In addition to the minimum annual payments, weCash Consideration, WRR agreed to pay Goodsprings a 2% production royalty based onextinguish the gross returns from the production and sale of minerals from the Garfield Property.

At any time$55,000 note payable we issued to WRR during the term of the Agreement we have a right to acquire 100% ownership of the Garfield Property for a one-time payment of $300,000 (the “Purchase Price”). The minimum annual payments paid by us to Goodsprings, cannot be applied or credited against the Purchase Price; however, once we exercise our option to acquire the Garfield Property, the minimum annual payments shall be credited against the production royalties payable.fiscal 2017.

On August 2, 2017, we entered into an exploration lease agreement (the “Lazy Claims Agreement”) with Tarsis Resources US Inc. (“Tarsis”), a Nevada corporation, to lease rights to three additional Lazy claims totaling 60 acres and located in the vicinity of our newthe Garfield Property. The term of the Lazy Claims Agreement is ten years and is subject to extension for an additional two consecutive 10-year terms. Full consideration of the Lazy Claims Agreement consists of the following: an initial cash payment of $1,000 to Tarsis, which we paid upon the execution of the Lazy Claims Agreement, with $2,000 payable to Tarsis on each subsequent anniversary of the effective date. We agreed to pay Tarsis a 2% production royalty (the “Lazy Claims Royalty”) based on the gross returns from the production and sale of minerals from the Lazy Claims Property. Should the Lazy Claims Royalty payments to Tarsis be in excess of $2,000 per year, we will not be required to pay a $2,000 annual minimum payment.

DuringIn December 2019 we acquired 27 unpatented mining claims for a total of $10,395 from a third-party (the “Loman Property”). As at the three-month period ended September 30, 2017, we staked an additional 69 Orsa Claimsdate of this Quarterly Report on Form 10-Q, the Loman Property claims are yet to be re-registered into the Company’s name, as due to COVID-19 pandemic certain regulatory requirements cannot be finalized. The Company intends to finalize the re-registration once the current world health crisis has passed and 75all local regulatory services are operating at full capacity.

As of the date of this Quarterly Report on Form 10-Q, our mineral interests are represented by Lazy Claims with a total paid cost of $54,152. These claims were added to the Garfield Flats Project.Property and Loman Property.

Critical Accounting Policies and Estimates

Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, revenues and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.

Our Management’s Discussion and Analysis of Financial Condition and Results of Operations section discusses our unaudited interim condensed interim financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments, including those related to revenue recognition, accrued expenses, financing and investing operations, and contingencies and litigation. Management bases its estimates and judgments on historical experience and on various other factors that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. The most significant accounting estimates inherent in the preparation of our unaudited interim condensed interim financial statements include estimates as to the appropriate carrying value of certain assets and liabilities, which are not readily apparent from other sources.

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited interim condensed financial statements for the threethree- and nine monthssix-month periods ended SeptemberJune 30, 2017, and 2016,2020, together with notes thereto, which are included in this Quarterly Report on Form 10-Q, as well as our most recent audited financial statements on Form 10-K for the year ended December 31, 2016.

Results of Operations2019.

Results of Operations

Three and ninesix months ended SeptemberJune 30, 2017,2020, compared to the three and ninesix months ended SeptemberJune 30, 2016:2019:

Revenues

Revenues. DuringWe had no revenues for the three monthsthree- and six-month periods ended SeptemberJune 30, 2017, we recorded $5,000 in revenue from consulting services we’ve provided to WRR. During the nine months ended September 30, 2017, we recorded $20,000 in revenue from consulting services we’ve provided to WRR. We did not have similar revenues during the three2020 and nine months ended September 30, 2017.2019. Due to the exploration rather than the production nature of our business, we do not expect to have significant operating revenue in the foreseeable future.

Operating Expenses

Operating expenses.Our operating expenses include exploration expenses, general and administrative expenses, professional fees and transfer agent and filing fees.

