Goldeneye Resources Corp. — Interim / Quarterly Report 2022

Sep 27, 2021

GOLDENEYE RESOURCES CORP.

CONDENSED INTERIM FINANCIAL STATEMENTS

For the three months ended July 31, 2021 and 2020

(Stated in Canadian Dollars)

(Unaudited – Prepared by Management)

NOTICE OF NO AUDITOR REVIEW OF THE CONDENSED INTERIM FINANCIAL STATEMENTS

In accordance with National Instrument 51-102 Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of these 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 for the three months ended July 31, 2021 have been prepared by and are the responsibility of the Company’s management, and have not been reviewed by the Company’s auditors.

GOLDENEYE RESOURCES CORP.

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION July 31, 2021 and April 30, 2021 (Stated in Canadian Dollars)

– (Unaudited Prepared by Management)

			July 31, 2021 April 30, 2021
Current Cash GST receivable Prepaid expenses (Note 7) Loan receivable (Note 7)			ASSETS $ 364,394 $ 357,432 12,775 6,558 77,799 18,883 301,013 297,267
			$ 755,981 $ 680,140
Current Accounts payable and accrued liabilities (Notes Loans payable (Note 5)		LIABILITIES 5 and 7) $ 154,529 $ 92,537 16,000 16,000
		170,529 108,537
SHAREHOLDERS’ EQUITY (DEFICIT) Share capital (Note 6) 4,767,670 4,767,670 Share subscriptions receivable/received (Note 6) 52,810 (63,000) Reserves (Note 6) 503,614 503,614 Deficit (4,738,642) (4,636,681)
585,452 571,603
$ 755,981 $ 680,140

Going concern (Note 2) Subsequent events (Note 10)

APPROVED ON BEHALF OF THE BOARD:

“Geoff Balderson” Director “Jack Bal” Director

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS

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GOLDENEYE RESOURCES CORP.

CONDENSED INTERIM STATEMENTS OF COMPREHENSIVE LOSS For the three months ended July 31, 2021 and 2020 (Stated in Canadian Dollars)

– (Unaudited Prepared by Management)

		For the three months	For the three months	For the three months
		ended	July 31,
		2021		2020
Administrative expenses
Administrative fees (Note 7)	$	7,500	$	7,500
Consulting fees (Note 7)		82,500		-
Filing fees		9,053		1,300
Office and miscellaneous		1,076		71
Rent (Note 7)		4,400		-
Transfer agent		1,178		705
		(105,707)		(9,576)
Other item:
Interest income (Note 7)		3,746		-
Total comprehensive loss for the period	$	(101,961)	$	(9,576)
Basic and diluted loss per share	$	(0.00)	$	(0.00)
Weighted average number of common shares outstanding basic and diluted		42,829,829	23,579,829

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED INTERIM FINANCIAL STATEMENTS

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GOLDENEYE RESOURCES CORP.

CONDENSED INTERIM STATEMENTS OF CASH FLOWS

For the three months ended July 31, 2021 and 2020 (Stated in Canadian Dollars)

– (Unaudited Prepared by Management)

		For the three months ended	For the three months ended	For the three months ended
		July 31,
		2021		2020
Operating Activities
Net loss for the period	$	(101,961)	$	(9,576)
Add items not affecting cash
Interest charges		-		190
Interest income		(3,746)		-
Changes in non-cash working capital items related to operations:
GST receivable		(6,217)		(405)
Prepaid expenses		(58,916)		1,300
Accounts payable and accrued liabilities		61,992		8,420
Cashprovided by (used in)operatingactivities		(108,848)		(71)
Financing Activities
Loans payable		-		7,000
Subscriptions received		115,810		-
Cashprovided byfinancingactivities		115,810		7,000
Change in cash during the period		6,962		6,929
Cash beginning of period		357,432		1,496
Cash end of theperiod	$	364,394	$	8,425
Supplemental Disclosure of Cash Flow Information:
Interest paid (received)	$	-	$	-
Dividendspaid(received)	$	-	$	-

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED INTERIM FINANCIAL STATEMENTS

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GOLDENEYE RESOURCES CORP.

