Trifecta Gold Ltd. — Interim / Quarterly Report 2020

Aug 26, 2020

Trifecta Gold Ltd.

Condensed Interim Financial Statements

For the six months ended June 30, 2020

Unaudited – Prepared by Management (Expressed in Canadian Dollars)

Trifecta Gold Ltd. #1016 – 510 West Hastings Street Vancouver, British Columbia V6B 1L8

August 26, 2020

To the Shareholders of Trifecta Gold Ltd.

The attached condensed interim financial statements have been prepared by the management of Trifecta Gold Ltd. and have not been reviewed by the auditor of the Company.

Yours truly,

Richard Drechsler Chief Executive Officer

Trifecta Gold Ltd.

Condensed Interim Statements of Financial Position

Unaudited – Prepared by Management

As at June 30, 2020 and December 31, 2019

		June	30, December 31,
		2020 2019
	Note	$	$
Assets
Current assets
Cash			131,647 92,561
Receivables andprepayments	3		11,307 8,106
			142,954100,667
Non-current assets
Mineralpropertyinterests	5		1,913,253 1,907,424
Total assets			2,056,2072,008,091
Liabilities and shareholders' equity
Current liabilities
Accounts payable and accrued liabilities			8,160 15,446
Accountspayable to relatedparties	8		20,595 10,670
Total liabilities			28,75526,116
Shareholders' equity
Share capital	6		4,123,310 4,031,310
Contributed surplus	6		268,641 276,449
Deficit			(2,364,499) (2,325,784)
Total shareholders' equity			2,027,4521,981,975
Total liabilities and shareholders' equity			2,056,2072,008,091

Nature of operations and going concern 1 Events after the reporting period 12

Approved on behalf of the Board of Directors on August 26, 2020:

“Bruce J. Kenway”

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Director
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Director “Graham Downs”

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

3

Trifecta Gold Ltd.

Condensed Interim Statements of Changes in Shareholders’ Equity Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

					Total
	Number of Share	Contributed			shareholders'
	shares capital	surplus		Deficit	equity
	# $	$		$	$
January 1, 2019	35,317,857 3,935,310	310,802		(1,817,876)	2,428,236
Common shares issued to settle debt	200,000 12,000	-		-	12,000
Common shares issued for severance	1,500,000 75,000	-		-	75,000
Re-allocated on cancellation of options	- -	(3,123)		3,123	-
Loss and comprehensive loss for theperiod	- -	-		(289,288)	(289,288)
June 30,2019	37,017,857 4,022,310	307,679		(2,104,041)	2,225,948
January 1, 2020	37,317,857 4,031,310	276,449		(2,325,784)	1,981,975
Common shares issued for cash	4,000,000 100,000		-	-	100,000
Share issue costs - cash	- (8,000)		-	-	(8,000)
Re-allocated on cancellation of options	- -	(7,808)		7,808	-
Loss and comprehensive loss for theperiod	- -		-	(46,523)	(46,523)
June 30, 2020	41,317,857 4,123,310	268,641		**(2,364,499) **	2,027,452

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

4

Trifecta Gold Ltd.

Condensed Interim Statements of Loss and Comprehensive Loss Unaudited – Prepared by Management

For the three and six months ended June 30,

		Three months	Three months	ended	Six months	Six months	ended
		June	30,	June 30,	June	30,	June 30,
		2020		2019	2020		2019
	Note	$		$	$		$
Expenses
Administration expenses			85	1,635		185	3,482
Insurance			1,941	4,171		3,854	8,571
Investor relations and shareholder information			952	3,855		3,632	15,730
Management, administrative and corporate development fees	8		300	1,175		850	3,291
Management, administrative and corporate development salaries	8		-	145,170		-	174,850
Office rent	8		4,500	6,500		9,000	14,000
Professional fees	8		9,004	13,916		24,970	24,176
Transfer agent and filingfees			1,958	3,030		4,332	6,849
Loss from operating expenses			(18,740)	(179,452)		(46,823)	(250,949)
Interest income			8	620		300	1,677
Mineral property write-offs	5(d)(i)		-	-		-	(36,046)
Gain(loss)on marketable securities	4		-	1,030		-	(3,970)
Loss and comprehensive loss for theperiod			(18,732)	(177,802)		(46,523)	(289,288)
Loss per share
Weighted average number of common shares outstanding
- basic #	7	38,251,190		36,417,857	37,779,395		35,906,807
- diluted #	7	38,251,190		36,417,857	37,779,395		35,906,807
Basic loss per share $	7		(0.00)	(0.00)		(0.00)	(0.01)
Diluted lossper share$	7		(0.00)	(0.00)		(0.00)	(0.01)

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

5

Trifecta Gold Ltd.

