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GIYANI GOLD CORP.

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014

(Expressed in Canadian Dollars)

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying consolidated financial statements of Giyani Gold Corp. (the “Company”) are the responsibility of

management and the Board of Directors.

The consolidated financial statements have been prepared by management, on behalf of the Board of Directors, in

accordance with the accounting policies disclosed in the notes to the consolidated financial statements. Where

necessary, management has made informed judgments and estimates in accounting for transactions which were not

complete at the statement of financial position date. In the opinion of management, the consolidated financial

statements have been prepared in accordance with International Financial Reporting Standards appropriate in the

circumstances.

Management has established processes, which are in place to provide it with sufficient knowledge to support

management representations that it has exercised reasonable diligence that (i) the consolidated financial statements

do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is

necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of,

and for the periods presented by, the consolidated financial statements and (ii) the consolidated financial statements

fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of

the date of and for the periods presented by the consolidated financial statements.

The Board of Directors is responsible for reviewing and approving the consolidated financial statements together with

other financial information of the Company and for ensuring that management fulfills its financial reporting

responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee

meets with management to review the financial reporting process and the consolidated financial statements together

with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for

its consideration in approving the consolidated financial statements together with other financial information of the

Company for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial

standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

/s/ Duane Parnham /s/ Duane Parham

Chief Executive Officer Chief Financial Officer

Toronto, Canada

April 28, 2016

PricewaterhouseCoopers LLP

PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2

T: +1 416 863 1133, F: +1 416 365 8215

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

April 28, 2016

Independent Auditor’s Report

To the Shareholders of

Giyani Gold Corp.

We have audited the accompanying consolidated financial statements of Giyani Gold Corp. and its

subsidiaries, which comprise the consolidated statements of financial position as at December 31, 2015

and December 31, 2014 and the consolidated statements of loss and comprehensive loss, shareholders’

equity and cash flows for the years then ended, and the related notes, which comprise a summary of

significant accounting policies and other explanatory information.

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial

statements in accordance with International Financial Reporting Standards (IFRS), and for such internal

control as management determines is necessary to enable the preparation of consolidated financial

statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with Canadian generally accepted auditing standards. Those

standards require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the consolidated financial statements. The procedures selected depend on the auditor’s judgment,

including the assessment of the risks of material misstatement of the consolidated financial statements,

whether due to fraud or error. In making those risk assessments, the auditor considers internal control

relevant to the entity’s preparation and fair presentation of the financial statements in order to design

audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an

opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the

appropriateness of accounting policies used and the reasonableness of accounting estimates made by

management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our

audit opinion.

2

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial

position of Giyani Gold Corp. and its subsidiaries as at December 31, 2015 and December 31, 2014 and

their financial performance and their cash flows for the years then ended in accordance with IFRS.

Emphasis of matter

Without qualifying our opinion, we draw attention to note 1 in the consolidated financial statements which

describes matters and conditions that indicate the existence of a material uncertainty that may cast

significant doubt about the corporation’s ability to continue as a going concern.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants, Licensed Public Accountants

GIYANI GOLD CORP.

Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

December 31, December 31,

2015 2014

Assets

Current assets

Cash (note 17) $ – $ 33,965

Restricted cash (note 5) 5,000 5,000

Amounts receivable 21,294 67,851

Prepaids 59,892 51,062

Total Current assets 86,186 157,878

Equipment (note 6) 41,329 57,181

Mineral property acquisition costs (note 7) – 5,680,292

Exploration and evaluation assets (note 7) 1,378,327 6,285,394

Total Assets $ 1,505,842 $ 12,180,745

Liabilities

Current liabilities

Accounts payable and accrued liabilities $ 1,275,663 $ 1,026,838

Promissory note (note 8) 65,862 62,962

Debenture (note 9) 416,161 466,161

Amounts due to related party (note 15) 692,648 347,264

Total Liabilities 2,450,334 1,903,225

Equity (Deficiency)

Share capital (note 10(b)) 18,520,824 18,173,796

Contributed surplus (note 11(b)) 5,090,180 5,090,180

Warrants (note 12) 4,093,233 4,093,233

Cumulative translation adjustment (150,673) 18,363

Deficit (28,533,490) (18,926,330)

(979,926) 8,449,242

Non-controlling interest (note 19) 35,434 1,828,278

(944,492) 10,277,520

Total Liabilities and Equity (Deficiency) $ 1,505,842 $ 12,180,745

Nature of operations and going concern (note 1)

Capital management (note 16)

Commitment (note 20)

Subsequent events (note 21)

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

Approved by the Board of Directors:

Director: Roger Laine

Director: Scott Kelly

– 1 –

GIYANI GOLD CORP.

Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian Dollars)

For the years ended December 31, 2015 2014

Expenses

Corporate, general and administration $ 1,311,877 $ 1,722,609

Amortization (note 6) 11,474 17,523

Financing fee (note 20) – 150,000

Stock-based compensation (note 11) – 744,475

Write-down of property acquisition costs,

and exploration and evaluation assets (note 7) 10,423,646 1,136,914

Net loss before interest and other items 11,746,997 3,771,521

Foreign exchange loss (gain) 1,121 (2,052)

Interest and other income (43,901) (76,747)

(Gain) loss on disposal of equipment (47) 879

Other income on settlement of flow-through premium obligation – (127,000)

Write down of amounts receivable – 130,000

Recovery of accounts payable – (155,086)

Net loss for the year before income taxes 11,704,170 3,541,515

Recovery of income taxes (note 14) – (126,065)

Net loss for the year $ 11,704,170 $ 3,415,450

Other comprehensive income

Items that may be subsequently reclassified to profit and loss

Currency translation adjustment 169,036 38,531

Other comprehensive loss for the year $ 11,873,206 $ 3,453,981

Attributable to:

Owners of the parent $ 9,567,004 $ 2,574,530

Non-controlling interest 2,137,166 840,920

Net loss for the year $ 11,704,170 $ 3,415,450

Basic and diluted loss per share $ 0.19 $ 0.06

Weighted average number of shares outstanding 61,346,988 56,179,325

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

– 2 –

GIYANI GOLD CORP.

Consolidated Statements of Changes in Shareholders’ Equity (Deficiency)

(Expressed in Canadian Dollars)

Share Capital Non- Cumulative

Contributed Controlling Translation

Number Amount surplus Warrant Interest Adjustment Deficit Total

Balance, December 31, 2013 54,978,578 $ 17,432,543 $ 4,482,971 $ 4,054,637 $ 1,066,787 $ 56,894 $ (17,015,956) $ 10,077,876

Shares of subsidiary issued to

non-controlling interest – – 3,960 559,292 – 138,618 701,870

Change in non-controlling interest

due to acquisition of Birch Hill Gold Corp.

and dilution impact (note 4) – – 34,636 905,853 – 525,538 1,466,027

Shares issued as financing fee 454,545 150,000 – – – – 150,000

Private placement 2,000,000 600,000 – – – – 600,000

Share issue costs – (8,747) – – – – (8,747)

Options granted by subsidiary – – 183,267 – 137,266 – – 320,533

Stock-based compensation – – 423,942 – – – – 423,942

Currency translation adjustment – – – – – (38,531) – (38,531)

Net loss for the year – – – – (840,920) – (2,574,530) (3,415,450)

Balance, December 31, 2014 57,433,123 18,173,796 5,090,180 4,093,233 1,828,278 18,363 (18,926,330) 10,277,520

Shares of subsidiary issued to

non-controlling interest – – – – 344,322 – (40,156) 304,166

Private placement 4,000,000 200,000 – – – – – 200,000

Shares issued for debt 1,837,858 147,028 – – – – – 147,028

Expiry of warrants – – – – – (169,036) – (169,036)

Net loss and comprehensive loss for the year – – – – (2,137,166) – (9,567,004) (11,704,170)

Balance, December 31, 2015 63,270,981 $ 18,520,824 $ 5,090,180 $ 4,093,233 $ 35,434 $ (150,673) $ (28,533,490) $ (944,492)

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

– 3 –

GIYANI GOLD INC.

Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

Year Ended

December 31,

2015 2014

Operating Activities

Net loss for the year $ (11,704,170) $ (3,415,450)

Accrued interest expense 2,900 17,005

Amortization 11,474 17,523

Financing fee – 150,000

Stock-based compensation – 744,475

Write-down of amounts receivable – 130,000

Recovery on accounts payable – (155,086)

Loss on disposal of equipment (47) 879

Other income on settlement of flow-through premium – (127,000)

Write-down of property acqusition costs and exploration and evaluation assets 10,423,646 1,136,914

Income tax recovery – (126,065)

Net change in non-cash working capital:

Receivables 79,195 50,673

Prepaid expenses (8,830) 9,182

Accounts payable and accrued liabilities 355,972 (551,947)

Amounts due to related parties 504,913 228,966

Cash used in operating activities (334,947) (1,889,931)

Investing Activities

Redemption of term deposit – 150,583

Restricted cash – 95,000

Exploration and evaluation asset expenditures (28,860) (290,778)

Repayment of debenture (50,000) (50,000)

Acquisition of Birch Hill Gold Corp. – (116,156)

Cash used in investing activities (78,860) (211,351)

Financing Activities

Proceeds on issuance of shares 365,000 600,000

Share issue costs – (8,747)

Proceeds from issuance of shares in subsidiary, net of costs – 138,120

Cash provided by financing activities 365,000 729,373

Effect of foreign exchange on cash 14,842 (23,825)

Change in cash during the year (33,965) (1,395,734)

Cash, beginning of the year 33,965 1,429,699

Cash, end of the year (note 17) $ – $ 33,965

Please refer to note 13 for supplemental disclosure with respect to cash flows

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

– 4 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

1. Nature of operations and going concern

Giyani Gold Corp. (“Giyani”, or “the Company”) was incorporated under the Canada Business Corporations Act on July

26, 2007 and continued under the Business Corporations Act of British Columbia on August 4, 2010. The Company is

engaged in the acquisition, exploration, evaluation and development of principally gold resource properties in South

Africa and Canada. The Company’s primary focus is the development of the Rock Island Gold Project in South Africa

and ongoing exploration for gold at its properties in Northern Ontario, Canada. The registered address is Suite 403 –

277 Lakeshore Road East, Oakville, Ontario, L6J 6J3. The Company trades on the TSX Venture Exchange (“TSXV”)

under the symbol “WDG”.

These consolidated financial statements have been prepared using International Financial Reporting Standards

(“IFRS”) applicable to a “going concern”, which assume 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 operations.

The Company reported a net loss of $11,704,170 for the year ended December 31, 2015 (2014 – $3,415,450) and had

an accumulated deficit of $28,533,490 at December 31, 2015 (2014 – $18,926,330).

In addition to its working capital requirements, the Company must secure sufficient funding for existing commitments

and exploration costs.

These circumstances indicate the existence of material uncertainty that may cast significant doubt as to the ability of

the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting

principles applicable to a going concern.

Management plans to secure the necessary financing through a combination of the exercise of existing warrants for

the purchase of common shares, the issue of new equity instruments and the entering into joint venture arrangements.

Nevertheless, there is no assurance that these initiatives will be successful.

The recovery of amounts capitalized for exploration and evaluation assets at December 31, 2015 in the statement of

financial position is dependent upon the ability of the Company to arrange appropriate financing to complete the

continued exploration of the properties and upon future profitable production or proceeds from their disposition.

Subsequent to year end, Canoe entered into an agreement to sell two of its assets to Wesdome Gold Mines Ltd. (see

note 21).

These financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the

reported expenses and statement of financial position classifications that would be necessary should the going

concern assumption be inappropriate, and those adjustments could be material. The Company will continue to pursue

opportunities to raise additional capital through equity markets and/or debt to fund investment in its exploration and

evaluation assets; however, there is no assurance of the success of sufficiency of these initiatives. Should the

Company fail to secure the necessary financing, judgments regarding the recoverability of the mineral property

acquisition costs and the exploration and evaluation assets could change resulting in a significant impairment to

existing assets.

2. Basis of preparation

(a) Statement of compliance

These consolidated financial statements of the Company, including comparatives, have been prepared in accordance

with IFRS as issued by the International Accounting Standards Board.

These consolidated financial statements were authorized for issuance by the Board of Directors of the Company on

April 28, 2016.

– 5 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

2. Basis of preparation (continued)

(b) Basis of consolidation and presentation

The consolidated financial statements have been prepared on a historical cost basis. All dollar amounts presented are

in Canadian dollars unless otherwise specified.

These consolidated financial statements incorporate the financial statements of the Company and its wholly controlled

subsidiaries. Control exists when the Company has the power, directly or indirectly, to govern the financial and

operating policies of an entity so as to obtain benefits from its activities. All intercompany transactions and balances

have been eliminated.

Entity name Company ownership Place of Functional Method of

(%) Incorporation currency consolidation

Canoe Mining Ventures Corp. (“Canoe”) 39.1 Canada Canadian Dollar Consolidated

Coldstream Mineral Ventures Corp. 39.1 Canada Canadian Dollar Consolidated

Sheltered Oak Resources Corp. 39.1 Canada Canadian Dollar Consolidated

Alpha 111 Holdings Co. Ltd. 100 Barbados Canadian Dollar Consolidated

Beta 222 Holdings Co. Ltd. 100 Barbados Canadian Dollar Consolidated

Giyani Gold Holdings 333 (Pty) Ltd. 100 South Africa Canadian Dollar Consolidated

Giyani Gold South Africa (Pty) Ltd. 100 South Africa South African Rand Consolidated

Lexshell 831 Investments (Pty) Ltd. 100 South Africa South African Rand Consolidated

GGC South Africa Mining 111 (Pty) Ltd. 100 South Africa South African Rand Consolidated

Obliwize (Pty) Ltd. 100 South Africa South African Rand Consolidated

Obliweb (Pty) Ltd. 100 South Africa South African Rand Consolidated

Lexshell 837 Investments (Pty) Ltd. 64 South Africa South African Rand Consolidated

Rock Island Trading 17 (Pty) Ltd. (1) 28.8 South Africa South African Rand Joint Operation

(1) 28.8% represents the Company’s effective ownership in Rock Island Trading 17 (Pty) Ltd., a joint operation.

Critical accounting estimates and judgments

The Company performed an analysis of risk factors which, if any should be realized, could materially and adversely

affect the results, financial position and/or market price of its securities.

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates

and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and

liabilities at the date of the consolidated financial statements and the reported amount of expenses and other income

for the year. These estimates and assumptions were based on management’s knowledge of the relevant facts and

awareness of circumstances, having regard to prior experience. Significant estimates and assumptions include the

following (excluding going concern which is disclosed in Note 1):

(i) Recoverability of exploration and evaluation properties

Management will consider the economics of its exploration and evaluation assets, including the drill and geophysical

results. Where an indicator of impairment exists, management will perform an impairment test and if the recoverable

amount is less than the carrying value, record an impairment charge. Refer to note 6 for the details of the impairment

charge recorded in these consolidated financial statements.

– 6 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

2. Basis of preparation (continued)

Critical accounting estimates and judgments (continued)

(ii) Judgment that the Company is the parent company of Canoe

Management determined that the Company has control over and is the parent company of Canoe despite the fact that

the Company owns less than 50% of Canoe as at December 31, 2015 and 2014 because the Company has power

over Canoe through the common directors and officers between the two companies and is exposed to variable returns

from its involvement with Canoe. In addition, the Company has the ability to use its power over Canoe to affect the

amount of return through its influence on Canoe’s financing and operating policies. Management periodically reviews

these elements to determine whether it has control over Canoe and whether Canoe should continue to be included in

the consolidated financial statements of the Company as a subsidiary.

(iii) Other accounting estimates and judgments

Other estimates and judgments included the benefits of future income tax assets and whether or not to recognize the

resulting assets on the statement of financial position and determinations as to whether exploration costs should be

expensed or capitalized.

While Management believes that these estimates and judgments are reasonable, actual results may differ from the

amounts included in the consolidated financial statements.

3. Significant accounting policies

Foreign currency translation

Items included in the consolidated financial statements of each of the Company’s entities are measured using the

currency of the primary economic environment in which the entity operates (“the functional currency”). The functional

currency of each entity is listed in Note 2(b). The consolidated financial statements are presented in Canadian dollars

which is the Company’s presentation currency.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate in effect at the

balance sheet date. Non-monetary assets and liabilities, expenses and other income arising from foreign currency

transactions are translated at the exchange rate in effect at the date of the transaction. Exchange gains or losses

arising from the translation are included in the determination of losses in the current year.

The results and financial position of all entities in the Company that have a functional currency different from the

Company’s presentation currency are translated into the Company’s presentation currency as follows:

 assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that

balance sheet;

 equity transactions are translated at the historical exchange rate;

 income and expenses for each income statement are translated at the exchange rate in effect on date of the

transaction (or at average exchange rates for the reporting period)

– 7 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

Financial instruments

Financial assets

The Company classifies its financial assets into one of the following categories, depending on the purpose for which

the asset was acquired. The Company’s accounting policy for each category is as follows:

Fair value through profit or loss – This category comprises derivatives, or assets acquired or incurred principally for the

purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair value

with changes in fair value recognized through profit or loss.

Loans and receivables – These assets are non-derivative financial assets with fixed or determinable payments that are

not quoted in an active market. They are carried at amortized cost less any provision for impairment. Individually

significant receivables are considered for impairment when they are past due or when other objective evidence is

received that a specific counterparty will default.

Held-to-maturity investments – These assets are non-derivative financial assets with fixed or determinable payments

and fixed maturities that the Company’s management has the positive intention and ability to hold to maturity. These

assets are measured at amortized cost using the effective interest method. If there is objective evidence that the

investment is impaired, determined by reference to external credit ratings and other relevant indicators, the financial

asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the

investment, including impairment losses, are recognized through profit or loss.

