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Teryl Resources Corp. (CA:TRC) -- Linux Gold Corp. (Otcbb:Lnxgf)

October 21, 2003

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EXPLORING FOR GOLD IN ALASKA AND BRITISH COLUMBIA

Business Summary

Linux Gold Corp. owns a 50% joint venture interest (Teryl Resources Corp. 50%) in 30 mining claims known as the Fish Creek Prospect.

Located in the Fairbanks Mining Division in Alaska, Kinross Gold's Fort Knox mill is within 6 miles from the Fish Creek claims.

The Fort Knox mine has been in operation for several years, producing over 400,000 ounces of gold annually, at a cash cost of approximately USD 207 per ounce.

The Fish Creek Property is an excellent gold prospect which is being drilled in 2003 to test its potential to host lode and alluvial gold deposits.

History

An Italian prospector named Felix Pedro discovered gold in the Fairbanks mining district in 1902.

Between 1902 and 1993, more than 8.0 million ounces of predominately placer gold were mined in the district. In 1984, a geologist discovered visible gold in granitic hosted quartz veins on the Fort Knox property.

Between 1987 and 1991, a number of companies conducted extensive exploration work on the Fort Knox, True North and Gil properties.

In 1991, Kinam entered into a joint venture agreement with Teryl to explore the Gil property. In 1992, Kinam acquired ownership of the Fort Knox property. Construction of the Fort Knox mine and mill operations began in 1995, and were completed in 1997. Commercial production at Fort Knox was achieved on March 1, 1997. Construction of the mine was completed at a capital cost of approximately $ 373 million, which included approximately $ 28 million of capitalized interest.

Kinross' ownership of the Fort Knox mine was acquired as a result of the Kinam Merger on June 1, 1998. After acquiring ownership of the True North property in 1999, the company completed pre-production capital expenditures, primarily permitting and the building of a haulage road to the Fort Knox mill. Commercial production at True North was achieved on April 1, 2001. Pre-production capital expenditures for True North were approximately $ 29.6 million.

Geology ad Mineralization

The Fort Knox mining and exploration properties are located within the Fairbanks mining district, a southwest - northeast trending belt of lode and placer gold deposits that comprise one of the largest gold producing areas in the state of Alaska.

The Fairbanks district is situated in the northwestern part of the Yukon - Tanana Uplands. The Yukon - Tanana terrane consists of a thick sequence of Precambrian to upper Paleozoic polymetamorphic rocks dominanted by the Fairbanks Schist. It is comprised of gray to brown, fine-grained micaceous schist and micaceous quartzite. Interlayered with the Fairbanks Schist is the Cleary Sequence, a varied assemblage of metamorphic lithologies. In the northern part of the district, high-grade metamorphic rocks of the Chatanika terrane have been identified. These rocks, which are in fault contact with the Fairbanks Schist and Cleary Sequence, are thought to be Devonian to Mississippian in age, and have been metamorphosed to eclogite facies.

The dominant structural trend of the district is expressed by numerous northeast trending faults and shear zones which were important to the localization of gold mineralization.

Several intrusive bodies, ranging in age from late Cretaceous to early Tertiary, penetrate the Yukon-Tanana terrane. They generally range from ultramafic to felsic in composition, and can be distinguished from older intrusive rocks by their lack of metamorphic textures.

The Fort Knox gold deposit is hosted by the Vogt stock - a late Cretaceous-aged multi-phase granitic body that intrudes Precambrian to mid-upper Paleozoic schists of the Yukon-Tanana terrane. The surface exposure of the Vogt stock is elongate, measuring approximately 1,067 meters east-west and 610 meters north-south.

Gold occurs in and along the margins of pegmatites, quartz veins and veinlets, quartz-filled shears, and fractures within the granite. Pre-mineralization fractures, which resulted from magmatic doming, provided conduits for mineralizing fluids within the stockwork and shear zones. The stockwork veins strike predominantly east-west and dip randomly. Vein density decreases with depth. Shear zones generally strike northwest to southeast and dip moderately to the southwest.