Condensed Interim Statements of Cash Flows

Unaudited – Prepared by Management

For the six months ended June 30,

		2020	2019
	Note	$	$
Operating activities
Loss and comprehensive loss for the period		(46,523)	(289,288)
Mineral property write-offs		-	36,046
Shares issued for severance		-	75,000
Loss on marketable securities		-	3,970
Interest income		(300)	(1,677)
Net change in non-cash workingcapital items	10	(9,277)	(30,134)
		(56,100)	(206,083)
Financing activities
Shares issued for cash		100,000	-
Share issue costs		-	(8,500)
		100,000	(8,500)
Investing activities
Interest received		300	1,677
Proceeds from sale of marketable securities	4	-	23,330
Mineral property acquisition costs		(4,228)	-
Deferred exploration and evaluation expenditures		(886)	(16,032)
		(4,814)	8,975
Net increase (decrease) in cash		39,086	(205,608)
Cash, beginning ofperiod		92,561	341,493
Cash, end ofperiod		131,647	135,885

Supplemental cash flow information 10

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

6

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

1. Nature of operations and going concern

Trifecta Gold Ltd. (the “Company” or “Trifecta”) was incorporated on October 4, 2016 under the laws of the Province of British Columbia, Canada and was registered extra-territorially in the Yukon Territory on January 6, 2017. The Company’s head office is located at 1016 - 510 West Hastings Street, Vancouver, British Columbia, Canada, V6B 1L8. Its records office is located at 1710 - 1177 West Hastings Street, Vancouver, British Columbia, Canada, V6E 2L3. The Company was a wholly-owned subsidiary of Strategic Metals Ltd. (“Strategic”), until June 9, 2017, at which time Strategic’s ownership position was reduced to approximately 9.19% through a Plan of Arrangement, which concluded with each Strategic shareholder receiving one Trifecta common share for every four and one-half Strategic common shares they owned as of May 31, 2017. The Company was listed on the TSX Venture Exchange (“TSX-V”) on June 15, 2017.

The Company’s principal business activity is the acquisition, exploration and evaluation of mineral properties. The Company has been exploring its mineral property interests and has not yet determined whether they contain mineral reserves that are economically recoverable. Its exploration activities have been curtailed pending an improvement in its working capital. The Company's continuing operations and the underlying value and recoverability of the amounts shown for mineral property interests are entirely dependent upon the existence of economically recoverable mineral reserves, the ability of the Company to obtain the necessary financing to complete the exploration and development of the mineral property interests, obtaining the necessary permits to mine, and on future profitable production or proceeds from the disposition or option of the mineral property interests. The carrying amounts of mineral properties are based on costs incurred to date, and do not necessarily represent present or future values.

These condensed interim financial statements (the “financial statements”) are prepared on the basis that the Company will continue as a going concern, which assumes that the Company will be able to continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of operations. The Company does not have revenues and has incurred operating losses since incorporation. As at June 30, 2020, the Company had working capital of $114,199 (December 31, 2019 – $74,551), and shareholders’ equity of $2,027,452 (December 31, 2019 - $1,981,975). As of August 26, 2020. the Company is awaiting regulatory approval to complete an additional $810,000 private placement (see note 12(b)), which should enable the Company to carry on as a going concern beyond one year. The Company will continue to seek the funding necessary to enable it to carry on as a going concern, but management cannot provide assurance that the Company will be able to raise additional debt and/or equity capital or conclude a corporate transaction.

In order to preserve working capital, the Company has undertaken a number of changes, including completing a Severance Settlement Agreement with its former CEO to step down (note 8), withdrawing from its option agreement on the Eureka Dome property (note 5(d)(i)), liquidation of its marketable securities (note 4) and it is awaiting regulatory approval to replace its Yuge project option with a more favorable purchase agreement (see note 12(a)). The Company will continue to seek cost saving measures, project partners, merger/acquisitions or financing opportunities. These financial statements do not include any adjustments related to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

During the six months ended June 30, 2020, there was a global outbreak of COVID-19 which has had a significant impact on businesses through the restrictions put in place by the American, Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s ability to raise capital or conduct exploration activities. There are travel restrictions and health and safety concerns in all areas in which the Company operates, including the Yukon Territory, Canada and Nevada, USA, that may prohibit or delay exploration programs from proceeding. Operations will depend on obtaining necessary field supplies, obtaining contractor services and safeguarding all personnel during the outbreak, which may be prohibitive or too costly. To date, the restricted nature of the Company’s activities has not qualified it for the various Government wage and loan subsidies.