Available-for-sale – Non-derivative financial assets not included in the above categories are classified as available-forsale.

They are carried at fair value with changes in fair value recognized directly in comprehensive income. Where a

decline in the fair value of an available-for-sale financial asset constitutes objective evidence of impairment, the

amount of the loss is removed from equity and recognized through income (loss).

All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at

each reporting date. Financial assets are impaired when there is any objective evidence that a financial asset or a

group of financial assets is impaired. Different criteria to determine impairment are applied for each category of

financial assets, which are described above.

The Company has classified its cash and receivables as loans and receivables.

Financial liabilities

The Company classifies its financial liabilities into one of two categories, depending on the purpose for which the asset

was acquired. The Company’s accounting policy for each category is as follows:

Fair value through profit or loss – This category comprises derivatives, or liabilities acquired or incurred principally for

the purpose of selling or repurchasing it in the near term. They are carried in the statement of financial position at fair

value with changes in fair value recognized through profit or loss.

Other financial liabilities: This category consists of liabilities carried at amortized cost using the effective interest

method.

The Company’s accounts payable and accrued liabilities, promissory note, debenture and amounts due to related

parties are classified as other financial liabilities.

– 8 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

Deferred acquisition costs

Acquisition costs related to mineral property interests are deferred until such time as title to the claim is obtained and

the Company has the right to explore that mineral property. Once title is obtained, the Company reclassifies deferred

acquisition costs to acquisition costs within exploration and evaluation assets. If title to a mineral property is not

obtained, the deferred acquisition costs are written-off to the statement of loss during the period when it is determined

that title will not be obtained.

Exploration and evaluation assets

The Company capitalizes all costs related to investments in mineral property interests on a property-by-property basis,

once the right to explore a property has been obtained by the Company. Such costs include mineral property

acquisition costs and exploration and evaluation expenditures, net of any recoveries, and are monitored for indications

of impairment. Where there are indications of a potential impairment, an assessment is performed for recoverability.

Capitalized costs are charged to the statement of comprehensive loss to the extent that they are not expected to be

recovered.

Exploration and evaluation expenditures relate to the initial search for deposits with economic potential and to detailed

assessments of deposits or other projects that have been identified as having economic potential. Once an

economically viable reserve has been determined for an area and the decision to proceed with development has been

approved, exploration and evaluation assets attributable to that area are first tested for impairment and then

reclassified to construction in progress within property, plant and equipment.

Subsequent recovery of the resulting carrying value depends on successful development or sale of the undeveloped

project. If a project does not prove viable, all irrecoverable costs associated with the project are written off.

Equipment

Equipment is carried at cost, less accumulated amortization and accumulated impairment losses. The cost of an item

of equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and

condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and

restoring the site on which it is located. Equipment is depreciated using the following annual rates:

Computer equipment 33.3% declining balance

Furniture and fixtures 14.3% declining balance

Mining and exploration equipment 14.3% declining balance

Telecommunication and mobile equipment 20.0% declining balance

– 9 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

Impairment of non-current assets

Non-current assets are evaluated at each reporting period by management for indicators that carrying value is

impaired and may not be recoverable. When indicators of impairment are present the recoverable amount of an asset

is evaluated at the level of a CGU, the smallest identifiable group of assets that generates cash inflows that are largely

independent of the cash inflows from other assets or groups of assets, where the recoverable amount of a CGU is the

greater of the CGU’s fair value less costs to sell and its value in use. An impairment loss is recognized in profit or loss

to the extent the carrying amount exceeds the recoverable amount.

In calculating recoverable amount, the Company uses discounted cash flow techniques to determine fair value when it

is not possible to determine fair value either by quotes from an active market or a binding sales agreement.

Management also considers fair value based on cost information and the value of successful exploration activities.

The determination of discounted cash flows is dependent on a number of factors, including future metal prices, the

amount of reserves, the cost of bringing the project into production, production schedules, production costs, sustaining

capital expenditures, and site closure, restoration and environmental rehabilitation costs. Additionally, the reviews take

into account factors such as political, social and legal, and environmental regulations. These factors may change due

to changing economic conditions or the accuracy of certain assumptions and, hence, affect the recoverable amount.

The Company uses its best efforts to fully understand all of the aforementioned to make an informed decision based

upon historical and current facts surrounding the projects. Discounted cash flow techniques often require management

to make estimates and assumptions concerning reserves and expected future production revenues and expenses.

Reversal of impairment

An impairment loss is reversed if there is an indication that there has been a change in the estimates used to

determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount

does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no

impairment loss had been recognized. An impairment loss with respect to goodwill is never reversed.

Provision for Environmental Rehabilitation

The Company records a liability based on the best estimate of costs for site closure and reclamation activities that the

Company is legally or constructively required to remediate. The liability is recognized at the time environmental

disturbance occurs and the resulting costs are capitalized to the corresponding asset. The provision for closure and

reclamation liabilities is estimated using expected cash flows based on engineering and environmental reports

prepared by third-party industry specialists and discounted at a pre-tax rate specific to the liability. The capitalized

amount is depreciated on the same basis as the related asset. The liability is adjusted for the accretion of the

discounted obligation and any changes in the amount or timing of the underlying future cash flows.

Significant judgments and estimates are involved in forming expectations of the amounts and timing of future closure

and reclamation cash flows. Additional disturbances and changes in closure and reclamation estimates are accounted

for as incurred with a change in the corresponding capitalized cost. Costs of rehabilitation projects for which a

provision has been recorded are recorded directly against the provision as incurred, most of which are incurred at the

end of the life of mine.

There are currently no environmental rehabilitation provisions recorded.

– 10 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

Interest in joint arrangements

The Company conducts a portion of its business through a joint operation whereby the joint operation participants are

bound by contractual agreements establishing joint control. Joint control exists when unanimous consent of the joint

operation participants is required regarding strategic, financial and operating policies of the joint operation. The

Company has interests in a jointly controlled entity.

A jointly controlled entity is a corporation, partnership or other entity in which each joint arrangement participant holds

an interest. A jointly controlled entity controls the assets of the joint arrangement and incurs its own liabilities and

expenses. The Company has determined that its interest in the jointly controlled entity is a joint operation and accounts

for their share of assets and liabilities, their expenses and any share of expenses of any future share of revenue of the

joint operation. The Company’s share of results from joint operations has been recognized in the Company’s

consolidated financial statements from the date the Company obtained joint control. Intercompany transactions

between the Company and jointly controlled entities are eliminated to the extent of the Company’s interest.

Capital stock

Proceeds from the exercise of stock options and warrants are recorded as capital stock in the amount for which the

option or warrant enabled the holder to purchase a share in the Company. Capital stock issued for non-monetary

consideration is valued at the closing market price at the date of issuance. The proceeds from the issuance of units are

allocated between common shares and common share purchase warrants based on the residual value method. Under

this method, the proceeds are allocated to capital stock based on the fair value of the common share and any residual

value remaining is allocated to common share purchase warrants.

Flow-through common shares

The Company finances a portion of its development and construction activities through financings in which flowthrough

common shares are issued. These shares transfer the tax deductibility of qualifying expenditures to investors.

At the time of closing a financing involving flow-through shares, the Company allocates the gross proceeds received

(“flow-through commitment”) as follows:

 Share capital — at fair market value, based on the share price at the date of grant;

 Warrant reserve — Warrants (if any) are measured, based on the valuation derived using the Black-Scholes

option-pricing model. A warrant reserve (if any) is recorded to the extent that the unit issue price is greater than

the fair market value of the share capital; and

 Flow-through share premium — Recorded as a liability and equal to the residual balance.

At the end of each reporting period, the Company reviews its tax position and records an adjustment to its deferred tax

expense/liability accounts for taxable temporary differences, including those arising from the transfer of tax benefits to

investors through flow-through shares. The Company considers the tax benefits of qualifying expenditures to have

been effectively transferred if it has formally renounced those expenditures and has incurred the expenditures at any

time before the end of the reporting period.

– 11 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

Share-based payments

The Company grants share options to acquire common shares of the Company to directors, officers, consultants and

employees.

The fair value of the instruments granted is measured using a Black-Scholes model, taking into account the terms and

conditions upon which the instruments are granted. The fair value of the awards is adjusted by the estimate of the

number of awards that are expected to vest as a result of non-market conditions and is expensed over the vesting

period using the graded vesting method of amortization. At each balance sheet date, the Company reviews its

estimates of the number of options that are expected to vest based on the non-market vesting conditions including the

impact of the revision to original estimates, if any, with corresponding adjustments to equity. Volatility, as input into the

Black-Scholes model, measured at the standard deviation of continuously compounded share returns is based on

statistical analysis of daily share prices over the expected life of the option.

