INCA ONE GOLD CORP.
Condensed Interim Consolidated Financial Statements
For the Three and Nine Months Ended January 31, 2024, and 2023
(Unaudited - Expressed in US Dollars)
NOTICE TO READER
Under National Instrument 51-102, Part 4, subsection 4.3(3)(a) issued by the Canadian Securities Administrators, if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.
The accompanying unaudited condensed interim consolidated financial statements have been prepared by and are the responsibility of the Company's management.
The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim consolidated financial statements by an entity's auditor.
Condensed Interim Consolidated Statements of Financial Position (Unaudited - Expressed in US Dollars)
January 31, | April 30, | ||
Note | 2024 | 2023 | |
$ | $ | ||
Assets | |||
Current: | |||
Cash | 1,249,528 | 761,542 | |
Receivables | 3 | 3,170,540 | 2,977,070 |
Prepaid expenses and deposits | 4 | 1,057,599 | 1,164,369 |
Inventory | 5 | 7,202,197 | 5,949,862 |
Total current assets | 12,679,864 | 10,852,843 | |
Long term receivable | 6 | 283,224 | 296,303 |
Property, plant and equipment | 7 | 8,702,492 | 9,589,852 |
Right of use assets | 9 | 1,384,685 | 198,932 |
Total assets | 23,050,265 | 20,937,930 | |
Liabilities | |||
Current: | |||
Accounts payable and accrued liabilities | 8 | 5,438,643 | 4,107,411 |
Contractual liabilities payable to Equinox | 10 | 3,434,349 | 2,450,069 |
Loans payable | 11 | 2,176,245 | 2,156,111 |
Deferred revenue | 2,445,000 | 1,488,000 | |
Gold loan | 12 | 7,588,820 | 7,953,755 |
Current portion of lease liabilities | 9 | 557,253 | 56,532 |
Total current liabilities | 21,640,310 | 18,211,878 | |
Accounts payable and accrued liabilities | 148,845 | 93,074 | |
Contractual liabilities payable to Equinox | 10 | 1,626,473 | 3,140,319 |
Loans payable | 11 | 957,297 | 944,536 |
Asset retirement and reclamation obligations | 13 | 2,012,257 | 1,915,366 |
Deferred income tax | 441,513 | 441,513 | |
Lease liabilities | 9 | 816,622 | 99,323 |
Total liabilities | 27,643,317 | 24,846,009 | |
Shareholders' Equity | |||
Share capital | 14 | 33,768,344 | 32,537,441 |
Equity reserves | 14 | 5,735,218 | 5,482,275 |
Convertible debentures - equity component | 11 | 12,895 | 12,895 |
Accumulated other comprehensive income | (418,688) | (324,673) | |
Deficit | (44,925,792) | (42,846,001) | |
Shareholders' equity (deficiency) attributable to Inca One | (5,828,023) | (5,138,063) | |
Non-controlling interest | 1,234,971 | 1,229,984 | |
Total shareholders' equity | (4,593,052) | (3,908,079) | |
Total liabilities and shareholders' equity | 23,050,265 | 20,937,930 | |
Nature of operations and going concern (note 1) | |||
Commitments (note 16) |
Approved on behalf of the Board of Directors on March 28, 2024
"Bruce Bragagnolo"
"Edward Kelly"
Director
DirectorThe accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited - Expressed in US Dollars)
Three Months Ended
January 31,Nine Months Ended
January 31,
Notes | |||||
Revenue | |||||
Cost of goods sold | |||||
Cost of operations | 18 | ||||
Depreciation | 18 | ||||
Total cost of goods sold | |||||
Gross operating margin | 1,027,385 | 1,252,814 | 2,303,954 | 2,341,558 | |
Corporate and administrative expenses | 18 | (721,448) | (951,981) | (2,201,291) | (2,630,363) |
Gain (Loss) from operations | 305,937 | 300,833 | 102,663 | (288,805) | |
Impairments net of reversal of prior year im | - | - | - | 7,000 | |
Finance costs | 18 | (754,953) | (1,536,823) | (1,910,131) | (3,029,526) |
Loss on gold loan remeasurement | 13 | (267,336) | - | (267,336) | - |
Net loss for the period | (716,352) | (1,235,990) | (2,074,804) | (3,311,331) | |
Deferred income tax expense | - | (12,667) | - | (12,267) | |
Net loss for the period | (716,352) | (1,248,257) | (2,074,804) | (3,323,598) | |
Other comprehensive income: | |||||
Foreign currency translation adjustment | (255,210) | (171,076) | (94,015) | 272,729 | |
Comprehensive loss for the period | (971,562) | (1,419,333) | (2,168,819) | (3,050,869) | |
Net loss and comprehensive loss attributable to: | |||||
Inca One Gold Corp.'s shareholders | (972,976) | (1,420,379) | (2,173,806) | (3,065,163) | |
Non-controlling interest | 1,414 | 1,046 | 4,987 | 14,294 | |
(971,562) | (1,419,333) | (2,168,819) | (3,050,869) | ||
Weighted average shares outstanding | |||||
Basic | 42,797,301 | 39,252,152 | 41,405,200 | 39,263,124 | |
Diluted | 42,797,301 | 39,252,152 | 41,405,200 | 39,263,124 | |
Loss per share | |||||
Basic | (0.02) | (0.03) | (0.05) | (0.08) | |
Diluted | (0.02) | (0.03) | (0.05) | (0.08) |
(10,623,051) (10,911,116) (29,957,191) (30,324,008)
2024 | 2023 | 2024 | 2023 |
$ | $ | $ | $ |
12,093,807 | 12,466,384 | 33,317,933 | 33,570,189 |
(443,371) (302,454) (1,056,788) (904,623)
(11,066,422) (11,213,570) (31,013,979) (31,228,631)The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
INCA ONE GOLD CORP.