CONDENSED INTERIM STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) For the three months ended July 31, 2021 and 2020 (Stated in Canadian Dollars)

– (Unaudited Prepared by Management)

					Share
				Subscription
	Number		Share		Received/
	of Shares		Capital	(Receivable)			Reserves	Deficit		Total
Balance, April 30, 2020	23,579,829	$	3,784,810	$	-	$	325,994	$ (4,204,186)	$	(93,382)
Net loss and comprehensive loss for
the period	-		-		-		-	(9,576)		(9,576)
Balance, July 31, 2020	42,829,829	$	4,767,670	$	(63,000)	$	503,614	$ (4,213,762)	$	(102,958)
Balance, April 30, 2021	42,829,829	$	4,767,670	$	(63,000)	$	503,614	$ (4,636,681)	$	571,603
Share subscriptions received	-		-		115,810		-	-		115,810
Net loss and comprehensive loss for
the period	-		-		-		-	(101,961)		(101,961)
Balance, July 31,2021	42,829,829	$	4,767,670	$	52,810	$	503,614	$ (4,738,642)	$	585,452

THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED INTERIM FINANCIAL STATEMENTS

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GOLDENEYE RESOURCES CORP. NOTES TO THE CONDENSED INTERIM FINANCIAL STATEMENTS July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

1. Corporate Information

Goldeneye Resources Corp. (the “Company”) was incorporated under the Business Corporations Act of British Columbia on March 2, 2011. The Company’s principal activities include the acquisition, exploration and development of assets locally and globally. The Company is listed for trading on the TSX Venture Exchange under the symbol “GOE”.

The head office and principal address of the Company is located at Suite 1000, 409 Granville Street, Vancouver, British Columbia, V6C 1T2.

2. Basis of Preparation

Statement of Compliance

These condensed interim financial statements, including comparatives, have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”), Interpretations issued by the International Financial Reporting Interpretations Committee (“IFRIC”) and in accordance with International Accounting Standard (“IAS”) 34 Interim Financial Reporting.

The condensed interim financial statements were authorized for issue by the Board of Directors on September 27, 2021.

Going Concern

These financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. At July 31, 2021, the Company has not achieved profitable operations, has accumulated losses of $4,738,642 since inception and expects to incur further losses in the development of its business. The above material uncertainties cast significant doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon successful results from its exploration and evaluation activities, its ability to attain profitable operations to generate funds and/or its ability to raise equity capital or borrowings sufficient to meet its current and future obligations. Although the Company has been successful in the past in raising funds to continue operations, there is no assurance it will be able to do so in the future.

The outbreak of COVID-19 and its variants have resulted in governments enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, quarantine periods and social distancing, have caused an economic slowdown and material disruption to business. Governments have continued to react with interventions intended to stabilize economic conditions. While COVID-19 has not had a material impact on the company’s operations, the duration and ultimate impact of the COVID-19 outbreak is unknown at the time. It is not possible to reliably estimate the length and severity of these developments and the impact on the financial performance and financial position of the Company in future periods.

Basis of Measurement

These financial statements have been prepared on an accrual basis, except for cash flow information, and are based on historical costs except for certain financial instruments which are measured at fair value. The financial statements are presented in Canadian dollars.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

3. Significant Accounting Policies

The preparation of financial data is based on accounting principles and practices consistent with those used in the preparation of the audited financial statements as at April 30, 2021. The accompanying unaudited condensed interim financial statements should be read in conjunction with the Company’s audited financial statements for the year ended April 30, 2021.

Accounting standards and amendments

Recent accounting pronouncements

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

The amendments to IAS1 provide a more general approach to the classification of liabilities based on the contractual arrangements in place at the reporting date. These amendments are effective for reporting periods beginning on or after January 1, 2023.

4. Use of Estimates and Judgments

The preparation of the financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements is included in the following notes:

Going concern

The assumption that the Company is a going concern and will continue in operation for the foreseeable future and at least one year is a judgment. The factors considered by management are disclosed in Note 2.

5. Loans Payable

As at July 31, 2021, the Company had the following loans payable:

• a) During the year ended April 30, 2016, the Company entered into loan agreements with two directors for an aggregate principal of $17,000. The amounts owed are unsecured, non-interest bearing and repayable within 15 days of the lenders’ demands for repayment. On September 17, 2015, the Company repaid $13,000 to the two directors. In addition, the Company received $3,000 from a parent of a director, which is unsecured, non-interest bearing, and has no specific terms of repayment. On January 9, 2020, a director of the Company advanced $2,000 to the Company and on July 30, 2020 another $7,000 was advanced by the same director, which are unsecured, non-interest bearing, and have no specific terms of repayment. As at July 31, 2021 $16,000 (April 30, 2021 - $16,000) remained outstanding.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

6. Share Capital and Reserves

• a) Authorized

Unlimited common shares, without par value.