There appear to be two distinct zones of gold distribution within the deposit: the inner zone, which is characterized by mineralization that has good continuity over considerable distances; and an outer zone, where the mineralization has shown itself to be less predictable. It appears that the differences in the continuity of the mineralization may be due to grain size changes and different phases within the stock.

Mineralization in the quartz-filled shears is distributed relatively evenly, and individual gold grains are generally less than 100 microns in size, in contrast to the stockwork veins, where gold particle size and distribution are more erratic. The mineralized zone has a very low sulfide content.

The True North gold deposits lies within the poly-metamorphic Chatanika Terrane, a klippe of eclogitic marbles, calc-magnesian schists, quartz-muscovite schists, carbonaceous phyllites and quartzites.

The mineral deposits are partially situated in a structurally complex zone that has a northeast elongated orientation that parallels the Eldorado fault. It is characterized by a series of gentle to complex folds, especially between the Eldorado fault and the sub-parallel "Neil's discontinuity", shear zones, breccias, and occasional low angle faults. Northwest of Neil's discontinuity the mineralized zones dip gently to the northwest, while south of the zone mineralization dips to the southeast. The area between Neil's discontinuity and the Eldorado fault is structurally complex, and the orientation of individual mineralized zones in this area can be highly variable.

Teryl Resources Corporation

  • Teryl is one of the main property owners in the Fairbanks Mining Division around and adjacent to Kinross' producing Fort Knox Mine and True North property.
  • Teryl's properties include the Gil, West Ridge, Fish Creek and Stepovich properties.
  • Teryl's Gil property (20% Teryl, 80% Kinross) is located adjacent to the Fort Knox mine.
  • To date, Teryl has spent $ 1.6 million on exploration that has defined a resource of 400,000 ounces of gold (10 million tons grading 0.04 ounces per ton gold).
  • The main zone that contains this resource ranges in thickness up to 80 feet and has been followed for over 2,500 feet. The zone remains open along strike and at depth.
  • The West Ridge property (100% owned by Teryl) contains two gold zones ("East" and "West" anomalies). Both anomalies contain elevated gold in soil, the West mineralization being associated with high levels of arsenic and antimony similar to the chemistry of gold mineralization found at Kinross' True North deposit (616,000 ounces of gold at 0.046 ounces per ton gold). To date, Teryl and Kinross have spent about $ 350,000 on the exploration of the West Ridge property.
  • The Fish Creek Property (50% owned by Teryl by option) is located adjacent to the north of the company's Gil Property. Elevated gold values, identified in an auger drill program, suggest the property may contain an extension of the mineralized zone found on the Gil property.
  • The Stepovich property is owned 100% by Kinross subject to a 10% net profit interest owned by Teryl. The property is adjacent to the Fort Knox gold deposit and could be readily available for production to feed the Fort Knox Mill.
  • The company believes its properties in Alaska could contain significant deposits of ore similar to that found at Fort Knox and True North. These deposits, once defined, could be readily put into production and processed at Kinross' Fort Knox mill.

Linux Gold Corp and their properties in Alaska

The Fish Creek Claims

Teryl Resources Corp. completed an option agreement with Linux for a 50% interest in the Fish Creek Claims after expending USD 500,000 on the property and issuing 200,000 shares of Teryl. Linux has the right to back in for a 25% working interest or retain a 5% net royalty interest.

Location and Access

The Fish Creek Claims are situated 20 air miles northeast of Fairbanks, Alaska and are accessible by road north along the Steese Highway to the Fairbanks Creek Road and thereafter on the Fish Creek gravel road. From the end of the road it is a one mile walk to the western boundary of the Fish Creek Claims. By the end of 1993 a road extension constructed by Amax Gold Inc. ("Amax") through the 26.7 mile turn-off point to the Polar Mining operation extended to within 100 yards of the southwestern claim boundary. Swampy conditions prelude vehicular passage over the claim area. The Fish Creek Claims are adjacent to the Gil Joint Venture Claims with Kinross Gold ("Kinross") and Teryl and is six miles from the Kinross Fort Knox Mine, now producing over 1,000 ounces of gold per day.

