10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] quarterly REPORT under SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2019

[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File No. 000-55600

NEVADA CANYON GOLD CORP.

(Exact Name of Registrant as Specified in its Charter)

Nevada		46-5152859
(State or other Jurisdiction of		(I.R.S. Employer
Incorporation or Organization)		Identification No.)

316 California Avenue, Suite 543
Reno, NV		89509
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (888) 909-5548

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§230.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated file,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]

Non-accelerated filer [ ] (Do not check if a smaller reporting company)	Smaller reporting company [X]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section l2, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes [ ] No [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: As of August 13, 2019, the number of shares outstanding of the issuer’s sole class of common stock, par value $0.0001 per share, is 44,550,000.

table of contents

	Page
Part I – FINANCIAL INFORMATION	3
Item 1. Financial Statements	3
Balance Sheets	3
Statements of Operations	4
Statements of Cash Flow	5
Notes to the Interim Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations	8
Results of Operations	11
Off-Balance Sheet Arrangements	14
Item 3. Quantitative and Qualitative Disclosures about Market Risk	15
Item 4. Controls and Procedures	15
PART II — OTHER INFORMATION	16
Item 1. Legal Proceedings	16
Item 1A. Risk Factors	16
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	16
Item 3. Defaults Upon Senior Securities	16
Item 4. Mine Safety Disclosures	16
Item 5. Other Information	16
Item 6. Exhibits	16
SignatureS	17

Nevada Canyon Gold Corp.

Balance Sheets

(Presented in US Dollars)

	June 30, 2019		December 31, 2018
	(Unaudited)
ASSETS
Current Assets
Cash	$	446,861	$	1,601
Prepaid expenses		4,583		1,283
		451,444		2,884

Equity investment		2,226,707		922,896
TOTAL ASSETS	$	2,678,151	$	925,780

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities
Accounts payable and accrued liabilities		331,133		282,500
Related party advances		942,232		822,132
Notes and advances payable		16,164		15,064
		1,289,529		1,119,696

Stockholders’ Equity (Deficit)
Preferred Stock: Authorized 10,000,000 preferred shares, $0.0001 par, none issued and outstanding as of June 30, 2019 and December 31, 2018		-		-
Common Stock: Authorized 100,000,000 common shares, $0.0001 par, 44,550,000 issued and outstanding as of June 30, 2019 and December 31, 2018		4,455		4,455
Additional paid in capital		522,645		522,645
Retained earnings (deficit)		861,522		(721,016	)
		1,388,622		(193,916	)
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)	$	2,678,151	$	925,780

The accompanying notes are an integral part of these unaudited interim financial statements

Nevada Canyon Gold Corp.

Statements of Operations

(Unaudited, Presented in US Dollars)

	For the three months ended June 30,						For the six months ended June 30,
	2019			2018			2019			2018

Operating expenses
Exploration expenses	$	30,687		$	-		$	60,687		$	-
General and administrative expenses		63,013			8,228			133,397			11,671
Professional fees		4,500			6,000			6,700			7,500
Transfer agent and filing fees		1,675			4,220			4,159			9,204
		(99,875	)		(18,448	)		(204,943	)		(28,375	)

Other items
Fair value gain (loss) on equity investments		624,327			(19,293	)		1,515,128			(382,315	)
Foreign exchange gain		19,033			-			22,805			-
Interest income		1,556			-			2,024			-
Realized gain on equity investment		-			-			247,524			-
Net income (loss) before income taxes		545,041			(37,741	)		1,582,538			(410,690	)

Income tax
Deferred tax recovery		-			-			-			21,978
Comprehensive income (loss)	$	545,041		$	(37,741	)	$	1,582,538		$	(388,712	)

Net income (loss) per common share - basic	$	0.01		$	-		$	0.04		$	(0.01	)
Net income (loss) per common share - diluted	$	0.01		$	-		$	0.04		$	(0.01	)
Weighted average number of common shares outstanding - Basic and diluted		44,550,000			44,550,000			44,550,000			44,550,000

The accompanying notes are an integral part of these unaudited interim financial statements

Nevada Canyon Gold Corp.

