GOLDQUEST MINING CORP.
CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
INDEPENDENT AUDITOR'S REPORT
To the Shareholders of
GoldQuest Mining Corp.
Opinion
We have audited the accompanying consolidated financial statements of GoldQuest Mining Corp. (the "Company"), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of loss and comprehensive loss, changes in shareholders' equity, and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.
In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.
Basis for Opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained in our audit is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current year ended. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
We have determined that there are no key audit matters to communicate in our auditor's report.
Other Information
Management is responsible for the other information. The other information obtained at the date of this auditor's report includes Management's Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We obtained Management's Discussion and Analysis prior to the date of this auditor's report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS Accounting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year ended and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor's report is Zachary Faure.
Vancouver, Canada | Chartered Professional Accountants |
April 25, 2024
Table of Contents | ||
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION | 6 | |
CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | 7 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | 8 | |
CONSOLIDATED STATEMENTS OF CASH FLOWS | 9 | |
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | 10 | |
1. | CORPORATE INFORMATION AND CONTINUANCE OF OPERATIONS | 10 |
2. | MATERIAL ACCOUNTING POLICIES AND BASIS OF PREPARATION | 11 |
3. | JOINT OPERATION | 22 |
4. | CASH AND CASH EQUIVALENTS | 22 |
5. | LONG-TERMINVESTMENTS | 22 |
6. | EQUIPMENT | 23 |
7. | EVALUATION AND EXPLORATION ASSETS | 23 |
8. | EVALUATION AND EXPLORATION COSTS | 24 |
9. | ACCOUNTS PAYABLE AND ACCRUED LIABILITIES | 25 |
10. | SHARE CAPITAL | 25 |
11. | RELATED PARTY TRANSACTIONS AND BALANCES | 27 |
12. | COMMITMENT | 28 |
13. | SEGMENTED INFORMATION | 28 |
14. | CAPITAL MANAGEMENT | 29 |
15. | FINANCIAL INSTRUMENTS | 29 |
16. | INCOME TAXES | 33 |
GoldQuest Mining Corp.
Consolidated Statements of Financial Position
(Expressed in Canadian Dollars)
As at | December 31, | December 31, | |||
2023 | 2022 | ||||
Note(s) | $ | $ | |||
ASSETS | |||||
Current assets | |||||
Cash and cash equivalents | 4 | 9,398,893 | 11,796,562 | ||
Amounts receivable | 65,888 | 71,456 | |||
Prepaid expenses | 153,866 | 127,843 | |||
Deposits | 22,942 | 22,077 | |||
9,641,589 | 12,017,938 | ||||
Non-current assets | |||||
Long-term investments | 5 | 24,000 | 22,500 | ||
Equipment | 6 | 61,535 | 41,718 | ||
Evaluation and exploration assets | 7 | 1 | 1 | ||
85,536 | 64,219 | ||||
TOTAL ASSETS | 9,727,125 | 12,082,157 | |||
LIABILITIES | |||||
Current liabilities | |||||
Accounts payable and accrued liabilities | 9, 11 | 155,173 | 140,719 | ||
TOTAL LIABILITIES | 155,173 | 140,719 | |||
SHAREHOLDERS' EQUITY | |||||
Share capital | 10 | 73,461,074 | 73,461,074 | ||
Stock options reserve | 10 | 2,280,758 | 2,138,732 | ||
Additional paid-in capital | 10 | 18,691,628 | 18,621,296 | ||
Deficit | (84,861,508) | (82,278,164) | |||
Accumulated other comprehensive income (loss) | - | (1,500) | |||
Equity attributable to owners of the Company | 9,571,952 | 11,941,438 | |||
TOTAL SHAREHOLDERS' EQUITY | 9,571,952 | 11,941,438 | |||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 9,727,125 | 12,082,157 | |||
Corporate information and continuance of operations | 1 | ||||
Commitments | 12 | ||||
Segmented information | 13 |
These consolidated financial statements were approved for issue by the Board of Directors and signed on its behalf by:
/s/ Luis SantanaDirector | /s/ Florian SiegfriedDirector |
See accompanying notes to these consolidated financial statements.
GoldQuest Mining Corp.
Consolidated Statements of Loss and Comprehensive Loss
(Expressed in Canadian Dollars)
For the years ended | ||||
December 31, | December 31, | |||
Note(s) | 2023 | 2022 | ||
$ | $ | |||
Expenses | ||||
Consulting fees | 21,000 | 24,000 | ||
Depreciation | 6 | 24,867 | 24,265 | |
Evaluation and exploration costs | 7 | 1,303,774 | 848,435 | |
Foreign exchange (gain) loss | - | 65,100 | ||
General and administrative | 240,165 | 183,671 | ||
Investor relations and promotion | 68,731 | 67,485 | ||
Management and directors' fees | 11 | 528,268 | 567,276 | |
Professional fees | 11 | 179,305 | 244,566 | |
Project evaluation costs | 11,541 | - | ||
Regulatory and filing fees | 58,799 | 48,589 | ||
Rent | 92,209 | 41,195 | ||
Salaries and wages | 11 | 290,329 | 237,594 | |
Share-based payments | 10, 11 | 212,358 | 543,867 | |
Travel | 4,243 | 16,137 | ||
(3,035,589) | (2,912,180) | |||
Other income | ||||
Interest income | 452,245 | 202,882 | ||
Net loss | (2,583,344) | (2,709,298) | ||
Other comprehensive income (loss) | ||||
Items that may be reclassified subsequently to profit or loss: | ||||
Change in fair value on available-for-sale investments | 5 | 1,500 | (9,000) | |
Total comprehensive loss | (2,581,844) | (2,718,298) |
Basic and diluted loss per share for the period attributable to common shareholders ($ per common share)
Weighted average number of common shares outstanding - basic and diluted
(0.01) (0.01)
259,442,384 259,442,384
See accompanying notes to these consolidated financial statements.
GoldQuest Mining Corp
Consolidated Statements of Changes in Shareholders' Equity
(Expressed in Canadian Dollars)
Accumulated | |||||||||||||||||||
other | |||||||||||||||||||
Stock options | Additional | comprehensive | |||||||||||||||||
Share capital | reserve | paid-in capital | Deficit | income (loss) | TOTAL | ||||||||||||||
Note(s) | # | $ | $ | $ | $ | $ | $ | ||||||||||||
Balance as of December 31, 2022 | 259,442,384 | 73,461,074 | 2,138,732 | 18,621,296 | (82,278,164) | (1,500) | 11,941,438 | ||||||||||||
Reclassification of grant-date fair value on expired stock | - | ||||||||||||||||||
options | 10 | - | - | (70,332) | 70,332 | - | - | ||||||||||||
212,358 | |||||||||||||||||||
Share-based payments | 10 | - | - | 212,358 | - | - | - | ||||||||||||
Loss and comprehensive loss | - | - | - | - | (2,583,344) | 1,500 | (2,581,844) | ||||||||||||
Balance as of December 31, 2023 | 259,442,384 | 73,461,074 | 2,280,758 | 18,691,628 | (84,861,508) | - | 9,571,952 | ||||||||||||
Balance as of December 31, 2021 | 259,442,384 | 73,461,074 | 3,663,448 | 16,552,713 | (79,568,866) | 7,500 | 14,115,869 | ||||||||||||
Reclassification of grant-date fair value on expired stock | - | ||||||||||||||||||
options | 10 | - | - | (2,068,583) | 2,068,583 | - | - | ||||||||||||
543,867 | |||||||||||||||||||
Share-based payments | 10 | - | - | 543,867 | - | - | - | ||||||||||||
Loss and comprehensive loss | - | - | - | - | (2,709,298) | (9,000) | (2,718,298) | ||||||||||||
Balance as of December 31, 2022 | 259,442,384 | 73,461,074 | 2,138,732 | 18,621,296 | (82,278,164) | (1,500) | 11,941,438 |
See accompanying notes to these consolidated financial statements.
