G Mining TZ Corp. — Interim / Quarterly Report 2020

Mar 23, 2020

Kanadario Gold Inc.

Condensed Interim Financial Statements

Three Months Ended January 31, 2020

(Unaudited – Expressed in Canadian Dollars)

Kanadario Gold Inc.

Three Months Ended January 31, 2020

INDEX Condensed Interim Financial Statements Notice of No Auditor Review Condensed Interim Statements of Financial Position Condensed Interim Statements of Comprehensive Loss Condensed Interim Statements of Changes in Equity Condensed Interim Statements of Cash Flows Notes to the Condensed Interim Financial Statements	Page 1 2 3 4 5 6-16

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 condensed interim financial statements, they must be accompanied by a notice indicating that the condensed interim financial statements have not been reviewed by an auditor.

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

March 23, 2020

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Kanadario Gold Inc.

Condensed Interim Statements of Financial Position (Unaudited – Expressed in Canadian Dollars)

	January 31, 2020	January 31, 2020	October 31, 2019	October 31, 2019
Assets
Current
Cash	$	572,815	$	778,986
Receivables		5,928		3,815
Prepaid expenses		3,375		-
		582,118		782,801
Exploration and Evaluation Assets(note 7)		332,299		236,418
	$	914,417	$	1,019,219
Liabilities
Current
Accounts payable and accrued liabilities	$	21,373	$	70,467
		21,373		70,467
Shareholders’ Equity
Share Capital(note 9)		1,159,435		1,144,435
Share-based Payments Reserve(note 9)		55,288		65,005
Deficit		(321,679)		(260,688)
		893,044		948,752
	$	914,417	$	1,019,219
Going Concern(note 2)
Subsequent Event(note 11)

Approved on behalf of the Board:

“Dominic Verdejo” "Karly Oliver” ……………………………… Director ……………………………… Director Dominic Verdejo Karly Oliver

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

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Kanadario Gold Inc.

Condensed Interim Statements of Comprehensive Loss (Unaudited – Expressed in Canadian Dollars)

	Three Months	Three Months	Three Months	Three Months
		Ended		Ended
		January 31,		January 31,
		2020		2019
Expenses
Consulting fees (note 8)	$	40,500	$	-
Office and general		5,263		444
Professional fees (note 8)		8,827		1,406
Rent		6,000		-
Shareholder communications and investor relations		158		-
Transfer agent and filing fees		9,960		-
Net Loss and Comprehensive Loss for the Period	$	(70,708)	$	(1,850)
Basic and Diluted Loss Per Share	$	(0.01)	$	(0.00)
Weighted Average Number of Common Shares Outstanding –
Basic and Diluted		12,659,783		4,376,087

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

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Kanadario Gold Inc.

Condensed Interim Statements of Changes in Equity (Unaudited – Expressed in Canadian Dollars)

	Share Capital Number of Shares Share Capital Share-based Payments Reserve Deficit Total
Balance, October 31, 2018 Share issuances Net loss and comprehensive loss for period	4,050,000 $ 202,500 $ - $ (82,178) $ 120,322 3,600,000 330,000 - - 330,000 - - - (1,850) (1,850)
Balance, January 31, 2019 Share issuances Share issue costs Stock options granted Net loss and comprehensive loss for period	7,650,000 532,500 - (84,028) 448,472 5,000,000 750,000 - - 750,000 - (138,065) 16,422 - (121,643) - - 48,583 - 48,583 - - - (176,660) (176,660)
Balance, October 31, 2019 Warrants exercised Stock options expired Net loss and comprehensive loss for period	12,650,000 1,144,435 65,005 (260,688) 948,752 100,000 15,000 - - 15,000 - - (9,717) 9,717 - - - - (70,708) (70,708)
Balance, January 31, 2020	12,750,000 $ 1,159,435 $ 55,288 $ (321,679) $ 893,044

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

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Kanadario Gold Inc.

