Xtra Gold Resources : Q3 2023 Unaudited Financial Statements (nine months ended September 30, 2023)

XTRA-GOLD RESOURCES CORP.

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

for the

Nine Months Ended September 30, 2023

(expressed in U.S. Dollars, except where noted)

NOTICE TO READER

The accompanying unaudited interim consolidated financial statements of Xtra-Gold Resources Corp. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.

INDEX TO FINANCIAL STATEMENTS
	Page
Condensed Interim Consolidated Balance Sheets as of September 30, 2023 (unaudited) and December 31, 2022	1
Condensed Interim Consolidated Statements of Operations for the nine months ended September 30, 2023
and 2022 (unaudited)	2
Condensed Interim Consolidated Statements of Equity (unaudited)	3
Condensed Interim Consolidated Statements of Cash Flows for the nine months ended September 30, 2023
and 2022 (unaudited)	4
Notes to the Interim Condensed Consolidated Financial Statements (unaudited)	5

XTRA-GOLD RESOURCES CORP.

INTERIM CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars - Unaudited)

AS AT	September 30, 2023		December 31, 2022
		(unaudited)
ASSETS
Current
Cash and cash equivalents	$	8,444,182	$	5,781,000
Investment in trading securities, at cost of $3,369,353 (December 31, 2022
- $3,239,782) (Note 4)		3,546,138		3,497,166
Receivables and other assets		108,984		104,791
Inventory (Note 8)		231,730		795,939
Total current assets		12,331,034		10,178,896
Restricted cash (Note 7)		296,322		296,322
Equipment, net (Note 5)		551,768		671,373
Mineral properties (Note 6)		734,422		734,422
TOTAL ASSETS	$	13,913,546	$	11,881,013
LIABILITIES AND EQUITY
Current
Accounts payable and accrued liabilities	$	1,425,252	$	1,307,165
Asset retirement obligation (Note 7)		87,942		99,514
Total current liabilities		1,513,194		1,406,679
Total liabilities		1,513,194		1,406,679
Equity
Capital stock (Note 9)
Authorized - 250,000,000 common shares with a par value of $0.001
Issued and outstanding
46,297,717 common shares (December 31, 2022 - 46,446,917 common
shares)		46,298		46,447
Additional paid in capital		31,770,102		31,838,291
Shares in treasury		(9,212)		(6,892)
Accumulated deficit		(19,573,504)		(21,345,398)
Total Xtra-Gold Resources Corp. stockholders' equity		12,233,684		10,532,448
Non-controlling interest		166,668		(58,114)
Total equity		12,400,352		10,474,334
TOTAL LIABILITIES AND EQUITY	$	13,913,546	$	11,881,013

History and organization of the Company (Note 1)	APPROVED ON BEHALF OF THE BOARD
Continuance of operations (Note 2)
Contingency and commitments (Note 13)
	"James Longshore"		"James Schweitzer"
	Director		Director

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

1

XTRA-GOLD RESOURCES CORP.

INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars - Unaudited)

	Three Month	Three Month		Nine Month		Nine Month
	Period Ended	Period Ended	Period Ended		Period Ended
	Sept. 30, 2023	Sept. 30, 2022	Sept. 30, 2023		Sept. 30, 2022
EXPENSES
Amortization	$	33,085		$	36,988	$		119,605	$	108,328
Exploration		133,302			(96,300)		644,276		760,982
General and administrative		99,692			153,934			337,251		375,078
LOSS BEFORE OTHER ITEMS		(266,079)			(94,622)			(1,101,132)		(1,244,388)
OTHER ITEMS
Recovery of gold, net		1,050,434		1,019,886			3,527,354		3,305,359
Foreign exchange gain (loss)		123,945	(475,488)		75,233		(571,974)
Net gain (loss) on trading securities		(218,404)		(298,739)			(103,023)		2,854
Other income		93,693			43,623			260,059		82,077
INCOME FROM OTHER ITEMS		1,049,668			289,282			3,759,623		2,818,316
Income before tax for the period		783,589			194,660			2,658,491		1,537,928
Income tax expense		(200,000)		(200,000)			(661,815)		(600,000)
Net income		583,589			(5,340)		1,996,676		973,928
Net gain attributable to non-controlling interest		(69,956)			(64,912)			(224,782)		(177,502)
Net income attributable to Xtra-Gold Resources Corp.	$	513,633	$ (70,252)	$	1,771,894	$	$ 796,426
Basic income attributable to common shareholders
per common share		$	0.01	$	(0.00)	$	0.04	$	0.02
Diluted income attributable to common shareholders
per common share		$	0.01		$	(0.00)	$		0.04	$	0.02
Basic weighted average number of common shares
outstanding	46,334,336	46,661,478		46,398,474		46,568,638
Diluted weighted average number of common shares
outstanding	48,982,836		48,682,478			49,046,974		48,589,638