Income taxes

Income tax expense consisting of current and deferred tax expense is recognized in the statement of loss and

comprehensive loss. Current tax expense is the expected tax payable on the taxable income for the year, using tax

rates enacted or substantively enacted at period end, adjusted for amendments to tax payable with regards to previous

years. Deferred tax assets and liabilities and the related deferred income tax expense or recovery are recognized for

deferred tax consequences attributable to differences between the financial statement carrying amounts of assets and

liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using the enacted or substantively enacted tax rates expected to apply

when the asset is realized or the liability settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that

substantive enactment occurs.

The Company uses the balance sheet method of accounting for deferred taxes. A deferred tax asset is recognized to

the extent that it is probable that future taxable income will be available against which the asset can be utilized. To the

extent that the Company does not consider it probable that a deferred tax asset will be recovered, the deferred tax

asset is reduced.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the

Company intends to settle its current tax assets and liabilities on a net basis.

Loss per share

Basic loss per share is calculated using the weighted average number of common shares outstanding during the

period.

The Company uses the treasury stock method to compute the dilutive effect of options, warrants and similar

instruments. Under this method the dilutive effect on earnings per share is calculated presuming the exercise of

outstanding options, warrants and similar instruments. It assumes that the proceeds of such exercise would be used to

repurchase common shares at the average market price during the period. However, the calculation of diluted loss per

share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive.

Shares held in escrow, other than where their release is subject to the passage of time, are not included in the

calculation of the weighted average number of common shares outstanding.

– 12 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

3. Significant accounting policies (continued)

New standards not yet adopted

IFRS 9 — Financial instruments (“I FRS 9”) was updated by the IASB in November 2009 and will replace part of IAS

39 – Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 addresses the classification and

measurement of financial assets. The two measurement categories for financial assets include amortized cost and fair

value. All equity instruments are measured at fair value. A debt instrument is recorded at amortized cost only if the

entity is holding it to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is

recorded at fair value through profit or loss.

Requirements for financial liabilities were added in October 2010 and they largely carried forward existing

requirements in IAS 39, Financial Instruments — Recognition and Measurement, except that fair value changes due to

credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other

comprehensive income rather than the income statement, unless this creates an accounting mismatch. IFRS 9 is

effective for annual periods beginning on or after January 1, 2018. The Company is in the process of assessing the

impact of this pronouncement.

IFRS 16- Leases (“IFRS 16”) was issued on January 13, 2016 and replaces IAS 17 – Leases as well as some lease

related interpretations. With certain exceptions for leases under twelve months in length or for assets of low value,

IFRS 16 states that upon lease commencement a lessee recognizes a right-of-use asset and a lease liability. The

right-of-use asset is initially measured at the amount of the liability plus any initial direct costs. After lease

commencement, the lessee shall measure the right-of-use asset at cost less accumulated depreciation and

accumulated impairment. A lessee shall either apply IFRS 16 with full retrospective effect or alternatively not restate

comparative information but recognize the cumulative effect of initially applying IFRS 16 as an adjustment to opening

equity at the date of initial application. IFRS 16 requires that lessors classify each lease as an operating lease or a

finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to

ownership of an underlying asset. Otherwise it is an operating lease. IFRS 16 is effective for annual periods

beginning on or after January 1, 2019. Earlier adoption is permitted if IFRS 15 has also been applied.

4. Acquisition of Birch Hill Gold Corp.

On June 3, 2014, the Company’s subsidiary, Canoe, completed an amalgamation (“Amalgamation”) with Birch Hill

Gold Corp. (“Birch Hill”) pursuant to which Birch Hill and 0996623 BC Ltd., a wholly owned subsidiary of the Company,

amalgamated under the name “Coldstream Mineral Ventures Corp.” The Company acquired all of the issued and

outstanding common shares of Birch Hill by issuing 5,368,554 common shares of Canoe representing one common

share of the Canoe for every 2.5 Birch Hill common shares. Canoe has reserved 1,559,432 common shares for

issuance on the exercise of share purchase warrants issued in exchange for the outstanding Birch Hill share purchase

warrants on the same exchange terms.

The net assets of Birch Hill were valued with reference to the fair market value of the Canoe’s common shares as at

June 3, 2014 being $0.26 and included additional costs of $116,156. Additionally, the share purchase warrants were

assigned a value of $70,203 estimated based on the Black-Scholes pricing model using the following weighted

average assumptions: risk-free interest rate – 1.11%; expected life – 2 years; expected volatility – 100%; and expected

dividends – Nil. This transaction has been accounted for as an acquisition of net assets, rather than a business

combination, as the net assets acquired did not represent a separate business operation.

– 13 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

4. Acquisition of Birch Hill Gold Corp. (continued)

The net assets of Birch Hill acquired are as follows:

Description Amount

Receivables $ 7,657

Exploration and evaluation assets 2,983,041

Accounts payable and accrued liabilities (554,457)

Promissory note (63,464)

Debenture (790,594)

Net assets $ 1,582,183

5. Restricted cash

The Company has credit cards with a major financial institution with an aggregate credit limit of $5,000 (December 31,

2014 – $5,000). The financial institution holds a $5,000 (December 31, 2014 – $5,000) deposit as collateral on the

credit amount as long as the credit cards are active. The restricted cash amounts would change if there were any

changes to the credit limits on the cards.

6. Equipment

Furniture

and Mining and Computer

Cost Fixture Exploration Equipment Equipment Total

Balance, December 31, 2013 $ 31,186 $ 21,724 $ 23,365 $ 42,243 $ 118,518

Disposition for the year – – (2,190) – (2,190)

Balance, December 31, 2014 31,186 21,724 21,175 42,243 116,328

Disposition for the year – – – (9,500) (9,500)

Balance, December 31, 2015 $ 31,186 $ 21,724 $ 21,175 $ 32,743 $ 106,828

Accumulated depreciation

Balance, December 31, 2013 $ 8,971 $ 12,896 $ 12,764 $ 8,303 $ 42,934

Depreciation for the year 3,174 4,858 6,639 2,852 17,523

Disposition for the year – – (1,310) – (1,310)

Balance, December 31, 2014 12,145 17,754 18,093 11,155 41,624

Depreciation for the year 2,720 3,132 3,082 2,540 11,474

Disposition for the year – – – (5,122) (5,122)

Balance, December 31, 2015 $ 14,865 $ 20,886 $ 21,175 $ 8,573 $ 47,976

Net book value

Balance, December 31, 2014 $ 19,041 $ 3,970 $ 3,082 $ 31,088 $ 57,181

Balance, December 31, 2015 $ 16,321 $ 838 $ – $ 24,170 $ 41,329

– 14 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets

Mineral property acquisition costs

Acquisition costs for Rock Island, South Africa

Balance, December 31, 2014 and 2013 $ 5,680,292

Write-down of property acquisition costs (5,680,292)

Balance, December 31, 2015 $ –

On October 26, 2012, the Company completed the execution of a revised binding agreement (the “Revised

Agreement”) with Kytanite Development Corp. (“Kytanite”) pursuant to which the Company has confirmed its

entitlement to acquire Kytanite’s interest in the Rock Island gold properties. The Company acquired 100% of Lexshell

831 (Pty) Ltd (“Lexshell 831”), a company duly incorporated and registered in the Republic of South Africa. Lexshell

831 was the legal and beneficial owner of 80% of the issued and outstanding shares of Lexshell 837 (Pty) Ltd (Lexshell

837), a Company incorporated and registered in the Republic of South Africa. Lexshell 837 owns 45% of the shares of

Rock Island Trading (Pty) Ltd.

Total consideration paid was US$2,500,000 (CAN $2,497,792) and 2,500,000 common shares valued at $3,182,500 of

the Company.

On October 26, 2012, Lexshell 831 sold a further 16% of the Common Shares in Lexshell 837 to Malungani Resources

(Pty) Ltd., a company representing the Community Trust for Rock Island. Total consideration is Rand 3,600,000. No

receivable has been set up for this amount, as it will be paid with proceeds from the property.

After sale of the shares Lexshell 831 is the legal and beneficial owner of 64% of the issued and outstanding shares of

Lexshell 837.

