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GIYANI GOLD CORP.

CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2016

(Expressed in Canadian Dollars)

(UNAUDITED)

Notice to Reader

The accompanying unaudited condensed interim consolidated financial statements of Giyani Gold Corp. (the

“Company”) have been prepared by and are the responsibility of management. The unaudited condensed interim

consolidated financial statements as at and for the three months ended March 31, 2016 have not been reviewed by the

Company’s auditors.

GIYANI GOLD CORP.

Condensed Interim Consolidated Statements of Financial Position

(Expressed in Canadian Dollars)

(Unaudited)

March 31, December 31,

2016 2015

Assets

Current assets

Cash $ 17,211 $ –

Restricted cash (note 3) 5,000 5,000

Amounts receivable 13,843 21,294

Prepaids 46,326 59,892

Total Current assets 82,380 86,186

Equipment (note 4) 39,507 41,329

Exploration and evaluation assets (note 5) 1,383,471 1,378,327

Total Assets $ 1,505,358 $ 1,505,842

Liabilities

Current liabilities

Accounts payable and accrued liabilities $ 1,486,000 $ 1,275,663

Promissory note (note 6) 66,583 65,862

Debenture (note 7) 416,161 416,161

Amounts due to related parties (note 11) 719,945 692,648

Total Liabilities 2,688,689 2,450,334

Deficiency

Share capital (note 8(b)) 18,520,824 18,520,824

Contributed surplus (note 9) 5,090,180 5,090,180

Warrants (note 10) 4,093,233 4,093,233

Cumulative translation adjustment (147,989) (150,673)

Deficit (28,712,295) (28,533,490)

(1,156,047) (979,926)

Non-controlling interest (note 15) (27,284) 35,434

(1,183,331) (944,492)

Total Liabilities and Deficiency $ 1,505,358 $ 1,505,842

Nature of operations and going concern (note 1)

Capital management (note 12)

Commitments and contingency (note 16)

Subsequent events (note 18)

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these

statements.

– 1 –

GIYANI GOLD CORP.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Expressed in Canadian Dollars)

(Unaudited)

Three Months Ended

March 31,

2016 2015

Expenses

Corporate, general and administration $ 241,031 $ 325,887

Amortization (note 4) 1,822 2,868

Net loss before interest and other items 242,853 328,755

Foreign exchange gain (1,330) (83)

Interest and other income – (24,772)

Gain on disposal of equipment – (47)

Net loss for the period $ 241,523 $ 303,853

Other comprehensive income

Items that may be subsequently reclassified to profit and loss

Currency translation adjustment (2,684) (66,303)

Other comprehensive loss for the period $ 238,839 $ 237,550

Attributable to:

Owners of the parent $ 178,805 $ 234,145

Non-controlling interest 62,718 69,708

Net loss for the period $ 241,523 $ 303,853

Basic and diluted loss per share $ 0.00 $ 0.01

Weighted average number of shares outstanding 63,270,981 57,433,123

The notes to the unaudited condensed interim consolidated financial statements are an integral part of these

statements.

– 2 –

GIYANI GOLD CORP.

Condensed Interim Consolidated Statements of Changes in Shareholders’ Deficiency

(Expressed in Canadian Dollars)

(Unaudited)

Share Capital Non- Cumulative

Obligation to Contributed Controlling Translation

Number Amount issue shares surplus Warrant Interest Adjustment Deficit Total

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 – – – – 217,208 – (52,208) 165,000

Obligation to issue shares – – 145,000 – – – – 145,000

Currency translation adjustment – – – – – – 66,303 – 66,303

Net loss for the period – – – – – (69,708) – (234,145) (303,853)

Balance, March 31, 2015 57,433,123 $ 18,173,796 $ 145,000 $ 5,090,180 $ 4,093,233 $ 1,975,778 $ 84,666 $ (19,212,683) $ 10,349,970

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)

Expiry of warrants – – – – – – 2,684 – 2,684

Net loss for the period – – – – – (62,718) – (178,805) (241,523)

Balance, March 31, 2016 63,270,981 $ 18,520,824 $ – $ 5,090,180 $ 4,093,233 $ (27,284) $ (147,989) $ (28,712,295) $ (1,183,331)

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

– 3 –

GIYANI GOLD INC.