Statements of Cash Flow

(Unaudited, Presented in US Dollars)

	For the six months ended June 30,
	2019			2018
OPERATING ACTIVITIES:
Cash flows used in operating activities
Net income (loss)	$	1,582,538		$	(388,712	)
Adjustment to reconcile net income (loss) to net cash used in operating activities:
(Gain) loss on equity investments		(1,762,652	)		382,315
Foreign exchange gain		(17,212	)		-
Interest income		(2,024	)		-
Deferred tax recovery		-			(21,978	)
Changes in operating assets and liabilities:
Accounts payable		48,633			7,744
Related party payable		120,100			-
Prepaid expenses		(3,300	)		4,380
Net cashed used in operating activities		(33,917	)		(16,251	)

INVESTING ACTIVITIES
Sale of equity investments		478,077			-
Net cash provided by investing activities		478,077			-

FINANCING ACTIVITIES
Advances from shareholders		-			15,000
Advances payable		1,100			-
Net cash provided by financing activities		1,100			15,000

Net increase (decrease) in cash		445,260			(1,251	)
Cash, beginning		1,601			2,981
Cash, ending	$	446,861		$	1,730

The accompanying notes are an integral part of these unaudited interim financial statements

NEVADA CANYON GOLD CORP.

Notes to the Interim Financial Statements

For the six months ended June 30, 2019 and 2018

(Unaudited)

NOTE 1 - NATURE OF BUSINESS

Nevada Canyon Gold Corp. (the “Company”) was incorporated under the laws of the state of Nevada on February 27, 2014. The Company is involved in acquiring and exploring mineral properties in Nevada.

Going Concern

The Company’s unaudited interim financial statements are prepared using accounting principles generally accepted in the United States of America (“US GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has only recently begun its exploration operations and has not generated or realized any revenues from these business operations. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

NOTE 2 - BASIS OF PRESENTATION

The unaudited interim financial statements of the Company have been prepared in accordance with US GAAP for interim financial information and the rules and regulations of the Securities and Exchange Commission (“SEC”). They do not include all information and footnotes required by US GAAP for complete financial statements. Except as disclosed herein, there have been no material changes in the information disclosed in the notes to the financial statements for the year ended December 31, 2018, included in the Company’s Annual Report on Form 10-K, filed with the SEC. The unaudited interim financial statements should be read in conjunction with those financial statements included in Form 10-K. In the opinion of management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the three and six months ended June 30, 2019, are not necessarily indicative of the results that may be expected for the year ending December 31, 2019.

Recent Accounting Pronouncements

The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

NOTE 3 – RELATED PARTY TRANSACTIONS

Amounts due to related parties at June 30, 2019 and December 31, 2018:

	June 30, 2019		December 31, 2018
Advances due to the Chief Executive Officer (“CEO”)	$	170,232	$	170,132
Advances due to a company controlled by the CEO		300,000		240,000
Advances due to a director		271,000		271,000
Amounts due to a company controlled by a director		180,000		120,000
Advances due to a major shareholder		21,000		21,000
Related party advances	$	942,232	$	822,132

Advances are non-interest bearing, unsecured and due on demand.

During the six-month period ended June 30, 2019, the Company accrued $60,000 in consulting fees payable to a company controlled by the CEO (2018 - $Nil) and $60,000 in consulting fees to a company controlled by a director of the Company (2018 - $Nil).

