Gold Torrent, Inc. - FORM 10-Q

Attached files

file	filename
EX-10.1 - Gold Torrent, Inc.	ex10-1.htm
EX-32.2 - Gold Torrent, Inc.	ex32-2.htm
EX-32.1 - Gold Torrent, Inc.	ex32-1.htm
EX-31.2 - Gold Torrent, Inc.	ex31-2.htm
EX-31.1 - Gold Torrent, Inc.	ex31-1.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

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

For the transition period from ______________________ to ______________________

Commission file number: 000-53872

GOLD TORRENT, INC.
(Exact name of registrant as specified in its charter)

Nevada

06-1791524

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

960 Broadway Avenue

Suite 530

Boise, Idaho 83706

(Address of principal executive offices, including zip code)

(208) 343-1413

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, Par Value $0.001

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 preceding 12 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 corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 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 Company is a larger accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	[ ]	Accelerated filer	[ ]
Non-accelerated filer	[ ]	Smaller reporting company	[X]
		Emerging growth company	[ ]

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of February 14, 2018, the registrant’s outstanding common stock consisted of 20,110,552 shares.

Table of Contents

	PART I – FINANCIAL INFORMATION

Item 1.	Interim Consolidated Financial Statements	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	23
Item 4.	Controls and Procedures	23

	PART II – OTHER INFORMATION

Item 1.	Legal Proceedings	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	27
Item 5.	Other Information	28
Item 6.	Exhibits	29

	SIGNATURES	30

PART 1 – FINANCIAL INFORMATION

Item 1. Interim Consolidated Financial Statements

The unaudited interim consolidated financial statements of GOLD TORRENT, INC. (“we”, “our”, “us”, the “Company”) follow. All currency references in this report are to US dollars unless otherwise noted.

GOLD TORRENT, INC.

Interim Consolidated Balance Sheets

(Unaudited - Expressed in US dollars)

	December 31, 2017			March 31, 2017
					(Audited)
Assets

Current
Cash	$	1,316,452		$	1,584,684
Advances receivable		747,639			-
Prepaids and deposits		25,836			153,487

		2,089,927			1,738,171
Long Term Assets
Mineral property interest (Note 4)		4,285,714			405,406
Land and other property		104,034			-
Property, plant and equipment (Note 5)		1,855,879			-

		6,245,627			405,406
Total Assets	$	8,335,554		$	2,143,577

Liabilities
Current
Accounts payable (Note 6)	$	309,829		$	356,274
Accrued liabilities		603,566			475,573
Payroll liabilities		98,364			-
		1,011,759			831,847
Long Term Liabilities
Long-term debt (Note 7)		8,500,000			2,000,000
Total Liabilities		9,511,759			2,831,847

Stockholders’ Equity (Deficiency)
Common Stock (Note 9)
Authorized:
200,000,000 common shares, $0.001 par value
20,000,000 preferred shares, $0.001 par value
Issued and outstanding:
20,110,552 common shares, $0.001 par value		20,111			33,087
(March 31, 2017 – 14,758,600 common shares)
Additional Paid-in Capital		5,746,214			3,057,263
Contributed Surplus (Notes 9 and 10)		866,808			208,808
Non-controlling Interest (Note 4)		2,186,541			-
Deficit		(9,995,879	)		(3,987,428	)

Total Stockholders’ Equity (Deficiency)		(1,176,205	)		(688,270	)

Total Liabilities and Stockholders’ Equity (Deficiency)	$	8,335,554		$	2,143,577

Nature of operations and going concern (Note 1)

See accompanying notes to interim financial statements.

GOLD TORRENT, INC.