Condensed Interim Consolidated Statements of Changes in Equity (Unaudited - Expressed in US Dollars)
Convertible | Accumulated | |||||||
debenture - | other | Total | ||||||
Common | Share | Equity | equity | Non-controlling | comprehensive | shareholders' | ||
shares | capital | reserves | component | interest | (loss) income | Deficit | equity | |
# | $ | $ | $ | $ | $ | $ | $ | |
Balance, April 30, 2022 | 39,200,670 | 32,194,972 | 5,435,660 | - | 1,220,375 | (697,831) | (37,131,873) | 1,021,303 |
Comprehensive income (loss) for the period | - | - | - | - | 14,294 | 272,729 | (3,337,892) | (3,050,869) |
Warrants exercised (note 14 (e)) | 115,982 | 23,949 | (8,115) | - | - | - | - | 15,834 |
Share-based payments (note 14 (d)) | - | - | 86,696 | - | - | - | - | 86,696 |
Balance January 31, 2023 | 39,316,652 | 32,218,921 | 5,514,241 | - | 1,234,669 | (425,102) | (40,469,765) | (1,927,036) |
Comprehensive income (loss) for the period | - | - | - | - | (4,685) | 100,429 | (2,376,236) | (2,280,492) |
Convertible debentures - equity component (note 12 (d)) | - | - | - | 12,895 | - | - | 12,895 | |
Shares issued pursuant to agreement with Equinox | 281,843 | 134,556 | - | - | - | - | - | 134,556 |
Shares issued for debt settlement (note 14 (c)) | 466,000 | 73,281 | - | - | - | - | - | 73,281 |
Warrants exercised | 546,094 | 110,683 | (38,209) | - | - | - | - | 72,474 |
Share-based payments | - | - | 6,243 | - | - | - | - | 6,243 |
Balance, April 30, 2023 | 40,610,589 | 32,537,441 | 5,482,275 | 12,895 | 1,229,984 | (324,673) | (42,846,001) | (3,908,079) |
Comprehensive income (loss) for the period | - | - | - | - | 4,987 | (94,015) | (2,079,791) | (2,168,819) |
Issuance of shares on private placement, net of share | ||||||||
issue costs | 6,969,000 | 264,323 | 257,009 | - | - | - | - | 521,332 |
Shares issued pursuant to agreement with Equinox | 1,848,843 | 896,161 | - | - | - | - | - | 896,161 |
Options exercised (note 14 (e)) | 431,000 | 70,419 | (13,419) | - | - | - | - | 57,000 |
Share-based payments (note 14 (d)) | - | - | 9,353 | - | - | - | - | 9,353 |
Balance January 31, 2024 | 49,859,432 | 33,768,344 | 5,735,218 | 12,895 | 1,234,971 | (418,688) | (44,925,792) | (4,593,052) |
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.
INCA ONE GOLD CORP.
