giyani gold corporation - sharenetinvestor relations 16,500 46,000 79,896 131,950 conferences and...

GIYANI GOLD CORPORATION

CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED

SEPTEMBER 30, 2013 AND 2012

(Expressed in Canadian Dollars)

Consolidated Financial Statements For the period ended September 30, 2013 and September 30, 2012 (Expressed in Canadian Dollars) Index Page Management’s Responsibilities 3 Notice of No Auditor review 4 Consolidated Statements of Financial Position 5 Consolidated Statements of Comprehensive Loss 6 Consolidated Statements of Changes in Shareholders’ Equity 7 Consolidated Statements of Cash Flows 8 Notes to Consolidated Financial Statements 9 – 21

Management's Responsibility for Consolidated Financial Statements

The accompanying consolidated financial statements of Giyani Gold Corp. (the "Company") are the responsibility of management and the Board of Directors. The consolidated financial statements have been prepared by management, on behalf of the Board of Directors, in accordance with the accounting policies disclosed in the notes to the consolidated financial statements. Where necessary, management has made informed judgments and estimates in accounting for transactions which were not complete at the balance sheet date. In the opinion of management, the consolidated financial statements have been prepared within acceptable limits of materiality and are in accordance with International Financial Reporting Standards appropriate in the circumstances Management has established processes, which are in place to provide it sufficient knowledge to support management representations that it has exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of, and for the periods presented by, the consolidated financial statements and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented by the consolidated financial statements. The Board of Directors is responsible for reviewing and approving the consolidated financial statements together with other financial information of the Company and for ensuring that management fulfills its financial reporting responsibilities. An Audit Committee assists the Board of Directors in fulfilling this responsibility. The Audit Committee meets with management to review the financial reporting process and the consolidated financial statements together with other financial information of the Company. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the consolidated financial statements together with other financial information of the Company for issuance to the shareholders. Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards, and applicable laws and regulations, and for maintaining proper standards of conduct for its activities. ON BEHALF OF THE BOARD

“Ed Guimaraes”

, Director

“Scott Kelly”

, Director

Notice of No Auditor Review of Condensed Interim Financial Statements

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the condensed interim consolidated financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor. The accompanying condensed unaudited interim consolidated financial statements of the Company have been prepared by, and are the responsibility of, the Company’s management.

See notes to the consolidated financial statements. 5

Giyani Gold Corporation Condensed Consolidated Interim Statements of Financial Position (Expressed in Canadian dollars) (Unaudited)

September 30, 2013

$

December 31, 2012

$

Assets

Current

Cash and cash equivalents 112,577 112,577

1,852,133

Term deposit (Note 4) 563,872 1,550,000

Restricted cash (Note 5) 100,000 200,000

Amounts receivable 220,076 75,499

Prepaids 74,412 31,472

1,070,937 3,709,105

Equipment (Note 6) 80,199 94,048

Exploration and evaluation assets (Note 8) 3,976,841 3,121,836

Investment jointly controlled entity Rock Island 5,680,292 5,680,292

10,808,269 12,605,281

Liabilities Current

Accounts payable and accrued liabilities 541,283 465,242

Due to related parties (Note 13) 72,787 6,000

614,070 471,242

Shareholders’ Equity

Share capital (Note 10) 17,278,342 16,910,654

Contributed surplus 4,518,646 4,440,908

Warrants 4,372,660 4,372,660

Non-controlling interest (13,048) (13,048)

Deficit (15,962,400) (13,577,134)

10,194,199 12,134,040

10,808,269 12,605,281

Note 1: Nature of operations and going concern Note 15: Commitments ON BEHALF OF THE BOARD

“Ed Guimaraes”

, Director

“Scott Kelly”

, Director


Giyani Gold Corporation Condensed Consolidated Statements of Loss and Comprehensive Loss (Expressed in Canadian dollars) (Unaudited)

Three Months Ended September 30

Nine Months Ended September 30

2013 $

2012 $

2013 $

2012 $

Expenses

Amortization 4,616 4,395 13,849 12,048 Investor Relations 16,500 46,000 79,896 131,950 Conferences and business development 5,467 7,032 29,802 68,447 General exploration 5,018 7,500 5,119 12,098 Management and consulting 323,555 346,897 1,044,127 1,024,319 Office and rent 87,905 50,243 236,302 146,845 Share-based payments - 1,349,775 77,738 1,349,775 Professional fees 54,966 53,143 241,893 249,385 Telephone and internet 9,783 9,518 35,031 39,477 Transfer agent and filing fees (9,896) 11,115 594,870 38,818 Travel 53,464 48,206 168,792 131,329

