Dynasty Gold : 2023 Annual Financial Statements

Dynasty Gold Corp.

Consolidated Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in Canadian Dollars)

Independent Auditor's Report

To the Shareholders of Dynasty Gold Corp.

Opinion

We have audited the consolidated financial statements of Dynasty Gold Corp. (the Company), which comprise the consolidated statements of financial position as at December 31, 2023 and 2022, and the consolidated statements of changes in shareholders equity, comprehensive loss, and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information (collectively referred to as the financial statements).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards.

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 report. We are independent of the Company 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.

Material Uncertainty Related to Going Concern

We draw attention to Note 1 to the financial statements, which describes events or conditions that indicate a material uncertainty exists that may cast significant doubt on the Company'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 of the current period. 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, we have determined that there are no other key audit matters to communicate in our report.

Other Information

Management is responsible for the other information. The other information comprises the information included in Managements Discussion and Analysis.

Our opinion on the financial statements does not cover the other information and we do 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, or otherwise appears to be materially misstated.

We obtained Managements Discussion and Analysis prior to the date of this auditors report. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. 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 International Financial Reporting Standards, 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.

In preparing the financial statements, management is responsible for assessing the Company'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 Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company'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 these 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 Companys 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 managements 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 Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors report. However, future events or conditions may cause the Company 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 represent the underlying transactions and events in a manner that achieves fair presentation.

We 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.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors 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 report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partner on the audit resulting in this independent auditor's report is Rakesh Patel.

DALE MATHESON CARR-HILTON LABONTE LLP

CHARTERED PROFESSIONAL ACCOUNTANTS

Vancouver, BC

April 24, 2024

Dynasty Gold Corp.

Consolidated Statements of Financial Position As at December 31, 2023 and 2022 (Expressed in Canadian dollars)

		December 31,		December 31,
		2023		2022
Assets
Current
Cash and cash equivalents	$	3,164,077	$	1,056,726
Receivables (Note 4)		154,115		62,498
Prepaid expenses		56,813		7,523
		3,375,005		1,126,747
Exploration and evaluation assets (Notes 5, 9 and 10)		2,573,516		1,771,199
	$	5,948,521	$	2,897,946
Liabilities
Current
Accounts payable and accrued liabilities (Notes 6 and 9)	$	52,805	$	355,361
Flow-through share premium (Note 13)		186,672		-
		239,477		355,361
Shareholders Equity
Share capital (Note 8)		41,091,732		37,844,739
Share-based payment reserve (Notes 8 and 9)		3,284,044		3,170,078
Deficit		(38,666,732)		(38,472,232)
		5,709,044		2,542,585
	$	5,948,521	$	2,897,946
Nature of Business and Continuance of Operations (Note 1)
Subsequent event (Note 14)

See accompanying notes to the consolidated financial statements.

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Dynasty Gold Corp.

Consolidated Statements of Changes in Shareholders Equity For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

	Common Shares			Share-based				Total
					Payment			Shareholders
	Number of Shares		Amount		Reserve		Deficit		Equity
Balance, December 31, 2021	35,652,208	$	36,966,099	$	3,085,504	$	(38,268,782)	$	1,782,821
Private placement (Note 8)	8,861,824		1,038,654		-		-		1,038,654
Share issue costs (Note 8)	-		(73,564)		-		-		(73,564)
Stock-based compensation (Notes 8 and 9)	-		-		84,574		-		84,574
Flow-through share premium (Notes 8 and 13)	-		(86,450)		-		-		(86,450)
Comprehensive loss	-		-		-		(203,450)		(203,450)
Balance, December 31, 2022	44,514,032	$	37,844,739	$	3,170,078	$	(38,472,232)	$	2,542,585
Private placement (Note 8)	15,787,232		3,743,889		-		-		3,743,889
Share issue costs (Note 8)	-		(264,495)		89,188		-		(175,307)
Warrant exercise (Note 8)	748,147		182,037		-		-		182,037
Option exercise (Note 8)	75,000		14,133		(5,133)		-		9,000
Stock-based compensation (Note 8 and 9)	-		-		29,911		-		29,911
Flow-through share premium (Notes 8 and 13)	-		(428,571)		-		-		(428,571)
Comprehensive loss	-		-		-		(194,500)		(194,500)
Balance, December 31, 2023	61,124,411	$	41,091,732	$	3,284,044	$	(38,666,732)	$	5,709,044

See accompanying notes to the consolidated financial statements.

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Dynasty Gold Corp.

