XTRA-GOLD RESOURCES CORP.
INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
for the Three Months Ended
March 31, 2024
(expressed in U.S. Dollars, except where noted)
NOTICE TO READER
The accompanying unaudited interim consolidated financial statements of Xtra-Gold Resources Corp. (the "Company") have been prepared by and are the responsibility of management. The unaudited condensed interim consolidated financial statements have not been reviewed by the Company's auditors.
INDEX TO FINANCIAL STATEMENTS | |
Page | |
Condensed Interim Consolidated Balance Sheets as of March 31, 2024 (unaudited) and December 31, 2023 | 1 |
Condensed Interim Consolidated Statements of Operations for the three months ended March 31, 2024 and 2023 (unaudited) | 2 |
Condensed Interim Consolidated Statements of Equity (unaudited) | 3 |
Condensed Interim Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023 (unaudited) | 4 |
Notes to the Interim Condensed Consolidated Financial Statements (unaudited) | 5 |
XTRA-GOLD RESOURCES CORP.
INTERIM CONSOLIDATED BALANCE SHEETS (Expressed in U.S. Dollars - Unaudited)
AS AT | March 31 31, 2024 | December 31, 2023 | |||
(unaudited) | |||||
ASSETS | |||||
Current | |||||
Cash and cash equivalents | $ | 8,447,054 | $ | 7,154,462 | |
Investment in trading securities (Note 5) | 2,171,556 | 2,212,401 | |||
Prepaids (Note 4) | 81,870 | 102,185 | |||
Inventory | 459,601 | 817,597 | |||
Total current assets | 11,160,801 | 10,286,645 | |||
Restricted cash (Note 3, 9) | 296,322 | 296,322 | |||
Equipment, net (Note 6) | 510,036 | 543,197 | |||
Mineral properties (Note 7) | 734,422 | 734,422 | |||
TOTAL ASSETS | $ | 12,700,861 | $ | 11,860,586 | |
LIABILITIES AND EQUITY | |||||
Current | |||||
Accounts payable and accrued liabilities (Note 8) | $ | 1,574,758 | $ | 1,281,060 | |
Due to related parties (Note 11) | 180,717 | 152,415 | |||
Asset retirement obligation (Note 9) | 92,571 | 85,628 | |||
Total current liabilities | 1,848,046 | 1,519,103 | |||
Total liabilities | 1,848,046 | 1,519,103 |
Commitment and contingencies (Note 14)
Equity
Capital stock (Note 10)
Authorized - 250,000,000 common shares with a par value of $0.001 Issued and outstanding
46,201,217 common shares (December 31, 2023 - 46,201,217 common shares) Additional paid in capital
Shares in treasury
Accumulated deficit
46,11946,201
31,645,59431,704,814
(24,386)(20,744)
(21,000,339)(21,511,326)
Total Xtra-Gold Resources Corp. stockholders' equity | 10,666,988 | 10,218,945 | |||
Non-controlling interest | 185,827 | 122,538 | |||
Total equity | 10,852,815 | 10,341,483 | |||
TOTAL LIABILITIES AND EQUITY | $ | 12,700,861 | $ | 11,860,586 | |
The accompanying notes are an integral part of these interim consolidated financial statements.
1
XTRA-GOLD RESOURCES CORP.
INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS (Expressed in U.S. Dollars - Unaudited)
Three Month | Three Month |
Period Ended | Period Ended |
Mar. 31, 2024 | Mar. 31, 2023 |
EXPENSES
Amortization
Exploration
General and administrative
EXPENSES BEFORE OTHER INCOME (EXPENSES)
OTHER INCOME (EXPENSES)
Recovery of gold, net (Note 11)
Foreign exchange gain (loss)
Net gain (loss) on trading securities
Interest earned and dividends
Impairment loss on trading securities
$33,161 $
255,277
171,843
(460,281)
1,122,296
(86,853)
92,723
106,391
35,781
268,761
103,228
(407,770)
1,338,420
(151,108)
(20,437)
79,038
-
OTHER INCOME, NET | 1,234,557 | |||
Income before tax | 774,276 | |||
Income tax expense | (200,000) | |||
Net income | 574,276 | |||
Net income attributable to non-controlling interest | (63,289) | |||
Net income (loss) attributable to Xtra-Gold Resources Corp. | $ | 510,987 | $ | |
1,245,913
838,143
(200,000)
638,143
(84,946)
553,197
Basic income attributable to common shareholders | ||||
per common share | $ | 0.01 | $ | 0.01 |
Diluted income attributable to common shareholders | ||||
per common share | $ | 0.01 | $ | 0.01 |
Basic weighted average number of common shares outstanding | 46,142,924 | 46,625,588 | ||
Diluted weighted average number of common shares outstanding | 48,431,424 | 48,646,588 | ||
The accompanying notes are an integral part of these interim consolidated financial statements.
2
XTRA-GOLD RESOURCES CORP.
INTERIM CONSOLIDATED STATEMENTS OF EQUITY (Expressed in U.S. Dollars - Unaudited)
Common Stock | ||||||||||||||
Additional | Shares | Non- | ||||||||||||
Number | Paid in | in | Accumulated | Controlling | ||||||||||
of Shares | Amount | Capital | Treasury | Deficit | Interest | Total | ||||||||
Balance, December 31, 2022 | 46,446,917 | $ | 46,447 | $ | 31,838,291 | $ | (6,892) | $ (21,345,398) | $ (58,114) | $ | 10,474,334 | |||
Stock-based compensation | - | - | - | - | - | - | - | |||||||
Repurchase of shares | (11,500) | (12) | (6,880) | 6,892 | - | - | - | |||||||
Shares in treasury | - | - | - | - | - | - | - | |||||||
Net income | - | - | - | - | 553,197 | 84,946 | 638,143 | |||||||
Balance, March 31, 2023 | 46,435,417 | 46,435 | 31,831,411 | - | (20,792,201) | 26,832 | 11,112,477 | |||||||
Stock-based compensation | - | - | 23,750 | - | - | - | 23,750 | |||||||
Repurchase of shares | (234,200) | (234) | (143,455) | (20,744) | - | - | (164,433) | |||||||
Shares in treasury | - | - | - | - | - | - | - | |||||||
Net loss | - | - | - | - | (719,125) | 95,706 | (623,419) | |||||||
Balance, December 31, 2023 | 46,201,217 | 46,201 | 31,704,814 | (20,744) | (21,511,326) | 122,538 | 10,341,483 | |||||||
Repurchase of shares | (82,300) | (82) | (59,220) | - | - | - | (59,302) | |||||||
Shares in treasury | - | - | - | (3,642) | - | - | (3,642) | |||||||
Net income | - | - | - | - | 510,987 | 63,289 | 574,276 | |||||||
Balance, March 31, 2024 | 46,201,217 | $ | 46,119 | $ | 31,645,594 | $ | (24,386) | $ (21,000,339) | $ 185,827 | $ | 10,852,815 | |||
The accompanying notes are an integral part of these interim consolidated financial statements.
5
XTRA-GOLD RESOURCES CORP.
INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. Dollars - Unaudited)
Three Month | Three Month |
Period Ended | Period Ended |
Mar. 31, 2024 | Mar. 31, 2023 |
CASH FLOWS FROM OPERATING ACTIVITIES | ||||
Net income for the period | $ | 574,276 | $ | 638,143 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation | 33,161 | 35,781 | ||
Stock-based compensation | - | - | ||
Unrealized foreign exchange loss (gain) | 10,962 | 64,039 | ||
Net (gain) loss on sales of trading securities | (92,723) | 20,437 | ||
Impairment loss on trading securities | - | - | ||
Changes in operating assets and liabilities: | ||||
(Increase) decrease in receivables and other assets | 20,315 | 29,200 | ||
Decrease (increase) in inventory | 357,996 | 300,224 | ||
Change in asset retirement obligation | 6,943 | - | ||
Increase (decrease) in accounts payable and accrued liabilities | 322,000 | 247,845 | ||
Net cash provided by operating activities | 1,232,930 | 1,335,669 | ||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||
Purchase of trading securities | (161,079) | (376,752) | ||
Proceeds on sale of trading securities | 283,685 | 514,665 | ||
Acquisition of equipment | - | - | ||
Net cash used in investing activities | 122,606 | 137,913 | ||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||
Proceeds from exercise of options and warrants | - | - | ||
Repurchase of capital stock | (62,972) | - | ||
Net cash (used in) provided by financing activities | - | - | ||
Change in cash and cash equivalents and restricted cash during the period | 1,292,564 | 1,473,582 | ||
Cash and cash equivalents and restricted cash, beginning of the year | 7,450,784 | 6,077,322 | ||
Cash and cash equivalents and restricted cash, end of the period | $ | 8,743,348 | $ | 7,550,904 |
Reconciliation of Cash and Cash Equivalents and Restricted Cash | ||||
Cash and cash equivalents at beginning of year | $ | 7,154,462 | $ | 5,781,000 |
Restricted cash at beginning of year | 296,322 | 296,322 | ||
Cash and cash equivalents and restricted cash at beginning of year | $ | 7,450,784 | $ | 6,077,322 |
Cash and cash equivalents at end of period | $ | 8,447,026 | $ | 7,254,582 |
Restricted cash at end of period | 296,322 | 296,322 | ||
Cash and cash equivalents and restricted cash at end of period | $ | 8,743,348 | $ | 7,550,904 |
Supplemental disclosure with respect to cash flows (Note 12)
The accompanying notes are an integral part of these consolidated financial statements.
6
XTRA-GOLD RESOURCES CORP.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars - Unaudited)
March 31, 2024
-
HISTORY AND ORGANIZATION OF THE COMPANY
Xtra-Gold Resources Corp., previously Silverwing Systems Corporation, was incorporated under the laws of the State of Nevada on September 1, 1998, pursuant to the provisions of the Nevada Revised Statutes. In 2003, the Company became a resource exploration company. The Company has also engaged in recovery of gold through alluvial operations on its claims. On November 30, 2012, the Company redomiciled from the USA to the British Virgin Islands.
In 2004, the Company acquired 100% of the issued and outstanding capital stock of Canadiana Gold Resources Limited
("Canadiana") and 90% of the issued and outstanding capital stock of Goldenrae Mining Company Limited ("Goldenrae").
Both companies are incorporated in Ghana and the remaining 10% of the issued and outstanding capital stock of Goldenrae is held by the Government of Ghana. On December 21, 2005, Canadiana changed its name to Xtra-Gold Exploration Limited
("XG Exploration"). On January 13, 2006, Goldenrae changed its name to Xtra-Gold Mining Limited ("XG Mining"). - GOING CONCERN
The Company is in development as an exploration company. It may need financing for its exploration and acquisition activities. The Company has incurred a gain of $510,987 for the period ended March 31, 2024, and it has an accumulated deficit of $21,000,339. Results for the period ended March 31, 2024 are not necessarily indicative of future results. The uncertainty of gold recovery and the fact the Company does not have a demonstrably viable business to provide future funds, raises substantial doubt about its ability to continue as a going concern for one year from the issuance of the financial statements. The ability of the Company to continue as a going concern is dependent on the Company's ability to raise additional capital and implement its business plan, which is typical for junior exploration companies. The financial statements do not include any adjustments related to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
Management of the Company ("Management") is of the opinion that sufficient financing will be obtained from external sources and further share issuances will be made to meet the Company's obligations. Although alluvial gold sales have contributed significantly to the Company, this funding source is nearly depleted and cannot be relied on as a source of future funding. The
Company's discretionary exploration activities do have considerable scope for flexibility in terms of the amount and timing of exploration expenditure, and expenditures may be adjusted accordingly if required. - SIGNIFICANT ACCOUNTING POLICIES Basis of presentation
These unaudited condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles of the United States of America ("US GAAP") for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. generally accepted accounting principles for complete annual financial statements. Therefore, these unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, 2023, included in our Annual Report on Form 20-F, filed with the SEC on April 1, 2024. These statements reflect all adjustments, consisting of normal recurring adjustments, which, in the opinion of management, are necessary for fair presentation of the information contained therein. The financial statements and notes are representations of the Company's management and its board of directors, who are responsible for their integrity and objectivity.