During the three-month period ended SeptemberJune 30, 2017,2020, our operating expenses decreased by $129,613,$92,178, or 89%92%, to $15,650$7,697 for the three months then ended, compared to $145,263$99,875 for the comparablethree-month period in 2016.ended June 30, 2019. This change was mainly associated with reduced explorationdecreased general and administrative fees, which decreased by $60,141 to $2,872 for the three-month period ended June 30, 2020, as compared to $63,013 we incurred during the three months ended June 30, 2019, the main component affecting the change in general and administrative expenses and professionalwas associated with absence of management consulting fees, as the drilling programCompany’s related parties agreed to provide their consulting services free of charge. During the comparative three-month period ended June 30, 2019, we carried out onincurred $60,000 in management consulting fees. Our professional fees decreased by $2,000, from $4,500 we incurred during a three-month period ended June 30, 2019 to $2,500 we incurred during the Lapon Canyon claims (the “Exploration Program”), which was required under our Agreement with WRRthree months ended June 30, 2020. In addition to earn a 50% interestthe increases in a joint venture, was completedabove noted expenses, we did not incur any exploration expenses for the three-month period ended June 30, 2020, as compared to $30,687 in our Fiscal 2016, and only minimal exploration activities took placeexpenses we incurred during the three-month period ended SeptemberJune 30, 2017.

During the nine-month period ended September 30, 2017, our operating expenses decreased by $174,965, or 73%, to $63,748 for the nine months ended September 30, 2017, as compared to $238,713 for the comparable period in 2016. This change was associated with reduced exploration operations on the Lapon Property, as the drilling program on the Lapon Canyon claims (the “Exploration Program”), which was required under our Agreement with WRR to earn a 50% interest in a joint venture, was completed in our Fiscal 2016. During the nine-month period ended September 30, 2017, we recorded $29,292 in exploration expenses directly associated with the Exploration Program, as compared with $153,453 we spent during the nine-month period ended September 30, 2017. Our general and administrative expenses decreased by $30,668, or 67%, to $14,915 for the nine months ended September 30, 2017, compared with $45,583 for the nine-month period ended September 30, 2016. The greater general and administrative expenses during the comparable period were in part attributable to the fair value of 800,000 common shares we issued to Nevada Canyon Gold Corporation, a Nevada privately held corporation, with the President and CEO in common (“NCG”), which were valued at $8,000. The shares were issued to purchase the intangible assets of NCG which included its corporate name, domain name and all related content. In addition to the above, our professional fees decreased by $23,601 to $6,500 we incurred during the nine-month period ended September 30, 2017, as compared to $30,101 we incurred during the comparable period in 2016. Greater professional fees in our Fiscal 2016 were mainly associated with legal and audit fees which increased in parallel with increased business activity.

Other items.During the nine-month period ended September 30, 2017, we recorded $2,262,519 gain from the sale of our 30% interest in the Lapon Canyon Gold Property to WRR in exchange for 9,100,000 common shares and warrants to acquire an additional 11,900,000 common shares of WRR. At the time of the transaction the fair market value of the shares was determined to be $1,008,869 based on then current share price of $0.11 (CAD$0.14) per share, and the fair market value of WRR Warrants was determined to be $1,318,650 using the Black-Scholes Option pricing model at the issuance date using the following assumptions: expected warrant life of 5 years, expected dividend yield of 0%, an average risk-free interest rate of 1.48% and an average expected stock price volatility of 155.82%.

Net income (loss). At September 30, 2017, we recorded net income of $2,251,869 for the three-month period then ended, as compared to net loss of $142,851 for the three-month period ended September 30, 2016. The change from net loss to net income resulted from the valuation of WRR shares and WRR Warrants we received in exchange for our 30% interest in the Lapon Canyon Gold Property, which2019. These decreases were in part offset by our operating expenses. $650 increase in transfer agent and filing fees, from $1,675 we incurred during a three-month period ended June 30, 2019 to $2,325 we incurred during the three months ended June 30, 2020.