Total expenditures on exploration and evaluation assets are as follows:

South Africa

Balance, December 31, 2013 $ 1,748,823

Current expenditures 104,300

Currency translation adjustment (15,232)

Balance, December 31, 2014 1,837,891

Current expenditures 48,804

Currency translation adjustment (207,255)

Write-down of property (1,679,440)

Balance, December 31, 2015 $ –

Canada – Iron Lake Gold Project Killins Emerald Abbie Lake Keating Total

Balance, December 31, 2013 $ 267,200 $ 467,018 $ 617,281 $ 298,946 $ 1,650,445

Acquisition costs – 103,750 – – 103,750

Current expenditures – – 180,000 – 180,000

Write-down of property (267,200) (570,768) – (298,946) (1,136,914)

Balance, December 31, 2014 – – 797,281 – 797,281

Current expenditures (recoveries) – – 617 (23,333) (22,716)

Write-down (recovery) of property – – (797,898) 23,333 (774,565)

Balance, December 31, 2015 $ – $ – $ – $ – $ –

– 15 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Canada Hamlin

Deaty Creek Coldstream Kerrs Total

Balance, December 31, 2013 $ – $ – $ – $ –

Acquisition costs 330,000 2,875,827 110,027 3,315,854

Current expenditures – 334,368 – 334,368

Balance, December 31, 2014 330,000 3,210,195 110,027 3,650,222

Current expenditures – 16,896 558 17,454

Write-down of property (230,000) (2,059,349) – (2,289,349)

Balance, December 31, 2015 $ 100,000 $ 1,167,742 $ 110,585 $ 1,378,327

Total exploration and evaluation assets

Balance, December 31, 2014 $ 6,285,394

Balance, December 31, 2015 $ 1,378,327

South Africa

Rock Island Gold Project

Pursuant to the joint operation agreement relating to the assets of Rock Island, the Company funds the joint operation

with Corridor Mining Resources (“CMR”) on a 50:50 basis, whereby both parties are to share the costs evenly on an

ongoing basis. Exploration costs are recorded in a loan account where interest is accrued at an agreed upon rate. This

loan will be repaid out of proceeds from the sale of the Rock Island asset. The loan is unsecured, with no fixed

repayment terms and bears interest at South African prime +1%. As at December 31, 2015 and December 31, 2014,

the Company had advanced $1,748,823 to Rock Island for exploration work.

The Company’s exploration permits expired on July 10, 2015. Prior to expiry, an application to extend for a three year

retention permit was submitted to the Department of Mineral Resources. This application was submitted by Giyani’s

partner CMR. At the time, no competing applications were submitted.

Notwithstanding numerous requests, evidence of the application has not been provided by CMR. Furthermore, a

response from the Department of Mineral Resources is still pending. Accordingly, the Company has written down the

value of the Rock Island Gold Project to $nil during the year ended December 31, 2015.

– 16 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Northern Ontario, Canada

UCEL Option Agreement

Canoe executed an option agreement on September 19, 2011 (the “UCEL Agreement”) with Upper Canada

Explorations Limited (the “Optionor”), an arm’s length party, to earn a 100% interest in certain surface and mineral

rights (the “Abbie Lake Property”) near Sault Ste. Marie, Ontario, Canada. Canoe paid the Optionor $50,000 upon

receipt of the approval of the UCEL Agreement by the TSX Venture Exchange (“Exchange”) (the “Approval Date”) and

issued 200,000 common shares of 2299895 Ontario Inc. (“2299895”) (exchanged for 311,223 shares of Canoe) value

at $20,000.

In November 2012, Canoe paid $50,000 and issued 150,000 common shares of 2299895 (exchanged for 233,417

shares of Canoe) valued at $15,000 pursuant to the UCEL Agreement. The UCEL Agreement also specifies payments

to the Optionor in the amount of $50,000 and 150,000 common shares of 2299895 within 24 months of the Approval

Date. Pursuant to an amending agreement dated October 28, 2013, Canoe renegotiated the final share payment to be

75,000 and ascribed a fair value of $12,000.

Pursuant to an amending agreement dated January 23, 2013, Canoe renegotiated the required Initial Work Program to

be $600,000 prior to December 31, 2013 with an aggregate total of $1,000,000 by December 31, 2014. Pursuant to an

amending agreement dated October 28, 2013, Canoe renegotiated the Initial Work Program to be $600,000 prior to

June 30, 2014 and an aggregate total of $1,000,000 by June 30, 2015. As at December 31, 2015, $614,546 has been

incurred relating to the Initial Work Program (excluding acquisition costs) on the Abbie Lake Property and the June 30,

2014 work commitment has been satisfied. Canoe did not complete the June 30, 2015 commitment and is in default on

the option.

Canoe must pay a 3% net smelter royalty (“NSR”) on ore and a 3% gross overriding royalty on gemstones and

diamonds covered under the UCEL Agreement, provided however that Canoe may purchase 1.5% of the NSR at any

time upon 30 days’ notice in writing in consideration for the sum of $1,500,000. Canoe must pay a 2% NSR on the sale

or disposition of minerals covered under the UCEL Agreement, provided however that Canoe may purchase 1.5% of

the NSR at any time upon 30 days’ notice in writing in consideration for the sum of $750,000.

During the year ended December 31, 2015, Canoe completed a strategic review of Canoe’s priorities and elected to

write-down the value of the Abbie Lake Property to $Nil. Canoe is in default on the option and intends to abandon the

property.

– 17 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Northern Ontario, Canada (continued)

Keating Property, Ontario

Canoe executed a licensing agreement on November 1, 2011 (the “Michipicoten Agreement”) with 3011650 Nova

Scotia Limited, trading as Michipicoten Forest Resources (the “Licensor”), an arm’s length party, to acquire the license

for an exploration area within the District of Algoma, Ontario, Canada. The term of the lease is five years and contains

the option to extend the Michipicoten Agreement for an additional five years.

Terms of the Michipicoten Agreement required Canoe to pay $8,040 in the first year and $500 multiplied by the number

of grid claims that constitute the licensed area for the remaining four years. If Canoe extends the Michipicoten

Agreement for an additional five years, Canoe would be required to pay $600 multiplied by the number of grid claims

that constitute the licensed area during each of the additional five years of the agreement. Canoe is responsible for all

taxes related to the licensed area during the term of the Michipicoten Agreement.

Canoe is required to incur minimum exploration expenditures during each license year. During each license year of the

initial term, an annual amount of $2,500 multiplied by the number of grid claims that constitute the licensed area must

be incurred. During each license year of the renewal term, an annual amount of $3,000 multiplied by the number of

grid claims that constitute the licensed area must be incurred.

Canoe shall pay the Licensor for each mine commencing commercial production, the conditional option of reducing the

royalty retained by and payable to the lessor therein to a maximum of 2% for all minerals except for diamonds, gems

and other precious or semi-precious stones which will remain at 5%. The purchase price for the first 1% of the royalty

shall be $1,000,000 and for each remaining 1/2% increment of the royalty there-after the purchase price shall be

$1,000,000.

During the year ended December 31, 2014, Canoe elected to prioritize certain assets given the difficult economic

conditions for financing exploration projects and wrote down the Keating Property to $Nil. Canoe is in default on the

option and intends to abandon the property.

– 18 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Northern Ontario, Canada (continued)

Keating East

On March 21, 2012, Canoe executed an agreement (the “Keating East Agreement”) with 2099840 Ontario Inc., trading

as Emerald Geological Services (“Emerald”), an arm’s length party, to have Emerald release an additional 985 Ha area

of claims (the “Lands”) in the form of certain surface and mineral rights situated in Keating Township, Ontario, Canada,

contiguous to Canoe’s Abbie Lake Property and then to have these Lands included in the Michipicoten Agreement.

Pursuant to the Keating East Agreement, Canoe can acquire a 100% interest in the Lands in exchange for a

combination of consideration comprised of: $126,600 in cash payable over three years; $100,000 in exploration

expenditures and other work programs, and up to 200,000 shares in 2299895 over a period of three years. 50,000

common shares of 2299895 (exchanged for 77,806 shares of the Company) were issued on September 23, 2012

valued at $5,000. The total current value of the maximum cash consideration payable if all conditions are satisfied is

$226,600. Under the terms of the agreement, Emerald has agreed to relinquish its license and rights in the Lands and

to allow 2299895 to acquire its interest and rights in the Lands under license from a private arms-length corporate

entity to 2299895 and the owner of the Lands, in exchange for an annual fee payable to that party and an annual work

program.

Pursuant to an amendment agreement, dated February 13, 2013, between 2299895 and Emerald, Emerald agreed

that all future obligations pursuant to the Keating East Agreement would be jointly those of 2299895 and Canoe and

agreed to exchange the 50,000 2299895 shares it currently held for 125,000 shares of Canoe. In addition, pursuant to

an amendment agreement, dated January 23, 2013, Emerald agreed to extend the date for payment of the

consideration payable upon the first anniversary of the Completion of the Qualifying Transaction to December 31, 2013

and agreed that Canoe is responsible for the payment of $25,000 and the issuance of 125,000 shares of Canoe.

Pursuant to an amending agreement dated August 12, 2013, 2299895 and Emerald agreed to issue the 125,000

shares of Canoe (issued on December 17, 2013 and ascribed a fair value of $20,000) and to pay Emerald $25,000 on

or before December 31, 2013 (paid, as stipulated). In addition, Emerald acknowledges that the shares to be issued on

the second and third anniversary will be 125,000 shares of Canoe.

During the year ended December 31, 2014, Canoe paid $70,000 as option payments on the Keating East Agreement

and issued 125,000 common shares valued at $33,750.

During the year ended December 31, 2014, Canoe elected to prioritize certain assets given the difficult economic

conditions for financing exploration projects and wrote down the Keating East Property to $Nil. Canoe is in default on

the option and intends to abandon the property.