• b) Issued

There were no shares issued during the three months ended July 31, 2021.

During the year ended April 30, 2021

On September 21, 2020, the Company completed a private placement of 5,250,000 units at a price of $0.06 per unit for total proceeds of $315,000 of which $18,000 is included in share subscriptions receivable as at April 30, 2021. Each unit consists of one common share and one share purchase warrant and each warrant will entitle the holder to purchase one common share of the Company at a price of $0.10 per share for a period of two years expiring on September 21, 2022. In connection with the private placement the Company paid a cash finders fee of $15,120 and issued 252,000 agents’ warrants exercisable at $0.10 for a period of two years from the date of issuance. These agents’ warrants were fair valued at $6,100 using the Black-Scholes Option Pricing Model with the following assumptions: risk-free interest rate of 0.25%; dividend yield of 0%; volatility of 100% and expected life of two years and a stock price of $0.06. Subsequent to April 30, 2021, the $18,000 was received.

On October 20, 2020, pursuant to the exercise of warrants, the Company issued 1,500,000 common shares at a price of $0.06 for total proceeds of $90,000.

On March 19, 2021, the Company completed a private placement of 12,500,000 units at a price of $0.05 per unit for total proceeds of $625,000 of which $45,000 is included in share subscription receivables as at April 30, 2021. Each unit consists of one common share and one share purchase warrant and each warrant will entitle the holder to purchase one common share of the Company at a price of $0.07 per share for a period of two years expiring on March 18, 2023. In connection with the private placement, the Company paid a cash finders fee of $14,400 and issued 288,000 agents’ warrants exercisable at $0.07 for a period of two years from the date of issuance. These agents’ warrants were fair valued at $11,520 using the Black-Scholes Option Pricing Model with the following assumptions: risk-free interest rate of 0.22%; dividend yield of 0%; volatility of 142% and expected life of two years and a stock price of $0.05.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

6. Share Capital and Reserves – (cont’d)

• c) Stock Options

The Company adopted a stock option plan under which it is authorized to grant options to officers, directors, employees and consultants enabling them to acquire up to 10% of the issued and outstanding common stock of the Company. The options can be granted for a maximum of ten years and vest as determined by the Board of Directors. The exercise price of each option granted may not be less than the fair market value of the common shares.

On April 19, 2021, the Company granted 4,000,000 stock options to directors, officers and consultants of the Company. The stock options entitle the holders thereof the right to purchase one common share for each option at $0.05 until April 19, 2024 and vested on the grant date. The fair value of the stock options at the date of grant was $160,000 or $0.04 per option was determined using the Black Scholes option valuation model with the following assumptions: risk-free interest rate of 0.48%; dividend yield of 0%; volatility of 128% and expected life of three years and a stock price of $0.05.

Details of stock options activities for the three months ended July 31, 2021 and for the year ended April 30, 2021 are as follows:

							Weighted
						Number of	Average
						options	Exercise Price
Balance outstanding, April	30,	2020				-	-
Granted						4,000,000	$0.05
Balance outstanding, April	30,	2021	and July	31,	2021	4,000,000	$0.05

As at July 31, 2021, there were 4,000,000 share purchase options outstanding exercisable at $0.05 per expiring on April 19, 2024. These stock options have a weighted average contractual life of 2.72 years.

