Converted by EDGARwiz

AMENDED

As of October 30, 2009

FORM 51-102

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF OPERATING RESULTS AND FINANCIAL CONDITION OF

TERYL RESOURCES CORP.

FOR THE YEAR ENDED MAY 31, 2009

Management’s Responsibility for Financial Statements

The preparation of the financial statements, conforming with GAAP, requires the Company's management to

make estimates and assumptions in order to make a determination of the future values for certain assets or

liabilities. Management believes such estimates have been based on careful judgments and have been

properly reflected in the accompanying financial statements. Actual results may differ from those estimates.

Management maintains a system of internal controls to provide reasonable assurance that the Company’s

assets are safeguarded and to facilitate the preparation of relevant and timely information.

1.1 Dated as of September 28, 2009

The following discussion of the results of operations of the Company for the fiscal year ended May 31, 2009,

and in comparison to the same period of the prior year, should be read in conjunction with the Company’s

Audited Financial Statements and accompanying notes for the years ended May 31, 2009 and 2008.

1.2 Overall Performance

Teryl Resources Corp. (“Teryl” or the “Company”) is engaged in the acquisition, exploration and

development of natural resource properties. The Company currently has mineral property interests in

Arizona, Alaska and British Columbia. The main exploration and development work over the last several

years has taken place on the Gil claims (gold prospect) located in the Fairbanks Mining District, Alaska. The

Gil joint venture, with Kinross Gold Corporation, is divided into several mineralized zones including the

Main Gil and the North Gil. The Gil claims are adjacent to the producing Fort Knox deposit owned by

Kinross Gold Corporation. Teryl, Inc., a subsidiary of the Company, owns a 20% working interest and

Kinross Gold has an 80% working interest in the Gil joint venture.

The Company, through its subsidiary, Teryl, Inc., owns a 100% interest in the West Ridge claims, subject to

a 1% NSR to the State of Alaska, located in the Fairbanks Alaska mining district. Also through its subsidiary,

Teryl, Inc., the Company owns 28 claim blocks, consisting of 602 acres in the Warren Mining District,

Cochise County, Arizona.

Period Highlights

Mining and Exploration Operations

Gil Mineral Claims

The Company owns a 20% interest in the Gil Mineral Claims. Kinross Gold Corporation owns the other 80%

of the claims and Kinross acts as operator of the project. Kinross and the Company each contribute to annual

exploration costs, if any, on an 80:20 ratio with net profits distributed in that same proportion in the event of

production.

Kinross, as the operator of the Gil Mineral Claims, determines whether exploration work will occur from

year to year. During the fiscal year ended May 31, 2009 a total of $120,241 ($104,476 US) was spent on the

Gil Mineral Claims. No expenditures or annual exploration expenses were incurred by the Company during

the fiscal years ended May, 2008 or 2007 as Kinross did not provide us with a formal Budget and work

program for these fiscal years. The Company was required to pay its 20% share of expenses during fiscal

2006, which amounted to $ 111,127 ($98,916 US).

In March, 2009, our joint venture partner, Fairbanks Gold Mining, Inc. (FGMI), a subsidiary of Kinross Gold

Corporation, reported the Gil joint venture exploration summary.

-1-

AMENDED

As of October 30, 2009

The 2008 field season on the Gil Joint Venture claim block involved exploration of the Sourdough Ridge and

Last Chance areas. At Last Chance, 103 soil samples were collected using a Bombardier-mounted auger. Soil

samples were in-filled on the eastern part of the area previously sampled. At Sourdough Ridge, RC drilling

(4,477 feet total) of nine holes was aimed at increasing the potential resource. RC holes were collared on

promising targets identified from previous soil, trench, and drill results, and were predominantly aimed at

intercepting mineralized calc-silicate horizons and quartz veins. Drill results from Sourdough Ridge are

encouraging and are worthy of future work.

The goal of the Kinross-FGMI 2008 Gil Joint Venture (Gil JV) exploration program was twofold, 1) to drill

ten RC exploration holes that could increase the potential resource of the claim block on Sourdough Ridge,

and 2) to in-fill the existing soil sample grid on the Last Chance property. Drilling was focused on the crest

of Sourdough Ridge, and holes were collared on promising targets identified from previous soil, trench, and

drill results.

Work Accomplished in 2008

Sourdough Ridge-

Between August 13 and October 30, FGMI drilled 4,477 feet in nine holes, using a combination of hammer

(shallow) and tri-cone (deep) bits. The drilling was designed to target soil anomalies or calc-silicate bodies

identified through previous resource modeling. Assay analyses were done by Alaska Assay Laboratories

using 50-gram fire assay for gold.

