Superior Gold : Condensed Consolidated Interim Financial Statements March 31, 2020

Condensed Consolidated

Interim Financial Statements

March 31, 2020

(Unaudited - Expressed in thousands of United States dollars)

SUPERIOR GOLD INC.

Condensed Consolidated Interim Statements of Financial Position (Unaudited)

(Expressed in thousands of United States Dollars)

	March 31, 2020	December 31, 2019
ASSETS
Current assets
Cash and cash equivalents	$	16,279	$	22,232
Receivables and other assets		2,010		3,592
Inventories (note 6)		6,619		8,214
Total current assets		24,908		34,038
Non-current assets
Mining interests; exploration and evaluation assets; and property,
plant and equipment (note 7)		58,074		62,882
TOTAL ASSETS	$	82,982	$	96,920
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities	$	10,844	$	16,015
Current portion of deferred revenue (note 9)		5,959		7,234
Current portion of derivative financial instruments (note 10)		1,623		154
Short-term loan (note 8)		425		852
Current portion of lease obligation (note 17)		2,926		3,449
Contingent royalty payable to Northern Star Resources (note 19)		3,951		4,413
Current portion of provisions (note 11)		4,512		5,018
Total current liabilities		30,240		37,135
Non-current liabilities
Deferred revenue (note 9)		1,639		2,617
Derivative financial instruments (note 10)		2,526		642
Lease obligation (note 17)		2,785		2,781
Provisions (note 11)		24,171		25,905
Deferred tax liability (note 16)		374		373
Total non-current liabilities		31,495		32,318
TOTAL LIABILITIES		61,735		69,453
SHAREHOLDERS' EQUITY
Share capital (note 14(a and b))	$	50,107	$	50,025
Contributed Surplus		6,080		6,026
Accumulated other comprehensive income (loss)		(5,448)		(2,928)
Retained deficit		(29,492)		(25,656)
TOTAL EQUITY	$	21,247	$	27,467
TOTAL EQUITY AND LIABILITIES	$	82,982	$	96,920

Commitments and contingencies note 12, 19 and 20

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

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SUPERIOR GOLD INC.

Condensed Consolidated Interim Statements of Loss and Comprehensive Loss (Unaudited)

(Expressed in thousands of United States Dollars, except per share amounts)

		Three months ended
			March 31
		2020		2019
REVENUES
Metal sales (note 5)	$	26,476	$	29,407
EXPENSES
Cost of sales		23,701		30,960
Exploration expense		644		552
General and administrative		1,017		973
OPERATING INCOME (LOSS)		1,114		(3,078)
OTHER EXPENSES (INCOME)
Net finance cost (income) (note 15)		1,177		47
(Gain) loss on change in valuation of warrant liability (note 14c)		-		(85)
Loss on, and change in valuation of, contingent royalty payable to Northern Star
Resources (note 19)		66		68
Change in valuation of derivative financial instruments (note 10)		3,675		-
LOSS BEFORE TAXES		(3,804)		(3,108)
Income and mining tax expense (recovery) (note 16)		32		(523)
NET LOSS FOR THE PERIOD	$	(3,836)	$	(2,585)
OTHER COMPREHENSIVE INCOME (LOSS)
Foreign currency translation difference on foreign operations		(2,520)		119
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD	$	(6,356)	$	(2,466)

Net loss per share (note 14(e)):
Basic loss per share	$	(0.04)	$	(0.03)
Diluted loss per share		(0.04)		(0.03)
Weighted average number of common shares outstanding (basic & diluted)		97,065,989		96,502,251

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

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SUPERIOR GOLD INC.

Condensed Consolidated Interim Statements of Changes in Equity (Unaudited)

(Expressed in thousands of United States Dollars)

								Accumulated
		Number of						other
		shares		Share	Contributed	Retained	comprehensive
	Note	issued		capital		Surplus	earnings	income/(loss)		Total
Balance as at January 1, 2019		95,752,473	$	49,313	$	5,767	$ (13,637)	$	(2,550)	$	38,893
Exercise of warrants	14	1,230,000		712		-	-		-		712
Share-based payments	14	-		-		112	-		-		112
Total comprehensive loss		-		-		-	(2,585)		119		(2,466)
Balance as at March 31, 2019		96,982,473	$	50,025	$	5,879	$ (16,222)	$	(2,431)	$	37,251
Balance as at January 1, 2020		96,982,473	$	50,025	$	6,026	$ (25,656)	$	(2,928)	$	27,467
Shares for services	14	152,000		82		-	-		-		82
Share-based payments	14	-		-		54	-		-		54
Total comprehensive loss		-		-		-	(3,836)		(2,520)		(6,356)
Balance as at March 31, 2020		97,134,473	$	50,107	$	6,080	$ (29,492)	$	(5,448)	$	21,247

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

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SUPERIOR GOLD INC.

Condensed Consolidated Interim Statements of Cash Flows (Unaudited)

(Expressed in thousands of United States Dollars)

		Three months ended
			March 31
		2020		2019
Cash flows provided from (used by):
OPERATING ACTIVITIES
Net loss for the period	$	(3,836)	$	(2,585)
Adjustments:
Depreciation and amortization		1,825		5,687
Loss on contingent royalty payable to Northern
Star Resources		66		68
Gain on change in valuation of warrant liability		-		(85)
Share-based payments		54		113
Employee provisions expense		772		725
Net finance (income) cost		1,177		47
Change in valuation of derivative financial
instruments		3,675		-
Income tax expense (recovery)		32		(523)
Gold loan repayments		(1,882)		-
Employee provisions paid		(692)		(552)
Reclamation payments		-		(70)
		1,191		2,825
Net changes in non-cash working capital items:
Receivables and other assets		1,163		(55)
Inventories		621		(2,379)
Accounts payable and accrued liabilities		(3,838)		12
		(863)		403
INVESTING ACTIVITIES
Interest received		26		45
Expenditures on mineral interests; exploration and evaluation assets;
and property, plant and equipment		(1,823)		(1,263)
		(1,797)		(1,218)
FINANCING ACTIVITIES
Issuance of common shares		-		467
Repayment of short-term loan		(348)		(195)
Repayment of lease obligation		(917)		(740)
Interest paid		(94)		(113)
		(1,359)		(581)
Effect of exchange rates on cash & cash
equivalents		(1,934)		162
Increase (decrease) in cash and cash equivalents		(5,953)		(1,234)
Cash and cash equivalents, beginning of period		22,232		17,332
Cash and cash equivalents, end of period		16,279		16,098

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

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