Condensed Interim Statements of Cash Flows (Unaudited – Expressed in Canadian Dollars)

	Three Months	Three Months	Three Months	Three Months
		Ended		Ended
		January 31,		January 31,
		2020		2019
Operating Activities
Net loss for the period	$	(70,708)	$	(1,850)
Changes in non-cash working capital
Receivables		(2,113)		388
Prepaid expenses		(3,375)		-
Accounts payable and accrued liabilities		(49,094)		1,488
Cash Provided By (Used in) Operating Activities		(125,290)		26
Investing Activity
Exploration and evaluation assets		(95,881)		(131,656)
Cash Used in Investing Activity		(95,881)		(131,656)
Financing Activity
Shares issued for cash		15,000		330,000
Cash Provided by Financing Activity		15,000		330,000
Inflow (Outflow) of Cash		(206,171)		198,370
Cash, Beginning of Period		778,986		64,116
Cash, End of Period	$	572,815	$	262,486
Supplemental Disclosure with Respect to Cash Flows
Income tax paid	$	-	$	-
Interest paid	$	-	$	-
Exploration and evaluation assets included in accounts payable and
accrued liabilities (opening)	$	-	$	44,892
Exploration and evaluation assets included in accounts payable and
accrued liabilities(closing)	$	-	$	-

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

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

1. NATURE OF OPERATIONS AND CONTINUANCE OF OPERATIONS

Kanadario Gold Inc. (the “Company”) is an exploration stage company incorporated on November 23, 2017, under the laws of the province of British Columbia, Canada. Its principal business activity is the acquisition, exploration and evaluation of mineral properties located in the province of Quebec, Canada. The Company’s head office and principal business address is 1680 – 200 Burrard Street, Vancouver, British Columbia, Canada, V6C 3L6. The Company’s registered and records office is 400 – 725 Granville Street, Vancouver, British Columbia, Canada, V7Y 1G5.

On October 22, 2019, the Company completed its initial public offering (“IPO”). The Company’s common shares are traded on the TSX Venture Exchange under the symbol “KANA”.

2. GOING CONCERN

These condensed interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes 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’s ability to continue its operations and to realize assets at their carrying values is dependent upon its ability to fund its existing acquisition and exploration commitments on its exploration and evaluation projects when they come due, which would cease to exist if the Company decides to terminate its commitments, and to cover its operating costs. The Company may be able to generate working capital to fund its operations by the sale of its exploration and evaluation projects or raising additional capital through equity markets. However, there is no assurance it will be able to raise funds in the future. These material uncertainties cast significant doubt regarding the Company’s ability to continue as a going concern. These condensed interim financial statements do not give effect to any adjustments required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying condensed interim financial statements.

If the going concern assumption were not appropriate for these condensed interim financial statements then adjustments may be necessary in the carrying values of assets and liabilities, the reported expenses and the statement of financial position classifications used. Such adjustments could be material.

3. BASIS OF PREPARATION

• a) Statement of compliance

The condensed interim financial statements of the Company have been prepared in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting .

The condensed interim financial statements of the Company should be read in conjunction with the Company’s October 31, 2019 audited financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.

These condensed interim financial statements were reviewed by the Audit Committee and approved and authorized for issue by the Board of Directors on March 23, 2020.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

3. BASIS OF PREPARATION (Continued)

• b) Basis of measurement

These condensed interim financial statements have been prepared under the historical cost basis, except for certain financial instruments, which are measured at fair value, as explained in the significant accounting policies (note 4 of the audited financial statements for year ended October 31, 2019). These condensed interim financial statements have been prepared under the accrual basis of accounting, except for cash flow information.

4. SIGNIFICANT ACCOUNTING POLICIES

These condensed interim financial statements have been prepared, for all periods presented, following the same accounting policies and methods of computation as described in Note 4 to the audited financial statements for the year ended October 31, 2019, except for the following new accounting standard adopted during the period:

IFRS 16 Leases

Initial adoption

On December 1, 2019, the Company adopted IFRS 16, which specifies how an IFRS reporter will recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognize assets and liabilities for all leases unless the lease term is twelve months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17 Leases . The standard was issued in January 2016 and is effective for annual periods beginning on or after January 1, 2019.

The Company has elected to apply IFRS 16 using a modified retrospective approach, which does not require restatement of prior period financial information. Modified retrospective application recognizes the cumulative effect of IFRS 16 as an adjustment to opening deficit at December 1, 2019 and applies the standard prospectively. The Company has determined that at December 1, 2019, adoption of IFRS 16 will not result in the recognition of a right-of-use (“ROU”) asset nor a lease obligation.