Consolidated Statements of Comprehensive Loss (Expressed in Canadian dollars)

For the years ended December 31,		2023		2022
Expenses
Consulting fees (Note 9)	$	158,668	$	93,150
Director fees (Note 9)		32,000		-
Office expenses		21,361		13,613
Rent		22,600		18,600
Professional fees		53,606		18,995
Regulatory and transfer agent fees		17,086		15,574
Shareholder communications		198,846		56,982
Stock-based compensation (Notes 8 and 9)		29,911		84,574

		534,078		301,488
Other items
Foreign exchange loss (gain)		1,225		(3,824)
Interest income		(98,904)		(7,764)
Flow-through premium reversal (Note 13)		(241,899)		(86,450)
		(339,578)		(98,038)
Comprehensive loss	$	194,500	$	203,450
Loss per share basic and diluted	$	(0.00)	$	(0.01)
Weighted average number of common shares outstanding
basic and diluted		56,072,625		34,087,759

See accompanying notes to the consolidated financial statements.

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Dynasty Gold Corp.

Consolidated Statements of Cash Flows (Expressed in Canadian dollars)

For the years ended December 31,		2023		2022
Cash flows provided by (used in):
Operating activities
Net loss	$	(194,500)	$	(203,450)
Items not affecting cash:
Stock-based compensation		29,911		84,574
Flow-through premium reversal		(241,899)		(86,450)
Changes in non-cash working capital items:		(91,617)		(49,813)
Receivables
Prepaid expenses		(49,290)		(7,523)
Accounts payable and accrued liabilities		(51,156)		83,497
		(598,551)		(179,165)
Financing activities
Shares issued from exercise of warrants and options		191,037		-
Issuance of shares for cash, net issuance costs		3,568,582		965,090
		3,759,619		965,090
Investing activity
Exploration and evaluation expenditures		(1,053,717)		(243,727)
		(1,053,717)		(243,727)
Change in cash and cash equivalents		2,107,351		542,198
Cash and cash equivalents, beginning		1,056,726		514,528
Cash and cash equivalents, ending	$	3,164,077	$	1,056,726
Cash and cash equivalents is represented by:
Cash	$	841,077	$	383,726
Guaranteed Investment Certificates	$	2,323,000	$	673,000
Supplemental cash flow information:
Exploration and evaluation assets in accounts payable	$	-	$	251,400
Flow-through liability recognized on flow-through private placement	$	428,571	$	86,450
Fair value of finders warrants	$	89,188	$	-
Transfer of reserve to share capital on exercise of options	$	5,133	$	-

See accompanying notes to the consolidated financial statements.

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Dynasty Gold Corp.

Notes to Consolidated Financial Statements

For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

1. Nature of Business and Continuance of Operations
   Dynasty Gold Corp. (the Company) was incorporated under of the laws of the province of British Columbia on December 12, 1985. The Companys principal office is located at 610 Granville Street, Suite 1613, Vancouver, B.C. V6C 3T3. The Company is an exploration stage company engaged in the acquisition, exploration and development of mineral properties. The Companys shares are listed on the TSX-Venture Exchange (the Exchange) under the symbol DYG.
   These consolidated financial statements have been prepared on a going concern basis which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business for the foreseeable future. The continuing operations of the Company are dependent upon its ability to raise adequate financing to develop its mineral properties, and to commence profitable operations in the future. To date, the Company has not generated any revenues and is considered to be in the exploration stage. The Company has sufficient funds to allow it to continue its exploration program for the upcoming year; however, additional funding will be required in the foreseeable future. These factors indicate the existence of a material uncertainty that may cast significant doubt about the Companys ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
2. Material Accounting Policy Information
3. 1. Basis of presentation and statement of compliance
      These consolidated financial statements have been prepared by management using International Financial Reporting 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 of the Company have been prepared on an accrual basis and are based on historical costs, modified where applicable. These consolidated financial statements are presented in Canadian dollars unless otherwise noted.
      The Companys board of directors approved these consolidated financial statements for issue on April 24, 2024.
   2. Basis of consolidation
      These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Terrawest Minerals Inc. and Terrawest Resources Corp.
      All intercompany balances and transactions have been eliminated on consolidation.
   3. Exploration and evaluation expenditures
      Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized. Costs incurred before the Company has obtained the legal right to explore are recognized in profit or loss.
      Government tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.

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Dynasty Gold Corp.

Notes to Consolidated Financial Statements

For the years ended December 31, 2023 and 2022 (Expressed in Canadian dollars)

2. Material Accounting Policy Information (continued)

1. Exploration and evaluation expenditures (continued)
   Exploration and evaluation assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.
   Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, exploration and evaluation assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.
   Recoverability of the carrying amount of any exploration and evaluation assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.
2. Impairment of non-current assets
   Non-current assets (which consist of exploration and evaluation assets) are reviewed for possible impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If any indication of impairment exists, an estimate of the assets recoverable amount is calculated. The recoverable amount is determined as the higher of the fair value less direct costs to sell and the asset value in use (being the present value of the expected future cash flows of the asset). An impairment loss is recognized for the amount by which the carrying amount exceeds its recoverable amount.
3. Share-basedpayments
   Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using the BlackScholes Option Pricing Model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

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