The best intersection from the 2008 drilling program from hole GVR08-505 included below:

Interval (feet)

Assay Results Opt/Au

80-100

20 feet of .022

120-145

25 feet of .018

230 - 250

20 feet of .021

265-275

10 feet of .026

375 - 415

40 feet of .061

FGMI approved the 2009 exploration budget of US$1,644,000 as follows:

The 2009 Gil Project Exploration Program has three major goals:

1. Ground magnetometer survey concentrating on Sourdough Ridge.

2. Delineate mineralized zones and establish a resource base at Sourdough Ridge.

3. Expand resource at North Gil.

The goal of the 2009 program is to further delineate the strike extension of the mineralized zone, and to infill

between step-out holes, in order to gain a better understanding of ore-zone continuity, and to establish a

resource base. The 2009 work plan calls for ground geophysics, 10,000 feet of RC drilling, and 6,000 feet of

HQ-NQ core drilling. Drillhole collar locations will be selected upon completion of the geophysical survey.

In addition, samples will be collected for a preliminary column leach study.

The geophysical survey began in March 2009 and the remainder of the program began in mid-April, and will

extend through the end of 2009. The bulk of the expenditures will occur between March and September,

2009.

-2-

AMENDED

As of October 30, 2009

West Ridge Claims

The West Ridge Property is made up of 53 State mining claims held by the Company north of Fairbanks,

Alaska, a distance of 22 miles by road. The West Ridge property adjoins Kinross Gold Corp.’s True North

gold deposit and lies approximately eight miles northwest of the producing Fort Knox gold mine. The

property was submitted to Kinross early in the summer of 1998 and a joint venture was signed and later

terminated. No field work was conducted on the West Ridge property during the fiscal years ended 2009 and

2008.

Fish Creek Claims

The Company owns a 50% joint venture interest in 30 State of Alaska mining claims, comprising 1,032 acres,

known as the Fish Creek Prospect, in the Fairbanks Mining District in Alaska, located 25 miles north of

Fairbanks, Alaska.

These claims are subject to an option agreement with Linux Gold Corp. The Company 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 and by paying annual rental

to the State of Alaska. The Company is permitted to conduct exploration by drilling. The Company currently

holds 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.

On January 25, 2008 the Company announced that it would be arranging a drill program on the Fish Creek

claims in Alaska to test several gold geophysical anomalies, from the geophysical survey completed by Fugro

Airborne Survey, Inc. The drilling has been postponed due to lack of drills available in Alaska in 2008.

The technical disclosure for the Fish Creek Property is prepared under the supervision of Curt Freeman, a

qualified person as that term is defined in NI 43-101, Standards of Disclosure for Mineral Projects.

Gold Hill Property, Arizona

On June 10, 2006, the Company and Frederic & John Rothermel (the Vendors) entered into an agreement

whereby the Company purchased a 100% interest in the Gold Hill Patented Claim Group located in the

Warren Mining District, Cochise County, Arizona, USA, subject to a 10% Net Profit royalty to the vendors,

for the following considerations:



$5,655 ($ 5,000 US) for a 90 day option and $ 11,268 ($ 10,000 US) to complete a due diligence within

90 days (paid),



$7,000 ($ 6,000 US) paid January 5, 2007 to the Vendors, with $ 6,000 US payments to be made each

quarter, (all required quarterly payments have been paid),



to complete a $ 50,000 US first phase exploration program conducted by the Vendors,



$ 250,000 US per year upon commencement of production.

On August 1, 2006 six additional unpatented lode mining claims were filed with the Arizona State office of

the Bureau of Land Management on behalf of the Company. On October 16, 2006, the Company exercised its

option and have a 10 year option to purchase up to a 10% net profit interest from the Vendors for US$1.5

million per 5% net profit interest, therefore, having an option on a 100% interest in the Bisbee, Arizona

patented claims. The Gold Hill Project is located approximately 4.5 miles southeast of Bisbee Arizona in the

Warren Mining District of Cochise County (Township 23 South, Range 25 East sections 25 30, 31, and 32).

The Gold Hill Project consists of fourteen patented claims comprising 250 acres.

On July 3, 2008 the Company announced that it has terminated the principle agreement for the Gold Hill

Prospect. Following compilation and review of results of mapping, geochemical sample results and drilling

carried out to July 2008, it was determined that there was insufficient economic mineralization to justify

further exploration expenditures. Property and exploration costs of $273,889 were written off.

-3-

AMENDED

As of October 30, 2009

The Company has staked 8 claims in Arizona (Cochise County).

