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GIYANI GOLD CORPORATION - Unaudited consolidated interim resu.ts for period ended 31 March 2014

Release Date: 16/05/2014 09:09
Code(s): GIY     PDF:  
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Unaudited consolidated interim resu.ts for period ended 31 March 2014

Giyani Gold Corporation
(formerly 99 Capital Corporation)
(Incorporated and registered in Canada)
(Registration number BC-C0887454)
Share code on the TSXV: WDG
Share code on the JSE: GIY        ISIN: CA37636L1076
 (“Giyani Gold” or “the company” or “the group”)

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)
(Unaudited)
FOR THE PERIOD ENDED MARCH 31, 2014


NOTICE OF NO AUDITOR REVIEW OF
CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3 (3) (a), if an auditor has not performed a
review of the condensed consolidated interim financial statements, they must be accompanied by a
notice indicating that an auditor has not reviewed the financial statements.


The accompanying unaudited condensed consolidated interim financial statements of the Company
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 financial statements in
accordance with standards established by the Canadian Institute of Chartered Accountants for a review
of interim financial statements by an entity’s auditor.



CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION
(Expressed in Canadian Dollars)
(Unaudited)
AS AT

                                                                     March 31,         December 31,
                                                                         2014                 2013


ASSETS

Current
 Cash                                                         $        1,068,852   $        1,429,699
 Term deposit (Note 4)                                                        -               150,583
 Restricted cash (Note 5)                                                100,000              100,000
 Amounts receivable                                                       75,987              110,911
 Prepaids                                                                176,631              190,244

                                                                       1,421,470            1,981,437

Equipment (Note 6)                                                        71,978               75,584
Mineral property acquisition costs (Note 8)                            5,680,292            5,680,292
          .
          Exploration and evaluation assets (Note 8)                   3,487,860            3,399,268

                                                             $        10,661,600       $   11,136,581


          LIABILITIES

          Current
           Accounts payable and accrued liabilities (Note 12)$           609,488       $     667,209
           Flow-through share premium                                    127,000             127,000
           Amounts due to related party (Note 12)                         51,603             118,298

                                                                         788,091              912,507
          Deferred income tax liability                                  146,198              146,198

                                                                         934,289            1,058,705

          EQUITY
           Share capital (Note 9)                                      17,432,543          17,432,543
           Contributed surplus (Note 10)                                5,037,044           4,482,971
           Warrants (Note 11)                                           4,054,637           4,054,637
           Cumulative translation adjustment                               92,874              56,894
           Deficit                                                    (17,900,421)        (17,015,956)

                                                                        8,716,677           9,011,089
          Non-controlling interest (Note 17)                            1,010,634           1,066,787

                                                                        9,727,311           10,077,876

                                                         $              10,661,600       $   11,136,581

          Nature of operations and going concern (Note 1)
          Commitments (Note 15)
          Proposed transaction (Note 18)

                 Approved and authorized by the Board on May 15, 2014:

                               “Ed Guimaraes”                   Director                 “Scott Kelly”                    Director


                   The accompanying notes are an integral part of these condensed consolidated interim financial statements.

         .
D INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS
           (Expressed in Canadian Dollars)
           (Unaudited)
           FOR THE THREE MONTHS ENDED MARCH 31

                                                                                                                   2014                 2013


         EXPENSES
           Corporate, general and administration                                               $                     $
                                                                                                               413,5 91              739,341
           Amortization                                                                                          3,6 06                4,616
           Stock-based compensation (Note 10)                                                                  687,2 49               38,869

         Net loss before interest and other items                                                           1,104,446                782,826
            Foreign exchange loss                                                                              (2,022)                (2,808)
            Interest and other income                                                                         (23,510)               (43,374)

         Net loss for the period                                                                            1,078,914                736,644

         Other Comprehensive Income
         Items that may be subsequently reclassified to profit and loss
      .
           Currency translation adjustment                                                                  (35,980)                   -

   Comprehensive loss for the period                                                         $             1,042,934 $               736,644

   Attributable to:
      Owners of the parent                                                                                 884,465                   736,644
      Non-controlling interest                                                                              194,449                        -

   Net loss for the period                                                                   $             1,078,914 $               736,644

   Basic and diluted loss per common share                                                   $                 0.02    $                 0.01

   Weighted average number of common shares outstanding                                                  54,978,578                54,224,828

  The accompanying notes are an integral part of these condensed consolidated interim financial statements.


  CONDENSED CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY
  (Expressed in Canadian Dollars)
  (Unaudited)


          Share Capital
                                                                        Non-           Cumulative
                                    Contributed                      Controlling       Translation
Number              Amount            surplus         Warrants        Interest         Adjustment           Deficit         Total


54,224,828         $16,910,654        $4,440,908       $4,372,660       $(13,048)                $-       $(13,577,134)    $12,134,040

               -                -         38,869                 -                 -                 -                -         38,869
               -                -              -                 -                 -                 -        (736,644)      (736,644)

54,224,828           16,910,654        4,479,777        4,372,660         (13,048)                   -     (14,313,778)     11,436,265



               -                -                 -              -      1,370,057                    -         225,880       1,595,937

  153,750                 249,214                 -     (118,526)                  -                 -                 -      130,688

  250,000                  73,175        (35,675)               -               -                 -                   -         37,500
  350,000                 199,500               -               -               -                 -                   -        199,500
        -                       -          38,869               -               -                 -                   -         38,869
        -                       -               -       (199,497)               -                 -                   -      (199,497)
        -                       -               -               -               -            56,894                   -         56,894
        -                       -               -               -       (290,222)                 -         (2,928,058)    (3,218,280)

54,978,578           17,432,543        4,482,971        4,054,637       1,066,787            56,894        (17,015,956)     10,077,876