Condensed Interim Consolidated Statements of Cash Flows (Unaudited - Expressed in US Dollars)
Nine Months Ended January 31,
2024 | 2023 | |
Cash flows provided by (used in): | $ | $ |
Operating activities: | ||
Net loss for the period | (2,074,804) | (3,323,598) |
Items not involving cash: | ||
Depreciation | 970,192 | 944,976 |
Depreciation of right of use assets | 213,201 | 60,877 |
Share-based payments | 9,354 | 86,696 |
Accretion of asset retirement and reclamation obligations | 96,891 | 67,603 |
Interest expense | 800,417 | 513,546 |
Unrealized foreign exchange | (37,447) | 70,117 |
Fair value adjustment on long term receivable | (20,590) | (35,923) |
Accretion of contractual liabilities payable to Equinox | 270,652 | 347,660 |
Change in fair value of derivatives | 698,829 | 2,045,517 |
Loss on gold loan remeasurement | 267,336 | - |
Changes in non-cash operating working capital: | ||
Receivables | (126,710) | 674,740 |
Prepaid expenses and deposits | 106,770 | (298,792) |
Inventory | (1,252,335) | 4,000,657 |
Accounts payable and accrued liabilities | 1,003,060 | (1,692,392) |
Deferred revenue | 957,000 | (840,000) |
Net cash provided by operating activities | 1,881,816 | 2,621,684 |
Financing activities: | ||
Proceeds from issuance of shares (including exercised warrants and | ||
options) | 579,141 | 15,835 |
Proceeds from loans (net of repayments) | 7,373 | 557,174 |
Payments of Gold Loans | (1,331,100) | (2,632,746) |
Decrease in restricted cash | - | (23,212) |
Interest paid | (565,878) | (407,978) |
Net cash used in financing activities | (1,310,464) | (2,490,927) |
Investing activities: | ||
Purchase of property, plant and equipment | (70,449) | (178,802) |
Net cash used in investing activities | (70,449) | (178,802) |
Increase (decrease) in cash | 500,903 | (48,045) |
Effect of exchange rates on cash held in foreign currencies | (12,917) | 3,856 |
Cash, beginning of the year | 761,542 | 1,565,378 |
Cash, end of the period | 1,249,528 | 1,521,189 |
Supplemental disclosure with respect to cash flows (note 19) |
The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements
NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN
Inca One Gold Corp. (the "Company") was incorporated under the laws of Canada on November 9, 2005 and was continued under the British Columbia Business Corporations Act on November 26, 2010. On September 17, 2014, the Company changed its name from Inca One Resources Corp. to Inca One Gold Corp. The Company's shares are traded on the TSX Venture Exchange (the "TSXV") under the symbol "INCA", on the OTCQB under the symbol "INCAF", on the Frankfurt Stock Exchange under the symbol "SU9.F", and the Santiago Stock Exchange Venture under the symbol "IOCL". The head office and principal address of the Company are located at Suite 850 - 1140 West Pender Street, Vancouver, Canada, V6E 4G1 and its registered office is located at 10th Floor, 595 Howe Street, Vancouver, Canada, V6C 2T5.
Inca One is engaged in the business of operating and developing gold-bearing mineral processing operations in Peru, to service government permitted small scale miners. In recent years the Peruvian government instituted a formalization process for informal miners as part of its efforts to regulate their activities. The Company, through its Peruvian subsidiaries Chala One S.A.C. ("Chala One") and EMC Green Group S.A. ("EMC") owns two Peruvian mineral processing plants with 450 tonnes per day of processing capacity. The Company's business plan is to source high grade gold mill feed from legally recognized Peruvian artisanal and small scale miners, purchase and process the material, and export gold doré.
The Company continues to actively evaluate potential mineral projects, including additional mineral processing operations.
These condensed interim consolidated financial statements are prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended January 31, 2024, the Company had a comprehensive loss of $2.2 million, a deficit of $44.9 million and working capital deficit of $8.9 million. These conditions indicate a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Management intends to fund operating and administration costs and debt and debt service costs over the year with the proceeds from gold doré sales at the Company's gold ore processing facilities in Peru and where required, from debt and equity financing and proceeds from option and warrant exercises.
The Company's ability to continue as a going concern is dependent upon its ability to generate net income and positive cash flows from its mineral processing operations and its ability to raise equity capital or debt sufficient to meet current and future obligations. These condensed interim consolidated financial statements do not reflect the adjustments to the carrying values and classifications of assets and liabilities that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.
NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). The accounting principles adopted are consistent with those of the previous financial year.
These condensed interim consolidated financial statements have been prepared using the significant accounting policies and measurement bases summarized below and were approved by the board of directors for issue on March 28, 2024.
(b)Basis of consolidation
The condensed interim consolidated financial statements are presented in US dollars unless otherwise noted and include the accounts of the Company and its subsidiaries listed below:
Country of
(c)
Incorporation | Equity Interest | |
Chala One S.A.C. | Peru | 100% |
Inca One Metals Peru S.A. | Peru | 100% |
Dynasty One S.A. | Peru | 100% |
Corizona S.A.C. | Peru | 100% |
Anthem United Inc. | Canada | 100% |
Anthem United (Holdings) Inc. | Canada | 100% |
Oro Proceso Co. S.A.C. | Peru | 100% |
EMC Green Group S.A.C. | Peru | 90.14% |
Koricancha Joint Venture | Peru | 90.14% |
Changes in accounting policies and disclosures |
There were no new standards effective May 1, 2023 that impacted these condensed interim consolidated financial statements or are expected to have a material effect in the future.
