and founder of the Company and a Director of the Company since its inception. Mr. Robertson has been the Chairman, President and Chief Executive Officer of REGI U.S., Inc., an Oregon
corporation traded on the OTC bulletin board, since July 1992, a U.S. public company engaged in the development of a rotary engine/compressor (“Rand Cam Engine”).  Since October 1984 Mr. Robertson has been President and a Director of Reg Technologies Inc., a British Columbia corporation listed on the TSX Venture Exchange and the OTC bulletin board that has financed the research on the Rand Cam Engine since 1986. Mr. Robertson has been the President and Principal Executive Officer and a Director
of IAS Energy, Inc. since its formation in December 1994, a U.S. public company.  Mr. Robertson is also the President and founder of Teryl Resources Corp., a British Columbia company trading on the TSX Venture Exchange and the OTC bulletin board involved in mineral exploration. Since May 1977 Mr. Robertson has been President and a member of the Board of Directors of SMR Investments Ltd., a private British Columbia corporation engaged in management of public companies.  Mr. Robertson is also
the President and Director of the following private companies: JGR Petroleum, Inc. (since July 1991), Access Information Services, Ltd. (since September 1993), 394754 B.C. Ltd., dba SOVO Computer Centre (since October 1990), Pavlik Travel Services Ltd. (since November 2000), International Diamond Syndicate Ltd. (since May 1993), KLR Enterprises Inc. (since 1999), Rainbow Networks Inc. (since 2000), Rand Energy Group Inc. (since 1993), and 540330 B.C Ltd. (since April 1997). Mr. Robertson is a citizen and resident
of Canada (see Item 7.B. – Related Party Transactions).





Jennifer Lorette - Ms. Lorette has held several positions with the Company since June 1994.  Also, since June 1994 Ms. Lorette, has been Vice President of REGI U.S., Inc., an Oregon corporation traded on the OTC bulletin board.  Since April 1994 she has
also been a director and Vice President of Administration for Reg Technologies, Inc., a British Columbia corporation listed on the TSX Venture Exchange and traded on the OTC BB.  Ms. Lorette has been a director of Teryl Resources Corp. since 2001, a British Columbia corporation listed on the TSX Venture Exchange and trading on the OTC BB engaged in exploration and development of mineral properties.  Ms. Lorette is a citizen and resident of Canada.












Susanne Robertson - Ms. Robertson was elected a director of the Company in August 2001.  She is also a director of Teryl Resources Corp. since 1990, a British Columbia corporation listed on the TSX Venture Exchange and trading on the OTC BB engaged in exploration
and development of mineral properties.  Ms. Robertson is also a director of Reg Technologies Inc. since 1984, a British Columbia corporation listed on the TSX Venture Exchange and traded on the OTC BB.  Ms. Robertson is a principal of SMR Investments, Ltd., a private business and financial consulting company providing management services to public companies, since 1979. Ms. Robertson  is a citizen and resident of Canada (see Item 7.B. – Related Party Transactions).





Monique van Oord –Ms. van Oord is Chief Financial Officer (since August 2004), and a Director (since February 2004) of the Company. Ms van Oord is also a Director and Chief Financial Officer of Teryl Resources Corp., since January 2003, a British Columbia mineral exploration
company which trades its shares on the TSX Venture Exchange and the OTC Bulletin Board.  Ms. van Oord has also acted as an Administrator for several public and private companies from 2002 to date. Ms. van Oord is a citizen and resident of Canada.





The Senior Management serves at the pleasure of the Board of Directors.  Each director of the Issuer holds office until the next Annual General Meeting unless his or her office is earlier vacated in accordance with the Articles of the Company and the Business Corporations Act(British
Columbia), or unless he or she becomes disqualified to act as a director.





On December 3, 2007 the British Columbia Securities Commission (BCSC) issued a Cease Trade Order for Linux Gold Corp. citing a failure to file a technical report and non-compliant disclosure. The commission staff found that the technical report filed on SEDAR on February 22, 2006 was not prepared by a qualified person. The commission staff
also found that our disclosure in the offering memorandum dated April 5, 2007 did not disclose repayment of debt to related parties. We filed the required documents on SEDAR to comply with the requirements to rectify the continuous disclosure deficiencies and the Cease Trade Order was revoked by the BCSC on February 8, 2008.





Other than the Cease Trade Order issued against the Company, no Director and/or Senior Management had been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation
of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any
felony.





There is a family relationship between two of the Directors or Senior Management. John Robertson and Susanne Robertson are husband and wife.  Please refer to Item 7.B. – Related Party Transactions.





There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.





B.         COMPENSATION





STATEMENT OF EXECUTIVE COMPENSATION





The Company is required, under applicable securities legislation in Canada, to disclose to its Shareholders details of compensation paid to its directors and officers.  The following fairly reflects all material information regarding compensation paid by the Company to its directors and officers, which information has been disclosed
to the Company's Shareholders in accordance with applicable Canadian law.





Executive Compensation





Compensation Discussion and Analysis





The Company’s executive officers make recommendations to the board of directors regarding compensation policies and the compensation of senior officers. The Company does not have a Compensation Committee.  The compensation of the senior executives comprises two components; namely, a base salary or consulting fees and the
grant of stock options pursuant to the Company’s stock option plan which is more particularly outlined below under the Option-based Awardssection.   These forms of compensation are chosen to attract, retain and motivate the performance of selected directors,









officers, employees or consultants of the Company of high caliber and potential.  Each senior executive is employed for his or her skills to perform specific tasks and the base salary and number of options is fixed accordingly.





Senior executives generally enter into an employment agreement, with standard clauses covering salaries and termination and change of control provisions. The highlights of the employment agreements for the NEOs are outlined below under the section entitled “Management Contracts” and Narrative
Discussionunder the Summary Compensation Table.





Option-based Awards





The grant of option-based awards to the senior executives is determined by the recommendation of executive officers to the board of directors pursuant to the terms of the stock option plan referred to below. Previous grants of option-based awards are taken into account when considering new grants.





The options are always granted at market price. The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions: weighted average risk free rate, weighted average expected life, expected volatility and dividend yield.





During the year ended February 28, 2009, no option-based awards for executives were granted.





Summary Compensation Table





Named Executive Officer mean the Chief Executive Officer (“CEO”), the Chief Financial Officer (“CFO”) or any individual acting in a similar capacity or function, regardless of the amount of compensation of that individual and each of the Company’s three most highly compensated executive officers, other than
the CEO and CFO, or three most highly compensated individuals acting in similar capacities, who were serving as executive officers, or in a similar capacity, at the end of the most recent financial year and whose compensation exceeds $150,000, and such individuals who would be an NEO but for the fact that they were not serving as an executive officer or in a similar capacity at the end of that financial year.





During the Company’s last completed financial year ended February 28, 2009, the Company had two Named Executive Officers: Mr. John Robertson, President and CEO, and Ms. Monique van Oord, CFO.





The following table (presented in accordance with Form 51-102F6 – Statement of Executive Compensation (“Form 51-102F6”) under National Instrument 51-102 – Continuous Disclosure Obligations) sets forth all annual, long term and other compensation for services in all capacities to the Company and its subsidiaries payable
to the NEOs for the three financial years ended February 28/29, 2009, 2008, and 2007 (to the extent required by the Regulations) in respect of the Named Executive Officers:




Non-equity incentive plan compensation
($)Name and Principal Position
Year Ended
February 28/29
Salary
($)
Share- based Awards
($)
Option- Based Awards
($) (7)
Annual incen-
tive plans
($)
Long-term incentive plans
($)
Pension value
($)
All other
Compen-sation
($)(5)(6)
Total
compensation
($)John G. Robertson, CEO(1)(2)(3)
2009
2008
2007
Nil
Nil
Nil
Nil
Nil
Nil
Nil
77,923(3*)
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
30,000
30,000
30,000
30,000
107,923
30,000Monique van Oord, CFO(4)
2009
2008
2007
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil




(1)
Mr. Robertson is also a director and receives compensation in that capacity. See “Director Compensation – Narrative Discussion”.


(2)
Mr. Robertson is a director of SMR Investments Ltd., which received or is to receive $2,500 per month from the Company for management services provided to the Company.  See “Management Contracts”.










(3)
Mr. Robertson’s option-based awards granted during 2008 consisted of 1,000,000 stock options which were previously granted on February 21, 2003.  These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.


(4)
Ms. van Oord is also a director but does not receive any compensation in that capacity.


(5)
The value of perquisites received by each of the NEOs, including property or other personal benefits provided to the NEOs that are not generally available to all employees, were not, in the aggregate, greater than $50,000 or 10% of the NEOs total salary for the financial year.


(6)
Additionally, a directors’ fee of $12,000 is payable, but has been accrued.  See “Director Compensation”.


(7)
The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend yield.





Narrative Discussion





The Company does not have a share-based award plan other than the stock option plan referred to above. The Company also does not have a pension plan or a long term incentive plan.





Employment Contracts and Termination of Employment





There are no employment agreements or other compensating plans or arrangements with regard to any of the Named Executive Officers which provide for specific compensation in the event of resignation, retirement, other termination of employment or from a change of control of the Issuer or from a change in a Named Executive Officer’s
responsibilities following a change in control.





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





In  the event the Participant resigns as an employee, the Participant shall have thirty (30) days from the date of such resignation to exercise such of the optioned  shares  in  respect  of  which  such  option  has  not been previously exercised,  and  thereafter  his
option shall expire and all rights to purchase shares  hereunder  shall  cease and expire and be of no further force or effect.





Refer also to the Compensation Discussion and Analysissection above.





Incentive Plan Awards





Narrative Discussion





As reported above under the Summary Compensation Table,the Company does not have a share-based award plan or a long term incentive plan.   Information with respect to the grant of stock options is more particularly described above in the Option-based
Awardsand Compensation Discussion and Analysissections.





Outstanding Option-Based Awards and Share-Based Awards





No option-based awards were granted to the NEOs at the end of the most recently completed financial year.  The following table sets out the option-based awards that are currently outstanding as at the end of the most recently completed financial year.















Option-based Awards


Stock-based AwardsName

Number of
securities underlying unexercised options
(#)


Option exercise price
($)

Option expiration date

Value of unexercised in-the-money options
($)


Number of shares or units of shares that have not vested
(#)


Market or payout value of share-based awards that have not vested
($)John Robertson


1,000,000



0.10

February 21, 2013


N/A



N/A



N/AMonique van Oord


50,000



0.30

April 22, 2009


N/A



N/A



N/A





Incentive Plan Awards – value vested or earned during the year





No incentive stock options were granted to any NEOs during the year ended February 28, 2009.





No incentive stock options vested during the year ended February 28, 2009 which were held by the NEOs.