Land Tenure

Thirty mineral claims (1,320' x 1,320'/40 acres each) comprise the Fish Creek property. Five of the claims are one-half the size of a standard claim, while the remainder are full-sized. Portions of six of the full-sized claims have overstaked previously patented mineral titles (USMS 2134, 2145, 2070). The claims are jointly owned by Linux Gold Corp. and Keltic Enterprises, Inc. A mining lease has been granted. Teryl Resources Corp. has an option to earn a 50% interest by expending USD 500,000 and issuing 200,000 shares. Linux retains a 5% net royalty or a 25% back in after the expenditure is completed.

British Columbia

TY Gold Property

Linux has a 100% interest in 21 units in the Bralorne/Lillooet mining division in British Columbia called the TY Gold Property. The TY Gold Property is adjacent to the company's ORO Property and islocated 12 miles from the Bralorne Pioneer Gold Mine, which, since its discovery, has produced 4.1 million ounces of gold, worth some $ 1.5 billion at today's gold prices. Linux Gold Corp. now has a total of 41 units in the Bralorne area.

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

The TY Gold Property was acquired for $ 30,000 (payable over three years) and 150,000 shares of Linux Gold Corp. The property is subject to a 2% net smelter interest (NSR). The company has an option to purchase each 1% NSR for $ 1,000,000 prior to production.

ORO Property

Linux has a 100% interest in 20 mineral claim units called the ORO property in the Bralorne/Lillooet mining division, British Columbia. The ORO property is located 12 miles from the Bralorne Pioneer Gold Mine, which was one of the richest producing gold mines in Western Canada. Several EM-VLF conductive zones have been located on the ORO property. The magnetic survey shows the entire property is underlain with sediments and volcanics, which are important geologic structures for the placement of gold bearing quartz veins.

The ORO property was acquired for $ 10,000 and 100,000 shares of the company and is subject to a 2% net smelter return. Linux Gold has the option to purchase back each 1% NSR return for $ 1,000,000 prior to production.

Recent News: LINUX GOLD CONTINUES DRILLING IN THE BRALORNE MINING DISTRICT, B.C. Linux Gold has announced that it has continued a second phase of drilling on the TY Gold property.

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

Linux Gold Corp. has an option on a 100% interest in two gold prospects in the Bralorne Gold mining area, BC, located near the Bralorne Pioneer Mine. The Bralorne Pioneer Mine has produced over 4.1 million ounces of gold during the life of the mine. Linux Gold Corp. also owns a 50% interest in 30 mineral claims known as the Fish Creek Prospect, located in the Fairbanks Mining Division in Alaska. Linux Gold Corp. optioned to Teryl Resources Corp. (TRC-V) a 50% interest in the Fish Creek claims by expending USD 500,000 over three years. Linux Gold Corp. retains a 5% net smelter return or may convert into a 25% working interest. The Kinross Fort Knox mill is within 6 miles from the Fish Creek claims. For more information, please visit www.linuxgoldcorp.com

Fundamental Considerations

Speculators with an appetite for stepping in at the bottom may just have such an opportunity with Linux Gold Corp. Through its association with Teryl Resources and Teryl's JV with Kinross respectively, Linux, with its tiny market capitalization of only 2.4 million dollars, could see its share price multiply in case their exploration efforts are successful - for which, of course, there is no guarantee.

But, Linux Gold is located in a region of Alaska and British Columbia where, historically, mining operations have produced results: so the mines may indeed yield the hoped for results. An investment in these shares is risky, but could be highly rewarding.

Technical Considerations

The gold price remains in a solid up-trend. A price target of $ 380 to $ 420 over the next six months seems to be attainable. Strong resistance exists around $ 400 - $ 425, but will eventually be overcome.

The shares of Teryl seem to be getting ready for an important move, once the resistance at 50 cents is definitely left behind.

Linux, controlled by the same management as Teryl, seems also to be ready for a break-out over the resistance zone at 10 cents.

Our recommendation for both companies:
BUY AS A HIGH RISK, HIGH REWARD SPECULATION!


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