(d)
Significant accounting judgements and estimates
The preparation of financial statements in conformity with IFRS requires the Company to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Management believes the estimates and assumptions used in these condensed interim consolidated financial statements are reasonable; however, actual results could differ from those estimates and could impact future results of operations and cash flows. The Company's significant accounting judgments and estimates were presented in note 2 of the audited annual consolidated financial statements for the years ended April 30, 2023 and 2022.
NOTE 3 - RECEIVABLES
January 31, | April 30, | |
2024 | 2023 | |
$ | $ | |
GST recoverable (Canada) | 7,031 | 9,334 |
IGV recoverable (Peru) | 3,119,821 | 2,958,791 |
Other | 43,688 | 8,945 |
3,170,540 | 2,977,070 | |
NOTE 4 - PREPAID EXPENSES AND DEPOSITS | ||
January 31, | April 30, | |
2024 | 2023 | |
$ | $ | |
Other deposits and advances | 135,611 | 108,959 |
Prepaid taxes | 431,503 | 693,020 |
Prepaid expenses | 490,485 | 362,390 |
1,057,599 | 1,164,369 | |
NOTE 5 - INVENTORY | ||
January 31, | April 30, | |
2024 | 2023 | |
$ | $ | |
Ore stockpiles and gold in process | 3,557,363 | 3,270,726 |
Finished goods - gold doré bars | 3,174,512 | 2,253,003 |
Materials and supplies | 470,322 | 426,133 |
7,202,197 | 5,949,862 |
As at January 31, 2024 and April 30, 2023, the Company recorded the value of its mineral in stockpiles, tanks and finished products at cost.
The amount of inventory recognized as expense for the three and nine months ended January 31, 2024 was $8.9 million and $23.7 million respectively (three and nine months ended January 31, 2023 - $5.3 million and $19.7 million respectively).
NOTE 6 - LONG TERM RECEIVABLE
January 31,
Beginning of year (1)
Transferred to IGV recoverable (Peru)
Change in estimate (2)
2024 $
296,303
(33,669)
20,590
283,224
(1)
April 30,
2023 $
292,074
(44,892)
49,121
296,303
Estimated fair value of the 50% of the right to claim refunds of prior years' general sales taxes ("Historical IGV") recognized as part of the acquisition of Anthem United Inc, from Equinox Gold Corp.
(2)
The Company used a discount rate of 11% (April 30, 2023 - 11%) and a duration of approximately 11 years (April 30, 2023 - 11.8 years)
NOTE 7 - PROPERTY, PLANT AND EQUIPMENT |
Plant |
$ |
Furniture and | ||||
Computers | Equipment | Total | ||
$ | $ | $ | ||
Costs: | ||||
Balance, April 30, 2022 | 16,353,034 | 209,037 | 121,404 | 16,683,475 |
Additions | 370,924 | - | - | 370,924 |
Change in ARO reserve | 420,974 | - | - | 420,974 |
Reclassification | (88,518) | 102,193 | (13,675) | - |
Balance, April 30, 2023 | 17,056,414 | 311,230 | 107,729 | 17,475,373 |
Additions | 82,832 | - | - | 82,832 |
Reclassification | (93,053) | 31,183 | 61,870 | - |
Balance, January 31, 2024 | 17,046,193 | 342,413 | 169,599 | 17,558,205 |
Furniture and | ||||
Plant | Computers | Equipment | Total | |
$ | $ | $ | $ | |
Accumulated Depreciation: | ||||
Balance, April 30, 2022 | 6,292,291 | 165,761 | 113,567 | 6,571,619 |
Depreciation | 1,255,474 | 45,427 | 13,001 | 1,313,902 |
Reclassification | 27,045 | - | (27,045) | - |
Balance, April 30, 2023 | 7,574,810 | 211,188 | 99,523 | 7,885,521 |
Depreciation | 812,788 | 105,241 | 52,163 | 970,192 |
Reclassification | 82,508 | (56,411) | (26,097) | - |
Balance, January 31, 2024 | 8,470,106 | 260,018 | 125,589 | 8,855,713 |
Net Book Value: | ||||
April 30, 2023 | 9,481,604 | 100,042 | 8,206 | 9,589,852 |
January 31, 2024 | 8,576,087 | 82,395 | 44,010 | 8,702,492 |
10 |
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Inca One Gold Corp. published this content on 28 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 March 2024 23:05:46 UTC.