Golcap Resources Corp. — Interim / Quarterly Report 2021

Feb 19, 2021

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GOLCAP RESOURCES CORP.

Unaudited Condensed Interim Financial Statements (Expressed in Canadian Dollars)

For the three month periods ended December 31, 2020 and 2019

NOTICE TO READER

Under National Instrument 51-102, 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 interim financial statements have been prepared by management, and were not reviewed by the Company's independent auditor.

GOLCAP RESOURCES CORP. Condensed Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited)

	December 31,	December 31,	December 31,	December 31,
		2020		2019
Assets
Current Assets
Cash	$	499,302	$	109,558
Amounts receivable (note 3)		8,983		587
Prepaid expenses(note 4)		2,500		-
		510,785		110,145
Non-current Assets
Exploration assets(note5)		102,501		43,397
	$	613,286	$	153,542
Liabilities and Shareholders’ Equity
Current Liabilities
Accountspayable and accrued liabilities	$	75,006	$	-
Shareholders’ Equity
Share capital (note 7 and 9)		817,439		154,998
Reserve		210,646		-
Accumulated deficit		(489,805)		(1,456)
		538,280		153,542
	$	613,286	$	153,542

Nature of operations (note 1) Subsequent events (note 9)

Approved on behalf of the Board:

“Gordon Lam” “Alan Tam” Gordon Lam, CEO Alan Tam, CFO

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

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GOLCAP RESOURCES CORP.

Condensed Interim Statements of Operations and Comprehensive Loss (Expressed in Canadian dollars) (Unaudited)

	Three month	Three month		Three month
	period ended		period ended
		December		December
		31, 2020		31, 2019
Expenses:
CSE listing costs (note 7)	$	233,511	$ -
Consultants		29,000		-
General and administrative		1,225		573
Management fees		4,000		-
Professional fees (note 7)		(9,018)		-
Stock based compensation (note 7)		137,594		-
Net loss and comprehensive loss for theperiod	$	(396,312)	$	(573)
Net lossper share,basic and diluted(note 7)	$	(0.03)	$	(0.00)
Weighted average number of common shares outstanding:
Basic and diluted
		13,611,873		6,576,044

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

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GOLCAP RESOURCES CORP.

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

	Number of		Share		Reserve	Accumulated	Accumulated
	shares		capital				deficit	Total
Balance September 30, 2019	3,000,001	$	15,000	$	-	$	(883) $	14,117
Issuance of common shares
non-brokered	6,999,916		139,998		-		-	139,998
Loss for the period	-		-		-		(573)	(573)
Balance December 31,2019	9,999,917	$	154,998	$	-	$	(1,456)$	153,542
Balance September 30, 2020	13,249,916	$	479,998	$	-		$ (93,493) $	386,505
Issuance of IPO units
brokered (note 7)	2,875,000		233,067		54,433		-	287,500
Issuance of IPO
advisory shares (note 7)	1,000,000		81,067		-		-	81,067
Issuance of IPO units
agent commission (note 7)	287,500		23,307		18,620		-	41,927
Grant of options (note 7)	-		-		137,593		-	137,593
Loss for the period	-		-		-		(396,312)	(396,312)
Balance December 31,2020	17,412,416	$	817,439	$	210,646	$	(489,805)	$ 538,280

.

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

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GOLCAP RESOURCES CORP.

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

	Three months	Three months	Three months	Three months
		ended		ended
		December		December
		31, 2020		31, 2019
Cash (used in) provided by:
Operating:
Net loss	$	(396,312)	$	(573)
Non-cash items:
CSE listing costs (note 7)		122,993
Stock based compensation		137,594		-
Changes in operating working capital:
Amounts receivable		(8,399)		(587)
Prepaid expenses		7,500		-
Accountspayable and accrued liabilities		43,384		(883)
Cash used in operating activities		(93,240)		(2,043)
Financing:
Issuance of common shares(note 7)		287,500		139,998
Cashprovided byfinancingactivities		287,500		139,998
Investing:
Investment in exploration assets		(6,500)		(43,397)
Cash used in investingactivities		(6,500)		(43,397)
Increase in cash		187,760		94,558
Cash, beginning of year		311,542		15,000
Cash,end ofyear	$	499,302	$	109,558

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

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

1. Nature of operations:

Golcap Resources Corp. (“Golcap” or “the Company”) was incorporated on September 20, 2019 under the Business Corporations Act (British Columbia). The Company’s registered office is located at #2080 – 777 Hornby Street, Vancouver, British Columbia, V6K 2A4.