During the year ended February 28, 2009, neither of the two NEOs exercised or sold options. There were 1,050,000 unexercised options at the financial year end held by the NEOs, none of which were in-the-money.





Pension Plan Benefits





As reported under the Summary Compensation Table, the Company does not maintain a Pension Plan for its employees and therefore no benefits were received.





Termination of Employment or Change of Control





Other than as described in the Narrative Discussionsection under the Summary Compensation Table, the Company has no plans or arrangements with respect to remuneration received or that may be received by the Named Executive
Officers during the Company’s most recently completed financial year or current financial year in view of compensating such officers in the event of termination of employment (as a result of resignation, retirement, change of control, etc.) or a change in responsibilities following a change of control, where the value of such compensation exceeds $150,000 per executive officer.





DIRECTOR COMPENSATION





Director Compensation Table





The following table sets forth all compensation provided to the directors for the year ended February 28, 2009.





The Company does not have a share-based award plan for the directors other than the stock option plan referred to above, details of which are provided below under Outstanding Option-Based Awards, Share- Based Awards and Non-equity Incentive Plan Compensation.The Company also does
not have a pension plan or a non-equity incentive plan for its directors.





Other than John Robertson, as described above in the Narrative Descriptionand reported in the table below, no directors, who were not NEO’s of the Company were compensated during the financial year ended February 28, 2009 for services in their capacity as directors.












Non-equity incentive plan compensation
($)Name and Principal Position
Year Ended
February 28/29
Salary
($)
Share- based Awards
($)
Option- Based Awards
($) (8)
Annual incentive plans
($)
Long-term incen-tive plans
Pension value
($)
All other
Compen-sation
($)
Total
compensation
($)John G. Robertson, CEO(1)(2)(3)
2009
2008
2007
11,000
12,000
12,000
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
11,000
12,000
12,000Monique van Oord, CFO(4)
2009
2008
2007
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
NilJennifer Lorette (5)
2009
2008
2007
Nil
Nil
Nil
Nil
Nil
Nil
Nil
11,688
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
11,688
NilSusanne Robertson (6)(7)
2009
2008
2007
Nil
Nil
Nil
Nil
Nil
Nil
Nil
23,377
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
23,377l
Nil





(1)
Mr. Robertson is also an NEO and indirectly receives or accrues compensation in that capacity. See “Executive Compensation – Narrative Discussion”.


(2)
Mr. Robertson received director’s fees from the Company.  This amount for fiscal 2009 (and fiscal 2008 and 2007) has been paid.  See “Narrative Discussion” below.  Additionally, Mr. Robertson is President and a director of SMR Investments Ltd., which received or is to receive $2,500 per
month from the Company for management services provided to the Company.  See “Executive Compensation – Narrative Discussion”, and “Management Contracts”.


(3)
Mr. Robertson did not receive option-based awards in his capacity as a director.


(4)
Ms. van Oord does not receive any compensation in her capacity as a director, nor any option-based awards in her capacity as a director.


(5)
Ms. Lorette’s option-based awards granted during 2008 consisted of 150,000 stock options which were previously granted on February 21, 2003.  These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.


(6)
Ms. Robertson does not receive any compensation in her capacity as a director.  However, Ms. Robertson is the majority shareholder of SMR Investments Ltd., which received or is to receive $2,500 per month from the Company for management services provided to the Company.  See “Executive Compensation –
Narrative Discussion”, and “Management Contracts”.


(7)
Ms. Robertson’s option-based awards granted during 2008 consisted of 300,000 stock options which were previously granted on February 21, 2003.  These options were due to expire on February 21, 2008 and were extended until February 21, 2013 at an exercise price of CDN$0.10 and fair value of CDN$0.077923 per share.


(8)
The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate, weighted average expected life, expected volatility and dividend yield.





Narrative Description





Other than a directors’ fee of $11,000 paid to the President and CEO of the Company in 2009 ($12,000 in each of 2008 and 2007), there was no other cash compensation paid to directors by the Company for services rendered in their capacities as directors for the year ended February 28, 2009.




A management fee was payable, but accrued to SMR Investments Ltd., a company controlled by Susanne Robertson, a director of the Company.  Mr. Robertson is the President and a director of SMR.  Other than as herein set forth, the Company did not pay any compensation to its directors or Named Executive Officers.





Directors of the Company who are also NEOs are not compensated for their services in their capacity as directors, although directors of the Company are reimbursed for their expenses incurred in connection with their services as directors.





Information with respect to grants of options to the directors is reported below under the Narrative Descriptionin the section below entitled Outstanding Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation.





Other than as described above, no directors of the Company were compensated by the Company during the financial year ended February 28, 2009 for services as consultants or experts.










Option-Based Awards, Share-Based Awards and Non-equity Incentive Plan Compensation for Directors





As disclosed under the Director Compensation Table,the Company does not have a share-based award plan, a pension plan or a non-equity incentive plan for its directors.





Option-based awards to the directors are granted pursuant to the terms of the Company’s stock option plan. The options are always granted at market price. The valuation of the fair value of the options at the time of the grant is based on the Black Scholes model and includes the following assumptions; weighted average risk free rate,
weighted average expected life, expected volatility and dividend yield.





Directors generally receive a grant of stock options upon their appointment.





During the most recently completed year, no stock options were granted to any directors.





Non-Cash Compensation





No stock options were granted by the Company during the financial year ended February 28, 2009 to the directors who are not a Named Executive Officer of the Company.





There were no exercises of stock options during the financial year ended February 28, 2009 by the directors who are not the Named Executive Officer, and the financial year end value of unexercised options.  There were 450,000 unexercised options at the financial year end held by two directors who are not a Named Executive Officer,
none of which were in-the-money.





Incentive Plan Awards Tables





No incentive stock options, which were held by the non-executive directors, vested during the 2009 year.








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





NAME OF OPTIONEE

NUMBER OF OPTIONS


EXERCISE PRICE
(US $)

EXPIRY DATEJohn G. Robertson


1,000,000


$
0.10

February 21, 2013Jennifer Lorette


150,000


$
0.10

February 21, 2013Monique van Oord


50,000


$
0.30

April 22, 2009Susanne Robertson


300,000


$
0.10

February 21, 2013TOTAL HELD AS A GROUP:


1,500,000





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





Name of Optionee

No. of Optioned Shares


Exercise Price Per Share

Expiry DateArnie Winrob


25,000


$
0.30

April 22, 2009Cindy Broad


12,500


$
0.20

November 9, 2009Michael Baybak


1,000,000


$
0.35

August 9, 2011Garry Pollack


500,000


$
0.35

August 9, 2011Cheryl Derbyshire


25,000


$
0.25

November 2, 2011James Foley


50,000


$
0.25

December 8, 2011Cindy Broad


25,000


$
0.31

November 7, 2012Susan Bromberg


25,000


$
0.31

November 7, 2012James Vandeberg


75,000


$
0.10

February 21, 2013TOTAL HELD AS A GROUP:


1,737,500












C.         BOARD PRACTICES





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





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





D.         EMPLOYEES





We employed no employees during any of the years ended February 28, 2009, February 29, 2008 and February 28, 2007.  Our legal, accounting, marketing and administrative functions are, and have been during the last three fiscal years, contracted out to consultants.





We have no employees; as such, no directors of officers belong to any labor unions.  We have not been subject to any strikes or other labor disturbances that have interfered with our operations.





E.         SHARE OWNERSHIP





The following table sets forth the ownership of our common shares by our Directors and Officers as at September 10, 2009:





Shareholder

Number of shares issued and outstanding


Percentage ownership (1)John G. Robertson


2,427,638
(2)


2.9%Jennifer Lorette


238,100
(3)


*Monique van Oord


58,500
(4)


*Susanne Robertson


6,888,772
(5)


8.3%





(1)
as at September 10,  2009, there were 87,650,825 issued and outstanding common shares.


(2)
includes 1,418,556 common shares directly owned, 8,482 shares registered in the name of Access Information Services, Ltd., a corporation controlled by the Robertson Family Trust, and 1,000,000 options that are currently exercisable. Mr. Robertson is one of three trustees of the Robertson Family Trust, which acts by the majority vote of the three trustees.
Mr. Robertson disclaims beneficial ownership of the shares owned or controlled by the Robertson Family Trust. Mr. Robertson's address is the same as our address.


(3)
Includes 88,100 common shares and 150,000 options that are currently exercisable. Ms. Lorette's address is the same as our address.


(4)
Includes 8,500 common shares directly owned and 50,000 options that are currently exercisable. Ms. van Oord’s address is the same as the Company’s.


(5)
includes 797,000 common shares directly owned, 5,416,772  shares registered in the name of SMR Investments Ltd., 3000,000 options that are currently exercisable, and 375,000 warrants. Ms. Robertson's address is the same as the Company’s.





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





For information regarding the ownership of stock options to acquire our common shares which are held by our Directors and Officers, and also by our employees, please refer to Item 6.B above “Stock Options Granted to Employees, Directors and Senior Managers”.









ITEM7.                 MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS





A.         MAJOR SHAREHOLDERS.





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





As of September 10, 2009, 87,650,825 Common Shares were outstanding. At such date, we are aware of one shareholder who owns 5% or greater of the voting shares of the Company.  Susanne Robertson, our director, owns 6,213,772 of our issued and outstanding common shares. Of these, 5,416,772 shares are registered in the name
of SMR Investments Ltd., a corporate controlled by Mrs. Robertson.  Mrs. Robertson does not have any different voting rights.





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





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





B.         RELATED PARTY TRANSACTIONS.





We are a party to a management services agreement with SMR Investment Ltd. (“SMR”) under which SMR incurred management fees of $30,000 in each of fiscal years 2009, 2008, and 2007. SMR is a private company owned by Susanne M. Robertson, the wife of John G. Robertson, the Company’s president, who is also a Director of SMR.





We paid or accrued director's fees of $11,000 to John G. Robertson, our President, during the fiscal year ended February 28, 2009 (2008 - $12,000; 2007 - $12,000).





We had related party advances outstanding of $211,140 at the February 2009 year-end, compared to $226,797 at the end of our previous fiscal year. These were unsecured, non-interest bearing and with no fixed terms of repayment.








C.         INTERESTS OF EXPERTS AND COUNSEL.





Not applicable.





ITEM8.                  FINANCIAL INFORMATION





A.         CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION





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





Legal Proceedings


We are not a party to any material legal proceedings.





Dividend Distribution Policy


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





B.         SIGNIFICANT CHANGES





None.