Ongoing recognition and measurement

On the date that the leased asset becomes available for use, the Company recognizes a ROU asset and a corresponding lease obligation. Interest expense associated with the lease obligation is charged to the statement of income/loss over the lease period with a corresponding increase to the lease obligation. The lease obligation is reduced as payments are made against the principal portion of the lease. The ROU asset is depreciated over the shorter of the asset’s useful life and the lease term on a straight-line basis. Depreciation of the ROU asset is recognized in depreciation expense.

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued)

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income/loss in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both.

Critical judgments in applying accounting policies

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the condensed interim financial statements within the next fiscal year are discussed below.

a) Impairment of exploration and evaluation assets

The application of the Company’s accounting policy for exploration and evaluation expenditures and impairment of the capitalized expenditures requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in profit or loss in the year the new information becomes available.

• b) Title to mineral property interests

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

c) Income taxes

Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability, including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent that it is probable that taxable profit will be available against which a deductible temporary difference can be utilized. This is deemed to be the case when there are sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity that are expected to reverse in the same year as the expected reversal of the deductible temporary difference, or in years into which a tax loss arising from the deferred tax asset can be carried back or forward. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

5. CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS (Continued)

• d) Going concern risk assessment

The assessment of the Company’s ability to continue as a going concern requires significant judgment. The condensed interim financial statements have been prepared on the basis of accounting principles applicable to a going concern, as disclosed in note 2.

Key sources of estimation uncertainty

The following are key assumptions concerning the future and other key sources of estimation uncertainty that have a significant risk of resulting in material adjustments to the condensed interim financial statements.

• a) Decommissioning liabilities

Rehabilitation provisions are created based on the Company’s internal estimates. Assumptions, based on the current economic environment, have been made that management believes are a reasonable basis upon which to estimate the future liability. These estimates take into account any material changes to the assumptions that occur when reviewed regularly by management. Estimates are reviewed annually and are based on current regulatory requirements. Significant changes in estimates of contamination, restoration standards and techniques will result in changes to provisions from year to year. Actual rehabilitation costs will ultimately depend on future market prices for the rehabilitation costs, which will reflect the market condition at the time the rehabilitation costs are actually incurred.

The final cost of the currently recognized rehabilitation provisions may be higher or lower than currently provided for. As at January 31, 2020, the Company has no known rehabilitation requirements, and accordingly, no provision has been made.

• b) Fair value of stock options granted

The Company uses the Black-Scholes option pricing model to value the stock options granted during the year. The Black-Scholes model was developed for use in estimating the fair value of traded options that have no vesting restrictions and are fully transferable. The model requires management to make estimates that are subjective and may not be representative of actual results. Changes in assumptions can materially affect estimates of fair values.

6. FINANCIAL INSTRUMENTS

Financial instruments are agreements between two parties that result in promises to pay or receive cash or equity instruments. The Company classifies its financial instruments as follows: cash is classified as fair value through profit or loss; receivables, as amortized cost; and accounts payable and accrued liabilities, as amortized cost. The carrying values of these instruments approximate their fair values due to their short term to maturity.

The following table sets forth the Company’s financial asset measured at fair value by level within the fair value hierarchy:

January	31,	2020		Level 1		Level 2			Level 3		Total
Cash			$	572,815	$		-	$		-	$572,815

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

6. FINANCIAL INSTRUMENTS (Continued)

October	31,	2019		Level 1		Level 2			Level 3		Total
Cash			$	778,986	$		-	$		-	$778,986

The Company has exposure to the following risks from its use of financial instruments:

• Credit risk;

• Liquidity risk; and

• Market risk.

• a) Credit risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company manages credit risk, in respect of cash, by placing it at major Canadian financial institutions. The Company has minimal credit risk. The maximum exposure to credit risk at January 31, 2020 is on cash of $572,815 (October 31, 2019 - $778,986). Receivables of $5,928 (October 31, 2019 - $3,815) is owing from the Canada Revenue Agency.

b) 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’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquid funds to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The contractual financial liabilities of the Company as of January 31, 2020 equal $21,373 (October 31, 2019 - $70,467). All of the liabilities presented as accounts payable are due within 30 days of the reporting date.

c) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on capital.

• i) Currency risk – The Company has no funds held in a foreign currency, and as a result, is not exposed to significant currency risk on its financial instruments at period-end.

• ii) Interest rate risk – Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash is at nominal interest rates, and therefore, the Company does not consider interest rate risk to be significant. The Company has no interestbearing financial liabilities.