Oil and Gas Properties

Jancik, C-S and Herrmann Wells, Fayette County, Texas

The Company owns 6.5% working interest (4.680% net revenue interest) in the Peters No. 1 Well, in Fayette

County, Texas, and a 7.5% working interest (5.79375% net revenue interest) in each of the C-S #1, Jancik #2

and Herrmann #4 wells, located in Burleson County, Texas. During the fiscal year ended May 31, 2009

revenues of $15,582 ($13,478 US) were recorded from the Texas properties.

Gas Wells, Knox County, Kentucky

On April 7, 2008, the Company entered into an agreement with IAS Energy, Inc., a company with common

directors, to purchase 40% the remaining interest (subject to 40% net revenue interests to others), in the three

gas wells located in Knox and Laurel Counties, Kentucky: the Ken Lee #1 (May 18/06) natural gas well for

$103,045 ($92,500 US); in the Elvis Farris #2 (June 8/06) natural gas well for $104,461 ($92,500 US); and in

the Clarence Bright #1 (July 31/06) natural gas well for $104,673 ($92,500 US).

In consideration, the Company received an initial payment of $25,000 and the balance was to be determined

after an independent valuation report prepared by a qualified petroleum geologist. Subsequent to the fiscal

year ended May 31, 2008, both parties agreed to indefinitely suspend the agreement due to the difficulty of

obtaining an independent valuation report due to the vertical fracture of the wells. As such, the $25,000 paid

to IAS will be applied against future revenue until the balance is fully depleted.

As there has been no determination as to the gas reserves done on any of the wells, the wells were being

depleted straight-line over 10 years, which is their estimated pay-out term. However, due to new reporting

regulations, these wells were written off at May 31, 2008, as there were no proven reserves.

The new operator, Young Oil and Gas, has gone into receivership. Prior to that, the Company earned $5,286

in well revenues during the fiscal year ended May 31, 2009.

Subsequent Events

Gil Mineral Claims

In July 2009, preliminary significant gold results were received from FGMI from the reverse circulation

drilling program. A total of 17 reverse circulation drill holes were completed from the North Gil and the

Sourdough zones. The best holes reported were Hole 513 on the Sourdough which assayed 60 feet of .05

ounces per ton gold from 15 to 75 feet and 15 feet of .04 ounces per ton (approx. 1.13 grams per ton) gold

from 105 feet to 120 feet.

Hole 521 also on the Sourdough zone assayed 65 feet of .1 ounces per ton (approx. 3 grams per ton) gold

from 220 feet to 285 feet.

In August 2009, additional significant gold assays were received from FGMI. A total of 33 R/C drill holes

and 6 core drill holes have been completed during the 2009 exploration program. Certified assays are

pending on all drill holes. The main focus of the drilling is on the Sourdough Ridge zone, which is similar in

geology to the Main Gil zone. The Main Gil zone has been drilled extensively in the past over a 3,000 ft

strike length with an average grade of .04 ounces gold per ton.

-4-

AMENDED

As of October 30, 2009

Preliminary assays from the following holes are as follows:

Hole Number Feet

Oz. P/T Gold

GVR-09-540

105' (from 145’-250’)

.14

GVR-09-534

75’ (from 15’-90’)

.09

GVR-09-523

110’ (from 125’-230’)

.04

As of July 2, 2009 the Gil Project is an advanced exploration program controlled by Teryl Resources and

Kinross Gold Corporation. The exploration area is located 19 miles north of Fairbanks, Alaska and 8 miles

northeast of Alaska’s largest gold producer, the Fort Knox Mine (owned by Kinross Gold). The Gil Project

consists of three adjacent prospect areas; the Main Gil Zone, the North Gil Zone and Sourdough Ridge.

A total of US$9,000,000 has been expended by the joint venture partners between 1992 and 2009, with Teryl

and Kinross accounting for 20% and 80% respectively of total expenditures. Lode prospects at the Gil have

been tested by 86 core holes totaling 33,354 feet, 327 reverse circulation drill holes, totaling 93,804 feet, and

21 trenches with a combined length of approximately 7,420 feet.

Management believes the current gold assay results are extremely favorable compared to the adjacent

producing property, Fort Knox Mine, with its values of .03 ounces per ton.

On July 15, 2009, the Company entered into two promissory note agreements with a related party for

$60,000 and US$27,000 to be paid on or before June 30, 2010. The two promissory notes have an interest

rate of 8% per annum to be paid monthly commencing on August 15, 2009. The principal amounts are

convertible into shares of the Company at $0.20 per share upon regulatory approval. As at August 31, 2009,

the equity component of the convertible loan was valued at $2,770 (2008 - $nil). As of August 31, 2009,

$596 (2008 - $nil) of interest has been paid to the lender.