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

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XTRA-GOLD RESOURCES CORP.

INTERIM CONSOLIDATED STATEMENTS OF EQUITY (Expressed in U.S. Dollars - Unaudited)

	Common Stock
			Additional	Shares		Non-
	Number		Paid in	in	Accumulated	Controlling
	of Shares	Amount	Capital	Treasury	Deficit	Interest	Total
Balance, December 31, 2021	46,687,517	$46,688	$31,770,515	$(13,294)	$ (21,977,165)	$ (191,196)	$ 9,635,548
Stock-based compensation	-	-	80,068	-	-	-	80,068
Repurchase of shares	(187,600)	(188)	(133,248)	3,022	-	-	(130,414)
Income for the period	-	-	-	-	796,426	177,502	973,928
Balance, September 30, 2022	46,999,917	46,500	31,717,335	(10,272)	(21,180,739)	(13,694)	10,559,130
Stock-based compensation	-	-	157,010	-	-	-	157,010
Repurchase of shares	(53,000)	(53)	(36,054)	10,272	-	-	(25,835)
Shares in treasury	-	-	-	(6,892)	-	-	(6,892)
Net income (loss)	-	-	-	-	(164,659)	(44,420)	(209,079)
Balance, December 31, 2022	46,446,917	46,447	31,838,291	(6,892)	(21,345,398)	(58,114)	10,474,334
Stock-based compensation	-	-	31,782	-	-	-	31,782
Repurchase of shares	(149,200)	(149)	(99,971)	6,892	-	-	(93,228)
Shares in treasury	-	-	-	(9,212)	-	-	(9,212)
Net income	-	-	-	-	1,771,894	224,782	1,996,676
Balance, September 30, 2023	46,297,717	$ 46,298	$ 31,770,102	$ (9,212)	$ (19,573,504)	$ 166,668	$ 12,400,352

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

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XTRA-GOLD RESOURCES CORP.

INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars - Unaudited)

		Nine Month		Nine Month
		Period Ended		Period Ended
		Sept. 30, 2023		Sept. 30, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Income for the period		$	1,996,676	$	973,928
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation			119,605		108,328
Stock-based compensation		31,782		82,068
Unrealized foreign exchange loss (gain)		(21,254)		205,565
Purchase of trading securities			(1,432,114)		(1,705,945)
Proceeds on sale of trading securities		1,301,373		1,514,043
Net (gain) loss on sales of trading securities			103,023		(2,854)
Changes in non-cash working capital items:
(Increase) decrease in receivables and other assets			(4,193)		26,568
Decrease (increase) in inventory		564,209		482,258
Change in asset retirement obligation		(11,572)		(31,628)
Increase (decrease) in accounts payable and accrued liabilities			118,087		197,581
Net cash provided by operating activities			2,765,622		1,849,915
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of equipment		-		(44,402)
Net cash used in investing activities		-		(44,402)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of options and warrants			-		-
Repurchase of capital stock		(102,440)		(132,414)
Net cash (used in) provided by financing activities			(102,440)		(132,414)
Change in cash and cash equivalents and restricted cash during the period		2,663,182		1,673,099
Cash and cash equivalents and restricted cash, beginning of the year		6,077,322		4,971,650
Cash and cash equivalents and restricted cash, end of the period		$	8,740,504	$	6,644,749
Reconciliation of Cash and Cash Equivalents and Restricted Cash
Cash and cash equivalents at beginning of year	$	5,781,000	$	4,675,328
Restricted cash at beginning of year		296,322		296,322
Cash and cash equivalents and restricted cash at beginning of year	$	6,077,322	$	4,971,650
Cash and cash equivalents at end of period	$	8,444,182	$	6,348,427
Restricted cash at end of period		296,322		296,322
Cash and cash equivalents and restricted cash at end of period	$	8,740,504	$	6,644,749

