Inca One Gold : Q3 - January 31, 2024 - Interim Financial Statements

INCA ONE GOLD CORP.

Condensed Interim Consolidated Financial Statements

For the Three and Nine Months Ended January 31, 2024, and 2023

(Unaudited - Expressed in US Dollars)

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a) issued by the Canadian Securities Administrators, if an auditor has not performed a review of the condensed interim consolidated 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 consolidated financial statements have been prepared by and are the responsibility of the Company's management.

The Company's independent auditor has not performed a review of these condensed interim consolidated financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of condensed interim consolidated financial statements by an entity's auditor.

Condensed Interim Consolidated Statements of Financial Position (Unaudited - Expressed in US Dollars)

January 31,	April 30,
Note	2024	2023
$	$
Assets
Current:
Cash	1,249,528	761,542
Receivables	3	3,170,540	2,977,070
Prepaid expenses and deposits	4	1,057,599	1,164,369
Inventory	5	7,202,197	5,949,862
Total current assets	12,679,864	10,852,843
Long term receivable	6	283,224	296,303
Property, plant and equipment	7	8,702,492	9,589,852
Right of use assets	9	1,384,685	198,932
Total assets	23,050,265	20,937,930
Liabilities
Current:
Accounts payable and accrued liabilities	8	5,438,643	4,107,411
Contractual liabilities payable to Equinox	10	3,434,349	2,450,069
Loans payable	11	2,176,245	2,156,111
Deferred revenue	2,445,000	1,488,000
Gold loan	12	7,588,820	7,953,755
Current portion of lease liabilities	9	557,253	56,532
Total current liabilities	21,640,310	18,211,878
Accounts payable and accrued liabilities	148,845	93,074
Contractual liabilities payable to Equinox	10	1,626,473	3,140,319
Loans payable	11	957,297	944,536
Asset retirement and reclamation obligations	13	2,012,257	1,915,366
Deferred income tax	441,513	441,513
Lease liabilities	9	816,622	99,323
Total liabilities	27,643,317	24,846,009
Shareholders' Equity
Share capital	14	33,768,344	32,537,441
Equity reserves	14	5,735,218	5,482,275
Convertible debentures - equity component	11	12,895	12,895
Accumulated other comprehensive income	(418,688)	(324,673)
Deficit	(44,925,792)	(42,846,001)
Shareholders' equity (deficiency) attributable to Inca One	(5,828,023)	(5,138,063)
Non-controlling interest	1,234,971	1,229,984
Total shareholders' equity	(4,593,052)	(3,908,079)
Total liabilities and shareholders' equity	23,050,265	20,937,930
Nature of operations and going concern (note 1)
Commitments (note 16)

Approved on behalf of the Board of Directors on March 28, 2024

"Bruce Bragagnolo"

"Edward Kelly"

Director

DirectorThe accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.

Condensed Interim Consolidated Statements of Operations and Comprehensive Loss (Unaudited - Expressed in US Dollars)

Three Months Ended

January 31,Nine Months Ended

January 31,

Notes
Revenue
Cost of goods sold
Cost of operations	18
Depreciation	18
Total cost of goods sold
Gross operating margin	1,027,385	1,252,814	2,303,954	2,341,558
Corporate and administrative expenses	18	(721,448)	(951,981)	(2,201,291)	(2,630,363)
Gain (Loss) from operations	305,937	300,833	102,663	(288,805)
Impairments net of reversal of prior year im	-	-	-	7,000
Finance costs	18	(754,953)	(1,536,823)	(1,910,131)	(3,029,526)
Loss on gold loan remeasurement	13	(267,336)	-	(267,336)	-
Net loss for the period	(716,352)	(1,235,990)	(2,074,804)	(3,311,331)
Deferred income tax expense	-	(12,667)	-	(12,267)
Net loss for the period	(716,352)	(1,248,257)	(2,074,804)	(3,323,598)
Other comprehensive income:
Foreign currency translation adjustment	(255,210)	(171,076)	(94,015)	272,729
Comprehensive loss for the period	(971,562)	(1,419,333)	(2,168,819)	(3,050,869)
Net loss and comprehensive loss attributable to:
Inca One Gold Corp.'s shareholders	(972,976)	(1,420,379)	(2,173,806)	(3,065,163)
Non-controlling interest	1,414	1,046	4,987	14,294
(971,562)	(1,419,333)	(2,168,819)	(3,050,869)
Weighted average shares outstanding
Basic	42,797,301	39,252,152	41,405,200	39,263,124
Diluted	42,797,301	39,252,152	41,405,200	39,263,124
Loss per share
Basic	(0.02)	(0.03)	(0.05)	(0.08)
Diluted	(0.02)	(0.03)	(0.05)	(0.08)

