Forward­looking Statements

Statements made in this Quarterly Report which are not purely historical are forward­looking statements with respect to the goals, plan objectives, intentions, expectations, financial condition, results of operations, future performance and our business, including, without limitation, (i) our ability to raise capital, and (ii) statements preceded by, followed by or that include the words "may," "would," "could," "should," "expects," "projects," "anticipates," "believes," "estimates," "plans," "intends," "targets" or similar expressions.

Forward­looking statements involve inherent risks and uncertainties, and important factors (many of which are beyond our control) that could cause actual results to differ materially from those set forth in the forward­looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which we may conduct business, changes in the interest rate environment, international gold prices, legislation or regulatory requirements, conditions of the securities markets, our ability to raise capital, changes in accounting principles, policies or guidelines, financial or political instability, acts of war or terrorism, other economic, competitive, governmental, regulatory and technical factors affecting our current or potential business and related matters.

Accordingly, results actually achieved may differ materially from expected results in these statements. Forward­looking statements speak only as of the date they are made. We do not undertake, and specifically disclaim, any obligation to update any forward­looking statements to reflect events or circumstances occurring after the date of such statements.

Results of Operations

For the Three Months Ended September 30, 2019 Compared to the Three Months Ended September 30, 2018

LKA had no revenues during the three months ended September 30, 2019 and 2018.

Exploration expenses were minimal in the three months ended September 30, 2019 at $8,944, compared to $16,552 during the three months ended September 30, 2018. Low exploration expenses are a result of exploration being temporarily ceased in late 2017.

Professional fees increased by $4,089 during the three months ended September 30, 2019 to $13,561, compared to $9,472 during the three months ended September 30, 2018, mainly as a result of on-going litigation in the three months ended September 30, 2019, there was no such litigation in the prior period.

General and administrative expenses decreased by $85,957 in the three months ended September 30, 2019 to $15,801, compared to $101,758 during the three months ended September 30, 2018. The decrease was mainly due to a $32,873 decrease in promotion expense during the three months ended September 30, 2019, but was accompanied by a general decrease in other general and administration expenses as a result of the decrease in exploration and other corporate activities in the 2019 period compared to the 2018 period.

Officer salaries and bonuses remained flat at $37,500 during both three month periods.

We incurred an operating loss of $75,806 during the three months ended September 30, 2019, as compared to an operating loss of $165,282 in the three months ended September 30, 2018. The $89,476, or approximately 54% decrease, is mainly due to the decrease in general and administrative and exploration costs as compared to the prior period, partially offset by an increase in professional fees, as discussed above.

We recognized total other income of $5,823 during the three months ended September 30, 2019, as compared to a loss of $1,899 in the three months ended September 30, 2018. The $7,722, or approximately 407% increase, is mainly due to a $20,271 decrease in interest expense during the three months ended September 30, 2019 as compared to the prior period due to the conversion of related party debt. The decrease is partially offset by decreases of $9,250 in gain on derivative and $3,299 in other income during the three months ended September 30, 2019 compared to the 2018 period.


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Net loss totaled $69,983, or $0.00 per share, in the three months ended September 30, 2019, compared to a net loss of $167,181, or $0.00 per share in the three months ended September 30, 2018.

For the Nine Months Ended September 30, 2019 Compared to the Nine Months Ended September 30, 2018

LKA had no revenues during the nine months ended September 30, 2019 and 2018.

Exploration expenses were minimal in the nine months ended September 30, 2019 at $17,308, compared to $28,179 during the nine months ended September 30, 2018. Low exploration expenses are a result of exploration being temporarily ceased in late 2017.

Professional fees decreased by $17,175 during the nine months ended September 30, 2019 to $46,406, compared to $63,581 during the nine months ended September 30, 2018, mainly as a result of a one-time payment of $28,500 during the 2018 period for consulting expense. We had no such large payments during the comparable 2019 period.

General and administrative expenses decreased by $122,860 in the nine months ended September 30, 2019 to $57,809, compared to $180,669 during the nine months ended September 30, 2018. The decrease was mainly due to a $62,063 decrease in promotion expense during the nine months ended September 30, 2019 as a result of the payment of cash, and common stock for services valued at $36,760, during the nine months ended September 30, 2018. We had no such large expenses in the 2019 period. Other decreases include a $41,644 decrease in loss on litigation accrual, a $7,668 decrease in payroll taxes and a $4,624 decrease in travel expenses.

Officer salaries and bonuses were $112,500 during the nine months ended September 30, 2019, compared to $313,925 during the nine months ended September 30, 2018. The $201,425 difference is due the issuance of 1,750,000 shares valued at $201,425 as an officer bonus during the 2018 period; we had no such bonuses during the comparable 2019 period.

We incurred an operating loss of $234,023 during the nine months ended September 30, 2019, as compared to an operating loss of $586,354 in the nine months ended September 30, 2018. The $352,331, or approximately 60% decrease, is mainly due to the decrease in officer salaries and bonuses, as well as decreases in general and administrative and professional fees as compared to the prior period as discussed above.

We incurred total other expense of $29,583 during the nine months ended September 30, 2019, as compared to $901,626 in the nine months ended September 30, 2018. The $872,043, or approximately 97% decrease, is mainly due to a $598,455 decrease in interest expense from the reduction of debt discount amortization during the nine months ended September 30, 2019 compared to the 2018 period. Additionally, we recognized a one-time loss on debt settlement of $309,406 during the nine months ended September 30, 2018. The decreases were partially offset by a $32,519 decrease in gains on derivatives.

Net loss totaled $263,606, or $0.01 per share, in the nine months ended September 30, 2019, compared to a net loss of $1,487,980, or $0.06 per share in the nine months ended September 30, 2018.

Liquidity

Current assets at September 30, 2019 totaled $4,000 in prepaid expenses, as compared to $61,696 in cash and $833 in prepaid expenses at December 31, 2018.

During the nine months ended September 30, 2019, our operating activities used net cash of $61,397 compared to $306,387 in the comparable 2018 period. Cash used in investing activities was $34,346 in the nine months ended September 30, 2018 period and $0 in the comparable 2019 period. Financing activities used $299 in cash during the nine months ended September 30, 2019 and provided $517,019 during the nine months ended September 30, 2018, mainly from the issuance of common stock for $500,000 cash to a related party.

At September 30, 2019, the Company had a working capital deficit of $631,434, as compared to $411,437 at December 31, 2018.


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