On October 30, 2009, Larry Gold was appointed to the board of directors of the Company. Larry Gold is a

self employed barrister and solicitor whose practice is located in downtown Vancouver. A graduate of the

University of British Columbia law school, he was called to the bar in 1974. He has practiced in several areas

of law including securities, commercial and civil and criminal litigation. Over the past 5 years his area of

practice has mainly focused on commercial litigation and consulting related to business contracts and other

business related matters.

Risks and Uncertainties

The Company is subject to a number of risk factors due to the nature of its business and the present stage of

development. The following risk factors should be considered:

RISK FACTORS RELATED TO OUR BUSINESS

The Company is subject to a number of risk factors due to the nature of its business and the present stage of

development. The following risk factors should be considered:

General

The Company is listed on the TSX Venture Exchange and trades on the OTC BB. We are engaged in the

acquisition, exploration and development of natural resource properties. We currently have mineral property

interests in Arizona, Alaska and British Columbia. The main exploration and development work over the last

several years has taken place on the Gil claims (gold prospect) located in the Fairbanks Mining District,

Alaska.

During the year ended May 31, 2009, the Company received $115,875 toward the completion of a $159,000

private placement which closed on June 8, 2009. These proceeds will be allocated to the administrative

operations of the Company and toward exploration and development of the Gil Mining Claims.

-5-

AMENDED

As of October 30, 2009

The amount of the Company’s exploration and development and administrative expenditures is related to the

level of financing activities that are being conducted. Consequently, the Company may be unable to fulfill its

commitments to Fairbanks Gold Mining, Inc. There may not be predictable or observable trends in the

Company’s business activities and comparisons of financial operating results with prior years may not be

meaningful.

Trends

Our financial success is dependent upon the ability to bring our mineral properties to production. There can

be no assurances that our properties have defined ore bodies with reserves and resources, and our proposed

exploration programs are only an exploratory search for ore. Other than as disclosed herein, the Company is

not aware of any trends, uncertainties, demands, commitments or events which are reasonably likely to have

a material effect on the Company’s sales or revenues, income from continuing operations, profitability,

liquidity or capital resources, or that would cause reported financial information not necessarily to be

indicative of future operating results of financial condition.

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 continue our exploration and

development and operations. 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 depends on our ability to obtain additional required financing or obtaining joint venture partners.

Our cash needs may vary materially from those now planned because of results of exploration or changes in

the focus and direction of our exploration program, results of laboratory and field testing, requirements of

regulatory agencies and other factors.

We have no credit facility or other committed sources of capital. To the extent capital resources are

insufficient to meet future capital requirements, we will have to raise additional funds to continue our

development and operations. There can be no assurance that such funds will be available on favorable terms,

or at all. To the extent that additional capital is raised through the sale of equity or convertible debt

securities, the issuance of such securities could result in dilution to our shareholders. If adequate funds are

not available, we may be required to curtail operations significantly or to obtain funds on unattractive terms.

Our inability to raise capital would have a material adverse effect on us.

As noted in our audited consolidated financial statements for the year ended May 31, 2009 we have incurred

significant operating losses and have an accumulated deficit of $9,530,364 at May 31, 2009. Furthermore, we

have a working capital deficiency of $393,518 as at May 31, 2009. This 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 meet our liabilities as

they become payable and satisfy working capital and operating.

Management and directors

The Company is dependent on a relatively small number of directors and officers. The loss of certain

members of our management and staff could adversely affect our business and the successful exploration,

development and production of our mineral properties. Our present officers and directors have other full-

time positions or part-time employment unrelated to our business. Some officers and directors will be

available to participate in management decisions on a part-time or as-needed basis only. Our management

may devote time to other companies or projects which may compete directly or indirectly with us. We do not

have “key man” life insurance on such officers and currently have no plans to obtain such assurance.

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 Linux Gold Corp., a public natural resource exploration company that shares office space and

administrative staff with the Company. We entered into an agreement with Linux Gold Corp. whereby the

Company could earn up to 50% of the Fish Creek claim. In addition, Mrs. Robertson and Mr. Robertson are

-6-

AMENDED

As of October 30, 2009

directors and officers of SMR Investments Ltd., which, together, hold approximately 15.75% of the Common

Shares of the Company. 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. 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.

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, and presently, during the current economic downtown, 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.

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 yield any new reserves or

result in any commercial mineral operations.