NOTE 4 – ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	June 30, 2019		December 31, 2018
Trade payables	$	326,633	$	272,700
Accrued liabilities		4,500		9,800
	$	331,133	$	282,500

NOTE 5 – MINERAL PROPERTY INTERESTS

Garfield Flats Project

Lazy Claims

On August 2, 2017, the Company entered into an exploration lease agreement (the “Lazy Claims Agreement”) with Tarsis Resources US Inc. (“Tarsis”), a Nevada corporation, to lease the Lazy Claims, consisting of three claims. The term of the Lazy Claims Agreement is ten years and is subject to extension for 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, paid upon the execution of the Lazy Claims Agreement, with $2,000 payable to Tarsis on each subsequent anniversary of the effective date. The Company 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. Should the Lazy Claims Royalty payments to Tarsis be in excess of $2,000 per year, the Company will not be required to pay a $2,000 annual minimum payment.

The Lazy Claims were initially added to the Garfield Flats project, which the Company sold on July 11, 2018, to Walker River Resources (“WRR”). The Lazy Claims were excluded from the Garfield Purchase Agreement, and as such the Company continues to have a right to explore the Lazy Claims and continues to have financial obligations specified under the Lazy Claims Agreement.

During the six-month period ended June 30, 2019, the Company paid $60,000 in consulting fees associated in part with preparing geological program to be run on Lazy Claims and $687 for other exploration expenses.

NOTE 6 – EQUITY INVESTMENT

As at June 30, 2019, the Company’s equity investments consist of 3,858,000 common shares of WRR and warrants to acquire an additional 11,900,000 common shares.

Each WRR Warrant is exercisable for a period of five years without further consideration into one common share in the capital of WRR. The terms of the WRR Warrants contain a provision which prevents the Company to exercise any part of the WRR Warrants which would result in the Company owning 10% or more of the issued and outstanding shares of WRR. Because these warrants can be exercised for no further consideration they have been accounted for as being equivalent to shares and classified as available for sale.

At June 30, 2019, the fair market value of the equity investment was calculated to be $2,226,707 (2018 - $922,896) based on the market price of WRR common shares. During the six-month period ended June 30, 2019, the Company sold 5,242,000 WRR common shares for gross proceeds of $478,077. The Company recorded a net gain of $247,524 on the sale of securities.

The revaluation of the equity investment in WRR resulted in $1,515,128 gain (2018 - $382,315 loss). The gain resulted from the increase of the market price of WRR’s common stock from CAD$0.06 per share at December 31, 2018, to CAD$0.185 per share at June 30, 2019; whereas the loss for the comparative period resulted from the decrease of the market price of WRR’s common stock from CAD$0.08 per share at December 31, 2017, to CAD$0.06 per share at June 30, 2018.

NOTE 7 – NOTES AND ADVANCES PAYABLE

At June 30, 2019, the Company’s liability associated with notes and advances payable consisted of $15,064 the Company received as an advance for its operating activities during the year ended December 31, 2018, and $1,100 the Company received from WRR as a payment of its vendor payable. The advances are non-interest bearing, unsecured and due on demand.

Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

Forward Looking Statements

This Quarterly Report on Form 10-Q, including “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this report include forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 (collectively, the “Reform Act”). The Reform Act provides a safe harbor for forward-looking statements to encourage companies to provide prospective information about themselves so long as they identify these statements as forward-looking and provide meaningful cautionary statements identifying important factors that could cause actual results to differ from the projected results. All statements, other than statements of historical fact that we make in this Quarterly Report on Form 10-Q are forward-looking. The words “anticipates,” “believes,” “expects,” “intends,” “will continue,” “estimates,” “plans,” “projects,” the negative of these terms and similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean the statement is not forward-looking.

Forward-looking statements involve risks, uncertainties or other factors which may cause actual results to differ materially from the future results, performance or achievements expressed or implied by the forward-looking statements. These statements are based on our management’s beliefs and assumptions, which in turn are based on currently available information. Certain risks, uncertainties or other important factors are detailed in this Quarterly Report on Form 10-Q and may be detailed from time to time in other reports we file with the Securities and Exchange Commission, including on Forms 8-K and 10-K.