(10,623,051) (10,911,116) (29,957,191) (30,324,008)

2024	2023	2024	2023
$	$	$	$
12,093,807	12,466,384	33,317,933	33,570,189

(443,371) (302,454) (1,056,788) (904,623)

(11,066,422) (11,213,570) (31,013,979) (31,228,631)The accompanying notes are an integral part of these Condensed Interim Consolidated Financial Statements.

INCA ONE GOLD CORP.

Condensed Interim Consolidated Statements of Changes in Equity (Unaudited - Expressed in US Dollars)

Convertible	Accumulated
debenture -	other	Total
Common	Share	Equity	equity	Non-controlling	comprehensive	shareholders'
shares	capital	reserves	component	interest	(loss) income	Deficit	equity
#	$	$	$	$	$	$	$
Balance, April 30, 2022	39,200,670	32,194,972	5,435,660	-	1,220,375	(697,831)	(37,131,873)	1,021,303
Comprehensive income (loss) for the period	-	-	-	-	14,294	272,729	(3,337,892)	(3,050,869)
Warrants exercised (note 14 (e))	115,982	23,949	(8,115)	-	-	-	-	15,834
Share-based payments (note 14 (d))	-	-	86,696	-	-	-	-	86,696
Balance January 31, 2023	39,316,652	32,218,921	5,514,241	-	1,234,669	(425,102)	(40,469,765)	(1,927,036)
Comprehensive income (loss) for the period	-	-	-	-	(4,685)	100,429	(2,376,236)	(2,280,492)
Convertible debentures - equity component (note 12 (d))	-	-	-	12,895	-	-	12,895
Shares issued pursuant to agreement with Equinox	281,843	134,556	-	-	-	-	-	134,556
Shares issued for debt settlement (note 14 (c))	466,000	73,281	-	-	-	-	-	73,281
Warrants exercised	546,094	110,683	(38,209)	-	-	-	-	72,474
Share-based payments	-	-	6,243	-	-	-	-	6,243
Balance, April 30, 2023	40,610,589	32,537,441	5,482,275	12,895	1,229,984	(324,673)	(42,846,001)	(3,908,079)
Comprehensive income (loss) for the period	-	-	-	-	4,987	(94,015)	(2,079,791)	(2,168,819)
Issuance of shares on private placement, net of share
issue costs	6,969,000	264,323	257,009	-	-	-	-	521,332
Shares issued pursuant to agreement with Equinox	1,848,843	896,161	-	-	-	-	-	896,161
Options exercised (note 14 (e))	431,000	70,419	(13,419)	-	-	-	-	57,000
Share-based payments (note 14 (d))	-	-	9,353	-	-	-	-	9,353
Balance January 31, 2024	49,859,432	33,768,344	5,735,218	12,895	1,234,971	(418,688)	(44,925,792)	(4,593,052)

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

INCA ONE GOLD CORP.

Condensed Interim Consolidated Statements of Cash Flows (Unaudited - Expressed in US Dollars)