Interim Consolidated Statements of Operations

(Unaudited - Expressed in US dollars)

	For the Three Months Ended December 31, 2017			For the Three Months Ended December 31, 2016			For the Nine Months Ended December 31, 2017			For the Nine Months Ended December 31, 2016
Income
Interest Received	$	2,594		$	-		$	2,594		$	-
Expenses
Accounting and legal		34,811			21,311			209,132			96,864
Advertising and promotion		-			-			12,049			-
Amortization		1,840			-			5,521			-
Bank charges and interest		289,434			208			290,227			1,792
Executive compensation and payroll (Note 8)		411,991			121,250			1,134,166			363,750
Development		1,330,321			308,731			3,488,082			723,091
Insurance		64,118			-			278,013			-
Licenses and fees		17,289			4,614			28,980			55,113
Office		43,206			1,588			112,612			7,908
Professional Services		19,940			-			43,682			-
Property Tax		-			-			1,432			-
Share-based payments		125,000			-			2,449,000			-
Travel and transport		18,780			8,743			57,322			31,938
Loss before Other Items		(2,356,730	)		(466,445	)		8,110,218			(1,280,456	)

Gain on settlement of debt		-			-			-			66,000
Net Loss and Comprehensive Loss for the Period	$	(2,354,136	)	$	(466,445	)	$	(8,107,624	)	$	(1,214,456	)
Attributed to non-controlling interest	$	(557,387	)	$	-		$	(2,099,173	)	$	-
Attributed to stockholders of the company	$	(1,796,749	)	$	(466,445	)	$	(6,008,451	)	$	(1,214,456	)

Weighted average number of common shares outstanding		20,093,093			12,651,858			19,084,723			14,189,586
Basic and diluted loss per share	$	(0.09	)	$	(0.04	)	$	(0.31	)	$	(0.09	)

See accompanying noted to interim financial statements.

GOLD TORRENT, INC.

Interim Consolidated Statements of Cash Flows

(Unaudited - Expressed in US dollars)

	For the Nine Months Ended September 30, 2017			For the Nine Months Ended December 31, 2016

Cash Flow from Operating Activities
Net loss for the period	$	(8,107,624	)	$	(1,214,456	)
Items not involving cash:
Share- based payments		2,449,000			-
Gain on settlement of debt		-			(66,000	)
Accrued interest on debt		185,459			-
Amortization		5,521			-
Changes in non-cash working capital items:
Advances receivable		(747,639	)		-
Prepaids and deposits		127,651			90,713
Accounts payable and accrued liabilities		(103,910	)		110,954
Payroll liabilities		98,363			-

Cash Used in Operating Activities		(6,093,179	)		(1,078,789	)

Cash Flow from Investing Activity
Purchase of property, plant and equipment		(1,560,028	)		(100,507	)

Cash used in Investing Activity		(1,560,028	)		(100,507	)
Cash Flow from Financing Activities
Proceeds from issuance of common stock		884,975			1,210,000
Proceeds from long-term debt		6,500,000			-
Repayment of shareholders’ loan		-			(93,793	)

Cash provided by financing Activities		7,384,975			1,116,207
Decrease in Cash		(268,232	)		(63,089	)
Cash, Beginning of Period		1,584,684			265,315

Cash, End of Period	$	1,316,452		$	202,226

Supplemental Information
Taxes paid	$	-		$	-
Interest paid	$	-		$	-
Interest received	$	2,594		$	-
Shares cancelled	$	59,000		$	-

See accompanying notes to interim financial statements.

GOLD TORRENT, INC.

Interim Consolidated Statements of Stockholders’ Equity (Deficiency)

(Unaudited - Expressed in US dollars)

	Shares of Common Stock Issued			Common Stock			Additional Paid-in Capital			Contributed Surplus		Non- controlling Interest			Deficit			Total
Balance, March 31, 2016		10,828,600		$	29,157		$	1,606,193		$	208,808	$	-		$	(2,040,757	)	$	(196,599	)
Shares issued for cash		3,930,000			3,930			1,451,070			-		-			-			1,455,000
Net loss for the year		-			-			-			-		-			(1,946,671	)		(1,946,671	)
Balance, March 31, 2017		14,758,600			33,087			3,057,263			208,808		-			(3,987,428	)		(688,270	)
Par value adjustment		-			(18,328	)		18,328			-		-			-			-
Mineral property leases contributed		-			-			-			-		4,285,714			-			4,285,714
Shares issued for cash		1,769,952			1,770			883,205			-		-			-			884,975
Share-based payments		3,700,000			3,700			1,846,300			-		-			-			1,850,000
Stock options granted		-			-			-			599,000		-			-			599,000
Shares cancelled		(118,000	)		(118	)		(58,882	)		59,000		-			-			-
Net loss for the period		-			-			-			-		(2,099,173	)		(6,008,451	)		(8,107,624	)
Balance, December 31, 2017		20,110,552		$	20,111		$	5,746,214		$	866,808	$	2,186,541		$	(9,995,879	)	$	(1,176,205	)

