Signal Gold : Q2 2022 Interim Financial Statements

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three and six month periods ended June 30, 2022 and 2021

(Expressed in Canadian Dollars)

Signal Gold Inc.
Condensed Interim Consolidated Statements of Comprehensive Loss
(Canadian Dollars)
		Three	Three	Six	Six
		months ended	months ended	months ended	months ended
		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
	Notes	$	$	$	$
Gold		9,657,088	6,934,599	17,672,462	14,287,887
Silver		5,309	5,405	10,238	12,025
Total revenue		9,662,397	6,940,004	17,682,700	14,299,912
Cost of operations
Operating expenses	2	5,082,524	6,611,503	13,780,439	14,531,625
Royalty expense	3	323,774	161,107	468,745	348,601
Depletion and depreciation		2,139,153	1,444,037	3,369,862	1,997,958
		7,545,451	8,216,647	17,619,046	16,878,184
Mine operating income (loss)		2,116,946	(1,276,643)	63,654	(2,578,272)
Expenses and other income
Corporate administration		1,312,727	841,643	2,571,636	1,792,731
Gain on revaluation of investments	10	-	-	(326,973)	-
Share of loss from equity accounted investments	10,11	15,034	41,609	51,677	238,127
Share-based compensation expense	16	206,455	275,135	348,547	428,784
Finance expense	4	549,089	39,708	663,409	83,806
Other income	5	(141,457)	(69,487)	(181,116)	(200,964)
		1,941,848	1,128,608	3,127,180	2,342,484
Income (loss) before income taxes		175,098	(2,405,251)	(3,063,526)	(4,920,756)
Current income tax expense			-
18	-	-	-	30,345
Deferred income tax expense (recovery)	18	506,000	(203,000)	817,000	(252,000)
		506,000	(203,000)	817,000	(221,655)
Net loss and comprehensive loss for the period		(330,902)	(2,202,251)	(3,880,526)	(4,699,101)
Net loss per share - basic and fully diluted	17	(0.00)	(0.01)	(0.02)	(0.03)
Weighted average number of shares outstanding
- basic and fully diluted		185,220,343	168,377,868	183,595,126	164,984,476

The accompanying notes are an integral part of these Condensed Interim Consolidated
Financial Statements	P a g e | 1

Signal Gold Inc.
Condensed Interim Consolidated Statements of Financial Position
(Canadian Dollars)
As at		June 30, 2022	December 31, 2021
	Notes	$	$
Assets
Current assets
Cash and cash equivalents		10,942,097	10,121,724
Trade and other receivables	6	451,198	1,287,219
Inventory	7	6,442,940	5,641,435
Prepaid expenses and deposits		632,570	792,816
		18,468,805	17,843,194
Non-current assets
Restricted cash		202,790	198,790
Property, mill and equipment	9	12,935,488	14,397,393
Exploration and evaluation assets	8	66,199,911	59,376,373
Investments	10	2,483,588	2,156,615
Equity accounted investments	11	1,526,962	1,578,639
		101,817,544	95,551,004
Liabilities
Current liabilities
Trade payables and accrued liabilities	12	9,066,138	9,528,294
Current portion of loans	13	10,455,874	1,363,383
Current portion of decommissioning liability	15	127,882	-
Flow-through premium	16	321,545	432,235
Advances	19	12,478	122,169
Unearned revenue	14	-	5,000,000
		19,983,917	16,446,081
Non-current liabilities
Loans	13	212,764	235,570
Deferred income tax liability		4,881,000	4,064,000
Decommissioning liability	15	3,585,850	3,936,423
		28,663,531	24,682,074
Shareholders' equity
Share capital, warrants and equity reserves	16	89,622,666	83,506,597
Accumulated deficit		(16,468,653)	(12,637,667)
		73,154,013	70,868,930
		101,817,544	95,551,004

Approved by the Board of Directors on August 4, 2022
"Mary-Lynn Oke"	"Lewis Lawrick"
Director	Director
Nature of operations, basis of presentation, and going concern (Note 1)
Commitments (Note 23)

The accompanying notes are an integral part of these Condensed Interim Consolidated
Financial Statements	P a g e | 2