               -                -              -                 -          5,120                 -                   -          5,120
               -                -        179,392                 -        133,176                 -                   -        312,568
               -                -        374,681                 -              -                 -                   -        374,681
               -                -              -                 -              -            35,980                   -         35,980
               -                -              -                 -      (194,449)                 -           (884,465)    (1,078,914)

54,978,578         $17,432,543        $5,037,044       $4,054,637      $1,010,634           $92,874       $(17,900,421)     $9,727,311

  The accompanying notes are an integral part of these condensed consolidated interim financial statements.
  .
  CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS
  (Expressed in Canadian Dollars)
  (Unaudited)
.
FOR THE THREE MONTHS ENDED MARCH 31

                                                                                               2014                 2013


CASH FLOWS FROM OPERATING ACTIVITIES
  Net loss for the period                                                       $         (1,078,914) $           (736,644)
  Non-cash items:
       Amortization                                                                             3,606                4,616
       Stock-based compensation                                                               687,249               38,869

    Changes in non-cash working capital items:
       Receivables                                                                             35,122                 9,343
       Prepaid expenses                                                                        13,613             (141,730)
       Accounts payable and accrued liabilities                                              (71,830)              (77,258)
       Amounts due to related parties                                                        (66,695)                32,297

                                                                                            (477,849)             (870,507)

CASH FLOWS FROM INVESTING ACTIVITIES
  Redemption (purchase) of term deposit                                                      150,583              (405,556)
  Exploration and evaluation asset expenditures                                              (23,909)               167,916

                                                                                              126,674             (237,640)

CASH FLOWS FROM FINANCING ACTIVITIES
  Proceeds on issuance of shares                                                                5,120                      -

                                                                                                5,120                      -

Effect of foreign exchange on cash                                                           (14,792)                      -

Change in cash during the period                                                            (360,847)           (1,108,147)

Cash, beginning of period                                                                   1,429,699            1,852,135

Cash, end of period                                                             $           1,068,852 $            743,988


The accompanying notes are an integral part of these condensed consolidated interim financial statements.

1. NATURE OF OPERATIONS AND GOING CONCERN

Giyani Gold Corp. ("Giyani", or "the Company") was incorporated under the Canada Business Corporations Act on July 26,
2007 and continued under the Business Corporations Act of British Columbia on August 4, 2010. The Company is engaged in
the acquisition, exploration, evaluation and development of principally gold resource properties in South Africa and Canada.
The Company’s primary focus is the development of the Rock Island Gold Project in South Africa and ongoing exploration for
gold at its properties in Northern Ontario, Canada. The registered address is Suite 403 - 277 Lakeshore Road East, Oakville,
Ontario, L6J 6J3. The Company trades on the TSX Venture Exchange (“TSXV”) under the symbol “WDG”.

These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”)
applicable to a “going concern”, which assume 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 operations.

The Company reported a net loss of $1,078,914 for the period ended March 31, 2014 (2013 - $736,644) and had an
accumulated deficit of $17,900,421 at March 31, 2014 (December 31, 2013 - $17,015,956).

In addition to its working capital requirements, the Company must secure sufficient funding for existing commitments and
exploration costs.

These circumstances may cast significant doubt as to the ability of the Company to meet its obligations as they come due and,
accordingly, the appropriateness of the use of accounting principles applicable to a going concern.
.
Management plans to secure the necessary financing through a combination of the exercise of existing warrants for the
purchase of common shares, the issue of new equity instruments and the entering into joint venture arrangements.
Nevertheless, there is no assurance that these initiatives will be successful.

The recovery of amounts capitalized for exploration and evaluation assets at March 31, 2014 in the statement of position is
dependent upon the ability of the Company to arrange appropriate financing to complete the development and continued
exploration of the properties and upon future profitable production or proceeds from their disposition.

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported
expenses and statement of financial position classifications that would be necessary should the going concern assumption be
inappropriate, and those adjustments could be material. The Company will continue to pursue opportunities to raise additional
capital through equity markets and/or debt to fund investment in its exploration and evaluation assets; however, there is no
assurance of the success of sufficiency of these initiatives. Should the Company fail to secure the necessary financing,
judgements regarding the recoverability of the mineral property acquisition costs and the exploration and evaluation assets
could change resulting in a significant impairment to existing assets.


2. BASIS OF PREPARATION

Statement of Compliance

These condensed consolidated interim financial statements, including comparatives, have been prepared in accordance with
International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using accounting policies consistent with
IFRS issued by the International Accounting Standards Board (“IASB”) and Interpretations of the International Financial
Reporting Interpretations Committee (“IFRIC”). The accounting policies and methods of computation applied by the Company
in these condensed consolidated interim financial statements are the same as those applied in the Company’s annual financial
statements for the year ended December 31, 2013.

Basis of Consolidation and Presentation

The condensed consolidated interim financial statements have been prepared on a historical cost basis except for certain
financial assets that are measured at fair value. All dollar amounts presented are in Canadian dollars unless otherwise
specified.