Examples of forward looking statements in this Quarterly Report on Form 10-Q include, but are not limited to, our expectations regarding our ability to generate operating cash flows and to fund our working capital and capital expenditure requirements. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for our future products, the timing and cost of capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Although we believe that the estimates and projections reflected in the forward-looking statements are reasonable, our expectations may prove to be incorrect. Important factors that could cause actual results to differ materially from the results and events anticipated or implied by such forward-looking statements include:

	●	management’s plans, objectives and budgets for its future operations and future economic performance;
	●	capital budget and future capital requirements;
	●	meeting future capital needs;
	●	our dependence on management and the need to recruit additional personnel;
	●	limited trading for our common stock;
	●	the level of future expenditures;
	●	impact of recent accounting pronouncements;
	●	the outcome of regulatory and litigation matters; and
	●	the assumptions described in this report underlying such forward-looking statements.

Actual results and developments may materially differ from those expressed in, or implied by, such statements due to a number of factors, including:

	●	those described in the context of such forward-looking statements;
	●	future product development and marketing costs;
	●	the markets of our domestic operations;
	●	the impact of competitive products and pricing;
	●	the political, social and economic climate in which we conduct operations; and
	●	the risk factors described in other documents and reports filed with the Securities and Exchange Commission, including our Registration Statement on Form S-1/A (SEC File No. 333-196075).

We operate in a very competitive environment. New risks emerge from time to time. It is not possible for us to predict all of those risks, nor can we assess the impact of all of those risks on our business or the extent to which any factor may cause actual results to differ materially from those contained in any forward-looking statement. We believe these forward-looking statements are reasonable. However, you should not place undue reliance on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and unless required by law, we expressly disclaim any obligation or undertaking to update publicly any of them in light of new information or future events.

The following is management’s discussion and analysis of financial condition and results of operations and is provided as a supplement to the accompanying unaudited condensed interim financial statements and notes to help provide an understanding of our financial condition, results of operations and cash flows during the periods included in the accompanying unaudited condensed interim financial statements.

In this Quarterly Report on Form 10-Q, “Company,” “the Company,” “us,” and “our” refer to Nevada Canyon Gold Corp., a Nevada corporation, unless the context requires otherwise.

We intend the following discussion to assist in the understanding of our financial position and our results of operations for the three and six months ended June 30, 2019 and 2018. You should refer to the Financial Statements and related Notes in conjunction with this discussion.

General

We were incorporated under the laws of the state of Nevada on February 27, 2014. We are involved in acquiring and exploring mineral properties in Nevada, however, as of the date of this Quarterly Report of Form 10-Q we have not generated or realized any revenues from these business operations.

We were a party to an exploration agreement (the “Agreement”) with an option to form a joint venture with Walker River Resources Corp. (“WRR”) on its wholly-owned Lapon Canyon Gold Project (“Lapon Canyon Project”, or “the Property”) located approximately 40 miles southeast of Yerington, Nevada. The Agreement did not grant us an interest in or to the Property, or any equity interest in WRR, but rather, granted us the right to earn up to an undivided 50% interest in the Property by incurring eligible expenditures of $500,000 (over a two-year period) in exploration and other expenses required to carry out a work program established and operated by WRR on the Property (the “Eligible Expenses”).

On July 5, 2017, we entered into a property purchase agreement (the “Purchase Agreement”) with WRR on the Lapon Canyon Project. Under the terms of the Purchase Agreement WRR agreed to buy back our 30% interest in the Lapon Canyon Project, which was prorated based on the amount of eligible expenditures we’ve incurred as of that date, in exchange for 9,100,000 common shares of WRR and warrants to acquire an additional 11,900,000 common shares (the “WRR Warrants”). Each warrant is exercisable for a period of five years without further consideration into one common share in the capital of WRR. The terms of the warrants contain a provision which prevents us from exercising any warrants which would result in us owning 10% or more of the issued and outstanding shares of WRR. Closing of the Purchase Agreement was subject to the acceptance of the TSX Venture Exchange, which was received on July 17, 2017.

