Cosigo Resources Ltd. — Interim / Quarterly Report 2021

Jun 25, 2021

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

Unaudited Interim Consolidated Financial Statements of

COSIGO RESOURCES LTD.

As at and for the three months ended March 31, 2021

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

NOTICE OF NO AUDITOR REVIEW OF 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 interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

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

“Andy Rendle”

Andy Rendle

Chief Operating Officer

Cosigo Resources Ltd.

“Hector Mario Cuevas”

Hector Mario Cuevas

Chief Financial Officer

Cosigo Resources Ltd.

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

COSIGO RESOURCES LTD.

Condensed Consolidated Statements of Financial Position Expressed in Canadian Dollars

ASSETS Current Cash GST Recoverable IVA Recoverable	March 31 2021 57,668 57,668 57,668 82,469 430,994 17,955 531,419 12,246,924 2,724,019 (14,722,977) (721,717) (473,751) 57,668	December 31
		2020 56,213 20,850
Total Current Assets		77,063
Total Assets		77,063
LIABILITIES Current Accounts payable and Accrued liabilities Loans Payable Due torelatedParties		75,337 430,994 24,182
Total current liabilities		530,513
EQUITY Share capital Share-based payments Reserve Retained Earnings Deficiency Effect of Exchange Rate		12,246,924 2,724,019 (14,702,134) (722,259)
Total Equity		(453,450)
Total Liabilities and Equity		77,063

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

Consolidated Consolidated Interim Statements of Operations (Unaudited - Prepared by Management) Expressed in Canadian Dollars Exploration INCOMES	Consolidated Consolidated Interim Statements of Operations (Unaudited - Prepared by Management) Expressed in Canadian Dollars Exploration INCOMES	and Comprehensive Loss March 31 2021 34 15,241 3,936 1,181 157 294 20,809 (20,843)
			March 31
			2020 810
Interest
General and administrative expenses Administrative fees and compensation Depreciation Foreign exchange/Loss Legal, accounting and audit Office and sundry Share-based compensation Telecommunications Travel			18,782 4,520 2,726 888 2,083
Total General and administrative expenses			29,000
Net Loss for the Period Other Comprehensive Loss for the period (Foreign Currency Translation Gain (Loss) Net and Comprehensive Loss for the Period Basic and Diluted Loss per Share Weighted Average number of Shares Outstanding, Basic and Diluted			(29,810)
		542	1073
		(20,301)	(28737)
		(0.0003)	(0.0003)
		77,630,523	77,630,523

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

COSIGO RESOURCES LTD.

Consolidated Interim Statements of Changes in Equity

(Unaudited - Prepared by Management) Expressed in Canadian Dollars

December 31, 2019 Net Loss for the year Foreign Currency Loss December 31, 2020 Net Loss for the period Foreign Currency Loss March 31, 2021	Number of Common Shares Share Capital $ Share- Based Payment Reserve $ Foreign Currency Translation Reserve $ Accumulated Deficit $ Total Deficiency $
	77,630,523 12,246,924 2,724,019 (726,552) (14,568,157) (323,766) (133,977) (133,977) 4,293 4,293
	77,630,523 12,246,924 2,724,019 (722,259) (14,702,134) (453,450) (20,843) (20,843) 542 542
	77,630,523 12,246,924 2,724,019 (721,717) (14,722,997) (473,751)

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

COSIGO RESOURCES LTD.

Consolidated Statements of Cash Flow Expressed in Canadian Dollars

COSIGO RESOURCES LTD. Consolidated Statements of Cash Flow Expressed in Canadian Dollars
Operating Activities Net Loss for the period Non-cash items Depreciation Share-based compensation Changes in non-cash operating assets and liabilities Amount receivable Increase or Decrease in Inventories Prepaid expenses IVA receivable Due from/to related parties Accounts payable and accrued liabilities Increase or Decrease in other accounts payable Sub Total Total Cash Outflow From Operating Activities Investing Activities Plant and equipment ownership Deferred and intangible charges Net cash flow from investing activities Financing Activities Financial obligations Accounts payable Total Cash Outflow From Financing Activities Decrease in cash Effect of Exchange rate on cash Cash, Beginning of period Cash, End of period	THREE MONTHS ENDED Mar-31
	2021 (20,843) 0 0 0 20,850 0 0 0 (6,227) 7,132 0 21,755 912 0 0 0 0 0 0 912 542 56,213 57,667	2020 (29,810) 0 0 0 (186) 0 0 0 (13,969) 40,552 361
		26,759 56,569
		0 0
		0
		0 0
		0
		56,569 (72,255) 26,499
		10,813