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the
Company. All intercompany transactions, balances, income and expenses are eliminated on consolidation. The consolidated
financial statements include the accounts of the Company and the following subsidiaries:


                                                        Company
                                                        Ownership         Place of                                 Method of
                      Entity Name                         (%)          Incorporation     Functional Currency      Consolidation

    Canoe Mining Ventures Corp.                           57.4          Canada            Canadian Dollar          Consolidated
    Alpha 111 Holdings Co. Ltd.                          100.0         Barbados           Canadian Dollar          Consolidated
    Beta 222 Holdings Co. Ltd.                           100.0         Barbados           Canadian Dollar          Consolidated
    Giyani Gold Holdings 333 (Pty) Ltd.                  100.0        South Africa        Canadian Dollar          Consolidated
    Giyani Gold South Africa (Pty) Ltd.                  100.0        South Africa      South African Rand         Consolidated
    Lexshell 831 Investments (Pty) Ltd.                  100.0        South Africa      South African Rand         Consolidated
    GGC South Africa Mining 111 (Pty) Ltd.               100.0        South Africa      South African Rand         Consolidated
    Obliwize (Pty) Ltd.                                  100.0        South Africa      South African Rand         Consolidated
    Obliweb (Pty) Ltd.                                   100.0        South Africa      South African Rand         Consolidated
    Lexshell 837 Investments (Pty) Ltd.                   64.0        South Africa      South African Rand         Consolidated
                                      (1)
    Rock Island Trading 17 (Pty) Ltd.                     28.8        South Africa      South African Rand         Proportionate
    (1)
        28.8% represents the Company’s effective ownership in Rock Island Trading 17 (Pty) Ltd. is a joint operation. (Note 8)

    Use of Estimates

The Company performed an analysis of risk factors which, if any should be realized, could materially and adversely affect the
results, financial position and/or market price of its securities.

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and
assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the
date of the consolidated financial statements and the reported amount of expenses and other income for the year. These
estimates and assumptions were based on management’s knowledge of the relevant facts and awareness of circumstances,
.
having regard to prior experience. Significant estimates and assumptions include the following (excluding going concern which
is disclosed in Note 1):

(i) Recoverability of exploration and evaluation properties

Management will consider the economics of its exploration and evaluation assets, including the drill and geophysical results.
Consideration was also given to the risk factors mentioned in Note 14 (and in Note 1) and their potential impact on the
economics of the mineral property assets.

(ii) Other accounting estimates

Other estimates included the benefits of future income tax assets and whether or not to recognize the resulting assets on the
statement of financial position, the estimated useful lives of capital assets, and determinations as to whether exploration costs
should be expensed or capitalized.

While Management believes that these estimates and assumptions are reasonable, actual results may differ from the amounts
included in the consolidated financial statements.


(iii) Stock-based compensation

Management is required to make certain estimates when determining the fair value of stock option awards, and the number of
awards that are expected to vest. These estimates affect the amount recognized as stock-based compensation in the
statements of loss based on estimates of forfeiture and expected lives of the underlying stock options.

New standards not yet adopted

IFRS 9 – Financial instruments (“IFRS 9”) was updated by the IASB in November 2009 and will replace part of IAS 39 -
Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 addresses the classification and measurement of
financial assets. The two measurement categories for financial assets include amortized cost and fair value. All equity
instruments are measured at fair value. A debt instrument is recorded at amortized cost only if the entity is holding it to collect
contractual cash flows and the cash flows represent principal and interest. Otherwise it is recorded at fair value through profit
or loss.

Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS
39, Financial Instruments – Recognition and Measurement, except that fair value changes due to credit risk for liabilities
designated at fair value through profit and loss would generally be recorded in other comprehensive income rather than the
income statement, unless this creates an accounting mismatch. IFRS 9 is effective for annual periods beginning on or after
January 1, 2018. The Company is in the process of assessing the impact of this pronouncement.


3. REVERSE TAKEOVER TRANSACTION

On December 5, 2013, the Canoe Mining Ventures Corp. ("Canoe") (formerly C-Level III Inc, a capital pool corporation under
the policies of the TSX Venture Exchange) acquired 2299895 Ontario Inc. ("2299895"), a subsidiary of Giyani, through
amalgamation. In accordance with the terms of the Letter Agreement, the Company entered into the Amalgamation Agreement
with 2299895 and Giyani to carry out a Qualifying Transaction (“QT”). Pursuant to the terms of the Amalgamation Agreement,
Canoe acquired all of the issued and outstanding shares of 2299895 and 2299895 amalgamated with a wholly-owned
subsidiary of Canoe, Ontario AcquisitionCo, to create Canoe Mining Ventures Inc. The 12,852,515 issued and outstanding
2299895 Shares of which Giyani Gold owned 12,602,515, representing approximately 98.1% of the issued and outstanding
2299895 Shares were exchanged for 20,000,000 shares of Canoe. As a result of the transaction, Giyani's interest in Canoe
declined from 98.1% to 57.4%.

The 865,395 New 2299895 shares issued to subscribers pursuant to a 2299895 private placement were exchanged for a total
of 6,057,765 shares of Canoe, on the basis of seven shares of Canoe for each New 2299895 share and seven warrants of the
Canoe.

The QT constituted a reverse acquisition of Canoe inasmuch as the former holders of 2299895 shares (excluding the
subscribers participating in the 2299895 Private Placement) owned approximately 59.5% of the outstanding shares of the
Canoe immediately after closing, including the conversion of the New 2299895 shares.

Prior to completion of the QT, C Level had 5,004,343 shares outstanding (including 3,250,000 C Level Seed Shares subject to
an escrow agreement), 483,392 C Level options exercisable at a price of $0.20 per C Level Share, and 175,435 C Level
Warrants exercisable at a price of $0.20 per C Level share. Upon completion of the transaction, C Level owned approximately
14.9% of Canoe.
.
The reverse takeover resulted in the issuance of common shares, broker warrants, and stock options to holders of C Level
equity investments with a total deemed value paid for C Level as agreed between C Level and 2299895. The excess value of
the consideration deemed paid of $645,361 over C Level net assets deemed received has been reflected as a listing expense
in the statement of loss and comprehensive loss as C Level was a non-operating public company with nominal assets.



                                                                                  Shares              Price           Amount

    Fair value of common shares deemed issued to former
    C Level shareholders                                                      5,004,343               $0.15         $750,651
    Fair value of broker warrants deemed issued to former
    C Level broker warrant holders                                                                                     2,456
    Fair value of stock options deemed issued to former
    C Level stock option holders                                                                                      42,539

    Total fair value of consideration deemed paid                                                                     795,646
    Less C Level net assets received                                                                                (150,285)

    Public company listing expense                                                                                  $645,361

Net Assets Received


    Description                                                                                                       Amount

    Opening C Level share capital                                                                                   $520,451
    Options and warrants previously issued                                                                            90,498
    C Level deficit                                                                                                 (460,664)

    Deemed fair value of C Level                                                                                     $150,285


4.TERM DEPOSIT

         As at December 31, 2013, the Company had a term deposit with a carrying value of $150,583 which was redeemed
         during the period ended March 31, 2014. The term deposit was held in the form of an interest bearing savings account
         at a Canadian Chartered bank, earning interest of approximately 1.35% per annum.

5.RESTRICTED CASH

         The Company has credit cards with a major financial institution with an aggregate credit limit of $100,000 (December
         31, 2013 - $100,000). The financial institution holds a $100,000 (December 31, 2013 - $100,000) deposit as collateral
         on the credit amount as long as the credit cards are active. The restricted cash amounts would change if there were
         any changes to the credit limits on the cards.

6.EQUIPMENT


                                                    Furniture
                                                      and           Mining and     Computer           Phone
                                                    Fixtures        Exploration    Equipment        Equipment       Total

    Cost
    Balance,
    December 31, 2012 and 2013,
    and March 31, 2014                                 $31,186          $21,724        $23,365         $42,243      $118,518

    Accumulated depreciation
    Balance, December 31, 2012                          $5,268           $7,000            $7,464       $4,737        $24,469
    Additions for the year                               3,703            5,896             5,300        3,566         18,465

    Balance, December 31, 2013                              8,971        12,896            12,764        8,303         42,934
    Additions for the period                                  793         1,215               884          714          3,606
.
    Balance, March 31, 2014                             $9,764        $14,111         $13,648           $9,017        $46,540

    Net book value
    As at December 31, 2013                           $22,215             $8,828      $10,601         $33,940         $75,584
    As at March 31, 2014                              $21,422             $7,613       $9,717         $33,226         $71,978

7.REHABILITATION DEPOSIT

The Department of Mineral Resources (“DMR”) in South Africa requires a deposit or bank guarantee as security for the duty to
rehabilitate any mineral property. The funds will be refunded once the rehabilitation has been completed to the satisfaction of
DMR. As at March 31, 2014, Giyani has recorded a deposit of $21,714 (December 31, 2013 - $15,018) included in exploration
and evaluation assets.

8.EXPLORATION AND EVALUATION ASSETS



    Mineral Property Acquisition Costs

    Acquisition costs for Rock Island, South Africa
    Balance, December 31, 2012, 2013 and March 31, 2014                                                            $5,680,292

On October 26, 2012, the Company completed the execution of a revised binding agreement (the “Revised Agreement”) with
Kytanite Development Corp. ("Kytanite") pursuant to which the Company has confirmed its entitlement to acquire Kytanite's
interest in the Rock Island gold properties. The Company acquired 100% of Lexshell 831 (Pty) Ltd (“Lexshell 831”), a company
duly incorporated and registered in the Republic of South Africa. Lexshell 831 was the legal and beneficial owner of 80% of the
issued and outstanding shares of Lexshell 837 (Pty) Ltd (Lexshell 837), a Company incorporated and registered in the
Republic of South Africa. Lexshell 837 owns 45% of the shares of Rock Island Trading (Pty) Ltd.

Total consideration paid was U$2,500,000 (CAN $2,497,792) and 2,500,000 common shares valued at $3,182,500 of the
Company.

On October 26, 2012, Lexshell 831 sold a further 16% of the Common Shares in Lexshell 837 to Malungani Resources (Pty)
Ltd., a company representing the Community Trust for Rock Island. Total consideration is Rand 3,600,000. No receivable has
been set up for this amount, as it will be paid with proceeds from the property.

8.EXPLORATION AND EVALUATION ASSETS (cont’d…)

After sale of the shares Lexshell 831 is the legal and beneficial owner of 64% of the issued and outstanding shares of Lexshell
837.

Total expenditures on exploration and evaluation assets are as follows:


                                                                                                                        South
    South Africa                                                                                                        Africa

    Balance, December 31, 2012                                                                                     $1,638,020
    Current expenditures                                                                                              110,803

    Balance, December 31, 2013                                                                                       1,748,823
    Current expenditures                                                                                                23,909
    Currency Translation Adjustment                                                                                     64,683

    Balance, March 31, 2014                                                                                        $1,837,415

    Canada                                              Killins       Emerald      Abbie Lake         Keating            Total

    Balance, December 31, 2012                       $267,200        $354,523        $563,148        $298,946      $1,483,817
    Current expenditures                                    -         112,495          54,133               -         166,628

    Balance, December 31, 2013 and
    March 31, 2014                                   $267,200        $467,018        $617,281        $298,946      $1,650,445

    Total exploration and evaluation assets
.
    December 31, 2012                                                                                               $3,121,837
    December 31, 2013                                                                                               $3,399,268
    March 31, 2014                                                                                                  $3,487,860

South Africa

Rock Island Gold Project

Pursuant to the joint operation agreement relating to the assets of Rock Island, the Company funds the joint operation with
Corridor Mining Resources (“CMR”) on a 50:50 basis, whereby both parties are to share the costs evenly on an ongoing basis.
Exploration costs are recorded in a loan account where interest is accrued at an agreed upon rate. This loan will be repaid out
of proceeds from the sale of the Rock Island asset. The loan is unsecured, with no fixed repayment terms and bears interest at
South African prime +1%. As at December 31, 2013 the Company had advanced $1,748,823 to Rock Island for exploration
work.

Khavagari and Siyandani

On November 17, 2011 the Company entered into a binding agreement to acquire prospecting rights from Sephaku Gold
Exploration (Proprietary) Limited ("SGE"), the holder of the rights, which are located in the Giyani Greenstone Belt ("GGB"),
South Africa. The transaction will be structured as an outright purchase of the prospecting rights from SGE, which owns the
rights for the Khavagari and Siyandani gold projects. Upon the execution of a definitive sale agreement and closing of the
transaction, the Company will have 100% interest in these projects.

As consideration for the interest in the Khavagari and Siyandani gold projects, the Company will provide the vendor a nominal
cash payment of approximately Rand 1,000,000.

This transaction has not closed.

Northern Ontario, Canada

UCEL Option Agreement

The Company executed an option agreement on September 19, 2011 (the “UCEL Agreement”) with Upper Canada
Explorations Limited (the “Optionor”), an arm’s length party, to earn a 100% interest in certain surface and mineral rights (the
“Abbie Lake Property”) near Sault Ste. Marie, Ontario, Canada. The Company paid the Optionor $50,000 upon receipt of the
approval of the UCEL Agreement by the TSXV (the “Approval Date”) and issued 200,000 common shares of 2299895
(exchanged for 311,223 shares of the Company (see note 3)) valued at $20,000.

In November 2012, the Company paid $50,000 and issued 150,000 common shares of 2299895 (exchanged for 233,417
shares of the Company (see note 3)) valued at $15,000 pursuant to the agreement. The UCEL Agreement also specifies
payments to the Optionor in the amount of $50,000 and 150,000 common shares of 2299895 within 24 months of the Approval
Date. Pursuant to an amending agreement dated October 28, 2013, the Company renegotiated the final share payment to be
75,000 shares to be due on or before April 30, 2014. The 75,000 shares were issued on December 17, 2013 and ascribed a
fair value of $12,000.

Pursuant to an amending agreement dated January 23, 2013, the Company renegotiated the Initial Work Program to be
$600,000 prior to December 31, 2013 and a total of $1,000,000 by December 31, 2014. Pursuant to an amending agreement
dated October 28, 2013, the Company renegotiated the Initial Work Program to be $600,000 prior to December 31, 2014 and
a total of $1,000,000 by December 31, 2015. As at March 31, 2014, $434,546 has been incurred relating to the Initial Work
Program (excluding acquisition costs) on the property.

The Company must pay a 3% net smelter royalty (“NSR”) on ore and a 3% gross overriding royalty (“GOR”) on gemstones and
diamonds covered under the UCEL Agreement, provided however that the Company may purchase 1.5% of the NSR at any
time upon 30 days’ notice in writing in consideration for the sum of $1,500,000. The Company must pay a 2% NSR on the sale
or disposition of minerals covered under the UCEL Agreement, provided however that the Company may purchase 1.5% of
the NSR at any time upon 30 days’ notice in writing in consideration for the sum of $750,000.


Keating Property, Ontario

The Company executed a licensing agreement on November 1, 2011 (the “Michipicoten Agreement”) with 3011650 Nova
Scotia Limited, trading as Michipicoten Forest Resources (the “Licensor”), an arm’s length party, to acquire the license for an
exploration area within the District of Algoma, Ontario, Canada. The term of the lease is five years and contains the option to
extend the Michipicoten Agreement for an additional five years.
.
Terms of the Michipicoten Agreement require the Company to pay $8,040 for the first year and $500 multiplied by the number
of grid claims that constitute the licensed area for the remaining four years. If the Company extended the Michipicoten
Agreement for an additional five years, the Company would be required to pay $600 multiplied by the number of grid claims
that constitute the licensed area during each of the additional five years of the agreement. The Company is responsible for all
taxes related to the licensed area during the term of the Michipicoten Agreement. The current land package for the exploration
area held by the Company is 70.02 grid claims.

The Company is required to incur minimum exploration expenditures during each license year. During each license year of the
original term, an annual amount of $2,500 multiplied by the number of grid claims that constitute the licensed area must be
incurred. During each license year of the renewal term, an annual amount of $3,000 multiplied by the number of grid claims
that constitute the licensed area must be incurred.

The Company shall pay the Licensor for each mine commencing commercial production, the conditional option of reducing the
royalty retained by and payable to the lessor therein to a maximum of 2% for all minerals except for diamonds, gems and other
precious or semi-precious stones which will remain at 5%. The purchase price for the first 1% of the royalty shall be
$1,000,000 and for each remaining 1/2% increment of the royalty there-after the purchase price shall be $1,000,000.

Keating East

On March 21, 2012, the Company executed an agreement (the “Keating East Agreement”) with 2099840 Ontario Inc. trading
as Emerald Geological Services (“Emerald”), an arm’s length party, to have Emerald release an additional 985 Ha area of
claims (the “Lands”) in the form of certain surface and mineral rights situated in Keating Township, Ontario, Canada,
contiguous to the Company's Abbie Lake Property and then to have these Lands included in the licensing agreement with
Michipicoten.

The Keating East Agreement entitles Emerald to completely release its interest in the Lands from the Licensor and to have the
Company acquire a 100% interest in the Lands in exchange for a combination of consideration comprised of: $126,600 in cash
payable over three years; $100,000 in exploration expenditures and other work programs, and up to 200,000 shares in
2299895 over a period of three years. 50,000 common shares of 2299895 (exchanged for 77,806 shares of the Company.
(see note 3)) were issued on September 23, 2012 valued at $5,000. The total current value of the maximum cash
consideration payable if all conditions are satisfied is $226,600. Under the terms of the agreement, Emerald has agreed to
relinquish its license and rights in the Lands and to allow 2299895 to acquire its interest and rights in the Lands under license
from a private arms-length corporate entity to 2299895 and the owner of the Lands, in exchange for an annual fee payable to
that party and an annual work program.

Pursuant to an amendment agreement, dated February 13, 2013, between 2299895 and Emerald, Emerald has agreed that all
future obligations pursuant to the Keating East Agreement shall be jointly those of 2299895 and the Company and has agreed
to exchange the 50,000 2299895 shares it currently holds for 125,000 shares of the Company. In addition, pursuant to an
amendment agreement, dated January 23, 2013, Emerald has agreed to extend the date for payment of the consideration
payable upon the first anniversary of the Completion of the QT to December 31, 2013 and agreed that the Company is
responsible for the payment of $25,000 and the issuance of 125,000 shares of the Company. Pursuant to an amending
agreement dated August 12, 2013, 2299895 and Emerald agreed to issue the 125,000 shares of the Company (issued on
December 17, 2013 and ascribed a fair value of $20,000) and to pay Emerald $25,000 on or before December 31, 2013 (paid,
as stipulated). In addition, Emerald acknowledges that the shares to be issued on the second and third anniversary will be
125,000 shares of Giyani Gold Corp.

Subsequent to the period ended March 31, 2014, the Company paid $35,000 as an option payment on the Keating East
Agreement.

Killen Agreement

On July 12, 2012, the Company executed a licensing agreement with a private arm’s length party (“Killen Agreement”). The
Killen Agreement entitles the Company to acquire a 100% interest and rights in 39.5 square kilometers of surface and mineral
rights situated in Keating Township, Ontario, in exchange for an annual fee payable and an annual work program.

The license agreement for the Lands will be the same terms and conditions as the Michipicoten Agreement.


9. SHARE CAPITAL

a) Authorized share capital

Unlimited number of common shares without par value.

b) Issued share capital
.
In fiscal 2013, Canoe issued 2,540,000 flow through shares. A liability of $127,000 related to tax benefits associated with the
flow through shares as been recorded.

In April 2013, the Company issued 350,000 common shares valued at $199,500 to an existing shareholder of 2299895, in
return for 350,000 shares of 2299895.


10. STOCK OPTIONS

The Company has adopted an incentive stock option plan in accordance with the policies of the TSXV, under which the Board
of Directors of the Company may grant to directors, officers, employees and consultants of the Company, non-transferable
options to purchase common shares provided the number of shares reserved for issuance under the stock option plan shall
not exceed 10% of the issued and outstanding common shares, exercisable for a period of up to five years from the date of
grant. The Board of Directors determines the price per common share and the number of common shares, which may be
allotted to directors, officers, employees and consultants, and all other terms and conditions of the option, subject to the rules
of the TSXV.

Stock option transactions are summarized as follows:


                                                                                   Number of Stock           Weighted Average
                                                                                  Options Outstanding         Exercise Price

    Balance, December 31, 2012                                                   3,350,000                                  $1.43
    Exercised                                                                    (250,000)                                   0.15
    Forfeited                                                                    (400,000)                                   1.30

    Balance, December 31, 2013                                                   2,700,000                                   1.53
    Granted                                                                      2,150,000                                   0.25

    Balance, March 31, 2014                                                      4,850,000                                  $0.97
    Balance, March 31, 2014 exercisable                                          4,775,000                                  $0.98

Stock options outstanding as at March 31, 2014:


                                                                            Weighted Average
                                                                             Life Remaining
            Expiry Date                                Exercise Price            (Years)           Options Outstanding

    November 3, 2015                                               $1.30                  1.59                           500,000
    June 24, 2016                                                   2.00                  2.24                           450,000
    July 26, 2016                                                   2.31                  2.32                           250,000
    August 30, 2016                                                 2.35                  2.42                            75,000
    July 11, 2017                                                   1.30                  3.28                         1,325,000
    October 18, 2017                                                1.30                  3.55                           100,000
    March 4, 2019                                                   0.25                  4.93                         2,150,000

                                                                    0.97                                               4,850,000

The Company’s subsidiary, Canoe, has 2,483,392 stock options outstanding of which 483,392 are exercisable at $0.20 until
December 5, 2014 and 2,000,000 are exercisable at $0.25 until February 27, 2019.

Stock-based compensation

During the period ended March 31, 2014, the Company granted 2,150,000 (2013 – Nil) options to directors, officers and
consultants. The weighted average fair value of options granted and vesting during the period was $0.19 (2013 - $Nil)

Total stock-based compensation recognized in the statement of loss and comprehensive loss for the period ended March 31,
2014 was $687,249 (2013 – $38,869). Of this amount, $374,681 (2013 - $Nil) relates to options granted and vesting in the
Company. The balance of $179,392 (2013 - $38,869) relates to the Company’s proportionate interest in the value of stock
options granted by the Company’s subsidiary, Canoe.

The following weighted average assumptions were used for the valuation of stock options granted by the Company:
.

                                                                                     2014                        2013

    Expected share price volatility                                                       115.00%                          -%
    Expected risk-free interest rate                                                        1.66%                          -%
    Expected dividend yield                                                                 0.00%                          -%
    Expected life of options, in years                                                      5.00%                          -%


11. WARRANTS

Warrant transactions are summarized as follows:


                                                                             Number of Warrants         Weighted Average
                                                                                Outstanding              Exercise Price

    Balance, December 31, 2012                                                       5,901,082                   $0.95
    Exercised                                                                        (153,750)                    0.85
    Expired                                                                         (1,075,456)                   1.40

    Balance, December 31, 2013 and March 31, 2014                                   4,671,876                    $1.88

Warrants outstanding as at March 31, 2014:


                                                                       Weighted Average
                                                                        Life Remaining              Warrants
             Expiry Date                            Exercise Price          (Years)                Outstanding

    October 25, 2014                                    $1.88                0.57                       4,671,876

The Company’s subsidiary, Canoe, has 7,698,521 warrants outstanding with a weighted average exercise price of $0.25 and a
weighted averages remaining life of 1.65 years.

12. RELATED PARTY TRANSACTIONS

Management Compensation

Remuneration of directors and key management personnel of the Company was as follows:


                                                                                                    2014                 2013

    Payments to key management personnel:
    Cash compensation                                                                             $80,954           $194,002
    Stock-based compensation                                                                      295,684                  -

Management and consulting fees of $80,954 (2013 - $194,002) were paid to officers and directors or to companies controlled
by officers or directors.

During the period ended March 31, 2014, the Company paid or accrued $Nil (2013 - $27,480) to McCarthy Tétrault LLP, a law
firm where one of the Company’s directors is a Partner.


12. RELATED PARTY TRANSACTIONS (cont’d…)

During the year ended December 31, 2012, the Company issued funds to 2299895 of $2,252,515, by means of an unsecured
loan, with no due date, bearing no interest. During the year ended December 31, 2013, the loan was settled through the
issuance of 2,252,515 common shares of 2299895, ascribed a fair value of $2,252,515. These shares were exchanged for
3,505,174 of the Company on the closing of the QT.

During the year ended December 31, 2013, the Company reversed an intercompany loan payable from Canoe for $56,905.
.
13. CAPITAL MANAGEMENT

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and sustain
future development of the business. The capital of the Company consists of equity.

The Company manages its capital structure and makes adjustments in light of the changes in its economic environment and
the risk characteristics of the Company’s assets. To effectively manage the Company’s capital requirements, the Company
has in place planning, budgeting and forecasting process to help determine the funds required to ensure the Company has the
appropriate liquidity to meet its operating and growth objectives. With the exception of commitments detailed in Note 15, there
were no externally imposed capital requirements to which the Company is subject as at March 31, 2014.

14. FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The Company provides information about its financial instruments measured at fair value at one of three levels according to
the relative reliability of the inputs used to estimate the fair value. The hierarchy gives the highest priority to unadjusted quoted
prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the
fair value hierarchy are as follows:

Level 1:quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2:inputs other than quotes prices included in Level 1 that are observable for the asset or liability, either directly (i.e.,   as
prices) or indirectly (i.e., derived from prices).
Level 3:inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair Values

Cash and term deposits are classified as Level 2. The Company's cash is comprised primarily of current deposits held with
Canadian and South African chartered banks and term deposits consist of Canadian guaranteed investment certificates. The
fair values of cash and term deposits approximate their carrying values due to their short-term nature.

Financial risk factors

The Company's risk exposure and the impact on the financial instruments are summarized below:

Credit risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual
obligations. The Company's exposure to credit risk includes cash, term deposits, and cash equivalents.
The Company reduces its risk by maintaining its bank accounts at large Canadian, Barbados, and South African financial
institutions.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company's
approach to managing liquidity risk is to provide reasonable assurance that it will have sufficient funds to meet its liabilities
when they come due. The Company manages its liquidity risk by forecasting cash flows required by operations to and
anticipated investing and financing activities. The Company's financial obligations currently consist of accounts payable and
accrued liabilities, and amounts due to related parties. The carrying value of the accounts payable, accrued liabilities and due
to related parties approximates fair value as they are short term in nature.

The Company had cash at March 31, 2014 of $1,068,852 (December 31, 2013 - $1,429,699). At March 31, 2014, the
Company had accounts payable and accrued liabilities and due to related parties of $661,091 (December 31,
2013 - $785,507).

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

a) Interest Rate Risk

The Company's cash and cash equivalents consist of cash and term deposits held in bank accounts that earn interest at
variable interest rates. Future cash flows from interest income on cash will be affected by interest rate fluctuations. Due to the
short-term nature of these financial instruments fluctuations in market rates do not have a significant impact on estimated fair
values. The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of
capital and liquidity. The interest income earned on cash is minimal; therefore, the Company is not subject to material interest
rate risk.
.

b) Foreign Currency Risk

The Company is exposed to foreign currency risk of the South African rand. This risk is limited as contracts and loan
agreements are denominated in Canadian dollars where possible.


                                                                                                                 South African Rand

      Cash                                                                                                                  $55,415
      Accounts receivable                                                                                                    53,651
      Accounts payable and accrued liabilities                                                                            3,810,176

Based on the net exposure at March 31, 2014, a 10% depreciation or appreciation of the South African rand against the
Canadian dollar would result in approximately a $39,000 increase or decrease in the Company’s net loss for the period.

c) Other Price Risk

Other price risk is the risk that the fair or future cash flows of a financial instrument will fluctuate because of changes in market
prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to any other price
risk.

15. COMMITMENTS

The Company has committed to approximately $1,085,120 over the next five years for obligations under operating leases,
rent, exploration, and option payments.


                                                      2014              2015               2016              2017              2018

      Exploration commitments                    $165,454           $407,500             $7,500               $-                  $-
      Licenses and taxes                           63,000             63,000                 -                 -                   -
                        (i)
      Option payments                              35,000             50,000                 -                 -                   -
      Rent (Oakville office)                       95,243             95,243             95,243             7,937                  -

                                                   $358,697        $615,743             $102,743            $7,937                $
(i)  
      The option payment of $35,000 due in fiscal 2014 was paid subsequent to the period ended March 31, 2014.

Commitments, totaling $791,454, inclusive of exploration commitments, licenses and taxes and option payments are those of
Canoe.