– 19 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Northern Ontario, Canada (continued)

Killen Agreement

On July 12, 2012, Canoe executed a licensing agreement with a private arm’s length party (“Killen Agreement”). The

Killen Agreement entitles Canoe to acquire a 100% interest and rights in 39.5 square kilometers of surface and mineral

rights situated in Keating Township, Ontario, in exchange for an annual fee payable and an annual work program.

The license agreement for the Lands will be on the same terms and conditions as those contained in the Michipicoten

Agreement.

During the year ended December 31, 2014, Canoe elected to prioritize certain assets given the difficult economic

conditions for financing exploration projects; therefore, Canoe wrote down the Killen Property in the amount of

$283,417 during the year ended December 31, 2014. Canoe is in default on the option and intends to abandon the

property.

Hamlin-Deaty Creek Property, Ontario

On May 12, 2014, Canoe entered into binding letters of intent (“Hamlin Agreement”) with Glencore Canada

Corporation (“Glencore”), Rainy Mountain Royalty Corp. (“Rainy Mountain”), and Mega Uranium Ltd. (“Mega Uranium”)

to purchase a 100% interest in the Hamlin Deaty Creek Property located in the Shebandowan Belt 110 km west of

Thunder Bay, Ontario.

Pursuant to the terms of the Hamlin Agreement, Canoe made a cash payment of $50,000 to Glencore and grant

Glencore a 1% NSR together with a right of first refusal for an off-take agreement. Rainy Mountain and Mega Uranium

were each issued 1,000,000 common shares of Canoe valued $280,000 in aggregate during the year ended

December 31, 2014.

The underlying 2% NSR held by the original vending prospectors may be purchased by Canoe under the following

terms: a 1% NSR may be purchased at any time for $1,000,000 and Canoe maintains the first right of refusal to

purchase the remaining 1% NSR.

Subsequent to year end the Company entered into an agreement to sell the Hamlin-Deaty Creek Property (see Note

21), and accordingly wrote down the Hamlin-Deaty Creek Property to $100,000.

– 20 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

7. Exploration and evaluation assets (continued)

Northern Ontario, Canada (continued)

Coldstream Property, Ontario

Canoe obtained a 100% interest in the Coldstream Property located in Thunder Bay, Ontario, via the acquisition of

Birch Hill.

Certain claims are subject to an NSR ranging from 0.5% to 3%, with certain buy-down provisions.

N Claims

The N Claims are comprised of three patented mineral claims (N1, N2, N3) and are internal to Canoe’s Coldstream

Property. To acquire the claim, Birch Hill issued 500,000 pre-amalgamation shares in March 2014 valued at $62,500

and paid $50,000. Canoe has acquired a 100% interest in the claims.

The claims are subject to an NSR of up to 2%. Half of the NSR (1%) may be repurchased by Canoe for $1,000,000

prior to a production decision on the Coldstream Property and $2,000,000 thereafter.

Subsequent to year end the Company entered into an agreement to sell the Coldstream Property (see Note 21), and

accordingly wrote down the Coldstream Property to $1,167,744.

Kerrs Gold Property, Ontario

In conjunction with the acquisition of Birch Hill, Canoe acquired a 100% interest in the Kerrs Gold Property which

consists of 11 mining claims and 12 mining leasehold patents located in the Larder Lake Mining Division of Ontario.

The property is subject to NSR’s ranging from 0.8% to 2.0%.

8. Promissory note

In connection with the Amalgamation with Birch Hill, Canoe assumed a promissory note with the Wahgoshig First

Nation for a principal amount of $58,000 which accrues interest a rate of 5% per annum and matured on January 30,

2014. The total balance payable on the promissory note is $65,862 as of December 31, 2015 (2014 – $62,962) which

includes $7,862 (2014 – $4,962) of accrued interest expense. The promissory note is currently being renegotiated.

– 21 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

9. Debenture

Prior to the Amalgamation, Birch Hill issued a non-interest bearing debenture to Alto Ventures Ltd. (“Alto”) as partial

consideration for the acquisition of the remaining 40% interest in the Coldstream property. The debenture is secured

by a security interest in Canoe’s 40% interest in the Coldstream property (including any buildings constructed on the

property) and proceeds from any insurance payout or sale of the property.

The debenture matured on November 21, 2013. In the year ended December 31, 2014, Canoe and Alto agreed to a

settlement (“Settlement”) to be enacted October 21, 2014 (“Settlement Date”) on the debenture as follows:

(a) $250,000 through the issuance of 1,250,000 common shares of Canoe on the Settlement Date at a deemed

value of $250,000 (issued at a value of $250,000);

(b) $50,000 on the Settlement Date (paid);

(c) $50,000 on or before December 31, 2014 (paid in 2015);

(d) $75,000 on or before March 31, 2015;

(e) $75,000 on or before June 30, 2015; and

(f) Granting a 1.5% NSR of portions of the Coldstream Property not previously subject to an NSR, subject to a

right of repurchase of 1.0% for $1,000,000, and a 0.5% NSR on portions of the Coldstream Property which are

subject to an existing NSR.

If Canoe fails to meet the terms of the Settlement, Alto will maintain the right to enforce its claims under the original

terms of the debenture.

Canoe is currently in default with the payment schedule of the Settlement. Canoe has recognized the full carrying

value of the debenture pursuant to the original debenture agreement in accordance with the provisions of the

Settlement.

Debenture

Principal acquired from Birch Hill $ 766,161

Accrued interest acquired from Birch Hill 24,433

Acquired balance, June 3, 2014 790,594

Payments (300,000)

Accrued interest expense 17,506

Adjustment to settlement (41,939)

Balance, December 31, 2014 466,161

Payment (50,000)

Balance, December 31, 2015 $ 416,161

– 22 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

10. Share capital

a) Authorized share capital

Unlimited number of common shares without par value.

b) Issued share capital

Shares issued in the period ended December 31, 2015

During the year ended December 31, 2015, the Company:

a) Completed a non-brokered private placement of 4,000,000 common shares of the Company at a price of $0.05 per

share gross proceeds of $200,000.

b) Issued 1,837,857 common shares valued at 12.5 cents for a total of $147,028 to settle accounts payable and

accrued liabilities and amounts due to related parties

Shares issued in the year ended December 31, 2014

The Company issued 454,545 common shares to Lambert Private Equity LLC as a commitment fee on an investment

agreement valued at $150,000 (Note 20).

On July 11, 2014, the Company completed a private placement of 2,000,000 units at a price of $0.30 per unit for gross

proceeds of $600,000. Each unit consists of one common share and one common share purchase warrant which

entitles the holder to acquire one common share of the Company at a price of $0.45 expiring July 11, 2016.

In October 2014, Canoe issued 866,667 units pursuant to a non-brokered private at a price of $0.15 per unit for gross

proceeds of $133,000. Each unit consists of one common share and one-half share purchase warrant. Each whole

warrant entitles the holder to acquire an additional common share of the Company at a price of $0.25 expiring October

22, 2016. Under the residual value method, the warrants were ascribed a value of $8,867.

– 23 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

11. Stock options

The Company has adopted an incentive stock option plan in accordance with the policies of the TSXV, under which the

Board of Directors of the Company may grant to directors, officers, employees and consultants of the Company, nontransferable

options to purchase common shares provided the number of shares reserved for issuance under the stock

option plan shall not exceed 10% of the issued and outstanding common shares, exercisable for a period of up to five

years from the date of grant. The Board of Directors determines the price per common share and the number of

common shares, which may be allotted to directors, officers, employees and consultants, and all other terms and

conditions of the option, subject to the rules of the TSXV.

Stock option transactions are summarized as follows:

Number of stock Weighted average

options outstanding exercise price

Balance, December 31, 2013 $ 2,700,000 $ 1.53

Granted 2,150,000 0.25

Forfeited (100,000) 1.30

Balance, December 31, 2014 4,750,000 0.96

Forfeited (1,000,000) 1.24

Expired (500,000) 1.30

Balance, December 31, 2015, outstanding and exercisable $ 3,250,000 $ 0.82

Stock options outstanding as at December 31, 2015:

Remaining

Exercise contractual Options

Expiry date price ($) life (years) exercisable

June 24, 2016 2.00 0.48 300,000

August 30, 2016 2.35 0.67 75,000

July 11, 2017 1.30 1.53 1,025,000

October 18, 2017 1.30 1.80 100,000

March 4, 2019 0.25 3.18 1,750,000

3,250,000

The Company’s subsidiary, Canoe, has 1,850,000 stock options outstanding which are exercisable at $0.25 until

February 27, 2019.

– 24 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

11. Stock options (continued)

Stock-based compensation

During the year ended December 31, 2015, the Company granted nil (2014 – 2,150,000) options to directors, officers

and consultants. The weighted average fair value of options granted and vesting during the year was $nil (2014 –

$0.20).

Total stock-based compensation recognized in the statement of loss and comprehensive loss for the year ended

December 31, 2015 was $nil (2014 – $741,533). Of this amount, $nil (2014 – $422,157) relates to options granted and

vesting in the Company. The balance of $nil (2014 – $319,376) relates to the value of stock options granted by the

Company’s subsidiary, Canoe.