Loss Before Interest and Other Items 551,378 1,933,823 2,527,418 3,204,490

Other Items

Foreign exchange loss (gain) 141,724 35,054 (28,822) 51,304 Interest and other income (69,258) (2,251) (200,517) (12,755) Taxes 68,408 87,187

140,875 32,803 (142,152) 38,549

Net Loss and Comprehensive loss for the year 692,253 1,966,626 2,385,266 3,243,038

Loss per share (basic and diluted) 0.01 0.04 0.04 0.08

Weighted average number of common shares outstanding 54,978,578 41,392,305 54,571,440 40,577,457


Giyani Gold Corporation Condensed Consolidated Statements of Changes in Shareholders’ Equity (Expressed in Canadian dollars) (Unaudited) Nine Months ended September 30, 2013 and 2012

Capital Stock Contributed Warrants Non-controlling Shareholders’

Number of Shares Amount Surplus Interest

Deficit Equity Balance, January 1, 2013 54,224,828 $ 16,910,654 $ 4,440,908 $ 4,372,660 $ (13,048) $ (13,577,134) $ 12,134,040 Shares issued on exercise of

warrants 153,750 130,688 - - - - 130,688

Shares issued on exercise of options and reallocation of contributed surplus 250,000 37,500 - - - - 37,500

Private placement - Flow Through - - - - - - - Shares of subsidiary issued to non-controlling interest 350,000 199,500 - - - - 199,500

Options - - 77,738 - - - 77,738

Share Issue Costs - - - - - - -

Comprehensive loss - - - - - (2,385,266) (2,385,266)

Balance, September 30, 2013 54,978,578 $ 17,278,342 $ 4,518,646 $ 4,372,660 $ (13,048) $ (15,962,400) $ 10,194,199

Balance, January 1, 2012 37,208,181 $ 8,696,441 $ 2,619,916 - 48,000 (8,044,371) $ 3,319,986

Shares Issued – private placement (less finders fee) 2,150,913 2,409,803 - - - - 2,409,803

Warrants Issued - (391,466) 391,466 - - - -

Shares issued – warrant exercises 1,675,625 553,946 - - - - 553,946 Shares issued on exercise of options 390,500 105,350 - - - - 105,350

Stock-based payments 250,000 325,000 1,349,775 1,674,775

Net loss and Comprehensive loss - - - - - (3,243,038) (3,243,038)

Balance, September 30, 2012 41,675,219 $ 11,699,074 $ 4,361,157 - 48,000 $ (11,287,409) $ 4,820,822


Giyani Gold Corporation Condensed Consolidated Statements of Cash Flows For the period ended September 30, 2013, and 2012 (Expressed in Canadian dollars) (Unaudited)

Nine Months Ended

September 2013

$

Nine Months Ended

September 2012

$

Operating Activities

Net loss for the period (2,385,266) (3,243,038) Adjustment for items not involving cash Amortization 13,849 12,048 Share-based payments 77,738 1,349,775

(1,881,215) Changes in non-cash working capital Amounts receivable (144,577) 210,322 Subscription receivable - 49,750 Prepaids (42,940) (157,064) Accounts payable and accrued liabilities 76,041 (172,974) Due to related parties 66,787 (608,168)

Cash used in operating activities (2,338,369) (2,559,349)

Investing Activities

Deferred acquisition costs - 21,675 Advances to Rock Island (622,700) Redemption (purchase) of term deposit 986,128 (773,125) Restricted Cash 100,000 Purchase of equipment - (43,685) Exploration and evaluation asset

expenditures (655,505) (1,325,770)

Cash used in investing activities 430,623 (2,743,605)

Financing Activities Proceeds from conversion of warrants

and options 168,188 659,296 Proceeds from issuance of shares (net of

costs) - 2,734,803

Cash provided by financing activities 168,188 3,394,099

Total (Outflow) inflow of cash (1,739,559) (1,908,855)

Cash, beginning of year 1,852,135 2,074,158

Cash, end of year 112,577 165,303

Giyani Gold Corporation Notes to the Condensed Consolidated Financial Statements September 30, 2013 (Expressed in Canadian dollars, unless otherwise stated)

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1. NATURE OF OPERATIONS AND GOING CONCERN