ITEM9.                THE OFFER AND LISTING





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





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





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












Year

High


Low


Close2009

$
0.24


$
0.04


$
0.062008

$
0.32


$
0.14


$
0.242007

$
0.54


$
0.21


$
0.272006

$
0.50


$
0.11


$
0.352005

$
0.35


$
0.12


$
0.19





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





Period

High


Low


Close


Volume2009
Q4  2/28/09

$
0.08


$
0.04


$
0.06



3,765,300Q3  11/30/08

$
0.11


$
0.04


$
0.06



4,128,500Q2  8/31/08

$
0.15


$
0.08


$
0.11



4,184,100Q1  5/31/08

$
.29


$
0.13


$
0.14



5,627,4002008
Q4  2/29/08

$
0.26


$
0.17


$
0.24



6,904,323Q3  11/30/07

$
0.33


$
0.13


$
0.23



17,831,023Q2  8/31/07

$
0.21


$
0.13


$
0.14



11,647,046Q1  5/31/07

$
0.28


$
0.16


$
0.17



15,395,177


_________


all prices in US$





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





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





Month

High*


Low*2009, August

$
0.06


$
0.082009, July

$
0.07


$
0.052009, June

$
0.07


$
0.052009, May

$
0.06


$
0.052009, April

$
0.06


$
0.052009, March

$
0.06


$
0.052009, February

$
0.06


$
0.05




_________


* All prices are in U.S. dollars.





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








ITEM10.                 ADDITIONAL INFORMATION





A.         SHARE CAPITAL





Not applicable.





B.         MEMORANDUM AND ARTICLES OF ASSOCIATION





The Company was incorporated on February 27, 1979 under a perpetual charter pursuant to the British Columbia Company Act by registration of its Memorandum and Articles and was extra-provincially registered in the Province of Alberta on October 12, 1995 under the name Flame Petro-Minerals Corp. At an extraordinary general meeting held on
March 15, 2000, our shareholders approved the change of name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc, which name change was effected on March 21, 2000. At our annual meeting of shareholders on February 20, 2003, our shareholders approved the change of name of the Company from LinuxWizardry









Systems, Inc. to Linux Gold Corp., which name change was effected March 18, 2003. We believe our new name, Linux Gold Corp. more closely represents our true business activities.





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





On March 29, 2004, the new British Columbia Business Corporations Act (the "BCA") came into force in British Columbia and replaced the former Company Act (“Former Act”), which is the statute under which we were previously governed. In accordance with the BCA, we were required to transition ("Transition") to the BCA and amend
our Articles or Notice of Articles upon Transition to the BCA. We filed a transition application with the Registrar of Companies British Columbia and completed the Transition on June 11, 2004.   On August 16, 2004, at the Annual General Meeting of shareholders, our shareholders passed a special resolution replace our Articles in their entirety pursuant to the Business Corporations Act(British Columbia).  Our Incorporation Number
is BC0187279.  Our Articles do not restrict the nature of the business that may be carried on by the Company.





C.         MATERIAL CONTRACTS





During the past two years ended February 28, 2009 and February 29, 2008, we entered into the following material contracts.





Fish Creek Joint Venture Agreement





On March 5, 2002, we optioned a 50% interest in the 30 Fish Creek Claims to Teryl Resources Corp. (“Teryl”) (a related company with common directors and officers). Under the terms of the agreement, Teryl issued 200,000 common shares to Linux at a fair value of $80,000 and must expend $500,000 over three years. Linux retained
a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest. Linux entered into an amending agreement with Teryl to extend the term of the original agreement until March 7, 2007, in which Teryl issued 100,000 common shares to the Company, and also agreed to expend a minimum of US$500,000 within two years from the date of that amending agreement. All other terms of the original agreement remain the same. Subsequently, Linux entered into a further amending agreement
with Teryl to extend the term of the original agreement until March 5, 2009 and a further amendment amending the original agreement until March 5, 2010, in which all other terms of the original agreement remain the same.  The claims are legally maintained by recording an affidavit of annual labour for a minimum expenditure of $100 per claim ($3,000 total) and by paying annual rental to the State of Alaska in the amount of $130 per claim ($3,900 total).





Corporate




The Company entered into a lease agreement dated September 7, 2006 for a term of three years commencing November 1, 2006 to October 31, 2009. Under the terms of the agreement, the Company will pay monthly rent of $1,833 plus a proportionate share of operating costs. On November 30, 2007, the monthly rent increased to $2,017, and on November
30, 2008 the monthly rent increased to $2,200. The Company shares the rentable area with related parties who reimburse the Company for 2/3 of the total monthly rental fee. The future commitment is as follows:




Fiscal year ending February 28, 2010

$
27,280$
27,280





In August 2006, the company entered into a consulting agreement with Michael Baybak, who was appointed Vice President of Financial Development, for the provision of financial development services. Under the terms of the agreement, the Company agreed to pay US$1,000 per month plus expenses for a term of two years, and issue stock options
for 1,000,000 common shares exercisable at US$ 0.35 per share (granted). The agreement may be terminated by either party before the end of the term by giving a 90-day written notice. During the year ended February 28, 2009, consulting fees of $6,076 (February 29, 2008 - $6,403; February 28, 2007 - $89,278) were incurred.





Also in August 2006, the Company entered into a consulting agreement with Garry Pollack, we was appointed Assistant Financial Advisor, for the provision of financial development services. Under the terms of the agreement, the Company agreed to pay expenses incurred for a term of two years, and issue stock options for 500,000 common shares
exercisable at US$ 0.35 per share (granted). The agreement may be terminated by either party before the end of the term by giving a 90-day written notice. During the year ended February 28, 2009, consulting fees of $Nil (February 29, 2008 - $Nil;









February 28, 2007 - $40,618) were incurred.





D.         EXCHANGE CONTROLS.





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





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





E.         TAXATION.





Certain Canadian Federal Income Tax Consequences





The discussion under this heading summarizes the principal Canadian federal income tax consequences of acquiring, holding and disposing of shares of our common stock for a shareholder of ours who is not a resident of Canada but is a resident of the U.S. and who will acquire and hold our common shares as capital property for the purposes
of the Income Tax Act(Canada) (the “Canadian Tax Act”). This summary does not apply to a shareholder who carries on business in Canada through a “permanent establishment” situated in Canada or performs independent personal services in Canada through a fixed base in Canada if the shareholder’s holding in Linux Gold
Corp. is effectively connected with such permanent establishment or fixed base. This summary is based on the provisions of the Canadian Tax Act and the regulations thereunder and on an understanding of the administrative practices of Canada Revenue Agency, and takes into account all specific proposals to amend the Canadian Tax Act or regulations made by the Minister of Finance of Canada as of the date hereof. It has been assumed that there will be no other relevant amendment of any governing law although no assurance
can be given in this respect. This discussion is general only and is not, nor is it intended to provide a detailed analysis of the income tax implications of any particular shareholder’s interest. Investors are advised to obtain independent advice from a shareholder’s own Canadian and U.S. tax advisors with respect to income tax implications pertinent to their particular circumstances. The provisions of the Canadian Tax Act are subject to income tax treaties to which Canada is a party, including the Canada-United
States Income Tax Convention(1980), as amended (the “Convention”).





Dividends on Common Shares and Other Income





Under the Canadian Tax Act, a non-resident of Canada is generally subject to Canadian withholding tax at the rate of 25 percent on dividends paid or deemed to have been paid to him or her by a corporation resident in Canada. We are responsible for withholding of tax at the source. The Convention limits the rate to 15 percent if the shareholder
is a resident of the U.S. and the dividends are beneficially owned by and paid to such shareholder, and to 5 percent if the shareholder is also a corporation that beneficially owns at least 10 percent of the voting stock of the payor corporation.





The amount of a stock dividend (for tax purposes) would generally be equal to the amount by which the paid up or our stated capital had increased by reason of the payment of such dividend. We will furnish additional tax information to our shareholders in the event of such a dividend. Interest paid or deemed to be paid on our debt securities
held by non-Canadian residents may also be subject to Canadian withholding tax, depending upon the terms and provisions of such securities and any applicable tax treaty.





The Convention generally exempts from Canadian income tax dividends paid to a religious, scientific, literary, educational or charitable organization or to an organization constituted and operated exclusively to administer a pension, retirement or employee benefit fund or plan, if the organization is a resident of the U.S. and is exempt
from income tax under the laws of the U.S.









Dispositions of Common Shares





Under the Canadian Tax Act, a taxpayer’s capital gain or capital loss from a disposition of a share of our common stock is the amount, if any, by which his or her proceeds of disposition exceed (or are exceeded by, respectively) the aggregate of his or her adjusted cost base of the share and reasonable expenses of disposition. The
capital gain or loss must be computed in Canadian currency using a weighted average adjusted cost base for identical properties. The capital gains net of losses included in income are as follows. For gains net of losses realized before February 28, 2000, as to 75%. For gains net of losses realized after February 27, 2000 and before October 18, 2000, as to 66 2/3%. For gains net of losses realized after October 17, 2000, as to 50%. There are special transitional rules to apply capital losses against capital gains
that arose in different periods. The amount by which a shareholder’s capital loss exceeds the capital gain in a year may be deducted from a capital gain realized by the shareholder in the three previous years or any subsequent year, subject to certain restrictions in the case of a corporate shareholder.





Under the Canadian Tax Act, a non-resident of Canada is subject to Canadian tax on taxable capital gains, and may deduct allowable capital losses, realized on a disposition of “taxable Canadian property.” Shares of our common stock will constitute taxable Canadian property of a shareholder at a particular time if the shareholder
used the shares in carrying on business in Canada, or if at any time in the five years immediately preceding the disposition 25% or more of the issued shares of any class or series in our capital stock belonged to one or more persons in a group comprising the shareholder and persons with whom the shareholder and persons with whom the shareholder did not deal at arm’s length and in certain other circumstances.





The Convention relieves U.S. residents from liability for Canadian tax on capital gains derived on a disposition of shares unless:


(a) the value of the shares is derived principally from “real property” in Canada, including the right to explore for or exploit natural resources and rights to amounts computed by reference to production;


(b) the shareholder was resident in Canada for 120 months during any period of 20 consecutive years preceding, and at any time during the 10 years immediately preceding, the disposition and the shares were owned by him when he or she ceased to be resident in Canada; or


(c) the shares formed part of the business property of a “permanent establishment” that the holder has or had in Canada within the 12 months preceding the disposition.





F.         DIVIDENDS AND PAYING AGENTS





Not applicable.





G.         STATEMENT BY EXPERTS.





Not applicable.





H.         DOCUMENTS ON DISPLAY.





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





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





I.         SUBSIDIARY INFORMATION.





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





ITEM11.                 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.











ITEM12.                 DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES





Not applicable.





PARTII





ITEM13.                 DEFAULTS, DIVIDEND ARREARAGES AND DELIQUENCIES





None.