7

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

2. Significant accounting policies

(a) Basis of presentation

These financial statements have been prepared in conformity with International Accounting Standard (“IAS”) 34, Interim Financial Reporting, using the same accounting policies as detailed in the Company‘s annual audited financial statements for the year ended December 31, 2019, and do not include all the information required for full annual financial statements in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). It is suggested that these financial statements be read in conjunction with the annual audited financial statements.

These financial statements have been prepared on an historical cost basis, except for financial instruments which are classified as fair value through profit or loss (“FVTPL”). In addition, these financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

All amounts on these financial statements are presented in Canadian dollars which is the functional currency of the Company.

(b) Significant accounting policies

The accounting policies, estimates and critical judgments, methods of computation and presentation applied in these financial statements are consistent with those of the most recent annual audited financial statements and are those the Company expects to adopt in its financial statements for the year ended December 31, 2020. Accordingly, these financial statements should be read in conjunction with the Company’s most recent annual audited financial statements.

3. Receivables and prepayments

Receivables and prepayments consist of the following:

	June 30,	December 31,
	2020	2019
	$	$
Prepaid expenses	9,933	5,688
Sales tax recoverable	1,374	2,418
	11,307	8,106

4. Marketable securities

Marketable securities consist of common shares received on the option of mineral property interests as follows:

	Cost	Fair value	(Loss) gain
	$	$	$
January 1, 2019	53,750	37,500
Proceeds on sale	(23,330)	-
Cost of disposals	-	(35,475)
Realized loss on sale	(12,145)	-	(12,145)
Unrealizedgain for theperiod	-	8,175	8,175
June 30,2019	18,275	10,200	(3,970)
January 1, 2020 and June 30, 2020	-	-	-

The fair value of the marketable securities was based on the bid price of the shares on the TSX-V at each period end.

8

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

5. Mineral property interests

The Company’s mineral property interests consist of exploration stage properties located in Canada (Yukon Territory and British Columbia) and the United States (Nevada). The properties have been grouped into those which are whollyowned projects, wholly-owned and under option, projects under option from other parties and others. Properties which are in close proximity and could be developed as a single economic unit are grouped into projects.

Changes in the project carrying amounts for the six months ended June 30, 2019 are summarized as follows:

		Acquisitions/	Exploration
	January 1,	staking/	and
	2019	assessments	evaluation	Write-offs	June 30, 2019
	$	$	$	$	$
Wholly-owned projects
Eureka	1,219,817	-	1,061	-	1,220,878
Treble	155,879	-	-	-	155,879
Triple Crown	283,940	-	-	-	283,940
Total	1,659,636	-	1,061	-	1,660,697
Wholly-owned and under option project
Trident - wholly-owned claims
Squid	212,142	-	789	-	212,931
Trident - under option claims
CH Claims	88,075	-	-	-	88,075
	300,217	-	789	-	301,006
Projects under option from other parties
Yuge	118,081	13,419	2,533	-	134,033
Eureka Dome	35,921	-	125	(36,046)	-
	154,002	13,419	2,658	(36,046)	134,033
Total allprojects	2,113,855	13,419	4,508	(36,046)	2,095,736

Exploration and evaluation expenditures on the projects consisted of the following:

	Eureka	Trident	Yuge	Eureka Dome	Total
Six months ended June 30, 2019	$	$	$	$	$
Assays	-	-	-	-	-
Field	-	-	-	-	-
Labour	1,061	789	2,533	125	4,508
Surveys and consulting	-	-	-	-	-
Travel and accommodation	-	-	-	-	-
Total	1,061	789	2,533	125	4,508

9

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

Trifecta Gold Ltd.