On a year-to-date basis, our net incomeoperating expenses decreased by $189,400, or 92%, to $15,543 for the six months ended June 30, 2020, compared to $204,943 for the six-month period ended June 30, 2019. This change was $2,218,771,mainly associated with decreased general and administrative fees, which decreased by $127,666 to $5,731 for the six-month period ended June 30, 2020, as compared to net loss$133,397 we incurred during the six months ended June 30, 2019, the main component affecting the change in general and administrative expenses was associated with absence of $238,794management consulting fees, as the Company’s related parties agreed to provide their consulting services free of charge. During the comparative six-month period ended June 30, 2019, we incurred $120,000 in management consulting fees. Our professional fees decreased by $1,700, from $6,700 we incurred during the six-month period ended June 30, 2019 to $5,000 we incurred during the six months ended June 30, 2020. In addition to the increases in above noted expenses, we did not incur any exploration expenses for the nine-monthsix-month period ended SeptemberJune 30, 2016. The change from net loss2020, as compared to net income resulted from$60,687 in exploration expenses we incurred during the valuation of WRR shares and WRR Warrants we received in exchange for our 30% interest in the Lapon Canyon Gold Property, whichthree-month period ended June 30, 2019. These decreases were in part offset by our operating expenses. $653 increase in transfer agent and filing fees, from $4,159 we incurred during the six-month period ended June 30, 2019 to $4,812 we incurred during the six months ended June 30, 2020.

Comprehensive income (loss). As at SeptemberOther Items

During the three months ended June 30, 2017, our comprehensive income included $27,6182020, we recognized $241,954 gain on fair value of equity investments which(2019 –$624,327). The gain resulted from revaluation of WRR Shares and WRR Warrants we received in exchange for our 30% interest in Lapon Canyon Gold Property. The gain resultedwarrants and was caused mainly by increased market price of WRR’s shares from theCAD$0.07 per share at March 31, 2020, to CAD$0.09 per share at June 30, 2020, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars. During the same period, we earned $488 in interest revenue (2019 - $1,556). Since the funds generated from the sale of equity investments are held in Canadian dollars, we incurred $18,024 gain associated with foreign exchange fluctuation rates (2019 - $19,033).

During the six months ended June 30, 2020, we recognized $9,367 gain on fair value of equity investments (2019 –$1,515,128). The gain resulted from revaluation of WRR Shares and WRR warrants and was caused mainly by increased market price of WRR’s shares from CAD$0.085 per share at December 31, 2019, to CAD$0.09 per share at June 30, 2020, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars.

During the same period, we recorded $82,280 gain on equity investments which was associated with the sale of 1,269,000 WRR Shares for net proceeds of $165,330 (CAD$219,974) (2019 - $247,524). We earned $1,882 in interest revenue (2019 - $2,024). Since the funds generated from the sale of equity investments are held in Canadian dollars, we incurred $18,426 loss associated with foreign exchange fluctuation rates (2019 - $22,805 gain).

Net Income

At June 30, 2020, we recorded a net income of $252,769, as compared to net income of $545,041 for the three-month period ended June 30, 2019. This change mainly resulted from $241,954 gain on revaluation of our equity investments, as opposed to $624,327 gain we recognized in the comparative period.

On a year-to-date basis, we recorded a net income of $59,560, as compared to net income of $1,582,538 for the six-month period ended June 30, 2019. This change mainly resulted from $9,367 gain on revaluation of our equity investments, and $82,280 realized gain on the sale of WRR Shares as compared to $247,524 gain we recognized in the comparative period.

Liquidity and Capital Resources

As of SeptemberJune 30, 2017,2020, we had a cash balance of $4,508,$490,394, of which $457,643 (CAD$623,676) were held in high-interest savings account with a major Canadian bank, and working capital deficit of $152,303$927,669 with cash flows used in operations totaling $42,129$23,711 for the period then ended. During the nine-month periodsix months ended SeptemberJune 30, 2017,2020, our operations were funded with $55,000 non-interest bearing advance$165,330 cash we receivedgenerated from an arm’s length party, $20,000 we received on accountthe sales of our consulting services provided to WRR, and with $9,000 in advances we received from our directors (net of $5,000 repayment of prior reimbursable expenses).equity investments.