We face strong competition from larger oil and gas companies, which could harm our business and ability

to operate profitably.

The oil and gas exploration and production business is highly competitive. Many of our competitors have

substantially larger financial resources, staffs and facilities. Our competitors in the United States include

numerous major oil and gas exploration and production companies, especially major oil and gas companies

such as BP Amoco, Exxon/Mobil, Texaco/Shell and Conoco/Phillips. These major oil and gas companies are

often better positioned to obtain the rights to exploratory acreage for which we may compete. If we are

unable to adequately address our competition, including, but not limited to, finding ways to secure profitable

oil and gas producing properties, our ability to earn revenues will suffer.

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 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; 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

-7-

AMENDED

As of October 30, 2009

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 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.

Any oil and gas we may discover or produce may not be readily marketable at the time of production,

delaying our ability to generate meaningful revenue.

Crude oil, natural gas, condensate and other oil and gas products are generally sold to other oil and gas

companies, government agencies and other industries. The availability of ready markets for oil and gas that

we might discover and the prices obtained for such oil and gas depend on many factors beyond our control,

including: the extent of local production and imports of oil and gas; the proximity and capacity of pipelines

and other transportation facilities; fluctuating demand for oil and gas; the marketing of competitive fuels; and

the effects of governmental regulation of oil and gas production and sales. Natural gas associated with oil

production is often not marketable due to demand or transportation limitations and is often flared at the

producing well site. Pipeline facilities do not exist in certain areas of exploration and, therefore, any actual

sales of discovered oil and gas might be delayed for extended periods until such facilities are constructed.

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

-8-

AMENDED

As of October 30, 2009

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 TSX Venture Exchange and the OTC

Bulletin Board and that market is extremely volatile.

There is only a limited public market for our common shares on the TSX Venture Exchange and the OTC

Bulletin Board, and there is a risk that a broader or more active public trading market for our common shares

will never develop or be sustained, or that current trading levels will not be sustained. The market price for

the common shares on the TSX Venture Exchange and 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.

1.3 Selected Annual Information

The following information is derived from our financial statements for each of the three most recently

completed financial years:

May 31, 2009

May 31, 2008

May 31, 2007

Net income or (loss) before discontinued

items or extraordinary items

- total

(454,573)

(1,142,796)

(465,540)

- per share undiluted

(0.01)

(0.03)

(0.01)

- per share diluted

(0.01)

(0.03)

(0.01)

Net income or loss after discontinued

operations

- total

(454,573)

(1,142,796)

(465,540)

- per share undiluted

(0.01)

(0.03)

(0.01)

- per share diluted

(0.01)

(0.03)

(0.01)

Total assets

3,374,985

3,486,056

3,562,296

Total long-term financial liabilities

$nil

$ nil

Cash dividends declared per share

$nil

$ nil

The loss for the year decreased from 2008 to 2009 as a result of lower general and administrative expenses

and reduced amounts written off for mineral properties, oil and gas wells and exploration expenditures. The

Company’s assets decreased during this period due to a reduction in the cash balance over the prior year.

-9-

AMENDED

As of October 30, 2009

1.4 Results of Operations

The following analysis of the Company's operating results for the fiscal year ended May 31, 2009 includes a

comparison against the same period for the previously completed financial year ended May 31, 2008.

Revenue

The Company experienced a reduction in revenues from oil and gas sales from $30,749 in 2008 to $20,868 in

2008. This is the result of the operator of the Kentucky gas wells, Young Oil and Gas, going into

receivership during the fiscal year.

Expenses

Year ending May 31

Variance

2009

2008

(Percentage)

Operating expenses consist of the following:

Amortization of equipment

3,030

3,987

(24.0)

Bad debts

15,377

100.0

Filing and regulatory fees

16,785

58,530

(71.3)

Foreign exchange loss (gain)

(9,938)

2,678

471.1

Management and directors fees

110,189

76,284

44.4

Office and sundry

16,446

28,637

(42.6)

Office rent and utilities

15,471

13,325

16.1

Oil and gas production, royalties and other

12,607

10,917

15.5

Professional fees

110,201

89,476

23.2

Publicity, promotion and investor relations

97,415

203,580

(52.1)

Secretarial and employee benefits

45,635

24,630

85.3

Stock-based compensation

12,474

21,311

(41.5)

Telephone

11,261

11,560

(2.6)

Transfer agent fees

8,994

8,959

0.01

Travel, auto and entertainment

21,702

35,725

(39.3)

475,042

578,682

(17.9)

Results of Operations for the year ended May 31, 2009 (“2009”) compared to year Ended May 31, 2008

(“2008”)

For the year ended May 31, 2009, the Company realized a net loss of $454,573 or $0.01 per share, as

compared to a net loss of $1,142,796 or $0.03 per share for the year ended May 31, 2008. This decrease in

net loss is mainly the result of lower general and administrative expenses and reduced amounts written off for

mineral properties, oil and gas wells and exploration expenditures.