See accompanying notes to interim financial statements.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

1.	Nature of Operations and Going Concern

Gold Torrent, Inc. (the “Company”) was incorporated in Nevada as Celldonate Inc. on August 15, 2006. Historically, the Company was in the business of developing mobile monetization solutions and applications. On September 10, 2013, certain shareholders, including the Company’s current Chief Executive Officer and its President, acquired approximately 53% of the Company’s issued and outstanding common stock resulting in a change of control. In connection with the transaction, Daniel Kunz was appointed Executive Chairman and Ryan Hart was appointed Chief Executive Officer and President. Thereafter, the Company began to focus on acquiring ownership in late-stage exploration to development stage gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America. During the fiscal year ended March 31, 2015, the Company entered into an Exploration and Option to Enter Joint Venture Agreement with a third party (Note 4).

On October 19, 2017, Gold Torrent, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Gold Torrent (Canada) Inc., a wholly-owned subsidiary of the Company organized under the laws of the Province of British Columbia, Canada (“Gold Torrent Canada”) and GTOR US Merger Co, a Nevada corporation and wholly-owned subsidiary of Gold Torrent Canada (“US Merger Co”). Pursuant to the terms of the Merger Agreement, the parties would effect a merger transaction that will effectively change the jurisdiction of incorporation of the corporate parent from Nevada to British Columbia, Canada (the “Redomicile Transaction”).

The Company has incurred losses since inception and has an accumulated deficit of $9,995,879 (March 31, 2017 - $3,987,428) as of December 31, 2017. As at December 31, 2017, the Company has working capital of $1,078,168 (March 31, 2017 - $906,324).

These factors raise some doubt about the ability of the Company to continue as a going concern. The Company’s continuance as a going concern is dependent on the success of the efforts of its directors and principal stockholders in providing financial support in the short-term, and achieving profitable operations. In the event that such resources are not secured, the assets may not be realized or liabilities discharged at their carrying amounts, and the difference from the carrying amounts reported in these consolidated financial statements could be material.

These consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of the assets or the amounts and classifications of the liabilities that may result from the inability of the Company to continue as a going concern.

2.	Significant Accounting Policies

(a)

Basis of presentation

These unaudited interim financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). The Company’s functional and reporting currency is the US dollar.

These unaudited consolidated interim financial statements include the accounts of the Company and the accounts of the Company’s 70% owned subsidiary, Alaska Gold Torrent, LLC, incorporated in the State of Alaska. For all periods presented, all significant inter-company accounts and transactions have been eliminated in the consolidated financial statements.

The results of operations for the consolidated interim period presented are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire year ending March 31, 2018. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been condensed or omitted. These unaudited consolidated interim financial statements and notes included herein have been prepared on a basis consistent with, and should be read in conjunction with, the Company’s audited financial statements and notes for the year ended March 31, 2017, as filed in its Form 10-K.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

2.	Significant Accounting Policies (continued)

(b)

Use of estimates

The preparation of interim consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the interim financial statements, and the reported amounts of revenues and expenses during the reporting period. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to accounts payable and accrued liabilities, the fair value of warrants attached to common shares issued, the fair value of shares issued for services, the fair value of stock options granted, and the recoverability of income tax assets.

While management believes the estimates used are reasonable, actual results could differ from those estimates and could impact future results of operations and cash flows.

(c)

Basic and diluted earnings (loss) per share

Basic earnings (loss) per share is computed using the weighted average number of common shares outstanding. Diluted earnings (loss) per share assumes the exercise of common stock equivalents, such as stock issuable pursuant to the exercise of stock options and warrants. However, the calculation of diluted loss per share excludes the effects of various conversions and exercise of options and warrants that would be anti-dilutive.

(d)

Foreign currency translation

Transactions in currencies other than the US dollar are translated into US dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, except amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net income/loss.