Principles of consolidation
These consolidated financial statements include the accounts of the Company, its wholly owned subsidiaries, XG Exploration and its 90% owned subsidiary, XG Mining . All intercompany accounts and transactions have been eliminated on consolidation.
Use of estimates
The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual
7
XTRA-GOLD RESOURCES CORP.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars - Unaudited)
March 31, 2024
results could differ from those estimates. Significant areas requiring the use of estimates include the carrying value and recoverability of mineral properties, inputs used in the calculation of stock-based compensation and warrants, inputs used in the calculation of the asset retirement obligation, the valuation allowance applied to level 3 investments, and the valuation allowance applied to deferred income taxes. Actual results could differ from those estimates and would impact future results of operations and cash flows.
Cash and cash equivalents
The Company considers highly liquid investments with original maturities of three months or less to be cash equivalents. At March 31, 2024 and December 31, 2023, cash and cash equivalents consisted of cash held at financial institutions.
The Company has been required by the Ghanaian government to post a bond for environmental reclamation. This cash has been recorded as restricted cash, a non-current asset.
Prepaids
Prepaid amounts are recognized in an earlier period than they are expensed. These amounts are expensed in the period to which they relate.
Inventory
Inventories are initially recognized at cost and subsequently stated at the lower of cost or net realizable value. The Company's inventory consists of raw gold recovered from alluvial operations. Costs are determined using the first-in,first-out ("FIFO") method and includes expenditures incurred in extracting the raw gold, other costs incurred in bringing them to their existing location and condition, and the cost of reclaiming the disturbed land to a natural state.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. Inventories are written down to net realizable value when the cost of inventories is not estimated to be recoverable due to declining selling prices, or other issues related to the sale of gold.
Recovery of gold
Recovery of gold and other income is recognized when title and the risks and rewards of ownership to delivered bullion and commodities pass to the buyer and collection is reasonably assured. Recovery of gold, net of expenses, is not related to exploration and is not the core business of the Company, so proceeds from gold recovery are recognized as other income.
Trading securities
The Company's trading securities are reported at fair value, with realized and unrealized gains and losses included in earnings.
Non-Controlling Interest
The consolidated financial statements include the accounts of XG Mining. All intercompany accounts and transactions have been eliminated upon consolidation. The Company records a non-controlling interest which reflects the 10% portion of the earnings (loss) of XG Mining allocable to the holders of the minority interest.
Equipment
Equipment is recorded at cost and is being depreciated over its estimated useful lives, which recognizes operating conditions in Ghana, using the declining balance method at the following annual rates:
Furniture and equipment | 20% |
Computer equipment | 30% |
8
XTRA-GOLD RESOURCES CORP.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars - Unaudited)
March 31, 2024
Vehicles | 30% |
Mining and exploration equipment | 20% |
Mineral properties and exploration and development costs
The costs of acquiring mineral rights are capitalized at the date of acquisition. After acquisition, various factors can affect the recoverability of the capitalized costs. If, after review, management concludes that the carrying amount of a mineral property is impaired, it will be written down to estimated fair value. Exploration costs incurred on mineral properties are expensed as incurred. Development costs incurred on proven and probable reserves will be capitalized. Upon commencement of production, capitalized costs will be amortized using the unit-of-production method over the estimated life of the ore body based on proven and probable reserves (which exclude non-recoverable reserves and anticipated processing losses). When the Company receives an option payment related to a property, the proceeds of the payment are applied to reduce the carrying value of the exploration asset. The mineral properties do not fall under the guidance of ASC 842.