Total general and administrative expenses decreased from $578,682 in 2008 to $475,042 in 2009.

Amortization of equipment decreased from $3,987 in 2008 to $3,030 in 2009 as there was a lower cost base

from which to depreciate. There were no purchases or disposals of equipment during the fiscal year. Bad

debts expense increased to $15,377 in 2009 from $nil in 2008. With Young Oil and Gas in receivership and

infrequent receipts from the operator of the other wells, the Company made the decision to set up an

allowance against the oil and gas revenues. Filing and regulatory fees decreased from $58,530 in 2008 to

$16,785 in 2009. The majority of the expenditures in 2008 were related to getting the Company listed on the

OTC-BB and Frankfurt stock exchanges. No similar expenses were incurred in 2009. The strengthening

Canadian dollar resulted in a foreign exchange gain of $9,938 in 2009 compared to a loss of $2,678 in 2008.

Management and directors’ fees increased to $110,189 in 2009 from $76,284 in 2008. The difference is

mainly the result of an increase in the number of staff and the dollar amounts of wages and benefits paid, as

well as the addition of an individual responsible for financial reporting and compliance. Office and sundry

expense decreased from $28,637 in 2008 to $16,446 in 2009. Courier, postage costs and related office

expenses were higher in 2008 as a result of costs incurred obtaining the OTC-BB and Frankfurt stock

exchange listings. Office rent and utilities increased to $15,471 in 2009 from $13,325 in 2008 as the result of

a modest increase in rent in the latter half of 2009. Professional fees increased to $110,201 in 2009 from

10- -

AMENDED

As of October 30, 2009

$89,476 in 2008. Legal fees declined by $20,783 as a result of decreased work relating to the OCT-BB and

Frankfurt stock exchange listings. This was offset by an increase in accounting and auditing fees of $41,508

resulting from a change in accounting service providers during the year and an increase in audit fees due to

the addition of US reporting requirements. Publicity, promotion and investor relations decreased from

$203,580 in 2008 to $97,415 in 2009 as a result of reduced promotional efforts in light of the economic

downturn and related difficulties raising capital. Secretarial and employee benefits increased to $45,635 in

2009 compared to $24,630 in 2008. The difference is mainly the result of an increase in the number of staff

and the dollar amounts of wages and benefits paid. Stock-based compensation decreased from $21,311 in

2008 to $12,474 in 2009 due to fewer stock options vesting in the current fiscal year. Telephone expense

remained virtually the same as in the prior year, declining to $11,261 in 2009 from $11,560 in 2008.

Transfer agent fees also remained virtually the same, increasing only slightly to $8,994 in 2009 from $8,959

in 2008. Travel, auto and entertainment fees decreased from $35,725 in 2008 to $21,702 in 2009, resulting

from reduced promotional activity in the Company.

In addition to the decrease in general and administrative expenses, there was also a reduction in other income

(expenses) for the 2009 fiscal year. Interest income decreased from $3,426 in 2008 to $1,487 in 2009 as a

result of lower cash balances in the Company. Write-offs of oil and gas and mineral properties were

$313,483 and $60,705, respectively in 2008. There were no comparable write-offs in 2009.

Recoverable expenditures increased to $26,578 in 2009 from $nil in 2008. In 2008, the company wrote-off

$26,578 ($25,000 US) due from IAS Energy, Inc. as a result of the suspension of the agreement to purchase

the remaining 40% interest in the three gas wells located in Kentucky. During fiscal 2009, it was decided

that the amount will be applied against future revenue until the balance is fully depleted, resulting in the

receivable from IAS being reinstated and designated as recoverable. Exploration expenditures written off

decreased from $213,184 in 2008 to $15,857 in 2009. In 2008, expenditures amounting to $213,184 were

written off by the Company as there were no proven reserves. In 2009, similar expenditures of $15,857 on

properties with no proven reserves were also written off.

During the year ended May 31, 2009 the Company raised $114,281 through subscriptions to its common

shares, compared to $1,217,908 raised from the issuance of common shares for cash during the year ended

May 31, 2008.

The Company received net advances from related parties of $12,982 during the year ended May 31, 2009,

compared to net repayments to related parties of $144,311 during the same period in 2008.

Results of Operations for the three months ended May 31, 2009 (“2009”) as compared to the three

months ended May 31, 2008 (“2008”)

For the three month period ended May 31, 2009, the Company realized a net loss of $152,928 or $0.01 per

share, as compared to a net loss of $774,025 or $0.02 per share for the same three month period in the prior

year. This decrease in net loss is mainly the result of lower general and administrative expenses and reduced

amounts written off for mineral properties, oil and gas wells and exploration expenditures.

Total general and administrative expenses decreased from $219,998 in 2008 to $154,659 in 2009.

Amortization of equipment decreased from $997 in 2008 to $757 in 2009 as there was a lower cost base from

which to depreciate. There were no purchases or disposals of equipment during the three month period. Bad

debts expense increased to $15,377 in 2009 from $nil in 2008. With Young Oil and Gas in receivership and

infrequent receipts from the operator of the other wells, the Company made the decision to set up an

allowance against the oil and gas revenues. Filing and regulatory fees decreased from $5,460 in 2008 to

$2,330 in 2009. The majority of the expenditures in 2008 were related to getting the Company listed on the

OTC-BB and Frankfurt stock exchanges. No similar expenses were incurred in 2009. The strengthening

Canadian dollar resulted in a foreign exchange gain of $4,449 in 2009 compared to a loss of $779 in 2008.

Management and directors’ fees remained nearly the same, decreasing only slightly from $33,715 in 2008 to

$31,255 in 2009. Office and sundry expense increased from $991 in 2008 to $3,762 in 2009. Courier,

postage costs and related office expenses were higher in the fourth quarter of 2009 as a result of costs

incurred related to a private placement that closed subsequent to the end of the fiscal year. Office rent and

utilities increased slightly to $3,826 in 2009 from $3,163 in 2008 as the result of a modest increase in rent in

11- -

AMENDED

As of October 30, 2009

the latter half of 2009. Professional fees increased to $54,477 in 2009 from $20,897 in 2008, primarily due

to an increase in accounting and auditing fees of resulting from a change in accounting service providers

during the year and an increase in audit fees due to the addition of US reporting requirements. Publicity,

promotion and investor relations decreased from $98,043 in 2008 to $11,197 in 2009 as a result of reduced

promotional efforts in light of the economic downturn and related difficulties raising capital. Secretarial and

employee benefits increased to $13,750 in 2009 compared to $10,439 in 2008. The difference is mainly the

result of an increase in the number of staff and the dollar amounts of wages and benefits paid. Stock-based

compensation decreased from $21,311 in 2008 to $12,474 in 2009 due to fewer stock options vesting in the

current fiscal year. Telephone expense decreased significantly in the fourth quarter of 2009, declining to

$3,495 in 2009 from $11,560 in 2008. This is the result of a reclassification made in the prior fiscal period to

bring the financial statements in line with the current presentation. Transfer agent fees decreased to $271 in

2009 from $1,940 in 2008 due to less stock transfer activity in the current three month period. Travel, auto

and entertainment fees decreased from $10,703 in 2008 to $6,137 in 2009, resulting from reduced

promotional activity in the Company.

In addition to the decrease in general and administrative expenses, there was also a reduction in other income

(expenses) for the 2009 fiscal year. Interest income decreased from $3,277 in 2008 to $25 in 2009 as a result

of lower cash balances in the Company. Write-offs of oil and gas and mineral properties were $313,483 and

$60,705, respectively in 2008. There were no comparable write-offs in 2009. Exploration expenditures

written off decreased from $213,184 in 2008 to $2,287 in 2009. In 2008, expenditures amounting to

$213,184 were written off by the Company as there were no proven reserves. In 2009, similar expenditures

of $2,287 on properties with no proven reserves were also written off.

During the three months ended May 31, 2009 the Company raised $114,281 through subscriptions to its

common shares, compared to $1,217,908 through the issuance of common shares for cash during the three

months ended May 31, 2008.

The Company received net advances from related parties of $52,389 during the three months ended May 31,

2009, compared to net repayments to related parties of $193 during the same period in 2008.

Significant Projects without Operating Revenue

Mining and Exploration Operations

Gil Mineral Claims

The Company owns a 20% interest in the Gil Mineral Claims. Kinross Gold Corporation owns the other 80%

of the claims and Kinross acts as operator of the project. Kinross and the Company each contribute to annual

exploration costs, if any, on an 80:20 ratio with net profits distributed in that same proportion in the event of

production.

Kinross, as the operator of the Gil Mineral Claims, determines whether exploration work will occur from

year to year. During the fiscal year ended May 31, 2009 a total of $120,241 ($104,476 US) was spent on the

Gil Mineral Claims. No expenditures or annual exploration expenses were incurred by the Company during

the fiscal years ended May, 2008 or 2007 as Kinross did not provide us with a formal Budget and work

program for these fiscal years. The Company was required to pay its 20% share of expenses during fiscal

2006, which amounted to $ 111,127 ($98,916 US).

In March, 2009, our joint venture partner, Fairbanks Gold Mining, Inc. (FGMI), a subsidiary of Kinross Gold

Corporation, reported the Gil joint venture exploration summary.

The 2008 field season on the Gil Joint Venture claim block involved exploration of the Sourdough Ridge and

Last Chance areas. At Last Chance, 103 soil samples were collected using a Bombardier-mounted auger. Soil

samples were in-filled on the eastern part of the area previously sampled. At Sourdough Ridge, RC drilling

(4,477 feet total) of nine holes was aimed at increasing the potential resource. RC holes were collared on

promising targets identified from previous soil, trench, and drill results, and were predominantly aimed at

12- -

AMENDED

As of October 30, 2009

intercepting mineralized calc-silicate horizons and quartz veins. Drill results from Sourdough Ridge are

encouraging and are worthy of future work.

The goal of the Kinross-FGMI 2008 Gil Joint Venture (Gil JV) exploration program was twofold, 1) to drill

ten RC exploration holes that could increase the potential resource of the claim block on Sourdough Ridge,

and 2) to in-fill the existing soil sample grid on the Last Chance property. Drilling was focused on the crest

of Sourdough Ridge, and holes were collared on promising targets identified from previous soil, trench, and

drill results.

Work Accomplished in 2008

Sourdough Ridge-

Between August 13 and October 30, FGMI drilled 4,477 feet in nine holes, using a combination of hammer

(shallow) and tri-cone (deep) bits. The drilling was designed to target soil anomalies or calc-silicate bodies

identified through previous resource modeling. Assay analyses were done by Alaska Assay Laboratories

using 50-gram fire assay for gold.

The best intersection from the 2008 drilling program from hole GVR08-505 included below:

Interval (feet)

Assay Results Opt/Au

80-100

20 feet of .022

120-145

25 feet of .018

230 - 250

20 feet of .021

265-275

10 feet of .026

375 - 415

40 feet of .061

FGMI approved the 2009 exploration budget of US$1,644,000 as follows:

The 2009 Gil Project Exploration Program has three major goals:

1. Ground magnetometer survey concentrating on Sourdough Ridge.

2. Delineate mineralized zones and establish a resource base at Sourdough Ridge.

3. Expand resource at North Gil.

The goal of the 2009 program is to further delineate the strike extension of the mineralized zone, and to infill

between step-out holes, in order to gain a better understanding of ore-zone continuity, and to establish a

resource base. The 2009 work plan calls for ground geophysics, 10,000 feet of RC drilling, and 6,000 feet of

HQ-NQ core drilling. Drillhole collar locations will be selected upon completion of the geophysical survey.

In addition, samples will be collected for a preliminary column leach study.

The geophysical survey began in March 2009 and the remainder of the program began in mid-April, and will

extend through the end of 2009. The bulk of the expenditures will occur between March and September,

2009.

In July 2009, preliminary significant gold results were received from FGMI from the reverse circulation

drilling program. A total of 17 reverse circulation drill holes were completed from the North Gil and the

Sourdough zones. The best holes reported were Hole 513 on the Sourdough which assayed 60 feet of .05

ounces per ton gold from 15 to 75 feet and 15 feet of .04 ounces per ton (approx. 1.13 grams per ton) gold

from 105 feet to 120 feet.

Hole 521 also on the Sourdough zone assayed 65 feet of .1 ounces per ton (approx. 3 grams per ton) gold

from 220 feet to 285 feet.

13- -

AMENDED

As of October 30, 2009

In August 2009, additional significant gold assays were received from FGMI. A total of 33 R/C drill holes

and 6 core drill holes have been completed during the 2009 exploration program. Certified assays are

pending on all drill holes. The main focus of the drilling is on the Sourdough Ridge zone, which is similar in

geology to the Main Gil zone. The Main Gil zone has been drilled extensively in the past over a 3,000 ft

strike length with an average grade of .04 ounces gold per ton.

Preliminary assays from the following holes are as follows:

Hole Number Feet

Oz. P/T Gold

g P/T Gold

GVR-09-540

105' (from 145’-250’)

.14

4.00

GVR-09-534

75’ (from 15’-90’)

.09

2.50

GVR-09-523

110’ (from 125’-230’)

.04

1.10