The following weighted average assumptions were used for the valuation of stock options granted by the Company:

2014

Expected share price volatility 115.00%

Expected risk-free interest rate 1.66%

Expected dividend yield 0.00%

Expected life of options, in years 5.00

Forfeiture rate 0.00%

No stock options were granted in year ended December 31, 2015.

12. Warrants

Warrant transactions are summarized as follows:

Number of Weighted average

warrants outstanding exercise price ($)

Balance, December 31, 2014 and December 31, 2015 2,000,000 0.45

Warrants outstanding as at December 31, 2015:

Remaining

Exercise contractual Options

Expiry date price ($) life (years) exercisable

July 11, 2016 0.45 0.53 2,000,000

The Company’s subsidiary, Canoe, has 1,763,315 warrants outstanding with a weighted average exercise price of

$2.37 and a weighted average remaining life of 0.79 years.

– 25 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

13. Supplemental disclosure with respect to cash flows

The significant non-cash transactions during the year ended December 31, 2015 included

a) Accruing exploration and evaluation expenditures of $14,730 through accounts payable and accrued liabilities;

b) Issuing 1,837,857 common shares valued at $147,028 to settle accounts payable and accrued liabilities and

amounts due to related parties; and

c) Issuing 2,083,308 shares of Canoe at a deemed price of $0.05 per share for total debt settlement of $104,166.

The significant non-cash transactions during the year ended December 31, 2014 included the Company issuing

2,165,000 common shares of Canoe Mining Ventures Corp. valued at $563,750 for exploration and evaluation assets

(Note 7), accruing exploration and evaluation expenditures of $450,704 through accounts payable and accrued

liabilities and issuing 454,545 common shares valued at $150,000 as a financing fee.

14. Income taxes

The income tax allowance differs from the amount resulting from the application of the combined Canadian income tax

rate as follows:

2015 2014

Loss before income taxes $(11,704,170) $ (3,415,450)

Combined statutory income tax rate 26.5% 26.5%

Income tax benefit at the combined Canadian statutory income tax rate (3,101,605) (938,501)

Permanent differences (354) 165,882

Change in tax benefits not recognized 3,094,751 671,063

Reversal of tax benefits not recognized 7,208 (24,509)

Actual income tax recovery $ – $ (126,065)

– 26 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

15. Related party transactions

Management compensation

2015 2014

Payment to key management personnel:

Cash compensation $ 93,929 $ 374,074

Payments with common shares for accrued fees $ 124,529 $ –

Stock-based compensation $ – $ 319,027

Management and consulting fees of $93,929 (2014 – $374,074) were paid to officers and directors or to companies

controlled by officers or directors.

During the year ended December 31, 2015, the Company incurred legal fees of $nil (2014 – $151,146) with a legal firm

where a partner is a Director of a significant subsidiary of the Company. As at December 31, 2015, $nil (2014 –

$84,542) was included in accounts payable and accrued liabilities with respect to these fees and certain expenses paid

on the company’s behalf.

During the year ended December 31, 2015, the Company issued 1,556,607 common shares at a price of $0.05 per

share for total debt settlement of $124,529 with related parties. Additionally, Canoe issued 700,000 common shares of

Canoe at a price of $0.05 per share for total debt settlement of $35,000 with related parties.

As at December 31, 2015, the Company owed $369,249 (2014 – $82,419) to directors and officers of the Company and

$221,717 (2014 – $264,844) to entities controlled by or associated with directors and officers of the Company. These

amounts were included in accounts payable and accrued liabilities.

During the year ended December 31, 2015, Canoe incurred legal fees of $15,751 (2014 – $151,146) with a legal firm

where a partner is a Director of Canoe. As at December 31, 2015, $104,970 (2014 – $84,542) was included in amounts

due to related parties with respect to these fees and certain expenses paid on Canoe’s behalf.

16. Capital management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and

sustain future development of the business. The capital of the Company consists of equity.

The Company manages its capital structure and makes adjustments in light of the changes in its economic

environment and the risk characteristics of the Company’s assets. To effectively manage the Company’s capital

requirements, the Company has in place planning, budgeting and forecasting process to help determine the funds

required to ensure the Company has the appropriate liquidity to meet its operating and growth objectives. With the

exception of commitments detailed in Note 20, there were no externally imposed capital requirements to which the

Company is subject as at December 31, 2015.

– 27 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

17. Financial instruments and risk management

The Company provides information about its financial instruments measured at fair value at one of three levels

according to the relative reliability of the inputs used to estimate the fair value. The hierarchy gives the highest priority

to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable

inputs. The three levels of the fair value hierarchy are as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quotes prices included in Level 1 that are observable for the asset or liability, either directly

(i.e., as prices) or indirectly (i.e., derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Fair Values

Cash is classified as Level 1. The Company’s cash is comprised primarily of current deposits held with Canadian and

South African chartered banks. The fair values of cash approximates their carrying values due to their short-term

nature. As at December 31, 2015, the Company had $879 bank overdraft which was included in accounts payable and

accrued liabilities.

The Company’s risk exposure and the impact on the financial instruments are summarized below:

Credit risk

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its

contractual obligations. The Company’s exposure to credit risk includes cash, term deposits, and cash equivalents.

The Company reduces its risk by maintaining its bank accounts at large Canadian, Barbados, and South African

financial institutions.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company’s

approach to managing liquidity risk is to provide reasonable assurance that it will have sufficient funds to meet its

liabilities when they come due. The Company manages its liquidity risk by forecasting cash flows required by

operations to and anticipated investing and financing activities. The Company’s financial obligations currently consist

of accounts payable and accrued liabilities, and amounts due to related parties. The carrying value of the accounts

payable, accrued liabilities and due to related parties approximates fair value as they are short term in nature.

The Company had cash at December 31, 2015 of $nil (December 31, 2014 – $33,965). At December 31, 2015, the

Company had accounts payable and accrued liabilities and due to related parties of $1,275,663 (December 31, 2014 –

$1,374,102). Additionally, the Company is liable for a promissory note of $65,862 past due and the repayment terms

on the debenture as per Note 8.

– 28 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

17. Financial instruments and risk management (continued)

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes

in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

a) Interest Rate Risk

The Company’s cash and cash equivalents consist of cash and term deposits held in bank accounts that earn interest

at variable interest rates. Future cash flows from interest income on cash will be affected by interest rate fluctuations.

Due to the short-term nature of these financial instruments fluctuations in market rates do not have a significant impact

on estimated fair values. The Company manages interest rate risk by maintaining an investment policy that focuses

primarily on preservation of capital and liquidity. The interest income earned on cash is minimal; therefore, the

Company is not subject to material interest rate risk.

b) Foreign Currency Risk

The Company is exposed to foreign currency risk of the South African rand. This risk is limited as contracts and loan

agreements are denominated in Canadian dollars where possible.

South African Rand

Cash 14,211

Accounts receivable 212,501

Accounts payable and accrued liabilities 2,333,265

Based on the net exposure at December 31, 2015, a 10% depreciation or appreciation of the South African rand

against the Canadian dollar would result in approximately a $18,845 increase or decrease in the Company’s

comprehensive loss for the period.

c) Other Price Risk

Other price risk is the risk that the fair or future cash flows of a financial instrument will fluctuate because of changes in

market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to

any other price risk.

– 29 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

18. Segmented information

Operating segments are reported in a manner consistent with internal reporting provided to the chief operating

decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance

of the operating segments and has been identified as the Company’s Chief Executive Officer.

The Company has two operating segments: the exploration, evaluation and development of precious metal mining

projects located in Ontario (“Canoe”) and located in South Africa (“South Africa Mining”). The rest of the entities within

the Company are grouped into a secondary segment (“Corporate”).

The segmental report is as follows:

South Africa

December 31, 2015 Canoe Mining Corporate Total

Property and equipment $ – $ – $ 41,329 $ 41,329

Exploration and evaluation 1,378,327 – – 1,378,327

Total assets 1,415,810 20,280 69,752 1,505,842

Total liabilities 1,357,276 208,734 884,324 2,450,334

Net loss 3,549,759 7,390,124 764,287 11,704,170

Net addition to exploration and evaluation

assets (5,262) (158,451) – (163,713)

Impairment to property acquistion costs and

exploration and evaluation assets (3,063,914) (7,359,732) – (10,423,646)

South Africa

December 31, 2014 Canoe Mining Corporate Total

Property and equipment $ – $ – $ 57,181 $ 57,181

Exploration and evaluation 4,447,503 1,837,891 – 6,285,394

Total assets 4,486,565 7,533,512 160,668 12,180,745

Total liabilities 1,182,438 206,789 513,998 1,903,225

Net loss 1,714,872 (83,012) 1,783,590 3,415,450

Net addition to exploration and evaluation

assets 3,933,973 89,068 – 4,023,041

– 30 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

19. Non-controlling interest

On December 5, 2013, Canoe entered into the Amalgamation Agreement with 2299895 and Giyani to carry out a

qualifying transaction. As a result of the transaction, Giyani’s interest in Canoe declined from 98.1% to 57.4%.