• iii) Other price risk – Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk. The Company is not exposed to significant other price risk.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

6. FINANCIAL INSTRUMENTS (Continued)

• d) Capital management

The Company considers its capital to be comprised of shareholders’ equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares. Although the Company has been successful at raising funds in the past through the issuance of share capital, it is uncertain whether it will continue this method of financing due to the current difficult market conditions.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions.

Management reviews the capital structure on a regular basis to ensure that the above objectives are met. There have been no changes to the Company’s approach to capital management during the three months ended January 31, 2020. The Company is not subject to externally imposed capital requirements.

7. EXPLORATION AND EVALUATION ASSETS

Cameron Lake Project

On June 1, 2018, the Company entered into a mineral property acquisition agreement to acquire a 100% interest in mineral claims located in the Cameron Lake area in the province of Quebec.

Under the terms of the agreement, the Company paid $50,000 during the current period and issued 1,000,000 common shares (issued and valued at $50,000) of the Company during the period ended October 31, 2018.

The property is subject to a 2% net smelter return royalty, of which the Company may repurchase one-half (1%) for $1,000,000.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

7. EXPLORATION AND EVALUATION ASSETS (Continued)

A summary of exploration and evaluation expenditures for the three months ended January 31, 2020 and year ended October 31, 2019 is as follows:

		Cameron Lake
		Project
Balance, October 31, 2018	$	133,695
Acquisition Costs
Acquisition		50,000
Claim costs		8,660
Total Acquisition Costs		58,660
Property Exploration Costs
Geological		9,971
Geophysics		34,092
Total Exploration Costs		44,063
Balance, October 31, 2019		236,418
Property Exploration Costs
Geophysics		95,881
Total Exploration Costs		95,881
Balance, January 31, 2020	$	332,299

8. RELATED PARTY TRANSACTIONS

These amounts of key management compensation are included in the amounts shown on the condensed interim statements of comprehensive loss:

		Three Months		Three Months
		Ended		Ended
	January 31, 2020		January 31, 2019
Short-term compensation(consultingfees andprofessional fees)	$	6,000	$	-

There were no other related party transactions for the three months ended January 31, 2020 and 2019.

There were no related party balances as at January 31, 2020 and October 31, 2019.

9. SHARE CAPITAL

a) Authorized

Unlimited number of common voting shares without par value

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

9. SHARE CAPITAL (Continued)

• b) Issued and outstanding

During the three months ended January 31, 2020

The Company received $15,000 on the exercise of 100,000 warrants. There was no value transferred from the share-based payment reserve to share capital upon exercise of the warrants.

During the year ended October 31, 2019

On December 17, 2018, the Company issued 600,000 common shares at a price of $0.05 per share for gross proceeds of $30,000.

On January 30, 2019, the Company closed a private placement for gross proceeds of $300,000. The Company issued 3,000,000 units at a price of $0.10 per unit. Each unit consisted of one common share and one share purchase warrant. Each warrant entitles the holder to acquire one common share at a price of $0.15 for a period of one year from the date of issuance. No value was attributed to the warrants.

On October 22, 2019, the Company completed its IPO of 5,000,000 common shares of the Company at $0.15 per share for gross proceeds of $750,000. The Company paid finders’ fees of $42,850 and issued 170,000 finder’s warrants with a value of $16,422. Each warrant entitles the holder to acquire one common share at a price of $0.15 for a period of two years from the date of issuance. The Company incurred other share issue costs of $78,793.

• c) Warrants

Warrant transactions and the number of warrants outstanding are summarized as follows:

		Three Months Ended	Three Months Ended	Year Ended	Year Ended
		January	31, 2020	October 31, 2019
			Weighted		Weighted
		Number of	Average	Number of	Average
		Warrants	Exercise Price	Warrants	Exercise Price
Outstanding,	beginning of period	4,170,000	$ 0.18*	1,000,000	$ 0.15
Issued		-	-	3,170,000	$ 0.15
Exercised		(100,000)	$ 0.15	-	-
Outstanding,	end ofperiod	4,070,000	$0.18	4,170,000	$0.15

*Weighted average exercise price increased from $0.15 to $0.18 as a result of modifications to warrants as described below.