For the six months ended June 30, 2020 and June 30, 2019

5. Mineral property interests (continued)

Changes in the project carrying amounts for the six months ended June 30, 2020 are summarized as follows:

		Acquisitions/	Exploration
	January 1,	staking/	and
	2020	assessments	evaluation	June 30, 2020
	$	$	$	$
Wholly-owned projects
Eureka	1,224,179	-	-	1,224,179
Treble	156,010	-	-	156,010
Total	1,380,189	-	-	1,380,189
Wholly-owned and under option project
Trident - wholly-owned claims
Squid	294,992	4,228	1,329	300,549
Trident - under option claims
CH	97,075	-	-	97,075
	392,067	4,228	1,329	397,624
Project under option from other parties
Yuge	135,168	-	272	135,440
	135,168	-	272	135,440
Total allprojects	1,907,424	4,228	1,601	1,913,253

Exploration and evaluation expenditures on the projects consisted of the following:

	Trident	Yuge	Total
Six months ended June 30, 2020	$	$	$
Field	39	-	39
Labour	1,290	272	1,562
Total	1,329	272	1,601

10

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

5. Mineral property interests (continued)

(a) Wholly-owned projects

By an agreement dated December 9, 2016, the Company agreed to purchase the Eureka, Treble and Triple Crown mineral properties from Strategic by issuing Strategic 14,500,000 of its common shares at a value of $0.10 per share, giving the transaction a total value of $1,450,000. The agreed amount approximated the cumulative acquisition and exploration costs incurred on the properties by Strategic.

Transactions between related parties take place at a fair market value, where such values can be determined. The purchased properties are in the exploration stage with no proven economic mineral reserves, so there was insufficient information to determine a fair value less cost to sell, or a value in use. Under IFRS 6, mineral property interests can be carried at cost until such time the properties become impaired. Given the properties were, and are not considered impaired, and given a fair value could not be determined, the Company used the cumulative property costs to Strategic as the transfer value of the properties.

(i) Eureka

The Eureka project consists of a 100% interest in the Eureka mineral claims located in the Dawson Mining District, Yukon Territory. The project was acquired in December 2016 from Strategic by the issue of 11,250,000 common shares at $0.10 per share for an aggregate cost of $1,125,000. The claims are subject to a 1% net smelter return royalty (“NSR”).

(ii) Treble

The Treble project consists of a 100% interest in the LLL mineral claims located in the Dawson Mining District, Yukon Territory. The project was acquired in December 2016 from Strategic by the issue of 1,150,000 common shares at $0.10 per share for an aggregate cost of $115,000. The claims are not subject to any royalty interests.

(b) Wholly-owned and under option project

Trident

The Trident project consists of the Squid claims, which are wholly-owned, and the CH claims which are being acquired under an option agreement.

Wholly-owned claims

The Squid claims are located in the Dawson Mining District, Yukon Territory, and were acquired by staking.

Under option claims

By an agreement dated December 8, 2016, and amended on April 27, 2017, the Company may acquire a 100% interest in the CH mineral claims located in the Dawson Mining District, Yukon Territory from Coureur Des Bois Ltee Ltd. (“Coureur”), for consideration of:

• The issuance of 1,500,000 common shares to Coureur as follows:

• 150,000 shares upon completion of a TSX-V listing (issued June 15, 2017);

• 150,000 shares on or before December 8, 2017 (issued December 8, 2017);

• 200,000 shares on or before December 8, 2018 (issued December 6, 2018);

• 300,000 shares on or before December 8, 2019 (issued December 2, 2019); and

• 700,000 shares on or before December 8, 2020.

Upon completion of the agreement, the Company will attain a 100% interest in the claims and Coureur will retain a 2% NSR from any precious metal commercial production and a 1% NSR from any non-precious metal commercial production. The Company would have the right at any time to purchase one-half of the NSR for $1,000,000.

11

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

5. Mineral property interests (continued)

(c) Project under option from other parties

Yuge

On February 27, 2018, the Company signed a letter of intent, which was subsequently replaced with a definitive agreement, to option from Silver Range Resources Ltd. (“Silver Range”) up to a 75% interest in Silver Range’s Yuge property, which is located in Nevada, USA.

For a 51% interest, the Company is required to:

• Reimburse Silver Range its staking and recording costs of US$7,100 (paid $9,066 Cdn);

• Complete a US$1,000,000 work program on or before February 28, 2021;

• Pay Silver Range US$250,000 cash and/or shares at the Company’s election, on or before February 28, 2021;

• Grant Silver Range a 1% NSR; and

• Grant Silver Range a success fee of US$1 per ounce, payable upon completion of a Preliminary Economic Assessment based on measured and indicated resources greater than 500,000 ounces.