On June 7, 2017, we entered into an exploration lease and option to purchase agreement (the “Garfield Agreement”) with Goodsprings Development LLC (“Goodsprings”), a Nevada limited liability corporation on the Garfield Flats Project (the “Garfield Property”), consisting of six Orsa Claims and six Lazy Claims totaling 240 acres located in sections 27 and 28 of T 7 N, R 32 E, Mineral County, Nevada about 18 miles southeast of the town of Hawthorne. The term of the Garfield Agreement is ten years, and is subject to extension for two additional terms of ten years each.

During our Fiscal 2017, we staked an additional 69 Orsa Claims and 75 Lazy Claims, with a total paid cost of $54,152. These claims were added to the Garfield Flats Project.

On July 11, 2018, we entered into a definitive purchase agreement with WRR for the sale of the Garfield Agreement. Full consideration for the Garfield Agreement consisted of a one-time cash payment of $55,000 (the “Cash Consideration”). In lieu of the Cash Consideration, WRR agreed to extinguish the $55,000 note payable we issued to WRR during our 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 the 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. As of the date of this Quarterly Report on Form 10-Q, we retain our leasing rights to Lazy Claims.

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 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 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 financial statements for the three and six months ended June 30, 2019, 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, 2018.

Results of Operations

Three and six months ended June 30, 2019, compared to the three and six months ended June 30, 2018:

	Three months ended June 30,						Changes between the			Six months ended June 30,						Changes between the
	2019			2018			periods			2019			2018			periods

Operating expenses
Exploration expenses	$	30,687		$	-		$	30,687		$	60,687		$	-		$	60,687
General and administrative expenses		63,013			8,228			54,785			133,397			11,671			121,726
Professional fees		4,500			6,000			(1,500	)		6,700			7,500			(800	)
Transfer agent and filing fees		1,675			4,220			(2,545	)		4,159			9,204			(5,045	)
Total operating expenses		(99,875	)		(18,448	)		81,427			(204,943	)		(28,375	)		176,568
Other items
Fair value gain (loss) on equity investments		624,327			(19,293	)		643,620			1,515,128			(382,315	)		1,897,443
Foreign exchange gain		19,033			-			19,033			22,805			-			22,805
Interest income		1,556			-			1,556			2,024			-			2,024
Realized gain on equity investment		-			-			-			247,524			-			247,524
Net income (loss)		545,041			(37,741	)		582,782			1,582,538			(410,690	)		1,993,228
Deferred tax recovery		-			-			-			-			21,978			(21,978	)
Net and comprehensive income (loss)	$	545,041		$	(37,741	)	$	582,782		$	1,582,538		$	(388,712	)	$	1,971,250

Revenues. We had no revenues for the three and six month periods ended June 30, 2019 and 2018. 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. Our operating expenses include exploration expenses, general and administrative expenses, professional fees and transfer agent and filing fees. During the three-month period ended June 30, 2019, our operating expenses increased by $81,427, or 441%, to $99,875 for the three months then ended, compared to $18,448 for the three-month period ended June 30, 2018. This change was mainly associated with increased general and administrative fees, which increased by $54,785 to $63,013 for the three-month period ended June 30, 2019, as compared to $8,228 we incurred during the three months ended June 30, 2018, the main component affecting the change in general and administrative expenses was associated with $60,000 in management consulting fees the Company incurred with its related parties for the services they provided during the reporting period. In addition to the increases in general and administrative expenses, our exploration expenses increased by $30,687 to $30,687 for the three-month period ended June 30, 2019, we did not incur any exploration expense during the three-month period ended June 30, 2018. These increases were in part offset by $1,500 decrease in professional fees, from $6,000 we incurred during a three-month period ended June 30, 2018 to $4,500 we incurred during the three months ended June 30, 2019, and by a $4,159 decrease in our transfer agent and regulatory fees, which amounted to $1,675 during the three-month period ended June 30, 2019, as opposed to $4,220 we incurred during the three-month period ended June 30, 2018; higher regulatory expenses in the comparative period were associated with the Company uplisting the Company’s shares from OTCPink marketplace to OTCQB.