Signal Gold Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Canadian Dollars)
		Three	Three	Six	Six
		months ended	months ended	months ended	months ended
		June 30, 2022	June 30, 2021	June 30, 2022	June 30, 2021
	Notes	$	$	$	$
Operating activities
Net loss		(330,902)	(2,202,251)	(3,880,526)	(4,699,101)
Adjustments to reconcile net loss to cash flow from
operating activities:
Depletion and depreciation		2,139,153	1,444,037	3,369,862	1,997,958
Write-down of inventory to net realizable value	2	-	58,000	1,547,000	2,529,000
Gain on revaluation of investments	10	-	-	(326,973)	-
Share of loss from equity accounted investments	10,11	15,034	41,609	51,677	238,127
Share-based compensation expense	16	206,455	275,135	348,547	428,784
Current income tax expense	18	-	-	-	30,345
Deferred income tax expense (recovery)	18	506,000	(203,000)	817,000	(252,000)
Deferred premium on flow-through shares	16	(164,801)	(91,652)	(344,519)	(233,714)
Interest accretion of decommissioning liability	15	37,303	4,223	58,263	6,573
Amortization of transaction costs	4	50,589	-	50,589	-
Foreign exchange loss on revaluation of loans		51,200	-	51,200	-
Change in working capital	20	(5,325,178)	(1,144,061)	(5,671,642)	(1,327,893)
Cash flow used in operating activities		(2,815,147)	(1,817,960)	(3,929,522)	(1,281,921)
Investing activities
Additions of property, mill and equipment	9	(814,649)	(1,519,300)	(2,712,136)	(2,305,469)
Additions of exploration and evaluation assets	8	(4,330,645)	(4,141,340)	(7,330,901)	(6,967,882)
(Increase) decrease in restricted cash		-	-	(4,000)	12,000
Cash flow used in investing activities		(5,145,294)	(5,660,640)	(10,047,037)	(9,261,351)
Financing activities
Proceeds from financing agreement	16	5,999,776	8,500,030	5,999,776	8,500,030
Issuance costs from financing agreement	16	(286,022)	(709,312)	(286,022)	(709,312)
Proceeds from loans	13	10,257,600	-	10,257,600	-
Transaction costs from loans	13	(330,158)	-	(330,158)	-
Repayment of loans	13	(413,188)	(505,845)	(1,052,652)	(979,491)
Proceeds from exercise of stock options	16	93,800	210,061	208,388	843,450
Proceeds from exercise of warrants	16	-	6,000	-	2,822,737
Cash flow provided from financing activities		15,321,808	7,500,934	14,796,932	10,477,414
Net increase (decrease) in cash		7,361,367	22,334	820,373	(65,858)
Cash at beginning of period		3,580,730	14,546,403	10,121,724	14,634,595
Cash at end of period		10,942,097	14,568,737	10,942,097	14,568,737
Supplemental cash flow information (Note 20)

The accompanying notes are an integral part of these Condensed Interim Consolidated
Financial Statements	P a g e | 3

Signal Gold Inc.

Consolidated Statements of Changes in Equity

(Expressed in Canadian Dollars, except share information)
		Share capital
		Number of	Issued	Equity		Accumulated
		shares	capital	reserves	Warrants	deficit	Total
	Notes		$	$	$	$	$
Balance at December 31, 2020		153,953,798	67,008,392	1,793,871	1,584,217	(5,545,554)	64,840,926
Common shares issued for cash	16	10,241,000	8,500,030	-	-	-	8,500,030
Share issuance expense, net of tax	16	-	(709,312)	-	-	-	(709,312)
Flow-through share premium	16	-	(750,913)	-	-	-	(750,913)
Share-based compensation from issuance of share units	16	-	-	277,818	-	-	277,818
Redemption of share units	16	176,481	37,395	(37,395)	-	-	-
Share-based compensation from issuance of options	16	-	-	152,466	-	-	152,466
Exercise of stock options	16	3,317,083	1,546,028	(702,578)	-	-	843,450
Expiry of stock options transferred to deficit	16	-	-	(4,510)	-	4,510	-
Exercise of warrants	16	6,328,165	3,212,340	-	(389,603)	-	2,822,737
Issuance of shares for property acquisition	8	64,917	45,000	-	-	-	45,000
Net loss for the period		-	-	-	-	(4,699,101)	(4,699,101)
Balance at June 30, 2021		174,081,444	78,888,960	1,479,672	1,194,614	(10,240,145)	71,323,101
Balance at December 31, 2021		180,306,657	81,979,482	1,527,115	-	(12,637,667)	70,868,930
Common shares issued for cash	16	11,722,673	5,999,776	-	-	-	5,999,776
Share issuance expense, net of tax	16	-	(1,268,382)	-	982,360	-	(286,022)
Flow-through share premium	16	-	(233,829)	-	-	-	(233,829)
Share-based compensation from issuance of share units	16	-	-	330,313	-	-	330,313
Redemption of share units	16	887,125	389,108	(389,108)	-	-	-
Share-based compensation from issuance of options	16	-	-	76,983	-	-	76,983
Exercise of stock options	16	678,750	350,865	(142,477)	-	-	208,388
Expiry of stock options transferred to deficit	16	-	-	(49,540)	-	49,540	-
Issuance of shares for property acquisition	8	87,983	70,000	-	-	-	70,000
Net loss for the period		-	-	-	-	(3,880,526)	(3,880,526)
Balance at June 30, 2022		193,683,188	87,287,020	1,353,286	982,360	(16,468,653)	73,154,013

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

P a g e | 4