For an additional 24% interest, the Company is required to:

• Complete an additional US$2,000,000 work program on or before February 28, 2023;

• Pay Silver Range US$500,000 cash and/or shares at the Company’s election, on or before February 28, 2023; and

• Grant Silver Range an additional 1% NSR, which can be purchased for US$1,000,000 at any time prior to production.

Silver Range will act as the project operator for the first phase of exploration in return for a 10% management fee. Once fully vested a Joint Venture would be formed to continue exploration of the property. Should either party’s interest be diluted to below 10%, it would be converted into a 1% NSR, half of which could be purchased for US$1,000,000.

As of August 26, 2020, the Company and Silver Range are awaiting regulatory approval to replace the Yuge option agreement with a property purchase agreement (see note 12(a)).

(d) Others

(i) Eureka Dome

In April 2019, the Company terminated an option agreement to earn a 70% interest in the Eureka Dome property located in the Dawson Mining District, Yukon Territory, and wrote-off its cumulative acquisition and exploration expenditures of $36,046. During the option period, the Company made cash payments totaling $20,000, and issued 200,000 of its common shares to the optionor.

(ii) Triple Crown

The Triple Crown project consisted of a 100% interest in the OOO mineral claims located in the Dawson Mining District, Yukon Territory. The project was acquired in December 2016 from Strategic by the issue of 2,100,000 common shares at $0.10 per share for an aggregate cost of $210,000.

By Agreement dated September 16, 2019, the Company sold its Triple Crown project back to Strategic for cash consideration of $100,000. The Company retains a 0.5% NSR on the claims, which Strategic can purchase at any time for $500,000.

12

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

5. Mineral property interests (continued)

• (d) Others (continued)

(iii) Handsome Jack

The Company retains a 1% NSR on the Handsome Jack project which consists of a 100% interest in the Never Sweat mineral claims located in the Golden Triangle region of British Columbia. One-half of the NSR can be purchased by the claim owner at any time for a cash payment of $500,000.

6. Share capital

The authorized share capital of the Company consists of an unlimited number of common shares without par value. All issued shares are fully paid.

Transactions for the issue of share capital during the six months ended June 30, 2020:

On June 9, 2020, the Company completed a private placement consisting of the issue of 4,000,000 common shares at a price of $0.025 per share for gross proceeds of $100,000. In connection with the financing, the Company incurred legal fees of $8,000 which were recorded as share issue costs.

Transactions for the issue of share capital during the six months ended June 30, 2019:

On February 14, 2019, the Company entered a Debt Settlement Agreement (the “Debt Settlement”) with Silver Range whereby the Company issued a total of 200,000 common shares to settle an amount owing to Silver Range of $12,000 ($0.06 per share). No gain or loss was recognized in connection with the Debt Settlement.

On May 7, 2019, the Company issued 1,500,000 to its former President and CEO in connection with a Severance Settlement Agreement (the “Severance Settlement”) (see note 8). The common shares were issued at a value of $0.05 per share, for an aggregate value of $75,000. No gain or loss was recognized in connection with the Severance Settlement.

Stock options

The Company has an incentive stock option plan (the “Plan”), under which the maximum number of stock options issued cannot exceed 10% of the Company’s currently issued and outstanding common shares. The exercise period for any options granted under the Plan cannot exceed ten years. The exercise price of options granted under the Plan cannot be less than the “discounted market price” of the common shares (defined as the last closing market price of the Company’s common shares immediately preceding the issuance of a news release announcing the granting of the options, or the date of grant in respect of options granted to consultants, less a discount of from 15% to 25%), unless otherwise agreed to by the Company and accepted by the TSX-V.

A participant who is not a consultant conducting investor relations activities, who is granted an option under the plan with exercise prices at or above “Market Price” will have their options vest immediately, unless otherwise determined by the Board of Directors. A participant who is granted an option under the plan with exercise prices below “Market Price” will become vested with the right to exercise one-sixth of the option upon conclusion of every three months subsequent to the grant date. A participant who is a consultant conducting investor relations activities who is granted options under the plan will become vested with the right to exercise one-quarter of the options upon conclusion of every three months subsequent to the grant date.