Impairment of long-lived assets
Long-lived assets are evaluated for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted future cash flows to the recorded value of the asset. If impairment is indicated, the asset is written down to its estimated fair value.
No impairment charge was deemed necessary for mineral properties in 2024 or 2023. Assets to be disposed of are reported at the lower of their carrying amount or fair value less costs to sell.
Asset retirement obligations
The Company records the estimated rehabilitation value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development, and/or normal use of the long-lived assets. Subsequent to the initial measurement of the asset retirement obligation, the obligation is adjusted at the end of each period to reflect the changes in the estimated future cash flows underlying the obligation (asset retirement cost).
Stock-based compensation
The Company accounts for stock compensation arrangements under ASC 718 "Compensation - Stock Compensation" using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the service period, which is usually the vesting period. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity's equity instruments or that may be settled by the issuance of those equity instruments.
An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee, including directors of the Company.
In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of the goods and services received.
We use the fair value method for equity instruments granted to non-employees and use the Black-Scholes model for measuring the fair value of options. The stock based fair value compensation is determined as of the date of the grant (measurement date) and is recognized over the vesting periods.
9
XTRA-GOLD RESOURCES CORP.
NOTES TO THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in U.S. Dollars - Unaudited)
March 31, 2024
Warrants
The Company accounts for freestanding warrants within stockholder's equity or as liabilities based on the characteristics and provisions of each instrument. The Company evaluates outstanding warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. If none of the criteria in the evaluation in these standards are met, the warrants are classified as a component of stockholders' equity and initially recorded at their grant date fair value without subsequent remeasurement. Warrants that meet the criteria are classified as liabilities and remeasured to their fair value at the end of each reporting period.
Share repurchases
The Company accounts for the repurchase of its common shares as an increase in shares in treasury for the market value of the shares at the time of purchase. When the shares are cancelled, the issued and outstanding shares are reduced by the $0.001 par value and the difference is accounted for as a reduction in additional paid in capital.
Income taxes
The Company accounts for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under the asset and liability method the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recognized if it is more likely than not that some portion or all of the deferred tax asset will not be recognized.
Income (Loss) per share
Basic and diluted earnings or loss per share ("EPS") amounts in the consolidated financial statements are computed in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 260 - 10 "Earnings per Share", which establishes the requirements for presenting EPS. In the accompanying financial statements, basic loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the year. Diluted earnings per share is computed by dividing net income by the weighted average number of shares of common stock and potentially dilutive outstanding shares of common stock during the period to reflect the potential dilution that could occur from common stock issuable through contingent share arrangements, stock options and warrants unless the result would be antidilutive. There were no potentially dilutive shares of common stock outstanding for the period ended March 31, 2024 or the year ended December 31, 2023, respectively.
Foreign exchange
The Company's functional currency is the U.S. dollar. Any monetary assets and liabilities that are in a currency other than the U.S. dollar are translated at the rate prevailing at year end. Revenue and expenses in a foreign currency are translated at rates that approximate those in effect at the time of translation. Gains and losses from translation of foreign currency transactions into U.S. dollars are included in current results of operations.
Financial instruments
The Company's financial instruments consist of cash and cash equivalents, trading securities, receivables, accounts payable and accrued liabilities. It is management's opinion that the Company is not exposed to significant interest, currency or credit risks arising from its financial instruments. The carrying amounts of cash and cash equivalents, trading securities, receivables, accounts payable and accrued liabilities approximate their fair value due to the short-term nature of those financial instruments. Cash in Canada is primarily held in financial institutions. Balances on hand may exceed insured maximums. Cash in Ghana is held in banks with a strong international presence. Ghana does not insure bank balances.
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Xtra-Gold Resources Corp. published this content on 08 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 May 2024 12:06:20 UTC.