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

NOTE 1 – NATURE OF OPERATIONS AND ABILITY TO CONTINUE AS A GOING CONCERN

Cosigo Resources Ltd. (the “Company”) was incorporated on December 21, 1987 in the Province of Alberta and subsequently continued in the province of British Columbia in July 2007, and is engaged in the business of acquisition and exploration of mineral properties. The address of the Company is 3854 Cadboro Bay Road, Victoria, BC, Canada, V8N 4G4.

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards on the basis that the Company is a going concern and will be able to meet its obligations and continue its operations for its next fiscal year. Several conditions as set out below cast uncertainties on the Company’s ability to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon the financial support from its shareholders and other related parties, its ability to obtain financing for the continuing exploration and development of its mineral properties, the existence of economically recoverable reserves, and the attainment of profitable operations or proceeds from disposition of these properties. The Company will need to raise additional funds through future issuance of securities or debt financing. Although the Company has raised funds in the past, there can be no assurance the Company will be able to raise sufficient funds in the future, in which case the Company may be unable to meet its obligations as they come due in the normal course of business. It is not possible to predict whether financing efforts will be successful or if the Company will attain a profitable level of operations.

The current cash resources are not adequate to pay the Company’s accounts payable and to meet its minimum commitments at the date of these consolidated financial statements, including planned corporate and administrative expenses, and other project implementation costs, accordingly, there is significant doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not give effect to adjustments that would be necessary to the carrying amounts and classifications of assets and liabilities should the Company be unable to continue as a going concern.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

a) Statement of Compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These unaudited consolidated financial statements were approved and authorized for issue by the Board of Directors on June 24, 2021.

b) Basis of Preparation

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as available-for-sale that have been measured at fair value. Cost is the fair value of the consideration given in exchange for net assets.

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

c) Basis of Consolidation

These consolidated financial statements include the accounts of the Company and its whollyowned subsidiary (collectively, the “Company”). Intercompany balances and transactions are eliminated in preparing the consolidated financial statements. The following companies have been consolidated within these consolidated financial statements:

Entity	Country of Incorporation	Holding	Functional Currency
Cosigo Resources Ltd.	Canada	Parent Company	CAD
Cosigo Frontier Mining Corporation Sucursal Colombia	Colombia	100%	COP
Cosigo Resources Sucursal Colombia	Colombia	100%	COP
Cosigo Resources Prospeccao Pesquisa e Extracao Mineral Ltda.	Brazil	99%	BRL

d) Foreign Currency

These consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the parent company. Each subsidiary determines its own functional currency (Note 2(c)) and items included in the financial statements of each subsidiary are measured using that functional currency.

i) Transactions and Balances in Foreign Currencies

Foreign currency transactions are translated into the functional currency of the respective entity using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the re-measurement of monetary items at year-end exchange rates are recognized in profit or loss. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and are not retranslated. Non-monetary items measured at fair value are translated using the exchange rate at the date when fair value was determined.

ii) Foreign Operations

On consolidation, the assets and liabilities of foreign operations are translated into Canadian dollars at the exchange rate prevailing at the reporting date and their revenues and expenses are translated at exchange rates prevailing at the dates of the

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

transactions. The exchange differences arising on the translation are recognized in other comprehensive income and accumulated in the currency translation reserve in equity. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognized in earnings and recognized as part of the gain or loss on disposal.

NOTE 4 – EXPLORATION AND EVALUATION ASSET

a) Machado Mineral License, Taraira North area, Vaupes Province, Colombia

In August 2007, the Company incorporated Cosigo Frontier Mining Corporation (“CFMC”) to carry out the joint exploration of the Taraira North mineral properties.