Condensed Interim Consolidated Statements of Cash Flows

(Expressed in Canadian Dollars)

(Unaudited)

Three Months Ended

March 31,

2016 2015

Operating Activities

Net loss for the period $ (241,523) $ (303,853)

Accrued interest expense 721 715

Amortization 1,822 2,868

Gain on disposal of equipment – (47)

Net change in non-cash working capital:

Amounts receivable 7,451 60,092

Prepaid expenses 13,566 11,890

Accounts payable and accrued liabilities 210,337 38,053

Amounts due to related parties 27,297 123,166

Cash provided by (used in) operating activities 19,671 (67,116)

Investing Activities

Exploration and evaluation asset expenditures (5,144) (20,320)

Cash used in investing activities (5,144) (20,320)

Financing Activities

Proceeds on obligation to issue shares – 145,000

Proceeds from issuance of shares in subsidiary, net of costs – 165,000

Cash provided by financing activities – 310,000

Effect of foreign exchange on cash 2,684 1,463

Change in cash during the period 17,211 224,027

Cash, beginning of the period – 33,965

Cash, end of the period $ 17,211 $ 257,992

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

– 4 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

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 unaudited condensed interim 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 $241,523 for the three months ended March 31, 2016 (three months ended March

31, 2015 – $303,853) and had an accumulated deficit of $28,712,295 at March 31, 2016 (December 31, 2015 –

$28,533,490).

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 March 31, 2016 in the unaudited

condensed interim consolidated 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 March 31, 2016, the Company’s subsidiary, Canoe

Mining Ventures Corp. (“Canoe”) entered into an agreement to sell two of its assets to Wesdome Gold Mines Ltd.

(“Wesdome”) (see note 18).

These unaudited condensed interim consolidated 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 or 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.

– 5 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

2. Summary of significant accounting policies

Statement of compliance

These unaudited condensed interim consolidated financial statements, including comparatives, have been prepared in

accordance with International Accounting Standards (“IAS”) 34 ‘Interim Financial Reporting’ (“IAS 34”) using

accounting policies consistent with IFRS issued by the International Accounting Standards Board (“IASB”) and

Interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). The accounting policies

and methods of computation applied by the Company in these unaudited condensed interim consolidated financial

statements are the same as those applied in the Company’s annual consolidated financial statements for the year

ended December 31, 2015. Any subsequent changes to IFRS that are given effect in the Company’s annual

consolidated financial statements for the year ending December 31, 2016 could result in resatement of these

unaudited condensed interim consolidated financial statements.

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

May 27, 2016.

New standards not yet adopted

IFRS 9 — Financial instruments (“IFRS 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.

3. Restricted cash

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

2015 – $5,000). The financial institution holds a $5,000 (December 31, 2015 – $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 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

4. Equipment

Furniture

and Mining and Computer

Cost Fixture Exploration Equipment Equipment Total

Balance, December 31, 2015 and

March 31, 2016 $ 31,186 $ 21,724 $ 21,175 $ 32,743 $ 106,828

Accumulated depreciation

Balance, December 31, 2015 $ 14,865 $ 20,886 $ 21,175 $ 8,573 $ 65,499

Depreciation for the period 584 30 – 1,208 1,822

Balance, March 31, 2016 $ 15,449 $ 20,916 $ 21,175 $ 9,781 $ 67,321

Net book value

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

Balance, March 31, 2016 $ 15,737 $ 808 $ – $ 22,962 $ 39,507

5. Exploration and evaluation assets

Canada Hamlin

Deaty Creek Coldstream Kerrs Total

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

Current expenditures – 5,144 – 5,144

Balance, March 31, 2016 $ 100,000 $ 1,172,886 $ 110,585 $ 1,383,471

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 March 31, 2016 and December 31, 2015, 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 wrote down the value

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

Northern Ontario, Canada

UCEL Option Agreement

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.