Giyani Gold Corp. (the "Company" or "Giyani") is engaged in the acquisition, exploration, evaluation and development of principally gold resource properties in South Africa and Canada. The Company’s primary focus is the development of the Company’s jointly controlled entity Rock Island Gold Project and ongoing exploration for gold at its Northern Ontario Project. The Company is incorporated and domiciled in Canada and its shares are publicly traded on the Toronto Venture Stock Exchange. As at June 25, 2013, the Company listed on the Johannesburg Stock Exchange (“JSE”). As at July 4, 2013, the Company listed on the Namibian Stock Exchange (“NSX”). The registered address is Suite 403 - 277 Lakeshore Road East, Oakville, Ontario, L6J 6J3 These consolidated financial statements have been prepared using International Financial Reporting Standards (“IFRS”) applicable to a “going concern”, which assume that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities in the normal course of operations. The Company reported a net loss of $ 692,253 or $0.01 per share for the three month period ended September 30, 2013 versus $ 1,966,626 in the same period in 2012 and had an accumulated deficit of $ 15,962,400 at September 30, 2013 (December 31, 2012 - $13,577,134). Year to date, the Company reported a net loss of $ 2,385,266 versus $ 3,243,038 for the same period of the previous year. In addition to its ongoing working capital requirements, the Company must secure sufficient funding for existing commitments and obtain new cash resources sufficient to cover expected expenses. On February 4, 2013, Giyani announced the divesture of 2299895 Ontario Inc to C Level III Inc. (TSXV: CLV.P) ("C Level"), a capital pool company under the policies of the TSX Venture Exchange Inc. As a result of the proposed transactions, Giyani Gold will become the majority shareholder of C Level. C Level will continue to operate and expand the Canadian mining exploration activities independent of Giyani Gold. As at the date of this MD&A, the transaction has not closed. These circumstances may cast significant doubt as to the ability of the Company to meet its obligations as they come due and, accordingly, the appropriateness of the use of accounting principles applicable to a going concern Management plans to secure the necessary financing through a combination of the exercise of existing warrants for the purchase of common shares, the issue of new equity instruments and the entering into joint venture arrangements. Nevertheless, there is no assurance that these Initiatives will be successful. The recovery of amounts capitalized for exploration and evaluation assets at September 30, 2013 in the consolidated balance sheet is dependent upon the ability of the Company to arrange appropriate financing to complete the development and continued exploration of the properties and upon future profitable production or proceeds from their disposition. On an ongoing basis, the Company examines various financing alternatives to address future funding requirements. Although Giyani has been successful in these activities in the past, the Company has no assurance on the success or sufficiency of these initiatives in the foreseeable future. These consolidated financial statements do not reflect the adjustments to the carrying


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values of assets and liabilities and the reported expenses and balance sheet classifications that would be necessary should the going concern assumption be inappropriate, and those adjustments could be material.

2. BASIS OF PRESENTATION

a. Statement of compliance

These condensed consolidated interim financial statement have been prepared in accordance with IFRS as issued by the IASB applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting, and should be read in conjunction with the audited annual financial statements for the year ended December 31, 2012, which were prepared in accordance with IFRS as issued by the IASB. These condensed interim consolidated financial statements were approved by the Board of Directors for issue on November 11, 2013.

b. Basis of Presentation The consolidated financial statements have been prepared on a going concern basis using historical cost.

The consolidated financial statements are presented in Canadian Dollars, which is the Company’s functional and presentation currency except where otherwise indicated.

c. Basis of Consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an invested entity so as to obtain benefits from its activities. All intercompany transactions, balances, income and expenses are eliminated on consolidation. The consolidated financial statements include the accounts of the Company and the following subsidiaries:

Entity Name Company Ownership

Place of Incorporation

Functional Currency

2299895 Ontario Inc 98.1% Canada Canadian dollar Alpha 111 Holdings Co Ltd 100.0% Barbados Canadian dollar Beta 222 Holdings Co Ltd 100.0% Barbados Canadian dollar Giyani Gold Holdings 333 (Pty Ltd 100.0% South Africa South African rand Giyani Gold South Africa (Pty) Ltd 100.0% South Africa South African rand Lexshell 831 Investments (Pty) Ltd 100.0% South Africa South African rand GGC South Africa Mining 111 (Pty) Ltd 100.0% South Africa South African rand Obliwize (Pty) Ltd 100.0% South Africa South African rand Obliweb (Pty) Ltd 100.0% South Africa South African rand Lexshell 837 investments (Pty) Ltd 64.0% South Africa South African rand Rock Island Trading 17 (Pty) Ltd (1) 28.8% South Africa South African rand

(1) Rock Island Trading 17 (Pty) Ltd is a jointly controlled entity.

All inter-company transaction, balances, income and expenses are eliminated on consolidation. All South Africa corporations currently have a fiscal year-end of February.