In September 2007 the Colombian government accepted the Company’s bid for the Machado Mineral License in the Taraira North area of Colombia, and awarded a mineral rights concession for the bid area. Under the terms of the government contract CFMC paid a fee of approximately $100,000 (196,000,000 Colombian Pesos) for reports with respect to exploration studies carried out by the Colombian government. CFMC also agreed to pay 1% of production revenue to the Colombian government over and above the 4% royalty payable to the Colombian government on all production revenue from the Machado Mineral License.

The Company completed a preliminary exploratory drilling program in 2014, and as at December 31, 2020, continues the process of obtaining environmental licensing to allow for further exploration of the area to define the importance and extent of known gold-bearing zones and to identify additional areas of interest.

b) CN Mineral License, Taraira South area, Vaupes Province, Colombia

In October 2009, the Company paid government fees and acquired a 100% interest in the CN Mineral License in the Taraira South area of Colombia.

In 2015 however, the mineral title was revoked by the government of Colombia based on the government’s claim that the CN mineral project is located within the boundaries of a Colombian National Park. The Company has filed an appeal against the license revocation, and while the appeal process is ongoing, the possibility of the Company getting the mineral title back is uncertain.

c) Damian area, Cauca Province, Colombia

The Company paid government fees to acquire a mineral license in the Damian area, province of Cauca, Colombia. As at December 31, 2020, the license remains valid.

NOTE 5 – LOANS PAYABLE

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

	March	31, 2021	Dec 31, 2020
		$	$
Loans Payable		430,994	430,994

As at March 31, 2021, the Company owes $100,570 (Dec 31, 2020 - $100,570) to a company controlled by a former director, $10,500 (Dec 31, 2020 - $10,500) to a former director, and $319,924 (Dec 31, 2020 - $319,924) to various shareholders, all for funds advanced to the Company. The amounts owing are unsecured, bear no interest, and are payable on demand.

NOTE 6 – RELATED PARTY TRANSACTIONS

Details of transactions between the Company and other related parties, in addition to those transactions disclosed elsewhere in these consolidated financial statements, are described below.

a) Related Party Balances

The Company has the following amounts owed to related parties as at March 31, 2021 and 2020:

Due to a company with a common director: 17,955 16,500

b) Compensation of Key Management Personnel and Other Related Parties

The Company incurred management and administration fees for key management personnel and for services provided by a company with common directors for the periods ended March 31, 2021 and 2020 as follows: Management and administration fees 6,555 6,455

All related party transactions were in the ordinary course of business and were measured at their exchange amount.

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

NOTE 7 – SHARE CAPITAL

a) Authorized Share Capital

Unlimited Number of Common Shares, Voting, No Par Value.

Unlimited Number of Preferred Shares, Non-Voting, No Par Value

b) Issued and Outstanding

As at March 31, 2021 there were 77,630,523 (December 31, 2020 – 77,630,523) common shares issued and outstanding.

There were no shares issued for the periods ended March 31, 2021 and December 31, 2020.

c) Share Purchase Warrants

There were no share purchase warrants outstanding as at March 31, 2021 and December 31, 2020.

d) Stock Options

There were no stock options granted during the years ended March 31, 2021 and December 31, 2020.

The continuity of stock options for the periods ended March 31, 2021 and December 31, 2020 is summarized below:

Number of Options	Exercise Price	Expiry Date
1,120,000	$ 0.50	April 10, 2022
75,000	$ 0.50	August 16, 2023
100,000	$ 0.50	December 2, 2023
350,000	$ 0.50	December 9, 2023
1,645,000	As at Dec 31, 2020
No issued or expired
1,645,000	As at March 31, 2021

NOTE 8 – CAPITAL MANAGEMENT

The Company manages its share capital as capital, which as at March 31, 2021, was $12,246,924 (December 31, 2020 - $12,246,924). The Company’s objectives when managing capital are:

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

i) to safeguard the entity’s ability to continue as a going concern, so that it can continue to provide return for shareholders and benefits for other stakeholders; and

ii) to ensure the entity has the capital and capacity to support a long-term growth strategy.