• d) Share purchase warrants

Details of share purchase warrants activities for the three months ended July 31, 2021 and for the year ended April 30, 2021 are as follows:

		Weighted
		Average
	Number of	Exercise
	Warrants	Price
Balance, April 30, 2020	19,595,000	$0.06
Issued	17,750,000	$0.08
Exercised	(1,500,000)	$0.06
Expired	(18,095,000)	$0.06
Balance, April 30, 2021 and July 31, 2021	17,750,000	$0.08

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

6. Share Capital and Reserves – (cont’d)

• d) Share purchase warrants – (cont’d)

As at July 31, 2021, the Company had 17,750,000 share purchase warrants outstanding as follows:

Number of	Exercise
Warrants	Price	Expiry Date
5,250,000	$0.10	September 21, 2022
12,500,000	$0.07	March 18, 2023
17,750,000

The weighted average remaining life of the 17,750,000 share purchase warrants is 1.49 years.

e) Agent’s warrants

Details of share purchase warrants activities for the three months ended July 31, 2021 and for the year ended April 30, 2021 are as follows:

							Weighted
							Average
						Number of	Exercise
						Warrants	Price
Balance, April	30,	2020				-	$-
Issued						540,000	$0.08
Balance, April	30,	2021	and July	31,	2021	540,000	$0.08

As at July 31, 2021, the Company had 540,000 share purchase warrants outstanding as follows:

Number of	Exercise
Warrants	Price	Expiry Date
252,000	$0.10	September 21, 2022
288,000	$0.07	March 18, 2023
540,000

The weighted average remaining life of the 540,000 Agent’s warrants is 1.40 years.

f) Reserve

The Company’s equity reserve is entirely comprised of share-based payments.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

7. Related Party Transactions

Related party transactions are comprised of services rendered by directors and/or officers of the Company or by a company with a director in common. Related party transactions are in the ordinary course of business and are measured at the exchange amount.

		For the three months ended	For the three months ended	For the three months ended
		July 31,
		2021		2020
Key management compensation
Administrative fees
Harmony Corporate Services Ltd. (“Harmony”), a
company controlled by the CFO, Geoff Balderson	$	7,500	$	7,500
Consulting fees
Jatinder Bal, CEO		26,000		-
Rent expense
Jatinder Bal, CEO		4,400		-
	$	37,900	$	7,500

Key management personnel compensation

The Company considers its President, Chief Executive Officer, Chief Financial Officer, vice-president of explorations and the directors of the Company to be key management. During the three months ended July 31, 2021 and 2020, the Company incurred key management compensation as noted in the above table.

Accounts payable and accrued liabilities at July 31, 2021, includes $64,280 (April 30, 2021 - $63,540) due to Harmony for reimbursement of expense and unpaid administrative fees.

Prepaid expenses include $16,300 (April 30, 2021 - $18,888) due to the CEO for consulting fees and advances on expenses.

On February 24, 2021, the Company provided a loan of $297,267 to another public company with a common CEO and director. The amount was non-interest bearing, unsecured and due on demand. On May 1, 2021, the Company entered into a loan agreement for the noted amount bearing interest at 5% per annum and repayable within 12 months from the date of the agreement. During the three months ended July 31, 2021, the Company accrued $3,746 in interest income and is included in loans receivable at July 31, 2021.

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GOLDENEYE RESOURCES CORP.

Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

8. Financial Instruments

The carrying amounts of the Company’s financial assets and liabilities approximate their fair values.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

• Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

• Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

• Level 3 – Inputs that are not based on observable market data.

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, and loans payable. The Company did not have any financial instruments carried at fair value on the statements of financial position as at July 31, 2021.

The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company’s financial instruments are summarized below.

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 majority of the Company’s cash is held through a major Canadian chartered bank and accordingly, the Company’s exposure to credit risk is considered to be limited.

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. The Company’s considers its exposure to interest rate risk to be not significant.

Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s accounts payable and accrued liabilities are all current and due within 30 days of the statement of financial position date. As at July 31, 2021 the Company had a working capital of $527,452 (April 30, 2021: working capital of $571,603). Management is considering different alternatives to secure adequate debt or equity financing to meet the Company’s short term and long term cash requirement.

At present, the Company’s operations do not generate cash flow. The Company’s primary source of funding has been the issuance of equity securities. Despite previous success in acquiring financing, there is no guarantee of obtaining future financings.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

9. Capital Disclosure

The Company’s objective when managing capital is to safeguard its ability to continue as a going concern. In order to facilitate the management of its capital requirements, the Company prepares periodic budgets that are updated as necessary. The Company manages its capital structure and makes adjustments to it to effectively support the Company’s objectives. In order to pay for general administrative costs, the Company will raise additional amounts as needed.

