Japan Gold : Financial Statements - June 30, 2021

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED

JUNE 30, 2021 AND 2020

(Unaudited - expressed in Canadian dollars)

JAPAN GOLD CORP.

CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

June 30, 2021

Notice of No Auditor Review

The accompanying unaudited condensed consolidated interim financial statements of Japan Gold Corp. for the three and six month period ended June 30, 2021 have been prepared by the Company's management and approved by the Audit Committee and Board of Directors of the Company.

In accordance with National Instrument 51-102, the Company discloses that its independent auditor has not performed a review of these unaudited condensed consolidated interim financial statements.

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JAPAN GOLD CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION (Unaudited - Expressed in Canadian dollars)

As at		June 30, 2021	December 31, 2020
Assets
Current
Cash and cash equivalents (Note 3)	$	6,514,295	$	2,368,000
Restricted cash (Note 4)		821,448		1,004,412
Accounts receivable		18,118		90,548
Prepaid expenses and deposits		176,828		253,766
Non-Current Assets		7,530,689		3,716,726
Deposit		102,460		106,583
Exploration and evaluation assets (Note 4)		16,498,139		16,304,050
Property, plant and equipment (Note 5)		293,398		385,368
Software		11,241		13,882
Right of use asset (Note 6)		94,004		129,879
Total assets	$	24,529,931	$	20,656,488
Liabilities
Current
Accounts payable and accrued liabilities (Note 4, Note 9)	$	1,451,786	$	1,020,625
Current portion of lease liability (Note 7)		34,644		72,995
Non-Current Liabilities		1,486,430		1,093,620
	29,359		34,725
Lease liability (Note 7)
Total liabilities		1,515,789		1,128,345
Shareholders' equity
Share capital (Note 8)		37,871,764		37,750,321
Subscription receipts (Note 8)		6,278,534		-
Contributed surplus		5,175,113		4,967,021
Accumulated other comprehensive income (loss)		(1,265,374)		316,723
Deficit		(25,045,895)		(23,505,922)
Total shareholders' equity		23,014,142		19,528,143
Total liabilities and shareholders' equity	$	24,529,931	$	20,656,488

Nature and continuance of operations (Note 1)

Subsequent events (Note 13)

Approved by the Board of Directors and authorized for issuance on August 26, 2021:

On behalf of the Board of Directors

"Murray Flanigan" Director	"John Proust"	Director

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

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JAPAN GOLD CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Unaudited - expressed in Canadian dollars)

	Three months	Three months	Six months	Six months
For the periods ended	ended June 30,	ended June 30,	ended June 30,	ended June 30,
2021	2020	2021	2020

Expenses
Audit	$	36,764	$	33,222	$	51,564	$	45,722
Consulting		74,155		46,115		159,345		119,845
Depreciation		2,304		536		4,237		1,049
Director fees		38,222		32,553		76,444		53,871
Filing and regulatory		34,453		41,153		63,549		62,508
Foreign exchange loss (gain)		(12,250)		84,597		27,844		96,903
Occupancy and office		58,524		92,058		131,250		174,881
Insurance		9,865		10,405		20,187		22,656
Investor relations		109,271		133,433		238,865		244,998
Management fees		141,000		141,000		282,000		282,000
Marketing		-		-		-		13,127
Professional fees		37,599		66,526		60,627		213,229
Project evaluation		124,821		213,501		206,671		257,099
Share-based compensation (Note 8)		80,285		434,799		208,092		551,055
Transfer agent		2,372		3,690		4,233		5,160
Travel		4,049		23,637		9,330		38,644
Loss before other items	$	741,434	$	1,357,225	$	1,544,238	$	2,182,747
Other items
Financing expense (Note 9)		4,320		85,183		8,242		100,117
Interest income		(5,185)		(554)		(12,507)		(11,673)
		(865)		84,629		(4,265)		88,444
Net loss for the period		740,569		1,441,854		1,539,973		2,271,191
Foreign exchange loss (gain) on translation of
foreign operations		265,001		487,473		1,582,097		(589,228)
Net comprehensive loss for the period	$	1,005,570	$	1,929,327	$	3,122,070	$	1,681,963
Loss per share
Basic and diluted loss per share	$	(0.00)	$	(0.01)	$	(0.01)	$	(0.02)
Weighted average number of shares
outstanding		176,286,895		161,383,374		176,121,986		147,725,575

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

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JAPAN GOLD CORP.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS (Unaudited - Expressed in Canadian dollars)

For the periods ended		June 30, 2021		June 30, 2020
Cash flows from operating activities
Net loss for the period	$	(1,539,973)	$	(2,271,191)
Adjustments for:
Share-based compensation (Note 8)		208,092		551,055
Depreciation (Note 5)		4,237		1,049
Financing expense		8,242		100,117
Interest income		(12,507)		(11,673)
Interest received		12,507		11,673
Unrealized foreign exchange loss		39,780		-
Changes in non-cash working capital items:
Accounts receivable and prepaid expenses and deposits		324,775		(507,292)
Accounts payable and accrued liabilities		678,358		(178,508)
Net cash used in operating activities		(276,489)		(2,304,770)
Cash flows from investing activities
Exploration and evaluation expenditure (Note 4)		(1,733,061)		(1,920,813)
Acquisition of property, plant and equipment and software (Note 5)		(14,897)		-
Barrick Alliance expenditures yet to be reimbursed from restricted cash (Note 4)		(153,993)		-
Net cash used in investing activities		(1,901,951)		(1,920,813)
Cash flows from financing activities		6,278,534		-
Subscription receipts (Note 8)
Proceeds received from private placement, net of issuance cost		-		7,339,683
Proceeds received from exercise of warrants (Note 8)		121,443		-
Lease payments (Note 7)		(44,892)		(40,106)
Loan from related party (Note 9)		-		1,100,000
Cash financing expense paid on related party loan		-		(55,000)
Repayment of related party loan (Note 9)		-		(100,000)
Net cash from financing activities		6,355,085		8,244,577
Change in cash and cash equivalents during the period	$	4,176,645	$	4,018,994
Effect of foreign exchange on cash and cash equivalents		(30,350)		(1,684)
Cash and cash equivalents, beginning of the period		2,368,000		1,452,270
Cash and cash equivalents, end of the period	$	6,514,295	$	5,469,580

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

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