GoldQuest Mining Corp.
Consolidated Statements of Cash Flows
(Expressed in Canadian Dollars)
For the years ended | |||||||
December 31, | December 31, | ||||||
2023 | 2022 | ||||||
Note(s) | $ | $ | |||||
Cash flow from (used in) | |||||||
OPERATING ACTIVITIES | |||||||
Net loss | (2,583,344) | (2,709,298) | |||||
Depreciation | 6 | 24,867 | 24,265 | ||||
Share-based payments | 10 | 212,358 | 543,867 | ||||
Net changes in non-cash working capital items: | 5,568 | (44,798) | |||||
Amounts receivable | |||||||
Prepaid expenses | (26,023) | (35,112) | |||||
Deposits | (865) | (11,822) | |||||
Accounts payable and accrued liabilities | 14,454 | (14,999) | |||||
Cash flow used in operating activities | (2,352,985) | (2,247,897) | |||||
INVESTING ACTIVITIES | |||||||
Purchase of equipment | 6 | (44,684) | (7,837) | ||||
Cash flow used in investing activities | (44,684) | (7,837) | |||||
Decrease in cash and cash equivalents | (2,397,669) | (2,255,734) | |||||
Cash and cash equivalents, beginning of period | 11,796,562 | 14,052,296 | |||||
Cash and cash equivalents, end of period | 9,398,893 | 11,796,562 | |||||
Supplemental cash flow information | |||||||
Reclassification of grant-date fair value on expired stock | 70,332 | 2,068,583 | |||||
options | 10 | ||||||
- | - | ||||||
Cash paid for income taxes | |||||||
Cash paid for interest | - | - |
See accompanying notes to these consolidated financial statements.
GoldQuest Mining Corp.
Notes to the Consolidated Financial Statements For the Years Ended December 31, 2023 and 2022 (Expressed in Canadian Dollars)
1. CORPORATE INFORMATION AND CONTINUANCE OF OPERATIONS
GoldQuest Mining Corp. (the "Company" or "GoldQuest") is a publicly listed company incorporated in British Columbia on July 12, 1989 and its shares are listed on the TSX Venture Exchange under the symbol "GQC". The Company together with its subsidiaries (collectively referred to as the "Company") is engaged in the identification, acquisition and exploration of mineral properties. The Company's registered office is located at Suite 2600, 595 Burrard Street, Vancouver, British Columbia, V7X 1L3.
The business of mining and exploring for minerals involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of evaluation and exploration properties and the Company's continued existence is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing, if necessary, or alternatively upon the Company's ability to dispose of its interests on an advantageous basis. Changes in future conditions could require material write-downs of the carrying values. The Company's exploration assets are located outside of Canada and are subject to the risk of foreign investment, including political uncertainty, increases in taxes and royalties, renegotiation of contracts and currency exchange fluctuations.
Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company's title. Property title may be subject to unregistered prior agreements, unregistered claims, other land claims and non-compliance with regulatory and environmental requirements.
These consolidated financial statements have been prepared on the assumption that the Company and its subsidiaries will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at December 31, 2023, the Company had not advanced its property to commercial production. The Company's continuation as a going concern is dependent upon the successful results from its mineral property exploration activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to fund operating costs over the next twelve months with cash and cash equivalents and through further equity financings. Management believes that the Company has sufficient working capital to meet its liabilities for the next twelve months.
Financial Reporting and Disclosure during Economic Uncertainty
In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic; the Company has not been significantly impacted by the spread of COVID-19. However, the ongoing COVID-19 pandemic, inflationary pressures, rising interest rates, the global financial climate and the conflict in Ukraine are affecting current economic conditions and increasing economic uncertainty, which may impact the Company's operating performance, financial position and the Company's ability to raise funds at this time.
The consolidated financial statements of GoldQuest for the year ended December 31, 2023 were approved by the Board of Directors on April 25, 2024.
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Goldquest Mining Corporation published this content on 26 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 26 April 2024 15:00:23 UTC.