Nine Months Ended January 31,

2024	2023
Cash flows provided by (used in):	$	$
Operating activities:
Net loss for the period	(2,074,804)	(3,323,598)
Items not involving cash:
Depreciation	970,192	944,976
Depreciation of right of use assets	213,201	60,877
Share-based payments	9,354	86,696
Accretion of asset retirement and reclamation obligations	96,891	67,603
Interest expense	800,417	513,546
Unrealized foreign exchange	(37,447)	70,117
Fair value adjustment on long term receivable	(20,590)	(35,923)
Accretion of contractual liabilities payable to Equinox	270,652	347,660
Change in fair value of derivatives	698,829	2,045,517
Loss on gold loan remeasurement	267,336	-
Changes in non-cash operating working capital:
Receivables	(126,710)	674,740
Prepaid expenses and deposits	106,770	(298,792)
Inventory	(1,252,335)	4,000,657
Accounts payable and accrued liabilities	1,003,060	(1,692,392)
Deferred revenue	957,000	(840,000)
Net cash provided by operating activities	1,881,816	2,621,684
Financing activities:
Proceeds from issuance of shares (including exercised warrants and
options)	579,141	15,835
Proceeds from loans (net of repayments)	7,373	557,174
Payments of Gold Loans	(1,331,100)	(2,632,746)
Decrease in restricted cash	-	(23,212)
Interest paid	(565,878)	(407,978)
Net cash used in financing activities	(1,310,464)	(2,490,927)
Investing activities:
Purchase of property, plant and equipment	(70,449)	(178,802)
Net cash used in investing activities	(70,449)	(178,802)
Increase (decrease) in cash	500,903	(48,045)
Effect of exchange rates on cash held in foreign currencies	(12,917)	3,856
Cash, beginning of the year	761,542	1,565,378
Cash, end of the period	1,249,528	1,521,189
Supplemental disclosure with respect to cash flows (note 19)

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

NOTE 1 - NATURE OF OPERATIONS AND GOING CONCERN

Inca One Gold Corp. (the "Company") was incorporated under the laws of Canada on November 9, 2005 and was continued under the British Columbia Business Corporations Act on November 26, 2010. On September 17, 2014, the Company changed its name from Inca One Resources Corp. to Inca One Gold Corp. The Company's shares are traded on the TSX Venture Exchange (the "TSXV") under the symbol "INCA", on the OTCQB under the symbol "INCAF", on the Frankfurt Stock Exchange under the symbol "SU9.F", and the Santiago Stock Exchange Venture under the symbol "IOCL". The head office and principal address of the Company are located at Suite 850 - 1140 West Pender Street, Vancouver, Canada, V6E 4G1 and its registered office is located at 10th Floor, 595 Howe Street, Vancouver, Canada, V6C 2T5.

Inca One is engaged in the business of operating and developing gold-bearing mineral processing operations in Peru, to service government permitted small scale miners. In recent years the Peruvian government instituted a formalization process for informal miners as part of its efforts to regulate their activities. The Company, through its Peruvian subsidiaries Chala One S.A.C. ("Chala One") and EMC Green Group S.A. ("EMC") owns two Peruvian mineral processing plants with 450 tonnes per day of processing capacity. The Company's business plan is to source high grade gold mill feed from legally recognized Peruvian artisanal and small scale miners, purchase and process the material, and export gold doré.

The Company continues to actively evaluate potential mineral projects, including additional mineral processing operations.

These condensed interim consolidated financial statements are prepared on a going concern basis, which contemplates that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of business. For the nine months ended January 31, 2024, the Company had a comprehensive loss of $2.2 million, a deficit of $44.9 million and working capital deficit of $8.9 million. These conditions indicate a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. Management intends to fund operating and administration costs and debt and debt service costs over the year with the proceeds from gold doré sales at the Company's gold ore processing facilities in Peru and where required, from debt and equity financing and proceeds from option and warrant exercises.

The Company's ability to continue as a going concern is dependent upon its ability to generate net income and positive cash flows from its mineral processing operations and its ability to raise equity capital or debt sufficient to meet current and future obligations. These condensed interim consolidated financial statements do not reflect the adjustments to the carrying values and classifications of assets and liabilities that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

NOTE 2 - SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of presentation

These condensed interim consolidated financial statements have been prepared 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"). The accounting principles adopted are consistent with those of the previous financial year.

These condensed interim consolidated financial statements have been prepared using the significant accounting policies and measurement bases summarized below and were approved by the board of directors for issue on March 28, 2024.