We did not generate sufficient cash flows from our operating activities to satisfy our cash requirements for the nine-month periodthree-and six-month periods ended SeptemberJune 30, 2017.2020. There is no assurance that we will be able to generate sufficient cash from our operations to repay the amounts owing under the advances payable, or to support our exploration program. If we are unable to generate sufficient cash flow from our operations to repay the amounts owing when due, we may be required to continue selling our equity investments or raise additional financing from other sources.

To provide us with the necessary capital to accomplishby borrowing funds or issuing our plan of operation we intend to seek additional financing in the form of equity or debt.equity. There can be no assurance that we will be successful in our efforts to raise additional capital.

Cash Flow

Net cash used in operating activities:

Our net cash used in operating activities decreased by $193,662,$10,206, or 82%30%, to $42,129$23,711 for the ninesix months ended SeptemberJune 30, 2017,2020, compared with $235,791$33,917 for the comparable period in 2016.2019. During the ninesix months ended SeptemberJune 30, 2017,2020, we used $43,748$13,661 to cover our cash operating costs, $4,883 to increase our prepaid expenses, and $5,167 to reduce our accounts payable and accrued liabilities.

Our net cash used in operating activities increased by $17,666, or 109%, to $33,917 for the six months ended June 30, 2019, compared with $16,251 for the comparable period in 2018. During the six months ended June 30, 2019, we used $199,350 to cover our cash operating costs and $981$3,300 to increase our prepaid expenses. These uses of cash were offset by $2,600$48,633 increase in our accounts payable and by $120,100 increase in the amounts payabledue to our vendors.related parties.

Adjustments to reconcile net income to net cash used by operating activities

During the nine-month period ended September 30, 2016, our net cash used in operating activities increased by $180,860, or 329%, to $235,791 as compared with $54,931 for the comparable period in 2015. During the ninesix months ended SeptemberJune 30, 2016,2020, we used $230,713 to cover our cash operating costs,recognized $9,367 gain on revaluation of fair value of equity investments associated with WRR Shares and to increase our prepaid expenses by $11,872. These usesWRR Warrants and recorded $82,280 gain on sale of cash were offset by increase in our accounts payable1,269,000 WRR Shares for net proceeds of $6,794.$165,330 (CAD$219,974). In addition, we recognized $18,426 loss on foreign exchange fluctuations.

Certain non-cash transactions:During the ninesix months ended SeptemberJune 30, 2017, our operating costs included $2,262,5192019, we recognized $1,515,128 gain from the saleon revaluation of fair value of equity investments associated with WRR Shares and WRR Warrants we received in exchange for our 30% interest in the Lapon Canyon Gold Property to WRRwhich resulted from the fluctuation in share prices and foreign exchange for 9,100,000 common sharesrates, we also recorded $247,524 gain on sale of our equity investments. These gains were further increased by $17,212 in foreign exchange fluctuations and warrants to acquire an additional 11,900,000 common shares of WRR.$2,024 we received in interest and dividend income on our investments.

Net cash generated by investing activities

During the nine monthssix-month period ended SeptemberJune 30, 2016, our operating costs included $81 in accrued interest2020, we generated $165,330 on $100,000 note payable we issued to an arms-length party, as well as $8,000 in share-based payment we recorded on issuancethe sale of 800,000 common shares to NCG in exchange for its intangible assets, including its corporate name, domain name and all related content.

Net cash used in investing activities: During the nine months ended September 30, 2017, we paid $15,000 as an initial payment to acquire Garfield Property pursuant to our exploration lease and option to purchase agreement with Goodsprings Development LLC. In addition, we paid $54,152 to acquire an additional 69 Orsa Claims and 75 Lazy Claims in the vicinity of our Garfield Flats Project.1,269,000 WRR Shares.

During the nine monthssix-month period ended SeptemberJune 30, 2016,2019, we did not have any investing transactions that would have effected our cash flows.generated $478,077 on the sale of 5,242,000 WRR Shares.