ITEM14.                 MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS.





A.         MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS





None.





B.         USE OF PROCEEDS.





Not applicable.





ITEM15.      CONTROLS AND PROCEDURES





Disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the "Exchange Act"), are controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded,
processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate
to allow timely decisions regarding required disclosure.  As required by Rule 13a-15 under the Exchange Act, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of February 28, 2009, being the date of the Company’s most recently completed fiscal year end. This evaluation was carried out under the supervision and with the participation of the Company’s management, including Mr. John Robertson, the Company’s
Chief Executive Officer, and Ms. Monique van Oord the Company’s Chief Financial Officer.





As of February 28, 2009, management conducted an evaluation of our disclosure controls and procedures pursuant to the Securities Exchange Act of 1934. Based upon that evaluation, management has concluded that our current disclosure controls and procedures are not effective as of February 28, 2009.





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








(b)         Management’s Annual Report on Internal Control over Financial Reporting





The Company’s board of directors and audit committee are responsible for establishing and maintaining adequate internal control over financial reporting.  The Company’s internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair
presentation of its consolidated financial statements for external purposes in accordance with generally accepted accounting principles.





The Company’s Chief Executive Officer, Mr. John Robertson, and the Company’s Chief Financial Officer, Ms. Monique van Oord, assessed the effectiveness of the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-(f) promulgated under the Exchange Act) as of February 28, 2009.





Based on management’s evaluation, we concluded our internal control over financial reporting was not effective as at February 28, 2009 due to inadequate segregation of duties and effective risk assessment.












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





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





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





ITEM15T. CONTROLS AND PROCEDURES





Not applicable.





ITEM16.[Reserved]





ITEM16A. Audit Committee Financial Expert





We do not currently have a financial expert in our audit committee due to our relatively small size.  In 2009, we had no employees and we relied upon the services of a chartered accounting firm in Langley, BC, Canada, to prepare our interim unaudited quarterly consolidated financial statements, and our annual consolidated financial
statements.  Effective September 5, 2008, Smythe Ratcliffe LLP, Chartered Accountants, at the request of the Company, resigned as auditors of the Company.  On the recommendation of the Audit Committee, the Board of Directors of the Company appointed James Stafford, Inc., Chartered Accountants as auditors of the Company for the financial year ended February 28, 2009, effective September 5, 2008. On July 8, 2009, James Stafford, Inc., Chartered Accountants, resigned as the Company’s principal
accountants.  On August 6, 2009 the Board of Directors appointed Dale Matheson Carr-Hilton Labonte LLP, Chartered Accountants.





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





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





ITEM16B. Code of Ethics





We have not adopted a formal written code of ethics given our relatively small size, whereby we had no employees in 2009.





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












ITEM16C. Principal Accountant Fees and Services





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





(Stated in terms of Canadian dollars)


Type of Services Rendered

2009
Fiscal Year


2008
Fiscal Year(a)  Audit Fees

$
18,099


$
32,000(b)  Audit-Related Fees

$nil


$nil(c)  Tax Fees

$nil


$nil(d)  All Other Fees

$nil


$nil





Our Audit Committee assists the Board in fulfilling its responsibilities relating to the Company’s corporate accounting and reporting practices.  The Audit Committee is responsible for ensuring that management has established appropriate processes for monitoring the Company’s systems and procedures for financial reporting
and controls, reviewing all financial information in disclosure documents; monitoring the performance and fees and expenses of the Company’s external auditors and recommending external auditors for appointment by shareholders.  The Audit Committee is also responsible for reviewing the Company’s annual financial statements prior to approval by the Board and release to the public.  Currently the members are Jennifer Lorette, Monique van Oord and Susanne Robertson. Upon recommendation of our
Audit Committee, our board of directors appointed James Stafford, Inc., Chartered Accountants, as our principal accountant to audit our consolidated financial statements for the fiscal year ended February 28, 2009. On July 8, 2009, James Stafford, Inc., Chartered Accountants, resigned as the Company’s principal accountants.  On August 6, 2009 the Board of Directors appointed Dale Matheson Carr-Hilton Labonte LLP, Chartered Accountants.




Subject to the requirements in Canada under National Instrument 52-110 (Audit Committees) (“NI 52-110”), the Audit Committee has not adopted specific policies and procedures for the engagement of non-audit services, however, as provided for under NI 52-110, the Audit Committee must pre-approve all non-audit services to be provided
to the Company or its subsidiaries, unless otherwise permitted by NI 52-110.






Our Audit Committee pre-approved all non-audit services (audit-related services, tax services, and all other services) provided to the Company prior to the commencement of the services.





In the table above, and the disclosure below, “audit fees” are fees billed by the Company’s external auditor for services provided in auditing the Company’s annual financial statements for the subject year. “Audit-related fees” are fees not included in audit fees that are billed by the auditor for assurance
and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. “Tax fees” are fees billed by the auditor for professional services rendered for tax compliance, tax advice and tax planning. “All other fees” are fees billed by the auditor for products and services not included in the foregoing categories.





Audit Fees


The aggregate fees billed by James Stafford, Inc.,  Chartered Accountants for professional services rendered for the audit of our annual consolidated financial statements for the fiscal years ended February 28, 2009 were $18,099.  Audit fees incurred during the fiscal year ended February 29, 2008 were $32,000 for professional
services rendered by Smythe Ratcliffe LLP, Chartered Accountants. For Audit Fees incurred during fiscal 2009 and 2008, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services.The percentage of Audit Fees pre-approved by our Audit Committee during fiscal 2009 and 2008 was 100%.





Audit Related Fees


The aggregate fees billed for assurance and related services, as applicable, relating to the performance of the audit of our consolidated financial statements for the fiscal year ended February 28, 2009 by James Stafford, Inc., Chartered Accountants and February 29, 2008 by Smythe Ratcliffe LLP, Chartered Accountants, which are not reported
under the









heading "Audit Fees" above, were $Nil and $Nil, respectively.  Had there been any Audit Related Fees incurred during fiscal 2009 and 2008, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services.





Tax Fees


For the fiscal years ended February 28, 2009, by James Stafford, Inc.Chartered Accountants, and February 29, 2008, by Smythe Ratcliffe LLP, Chartered Accountants, the aggregate fees billed for tax compliance, tax advice and tax planning, as applicable, were $nil and $nil, respectively. For Tax Fees incurred during fiscal 2009 and 2008,
it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services.The percentage of Audit Related Fees pre-approved by our Audit Committee during fiscal 2009 was 100%.





All Other Fees


For the fiscal years ended February 28, 2009, by James Stafford, Inc., Chartered Accountants , and February 29, 2008, by Smythe Ratcliffe LLP, Chartered Accountants, the aggregate fees billed, as applicable, for products and services other than the services set out above, were $Nil and $Nil, respectively. Had
there been any Other Fees incurred during fiscal 2009 and 2008, it is our policy for our Audit Committee to pre-approve 100% of these fees prior to commencement of the services.





ITEM16D.      Exemptions from the Listing Standards for Audit Committees




Not applicable.




ITEM16E.      Purchases of Equity Securities by the Issuer and Affiliated Purchasers




Not applicable.







PARTIII





ITEM17.                 FINANCIAL STATEMENTS





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





ITEM18.                  FINANCIAL STATEMENTS





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





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





ITEM19.                  EXHIBITS





The following consolidated financial statements, together with the report of James Stafford, Inc. Chartered Accountants on the annual consolidated financial statements referred to below, are filed as part of this annual report, and are included immediately following the text of this 20-F:





Report of Registered Public Accounting Firm dated James Stafford, Inc., Chartered Accountants, 2009


Consolidated Balance Sheets as at February 28, 2009 and February 29, 2008


Consolidated Statements of Operations as at February 28, 2009, February 29, 2008 and February 28, 2007


Consolidated Statements of Stockholders’ Deficiency, March 1, 2003 to February 28, 2009


Consolidated Statements of Cash Flows as at February 28, 2009, February 29, 2008 and February 28, 2007


Notes to the Consolidated Financial Statements as at February 28, 2009, February 29, 2008 and February 28, 2007












Documents filed as exhibits to this annual report:





Number
Description1.1
Memorandum and articles of incorporation with bylaws dated February 27, 1979
(1)1.2
Altered memorandum and special resolution dated September 20, 1993 increasing the authorized capital to 100,000,000 common shares from 90,000,000 and redesignating Class “A” Common voting shares without par value as common shares without par value and redesignating Class “B” Common non-voting shares as common shares
without par value
(1)1.3
Altered memorandum and special resolution dated March 15, 2000 changing the name of the Company from Flame Petro-Minerals Corp. to LinuxWizardry Systems, Inc.
(3)1.4
Altered memorandum and special resolution dated February 20, 2003 changing the name of the Company from LinuxWizardry Systems, Inc. to Linux Gold Corp.
(5)1.5
Memorandum and articles of incorporation amended effective September 15, 2004
(7)2.1
Specimen copy of Registrant’s common share certificate
(2)4.1
Commitment by John G. Robertson dated July 16, 1999 to provide financing to the Registrant as required for ongoing operations
(2)4.2
Share Purchase Agreement dated January 7, 2000 between Flame Petro-Minerals Corp. and Mike Carpenter and LinuxWizardry, Inc.
(3)4.3
Purchase order dated May 22, 2000 between LinuxWizardry, Inc. and Motorola, Inc., Personal Communications Sector
(4)4.4
License Agreement dated June 30, 2000 between LinuxWizardry Systems, Inc. and LinuxWizardry, Inc. and Lineo, Inc
(4)4.5
Vendor Agreement dated January 5, 2001 between Merrimack Services Corporation d/b/a PC Connection  and LinuxWizardry Systems, Inc.
(4)4.6
Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2002
(5)4.7
Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated November 4, 2002
(5)4.8
Edward Skoda Purchase Agreement – TY Gold Property
(6)4.9
Edward Skoda Purchase Agreement – ORO Mineral Claims
(6)4.10
Property Option Agreement – Peter Tse
(6)4.11
Amendment to Joint Venture Agreement between Linux Gold Corp. and Teryl Resources Corp. dated March 5, 2007
(8)12.1
Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(John G. Robertson)
(9)12.2
Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
(Monique van Oord)
(9)13.1
Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(John G. Robertson)
(9)13.2
Certification pursuant to Title 18, United States Code, Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Monique van Oord)
(9)99.1
Consent of Independent Auditors – James Stafford, Inc.,  Chartered Accountants
(9)99.2
Consent of Independent Auditors – Smythe Ratcliffe LLP
(9)







(1)
incorporated by reference to the Registrant’s Registration Statement on Form 20-F filed on June 4, 1999 with the US Securities and Exchange Commission


(2)
incorporated by reference to the Registrant’s Amendment No. 1 to the Registration Statement dated July 22, 1999


(3)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on September 14, 2000


(4)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on July 14, 2001


(5)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on August 25, 2003


(6)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on July 19, 2004


(7)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on July 19, 2005


(8)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on July 23, 2007


(9)
incorporated by reference to the Registrant’s Annual Report on Form 20-F filed on September 2, 2008


(9)
attached hereto.