(e)

Financial instruments

All financial instruments are classified as one of the following: held-to-maturity, loans and receivables, held-for-trading, available-for-sale or other financial liabilities. Financial assets and liabilities held-for-trading are measured at fair value with gains and losses recognized in net income. Financial assets held-to-maturity, loans and receivables, and other financial liabilities are measured at amortized cost using the effective interest method. Available-for-sale instruments are measured at fair value with unrealized gains and losses recognized in other comprehensive income and reported in stockholders’ equity.

A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company prioritizes the inputs into three levels that may be used to measure fair value:

	(i) Level 1 –	Applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

	(ii) Level 2 –	Applies to assets or liabilities for which there are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly, such as quoted prices for similar assets or liabilities in active markets, or indirectly, such as quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions.

	(iii) Level 3 –	Applies to assets or liabilities for which there are unobservable market data.

Transaction costs that are directly attributable to the acquisition or issue of financial instruments that are classified as held-to-maturity, loans and receivables or other financial liabilities are included in the initial carrying value of such instruments and amortized using the effective interest method. Transaction costs classified as held-for-trading are expensed when incurred, while those classified as available-for-sale are included in the initial carrying value.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

2.	Significant Accounting Policies (continued)

(f)

Income taxes

The Company uses the asset and liability approach in its method of accounting for income taxes that requires the recognition of deferred tax liabilities and assets for expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. The Company recognizes the effect of uncertain tax positions where it is more likely than not based on technical merits that the position could be sustained where the tax benefit has a greater than 50% likelihood of being realized upon settlement. A valuation allowance against deferred tax assets is recorded if based upon available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

(g)

Share-based payments

The Company records all share-based payments at fair value. Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized through profit or loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied.

Where equity instruments are granted to non-employees, they are recorded at the fair value of the goods or services received. When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model.

At each balance sheet date, the amount recognized as an expense is adjusted to reflect the actual number of stock options expected to vest. On the exercise of stock options, common stock is recorded for the consideration received and for the fair value amounts previously recorded to contributed surplus. The Company uses the Black-Scholes option pricing model to estimate the fair value of share-based payments.

(h)

Exploration and evaluation

The Company is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration and development costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred. When the Company has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property will be capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment at each fiscal year end. An impairment loss is recognized when the sum of the expected undiscounted future cash flows is less than the carrying amount of the mineral property. Impairment losses, if any, are measured as the excess of the carrying amount of the mineral property over its estimated fair value.

(i)

Property, plant and equipment

Property, plant and equipment are carried at cost less accumulated amortization and impairment losses, if any. Amortization is provided at rates and methods designed to write off cost of the assets over their estimated useful lives as follows:

Mine and mill, buildings and equipment		Units-of-production method
Computers		25% declining balance
Vehicles		20% declining balance
Furniture and fittings		20% declining balance

Management reviews the amortization method, useful lives and residual values annually and accounts for any changes in estimates on a prospective basis.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

2.	Significant Accounting Policies (continued)

(j)

Recent accounting guidance adopted

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company 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.

3.	Financial Instruments

The Company has designated its cash as held-for-trading; advances receivable as loans and receivables; and accounts payable, accrued liabilities, and payroll liabilities as other financial liabilities.

(a)

Fair value

The fair values of the Company’s cash, advances receivable, accounts payable, accrued liabilities, and payroll liabilities approximate their carrying values due to the short-term maturity of these instruments.

(b)

Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company is not exposed to significant credit risk as at December 31, 2017.

(c)

Translation risk

The Company’s functional currency is the US dollar. The Company translates transactions in foreign currencies into US currency using rates on the date of the transactions. Translation risk is considered minimal, as the Company does not incur any significant transactions in currencies other than US dollars.

(d)

Interest rate risk

The Company is not exposed to significant interest rate risk due to the short-term maturity of its monetary current assets and liabilities.

(e)

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying its financial obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. At December 31, 2017, the Company had accounts payable of $309,829 (March 31, 2017 - $356,274), which are due within 30 days or less. At December 31, 2017, accrued liabilities of 603,566 (March 31, 2017 - $475,573) consist of accrued accounting and legal fees of $10,000 (March 31, 2017 - $15,000), accrued interest of $185,458 (March 31, 2017 - $25,205), accrued executive compensation of $408,108 (March 31, 2017 - $407,607), and exploration and development costs of $Nil (March 31, 2017 - $27,761).