On a year-to-date basis, during the six-month period ended June 30, 2019, our operating expenses increased by $176,568, or 622%, to $204,943 for the six months then ended, compared to $28,375 for the six-month period ended June 30, 2018. This change was mainly associated with increased general and administrative fees, which increased by $121,726 to $133,397 for the six-month period ended June 30, 2019, as compared to $11,671 we incurred during the six months ended June 30, 2018, the main component affecting the change in general and administrative expenses was associated with $120,000 in management consulting fees the Company incurred with its related parties for the services they provided during the reporting period. In addition to the increases in general and administrative expenses, our exploration expenses increased by $60,687 to $60,687 for the six-month period ended June 30, 2019, we did not incur any exploration expense during the six-month period ended June 30, 2018. These increases were in part offset by $800 decrease in professional fees, from $7,500 we incurred during a six-month period ended June 30, 2018 to $6,700 we incurred during the six months ended June 30, 2019, and by a $5,045 decrease in our transfer agent and regulatory fees, which amounted to $4,159 during the six-month period ended June 30, 2019, as opposed to $9,204 we incurred during the six-month period ended June 30, 2018; higher regulatory expenses in the comparative period were associated with the Company uplisting the Company’s shares from OTCPink marketplace to OTCQB.

Other items. During the three months ended June 30, 2019, we recognized $624,327 gain on fair value of equity investments (2018 – loss of $19,293). During the six months ended June 30, 2019, our gain on fair value of equity investments was calculated to be $1,515,128 (2018 – loss of $382,315). The gain resulted from revaluation of WRR Shares and WRR Warrants we received in exchange for our 30% interest in Lapon Canyon Gold Property, and was caused mainly by an increase in market price of WRR’s common stock from CAD$0.06 per share at December 31, 2018 (CAD$0.135 per share at March 31, 2019), to CAD$0.185 per share at June 30, 2019, and to a smaller degree from fluctuation of exchange rates between the US and Canadian dollars.

During the six-month period ended June 30, 2019, we recorded $247,524 gain on our equity investments, which resulted from the sale of 5,242,000 WRR shares during the first quarter of our Fiscal 2019 for gross proceeds of $478,077 (CAD$632,068). We invested CAD$489,500 of the proceeds from the sales of WRR shares into Guaranteed Investment Certificates (“GIC”) at floating interest rate with reference to the market. During the six-month period ended June 30, 2019, we received $1,983 in dividend payments on the balance in GIC (three months ended June 30, 2019 - $1,556), which we reinvested. In addition, we received cash interest of $41 (three months ended June 30, 2019 - $Nil). Since our investments and the funds held in the GIC account are held in Canadian dollars, during the six-month period ended June 30, 2019, we recorded gain of $22,805 associated with fluctuations in foreign exchange rates (three months ended June 30, 2019 - $19,033). We did not have similar transactions during our Fiscal 2018.

Income tax. The sale of our 30% interest in the Lapon Canyon Project in exchange for 9,100,000 common shares of WRR and warrants to acquire an additional 11,900,000 common shares, which we effected during the year ended December 31, 2017, resulted in a deferred tax expense of $358,228. During the six-month period ended June 30, 2018, we recorded $21,978 as recovery of deferred tax liability associated with the decrease in the fair market value of WRR shares. We did not have similar expenses during the six-month period ended June 30, 2019.

Net income (loss). At June 30, 2019, we recorded a net income of $1,582,538, as compared to net loss of $410,690 for the six-month period ended June 30, 2018. This change mainly resulted from $247,524 gain on the sale of WRR Shares, as well as $1,515,128 gain on revaluation of our equity investments.