– 7 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

5. Exploration and evaluation assets (continued)

Northern Ontario, Canada (continued)

Keating Property, Ontario

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.

Keating East

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.

Killen 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 March 31, 2016, the Company entered into an agreement to sell the Hamlin-Deaty Creek Property (see

Note 18).

– 8 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

5. 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 Gold Corp. (“Birh 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 March 31, 2016, the Company entered into an agreement to sell the Coldstream Property (see note

18).

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%.

6. 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 $66,583 as of March 31, 2016 (December 31, 2015 –

$65,862) which includes $8,583 (December 31, 2015 – $7,862) of accrued interest expense. The promissory note is

currently being renegotiated.

– 9 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

7. 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.

8. Share capital

a) Authorized share capital

Unlimited number of common shares without par value.

b) Issued share capital

No shares were issued during the three months ended March 31, 2016.

During the three months ended March 31, 2015, the Company received funds of $145,000 for a private placement of

2,900,000 common shares at a price of $0.05 per share which were issued subsequent to March 31, 2015.

– 10 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

9. 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, 2014 4,750,000 $ 0.96

Forfeited (1,000,000) 1.24

Balance, March 31, 2015 3,750,000 $ 0.89

Balance, December 31, 2015 3,250,000 $ 0.82

Forfeited (1,525,000) 1.04

Balance, March 31, 2016 1,725,000 $ 0.63

Stock options outstanding as at March 31, 2016:

Remaining

Exercise contractual Options

Expiry date price ($) life (years) exercisable

July 11, 2017 1.30 1.28 525,000

October 18, 2017 1.30 1.55 100,000

March 4, 2019 0.25 2.93 1,100,000

1,725,000

The Company’s subsidiary, Canoe, has 1,600,000 stock options outstanding which are exercisable at $0.25 until

February 27, 2019.

Stock-based compensation

Total stock-based compensation recognized in the unaudited condensed interim consolidated statement of loss and

comprehensive loss for the three months ended March 31, 2016 was $nil (three months ended March 31, 2015 – $nil).

– 11 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

10. Warrants

Warrant transactions are summarized as follows:

Number of Weighted average

warrants outstanding exercise price ($)

Balance, December 31, 2014, March 31, 2015

December 31, 2015 and March 31, 2016 2,000,000 0.45

Warrants outstanding as at March 31, 2016:

Remaining

Exercise contractual Options

Expiry date price ($) life (years) exercisable

July 11, 2016 0.45 0.28 2,000,000

The Company’s subsidiary, Canoe, has 1,133,315 warrants outstanding with a weighted average exercise price of

$3.36 and a weighted average remaining life of 0.69 years.

11. Related party transactions

Management and consulting fees of $12,500 (three months ended March 31, 2015 – $nil) were paid to officers and

directors or to companies controlled by officers or directors during the three months ended March 31, 2016.

As at March 31, 2016, the Company owed $492,248 (December 31, 2015 – $369,249) to directors and officers of the

Company and $225,697 (December 31, 2015 – $221,717) to entities controlled by or associated with directors and

officers of the Company. These amounts were included in due to related parties.

– 12 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

12. 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 16, there were no externally imposed capital requirements to which the

Company is subject as at March 31, 2016.

13. 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 March 31, 2016, the Company had $17,211 cash balance.

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 and restricted cash.

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

financial institutions.

– 13 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

13. Financial instruments and risk management (continued)

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 amounts due to related parties approximates fair value as they are short term in nature.

The Company had cash at March 31, 2016 of $17,211 (December 31, 2015 – $nil). As at March 31, 2016, the

Company had accounts payable and accrued liabilities and amounts due to related parties of $2,205,945 (December

31, 2015 – $1,968,311). Additionally, the Company is liable for a promissory note of $66,583 past due and the

repayment terms on the debenture as per note 6.