Pursuant to additional equity issuances by Canoe, the Company’s interest as at December 31, 2015 is 39.1%.

The Company has assessed its investment in Canoe and has judged that it has maintained control over Canoe as

defined by IFRS 10. Since equity issuances by Canoe did not result in a loss of control by Giyani, they have been

recorded as a transfer of equity to non-controlling interest holders. The major transactions not resulting in a loss of

control and the resulting impact are summarized and described as follows:

2015 2014

Balance, beginning of the year $ 1,828,278 $ 1,066,787

Change in non-controlling interest 344,322 1,465,145

Stock-based compensation in Canoe – 137,266

Share of loss attributable to non-controlling interests (2,137,166) (840,920)

Balance, end of the year $ 35,434 $ 1,828,278

Set out below is summary financial information for Canoe, in which the Company holds a 39.1% interest (2014 –

44.6%). The amounts disclosed are based on those included in the consolidated financial statements, before

intercompany eliminations.

Summarized consolidated statement of financial position  2015 2014

Current assets $ 37,481 $ 39,062

Current liabilities (1,357,276) (1,182,438)

(1,319,795) (1,143,376)

Non-current assets 1,378,329 4,447,503

Balance, end of the year $ 58,534 3,304,127

Accumulated non-controlling interest $ 35,434 $ 1,828,278

Summarized consolidated statement of loss and comprehensive loss  2015 2014

60.9% 55.3%

Expenses $ 485,843 $ 833,692

Net loss and comprehensive loss 3,549,759 1,649,871

Loss allocated to non-controlling interest $ 2,137,166 $ 840,920

Summarized consolidated statement of cash flows  2015 2014

60.9% 55.3%

Cash flows from operating activities $ (130,530) $ (996,982)

Cash flows from financing activities $ 200,000 $ 138,120

Cash flows from investing activities $ (78,861) $ (452,056)

– 31 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

19. Non-controlling interest (continued)

Of total cash and cash equivalents as of December 31, 2015, $nil (December 31, 2014 – $9,852) was held in

subsidiaries which have regulatory regulations, contractual restrictions or operate in countries where exchange

controls and other legal restrictions apply and are therefore not available for general use by the Company.

20. Commitments

The Company has the following obligations under operating leases over the next two years.

2016 2017 Total

Rent (Oakville Office) $ 95,243 $ 7,937 $ 103,180

Financing Agreement

During the year ended December 31, 2014, the Company entered into an equity agreement (“Equity Agreement”) with

Lambert Private Equity LLC (“Lambert”), a California-based private equity firm.

In accordance with the Equity Agreement, Lambert will commit up to a maximum of $10,000,000 over a period of three

years. And, at the Company’s discretion at any time over the next 5 years, Lambert’s commitment amount may be

increased from $10,000,000 to $25,000,000 with all other terms and conditions of the Equity Agreement remaining

unchanged and with no additional fees or compensation due.

Subject to certain conditions, upon notice by the Company (“Notice”), Lambert and associates of Lambert will

subscribe for, and the Company will agree to issue and sell, units (“Units”) through a series of private placements

(each, a “Private Placement”). The purchase price per Unit for any given Private Placement will be equal to the greater

of (i) 90% of the lowest daily volume-weighted average price of the common shares of the Company (each, a “Share”)

on the TSXV during the 15 trading days following Notice, or (ii) the lowest price permitted by the policies of the TSXV.

Each Unit will be comprised of one Share and one Share purchase warrant (each, a “Warrant”). Each Warrant will

entitle the holder thereof to acquire one additional Share for a period of five years from the date of issuance of such

Warrant at the lowest price permitted by the policies of the TSXV.

The number of Units to be subscribed for in each Private Placement will be determined by the Company in its sole

discretion and will be set forth in the applicable Notice. To the extent that Lambert arranges eligible substituted

purchasers for each Private Placement, its own obligation to subscribe for Units shall be reduced accordingly, subject

to certain conditions.

The proceeds from each Private Placement will be used for general corporate and working capital purposes and may

be used to evaluate and pursue strategic acquisitions. The Shares and Warrants underlying the Units issued pursuant

to each Private Placement will be subject to a four-month hold period.

Pursuant to the Equity Agreement, the Company paid Lambert a commitment fee valued at $150,000 by issuing

454,545 common shares which has been recorded in the consolidated statement of loss and comprehensive loss as a

financing fee.

– 32 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

20. Commitments (continued)

Prior to filing a Notice, Lambert may engage in purchases and sales of shares held for its own account as well as

shares borrowed by Lambert from third parties, including insiders. The obligation to deliver any borrowed securities

may be satisfied by delivery of shares subscribed for by Lambert pursuant to the Private Placement. With respect to

Shares subscribed for under the Agreement, one or more existing shareholders of the Company, including insiders,

may from time to time agree to exchange Shares owned by them that are not subject to resale restrictions with Shares

acquired under a Private Placement that are subject to the customary resale restrictions. The existing shareholders

who agree to loan shares, or agree to exchange shares which are not subject to resale restrictions, may be entitled to

receive a portion of the warrants issued on the Private Placement pursuant to arrangements made by Lambert. The

participation of each insider will be subject to the approval of the independent directors of the Company.

Each Private Placement will remain subject to receipt of regulatory approval from the TSXV. While the Company

cannot provide any assurances that it will be successful in completing the Equity Agreement, it is the Company’s

intention to obtain the funding.

21. Subsequent events

(i) On October 14, 2015, the Company signed a letter of intent (“LOI”) with Crystal Capital Wealth Corporation

(“Crystal”). The LOI proposes a transaction pursuant to which the Company would acquire all the issued and

outstanding securities of Crystal by means of a Reverse Takeover and Change of Business (the “Transaction”).

Upon completion of the Transaction, the Company will change its name and hold a 100% interest in Crystal. As

consideration, it was expected that common shares in the capital of the Company would be issued to the shareholders

of Crystal.

Crystal is an innovative, diversified financial services firm headquartered in Toronto, Canada, providing a holistic suite

of financial products and services that cater to clients from all walks of life and income levels. Founded in its belief that

Debt, Taxes, Inflation and Cash Flow are the biggest hazards to ensuring a certain lifestyle in retirement, Crystal has

integrated debt management services, investment services, insurance, mortgage services and tax services under one

roof for a 360-degree plan. This plan was designed to help individuals and families meet or exceed their financial goals

and expectations.

The Transaction and the terms outlined in the LOI were subject to a number of conditions, including the parties

executing a binding definitive agreement with respect to the Transaction, completion of due diligence, TSXV approval,

and receipt of all necessary regulatory and shareholder approvals and the approval of a Sponsor under TSXV Policy

2.2, unless an exemption was available therefrom. If all conditions were satisfied and a definitive agreement was

executed, it was expected that the Transaction would close on or about March 31, 2016.

In connection with the Transaction, it was contemplated that an equity financing of up to $5,000,000 would be

undertaken by Crystal, with a minimum of $2,000,000 of this financing closing concurrently with the Transaction. In

addition, it was contemplated that the common shares of Giyani would be consolidated on a basis to be determined by

the parties.

On March 31, 2016, the Company and Crystal terminated the “Agreement” as it has expired. Under the terms of the

Agreement, Giyani is entitled to and will pursue collecting the US$250,000 break fee. Crystal loaned the Company

CDN$35,000 which will be deducted from the break fee owing.

– 33 –

GIYANI GOLD CORP.

Notes to Consolidated Financial Statements

December 31, 2015 and 2014

(Expressed in Canadian Dollars)

21. Subsequent events (continued)

(ii) On April 6, 2016, Canoe and Wesdome Gold Mines Ltd. (“Wesdome”) announced that they had entered into a

definitive agreement (the “Purchase Agreement”) whereby Wesdome has agreed to purchase from Canoe, a 100%

interest in the Coldstream Property (“Coldstream”) and the Hamlin-Deaty Creek Property (“Hamlin”) (collectively, the

“Properties”).

Terms of the Purchase Agreement

Pursuant to the terms and conditions of the Purchase Agreement, Wesdome will acquire the Properties from Canoe

free from all liens, mortgages, charges, pledges, encumbrances or other burdens with all rights now or thereafter

attached thereto (other than with respect to any royalties set forth in the Purchase Agreement). As consideration for

the Properties, Wesdome shall pay or issue (as applicable) to Canoe the following at the closing of the acquisition:

(a) with respect to the purchase of the Coldstream portion of the Properties:

(i) an aggregate of $400,000 cash; and

(ii) 454,545 fully paid and non-assessable common shares in the capital of Wesdome; and

(b) with respect to the purchase of the Hamlin portion of the Properties, an aggregate of $100,000 cash.

The proposed transaction, including the issuance of the common shares by Wesdome, is subject to regulatory

approval by the Exchange.

– 34 –