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3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in these condensed interim consolidated financial statements are consistent with those applied in the Company’s annual financial statements for the year ended December 31, 2012, except as described below.

a. Accounting Standards Adopted The Company has adopted the following new and revised accounting standards, along with any consequential amendments, effective January 1, 2013. These changes were made in accordance with the applicable transitional provisions. International Financial Reporting Standard 10, Consolidated Financial Statements (“IFRS 10”) IFRS 10 replaces the guidance on control and consolidation in IAS 27 “Consolidated and Separate Financial Statements”, and SIC-12 “Consolidation – Special Purpose Entities”. IFRS 10 requires consolidation of an investee only if the investor possesses power over the investee, has exposure to variable returns from its involvement with the investee and has the ability to use its power over the investee to affect its returns. Detailed guidance is provided on applying the definition of control. The accounting requirements for consolidation have remained largely consistent with IAS 27. The Company assessed its consolidation conclusions on January 1, 2013 and determined that the adoption of IFRS 10 did not result in any change in the consolidation status of any of its subsidiaries and investees. International Financial Reporting Standard 11, Joint Arrangements (“IFRS 11”) IFRS 11 supersedes IAS 31 “Interests in Joint Ventures” and requires joint arrangements to be classified either as joint operations or joint ventures depending on the contractual rights and obligations of each investor that jointly controls the arrangement. For joint operations, a company recognizes its share of assets, liabilities, revenues and expenses of the joint operation. An investment in a joint venture is accounted for using the equity method as set out in IAS 28 “Investments in Associates and Joint Ventures”. The Company has reviewed its joint arrangements and concluded that the adoption of IFRS 11 did not result in any changes in the accounting for its joint arrangements. International Financial Reporting Standard 12, Disclosure of Interest in Other Entities (“IFRS 12”) IFRS 12 was issued in May 2011 and it is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity’s interest in other entities. The Company has not implemented any disclosure changes in these interim statements as a result of this standard. Additional disclosure will be required in the Company’s annual statements. International Financial Reporting Standard 13, Fair Value Measurement (“IFRS 13”) IFRS 13 establishes new guidance on fair value measurement and related disclosure requirements and clarifies that the measurement of fair value of an asset or liability is based on assumptions that market participants would use when pricing the asset or liability under current market conditions, including assumptions about risk.


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The adoption of IFRS 13 by the Company did not require any adjustments to the valuation techniques used by the Company to measure fair value and did not result in any measurement adjustments; however, the adoption of this standard has resulted in additional disclosure about the fair value of financial instruments that are measured on a recurring basis as reported in the interim consolidated financial statements.

b. Accounting Standards Issued But Not Yet Applied The Company has not yet adopted the following new accounting pronouncements which are effective for fiscal periods of the Company beginning on or after January 1, 2014: International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”) IFRS 9 was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments, and such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income. Where such equity instruments are measured at fair value through other comprehensive income, dividends are recognized in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income indefinitely. Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, Financial Instruments – Recognition and Measurement, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income. This standard is required to be applied for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted. The Company has not evaluated the impact of adopting this standard.

4. TERM DEPOSIT The Company has a term deposit with a carrying value of $ 563,872 (2012 – $1,550,000). The term deposit is redeemable in November 2013 and earns interest of approximately 1.35% (2012 –2.05%). The fair value of the term deposit approximates its carrying value due to the short term to maturity.

5. RESTRICTED CASH The Company has credit cards with a major financial institution with an aggregate credit limit of $ 100,000. The financial institution holds a $100,000 (2012- $200,000) deposit as collateral on the credit amount as long as the credit cards are active. The restricted cash amounts would change if there were any changes to the credit limits on the cards.


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6. EQUIPMENT

Furniture and

Fixtures Mining and Exploration

Computer Equipment

Phone Equipment Total

COST

Balance, January 1, 2011 $ - $ - $ - $ - $ -

Additions 22,922 32,922 12,852 2,852 71,548

Depreciation 1,637 2,976 2,142 285 7,040

Balance, December 31, 2011 $ 21,285 $ 29,946 $ 10,710 $ 2,567 64,508

Additions 8,264 10,662 10,513 17,531 46,970

Depreciation 3,631 6,210 5,322 2,266 17,429

Balance, December 31, 2012 $ 25,918 $ 34,938 $ 15,901 $ 17,832 $ 94,048

Additions - - - - -

Depreciation 2,777 4,422 3,975 2,675 13,849

Balance, September 30, 2013 $ 23,141 $ 29,976 $ 11,926 $ 15,157 $ 80,199

7. REHABILITATION DEPOSIT The Department of Mineral Resources (“DMR”) in South Africa requires a deposit or bank guarantee as security for the duty to rehabilitate any mineral property. The funds will be refunded once the rehabilitation has been completed to the satisfaction of DMR. As at September 30, 2013 Giyani has recorded a deposit of $15,018 (2012- nil) included in exploration and evaluation assets.


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8. EXPLORATION AND EVALUATION ASSETS

Killins Emerald Abbie Lake Keating Thibodeau South Africa Total

Balance, January 1, 2012 $ - $ - $ 368,112 $ 177,150 $ 336,871 $ - $ 882,133

Current expenditures 267,200 354,523 195,034 121,797 709,188 - 1,647,742

Exploration South Africa - - - - - 1,638,020 1,638,020

Asset write-down - - - - (1,046,058) - (1,046,058)

Balance, December 31, 2012 $ 267,200 $ 354,523 $ 563,146 $ 298,947 $ - $ 1,638,020 $ 3,121,836

Balance, January 1, 2013 $ 267,200 $354,523 $ 563,146 $ 298,947 $ 0 1,638,020 $ 3,121,836

Current expenditures 22,347 8,004 221,963 - - 252,314

Exploration South Africa - - - - - 602,691 602,691

Balance, September 30, 2013 $ 289,547 $ 362,527 $ 785,109 $ 298,947 $ 0 $ 2,240,711 $ 3,976,841

In October 2012, the Company made the decision not to renew the option agreement on the Thibodeau lands. The Company has identified impairment on the entire book value of the asset ($1,046,058).

Pursuant to the joint venture agreement relating to the jointly controlled entity of Rock Island. The Company funds the joint venture with Corridor Mining Resources (“CMR”) on a 50:50 basis. Both parties are to share the costs evenly on an ongoing basis. Exploration costs are recorded in a loan account with Rock Island where interest is accrued at an agreed upon rate.. This loan will be repaid out of proceeds from the sale of the Rock Island asset. The loan is unsecured, with no fixed repayment terms and bears interest at South African prime +1%.


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9. INVESTMENT IN MINERAL PROPERTIES

On October 26, 2012, the Company completed the execution of a revised binding agreement (the “Revised Agreement”) with Kytanite Development Corp. ("Kytanite") pursuant to which the Company has confirmed its entitlement to acquire Kytanite's interest in the Rock Island gold properties. The Company acquired 100% of Lexshell 831 (Pty) Ltd (“Lexshell 831”), a Company duly incorporated and registered in the Republic of South Africa. Lexshell 831 was the legal and beneficial owner of 80% of the issued and outstanding shares of Lexshell 837 (Pty) Ltd (Lexshell 837), a Company incorporated and registered in the Republic of South Africa. Lexshell 837 owns 50% of the shares of Rock Island Trading (Pty) Ltd, reducing to 45% once the Community trust is established. Total consideration paid was USD $2,500,000 (CAN $2,497,792) and 2,500,000 common shares valued at $3,182,500 of the Company. Total acquisition costs of $5,680,292 have been capitalized. This amount is reviewed annually to identify any potential impairment in the asset. The exploration asset is proportionality consolidated and held at cost less impairment. On October 26, 2012, Lexshell 831 sold a further option for 16% of the Common Shares in Lexshell 837 to Malungani Resources (Pty) Ltd., a company representing the Community Trust for Rock Island. Total consideration is Rand 3,600,000. No receivable has been set up for this amount, as it will be paid for proceeds from the property.

Balance January 1, 2012 $ -

Acquisition of jointly controlled entity Rock Island $ 5,680,292

Balance December 31, 2012 $ 5,680,292

Balance September 30, 2013 $ 5,680,292

10. SHARE CAPITAL AND CONTRIBUTED SURPLUS

Authorized: unlimited common shares without par value Issued:

Number of

Shares Share Capital $

Balance January 1, 2011 32,950,414 6,461,646 Shares issued on exercise of warrants 2,736,644 851,359 Shares issued on exercise of options 285,210 77,109 Private placement 1,235,913 1,306,327

Balance December 31, 2011 37,208,181 8,696,441

Shares issued on exercise of warrants 2,323,987 1,108,724 Shares issued on exercise of options 390,500 105,350 Shares issued on property purchase 2,500,000 3,182,500 Private Placements 11,802,160 8.190.299 Less value ascribed to warrants - (4,372,660)

Balance December 31, 2012 54,224,828 16,910,654

Shares issued on exercise of warrants 153,750 130,688 Shares issued on exercise of options 250,000 37,500 Shares of subsidiary issued to non-controlling interest

350,000 199,500

Balance September 30, 2013 54,978,578 17,278,342


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Share option activities for the periods ended September 30, 2013 and December 31, 2012 are as follows:

2013 2012

Number of

Options

Weighted Average

Exercise Price Number of

Options

Weighted Average

Exercise Price

Balance – beginning of year 3,350,000 $1.43 2,525,000 $1.34

Granted - - 1,675,000 $1.30

Exercised 250,000 $0.05 (390,500) $0.27

Forfeited 400,000 $1.30 (459,500) $1.47

Outstanding and exercisable –

end of year 2,700,000 $1.54 3,350,000 $1.43

Expiry Date

Weighted Average

Remaining Contractual Life in Years

Exercise Price 2013 2012

July 15, 2015 - $ 0.15 250,000

November 3, 2015 2.09 $ 1.30 500,000 575,000

June 24, 2016 2.73 $ 2.00 450,000 450,000

July 25, 2016 2.82 $ 2.31 250,000 325,000

August 30, 2016 2.92 $ 2.35 75,000 75,000

July 11, 2017 3.78 $1.30 1,325,000 1,575,000

October 18, 2017 4.05 $1.30 100,000 100,000

2,700,000 3,350,000


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11. WARRANTS Warrants The following table summarizes the number of common shares reserved pursuant to warrant activities during the period ended September 30, 2013 and December 31, 2012:

2013 2012

Number of Warrants

Weighted Average Exercise

Price Number of Warrants

Weighted Average Exercise

Price

Outstanding – beginning of year 5,901,082 $0.95 2,363,358 $0.48

Granted - - 5,901,082 $0.95

Exercised 153,750 $0.85 (2,323,987) $0.48 Expired 1,075,456 1.40 (39,371) $0.85

Outstanding and exercisable – end of year 4,671,876 $0.85 5,901,082 $0.95

Expiry Date

Weighted Average

Remaining Contractual Life in Years Exercise Price 2013 2012

July 16, 2013 0.55 $ 1.40 - 1,075,456

October 26, 2014 1.07 $ 0.85 4,671,876 4,825,626

4,671,876 5,901,082

12. RELATED PARTY TRANSACTIONS

Management and consulting fees of $ 559,005 (2012 - $526,870) were paid to officers and directors or to companies controlled by officers or directors. In addition stock based payments awarded to officers and directors of the Company of $ 77,738 (2012 - $1,349,775) were expensed. The Company incurred services of $ 154,730 in 2013 (2012 - $ 219,977 ) from McCarthy Tétrault LLP and $ 84,597 from Caledonian Consultancy, law firms where one of the Company’s Directors is a Partner. At September 30, 2013, the Company owed $ 72,787 (2012 - $Nil) to related parties.

The Company is a 28.8% shareholder in jointly controlled entity Rock Island Trading (Pty) Ltd located in South Africa.


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Pursuant to the joint venture agreement relating to the assets of Rock Island. The Company funds the joint venture with Corridor Mining Resources (“CMR”) on a 50:50 basis. 50% of expenditures incurred by Giyani in respect of Rock Island are recoverable from CMR either by direct refund, from proceeds of any future sale of the property or from future production from the property. Both parties are to share the costs evenly on an ongoing basis. Exploration costs are recorded in a loan account with Rock Island where interest is accrued at an agreed upon rate. This loan will be repaid out of proceeds from the sale of the Rock Island asset. The loan is unsecured, with no fixed repayment terms and bears interest at South African prime +1%.

13. JOINTLY CONTROLLED ENITY

The Company has a 28.8% interest in the jointly controlled entity Rock Island Trading (Pty) Ltd., through Lexshell 837 (Pty) Ltd.

The Company recognizes its interests in jointly controlled entities using the proportionate consolidation method.

14. SEGMENTED INFORMATION

Operating segments are reported in a manner consistent with internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments and has been identified as the Company’s Chief Executive Officer. The Company has two operating segments: the exploration, evaluation and development of precious metal mining projects located in Ontario (“Ontario Mining”) and located in South Africa (“SA Mining”). The rest of the entities within the Company are grouped into a secondary segment (“Corporate”). The segmental report is as follows

For the period ending September 30, 2013 Ontario Mining SA Mining Corporate

Property and Equipment 80,199 Exploration and Evaluation 1,536,630 2,240,711 199,500 Total Assets 1,546,981 7,941,936 1,319,352 Total Liabilities 76,100 359,025 178,944 Total Loss 69,960 690,088 1,625,218 Net Additions exploration and evaluation assets 52,814 602,691 199,500 Impairment to exploration and evaluation assets - - -

For the period ending September 30, 2012 Ontario Mining SA Mining Corporate

Property and Equipment - - 96,143 Exploration and Evaluation 2,207,904 - - Total Assets 2,269,858 381,236 2,411,691 Total Liabilities 10,524 - 231,439 Total Loss 29,595 49,387 3,164,056 Net Additions exploration and evaluation assets 279,182 - - Impairment to exploration and evaluation assets - - -


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15. COMMITMENTS

The Company has committed to approximately $1,088,758 over the next 5 years for obligations under operating leases, rent, exploration and option payments. 2013 2014 2015 2016 2017

Exploration commitments 165,814 407,500 7,500 7,500 Option Payments 75,000 35,000 50,000 Rent (Oakville office) 46,778 95,243 95,243 95,243 7,937

Total 287,592 537,743 152,743 102,743 7,937

The rent payments are for the head office space located in Oakville, Ontario. This lease expires on January 31, 2017. There are no restrictions imposed on the Company with this lease. Abbie Lake, Ontario In September 2011 the Company and 2299895 executed an option agreement (the “UCEL Agreement”) with Upper Canada Explorations Limited (the “Optionor”), an arm’s length party, whereby 2299895 has a right to earn a 100% interest in certain surface and mineral rights (the “Abbie Lake Property”) near Sault. Ste. Marie, Ontario, Canada. The Company paid the Optionor $50,000 upon receipt of the approval of the UCEL Agreement by the Exchange (the “Approval Date”). The UCEL Agreement also specifies payments to the Optionor in the amount of $50,000 within 12 months of the Approval Date (paid October 2012) and $50,000 within 24 months of the Approval Date. The Company issued 200,000 common shares in the capital stock of 2299895 Ontario Inc. (“2299895”) within 10 days of the Approval Date. The Company issued 150,000 common shares in the capital stock of 2299895 on the first anniversary of the Approval Date, and 150,000 common shares in the capital stock of 2299895 will be issued on the second anniversary of the Approval Date. In April 2013, 350,000 shares of 2299895 held by the Optionor were cancelled and converted to 350,000 shares in the Company. 2299895 must pay Michael Tremblay and Jacques Robert (collectively “Tremblay/Robert”) a 3% NSR on ore and a 3% GOR on gemstones and diamonds covered under the UCEL Agreement, provided however that the Company may purchase 1.5% of the NSR at any time upon 30 days’ notice in writing in consideration for the sum of $1,500,000. 2299895 must pay Trelawney Mining and Exploration Inc. a 2% NSR on the sale or disposition of minerals covered under the UCEL Agreement, provided however that the Company may purchase 1.5% of the NSR at any time upon 30 days’ notice in writing in consideration for the sum of $750,000. The UCEL Agreement also states a minimum 2011 work commitment for 2299895 in the amount of $300,000 (“Initial Work Program”), a minimum work commitment of $700,000 by the end of the first anniversary of the Approval Date and a total work commitment of $2,000,000 by the end of the second anniversary of the Approval Date. This provision has been amended by letter agreement dated November 14, 2011, between the parties such that the Initial Work Program in the amount of $300,000 must be completed by April 30, 2012 (this initial phase payment has been satisfied), a work commitment of $700,000 must be completed by April 30, 2013 and a total work commitment of $2,000,000 by April 30, 2014.


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Pursuant to an amending agreement dated January 23, 2013, the Company renegotiated the Initial Work Program such that $600,000 must be incurred prior to December 31, 2013 and a total of $1,000,000 must be incurred by December 31, 2014. To date $434,186 of eligible expenses have been incurred against the initial work program. In addition, pursuant the January 23, 2013 amending agreement, UCEL has agreed that all future obligations pursuant to the UCEL Agreement shall be those jointly of 2299895 and C Level with the intention that all future issuances of shares and warrants will be subject to a similar adjustment as identified in the Definitive Agreement Keating, Ontario

The Company executed a licensing agreement (the “Michipicoten Agreement”) on November 1, 2011 with 3011650 Nova Scotia Limited, trading as Michipicoten Forest Resources (the “Licensor”), an arm’s length party, to acquire the license for an exploration area within the District of Algoma, Ontario, Canada. The term of the lease is 5 years and contains the option to extend the agreement for an additional 5 years.

The Company is required to pay $8,040 for the first year of the agreement and $500 multiplied by the number of grid claims that constitute the licensed area for the remaining four years of the agreement. For the renewal term, 2299895 is required to pay $600 multiplied by the number of grid claims that constitute the licensed area for the additional 5 years of the agreement. 2299895 is responsible for all taxes related to the licensed area during the term of the Michipicoten Agreement.

2299895 is required to incur minimum exploration expenditures during each license year. During each license year of the original term, an annual amount of $2,500 multiplied by the number of grid claims that constitute the licensed area must be incurred. During each license year of the renewal term, an annual amount of $3,000 multiplied by the number of grid claims that constitute the licensed area must be incurred.

On March 21, 2012, the Company executed an agreement (the “Keating East Agreement”) with 2099840 Ontario Inc trading as Emerald Geological Services (the “Licensor”), an arm’s length party, to acquire an additional 985 Ha of claims (“the Lands”) in the form of certain surface and mineral rights situated in Keating Township, Ontario, contiguous to Giyani Gold's Abbie Lake- Keating East Property On March 21, 2012, 2299895 executed an agreement (the “Keating East Agreement”) with 2099840 Ontario Inc trading as Emerald Geological Services (the “Emerald”), an arm’s length party, to have Emerald release additional 985 Ha of claims (“the Lands”) in the form of certain surface and mineral rights situated in Keating Township, Ontario, contiguous to Giyani Gold's Abbie Lake-Keating Property and then to have these lands included in the licensing agreement with the Licensor.

The agreement entitles Emerald to release completely its interest in Lands from the Licensor and to have 299895 acquire a 100% interest in the Lands in exchange for a combination of consideration comprised of: $126,600 in cash payable over three years; $100,000 in exploration expenditures and other work programs, and up to 200,000 shares in 2299895 over a period of three years, which shares are exchangeable into shares of Giyani Gold, subject to satisfaction of certain conditions. The total current value of the maximum consideration payable if all conditions are satisfied is $426,600. Under the terms of the agreement, Emerald has agreed to relinquish its license and rights in the Lands and to allow 2299895 to acquire its interest and rights in the Lands


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under license from a private arms-length corporate entity to the Company and the owner of the Lands, in exchange for an annual fee payable to that party and an annual work program.

Pursuant to an amendment agreement dated August 12, 2013, between 2299895 and Emerald, Emerald has confirmed that all future obligations pursuant to the Keating East Agreement shall be jointly those of 2299895 and C Level and has agreed to extend the date for payment of the $25,000 in consideration payable to on or before December 31, 2013 and has confirmed that the Resulting Issuer, following the completion of the Proposed QT, will be responsible for the payment of all cash payments and the 50,000 shares to be issued pursuant to the Keating East Agreement. The number of shares to be issued to Emerald is 50,000 Resulting Issuer Shares pursuant to the Emerald Securities Exchange Agreement On July 12, 2012, the Company executed a licensing agreement with a private arm’s length party (“Killen agreement”). The agreement entitles the Company to acquire a 100% interest and rights in 39.5 square kilometers of surface and mineral rights situated in Keating Township, Ontario, in exchange for an annual fee payable and an annual work program South Africa The Company entered into a binding agreement (the “Madonsi Transaction”) to acquire a 74% interest in historically past-producing Madonsi Gold Mine located in the Giyani Greenstone belt of South Africa. The Madonsi Transaction will be structured as a purchase by the Company of 100% of the issued and outstanding common shares of Lexshell 845 Investments (Pty) Ltd. (“Lexshell”), which shares are currently held by Nokuthula Ngubeni (the “Seller”). Lexshell has entered into a sale of shares and claims agreement to acquire 74% of the issued and outstanding common shares of Hectocorp (Pty) Ltd. (“Hectocorp”), which has applied for a prospecting right (permit) for gold for the Madonsi Gold Mine to the Minister of Mines and Energy of the Republic of South Africa (“the Minister”). The remaining 26% interest in Hectocorp will on completion of the sale of shares and claims agreement be owned by local South African partners. As consideration for the acquisition of the interest in Madonsi Gold Mine, the Company will pay to the Seller a total of $2,000,000 plus a 5% finder’s fee to an arm’s length party. No costs have been deferred relating to this transaction. As of the date of the MD&A, the Company has been advised that the Minister is not likely to issue the prospecting right to Hectocorp and its partners and, accordingly, believe that the likelihood of the Company acquiring the Madonsi Gold Mine as minimal. On November 17, 2011 the Company entered into a binding agreement to acquire prospecting rights from Sephaku Gold Exploration (Proprietary) Limited ("SGE"), the holder of the rights, which are located in the Giyani Greenstone Belt ("GGB"), South Africa. The transaction will be structured as an outright purchase of the prospecting rights from SGE, which owns the rights for the Khavagari and Siyandani gold projects. Upon the execution of a definitive sale agreement and closing of the transaction, the Company will have 100% interest in these projects. As consideration for the interest in the Khavagari and Siyandani gold projects, the Company will provide the vendor a nominal cash payment of approximately Rand 1,000,000. This transaction has not closed.

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