Comprehensive income (loss). At June 30, 2019, we recorded a comprehensive income of $1,582,538 for the six-month period then ended, as compared to comprehensive loss of $388,712 for the six-month period ended June 30, 2018. The overall increase in our comprehensive income resulted from $247,524 gain on the sale of WRR Shares, as well as $1,515,128 gain on revaluation of our equity investments. During the six-month period ended June 30, 2018, our comprehensive loss was affected by $21,978 in recovery of deferred tax liability.

Liquidity and Capital Resources

	June 30, 2019			December 31, 2018

Current assets	$	451,444		$	2,884
Current liabilities		1,289,529			1,119,696
Working capital deficit	$	(838,085	)	$	(1,116,812	)

As of June 30, 2019, we had a cash balance of $446,861, of which $376,060 (CAD$492,150) were held in GIC at floating interest rate with reference to market, and working capital deficit of $838,085 with cash flows used in operations totaling $33,917 for the period then ended. During the six months ended June 30, 2019, our operations were funded with $478,077 cash we generated from the sales of our equity investments.

We did not generate sufficient cash flows from our operating activities to satisfy our cash requirements for the six-month period ended June 30, 2019. 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 by borrowing funds or issuing our equity. There can be no assurance that we will be successful in our efforts to raise additional capital.

Cash Flow

	Six Months Ended June 30,
	2019			2018
Cash flows used in operating activities	$	(33,917	)	$	(16,251	)
Cash flows provided by investing activities		478,077			-
Cash flows provided by financing activities		1,100			15,000
Net increase (decrease) in cash during the period	$	445,260		$	(1,251	)

Net cash used in operating activities: 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 $3,300 to increase our prepaid expenses. These uses of cash were offset by $48,633 increase in our accounts payable and by $120,100 increase in the amounts due to our related parties.

For the six months ended June 30, 2018, our net cash used in operating activities decreased by $11,000, or 40%, to $16,251 compared with $27,251 for the comparable period in 2017. During the six months ended June 30, 2018, we used $28,375 to cover our cash operating costs. This use of cash was offset by $7,744 increase in our accounts payable and accrued liabilities and by $4,380 decrease in our prepaid expenses.

Adjustments to reconcile net income (loss) to net cash used by operating activities: During the six months ended June 30, 2019, we recognized $1,515,128 gain on revaluation of fair value of equity investments associated with WRR Shares and WRR Warrants we received in exchange for our 30% interest in Lapon Canyon Gold Property which resulted from the fluctuation in share prices and foreign exchange rates, 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 $2,024 we received in interest and dividend income on our investments.

During the six months ended June 30, 2018, our operating expenses included $382,315 loss we recognized on revaluation of fair value of equity investments associated with WRR Shares and WRR Warrants we received in exchange for our 30% interest in Lapon Canyon Gold Property, and $21,978 deferred tax recovery associated with the decrease in fair market value of WRR shares.

Net cash generated by investing activities: During the six-month period ended June 30, 2019, we generated $478,077 on the sale of 5,242,000 WRR Shares.

During the six months ended June 30, 2018, we did not have any investing transactions that would have affected our cash flows.

Net cash provided by financing activities: During the six months ended June 30, 2019, we recorded $1,100 as non-interest-bearing advance owed to WRR for a payment that WRR made on our behalf.

During the six months ended June 30, 2018, we received $10,000 as a non-interest bearing advance from our director and $5,000 as non-interest bearing advance from our CEO and President.

Going Concern

At June 30, 2019, we had a working capital deficit of $838,085 and cash on hand of $446,861, which is not sufficient enough to carry out our current plan of operation. Our capital assets include equity investment in WRR shares and warrants, which we can use as a source of additional cash inflow should we decide to sell all or part of our investment. In addition, we are actively pursuing other means of financing our operations through additional equity and/or debt financing. There can be no assurance that we will be able to procure funds sufficient 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.

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 six months ended June 30, 2019.

Unproved Mineral Properties

As of the date of this quarterly report on Form 10-Q, our mineral interests are represented by Lazy Claims Property under an exploration lease agreement with Tarsis Resources US Inc. (“Tarsis”), a Nevada corporation, dated for reference August 2, 2017, (the “Lazy Claims Agreement”). The Lazy Claims Agreement grants us a right to conduct exploratory work for minerals on three Lazy Claims totaling 60 acres and located in Mineral County, Nevada about 18 miles southeast of the town of Hawthorne (the “Lazy Claims”).

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 for 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.

Off-Balance Sheet Arrangements

None.

Use of Estimates

Areas where significant estimation judgments are made and where actual results could differ materially from these estimates are the carrying value of certain assets and liabilities which are not readily apparent from other sources and the classification of net operating loss and tax credit carry forwards.

We evaluate impairment of our long-lived assets by applying the provisions of SFAS No. 144. In applying those provisions, we have not recognized any impairment charge on our long-lived assets during the three and six months ended June 30, 2019.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

We conducted an evaluation, under the supervision and with the participation of the Chief Executive Officer, who is also our Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(f) under the Securities Exchange Act of 1934 as amended (the “Exchange Act”)). Based on this evaluation, the Chief Executive Officer, who is also our Chief Financial Officer, concluded that our disclosure controls and procedures as of the end of the fiscal quarter covered by this quarterly report on Form 10-Q were not effective to ensure that information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

(b) Changes in Internal Controls over Financial Reporting

During the six-month period ended June 30, 2019, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Inherent Limitations of Internal Controls

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the U.S. GAAP. Our internal control over financial reporting includes those policies and procedures that:

	●	pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;

	●	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with the U.S. GAAP, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and

	●	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.

Management does not expect that our internal controls will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of internal controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. Also, any evaluation of the effectiveness of controls in future periods are subject to the risk that those internal controls may become inadequate because of changes in business conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this item.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

Item 6. Exhibits

(a)

The following exhibits are filed with this quarterly report on Form 10-Q or are incorporated herein by reference:

Exhibit Number		Description

10.01.1		Definitive Agreement, dated December 17, 2015 (1)
10.01.2		Exploration and Option Agreement, dated September 15, 2015 (1)
10.02		Exploration Lease and Option to Purchase Agreement, dated June 7, 2017 (2)
10.03		Option Purchase Agreement, dated July 5, 2017 (3)
10.04		Exploration Lease Agreement, dated August 2, 2017 (4)
10.05		Definitive Purchase Agreement dated July 11, 2018 (5)
31.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934*.
32.1		Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*.
101.INS		XBRL Instance Document.
101.SCH		XBRL Taxonomy Extension Schema.
101.CAL		XBRL Taxonomy Extension Calculation Linkbase.
101.DEF		XBRL Taxonomy Extension Definition Linkbase.
101.LAB		XBRL Taxonomy Extension Label Linkbase.
101.PRE		XBRL Taxonomy Extension Presentation Linkbase.

	(1)	Incorporated by reference herein from the Form 8-K filed by the Company on December 22, 2015.
	(2)	Incorporated by reference herein from the Form 8-K filed by the Company on June 8, 2017.
	(3)	Incorporated by reference herein from the Form 8-K filed by the Company on July 7, 2017.
	(4)	Incorporated by reference herein from the Form 8-K filed by the Company on August 7, 2017.
	(5)	Incorporated by reference herein from the Form 8-K filed by the Company on July 12, 2018.
	*	Filed herewith.

SignatureS

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	NEVADA CANYON GOLD CORP.

August 13, 2019	/s/ Jeffrey A. Cocks
	Jeffrey A. Cocks
	Chairman and Chief Executive Officer (Principal Executive
	Officer) and Chief Financial Officer (Principal Accounting Officer)