(b)Basis of consolidation

The condensed interim consolidated financial statements are presented in US dollars unless otherwise noted and include the accounts of the Company and its subsidiaries listed below:

Country of

(c)

Incorporation	Equity Interest
Chala One S.A.C.	Peru	100%
Inca One Metals Peru S.A.	Peru	100%
Dynasty One S.A.	Peru	100%
Corizona S.A.C.	Peru	100%
Anthem United Inc.	Canada	100%
Anthem United (Holdings) Inc.	Canada	100%
Oro Proceso Co. S.A.C.	Peru	100%
EMC Green Group S.A.C.	Peru	90.14%
Koricancha Joint Venture	Peru	90.14%
Changes in accounting policies and disclosures

There were no new standards effective May 1, 2023 that impacted these condensed interim consolidated financial statements or are expected to have a material effect in the future.

(d)

Significant accounting judgements and estimates

The preparation of financial statements in conformity with IFRS requires the Company to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Management believes the estimates and assumptions used in these condensed interim consolidated financial statements are reasonable; however, actual results could differ from those estimates and could impact future results of operations and cash flows. The Company's significant accounting judgments and estimates were presented in note 2 of the audited annual consolidated financial statements for the years ended April 30, 2023 and 2022.

NOTE 3 - RECEIVABLES

January 31,	April 30,
2024	2023
$	$
GST recoverable (Canada)	7,031	9,334
IGV recoverable (Peru)	3,119,821	2,958,791
Other	43,688	8,945
3,170,540	2,977,070
NOTE 4 - PREPAID EXPENSES AND DEPOSITS
January 31,	April 30,
2024	2023
$	$
Other deposits and advances	135,611	108,959
Prepaid taxes	431,503	693,020
Prepaid expenses	490,485	362,390
1,057,599	1,164,369
NOTE 5 - INVENTORY
January 31,	April 30,
2024	2023
$	$
Ore stockpiles and gold in process	3,557,363	3,270,726
Finished goods - gold doré bars	3,174,512	2,253,003
Materials and supplies	470,322	426,133
7,202,197	5,949,862

As at January 31, 2024 and April 30, 2023, the Company recorded the value of its mineral in stockpiles, tanks and finished products at cost.

The amount of inventory recognized as expense for the three and nine months ended January 31, 2024 was $8.9 million and $23.7 million respectively (three and nine months ended January 31, 2023 - $5.3 million and $19.7 million respectively).

NOTE 6 - LONG TERM RECEIVABLE

January 31,

Beginning of year (1)

Transferred to IGV recoverable (Peru)

Change in estimate (2)

2024 $

296,303

(33,669)

20,590

283,224

(1)

April 30,

2023 $

292,074

(44,892)

49,121

296,303

Estimated fair value of the 50% of the right to claim refunds of prior years' general sales taxes ("Historical IGV") recognized as part of the acquisition of Anthem United Inc, from Equinox Gold Corp.

(2)

The Company used a discount rate of 11% (April 30, 2023 - 11%) and a duration of approximately 11 years (April 30, 2023 - 11.8 years)

NOTE 7 - PROPERTY, PLANT AND EQUIPMENT

Plant

$

Furniture and
Computers	Equipment	Total
$	$	$
Costs:
Balance, April 30, 2022	16,353,034	209,037	121,404	16,683,475
Additions	370,924	-	-	370,924
Change in ARO reserve	420,974	-	-	420,974
Reclassification	(88,518)	102,193	(13,675)	-
Balance, April 30, 2023	17,056,414	311,230	107,729	17,475,373
Additions	82,832	-	-	82,832
Reclassification	(93,053)	31,183	61,870	-
Balance, January 31, 2024	17,046,193	342,413	169,599	17,558,205
Furniture and
Plant	Computers	Equipment	Total
$	$	$	$
Accumulated Depreciation:
Balance, April 30, 2022	6,292,291	165,761	113,567	6,571,619
Depreciation	1,255,474	45,427	13,001	1,313,902
Reclassification	27,045	-	(27,045)	-
Balance, April 30, 2023	7,574,810	211,188	99,523	7,885,521
Depreciation	812,788	105,241	52,163	970,192
Reclassification	82,508	(56,411)	(26,097)	-
Balance, January 31, 2024	8,470,106	260,018	125,589	8,855,713
Net Book Value:
April 30, 2023	9,481,604	100,042	8,206	9,589,852
January 31, 2024	8,576,087	82,395	44,010	8,702,492
10