Japan Gold : Financial Statements - Dec 31, 2023

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2023 AND DECEMBER 31, 2022

(Expressed in Canadian dollars)

KPMG LLP	Telephone	[phone]
Chartered Professional Accountants	Fax	[phone]
PO Box 10426 777 Dunsmuir Street	Internet	www.kpmg.ca

Vancouver BC V7Y 1K3

Canada

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of Japan Gold Corp.

Opinion

We have audited the consolidated financial statements of Japan Gold Corp. ("the Entity"), which comprise:

• the consolidated statements of financial position as at December 31, 2023 and December 31, 2022;
• the consolidated statements of loss and comprehensive loss for the years then ended;
• the consolidated statements of changes in shareholders' equity for the years then ended;
• the consolidated statements of cash flows for the years then ended;
• and notes to the consolidated financial statements, including a summary of material accounting policy

information

(Hereinafter referred to as the "financial statements").

In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated financial position of the Entity as at December 31, 2023 and December 31, 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board.

Basis for Opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the "Auditor's Responsibilities for the Audit of the Financial Statements" section of our auditor's report.

We are independent of the Entity in accordance with the ethical requirements that are relevant to our audit of the financial statements in Canada and we have fulfilled our other ethical responsibilities in accordance with these requirements.

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

KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG

International Cooperative ("KPMG International"), a Swiss entity. KPMG Canada provides services to KPMG LLP.

Japan Gold Corp.

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Material Uncertainty Related to Going Concern

We draw attention to Note 1 in the financial statements, which indicates that the Entity has incurred losses and negative cash flows from operations to date, has no current sources of revenues, expects to incur further losses, and will be required to obtain additional funding in the future.

As stated in Note 1 in the financial statements, these events or conditions, along with other matters as set forth in Note 1 in the financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Entity's ability to continue as a going concern.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Except for the matter described in the "Material Uncertainty Related to Going Concern" section of the auditor's report, we have determined that there are no other key audit matters to communicate in our auditor's report.

Other Information

Management is responsible for the other information. Other information comprises the information in Management's Discussion and Analysis filed with the relevant Canadian Securities Commissions.

Our opinion on the financial statements does not cover the other information and we do not and will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit and remain alert for indications that the other information appears to be materially misstated.

We obtained the information included in Management's Discussion and Analysis filed with the relevant Canadian Securities Commissions as at the date of this auditor's report. If, based on the work we have performed on this other information, we conclude that there is a material misstatement of this other information, we are required to report that fact in the auditor's report.

We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Financial Statements

Management is responsible for the preparation and fair presentation of the financial statements in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Japan Gold Corp.

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In preparing the financial statements, management is responsible for assessing the Entity's ability to continue as a going concern, disclosing as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Entity or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Entity's financial reporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements.

As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion.
  The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Entity to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represents the underlying transactions and events in a manner that achieves fair presentation.

Japan Gold Corp.

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• Communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
• Provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the group Entity to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
• Determine, from the matters communicated with those charged with governance, those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our auditor's report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chartered Professional Accountants

The engagement partner on the audit resulting in this auditor's report is James Barron, CA, CPA.

Vancouver, Canada

April 29, 2024

JAPAN GOLD CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (Expressed in Canadian dollars)

As at		December 31, 2023		December 31, 2022
Assets
Current
Cash and cash equivalents (Note 3)	$	1,968,831	$	2,139,425
Restricted cash (Note 4)		572,685		374,843
Accounts receivable		48,436		16,414
Prepaid expenses and deposits		176,818		206,212
Non-current assets		2,766,770		2,736,894
Deposit		71,033		76,380
Exploration and evaluation assets (Note 4)		25,735,463		25,357,978
Property, plant and equipment (Note 5)		185,021		305,982
Total assets	$	28,758,287	$	28,477,234
Liabilities
Current
Accounts payable and accrued liabilities (Note 4 and 7)	$	811,911	$	1,206,155
Total liabilities		811,911		1,206,155
Shareholders' equity
Share capital (Note 6)		59,659,032		53,598,471
Contributed surplus		6,691,075		6,715,164
Accumulated other comprehensive loss		(4,357,013)		(2,267,425)
Deficit		(34,046,718)		(30,775,131)
Total shareholders' equity		27,946,376		27,271,079
Total liabilities andshareholders' equity	$	28,758,287	$	28,477,234

Nature and continuance of operations (Note 1)

Subsequent events (Notes 4 and 12)

Approved by the Board of Directors and authorized for issuance on April 29, 2024:

On behalf of the Board of Directors

"Murray Flanigan" Director	"John Proust"	Director

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

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JAPAN GOLD CORP.

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS (Expressed in Canadian dollars)

For the years ended		December 31, 2023		December 31, 2022
Expenses
Consulting (Note 7)	$	559,519	$	653,559
Depreciation (Note 5)		4,134		5,322
Director fees (Note 7)		158,193		154,532
Filing and regulatory		69,963		39,366
Foreign exchange loss		25,839		115,901
Insurance		54,763		47,431
Investor relations		531,138		421,732
Management fees (Note 7)		428,000		528,000
Occupancy and office (Note 7)		349,197		312,632
Professional fees		376,113		247,572
Project evaluation (Note 7)		586,236		508,754
Share-based compensation (Note 6)		22,636		811,837
Transfer agent		21,879		26,480
Travel		177,013		110,574
Loss before other items		3,364,623		3,983,692
Other items
Financing expense		-		5,200
Interest income		(92,636)		(46,478)
Other income		(400)		-
		(93,036)		(41,278)
Net loss for the year		3,271,587		3,942,414
Foreign exchange loss on translation of foreign operations (Note 2)		2,089,588		865,972
Net comprehensive loss for the year	$	5,361,175	$	4,808,386
Loss per share
Basic and diluted loss per share	$	(0.01)	$	(0.02)
Weighted average number of shares outstanding		245,490,411		224,890,479