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:
September 10, 2009
By:
/s/  John G. Robertson


John G. Robertson


President, Chairman of the Board/Director


















Linux Gold Corp.


(An Exploration Stage Company)





Consolidated Financial Statements


(Expressed in Canadian Dollars)


28 February 2009
















Report of Independent Registered Public Accounting Firm








To the Board of Directors and Stockholders of


Linux Gold Corp.


(An Exploration Stage Company)





We have audited the consolidated balance sheet of Linux Gold Corp.(the “Company”) as at 28 February 2009 and the related consolidated statements of operations, cash flows and changes in stockholders’ equity (deficiency) for the year ended 28 February 2009.  These
consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.





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





In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 28 February 2009 and the results of its operations, cash flows and changes in stockholders’ equity (deficiency) for the year ended 28 February 2009 in conformity with accounting
principles generally accepted in the United States of America.





The consolidated balance sheet of the Company as at 29 February 2008 and the related consolidated statements of operations, cash flows and changes in stockholders’ equity (deficiency) for the years ended 29 February 2008 and 28 February 2007 were audited by other auditors whose report dated 18 June 2008 expressed an unqualified opinion.





The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.  As discussed in Note 1 to the consolidated financial statements, conditions exist which raise substantial doubt about the Company’s ability to continue as a going concern unless it is able to generate
sufficient cash flows to meet its obligations and sustain its operations.  Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.





/s/ James Stafford


Vancouver, Canada Chartered Accountants





15 June 2009














Linux Gold Corp.


(An Exploration Stage Company)


Consolidated Balance Sheets
 (Expressed in Canadian Dollars)





As at
28 February
2009
$


As at
29 February
2008
$AssetsCurrentCash and cash equivalents


13,894



8,236Goods and Services Tax receivable


7,938



4,291Available-for-sale investments (Note 3)


78,000



286,000Prepaid expenses and deposits


4,012



18,431103,844



316,958Property and equipment(Note 4)


9,098



11,965112,942



328,923LiabilitiesCurrentAccounts payable and accrued liabilities (Note 6)


188,787



309,374Due to related parties (Note 7)


211,140



226,797399,927



536,171Stockholders’ deficiencyCapital stock (Note 10)Authorized200,000,000 common shares without par valueIssued and outstanding28 February 2009 – 87,650,825 common shares29 February 2008 – 83,095,825 common shares


15,051,086



14,372,703Share subscriptions received in advance


-



40,062Donated capital


383,961



357,818Accumulated other comprehensive loss


(268,000
)


(60,000
)Deficit, accumulated from prior operations


(7,524,145
)


(7,524,145
)Deficit, accumulated during the exploration stage


(7,929,887
)


(7,393,686
)(286,985
)


(207,248
)112,942



328,923





Nature and Continuance of Operations(Note 1), Commitments(Note 11) and Subsequent Events(Note 15)





On behalf of the Board:








“John Robertson”“Jennifer
Lorette”








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





Linux Gold Corp.


(An Exploration Stage Company)


Consolidated Statements of Operations
 (Expressed in Canadian Dollars)





Cumulative from inception of exploration stage on
1 March 2003
to 28 February
2009
(unaudited)


For the
year
ended
28 February
2009


For the
year
ended
29 February
2008


For the
year
ended
28 February
2007$


$


$


$General and administrative expensesAmortization of debt issue costs


205,242



-



173,175



32,067Amortization of property and equipment (Note 4)


26,896



2,867



4,852



3,145Bad debt expense


84,952



-



84,952



-Consulting and subcontracts


1,417,801



124,751



210,313



541,438Filing and regulatory fees


139,973



22,034



24,319



26,772Foreign exchange loss


(9,522
)


29,459



(7,130
)


(6,941
)Imputed interest (Note 7)


178,461



26,143



8,966



53,657Interest expense (Note 9)


2,302,583



-



1,041,913



1,260,670Management fees (Note 8)


184,750



30,000



30,000



30,000Mineral property exploration and development costs (Note 5)


1,815,087



61,885



170,663



1,074,870Office, rent and telephone


657,675



57,228



35,406



110,824Professional fees


377,164



79,189



94,132



79,037Travel and promotion


879,701



104,249



262,766



445,132Net loss before other items


(8,260,763
)


(537,805
)


(2,134,327
)


(3,650,671
)Other itemsMineral property acquisition costs written off


(126,417
)


-



(126,417
)


-Accounts payable written off


46,281



-



-



46,281Income from discontinued operations


369,213



-



-



-Interest income


41,799



1,604



453



33,207Net loss for the period


(7,929,887
)


(536,201
)


(2,260,291
)


(3,571,183
)Basic and diluted net loss per share






(0.01
)


(0.03
)


(0.05
)Weighted average number of common shares used in per share calculations






86,536,209



78,776,000



69,105,000Comprehensive lossNet loss for the period


(7,929,887
)


(536,201
)


(2,260,291
)


(3,571,183
)Unrealized holding gain (loss) on available-for-sale investments


(268,000
)


(208,000
)


78,000



(130,000
)Comprehensive loss


(8,197,887
)


(744,201
)


(2,182,291
)


(3,701,183
)Comprehensive loss per share






(0.01
)


(0.03
)


(0.05
)








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





Linux Gold Corp.


(An Exploration Stage Company)


Consolidated Statements of Cash Flows


(Expressed in Canadian Dollars)





Cumulative from inception of exploration stage on 1 March 2003
to 28 February
2009
(unaudited)


For the
year ended
28 February
2009


For the
year ended
29 February
2008


For the
year ended
28 February
2007$


$


$


$Cash flows used in operating activitiesNet loss for the period


(7,929,887
)


(536,201
)


(2,260,291
)


(3,571,183
)Adjustments to reconcile loss to net cash used by operating activitiesAmortization of debt issue costs


205,242



-



173,175



32,067Amortization of property and equipment


26,896



2,867



4,852



3,144Receipt of marketable securities for property


(16,000
)


-



-



(16,000
)Accretion of discount on convertible debt


2,291,794



-



1,093,413



1,198,381Bad debt expense


84,952



-



84,952



-Imputed interest


178,461



26,143



8,966



53,657Accounts payable written off


(46,281
)


-



-



(46,281
)Mineral property acquisition costs written off


126,417



-



126,417



-Stock-based compensation


268,550



-



75,042



109,228Shares issued for services


120,000



-



-



-Shares issued for settlement of rent obligation


19,200



-



-



-Income from discontinued operations


(369,213
)


-



-



-Changes in operating assets and liabilitiesGoods and Services Tax receivable


36,967



(3,647
)


(32,205
)


42,660Prepaid expenses and deposits


(3,521
)


14,419



11,422



(18,854
)Accounts payable and accrued liabilities


(90,092
)


(120,587
)


107,757



32,031Due to related parties


153,560



(15,657
)


(244,165
)


177,753(4,942,955
)


(632,663
)


(850,665
)


(2,003,397
)Cash flows used in investing activitiesMineral interest acquisition costs


(66,417
)


-



-



-Purchase of marketable securities


(250,000
)


-



-



(250,000
)Purchase of property and equipment


(35,994
)


-



(330
)


(9,456
)(352,411
)


-



(330
)


(259,456
)Cash flows from financing activitiesAdvances from related parties


16,238



-



-



-Debt issue costs


(205,242
)


-



-



(205,242
)Proceeds from convertible debt


2,226,251



-



-



2,226,251Repayment of debt


(153,400
)


-



-



(153,400
)Proceeds from issuance of common shares


3,446,649



713,842



696,305



76,399Share subscriptions received


52,277



(40,062
)


40,062



52,277Share issue costs


(84,647
)


(35,459
)


(4,003
)


(2,614
)5,298,126



638,321



732,364



1,993,671Increase (decrease) in cash and cash equivalents


2,760



5,658



(118,631
)


(269,182
)Cash and cash equivalents, beginning of period


11,134



8,236



126,867



396,049Cash and cash equivalents, end of period


13,894



13,894



8,236



126,867





Supplemental Disclosures with Respect to Cash Flows(Note 12)





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





Linux Gold Corp.


(An Exploration Stage Company)


Consolidated Statements of Changes in Stockholders’ Equity (Deficiency)


(Expressed in Canadian Dollars)


Shares of common stock issued


Common stock and paid-in capital


Subscriptions received, net


Donated capital


Deficit accumulated from prior operations


Deficit accumulated during the exploration stage


Accumulated other comprehensive income (loss)


Total stockholders’ equity (deficiency)$


$


$


$


$


$


$Balance from prior operations
at 1 March 2003 (unaudited)


57,458,413



6,804,412



-



205,500



(7,524,145
)


-



-



(514,233
)Common stock issued for mineral property


175,000



17,500



-



-



-



-



-



17,500Common stock issued for services


1,000,000



100,000



-



-



-



-



-



100,000Common stock issued for settlement of rent obligation


200,000



19,200



-



-



-



-



-



19,200Options exercised


150,000



19,812



-



-



-



-



-



19,812Warrants exercised


1,300,000



280,922



-



-



-



-



-



280,922Imputed interest


-



-



-



22,960



-



-



-



22,960Marketable securities adjustment


-



-



-



-



-



-



44,000



44,000Net loss for the year


-



-



-



-



-



(3,738
)


-



(3,738
)Balance at 29 February 2004 (unaudited)


60,283,413



7,241,846



-



228,460



(7,524,145
)


(3,738
)


44,000



(13,577
)Common stock issued for mineral property


125,000



45,384



-



-



-



-



-



45,384Common stock issued for cash


4,205,610



860,089



-



-



-



-



-



860,089Options exercised


87,500



10,606



-



-



-



-



-



10,606Warrants exercised


250,000



37,500



-



-



-



-



-



37,500Imputed interest


-



-



-



35,013



-



-



-



35,013Stock-based compensation


-



82,000



-



-



-



-



-



82,000Marketable securities adjustment


-



-



-



-



-



-



(54,000
)


(54,000
)Net loss for the year


-



-



-



-



-



(748,369
)


-



(748,369
)Balance at 29 February 2005 (unaudited)


64,951,523



8,277,425



-



263,473



(7,524,145
)


(752,107
)


(10,000
)