The Company’s capital structure reflects the requirements of a company focused on significant growth in a capitalintensive industry. The Company faces lengthy development lead times, as well as risks associated with rising capital costs and timing of project completion because of the availability of resources, permits and other factors beyond the Company’s control. The Company’s operations are also affected by potentially significant volatility of the metals and materials cycles.

Management continually assesses the adequacy of the Company’s capital structure and makes adjustments within the context of its strategy, the base metal mining industry, economic conditions, and the risk characteristics of the Company’s assets. To adjust or maintain its capital structure, the Company may enter into new credit facilities or issue new shares.

The Company has several key policy guidelines for managing its capital structure:

i) maintain a liquidity cushion that allows the Company to address operational and/or industry disruptions or downturns;

ii) ensure the Company has enough funding to complete its development programs at or around the time a definitive decision is made to move forward with a project; and

iii) maintain a conservative level of debt relative to total capital and earnings within the context of financial forecasts for pricing, costs and production.

The Company’s share capital is not subject to external restrictions. The Company has not paid or declared any dividends since the date of incorporation, nor are any contemplated in the foreseeable future. There were no changes in the Company’s approach to capital management during the period ended March 31, 2021.

NOTE 9 – FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company is exposed to various risks in relation to financial instruments. The Company’s financial assets and liabilities by category are summarized in Note 2(l). The Company’s risk management is coordinated in close cooperation with the board of directors and focuses on actively securing the Company’s short to medium-term cash flows and raising finances for the Company’s capital expenditure program. The Company does not actively engage in the trading of financial assets for speculative purposes. The most significant financial risks to which the Company is exposed are described below.

a) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company is dependent upon the availability of credit from its suppliers and its

COSIGO RESOURCES LTD. Notes to the Unaudited Consolidated Interim Financial Statements For the period ended March 31, 2021 Expressed in Canadian Dollars

ability to generate sufficient funds from equity and debt financing to meet current and future obligations. There can be no assurance that such financing will be available on terms acceptable to the Company.

b)

Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Management considers that risk related to interest is not significant to the Company at this time as the Company has limited short term investments. Amounts owed to related parties are non-interest bearing.

c)

Credit Risk

Credit risk is the risk of loss associated with a counter party’s inability to fulfill its payment obligations. The Company is in the exploration stage and has not yet commenced commercial production or sales. The Company is not exposed to credit risk.

d) Currency Risk

The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada, Colombia, and Brazil and as a result, a portion of the Company’s expenditures are in Colombian Pesos and Brazilian Reals. The risk from a significant change in the exchange rate of the Canadian dollar relative to the foreign currencies could have an effect on the Company’s results of operations, financial position or cash flows. However, management believes that the Company’s foreign currency exchange risk is not significant at this time. The Company has not hedged its exposure to currency fluctuations.

NOTE 10 – 2020 COVID-19 PANDEMIC

The outbreak of the COVID-19 virus and the worldwide pandemic has impacted the Company’s plans and activities. The Company may face disruption to operations, supply chain delays, travel and trade restrictions, and impacts on economic activity in affected countries or regions can be expected and are difficult to quantify. Regional disease outbreaks and pandemics represent a serious threat to hiring and maintaining a skilled workforce and could be a major health-care challenge for the Company. There can be no assurance that the Company’s personnel will not be impacted by these regional disease outbreaks and pandemics and ultimately that the Company would see its workforce productivity reduced or incur increased medical costs and insurance premiums as a result of these health risks.

In addition, the pandemic has created a dramatic slowdown in the global economy. The duration of the outbreak and the resulting travel restrictions, social distancing recommendations, government response actions, business disruptions and business closures may have an impact on the Company’s exploration operations and access to capital. There can be no assurance that the Company will not be impacted by adverse consequences that may be brought about by the pandemic’s impact on global industrial and financial markets which may reduce metal prices, share prices and financial liquidity thereby severely limiting access to essential capital.