Supplemental disclosure with respect to cash flows (Note 11)

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

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XTRA-GOLD RESOURCES CORP.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars - Unaudited)

September 30, 2023

1. HISTORY AND ORGANIZATION OF THE COMPANY
   Xtra-Gold Resources Corp., previously Silverwing Systems Corporation, was incorporated under the laws of the State of Nevada on September 1, 1998, pursuant to the provisions of the Nevada Revised Statutes. In 2003, the Company became a resource exploration company. The Company has also engaged in recovery of gold through alluvial operations on its claims. On November 30, 2012, the Company redomiciled from the USA to the British Virgin Islands.
   In 2004, the Company acquired 100% of the issued and outstanding capital stock of Canadiana Gold Resources Limited
   ("Canadiana") and 90% of the issued and outstanding capital stock of Goldenrae Mining Company Limited ("Goldenrae").
   Both companies are incorporated in Ghana and the remaining 10% of the issued and outstanding capital stock of Goldenrae is held by the Government of Ghana. On December 21, 2005, Canadiana changed its name to Xtra-Gold Exploration Limited
   ("XG Exploration"). On January 13, 2006, Goldenrae changed its name to Xtra-Gold Mining Limited ("XG Mining").
2. CONTINUANCE OF OPERATIONS - GOING CONCERN
   The Company is in development as an exploration company. It may need financing for its exploration and acquisition activities. Although the Company has incurred a gain of $1,771,894 for the nine-month period ended September 30, 2023, it has an accumulated a deficit of $19,573,504. Results for the nine-month period ended September 30, 2023 are not necessarily indicative of future results. The uncertainty of gold recovery and the fact the Company does not have a demonstrably viable business to provide future funds, raises substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan, which is typical for junior exploration companies. The financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
   Management of the Company ("Management") is of the opinion that sufficient financing will be obtained from external sources and further share issuances will be made to meet the Company's obligations. The Company's discretionary exploration activities do have considerable scope for flexibility in terms of the amount and timing of exploration expenditure, and expenditures may be adjusted accordingly if required.
3. SIGNIFICANT ACCOUNTING POLICIES Generally accepted accounting principles
   These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America ("US GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete annual financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2022, included in our Annual Report on Form 20-F, filed with the SEC on March 31, 2023. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. The financial statements and notes are representations of the Company's management and its board of directors, who are responsible for their integrity and objectivity.
   Principles of consolidation
   These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, XG Exploration (from February 16, 2004) and its 90% owned subsidiary, XG Mining (from December 22, 2004). All intercompany accounts and transactions have been eliminated on consolidation.
   Use of estimates

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual

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XTRA-GOLD RESOURCES CORP.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars - Unaudited)

September 30, 2023

results could differ from those estimates. Significant areas requiring the use of estimates include the carrying value and recoverability of mineral properties, inputs used in the calculation of stock-based compensation and warrants, inputs used in the calculation of the asset retirement obligation, and the valuation allowance applied to deferred income taxes. Actual results could differ from those estimates and would impact future results of operations and cash flows.

Cash and cash equivalents

The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. At September 30, 2023 and December 31, 2022, cash and cash equivalents consisted of cash held at financial institutions.

The Company has been required by the Ghanaian government to post a bond for environmental reclamation. This cash has been recorded as restricted cash, a non-current asset.

Receivables

Management has evaluated all receivables and has provided allowances for accounts where it deems collection doubtful. As of September 30, 2023 and December 31, 2022, the Company had not recorded any allowance for doubtful accounts.

Inventory

Inventories are initially recognized at cost and subsequently stated at the lower of cost or net realizable value. The Company's inventory consists of raw gold recovered from alluvial operations. Costs are determined using the first-in,first-out ("FIFO") method and includes expenditures incurred in extracting the raw gold, other costs incurred in bringing them to their existing location and condition, and the cost of reclaiming the disturbed land to a natural state.

Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost of inventories is not estimated to be recoverable due to declining selling prices, or other issues related to the sale of gold.

Recovery of gold

Recovery of gold and other income is recognized when title and the risks and rewards of ownership to delivered bullion and commodities pass to the buyer and collection is reasonably assured. Recovery of gold, net of expenses, is not related to exploration and is not the core business of the Company, so proceeds from gold recovery are recognized as other income.

Trading securities

The Company's trading securities are reported at fair value, with realized and unrealized gains and losses included in earnings.

Non-Controlling Interest

The consolidated financial statements include the accounts of XG Mining (from December 22, 2004). All intercompany accounts and transactions have been eliminated upon consolidation. The Company records a non-controlling interest which reflects the 10% portion of the earnings (loss) of XG Mining allocable to the holders of the minority interest.

Equipment

Equipment is recorded at cost and is being amortized over its estimated useful lives using the declining balance method at the following annual rates:

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XTRA-GOLD RESOURCES CORP.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars - Unaudited)

September 30, 2023

Furniture and equipment	20%
Computer equipment	30%
Vehicles	30%
Mining and exploration equipment	20%

Mineral properties and exploration and development costs

The costs of acquiring mineral rights are capitalized at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs. If, after review, management concludes that the carrying amount of a mineral property is impaired, it will be written down to estimated fair value. Exploration costs incurred on mineral properties are expensed as incurred. Development costs incurred on proven and probable reserves will be capitalized. Upon commencement of production, capitalized costs will be amortized using the unit-of-production method over the estimated life of the ore body based on proven and probable reserves (which exclude non-recoverable reserves and anticipated processing losses). When the Company receives an option payment related to a property, the proceeds of the payment are applied to reduce the carrying value of the exploration asset.

Impairment of non-financial assets

At the end of each reporting period, the Company reviews the carrying amounts of its non-financial assets with finite lives to determine whether there is any indication that those assets are impaired. Where such an indication exists, the recoverable amount of the asset is estimated. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or "CGUs"). The recoverable amount is the higher of an asset's fair value less costs of disposal and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount.

The Company has assessed the assets of all its operating entities and has determined that no impairment was considered necessary for the Company's non-financial assets as at September 30, 2023 and December 31, 2022.

Long-lived assets

Long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. For purposes of evaluating the recoverability of long- lived assets, the recoverability test is performed using undiscounted net cash flows related to the long-lived assets. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell.

Asset retirement obligations

The Company records the estimated rehabilitation value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the changes in the estimated future cash flows underlying the obligation (asset retirement cost).

Stock-based compensation

The Company accounts for stock compensation arrangements under ASC 718 "Compensation - Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses

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XTRA-GOLD RESOURCES CORP.

NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in U.S. Dollars - Unaudited)

September 30, 2023

transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments.

We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting periods.

Warrants

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value using the appropriate valuation methodology and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The warrants are presented as a liability because they do not meet the criteria of Accounting Standard Codification ("ASC") topic 480 for equity classification. Subsequent changes in the fair value of the warrants are recorded in the consolidated statement of operations.

Share repurchases

The Company accounts for the repurchase of its common shares as an increase in shares in treasury for the market value of the shares at the time of purchase. When the shares are cancelled, the issued and outstanding shares are reduced by the $0.001 par value and the difference is accounted for as a reduction in additional paid in capital.

Share-based payment transactions

The fair value is measured at grant date and recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the actual number of share options that are expected to vest.

An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.

In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of the goods and services received.

Income taxes

The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax asset will not be recognized.

Income (Loss) per share

Basic loss per common share is computed using the weighted average number of common shares outstanding during the period. To calculate diluted loss per share, the Company uses the treasury stock method and if converted method. As of September 30, 2023, there were Nil warrants (September 30, 2022 - Nil) and 2,648,500 stock options (September 30, 2022 - 2,136,000). For the nine-month period ending September 30, 2023, the fully diluted weighted average shares outstanding would increase to 48,984,474 (September 30, 2022 - 48,589,638) from the basic weighted average shares outstanding of 46,398,474 (September 30, 2022 - 46,568,638). This increase did not change the income per share from the basic income per share number.

8