254,646Common stock issued for mineral property


50,000



20,500



-



-



-



-



-



20,500Common stock issued for cash


3,100,000



715,127



-



-



-



-



-



715,127Options exercised


93,750



10,838



-



-



-



-



-



10,838Warrants exercised


92,500



21,825



-



-



-



-



-



21,825Share issue costs


-



(42,571
)


-



-



-



-



-



(42,571
)Imputed interest


-



-



-



31,722



-



-



-



31,722Stock-based compensation


-



2,280



-



-



-



-



-



2,280Marketable securities adjustment


-



-



-



-



-



-



2,000



2,000Net loss for the year


-



-



-



-



-



(810,105
)


-



(810,105
)Balance at 28 February 2006 (unaudited)


68,287,773



9,005,424



-



295,195



(7,524,145
)


(1,562,212
)


(8,000
)


206,262Subscriptions received


-



-



52,277



-



-



-



-



52,277Common stock issued for debt


2,586,076



644,749



-



-



-



-



-



644,749Options exercised


323,750



75,670



-



-



-



-



-



75,670Warrants exercised


52,500



15,329



(14,600
)


-



-



-



-



729Share issue costs


-



(2,613
)


-



-



-



-



-



(2,613
)Imputed interest (Note 7)


-



-



-



53,657



-



-



-



53,657Intrinsic value of beneficial conversion feature of convertible debentures


-



963,670



-



-



-



-



-



963,670Fair value of warrants issued with convertible debentures


-



1,262,580



-



-



-



-



-



1,262,580Stock-based compensation


-



109,228



-



-



-



-



-



109,228Marketable securities adjustment


-



-



-



-



-



-



(130,000
)


(130,000
)Net loss for the year


-



-



-



-



-



(3,571,183
)


-



(3,571,183
)Balance at 28 February 2007


71,250,099



12,074,037



37,677



348,852



(7,524,145
)


(5,133,395
)


(138,000
)


(334,974
)Subscriptions received


-



-



40,062



-



-



-



-



40,062Common stock issued for debt redemption (Note 9)


8,378,226



1,493,911



-



-



-



-



-



1,493,911Common stock issued for cash


2,825,000



615,195



(52,277
)


-



-



-



-



562,918Options exercised


212,500



24,020



-



-



-



-



-



24,020Warrants exercised


430,000



94,501



14,600



-



-



-



-



109,101Share issue costs


-



(4,003
)


-



-



-



-



-



(4,003
)Imputed interest (Note 7)


-



-



-



8,966



-



-



-



8,966Stock-based compensation (Note 10)


-



75,042



-



-



-



-



-



75,042Marketable securities adjustment (Note 14)


-



-



-



-



-



-



78,000



78,000Net loss for the year


-



-



-



-



-



(2,260,291
)


-



(2,260,291
)Balance at 29 February 2008


83,095,825



14,372,703



40,062



357,818



(7,524,145
)


(7,393,686
)


(60,000
)


(207,248
)Common stock issued for cash (Note 10)


4,555,000



507,867



(40,062
)


-



-



-



-



467,805Fair value of warrants issued with common shares (Note 10)


-



205,975



-



-



-



-



-



205,975Share issue costs (Note 10)


-



(35,459
)


-



-



-



-



-



(35,459
)Imputed interest (Note 7)


-



-



-



26,143



-



-



-



26,143Unrealized holding loss on available-for-sale investment (Note 14)


-



-



-



-



-



-



(208,000
)


(208,000
)Net loss for the year


-



-



-



-



-



(536,201
)


-



(536,201
)Balance at 28 February 2009


87,650,825



15,051,086



-



383,961



(7,524,145
)


(7,929,887
)


(268,000
)


(286,985
)




The accompanying notes are an integral part of these consolidated financial statements.
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





1.
Nature and Continuance of Operations





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





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





The Company’s consolidated financial statements as at 28 February 2009 and for the year then ended have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.  The Company has a loss of $536,201 for the year ended
28 February 2009 (29 February 2008 – $2,260,291, 28 February 2007 – $3,571,183) and has a working capital deficit of $296,083 at 28 February 2009 (29 February 2008 – $219,213).





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





At 28 February 2009, 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.  There are no consolidated financial statements prepared using Canadian generally accepted accounting principles.  The Company
is an exploration stage company, as defined by the Statement of Financial Accounting Standard (“SFAS”) No. 7, “Accounting and Reporting by Development Stage Enterprises”.






(F-1)




Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009


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 SFAS No. 52, “Foreign Currency Translation”.  Foreign currency transactions
are primarily undertaken in U.S. dollars.  Monetary assets and liabilities denominated in U.S. dollars are translated using the exchange rate prevailing at the balance sheet date.  Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.  The Company has not, to the date of these 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 GAAP requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amount of revenues and expenses during the reporting
period.  Significant areas requiring the use of management estimates include the determination of rates for amortization, the impairment of marketable securities, fair value of imputed interest and the assumptions used in computing the fair value of stock-based compensation.  Actual results could differ from those estimates.





Basic and diluted net loss per share





The Company computes net loss per share in accordance with SFAS No. 128, “Earnings per Share”.  SFAS No. 128 requires presentation of both basic and diluted earnings per share (“EPS”) on the face of the income statement.  Basic EPS is computed
by dividing net loss available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period.  Diluted EPS gives effect to all potentially dilutive common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method.  In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise
of stock options or warrants.  Diluted EPS excludes all potentially dilutive shares if their effect is anti-dilutive.





Stock-based compensation





The Company records stock-based compensation in accordance with SFAS No. 123(R), “Share-Based Payments”, using the fair value method.  All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted
for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  Equity instruments issued to employees and the cost of the services received as consideration are measured and recognized based on the fair value of the equity instruments issued.







(F-2)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





Cash and cash equivalents





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





Marketable securities





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





Mineral exploration expenditures





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





Mineral property acquisition costs are capitalized in accordance with Emerging Issue Task Force (“EITF”) 04-2 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.





Mineral property exploration costs are expensed as incurred.





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





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





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





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


















Linux Gold Corp.
(An Exploration Stage Company)
Notes to Consolidated Financial Statements
(Expressed in Canadian Dollars)
28 February 2009





Asset retirement obligation





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





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





Long-lived assets





In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of intangible assets and other long-lived assets is 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.





Property and equipment





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





Financial instruments





The Company classifies its financial instruments into held-to-maturity, trading or available-for-sale categories.  Financial instruments are classified as held-to-maturity when the Company has the positive intent and ability to hold the instruments to maturity.  Financial instruments for which the Company does not have
the intent or ability to hold to maturity are classified as available-for-sale.  Held-to-maturity instruments are recorded as either short-term or long-term on the balance sheet based on contractual maturity date and are stated at amortized cost.  Financial instruments that are bought and held principally for the purpose of selling them in the near term are classified as trading securities and are reported at fair value, with unrealized gains and losses recognized in earnings.  Financial
instruments not classified as held-to-maturity or as trading are classified as available-for-sale and are carried at fair market value, with the unrealized gains and losses, net of tax, included in the determination of comprehensive income and reported in stockholders’ equity.







(F-4)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





Income taxes





Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not.  The Company has adopted SFAS No. 109, “Accounting for Income Taxes”,as
of its inception.  Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward.  Potential benefits of net operating losses have not been recognized in these consolidated financial statements because the Company cannot be assured it is more likely than not it will utilize the net operating losses carried forward in future years.





Comprehensive loss





SFAS No. 130, “Reporting Comprehensive Income”, establishes standards for the reporting and display of comprehensive loss and its components in the financial statements.  As at 28 February 2009 and 29 February 2008, the Company’s only component of other comprehensive
loss was unrealized holding gains and losses on available-for-sale securities.





International Financial Reporting Standards





In 2006, the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian GAAP with IFRS over an expected five year transitional period. In February 2008, the AcSB
announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing Canada’s own GAAP. The date is for interim and annual financial statements relating to fiscal years beginning on or after 1 January 2011. The transition date of 1 January 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended 30 November 2011. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition
to IFRS cannot be reasonably estimated at this time.





Recent accounting pronouncements





In May 2008, the Financial Accounting Standards Board (the “FASB”) issued SFAS No. 163, “Accounting for Financial Guarantee Insurance Contracts – an interpretation of SFAS No. 60”.  SFAS No. 163 provides enhanced guidance on the recognition and
measurement to be used to account for premium revenue and claim liabilities and related disclosures and is limited to financial guarantee insurance (and reinsurance) contracts, issued by enterprises included within the scope of SFAS No. 60, “Accounting and Reporting by Insurance Enterprises”.  SFAS No. 163 also requires that an insurance enterprise recognize a claim liability prior to an event of default when there is evidence that
credit deterioration has occurred in an insured financial obligation.  SFAS No. 163 is effective for financial statements issued for fiscal years and interim periods beginning after 15 December 2008, with early application not permitted.  The Company does not expect SFAS No. 163 to have an impact on its consolidated financial statements.









(F-5)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting Principles”.  SFAS No. 162 is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting accounting principles to be used
in preparing financial statements that are presented in conformity with GAAP for nongovernmental entities.  Prior to the issuance of SFAS No. 162, GAAP hierarchy was defined in the American Institute of Certified Public Accountants (“AICPA”) Statement on Auditing Standards (“SAS”) No. 69, “The Meaning of Present Fairly in Conformity with GAAP”.  SAS No. 69 has been criticized because it is directed
to the auditor rather than the entity.





SFAS No. 162 addresses these issues by establishing that the GAAP hierarchy should be directed to entities because it is the entity, not its auditor, that is responsible for selecting accounting principles for financial statements that are presented in conformity with GAAP.  SFAS No. 162 is effective 60 days following the Securities
and Exchange Commission’s (“SEC”) approval of the Public Company Accounting Oversight Board Auditing amendments to AU Section 411, “The Meaning of Present Fairly in Conformity with Generally Accepted Accounting Principles”.  The Company does not expect SFAS No. 162 to have a material effect on its consolidated financial statements.





In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133”, which amends and expands the disclosure requirements of SFAS No. 133 to provide an enhanced understanding of an entity’s
use of derivative instruments, how they are accounted for under SFAS No. 133 and their effect on the entity’s financial position, financial performance and cash flows.  The provisions of SFAS No. 161 are effective for periods beginning after 15 November 2008.  The Company is currently reviewing the effect, if any, that the adoption of this statement will have on the Company’s consolidated financial statements.





3.
Available-for-Sale Investments




28 February 2009


29 February 2008Book value


Fair value


Book value


Fair value$


$


$


$346,000 (2008 – 346,000) common shares of Teryl Resources Corp.