4.	Exploration, Development and Mineral Properties

On July 28, 2014, the Company entered into a non-binding Letter of Intent with a third party to negotiate and enter into a Joint Venture Agreement for the development of the gold property known as Lucky Shot, Alaska (formerly known as “Willow Creek”). On November 5, 2014, the Company signed an Exploration and Option to Enter Joint Venture Agreement for the Lucky Shot project in Alaska. The Exploration and Option Agreement provides the Company with the right to earn up to 70% interest in a joint venture with Miranda USA Inc. (“Miranda”) by making certain expenditures over the next three years totaling $10,000,000. The principal terms of the Exploration and Option Agreement provide that the Company can earn an initial 20% interest in the Lucky Shot gold project by incurring an initial work commitment of $1,070,000 before May 5, 2016 in costs related to exploration and development of the project.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

4.	Exploration, Development and Mineral Properties (continued)

On January 15, 2015 and January 6, 2016, the Company paid $150,000 for a Lease Agreement between Miranda and a private company. In addition, the Company is committed to paying $150,000 every year on January 15. The purpose of this lease is to afford Miranda the opportunity to enter onto and produce minerals from certain patents and State of Alaska mining claims located in the State of Alaska. This lease is to be vended by Miranda to the joint venture upon the Company earning its initial 20% interest. On May 25, 2016, the Company received formal notice from Miranda that the Company has acquired a permanent 20% interest in the Lucky Shot project by virtue of meeting the initial earn-in required expenditures.

On July 8, 2016, the Company purchased a 30-acre parcel of private, undeveloped land for $100,506 and on March 15, 2017, purchased two buildings for $304,900 in Alaska near the Lucky Shot project for the siting of a gold recovery plant.

On February 13, 2017, the Company entered into a $11,250,000 gold and silver prepayment arrangement for the Lucky Shot gold project. The Streaming Agreement provided for a closing on the first tranche of $6,250,000 upon satisfaction by the Company of certain closing conditions.

On June 27, 2017, the Company and the Stream Investor agreed, after the satisfaction by the Company of a majority of the Tranche 1 closing conditions, to amend certain provisions of the Streaming Agreement and concurrently close on one-half of Tranche 1 in the amount of $3,250,000. The second half of the first tranche, also in the amount of $3,250,000, has been consummated on August 8, 2017 upon satisfaction of the final closing conditions.

The Company has acquired a permanent 70% interest in the Lucky Shot project by virtue of meeting the earn-in required expenditures. In addition, Miranda contributed mineral property leases valued at $4,285,714 to the Lucky Shot project.

On August 28, 2017, the Company entered into a Mining Services Agreement with Mining & Environmental Services, LLC (“MES”) for development of the Company’s Luck Shot Mine, and other related mining services, including the development of the land located around the mine. If fully completed, it is estimated the Company will pay approximately $4,500,000 for such services. The Agreement contains customary representations, warranties and covenants by the parties for like transactions. On November 14, 2017, the Company issued a notice of suspension to MES due to the decision to slow down activities for the winter period and until further funding is arranged. On November 20, 2017, the Agreement was terminated for convenience.

As at December 31, 2017, mineral property interest consists of:

Mineral property leases

4,285,714

Cumulative Funding to Alaska Gold Torrent LLC:

As at December 31, 2017, the Company has provided funding to Alaska Gold Torrent, LLC in the total amount of $9,886,925. This consists of cumulative acquisition, exploration, engineering costs and capital contributions of $2,886,925 as at March 31, 2017, and $7,000,000 in additional funding during the nine months ended December 31, 2017:

As at March 31, 2017	$	2,886,925
Current period funding		500,000
Streaming Agreement financing		6,500,000
	$	9,886,925

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

5.	Property, Plant and Equipment

Balance as at December 31, 2017:

	Cost		Amortization		Net Book Value
Buildings	$	995,728	$	-	$	995,728
Mine Equipment./Infrastructure		640,475		-		640,475
Mill Equipment		152,775		-		152,775
Computers		4,916		460		4,456
Vehicles		63,562		4,766		58,796
Furniture and fittings		3,944		295		3,649
	$	1,861,400	$	5,521	$	1,855,879

6.	Accounts Payable

Accounts payable of $309,829 as at December 31, 2017 includes the following:

$ 296,088 due to unrelated parties,

$ 10,625 in salary due to directors,

$ 3,116 in travel expenses due to directors.