16. SEGMENTED INFORMATION

Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating
segments and has been identified as the Company’s Chief Executive Officer.

The Company has two operating segments: the exploration, evaluation and development of precious metal mining projects
located in Ontario (“Canoe”) and located in South Africa (“South Africa Mining”). The rest of the entities within the Company
are grouped into a secondary segment (“Corporate”).

The segmental report is as follows


                                                                                  South Africa
      Three months ended March 31, 2014                           Canoe             Mining           Corporate            Total

      Property and equipment                                             $-                $-             $71,978           $71,978
      Exploration and evaluation                                   1,650,445         1,837,415                 -          3,487,860
      Total assets                                                 2,578,419         7,529,159            554,022        10,661,600
      Total liabilities                                              300,230           400,069            233,990           934,289
      Net loss                                                       456,378             6,242            616,294         1,078,914
      Net additions to
      exploration and evaluation assets                                      -           88,592                  -           88,592
.
    Year ended December 31, 2013                              Canoe        South Africa       Corporate             Total
                                                                             Mining

    Property and equipment                                          $-              $-            $75,584            $75,584
    Exploration and evaluation                                1,650,445       1,748,823                -           3,399,268
    Total assets                                              3,035,877       7,452,790           647,914         11,136,581
    Total liabilities                                           531,683         389,936           137,086          1,058,705
    Net loss                                                    703,004       1,135,491         2,116,429          3,954,924
    Net additions to
    exploration and evaluation assets                          166,629          110,803                    -         277,432

17. NON-CONTROLLING INTEREST

On December 5, 2013, Canoe entered into the Amalgamation Agreement with 2299895 and Giyani to carry out a QT (Note 3).
As a result of the transaction, Giyani's interest in Canoe declined from 98.1% to 57.4%.

Since these transactions did not result in a loss of control by Giyani, they have been recorded as a transfer of equity to
non-controlling interest holders. The major transactions not resulting in a loss of control and the resulting impact are
summarized and described as follows:


                                                                                           For the three        For the year
                                                                                          months ended                ended
                                                                                              March 31,        December 31,
                                                                                                    2014               2013

    Balance, beginning of period                                                             $1,066,787             $(13,048)
    Change in non-controlling interest                                                            5,120              1,370,057
    Stock-based compensation in Canoe                                                           133,176                     -
    Share of loss attributing to non-controlling interests                                    (194,449)               (290,222)

    Balance, end of period                                                                   $1,010,634              $1,066,787

Set out below is summary financial information for Canoe, in which the Company holds a 57.4% interest (December 31, 2013
– 57.4%). The amounts disclosed are based on those included in the consolidated financial statements, before intercompany
eliminations.


                                                                                              March 31,        December 31,
    Summarized consolidated statement of financial position                                       2014                2013

    Non-controlling interest percentage                                                           42.6%                42.6%

    Current assets                                                                             $976,663           $1,385,432
    Current liabilities                                                                        (154,032)           (424,111)

                                                                                                822,631              961,321

    Non-current assets                                                                        1,650,445            1,650,445
    Non-current liabilities                                                                   (146,198)            (146,198)

                                                                                              1,504,247            1,504,247

    Net assets                                                                                2,326,878            2,465,568

    Accumulated non-controlling interest                                                       $992,414           $1,050,332


                                                                                           For the three        For the three
                                                                                          months ended         months ended
                                                                                              March 31,            March 31,
Summarized consolidated statement of loss and comprehensive loss                                    2014                 2013

Non-controlling interest percentage                                                               42.6%                     -%
.

Expenses                                                                                         $456,378               $150
Net loss and comprehensive loss                                                                   456,378                150

Loss allocated to non-controlling interest                                                       $194,449                  $-

17. NON-CONTROLLING INTEREST (cont’d…)


                                                                                            For the three      For the three
                                                                                           months ended       months ended
                                                                                               March 31,          March 31,
Summarized consolidated statement of cash flows                                                      2014               2013

Non-controlling interest percentage                                                                 42.6%                  -%

Cash flows from operating activities                                                           $(436,146)            $39,927
Cash flows from financing activities                                                                5,120                   -
Cash flows from investing activities                                                                    -            (31,079)

Of total cash and cash equivalents as of March 31, 2014, $5,819 (December 31, 2013 - $18,240) was held in subsidiaries
which have regulatory regulations, contractual restrictions or operate in countries where exchange controls and other legal
restrictions apply and are therefore not available for general use by the Company.

18. PROPOSED TRANSACTION

On March 26, 2014, the Company’s subsidiary, Canoe Mining Ventures Corp., entered into a definitive amalgamation
agreement (“Agreement”) with Birch Hill Gold Corp. ("Birch Hill"). Pursuant to the terms of the Agreement, the Company will
acquire all of the issued and outstanding common shares of Birch Hill and the shareholders of Birch Hill will receive 0.4 of a
common share of the Company for each common share of Birch Hill held. Holders of Birch Hill share purchase warrants will
receive 0.4 of a share purchase warrants of the Company with a corresponding adjustment to the exercise price.

The currently issued and outstanding capital of Birch Hill consists of 13,421,385 Birch Hill Shares and 3,898,579 Birch Hill
share purchase warrants. In order to execute the Agreement, the Company will issue approximately 5,368,554 common
shares in exchange for all the issued and outstanding Birch Hill Shares and reserve a further 1,559,432 common shares for
issuance on the exercise of share purchase warrants issued in exchange for the Birch Hill share purchase warrants.

The Agreement is subject to approval by the shareholders of Birch Hill on May 15, 2014, certain closing conditions and the
approval of the TSXV.

16 May 2014

Sponsor
Sasfin Capital (a division of Sasfin Bank Limited)

Date: 16/05/2014 09:09:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
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