346,000



78,000



346,000



286,000




4.
Property and Equipment





Accumulated


Net book valueCost


amortization


2009


2008$


$


$


$Office furniture


11,194



5,411



5,783



7,229Vehicle


15,531



12,216



3,315



4,73626,725



17,627



9,098



11,965





During the year ended 28 February 2009, total additions to property, plant and equipment were $Nil (29 February 2008 - $330).













Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





5.
Mineral Properties





Alaska Mineral Properties





Granite Mountain Property and Dime Creek Property





The Company has a total of 176 mining claims in Granite Mountain and 12 mining claims in Dime Creek, which are located near Nome in the State of Alaska.





Fish Creek Property





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





The Company retained a 5% net royalty interest, until US$2,000,000 has been received, and may convert into a 25% working interest.  The Company entered into an amending agreement with Teryl to extend the term of the original agreement until 7 March 2007, in which Teryl issued 100,000 common shares to the Company, and also agreed
to expend a minimum of US$500,000 within two years from the date of that amending agreement.  All other terms of the original agreement remain the same.  Subsequently, the Company entered into a further agreement with Teryl to extend the term of the original agreement until 5 March 2009, in which all other terms of the original agreement remain the same. Subsequent to the year end, the Company entered into an agreement to extend the expenditure date on the Fish Creek mineral claim to 5 March
2010 (Note 15).





The following is a summary of mineral property expenditures related to the Alaska Mineral Properties for the years ended 28 February 2009, 29 February 2008 and 28 February 2007:





For the
year ended
28 February 2009


For the
year ended
29 February 2008


For the
year ended
28 February 2007$


$


$Exploration and development costsAssaying


363



26,357



130,544Field supplies and other


-



-



609,856Geological consulting


14,121



43,999



105,655Staking and recording fees


47,401



96,344



26,357Transportation


-



3,963



202,45861,885



170,663



1,074,870














(F-7)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





British Columbia Mineral Properties





Ty Property





The Company acquired the TY Area, TY Grid 2 and 3 (21 units) mineral claims located in the Lillooet Mining Division in British Columbia under the following terms and conditions:





a)
the Company must pay $30,000 in various stages to 1 December 2004 (paid);





b)
the Company must issue 150,000 shares as follows: 100,000 upon signing of the agreement and receiving regulatory approval (issued) and 50,000 shares upon completion of Phase III (issued); and





c)
the vendor will retain a 2% net smelter return interest (“NSR”).  The Company may purchase the NSR for $1,000,000 for each 1% prior to commercial production, in shares or cash.





During the year ended 29 February 2004, the Company staked an additional three mineral claims representing 35 units.  The Company elected not to file the necessary assessments in 2008.  These mineral claims have now lapsed.





ORO Property





The Company acquired the ORO (20 units) claim in the Lillooet Mining Division in British Columbia under the following terms and conditions:





a)
the Company must pay $10,000 (paid) and issue 100,000 common shares (issued); and





b)
the vendor will retain a 2% NSR.  The Company may purchase the NSR for $1,000,000 for each 1% prior to commercial production, in shares or cash.





During the year ended 29 February 2004, the Company staked an additional mineral claim representing 5 units.  The President of the Company is the registered owner of the mineral properties.  The Company has entered into a trust agreement stating that these mineral claims are held in trust on behalf of the Company.  The
Company has re-staked the TY property and acquired additional claims in the same area.





During the year ended 29 February 2008, the Company discontinued active exploration on both British Columbia properties and wrote off its acquisition costs.  The Company elected not to file the necessary assessments in 2008.  These mineral claims have now lapsed.





China Mineral Property





On 20 January 2004, the Company acquired an option to purchase 100% of the shares of Ginyen Recovery Inc. (“Ginyen”).  Ginyen has an 85% interest in a co-operative joint venture with Bo Luo Neo Wang Yuan Gold Mine Company (“BLN Gold”) of Heibei Province, China.  BLN Gold holds an operational gold
recovery mill, the right and license to operate all existing small mines in the district, the right to explore, develop and produce gold and silver in the district and options to expand to other districts.








(F-8)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





To complete the option agreement, the Company must:





a)
pay $55,000 as follows: $10,000 upon regulatory approval (paid), $15,000 upon completion of Phase 1, $15,000 upon completion of Phase II and a minimum of $15,000 annually or 5% of net profits paid quarterly, whichever is greater.  The Company is currently in Phase 1;





b)
issue 200,000 shares as follows: 50,000 upon regulatory approval (issued), 50,000 upon completion of Phase 1, 50,000 upon completion of Phase II and 50,000 upon completion of Phase III.  The Company also issued 50,000 common shares as a finders’ fee.  The Company is currently in Phase 1; and





c)
incur production expenses, subject to successful results in each phase, of $500,000 as follows: $160,000 ($114,457 incurred) for Phase 1, $130,000 for Phase II and $210,000 for Phase 3.





During the year ended 29 February 2008, the Company discontinued active exploration on the property and wrote off the related acquisition costs.





6.
Accounts Payable and Accrued Liabilities





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





7.
Due to Related Parties





Amounts due to related parties are unsecured, non-interest bearing and have no fixed terms of repayment.  During the year, imputed interest at 15%, totalling $26,143 (29 February 2008 - $8,966, 28 February 2007 - $53,657) was charged to operations and treated as donated capital (Note 12).  As at 28 February 2009, 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.





29 February 2008


Advances
(repayments)


28 February
2009$


$


$Information Highway.com


3,000



(1,000
)


2,000JGR Petroleum, Inc.


82,533



(2,800
)


79,733J. Robertson, President, CEO and shareholder


11,584



(11,584
)


-KLR Petroleum Ltd.


2,150



4,589



6,739REGI U.S., Inc.


(38
)


1,214



1,176SMR Investments Ltd.


29,250



2,250



31,500Teryl Resources Corp.


98,318



(8,326
)


89,992226,797



(15,657
)


211,140








(F-9)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





8.
Related Party Transactions





Pursuant to a management services agreement, during the year ended 28 February 2009, the Company accrued management fees of $30,000 (29 February 2008 - $30,000, 28 February 2007 - $30,000) to a company where the President of the Company is a director.  At 28 February 2009, the Company is indebted in the amount of $38,239 (29 February
2008 - $31,400) which is included in accrued liabilities to related parties.  These amounts are non-interest bearing, unsecured and have no specific terms of repayment.





During the year ended 28 February 2009, the Company paid investor relations fees of $11,000 (29 February 2008 - $12,000, 28 February 2007 - $12,000) to a company related to the Company by way of director in common.





During the year ended 28 February 2009, the Company paid consulting fees of $16,067 (29 February 2008 - $12,851, 28 February 2007 - $9,083) to a company where the President of the Company is a director.





During the year ended 28 February 2009, the Company incurred consulting fees valued at US$45,000 which were delivered by a company not related to the Company (the “Third Party”).  The payment for these consulting fees was made by way of payment of US$45,000 by the Company to a company related to the Company by way of
director in common (the “Related Party”).  The Related Party then settled the debt with the Third Party by transferring 300,000 shares of the Company’s common stock (valued at US$45,000), held by the Related Party as an investment, to the Third Party.





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





9.
Convertible Debentures





The Company completed a private placement financing of $2,226,250 (US$2,000,000) on 8 May 2006 with several institutional investors consisting of secured convertible discount notes (the “Discount Notes”) with a principal amount of US$2,105,250.  The Discount Notes were issued at a discount of 5%, are convertible into
common stock at a conversion price of $0.40 per share at the option of the investor.  Effective 1 October 2006, the Company was required to repay 1/15 of the principal amount per month.  Upon required monthly repayment, the Discount Notes were converted to common stock at a conversion price calculated at the 15-day volume weighted average stock price less a 15% discount.  The Discount Notes matured on 8 November 2007.





The securities were issued in a private placement transaction pursuant to Section 4(2) of the Securities Act of 1933, as amended.  The Company is obligated to file a registration statement with the United States SEC registering the resale of shares of the Company’s common stock issuable upon conversion of the Discount Notes
and exercise of the warrants.  This resale registration was filed on 9 August 2006 and became effective 1 September 2006.








(F-10)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





The Company received proceeds of US$1,500,000 at first closing on 8 May 2006, and the remaining US$500,000 was received upon the filing of a resale registration statement.  The investors received Series A warrants to purchase, in the aggregate, 5,000,000 shares of common stock at $0.50 per share for a term of five years, and Series
B warrants to purchase, in the aggregate, an additional 2,500,000 shares of common stock at $0.52 per share for a term expiring upon the earlier of one year after the effectiveness of the resale registration statement or ten years.  These warrants were subject to a price adjustment clause whereby any future equity financing at a share price less than the exercise price of the warrants would result in the re-pricing of the warrants’ exercise price to equal the share price of the financing and additional
warrants would be issued so that the aggregate exercise price of the re-priced warrants would aggregate the exercise price of the originally issued warrants.





The Company received US$1,815,000 net proceeds from this transaction.  The funds were used for continued exploration and development expenses on the Granite Mountain claims and for general working capital.





During the year ended 29 February 2008, the Company redeemed $1,493,911 (US$1,403,518) of principal paid by the issuance of 8,378,226 common shares.





In accordance with EITF 98-5 “Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Rations”, the Company recognized the value of the embedded beneficial conversion feature of $963,670 (US$864,866) as additional paid-in
capital as the debt was issued with a fair value conversion feature.  In addition, in accordance with EITF 00-27 “Application of Issue No. 98-5 to Certain Convertible Instruments”, the Company allocated the proceeds of issuance between the convertible debt and the detachable warrants based on their relative fair values.  Accordingly, the Company recognized the fair value of the detachable warrants of $1,262,580 (US$1,135,134)
as additional paid-in capital.  The carrying value of the Discount Notes has been accreted to the face value of the principal.  During the year ended 28 February 2009, interest expense of $Nil (29 February 2008 - $1,041,913, 28 February 2007 - $1,260,670) has been accreted.





10.
Capital Stock





Authorized





The total authorized capital is 200,000,000 common shares without par value.





Issued and outstanding





The total issued and outstanding capital stock is 87,650,825 common shares without par value.





On 27 March 2008, the Company issued 500,000 units pursuant to a private placement at a price of US$0.20 per unit for proceeds of $99,364 (US$100,000) before finders’ fee of $3,588.  Each unit consisted of one common share and one warrant, with each warrant entitling the holder to purchase one share at an exercise price of
US$0.25 per share for a one year term expiring on 27 March 2009.  The Company allocated $77,244 to the common shares and $22,120 to the share purchase warrants based on the relative fair values.  The Company extended the expiry date of these share purchase warrants to 27 March 2010 subsequent to 28 February 2009 (Note 15).