The Company is engaged in the exploration of mineral properties and has not yet determined whether any of its properties contain economically recoverable reserves. To date, the Company has not earned any operating revenue and is in the exploration stage. The mining exploration business involves a high degree of risk. The recoverability of the amounts expended on mineral interests by the Company is dependent upon the existence of economically viable reserves, the ability of the Company to obtain necessary financing to complete the exploration and development of its mineral properties and upon future profitable production or proceeds from disposition of its mineral interest.

These financial statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at December 31, 2020, the Company has no source of revenue, and during the period ended December 31, 2020, generated negative cash flows from operating activities and has an accumulated deficit of $489,805.

Since incorporation, the Company has raised equity financing from investors and expects these funds to provide for its early stage exploration and working capital needs for the next twelve months. Additional fundraising may involve further private placements, convertible debentures, third party earn-ins or joint ventures using debt or equity financing structures, to ensure the continuation of the Company’s operations.

There can be no assurances that the Company will be successful in raising additional cash to finance operations or that the continued support of shareholders will be available. These financial statements have been prepared using the going concern assumption, which assumes that the Company will continue in operation for the foreseeable future. The financial statements do not include any adjustments relating to the recoverability of assets and liabilities that might be necessary should the Company be unable to continue as a going concern.

On March 11, 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, leading to an economic downturn. The impact on the Company is not currently determinable but management continues to monitor the situation.

On December 22, 2020, the Company completed an initial public offering for gross proceeds of $287,500 and the company shares are listed on the CSE under the symbol “GCP” (see Note 7).

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

2. Basis of preparation:

• (a) Statement of compliance:

The financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). These financial statements were approved and authorized for issue by the Board of Directors on February 19, 2021.

• (b) Basis of measurement:

These financial statements have been prepared on the historical cost basis, except for certain financial instruments, which are recorded at fair value.

• (c) Functional and presentation currency:

These financial statements are presented in Canadian dollars, which is the functional currency for the Company.

• (d) Use of estimates and judgments:

The preparation of these financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses.

Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Significant judgments made by management in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the financial statements include the recoverability of exploration assets and the application of the going concern assumption.

3. Amounts receivable:

The amounts receivable is comprised of GST input tax credit receivable.

4. Prepaid expenses:

Prepaid fees relate to an Agent expense holdback amount.

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

5. Exploration assets:

	Tulameen Property
	Geological and geophysical costs 94,300 Staking costs 2,456 Survey costs 5,745
	Balance,December31,2020 $ 102,501
	Tulameen Property
	Geological and geophysical costs $ 39,591 Staking costs 2,456 Survey costs 1,350
	Balance,December 31,2019 $ 43,397

The Tulameen property (the “Property”) consists of two mineral claims totalling 1,738.29 hectares situated west of Otter Lake in southern British Columbia.

On October 10, 2019, the Company staked the Redcap tenure consisting of 1,403.33 hectares and on October 19, 2019, staked the SGBG TIP tenure consisting of 334.96 hectares.

6. Financial instruments:

(a) Fair Values

Assets and liabilities measured at fair value on a recurring basis are presented on the Company’s statement of financial position as at December 31, 2020 as follows:

	Fair Value Measurements Using Quoted prices in active markets for identical instruments (Level 1) $ Significant other observable inputs (Level 2) $ Significant unobservable inputs (Level 3) $ Balance as at December 31, 2020 $ 499,302 - - 499,302 8,983 - - 8,983
Cash Amounts receivable

The fair values of other financial instruments, which include accounts payable, approximate their carrying values due to the nature and relatively short-term maturity of these instruments.

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

6. Financial instruments (continued):

• (b) Financial risk management (continued):

The following provides disclosures relating to the nature and extent of the Company’s exposure to risks arising from financial instruments, including credit risk, liquidity risk, foreign currency risk and interest rate risk, and how the Company manages those risks.

( i ) 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’s credit risk is attributable to cash. The Company manages such risk by holding cash as operating bank accounts with Canadian chartered banks with minimum DBRS ratings of AA (S&P AA-).

( ii ) 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 currently settles its financial obligations using cash. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs.

All of the Company’s contractual obligations have maturities of one year or less:

	Carrying	Contractual	Within	Within	Within
	Amount	Cash Flows	1 year	2 years	3 years
	$	$	$	$	$
As at December 31, 2020
Accounts payable	75,006	75,006	75,006	–	–
Total	75,006	75,006	75,006	–	–
As at December 31, 2019
Accounts payable	-	-	-	–	–
Total	-	-	-	–	–

( iii ) Currency risk:

Currency risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company does not have any significant transaction in foreign currencies and therefore is not exposed to significant currency risk.

• (iv) Interest rate risk:

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

The Company is not exposed to significant interest rate risk.