Net cash provided by financing activities:: Our net cash provided by financing activities decreased by $240,494, or 79%. During the nine-month period ended September 30, 2017, we received $55,000 non-interest bearing advance from an arm’s length party; in addition, we advanced $9,000 from our directors (net of $5,000 repayment of prior reimbursable expenses). All advances are interest free and due on demand.

During the ninesix months ended SeptemberJune 30, 2016,2019, we recorded $1,100 as non-interest-bearing advance owed to WRR for a payment that WRR made on our net cash provided by financing activities increased by $295,994, or 3,482%, to $304,494 compared with $8,500 forbehalf. We did not have similar transactions during the comparable period in 2015. We received $375,000 in gross proceeds from a private placement for 3,750,000 shares of our common stock at $0.10 per share, which we closed onsix months ended June 21, 2016. We received $30,000 advance from our CEO and President free of interest and payable on demand.

On August 1, 2016, we renegotiated the terms of the note payable we issued to an arms-length party, extending the maturity date to August 2, 2016, and reducing the interest rate to 0.75%. We repaid the note payable and accrued interest totaling $100,506 in accordance with the new terms on August 2, 2016.

30, 2020.

Going Concern

At SeptemberJune 30, 2017,2020, we had a working capital deficit of $152,303$927,669 and cash on hand of $4,508,$490,394, which is not sufficient enough to carry outsupport our current plan of operations howeverfor the next 12-month period. Our equity investments include 12,589,000 WRR Shares and 1,900,000 WRR Warrants, which we have been using and are in the processplanning to continue to use as a source of procuring funds sufficient to fundadditional cash inflow. To support our operations untilbeyond the 12-month period we are ablemay require additional funds; therefore, we continue to financeactively pursue other means of financing our operations through cash flow.equity and/or debt financing. There can be no assurance that we will be able to procure funds sufficient for such purpose.to support our day-to-day operations and exploration programs. If operating difficulties or other factors (many of which are beyond our control) delay our realization of revenues or cash flows from operations, we may be limited in our ability to pursue our business plan. Moreover, if our resources from obtaining additional capital or cash flows from operations, once we commence them, do not satisfy our operational needs or if unexpected expenses arise due to unanticipated pressures or if we decide to expand our business plan beyond its currently anticipated level or otherwise, we will require additional financing to fund our operations, in addition to anticipated cash generated from our operations. Additional financing might not be available on terms favorable to us, or at all. If adequate funds were not available or were not available on acceptable terms, our ability to fund our operations, take advantage of unanticipated opportunities, develop or enhance our business or otherwise respond to competitive pressures would be significantly limited. In a worst-case scenario, we might not be able to fund our operations or to remain in business, which could result in a total loss of our stockholders’ investment. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders would be reduced, and these newly issued securities might have rights, preferences or privileges senior to those of existing stockholders.

Income Tax BenefitContinued Uncertainty due to Global Outbreak of COVID-19

In March of 2020, the World Health Organization declared an outbreak of COVID-19 Global pandemic. The COVID-19 has impacted vast array of businesses through the restrictions put in place by most governments internationally, including the USA federal government as well as provincial and municipal governments, regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown to what extent the impact of the COVID-19 outbreak may have on the Company has a prospective income tax benefit resultingas this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from a netthe inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place world-wide to fight the virus. While the extent of the impact is unknown, the COVID-19 outbreak may hinder the Company’s ability to raise financing for exploration or operating loss carry forwards thatcosts due to uncertain capital markets, supply chain disruptions, increased government regulations and other unanticipated factors, all of which may offset any future operating profit.also negatively impact the Company’s business and financial condition.

Impact of Inflation

We believe that inflation has had a negligible effect on operations over the past fiscal quarter.

Capital Expenditures

The Company expended no amounts on capital expenditures for the ninesix months ended SeptemberJune 30, 2017.2020.

Unproved Mineral Properties

As of the date of this quarterly report on Form 10-Q, our mineral interests are comprised ofrepresented by Lazy Claims Property and the following: