TROJAN GOLD INC.
CONDENSED INTERIM FINANCIAL STATEMENTS
THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024
(EXPRESSED IN CANADIAN DOLLARS)
(UNAUDITED)
Notice To Reader
The accompanying unaudited condensed interim financial statements of Trojan Gold Inc. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim financial statements have not been reviewed by the Company's auditors.
Trojan Gold Inc.
Condensed Interim Statements of Financial Position
(Expressed in Canadian Dollars)
Unaudited
As at | September 30, 2024 | December 31, 2023 |
$ | $ | |
ASSETS | ||
Current assets | ||
Cash and cash equivalents | 94,762 | 345 |
Harmonized sales tax recoverable | 32,005 | 20,793 |
Due from related parties (note 11) | 3,500 | 3,500 |
Total current assets | 130,267 | 24,638 |
Non-current assets | ||
Exploration and evaluation assets (note 3) | 968,057 | 710,177 |
Total assets | 1,098,324 | 734,815 |
EQUITY AND LIABILITIES | ||
Current liabilities | ||
Accounts payable and accrued liabilities (note 4) | 203,813 | 146,721 |
Due to related parties (note 11) | 201,246 | 147,842 |
Demand loan (note 5) | 30,723 | 5,000 |
Total liabilities | 435,782 | 299,563 |
Equity | ||
Share capital (note 6) | 2,346,621 | 2,096,621 |
Share-based payment reserve (note 9) | 73,400 | 73,400 |
Warrant reserve (note 8) | 996,000 | 996,000 |
Subscription receipts (note 7) | 100,000 | - |
Deficit | (2,853,479) | (2,730,769) |
Total equity | 662,542 | 435,252 |
Total equity and liabilities | 1,098,324 | 734,815 |
Nature of operations and going concern (note 1)
The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.
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Trojan Gold Inc.
Condensed Interim Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
Unaudited
For the three months ended | For the nine months ended | ||
September 30, | September 30, | ||
2024 | 2023 | 2024 | 2023 |
$ | $ | $ | $ |
Operating expenses | ||||
Consulting fees (note 11) | 4,500 | 4,500 | 13,500 | 22,316 |
Filling fees and shareholder information | 7,865 | 2,610 | 15,309 | 33,533 |
General and administrative | 870 | 2,461 | 4,369 | 3,925 |
Investor relations | 3,000 | 3,000 | 5,000 | 9,000 |
Premises rent | 2,850 | 2,850 | 8,550 | 8,550 |
Pre exploration and evaluation expenditure | 1,177 | 1,009 | 1,177 | 5,026 |
Professional fees (note 11) | 13,721 | 22,113 | 84,305 | 75,075 |
(33,983) | (38,543) | (132,210) | (157,425) | |
Other income | - | - | 9,500 | - |
Net loss and comprehensive loss for the period | (33,983) | (38,543) | (122,710) | (157,425) |
Loss and comprehensive loss per share | ||||
basic and diluted (note 10) | (0.00) | (0.00) | (0.00) | (0.00) |
Weighted average number of shares outstanding | ||||
basic and diluted (note 10) | 44,199,433 | 39,099,433 | 41,808,922 | 39,099,433 |
The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.
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Trojan Gold Inc.
Condensed Interim Statements of Cash Flows
(Expressed in Canadian Dollars)
Unaudited
For the nine months ended September 30,
2024 | 2023 | |
$ | $ | |
Operating activities | ||
Net loss for the period | (122,710) | (157,425) |
Items not affecting cash: | ||
Change in non-cash working capital items: | ||
Harmonized sales tax recoverable | (11,212) | (9,269) |
Amounts payable and accrued liabilities (note 4) | 57,092 | 103,862 |
Net cash used in operating activities | (76,830) | (62,832) |
Investing activities | ||
Exploration and evaluation assets additions | (7,880) | (15,481) |
Net cash used in investing activities | (7,880) | (15,481) |
Financing activities | ||
Net advances from related parties (note 11) | 53,404 | 67,750 |
Proceeds from subscription receipts | 100,000 | - |
Proceeds from demand loans | 25,723 | - |
Net cash provided by financing activities | 179,127 | 67,750 |
Net change in cash | 94,417 | (10,563) |
Cash, beginning of period | 345 | 10,563 |
Cash, end of period | 94,762 | - |
The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.
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Trojan Gold Inc.
Condensed Interim Statements of Changes in Equity
(Expressed in Canadian Dollars)
Unaudited
Share-based | Warrants | Subscription | ||||
Share capital | payment reserve | reserve | Receipts | Deficit | Total | |
$ | $ | $ | $ | $ | $ | |
Balance December 31, 2022 | 2,093,621 | 69,400 | 996,000 | - | (2,250,990) | 908,031 |
Net loss for the period | - | - | - | - | (157,425) | (157,425) |
Balance September 30, 2023 | 2,093,621 | 69,400 | 996,000 | - | (2,408,415) | 750,606 |
Balance December 31, 2023 | 2,096,621 | 73,400 | 996,000 | - | (2,730,769) | 435,252 |
Shares issued for exploration and evaluation assets | 250,000 | - | - | - | 250,000 | |
Subscription receipts | - | - | - | 100,000 | - | 100,000 |
Net loss for the period | - | - | - | - | (122,710) | (122,710) |
Balance September 30, 2024 | 2,346,621 | 73,400 | 996,000 | 100,000 | (2,853,479) | 662,542 |
The accompanying notes to the unaudited condensed interim financial statements are an integral part of these statements.
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Trojan Gold Inc.
Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
Unaudited
1. Nature of operations and going concern
Trojan Gold Inc. ("TGI" or the "Company") was incorporated in 2012 under the provisions of the Business Corporations Act (Alberta) and is trading on the Canadian Securities Exchange ("CSE") under the symbol 'TGII' and on the OTCQB Venture Market (ticker symbol "TRJGF"). The Company is engaged in the acquisition and exploration of mineral resource properties in Canada and the Dominican Republic. Substantially all of the Company's efforts are devoted to financing, exploring and developing these properties. The Company's head office is 401 - 82 Richmond Street East, Toronto, Ontario, M5C 1P1.
These unaudited condensed interim financial statements have been prepared on a going concern basis which assumes that the Company will continue in operations for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Realization values may be substantially different from carrying values as shown and the financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.
The mineral properties of the Company are in the exploration stage and, as a result, the Company has no source of operating cash flow. The exploration and development of the Company's properties depend on the ability of the Company to obtain financing. The Company has incurred losses in previous periods and has not yet achieved profitable operations, with a comprehensive loss of $122,710 for the nine months ended September 30, 2024 (nine months ended September 30, 2023 - loss of $157,425). At September 30, 2024, the Company had no source of operating cash flow and an accumulated deficit of $2,853,479 (December 31, 2023 - $2,730,769). At September 30, 2024, the Company had working capital deficiency of $305,515 (December 31, 2023 - $274,925). These conditions raise material uncertainties as to the Company's ability to continue as a going concern.
The Company's future viability depends upon the acquisition and financing of mineral exploration or other projects. If the mineral projects are to be successful, additional funds will be required to develop these resources and to place them into commercial production. The only source of future funds presently available to the Company is through the issuance of common shares or through the sale of an interest in any of its properties or assets in whole or in part. The ability of the Company to arrange such financing or the sale of an interest will depend, in part, on prevailing market conditions as well as the business performance of the Company. There can be no assurance that the Company will be successful in its efforts to arrange the necessary financing, if needed, on terms satisfactory to the Company. If additional financing is arranged through the issuance of shares, control of the Company may change and shareholders may suffer significant dilution.
2. Significant accounting policies Statement of compliance
The Company applies International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations issued by the International Financial Reporting Interpretations Committee ("IFRIC"). These unaudited condensed interim financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. Accordingly, they do not include all of the information required for full annual financial statements required by IFRS as issued by IASB and interpretations issued by IFRIC.
The policies applied in these unaudited condensed interim financial statements are based on IFRSs issued and outstanding as of November 28, 2024, the date the Board of Directors approved the statements. The same accounting policies and methods of computation are followed in these unaudited condensed interim financial statements as compared with the most recent annual financial statements as at and for the year ended December 31, 2023. Any subsequent changes to IFRS that are given effect in the Company's annual financial statements for the year ending December 31, 2024 could result in restatement of these unaudited condensed interim financial statements.
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Trojan Gold Inc.
Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
Unaudited
Basis of presentation
These unaudited condensed interim financial statements have been prepared on a historical cost basis, with the exception of financial instruments classified at fair value through profit or loss ("FVTPL"). In addition, these unaudited condensed interim financial statements have been prepared using the accrual basis of accounting except for cash flow information.
Functional and presentation currency
These unaudited condensed interim financial statements are presented in Canadian Dollars, which is also the functional currency of the Company. All financial information is expressed in Canadian Dollars otherwise stated and has been rounded to the nearest dollar.
Adoption of new standards
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2024. Many are not applicable or do not have a significant impact to the Company. There are no relevant IFRS's or IFRS interpretations that are effective that would have a material impact on the Company.
New standards not yet adopted and interpretations issued but not yet effective
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods commencing on or after January 1, 2025. Many are not applicable or do not have a significant impact to the Company and have been excluded.
3. Exploration and evaluation assets Watershed Property, Ontario
The Company holds a 100% interest in 111 mining claims comprising the Watershed property. The property is located 100 kilometers west of the city of Thunder Bay situated in the Shebandowan Greenstone Belt.
Hemlo South Property, Ontario
The Hemlo South Property comprises 8 mining claims and is situated in the Hemlo Gold Camp, 35 kilometres east of Marathon.
On March 1, 2017, TGI entered into a Letter of Intent with Tashota Resources Inc ("TRI") (the "TGI-TRI Option") whereby TRI granted TGI the right to acquire a 50% interest in the property by:
- Issuing to TRI 1,250,000 common shares of TGI (issued).
- Making, or reimbursing TRI for making, certain cash payments required under the TRI-Wahl Option, totaling $50,000. If TRI makes such payments in cash, and by mutual agreement, TGI can elect to reimburse TRI by issuing common shares from treasury with a deemed value of $0.10/share (completed).
- Incurring or reimbursing TRI for exploration expenditures on the property totaling $250,000 (completed).
The property contains a 3% NSR royalty, of which 2% can be purchased for $2,000,000 at any time.
TRI and TGI share a common officer and director.
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Trojan Gold Inc.
Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
Unaudited
3. Exploration and evaluation assets (continued) Hemlo South Property, Ontario (continued)
On January 22, 2021, TRI and the Company entered into a joint venture agreement (the "Joint Venture Agreement") which sets out the terms of their joint venture arrangement regarding the Hemlo South Property. The Joint Venture Agreement provides that each of the Company and TRI has a 50% working interest in the Hemlo South Property, which is subject to the NSR royalty in favour of Wahl.
The Joint Venture Agreement provides for the following: (i) management and budget control is to be by a joint management committee; (ii) each party will have an initial working interest (or define "WI") of 50% and a deemed initial contribution of $450,000; (iii) TRI and the Company will be joint operators, unless the interest of either party is diluted below 50%, in which case, the party with the larger WI will have the right to become the operator; (iv) budgets will be set annually, or more frequently if requested by either party; (v) technical reports will be prepared in a timely manner on all activities, submitted to Wahl and reported to the MNDM for assessment credit; (vi) if either party (a "Non- Contributing Party") is unable or unwilling to provide its pro rata share of an approved budget, the other party (the "Contributing Party") will have the right to provide the difference between the amount which the Non-Contributing Party has contributed to an approved budget, and its pro rata share of the approved budget; and (vii) the WI of a Non- Contributing Party shall be diluted according to the industry-standard formula.
The company determined the TRI JV as a joint operation.
Paulpic-Wascanna Property, Ontario
April 11, 2024, the Company entered an option agreement with arms-length third parties ("Optionors") pursuant to which Trojan has an option to acquire a 50% interest in the Paulpic-Wascanna gold property. The property lies within the Beardmore-Geraldton-Tashota greenstone belt, approximately 80 km northwest of the town of Geraldton and 240 km northeast of the City of Thunder Bay in Northwestern Ontario. The property, which comprises four mining leases and twenty-five mining claims, covers two significant gold deposits as well as several under-explored gold occurrences.
The Option Agreement was originally entered into between the Optionors and Advandtel Minerals (Canada) Ltd. ("AMCL") in July 2018 and assigned by AMCL to Tashota Resources Inc. on November 3, 2021. TRI has now assigned 50% of its interest in the option under the Option Agreement to Trojan. As consideration for the assignment, Trojan has agreed to issue 5,000,000 common shares to the Optionors at a deemed price of $0.05 per common share.
The Company's exploration and evaluation assets consist of the following:
Hemlo South | Watershed | Total | ||||
Balance, December 31, 2022 | $ | 498,991 | $ | 195,705 | $ | 694,696 |
Acquisition Costs | ||||||
Licenses and permits | - | 873 | 873 | |||
- | 873 | 873 | ||||
Exploration and Evaluation Costs | ||||||
Assays | - | 10,608 | 10,608 | |||
Geological consulting | - | 4,000 | 4,000 | |||
- | 14,608 | 14,608 | ||||
Balance, September 30, 2023 | $ | 498,991 | $ | 211,186 | $ | 710,177 |
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Trojan Gold Inc.
Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
Unaudited
3. Exploration and evaluation assets (continued)
Paulpic- | ||||||||
Hemlo South | Watershed | Wascanna | Total | |||||
Balance, December 31, 2023 | $ | 498,991 | $ | 211,186 | $ | - | $ | 710,177 |
Acquisition Costs | ||||||||
Acquisition of Paulpic-Wascanna | - | - | 250,000 | 250,000 | ||||
Claim staking | - | 5,775 | - | 5,775 | ||||
Licenses and permits | - | 2,105 | - | 2,105 | ||||
- | 7,880 | 250,000 | 257,880 | |||||
Exploration and Evaluation Costs | - | - | - | - | ||||
Balance, September 30, 2024 | $ | 498,991 | $ | 219,066 | $ | 250,000 | $ | 968,057 |
4. | Trade and other payables | |||||||
As at | As at | |||||||
September 30, | December 31, | |||||||
2024 | 2023 | |||||||
Trade accounts payable | $ | 158,948 | $ | 106,936 | ||||
Accrued liabilities | 44,865 | 39,785 | ||||||
Total trade and other payables | $ | 203,813 | $ | 146,721 | ||||
5. | Demand loan | |||||||
Balance, December 31, 2022 and 2023 | $ | 5,000 | ||||||
Addition | 25,723 | |||||||
Balance, September 30, 2024 | $ | 30,723 |
During the nine months ended September 30, 2024, the Company borrowed $25,723. Subsequent to September 30, 2024, the Company received an additional $165,000 loan from an investor. The amount is unsecured and due on demand.
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Trojan Gold Inc.
Notes to Condensed Interim Financial Statements Three and Nine Months Ended September 30, 2024 (Expressed in Canadian Dollars)
Unaudited
6. Share capital
a) Authorized share capital
The Company is authorized to issue an unlimited number of voting and participating common shares. The common shares have no par value and are fully paid.
b) Common shares issued
Number of | ||
common shares | Amount | |
Balance, December 31, 2022 | 39,099,433 | $2,093,621 |
Share issue for services (i) | 100,000 | 3,000 |
Balance, December 31, 2023 | 39,199,433 | $ 2,096,621 |
Shares issued for exploration and evaluation assets (ii) | 5,000,000 | 250,000 |
Balance, September 30, 2024 | 44,199,433 | $ 2,346,621 |
- On December 4, 2023, the Company issued 100,000 common shares to an officer of the Company in payment of $3,000 of consulting fees. The common shares issued had a price of $0.03 based on the fair value on the issuance date.
- On May 10, 2024, the Company issued 5,000,000 common shares to arms-length third parties ("Optionors"), at a price of $0.05 per share, as consideration for the assignment of the option agreement related to the Paulpic- Wascanna Property. Also see note 3.
In May 2024, the Company announced a private placement financing consisting of the sale of up to 8,000,000 units (the "Units") and 5,000,000 flow-through units (the "FT Units") in the capital of the company at a price of $0.05 per Unit and $0.10 per FT Unit for aggregate gross proceeds of minimum of $350,000 and a maximum of $900,000 (the "Offering").
Each Unit will consist of one common share (a "Common Share") and one-half of one common share purchase warrant (each whole common share purchase warrant, a "Unit Warrant"). Each Unit Warrant will entitle the holder thereof to purchase one Common Share in the capital of the Company for a price of $0.08 for a period of 24 months from the date of the closing, subject to acceleration of the expiry date upon the occurrence of certain events.
Each FT Unit will consist of one Common Share that will qualify as a "flow-through share" for the purposes of the Income Tax Act (Canada) and one-half of one common share purchase warrant (each whole common share purchase warrant, a "FT Warrant"). Each FT Warrant will entitle the holder thereof to purchase one Common Share in the capital of the Company for a price of $0.12 for a period of 24 months from the date of the closing.
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