A summary of the status of the Company’s stock options as at June 30, 2020 and December 31, 2019 and changes during the period/year then ended is as follows:

	Period ended		Year ended
	June 30, 2020		December 31,2019
	Options Exercise price		Options Exercise price
	#	$	#	$
Options outstanding, beginning of period/year	2,015,000	0.25	2,345,000	0.25
Cancelled	(75,000)	0.25	(330,000)	0.25
Options outstanding, end ofperiod/year	1,940,000	0.25	2,015,000	0.25

13

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

6. Share capital (continued)

Stock options (continued)

As at June 30, 2020, the Company has stock options outstanding and exercisable as follows:

Options	Options	Exercise	Weighted average
outstanding	exercisable	price	remaining life	Expiry date
#	#	$	(years)
1,940,000	1,940,000	0.25	2.15	August 25, 2022

No stock options were granted during the six months ended June 30, 2020 or June 30, 2019.

During the six months ended June 30, 2020, 75,000 stock options (2019 – 30,000) were cancelled. As a result, the original share-based payment expense of $7,808 (2019 - $3,123) has been reversed from contributed surplus and credited to deficit.

Warrants

As an incentive to complete private placements, the Company may issue units which consist of common shares and common share purchase warrants. Using the residual value method, the Company determines whether a value should be allocated to the warrants attached to private placement units.

A summary of the status of the Company’s warrants as at June 30, 2020 and December 31, 2019, and changes during the period/year then ended is as follows:

	Period ended	Period ended	Year ended	Year ended
	June 30,	2020	December	31, 2019
	Warrants	Exercise price	Warrants	Exercise price
	#	$	#	$
Warrants outstanding, beginning of period/year	4,352,856	0.10	5,852,856	0.11
Privateplacement warrants expired	-	-	(1,500,000)	0.15
Warrants outstanding, end ofperiod/year	4,352,856	0.10	4,352,856	0.10

As at June 30, 2020, the Company had private placement warrants outstanding and exercisable as follows:

Warrants	Exercise	Weighted average
outstanding	price	remaining life	Expiry date
#	$	(years)
4,352,856	0.10	0.45	December 13, 2020

Contributed surplus

Contributed surplus, when applicable, includes the accumulated fair value of stock options recognized as share-based payments and the fair value of warrants issued on private placements. Contributed surplus is increased by the fair value of these items on vesting and is reduced by corresponding amounts when the options or warrants expire or are exercised or cancelled.

7. Loss per share

The calculation of basic and diluted loss per share for the six months ended June 30, 2020 is based on the loss attributable to common shareholders of $46,523 (2019 - $289,288) and a weighted average number of common shares outstanding of 37,779,395 (2019 – 35,906,807).

All stock options and warrants were excluded from the diluted weighted average number of shares calculation, as their effect would have been anti-dilutive.

14

Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

8. Related party payables and transactions

The Company’s related parties include key management personnel and Directors, and companies in which they have control or significant influence over the financial or operating policies of those entities. There were no loans to key management personnel or Directors, or entities over which they have control or significant influence during the six months ended June 30, 2020 or June 30, 2019.

Dylan Arnold-Wallinger (“Wallinger”), the Company’s former President and CEO was a salaried employee until April 30, 2019. No other key management personnel or Directors receive salaries, non-cash benefits (other than incentive stock options), or other remuneration directly from the Company, other than noted below, and there are no contracts with them that cannot be terminated without penalty on thirty days’ notice. Key management personnel and Directors participate in the Company’s stock option plan.

Effective April 30, 2019, the Company and Wallinger agreed to terminate his Employment Agreement and the Company made a one-time cash payment of $60,000 and issued a total of 1,500,000 common shares with a fair value of $75,000 as consideration for the early termination. All 300,000 stock options of Wallinger were cancelled on him leaving employment. The options had a fair value on grant date of $31,221, which were reversed from contributed surplus and credited to deficit.

There were no stock options granted to key management personnel and Directors during the six months ended June 30, 2020 or June 30, 2019.

The Company transacted with the following related parties:

• (a) Archer Cathro & Associates (1981) Limited (“Archer Cathro”) is a geological consulting firm that is a related party through its management contracts, which confer significant influence over operations. Charges are for mineral property management, office rent and administration.

• (b) Glenn Yeadon is the Company’s Secretary. He controls Glenn R. Yeadon Personal Law Corporation (“Yeadon Law Corp”), which provides the Company with legal services.

• (c) Larry Donaldson is the Company’s CFO. He is a principal of Donaldson Brohman Martin CPA Inc. (“DBM CPA”) a firm in which he has significant influence. DBM CPA provides the Company with accounting and tax services.

• (d) Wallinger was the Company’s President and CEO. He provided the Company with management, administrative, corporate development and technical services.