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 consists of cash 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 171,438

Amounts receivable 54,501

Accounts payable and accrued liabilities 2,372,196

Based on the net exposure at March 31, 2016, a 10% depreciation or appreciation of the South African rand against

the Canadian dollar would result in approximately a $18,921 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.

– 14 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

14. 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

March 31, 2016 Canoe Mining Corporate Total

Equipment $ – $ – $ 39,507 $ 39,507

Exploration and evaluation assets 1,383,471 – – 1,383,471

Total assets 1,418,069 19,918 67,371 1,505,358

Total liabilities 1,462,598 209,133 1,016,958 2,688,689

Net loss 103,062 3,447 135,014 241,523

Net addition to exploration and evaluation

assets 5,144 – – 5,144

South Africa

December 31, 2015 Canoe Mining Corporate Total

Equipment $ – $ – $ 41,329 $ 41,329

Exploration and evaluation assets 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 acquisition costs and

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

– 15 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

15. 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 March 31, 2016 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:

March 31, December 31,

2016 2015

Balance, beginning of the period $ 35,434 $ 1,828,278

Change in non-controlling interest – 344,322

Stock-based compensation in Canoe – –

Share of loss attributable to non-controlling interests (62,718) (2,137,166)

Balance, end of the period $ (27,284) $ 35,434

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

31, 2015 – 39.1%). The amounts disclosed are based on those included in the unaudited condensed interim

consolidated financial statements, before intercompany eliminations.

March 31, December 31,

Summarized consolidated statement of financial position  2016 2015

Current assets $ 34,599 $ 37,481

Current liabilities (1,462,597) (1,357,276)

(1,427,998) (1,319,795)

Non-current assets 1,383,471 1,378,329

Balance, end of the year $ (44,527) $ 58,534

Accumulated non-controlling interest $ (27,284) $ 35,434

Three Months Ended

March 31,

Summarized consolidated statement of loss and comprehensive loss  2016 2015

60.9% 59.1%

Expenses $ 103,060 $ 125,967

Net loss and comprehensive loss 103,060 125,967

Loss allocated to non-controlling interest $ 62,718 $ 60,708

– 16 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

15. Non-controlling interest (continued)

Three Months Ended

March 31,

Summarized consolidated statement of cash flows  2016 2015

60.9% 59.1%

Cash flows from operating activities $ 4,280 $ (21,086)

Cash flows from financing activities $ – $ 165,000

Cash flows from investing activities $ – $ (2,920)

16. Commitments and contingency

Commitment

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.

– 17 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

16. Commitments and contingency (continued)

Commitment (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 Equity 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.

Contingency

The Company has been in arrears or in default on payments to some of its vendors, which, if not cured on a timely

basis, may lead to legal proceedings against the Company. The amounts owed to the vendors as invoiced have been

fully included in accounts payable and accrued liabilities as at March 31, 2016, however, the potential legal

proceedings may result in interests, penalties or legal costs, the amount of which are not determinable as at March 31,

2016.

17. Management cease trade order

Giyani was in technical default of the provisions of NI 51-102 requiring the Company to file its audited annual

consolidated financial statements for the years ended December 31, 2015 and 2014 and management discussion and

analysis (“MD&A”) by March 30, 2016 resulting from its listing on the Johannesburg Stock Exchange (“JSE”). The

Company remedied this default by filing its annual financial statements and MD&A on April 29, 2016. Further, Giyani

was also in technical default by not filing its unaudited condensed interim consolidated financial Statements and MD&A

for the three months ended March 31, 2016 45 days after the end of the first quarter. Giyani has now remedied this

default by filing the statements on May 27, 2016. Giyani will be filing their Q2 statements on or before August 15, 2016,

the due date under NI 51-102.

– 18 –

GIYANI GOLD CORP.

Notes to Condensed Interim Consolidated Financial Statements

March 31, 2016

(Expressed in Canadian Dollars)

(Unaudited)

18. Subsequent event

On April 6, 2016, Canoe and 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 TSXV.

– 19 –MCRApril272016