Prior to January 30, 2020, 2,900,000 warrants with an exercise price of $0.15 and expiry date of January 30, 2020 were modified to have an exercise price of $0.19 and an expiry date of January 30, 2021. No changes in fair values were recorded.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

9. SHARE CAPITAL (Continued)

• c) Warrants (continued)

The following warrants were outstanding and exercisable:

	Weighted Average
	Remaining Contractual
Expiry Date	Life in Years	Exercise Price	January 31, 2020
December 27, 2020	0.91	$ 0.15	1,000,000
January 30, 2021	1.00	$ 0.19	2,900,000
October 22, 2021	1.73	$ 0.15	170,000
	1.01		4,070,000

The Company applies the fair value method using the Black-Scholes option pricing model in accounting for its finder’s warrants granted. The fair value of each stock option granted was calculated using the following weighted average assumptions:

	Three Months Ended	Year Ended
	January 31, 2020	October 31, 2019
Expected life (years)	N/A	2.00
Risk-free interest rate	N/A	1.62%
Annualized volatility	N/A	129%
Dividend yield	N/A	N/A
Stock price at grant date	N/A	$ 0.15
Exercise price	N/A	$ 0.15
Weighted averagegrant date fair value	N/A	$0.10

Option pricing models require the input of highly subjective assumptions regarding volatility. The Company has used historical volatility and the volatility of a comparable company to estimate the volatility of the share price.

d) Stock options

The Company has a stock option plan to grant incentive stock options to directors, officers, employees and consultants. Under the plan, the aggregate number of common shares that may be subject to option at any one time may not exceed 10% of the issued common shares of the Company as of that date, including options granted prior to the adoption of the plan. Options granted may not exceed a term of 10 years, and the term will be reduced to one year following the date of death of the optionee. All options vest when granted unless they are otherwise specified by the Board of Directors or if they are granted for investor relations activities. Options granted for investor relations activities vest over a twelve-month period with no more than 25% of the options vesting in any three-month period.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

9. SHARE CAPITAL (Continued)

• d) Stock options (continued)

Stock option transactions and the number of stock options outstanding are summarized as follows:

		Three Months Ended	Three Months Ended		Year Ended	Year Ended
		January	31, 2020		October 31, 2019
			Weighted			Weighted
		Number of	Average		Number of	Average
		Options	Exercise Price		Options	Exercise Price
Outstanding,	beginning of period	500,000	$	0.15	-	-
Issued		-		-	500,000	$ 0.15
Expired		(100,000)		-	-	-
Outstanding,	end ofperiod	400,000	$	0.15	500,000	$0.15

The following stock options were outstanding and exercisable:

	Weighted Average
	Remaining Contractual
Expiry Date	Life in Years	Exercise Price	January 31, 2020
May7,2024	4.27	$0.15	400,000

The Company applies the fair value method using the Black-Scholes option pricing model in accounting for its stock options granted. Accordingly, no share-based payments were recognized during the three months ended January 31, 2020 (year ended October 31, 2019 - $48,583).

The fair value of each stock option granted was calculated using the following weighted average assumptions:

	Three Months Ended	Year Ended
	January 31, 2020	October 31, 2019
Expected life (years)	N/A	5.00
Risk-free interest rate	N/A	1.55%
Annualized volatility	N/A	202%
Dividend yield	N/A	N/A
Stock price at grant date	N/A	$ 0.10
Exercise price	N/A	$ 0.15
Weighted averagegrant date fair value	N/A	$0.10

Option pricing models require the input of highly subjective assumptions regarding volatility. The Company has used historical volatility and the volatility of a comparable company to estimate the volatility of the share price.

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Kanadario Gold Inc. Notes to the Condensed Interim Financial Statements For the Three Months Ended January 31, 2020 (Unaudited – Expressed in Canadian Dollars)

9. SHARE CAPITAL (Continued)

• d) Stock options (continued)

During the three months ended January 31, 2020, the Company transferred $9,717 from the share-based payments reserve to deficit upon the expiry of $100,000 stock options granted to a director.

10. SEGMENTED DISCLOSURE

The Company has one operating segment, being mineral exploration and development. All of the Company’s assets are located in Canada.

11. SUBSEQUENT EVENT

In early March 2020, there was a global outbreak of coronavirus (COVID-19) that has resulted in changes in global supply and demand of certain mineral and energy products. These changes, including a potential economic downturn and any potential resulting direct and indirect negative impact to the Company cannot be determined, but they could have a prospective material impact to the Company’s project exploration activities, cash flows and liquidity.

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