The aggregate value of transactions and outstanding balances with related parties are as follows:

(1) (2)	Transactions 6 months ended June 30, 2020 $ Transactions 6 months ended June 30, 2019 $ Balances outstanding, June 30, 2020 $ Balances outstanding, December 31, 2019 $
	Archer Cathro - geological services 1,565 1,404 715 - - office and administration 10,598 17,540 2,108 344
	12,163 18,944 2,823 344 Yeadon Law Corp 22,543 15,781 12,772 4,326 DBM CPA 10,750 10,200 5,000 6,000 Wallinger - 177,830 - -
	45,456 222,755 20,595 10,670

(1) Transactions include share issue costs of $8,000 for the six months ended June 30, 2020.

(2) Transactions include geological services of $2,979 for the six months ended June 30, 2019.

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Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

Trifecta Gold Ltd.

For the six months ended June 30, 2020 and June 30, 2019

8. Related party payables and transactions (continued)

All related party balances are unsecured and are due within thirty days without interest. The related party transactions do not include expense reimbursements or recoverable sales tax amounts that are included in the year end related party payable balances. The transactions with the key management personnel and Directors are included in operating expenses as follows:

• (a) Management, administrative and corporate development fees

• Includes charges by Archer Cathro for administrative personnel.

(b) Management, administrative and corporate development salaries

• 2019 includes Wallinger’s salary related to management, administrative and corporate development services. The remainder of Wallinger’s salary is allocated to deferred exploration and evaluation expenditures for his project technical services.

• (c) Office rent

• Charged by Archer Cathro.

• (d) Professional fees

• Includes the legal services of the Company’s Secretary, Glenn Yeadon, charged to the Company by Yeadon Law Corp.

• Includes the accounting and tax services of the Company’s CFO, Larry Donaldson, charged to the Company by DBM CPA.

9. Income taxes

Income tax recovery varies from the amount that would be computed from applying the combined federal and provincial income tax rate to loss before income taxes as follows:

	June 30,	June	30,
	2020	2019
	$	$
Loss for the period before income taxes	(46,523)		(289,288)
StatutoryCanadian corporate tax rate	27.00%		27.00%
Anticipated income tax recovery	12,561		78,108
Change in tax resulting from:
Unrecognized items for tax purposes	-		(536)
Tax benefits unrecognized	(12,561)		(77,572)
Income tax recovery	-		-

The significant components of the Company’s unrecognized deferred income tax assets are as follows:

	June 30,	December 31,
	2020	2019
	$	$
Mineral property interests	201,338	202,840
Capital loss carry forwards	3,143	3,143
Non-capital loss carry forwards	296,177	280,671
Share issue costs	5,298	5,444
Tax benefits unrecognized	(505,956)	(492,098)
Net deferred tax assets	-	-

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Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

Trifecta Gold Ltd.

For the six months ended June 30, 2020 and June 30, 2019

9. Income taxes (continued)

As at June 30, 2020, the Company has unused non-capital losses of approximately $1,097,000 (December 31, 2019 – $1,040,000) of which $43,000 expire in 2036, $305,000 in 2037, $355,000 in 2038, $337,000 in 2039 and $57,000 in 2040.

As at June 30, 2020, the Company has unused capital losses of approximately $12,000 (December 31, 2019 - $12,000), which have no expiry dates and can only be used to reduced future income from capital gains.

As at June 30, 2020, the Company has unclaimed resource deductions in the amount of approximately $2,659,000 (December 31, 2019 – $2,659,000), which may be deductible against future taxable income.

As at June 30, 2020, there are share issue costs totaling approximately $20,000 (December 31, 2019 – $20,000), which have not been claimed for tax purposes.

Income tax attributes are subject to review, and potential adjustments, by tax authorities.

10. Supplemental cash flow information

Changes in non-cash operating working capital during the six months ended June 30, 2020 and June 30, 2019 were comprised of the following:

comprised of the following:
	June 30,	June 30,
	2020	2019
	$	$
Receivables and prepayments	4,132	(11,807)
Accounts payable and accrued liabilities	(14,619)	(11,719)
Accountspayable to relatedparties	1,210	(6,608)
**Net change **	(9,277)	(30,134)

The Company incurred non-cash financing and investing activities during the six months ended June 30, 2020 and June 30, 2019 as follows:

June 30, 2019 as follows:
	June	30,	June 30,
	2020		2019
	$		$
Non-cash financing activities:
Share issue costs included in related party payables	8,000		-
Share capital issued to settle debt		-	12,000
Share capital issued for severance		-	75,000
	8,000		87,000
Non-cash investing activities:
Deferred exploration expenditures included in accounts payable and
relatedparty payables		715	14,141
		715	14,141

During the six months ended June 30, 2020 and June 30, 2019, no amounts were paid for interest or income tax expenses.