7.	Long-Term Debt

On February 13, 2017, the Company entered into a convertible preferred note and investment agreement with two Singapore private limited companies for a $2,000,000 convertible preferred note and a $11,250,000 gold and silver prepayment arrangement for the Company’s Lucky Shot gold project. The Company paid $100,000 in legal expenses and used the proceeds from the note as part of the Company’s initial investment in the project.

The convertible preferred note bears interest at 10% per annum, is due on February 13, 2019 and secured by certain assets of the Company. It is also convertible into 15% of the shares of common stock of the Company on a post-money basis on the earlier of: (i) a Canadian Going Public Transaction or (ii) funding of the $11,250,000 prepayment arrangement and following an equity raise by the Company of $5,000,000 or more (of which $2,000,000 will include the conversion of the preferred note).

Concurrent with the closing and funding of the convertible preferred note, the Company and Miranda, a wholly-owned subsidiary of Miranda Gold Corp. of Canada, executed a joint venture operating agreement and formed Alaska Gold Torrent, LLC, an Alaska limited liability company under which the Company now owns a seventy percent (70%) undivided interest in the project.

On August 8, 2017, the Company received the second payment of $3,250,000 for a total of $6,500,000 as per the Streaming Agreement (Note 4).

8.	Related Party Transactions

Transactions with related parties for goods and services are based on the exchange amount as agreed to by the related parties.

Details of related party transactions are as follows:

(a)

During the year ended March 31, 2016, the Company signed employment agreements with three directors and officers. During the period ended December 31, 2017, the Company incurred $355,896 (December 31, 2016 - $363,750) in consulting fees (included within executive compensation) to these directors and officers. As at December 31, 2017, $421,848 (March 31, 2017 - $462,607) were owing to these related parties.

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

8.	Related Party Transactions (continued)

	(b)	On February 13, 2017, the Company entered into a Gold and Silver Prepayment Agreement, and as per this agreement, the Company signed an employment agreement with one director. A total of $81,000 (December 31, 2016 - $Nil) was paid in the period ended December 31, 2017 as a result of this agreement.

9.	Segmented Information

The Company operates primarily in one business segment being the identification and development of mining projects with substantially all of its assets and operations located in the United States.

10.

Common Stock

During the year ended March 31, 2017, the Company entered into subscription agreements for the issuance of 2,040,000 shares of common stock at a purchase price of $0.25 per share for a total amount of $510,000 in cash, and 1,890,000 shares of common stock at a purchase price of $0.50 per share for a total amount of $945,000 in cash.

During the period ended December 31, 2017, the Company entered into subscription agreements for the issuance of 3,700,000 bonus shares of common stock as compensation to its current CEO, Chairman, management and technical team for $0.50 per share.

The Company also issued 1,769,952 shares of common stock for $884,975 in cash in the period ended December 31, 2017. Pursuant to the terms of a Merger Agreement on October 19, 2017, US Merger Co. will be merged with and into the Company, with the Company continuing as the surviving corporation, and each share of Company common stock outstanding immediately prior to the effective time of the Redomicile Transaction will be cancelled and converted into the right to receive one common share of Gold Torrent Canada. At the effective time of the Redomicile Transaction and pursuant to the terms of the Merger Agreement, all outstanding options to purchase shares of the Company’s common stock, all outstanding shares of restricted stock, and all other equity-based awards granted to employees and directors of the Company or any of its subsidiaries under the Company’s equity incentive plans prior to the effective time of the Redomicile Transaction will entitle the holder to purchase or receive, or receive benefits or amounts based on, as applicable, an equal number of common shares in Gold Torrent Canada. All such equity-based awards will generally be subject to the same terms and conditions as were applicable to such awards immediately prior to the effective time of the Redomicile Transaction.

11.