(F-11)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





On 5 June 2008, the Company issued 4,055,000 units pursuant to a private placement at a price of US$0.15 per unit for proceeds of $614,478 (US$608,250) before finders’ fee of $31,871.  Each unit consisted of one common share and one warrant, with each warrant entitling the holder to purchase one share at an exercise price
of US$0.20 per share for a one year term expiring on 5 June 2009.  The Company allocated $430,623 to the common shares and $183,855 to the share purchase warrants based on the relative fair values.  The Company extended the expiry date of these share purchase warrants to 5 June 2010 subsequent to 28 February 2009 (Note 15).





Warrants





The following share purchase warrants were outstanding at 28 February 2009:





Exercise price


Number
of warrants


Remaining
contractual life (years)US$Warrants expiring 27 March 2010


0.25



500,000



1.07Warrants expiring 1 June 2010


0.30



1,412,500



1.25Warrants expiring 5 June 2010


0.20



4,055,000



1.27Warrants expiring 8 May 2011


0.20



9,275,000



2.19Warrants expiring 28 June 2011


0.20



3,125,000



2.3318,367,500





The Company extended the expiry dates of certain of these share purchase warrants to dates ranging from 27 March 2010 to 5 June 2010 subsequent to 28 February 2009 (Note 15).





The following is a summary of the Company’s warrant activities during the year ended 28 February 2009:








Number of warrants


Weighted average exercise priceUS$Outstanding and exercisable at 1 March 2008


13,812,500



0.21Granted


4,555,000



0.21Exercised


-



-Expired


-



-Cancelled


-



-Outstanding and exercisable at 28 February 2009


18,367,500



0.21Weighted average fair value of warrants granted during the year






0.04








(F-12)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





The weighted average grant date fair value of warrants issued during the year ended 28 February 2009 is $0.04 per warrant.  The fair value of each warrant granted was determined using the Black-Scholes warrant pricing model and the following weighted average assumptions: risk free interest rate of 2.12%, expected life of 1 year,
annualized volatility of 98.15% and expected dividends of 0%.





Warrant pricing models require the input of highly subjective assumptions including the estimate of the share 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 value of the Company’s
warrants.





Stock Options





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





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





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





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





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





On 30 October 2008, a total of 25,000 stock options exercisable at a price of US$0.34 per common share were cancelled.





During the years ended 28 February 2009 and 29 February 2008, the Company recorded stock-based compensation of $Nil and $75,042, respectively.








(F-13)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





The following stock options were outstanding and exercisable at 28 February 2009 (Note 15):





Exercise price


Number
of options outstanding


Number of options exercisable


Remaining
contractual life (years)US$Options expiring 22 April 2009


0.30



75,000



75,000



0.15Options expiring 9 November 2009


0.20



12,500



12,500



0.70Options expiring 9 August 2011


0.35



1,500,000



375,000



2.44Options expiring 2 November 2011


0.25



25,000



6,250



2.68Options expiring 8 December 2011


0.25



50,000



12,500



2.78Options expiring 7 November 2012


0.31



50,000



12,500



3.69Options expiring 21 February 2013


0.10



1,525,000



381,250



3.983,237,500



875,000





The following is a summary of the Company’s stock option activities during the years ended 29 February 2008 and 28 February 2009:





Number of options


Weighted average exercise priceUS$Outstanding at 1 March 2007


3,720,000



0.22Granted


300,000



0.22Exercised


(212,500
)


0.10Expired


-



-Cancelled


(545,000
)


0.15Outstanding at 29 February 2008


3,262,500



0.23Exercisable at 29 February 2008


815,625



0.23Weighted average fair value of stock options granted during the year






0.36





(F-14)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009








Number of options


Weighted average exercise priceUS$Outstanding at 1 March 2008


3,262,500



0.23Granted


-



-Exercised


-



-Expired


-



-Cancelled


(25,000
)


0.34Outstanding at 28 February 2009


3,237,500



0.23Exercisable at 28 February 2009


875,000



0.23Weighted average fair value of stock options granted during the year






-





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 weighted average assumptions:





For the
year ended
28 February
2009

For the
year ended
29 February
2008Risk free interest rate


-

2.71% to 4.17%Expected life


-

5 yearsAnnualized volatility


-

122% to 128%Expected dividends


-

0%





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.





11.
Commitments





The Company has the following commitments during the year ended 28 February 2009:





a)
The Company entered into a consulting agreement dated 9 August 2006 for the provision of financial development services. Under the terms of the agreement, the Company agreed to pay US$1,000 per month plus expenses for a term of two years and issue stock options for 1,000,000 common shares exercisable at US$0.35 per share (granted).  The agreement
may be terminated by either party before the end of the term by giving 90-day written notice.  During the year ended 28 February 2009, consulting fees of $6,076 (29 February 2008 - $6,403, 28 February 2007 - $89,278) were incurred.











Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009








b)
The Company entered into a consulting agreement dated 9 August 2006 for the provision of financial development services.  Under the terms of the agreement, the Company agreed to pay expenses incurred for a term of two years, and issue stock options for 500,000 common shares exercisable at US$0.35 per share (granted).  The agreement
may be terminated by either party before the end of the term by giving 90-day written notice.  During the year ended 28 February 2009, consulting fees of $Nil (29 February 2008 - $Nil, 28 February 2007 - $40,618) were incurred.





c)
The Company entered into a lease agreement dated 7 September 2006 for a term of three years commencing 1 November 2006 to 31 October 2009.  Under the terms of the agreement, the Company will pay monthly rent of $1,833 plus a proportionate share of operating costs.  On 30 November 2007, the monthly rent increased to $2,017 and on 30
November 2008, the monthly rent increased to $2,200. The Company shares the rentable area with related parties who reimburse the Company for two-thirds of the total monthly rental fee.  The future commitment is as follows:





$Fiscal year ending 28 February 2010


27,280





12.
Supplemental Disclosures With Respect to Cash Flows





Cumulative from inception of exploration stage on
1 March 2003 to 28 February
2009
(unaudited)


For the
year
ended
28 February
2009


For the
year
ended
29 February
2008


For the
year ended
28 February
2007$


$


$


$Cash paid during the year for interest


-



-



-



-Cash paid during the year for income taxes


-



-



-



-





During the year ended 28 February 2009, imputed interest at 15% per annum totalling $26,143 (29 February 2008 - $8,966, 28 February 2007 - $53,657) on amounts due to related parties was charged to operations and treated as donated capital (Note 7).








(F-16)
 
 Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009





13.
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:





2009
$


2008
$Loss before income taxes


(536,201
)


(2,260,291
)Canadian federal and provincial income tax rates


30.75
%


31.00
%Income tax recovery based on the above rates


(164,882
)


(700,690
)Increase due to:Non-deductible items and other


8,534



315,587Losses and temporary differences for which no future income benefit has been recognized


127,112



45,087Reduction in long-term Canadian income tax rates


29,236



340,016Income tax recovery


-



-





The components of future income taxes are as follows:





2009
$


2008
$Future income tax assetsNon-capital losses


782,945



946,526Mineral property costs


661,108



741,190Capital assets


3,010



6,801Marketable securities and other


64,306



17,220Total future income tax assets


1,511,369



1,711,737Valuation allowance


(1,511,369
)


(1,680,315
)Net future income tax assets


-



31,422Future income tax liabilitiesDebt issue costs


-



31,422Future income tax liabilities


-



31,422Net future income tax liabilities


-



-





(F-17)








Linux Gold Corp.


(An Exploration Stage Company)


Notes to Consolidated Financial Statements


(Expressed in Canadian Dollars)


28 February 2009










The Company has non-capital loss carry-forwards of approximately $3,131,780 that may be available for tax purposes.  The loss carry-forwards are all in respect of Canadian operations and expire as follows:





$2010


28,1972011


347,4282015


398,6122026


402,3602027


1,036,7152028


417,6822029


500,7863,131,780





Additionally, the Company has approximately $2,644,431 of development expenses and exploration expenditures as at 28 February 2009 which, under certain circumstances, may be utilized to reduce taxable income of future years.  The potential income tax benefits of these losses have been offset by a full valuation allowance.





14.
Financial Instruments





a)
Fair value





The carrying values of all held-for-trading and held-to-maturity instruments, represented by cash and cash equivalents, Goods and Service Tax receivable, accounts payable and accrued liabilities and amounts due to related parties, approximate their fair values because of the short-term maturity of these financial instruments.  The
aggregate fair value of all held-for-trading instruments is $13,894 (29 February 2008 - $8,236).  The aggregate carrying value and fair value of all held-to-maturity assets is $7,938 (29 February 2008 - $4,291).





Available-for-sale securities consist of common shares in a company related by common directors and is represented as marketable securities on the consolidated financial statements.  The fair value of these securities is $78,000 (29 February 2008 - $286,000) and losses included in accumulated other comprehensive loss is $268,000
(29 February 2008 - $60,000).





b)
Interest rate risk





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





c)
Credit risk





The Company’s financial asset that is exposed to credit risk consists primarily of cash and cash equivalents.  To manage the risk, cash is placed with major financial institutions.  The Company does not have significant concentrations of credit risk in regards to its amounts receivable and allows for any uncollectible
accounts on a specific identification basis based on payment history.






Linux Gold Corp.
 (An Exploration Stage Company)
 Notes to Consolidated Financial Statements
 (Expressed in Canadian Dollars)
 28 February 2009









d)
Currency risk





The Company translates the results of its foreign operations into Canadian currency using rates approximating the average exchange rate for the period.





The Company is exposed to foreign currency risk through the following financial assets and liabilities denominated in currencies other than Canadian dollars:





As at
28 February
2009


As at
29 February
2008US$


US$Cash and cash equivalents


4,296



5,213Accounts payable and accrued liabilities


85,446



233,434





As at 28 February 2009, with other variables unchanged, an approximately 10% change in exchange rates would increase/decrease pre-tax loss by $11,307.





15.
Subsequent Events





The following events occurred subsequent to 28 February 2009:





a)
On 5 March 2009, the Company and Teryl entered into an agreement to extend the expenditure date on the Fish Creek, Alaska mineral claims to 5 March 2010 (Note 5).





b)
On 27 March 2009, the Company extended the expiry date of 500,000 share purchase warrants exercisable at a price of US$0.25 per common share from 27 March 2009 to 27 March 2010 (Note 10).





c)
On 22 April 2009, a total of 75,000 stock options exercisable at a price of US$0.30 per common share expired (Note 10).





d)
On 1 June 2009, the Company extended the expiry date of 1,412,500 share purchase warrants exercisable at a price of US$0.30 per common share from 1 June 2009 to 1 June 2010 (Note 10).





e)
On 5 June 2009, the Company extended the expiry date of 4,055,000 share purchase warrants exercisable at a price of US$0.20 per common share from 5 June 2009 to 5 June 2010 (Note 10).