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Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

11. Financial risk management

Capital management

The Company is a resource exploration company and considers items included in shareholders’ equity as capital. The Company has no debt and does not expect to enter into debt financing. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of underlying assets. In order to maintain or adjust its capital structure, the Company may issue new shares, purchase shares for cancellation pursuant to normal course issuer bids or make special distributions to shareholders. The Company is not subject to any externally imposed capital requirements and does not presently utilize any quantitative measures to monitor its capital. The Company’s capital structure as at June 30, 2020 is comprised of shareholders’ equity of $2,027,452 (December 31, 2019 - $1,981,975).

The Company currently has no source of revenues. In order to fund future projects and pay for operating costs, the Company will spend its existing working capital and raise additional funds as needed. The Company's ability to continue as a going concern on a long-term basis and realize its assets and discharge its liabilities in the normal course of business rather than through a process of forced liquidation is primarily dependent upon its ability to sell or option its mineral properties and its ability to borrow or raise additional financing from equity markets (see note 1).

Financial instruments - fair value

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities, and accounts payable to related parties. The carrying value of accounts payable and accrued liabilities, and accounts payable to related parties approximates their fair value because of the short-term nature of these instruments.

Financial instruments measured at fair value on the statements of financial position are summarized into the following fair value hierarchy levels:

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

	Level 1	Level 2		Level 3		Total
	$	$		$		$
June 30, 2020
Cash	131,647		-		-	131,647
	131,647		-		-	131,647
December 31, 2019
Cash	92,561		-		-	92,561
	92,561		-		-	92,561

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Trifecta Gold Ltd.

Notes to the Condensed Interim Financial Statements Unaudited – Prepared by Management

For the six months ended June 30, 2020 and June 30, 2019

11. Financial risk management (continued)

Financial instruments - risk

The Company’s financial instruments can be exposed to certain financial risks, including credit risk, interest rate risk, liquidity risk and market and currency risk.

(a) Credit risk

The Company is exposed to credit risk by holding cash. All of the Company’s cash is held in financial institutions in Canada, and management believes the exposure to credit risk with respect to such institutions is not significant. The Company has minimal receivable exposure as its refundable credits are due from the Canadian government.

(b) Interest rate risk

The Company is not exposed to interest risk as it does not hold financial securities or debt that would be impacted by fluctuating interest rates.

(c) Liquidity risk

Liquidity risk is the risk that the Company is unable to meet its financial obligations as they come due. The Company manages this risk by careful management of its working capital to ensure its expenditures will not exceed available resources. See note 1 for further details.

(d) Market and currency risk

The Company is not exposed to market or currency risk as it no longer holds marketable securities and does not hold US dollars.

12. Events after the reporting period

• (a) On July 7, 2020, the Company entered into a Property Purchase Agreement (the “PP Agreement”) with Silver Range in respect of the Yuge Property, which is currently under an option agreement, that would allow the Company to earn a 75% interest (note 5(c)). Pursuant to the terms of the PP Agreement, which is subject to regulatory approval, the Company can acquire a 100% interest in the Yuge Property by:

• Terminating the option agreement;

• Issuing to Silver Range that number of common shares equal to 9.9% of the total number of issued and outstanding common shares of the Company immediately following the closing of the first $500,000 of a financing (subsequently determined to be 4,797,611 shares);

• Reimbursing Silver Range for property maintenance payments, rentals and filing fees made to maintain the property in good standing until September 1, 2021; and

• Paying Silver Range $250,000 on or before July 7, 2021 (the “Final Payment”).

Upon completion of the PP Agreement, Silver Range will retain a 2% NSR from the commercial production of any mineral products on the property. At any time following the closing of the PP Agreement, the Company will have the right to purchase one-half of the NSR for $1,000,000.

• (b) As of August 26, 2020, the Company is awaiting regulatory approval to complete a private placement consisting of the issue of 11,571,429 non-flow-through common share units at a price of $0.07 per unit for gross proceeds of $810,000. Each unit will consist of one common share and one share purchase warrant, with each warrant being exercisable into an additional common share at an exercise price of $0.14 for a period of 12 months from the date of issue.

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