Inca One Gold : Annual Report

INCA ONE GOLD CORP.

Consolidated Financial Statements

For the Years Ended April 30, 2022, and 2021

(Expressed in US Dollars)

Independent Auditor's Report

To the shareholders of

Inca One Gold Corp.

Opinion

Grant Thornton LLP

Suite 1600

333 Seymour Street Vancouver, BC V6B 0A4

T [phone] F [phone]

We have audited the consolidated financial statements of Inca One Gold Corp. (the "Company"), which comprise the consolidated statements of financial position as at April 30, 2022 and 2021, and the consolidated statements of operations and comprehensive loss, consolidated statements of changes in equity and consolidated statements of cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information.

In our opinion, the accompanying consolidated financial statements present fairly in all material respects, the consolidated financial position of Inca One Gold Corp. as at April 30, 2022 and 2021, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with International Financial Reporting Standards.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the consolidated Financial Statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to Note 1 in the financial statements, which indicates that the Company incurred a comprehensive loss of $4,557,310 for the year ended April 30, 2022. As at April 30, 2022, the Company had an accumulated deficit of $37,131,873. As stated in Note 1, these events or conditions, along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast significant doubt on the Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Information other than the consolidated financial statements and auditor's report thereon

Management is responsible for the other information. The other information comprises the Management Discussion and Analysis but does not include the consolidated financial statements and our auditor's report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

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In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company's financial reporting process.

Auditor's responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.

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• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor's report is Mark Iwanaka.

Vancouver, Canada	Chartered Professional Accountants
July 29, 2022

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INCA ONE GOLD CORP.

Consolidated Statements of Financial Position

(Expressed in US Dollars)

				April 30,	April 30,
			Note	2022	2021
	Assets			$	$
	Current:
	Cash			1,565,378	1,963,574
	Restricted cash	4	284,547	175,000
	Receivables	3	3,216,672	980,001
	Derivative financial asset	4	528,320	50,940
	Prepaid expenses and deposits	5	1,291,106	798,613
	Inventory	6	8,174,011	4,663,349
	Total current assets			15,060,034	8,631,477
	Long term receivable	7	292,074	318,930
	Property, plant and equipment	8	10,111,856	10,578,896
	Right of use assets	10	273,992	-
	Total assets			25,737,956	19,529,303
	Liabilities
	Current:	9	4,829,497
	Accounts payable and accrued liabilities	2,777,453
	Contractual liabilities payable to Equinox	11	1,384,129	193,177
	Loans payable	12	2,173,301	1,557,365
	Deferred revenue	17	840,000	480,000
	Current portion of gold loan	13	8,712,330	2,711,652
	Current portion of lease liabilities	10	81,092	-
	Total current liabilities			18,020,349	7,719,647
	Accounts payable and accrued liabilities	9	90,609	-
	Contractual liabilities payable to Equinox	11	4,115,881	5,507,143
	Loans payable	12	11,459	973,351
	Gold loan	13	516,518	-
	Asset retirement and reclamation obligations	14	1,391,454	1,152,653
	Deferred income tax	22	424,793	-
	Lease liabilities	10	145,590	-
	Total liabilities			24,716,653	15,352,794
	Shareholders' Equity	15	32,194,972
	Share capital	31,012,161
	Equity reserves	15	5,435,660	5,216,367
	Accumulated other comprehensive income			(697,831)	(992,689)
	Deficit			(37,131,873)	(32,288,452)
	Shareholders' equity (deficiency) attributable to Inca One			(199,072)	2,947,387
	Non-controlling interest			1,220,375	1,229,122
	Total shareholders' equity			1,021,303	4,176,509
	Total liabilities and shareholders' equity			25,737,956	19,529,303
	Nature of operations and going concern (note 1)
Subsequent events (note 11)
Commitments (note 17)
Approved on behalf of the Board of Directors on July 29, 2022
	"Bruce Bragagnolo"			"Edward Kelly"
	Director			Director

The accompanying notes are an integral part of these Consolidated Financial Statements.