AntioquiaGold Inc

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INTERIM UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 29/11/2017

ANTIOQUIA GOLD INC.
NOTES TO THE INTERIM UNAUDITED CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2017 AND 2016

1 . NATURE OF BUSINESS

The registered address of Antioquia Gold Inc. is 2800 Park Place, 666 Burrard St., Vancouver, BC, V6C 2Z7. The Company is listed on the TSX Venture Exchange (“TSX-V”) under the symbol “AGD”. The Company trades on the OTCQX pink sheets, under the symbol “AGDXF”.

Antioquia Gold Inc. (the “Company”) owns 100% of Antioquia Gold Ltd., a Barbados company, which in turn has a branch, AGD Colombia, registered to conduct business in Colombia, South America. All mineral exploration and evaluation activities of the Company are carried out in Colombia. The Company owns 100% of Ingenieria Y Gestion Del Territorio S.A. (“IGTER”) a management company incorporated under the laws of Colombia.

The Company is engaged in the exploration, evaluation and development of mineral resource properties in Colombia. The Company is in the process of exploring and evaluating its mineral properties and has not yet determined whether they contain reserves that are economically recoverable. The success of the Company’s exploration, evaluation and development of its mineral properties will be influenced by significant risks; financial; economic; legal; a political environment in an emerging market; fluctuations in commodity prices and currency exchange rates; varying levels of taxation; the ability of the Company to discover recoverable reserves and to bring such reserves into production on an economic basis. The Company will be required to obtain additional financing to develop its resource properties. While the Company seeks to manage these risks, many of these
factors are beyond its control.

These interim unaudited condensed consolidated financial statements of the Company for the nine months ended September 30, 2017 and 2016 were authorized for issue by the board of directors on November 23, 2017.

2 . GOING CONCERN

These interim unaudited condensed consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) applicable to a going concern, which assumes continuity of operations and realization of assets and settlement of liabilities in the normal course of business for the foreseeable future, which
is at least, but not limited to, one year from September 30, 2017. At September 30, 2017, the Company had a cumulative deficit of $35,163,515 (December 31, 2016 – 33,767,665), and a working capital deficit of $27,177,576 (December 31, 2016 – working capital deficit of $2,041,363). The Company’s ability to continue as a going concern is dependent upon its ability to achieve profitable operations, generate sufficient funds and continue to obtain sufficient capital from investors to meet its current and future obligations. The recoverability of amounts shown for property and equipment is dependent on several factors. These factors include the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the exploration, evaluation, and development of its properties, and future profitable operations or proceeds from
disposition of mineral interests. The Company is subject to risks and challenges similar to companies in a comparable stage of exploration, evaluation and development. As a result of these risks, there is material uncertainty which raises significant doubt as to the appropriateness of the going concern assumption. There is no assurance that the Company’s funding initiatives will continue to be successful. These interim unaudited condensed consolidated financial statements do not reflect the adjustments to the carrying values of assets and liabilities and the reported expenses and Consolidated Statements of Financial Position classifications that would be necessary if the going concern assumption was inappropriate. These adjustments could be material. The Company will have to raise additional funds to advance its exploration, evaluation and development efforts and, while it has been successful in doing so in the past, there can be no assurance that it will be able to do so in the future.

3 . SUMMARY OF SIGNIFICA NT ACCOUNTING POLICIES

The following is a summary of significant accounting policies used in the preparation of these financial statements:

Basis of presentation

These interim unaudited condensed consolidated financial statements are presented in accordance with IFRS and in particular in accordance with International Accounting Standard 34, Interim Financial Reporting, as issued by the International Accounting Standards Board (“IASB”). IFRS represents standards and interpretations approved by the IASB, and are comprised of IFRSs, International Accounting Standards (“IASs”), and interpretations issued by the IFRS Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”).

These interim unaudited condensed consolidated financial statements have not been audited by the Company’s external auditors. These interim unaudited condensed consolidated financial statements do not include all the information and disclosures required in the consolidated annual financial statements and should be read in conjunction with the Company’s consolidated annual financial statements for the year ended December 31, 2016, which have been prepared in accordance with IFRS.

The preparation of these interim unaudited condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. In preparing these interim unaudited condensed consolidated financial statements, the significant judgments made by management in applying the Company’s accounting policies and the key sources of estimation and uncertainty were the same as those applied to the consolidated annual financial statements for the year ended December 31, 2016.

Basis of measurement

These interim unaudited condensed consolidated financial statements have been prepared on the historical cost basis, except for financial instruments designated at fair value through profit and loss, which are stated at their fair value.

Basis of consolidation

These interim unaudited condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries; Antioquia Gold Ltd., a Barbados company (“AGD Barbados”) and Ingenieria Y Gestion Del Territorio S.A. (“IGTER”). AGD Barbados has a branch operation in Colombia (“AGD Colombia”). Subsidiaries consist of entities over which the Company is exposed to, or has rights to, variable returns as well as the ability to affect those returns through the power to direct the relevant activities of the entity. Subsidiaries are fully consolidated from the date control is transferred to the Company and are de-consolidated from the date control ceases. Intercompany ransactions and balances are eliminated on consolidation.

Presentation and functional currency

The Company’s presentation and functional currencies are the Canadian dollar. The functional currency of AGD Barbados is the United States dollar, and the functional currency of IGTER and AGD Colombia is the Colombian peso.

Recent accounting pronouncements

The Company is currently evaluating the impact on its interim unaudited condensed consolidated financial statements of recent accounting pronouncements, as follows:

IFRS 9 – Financial Instruments (“IFRS 9”) was issued by the IASB in November 2009 with additions in October 2010 and May 2013 and will replace IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried forward unchanged to IFRS 9, except that an entity choosing to measure a financial liability at fair value will present the portion of any change in its fair value due to changes in the entity’s own credit risk in other comprehensive income, rather than within profit or loss. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on or after January 1, 2018. Earlier adoption is permitted.

IFRS 15 – Revenue from Contracts with Customers – In May 2014, the IASB issued IFRS 15 which replaces IAS 18 for the accounting of revenue. The standard establishes principles for reporting the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. This standard will be effective for periods beginning on or after January 1, 2018.

IFRS 16 – Leases – In January 2016, the IASB issued IFRS 16 which replaces IAS 17 for the accounting of leases. IFRS 16 eliminates the classification as an operating lease and requires lessees to recognize a right-of-use asset and a lease liability in the statement of financial position for all leases with exemptions permitted for short-term leases and leases of low value assets. In addition, IFRS 16 changes the definition of a lease; sets requirements on how to account for the asset and liability, including complexities such as non-lease elements, variable lease payments and options periods; changes the accounting for sale and leaseback arrangements; largely retains IAS 17’s approach to lessor accounting and introduces new disclosure requirements. IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019 with early application permitted in certain circumstances.

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