The Company reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company considers shareholders’ equity (deficit) and working capital as components of its capital base. The Company may access capital through the issuance of shares or the disposition of assets. Management historically funds the Company’s expenditures by issuing share capital rather than using capital sources that require fixed repayments of principal and/or interest. The Company is not subject to externally imposed capital requirements and does not have exposure to assetbacked commercial paper or similar products. The Company believes it will be able to raise additional equity capital as required, but recognizes the uncertainty attached thereto.

There has been no change in the Company’s approach to capital management during the period ended July 31, 2021.

10. Subsequent Events

Subsequent to July 31, 2021:

On June 15, 2021, the Company entered into a purchase agreement with Unity Resources Inc. (the “Seller”) to acquire 100% interest in two mineral licences comprising of 153 claims in the Gander River Ultamafic Belt East (“GRUBE”) project located within the province of Newfoundland, Canada. As consideration, the Company agreed to make a cash payment of $25,000 and issue 1,100,000 common shares within five business days of the receipt of TSXV approval (pending). This agreement is subject to the 3% Net Smelter Royalty (“NSR”) to be held by the Seller with the Company having the right to buy back 2% for a cash payment of $1,500,000.

On June 15, 2021, the Company entered into a purchase agreement with the Seller to acquire 100% interest in six mineral licences comprising of 143 claims in the Roberts Arm Cu + Au Project & Grand Lake Au Project located within the province of Newfoundland, Canada. As consideration, the Company agreed to make a cash payment of $100,000 and issue 3,100,000 common shares within five business days of the receipt of TSXV approval (pending) and within six months of TSXV approval, make another cash payment of $100,000 and issue an additional 3,100,000 common shares. This agreement is subject to the 3% NSR to be held by the Seller with the Company having the right buy back 2% for a cash payment of $1,500,000.

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GOLDENEYE RESOURCES CORP. Notes to the Condensed Interim Financial Statements July 31, 2021 (Stated in Canadian Dollars) (Unaudited – Prepared by Management)

10. Subsequent Events – (cont’d)

On July 16, 2021, the Company entered into a property option agreement with Windfall Geotek Inc. (the “Optionor”) for the right to acquire 95% interest in and to the claims located near Corallen Lake Region, Ontario known as the “Corallen” project. As consideration, the Company agreed to a cash payment of $250,000 and issue 3,000,000 common shares within 30 days following receipt of approval from the TSXV Exchange (pending) and also: (i) on or before December 31, 2021, incur $200,000 in expenditures whereafter the Company shall have earned a 25% legal and beneficial interest in the property; (ii) on or before December 31, 2022, enter into a master service agreement (“MSA”) and hiring the Optionor to provide services for artificial intelligence for consideration of $150,000 pursuant to the MSA, and incurring $300,000 in additional expenditures whereafter the Company shall have earned a 50% legal and beneficial interest in the property; (iii) on or before December 31, 2023, hire the Optionor to provide services for artificial intelligence for consideration of $150,000 pursuant to the MSA, and incurring $400,000 in additional expenditures whereafter the Company shall have earned a 75% legal and beneficial interest in the property and; (iv) on or before December 31, 2024, pay $150,000 in cash to Windfall Geotek AI Services and incurring $450,000 in additional expenditures whereafter the Company shall have earned the 95% interest in and to the property. The Optionor is entitled to a 2% NSR.

The Company entered into the MSA on August 19, 2021, whereby the Optionor agrees to provide artificial intelligence services that help identify targets on the Company’s properties and deliver information and other documents pursuant to the statement of work. The Optionor grants in favour of the Company a sole nontransferable, non-sublicensable, royalty-free worldwide license to use the intellectual property from the deliverables provided by the Optionor for the purposes of conducting exploration in the Area of Interest. Meanwhile, the Company grants the Optionor the right to purchase 0.5% NSR for $500,000 payable in cash and/or common shares with an indefinite term, and the right to purchase 0.5% NSR for $1,000,000 payable in cash and/or common shares with an expiry of 10 years from the date the first target provided by the Optionor is drilled by the Company.

On September 27, 2021, the Company complete a non-brokered private placement of 6,997,399 units at a price of $0.06 per unit for total proceeds of $419,844. Each unit will consist of one common share and onehalf common share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one additional common share at a price of $0.09 per share for a period of 3 years from the date of closing. In connection with the private placement, the Company a cash finders fee of $7,680 and issued 128,000 Finder warrants exercisable at $0.09 per share expiring 3 years from the date of closing.

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