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

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JAPAN GOLD CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in Canadian dollars)

For the years ended		December 31, 2023		December 31, 2022
Cash flows from operating activities
Net loss for the year	$	(3,271,587)	$	(3,942,414)
Adjustments for:
Share-based compensation (Note 6)		22,636		811,837
Depreciation (Note 5)		4,134		5,322
Interest income		(92,636)		(46,478)
Interest received		92,636		46,478
Non-cash financing expense		-		370
Unrealized foreign exchange loss		25,839		115,901
Changes in non-cash working capital items:
Accounts receivable, prepaid expenses and deposits		2,719		42
Accounts payable and accrued liabilities		(22,579)		(79,833)
Financing expense		-		5,200
Net cash used in operating activities		(3,238,838)		(3,083,575)
Cash flows from investing activities
Exploration and evaluation expenditure (Note 4)		(2,261,072)		(7,031,514)
Acquisition of property, plant and equipment, net (Note 5)		(7,823)		(118,879)
Reimbursements of Barrick Alliance expenditures, net (Note 4)		(560,290)		505,849
Net cash used in investing activities		(2,829,185)		(6,644,544)
Cash flows from financing activities
Proceeds received fromprivate placement, net of issuance costs (Note 6)		5,823,836		-
Proceeds received fromexercise of options (Note 6)		190,000		-
Lease payments		-		(22,493)
Net cash (used in) fromfinancing activities		6,013,836		(22,493)
Change in cash andcash equivalents during the year	$	(54,187)	$	(9,750,612)
Effect of foreign exchange on cash and cash equivalents		(116,407)		(64,628)
Cash and cash equivalents, beginning of the year		2,139,425		11,954,665
Cash andcash equivalents, endof the year	$	1,968,831	$	2,139,425

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

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JAPAN GOLD CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND DECEMBER 31, 2022 (Expressed in Canadian dollars)

						Accumulated other
	Number of shares				Contributed		comprehensive		Deficit
		Share capital		surplus		loss			Total equity
Balance, December 31, 2021	224,890,479	$	53,598,471	$	5,903,327	$	(1,401,453)	$	(26,832,717)	$	31,267,628
Share-based compensation	-		-		811,837		-		-		811,837
Net loss for the year	-		-		-		-		(3,942,414)		(3,942,414)
Foreign currency translation	-		-		-		(865,972)		-		(865,972)
Balance, December 31, 2022	224,890,479		53,598,471		6,715,164		(2,267,425)		(30,775,131)		27,271,079
Share-based compensation	-		-		22,636		-		-		22,636
Options exercised (Note 6)	975,000		341,230		(151,230)		-		-		190,000
Shares issued for private placment,
net of issuance costs (Note 6)	30,650,000		5,719,331		104,505		-		-		5,823,836
Net loss for the year	-		-		-		-		(3,271,587)		(3,271,587)
Foreign currency translation	-		-		-		(2,089,588)		-		(2,089,588)
Balance, December 31, 2023	256,515,479	$	59,659,032	$	6,691,075	$	(4,357,013)	$	(34,046,718)	$	27,946,376

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

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JAPAN GOLD CORP.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS For the years ended December 31, 2023 and December 31, 2022 (Expressed in Canadian dollars)

1. NATURE AND CONTINUANCE OF OPERATIONS
   Japan Gold Corp. ("Japan Gold" or "the Company") is incorporated under the laws of British Columbia.
   The Company is exploring and evaluating mineral properties across the three largest islands of Japan: Hokkaido, Honshu and Kyushu. The Company's head office is at Suite 650-669 Howe Street, Vancouver, British Columbia, Canada, V6C 0B4. The Company's shares are traded on the TSX Venture Exchange ("TSX-V") under the symbol "JG" and on the OTC Markets ("OTCQB") under the symbol "JGLDF".
   These consolidated financial statements have been prepared on the basis of accounting principles applicable to a "going concern", which assumes that the Company will continue its operations for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations as they become due. The Company has not generated any revenues or cash flows from operations to date. For the year ended December 31, 2023, the Company incurred negative cash flows from operations of $3,238,838 and recorded a net loss of $3,271,587. The Company's ability to continue as a going concern is dependent on its ability to successfully raise additional financing, entering into a joint venture, sale of all or a portion of the Company's assets, the outright sale of the Company, the successful development of the Company's mineral property interests, or a combination thereof. The Company believes that it will be able to continue as a going concern for the foreseeable future based on the Company's historical and anticipated ability to raise additional financing (Note 12) to further advance its projects. However, the Company will continue to incur negative cash flows from operations and the Company will require additional funding in the future. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. These factors indicate the existence of a material uncertainty that may cast significant doubt upon the Company's ability to continue as a going concern. These consolidated financial statements do not give effect to any adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern. Such adjustments could be material.
2. MATERIAL ACCOUNTING POLICY INFORMATION Basis of presentation

These consolidated financial statements have been prepared in accordance with the IFRS Accounting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee ("IFRIC"). These consolidated financial statements have been prepared on a historical cost basis.

These consolidated financial statements were approved for issuance by the Company's Board of Directors on April 29, 2024.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly owned Japanese subsidiary, Japan Gold KK ("JGKK"). All intercompany balances and transactions have been eliminated on consolidation. The Company consolidates subsidiaries where it has the ability to exercise control. Control over an investee is defined to exist when the investor is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Particularly, the Company controls investees, if and only if, the Company has all of the following: power over the investee, exposure or rights to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns.

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