Stock Options

The stock options have been granted in conjunction with an Equity Incentive Plan (the “Plan”) for employees, directors and consultants, whereby a maximum aggregate number of common shares that may be issued under the Plan are 20,000,000 common shares. The term of the options is determined by the Board of Directors and cannot exceed 10 years. The exercise price of the stock options is determined by the Board of Directors, but shall not be less than the fair market value of the common stock on the date of grant. Stock options granted under the Plan vest over varying periods at the discretion of the Board of Directors.

The following table summarizes historical information about the Company’s incentive stock options:

	Number of Options		Weighted Average Exercise Price
Balance, March 31, 2017 and 2016		175,000	$	1.27
Granted		2,175,000	$	0.50
Balance, December 31, 2017		2,350,000	$	0.56

GOLD TORRENT, INC.

Notes to Interim Consolidated Financial Statements

Nine Months Ended December 31, 2017 and 2016

(Unaudited - Expressed in US dollars)

11.

Stock Options (continued)

The Company’s stock options are outstanding and exercisable as follows:

			December 31, 2017
Expiry date	Exercise price		Options outstanding		Options exercisable
July 30, 2019	$	1.25		150,000		150,000
July 30, 2019		1.38		25,000		25,000
March 23, 2022		0.55		400,000		135,000
March 23, 2022		0.50		1,775,000		591,666
				2,350,000		901,666

During the fiscal year ended March 31, 2017, the Company did not grant any stock options.

In April 2017, the Board approved a new grant of up to 3,000,000 stock options exercisable at $0.50 per share options to the directors, officers, employees, and advisors; the total amount of options granted was 2,175,000 exercisable at $0.50 per share under the terms of the 2016 Stock Option and Bonus Plan.

12.

Subsequent Events

The consummation of the Redomicile Transaction is in progress. Gold Torrent, Inc. (the “Company”) entered on October 19, 2017 into an Agreement and Plan of Merger (the “Merger Agreement”) with Gold Torrent (Canada) Inc., a wholly-owned subsidiary of the Company organized under the laws of the Province of British Columbia, Canada (“Gold Torrent Canada”) and GTOR US Merger Co, a Nevada corporation and wholly-owned subsidiary of Gold Torrent Canada (“US Merger Co”). Pursuant to the terms of the Merger Agreement, the parties would effect a merger transaction that will effectively change the jurisdiction of incorporation of the corporate parent from Nevada to British Columbia, Canada (the “Redomicile Transaction”).

Pursuant to the terms of the Merger Agreement, US Merger Co. will be merged with and into the Company, with the Company continuing as the surviving corporation, and each share of Company common stock outstanding immediately prior to the effective time of the Redomicile Transaction will be cancelled and converted into the right to receive one common share of Gold Torrent Canada. At the effective time of the Redomicile Transaction and pursuant to the terms of the Merger Agreement, all outstanding options to purchase shares of the Company’s common stock, all outstanding shares of restricted stock, and all other equity-based awards granted to employees and directors of the Company or any of its subsidiaries under the Company’s equity incentive plans prior to the effective time of the Redomicile Transaction will entitle the holder to purchase or receive, or receive benefits or amounts based on, as applicable, an equal number of common shares in Gold Torrent Canada. All such equity-based awards will generally be subject to the same terms and conditions as were applicable to such awards immediately prior to the effective time of the Redomicile Transaction.

The consummation of the Redomicile Transaction will be conditioned on (1) the affirmative vote of a majority of the outstanding shares of the Company’s common stock entitled to vote on the adoption of the Merger Agreement, (2) the Securities and Exchange Commission (the “SEC”) declaring effective a registration statement registering the distribution of common shares of Gold Torrent Canada in the Redomicile Transaction filed by Gold Torrent Canada on Form S-4 under the Securities Act of 1933, as amended, and (4) other customary conditions.

The Company evaluates events that have occurred after the balance sheet date, but before the financial statements are issued. Based upon the evaluation, other than what is described above, the Company did not identify any recognized or non-recognized subsequent events that would have required further adjustments or disclosures in the financial statements.

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

Forward Looking Statements

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. These statements are only predictions.

While these forward-looking statements, and any assumptions upon which they are based, are made in good faith and reflect our current judgment regarding the direction of our business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested in this report. Except as required by applicable law, we do not intend to update any of the forward-looking statements to conform these statements to actual results.