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

7. Share capital:

• (a) Authorized share capital:

Unlimited voting, participating common shares, with no par value.

As at December 31, 2020, there were 17,412,416 common shares outstanding of which 3,500,000 common shares are being held in escrow.

• (b) Issued share capital and options:

On December 22, 2020, the Company completed an initial public offering for gross proceeds of $287,500 by the issuance of 2,875,000 units of the Company at a price of $0.10. Each unit consists of one common share and one common share purchase warrant. Each warrant is exercisable into one common share of the Company at an exercise price of $0.30 per warrant for a period of 12 months from the date of grant.

Pursuant to the terms of the agreement, the Company paid the Agent a commission representing 10% of the gross proceeds through the issuance of the 287,500 Agent’s units. In addition, the Company paid the Corporate Finance Fee in the amount of $20,000 and issued 1,000,000 Advisory Shares. The Agent also received 287,500 non-transferable agent's warrants to acquire up to 287,500 shares at a price of $0.10 per share until December 22, 2021. As a consequence, the Company recognized $28,750 as fair value for the Agent’s commission units, $81,067 as fair value for the Advisory Shares, and $13,176 as fair value for the nontransferrable agent’s warrants.

On December 22, 2020, the Company granted 1,660,000 incentive stock options to the directors and officers of the Company. The stock options are exercisable into 1,660,000 common shares at a price of $0.10 per share for a period of five years. As a consequence, the Company recognized $137,594 as share based compensation.

After completing the initial public offering, the Company reclassified certain expenses, such as legal expenses to CSE listing costs.

• (c) Loss per share computation:

The following table sets forth the computation of loss per common share:

	Three months	Three months	Three months	Three months
		ended		ended
	December 31, 2020		December 31, 2019
Loss for the period	$	(396,312)	$	(573)
Weighted average, commonshares outstanding		13,611,873		6,576,044
Lossper share,basic and diluted	$	(0.03)	$	(0.00)

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

7. Share capital (continued):

(d) Share Purchase Warrants:

A summary of the warrant transactions during the period ended December 31, 2020 is as follows:

	Number of Warrants	Weighted Average
		Exercise Price
Balance, September 30, 2020	3,250,000	$ 0.30
Issued during the period
IPO offering warrants	2,875,000	0.30
Agent’s Commission warrants	287,500	0.30
Agent’s warrants	287,500	0.10
Balance December 31, 2020	6,700,000	$ 0.29

The following warrants are outstanding at December 31, 2020:

Number of warrants	Exercisepriceper warrant	Expirydate
3,150,000	$ 0.30	April 30, 2021
100,000	0.30	June 30, 2021
2,875,000	0.30	December 22, 2021
287,500	0.30	December 22, 2021
287,500	0.10	December 22,2021
6,700,000

As at December 31, 2020, the weighted average life of warrants outstanding was 0.67 years.

(e) Share Purchase Options:

A summary of the option transactions during the period ended December 31, 2020 is as follows:

	Number of Options	Weighted Average
		Exercise Price
Balance, September 30, 2020	-	$ -
Issued during the period
Management options	1,660,000	0.10
Balance December 31, 2020	1,660,000	$ 0.10

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GOLCAP RESOURCES CORP. Notes to the Condensed Interim Financial Statements (Expressed in Canadian dollars) (Unuaudited)

7. Share capital (continued):

• (e) Share Purchase Options (continued):

The following options are outstanding at December 31, 2020:

Number of options	Exercisepriceper option	Exercisepriceper option	Expirydate
1,660,000		$0.10	December 31,2025
1,660,000

As at December 31, 2020, the weighted average life of options outstanding was 4.98 years.

8. Related party transactions and balances:

Related parties include Directors of the Company and the Company’s key management personnel. Key management personnel include the Company’s CEO and CFO.

• (a) Balances with related parties:

There are no balances owing to or from related parties as at December 31, 2019 and December 31, 2020.

• (b) Transactions during the period with management consulting companies controlled by the Chief Executive Officer, the Chief Financial Officer and a Director, respectively, are as follows:

	Three month	Three month	Three month
	period ending	period	ending
	December 31,	December 31,
	2020		2019
Management fees	$ 4,000	$	-
Professional fees	6,320	$	-
Exploration asset – geological and geophysical costs	-		11,195

9. Subsequent events:

• (a) In February 2021, there was a total of 220,000 warrants exercised by unit holders.

• (b) On February 1, 2021, the Company extended the expiry date of the April 30 and June 30, 2020 warrants, totalling 3,250,000 warrants, to match the IPO unit warrants expiry date of December 22, 2021. There was no change to the exercise price.

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