Our unaudited interim consolidated financial statements for the Nine months ended December 31, 2017 are expressed in US dollars and are prepared in accordance with generally accepted accounting principles in the United States of America. They reflect all adjustments (all of which are normal and recurring in nature) that, in the opinion of management, are necessary for fair presentation of our interim financial information. The results of operations for the interim periods presented are not necessarily indicative of the results to be expected for any subsequent quarter or for our fiscal year ending March 31, 2018. Our unaudited consolidated financial statements and notes included therein have been prepared on a basis consistent with and should be read in conjunction with our audited financial statements and notes for the year ended March 31, 2017, as filed in our annual report on Form 10-K.

The following discussion should be read in conjunction with our interim financial statements and the related notes that appear elsewhere in this quarterly report.

Business Overview

Gold Torrent, Inc. (the “Company”) was incorporated in Nevada as Celldonate Inc. on August 15, 2006. Historically we were in the business of developing mobile monetization solutions and applications. On September 10, 2013, certain shareholders, including the Company’s current Chief Executive Officer and its President, acquired approximately 53% of the Company’s issued and outstanding common stock resulting in a change of control. In connection with the transaction, Daniel Kunz was appointed Executive Chairman and Ryan Hart was appointed Chief Executive Officer and President. Thereafter the Company began to focus on acquiring ownership in late-stage exploration to development stage gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America. On January 16, 2014, the Company changed its name to “Gold Torrent, Inc.” in order to better reflect the direction and business of the Company. On that date, the Company also amended its Articles of Incorporation to (i) effectuate a reverse split of the Company’s common stock on a 1 for 5 basis; and (ii) increase the number of the Company’s authorized capital stock to 220,000,000 of which 200,000,000 were classified as common stock and 20,000,000 were classified as “blank check” preferred stock. On November 19, 2014, the Company entered into a Spin-off Agreement (the “Agreement”) with a company controlled by a former shareholder to sell all intellectual property and assets associated with the previous business of the Company, pursuant to which the Company was released from certain liabilities amounting to $420,653. Daniel Kunz was subsequently named Chief Executive Officer and Chairman and Mr. Hart was named President.

Going forward, the Company plans to focus on acquiring ownership in late-stage exploration to development-stage gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America but may pursue other profitable business opportunities that are available to us. Our main focus will be on identifying solid resources, and then utilize funding to bring a distressed asset into production, while either securing equity ownership or rights of title in the form of royalties. We are targeting pre-production resource projects that are well understood and show strong financial projections and low capital intensity, where we can apply capital to take the projects into production within 12-36 months.

On November 5, 2014, the Company signed an Exploration and Option to Enter Joint Venture Agreement with Miranda U.S.A., Inc. (“Miranda”) for the Willow Creek project in Alaska (the “Exploration and Option Agreement”). The Exploration and Option Agreement provides the Company with the right to earn up to 70% interest in a joint venture with Miranda Gold Corp. by making certain expenditures over the next three years totaling US$10 million. The initial principal terms of the Exploration and Option Agreement provided that the Company would earn an initial 20% interest in the Willow Creek gold project by incurring an initial work commitment of $1,070,000 before November 5, 2015 in costs related to exploration and development of the project. On September 2, 2015 Miranda granted the Company a Nine-month extension to the dates related to the earn-in. Therefore, the Company would earn an initial 20% interest in the Willow Creek gold project by incurring an initial work commitment of $1,070,000 before May 5, 2016 in costs related to exploration and development of the project. While the Company shall be the manager of the initial joint venture, the management committee during the initial earn–in period shall be comprised of one nominee from the Company and one nominee from Miranda.

Upon completion of the initial work commitment, the Company could then either terminate the agreement or exercise an option to enter into a limited liability company (“JV”) with Miranda under the following terms:

	●	Miranda will assign the underlying twenty-year lease that includes 8,700 acres of patented mining claims and State Claims on the Lucky Shot project to the JV and Miranda will retain a 30% participating interest in the JV;

	●	The Company will solely fund the next US$8.93 million of expenditures on the JV to earn a 70% interest in the JV while Miranda will hold the remaining 30%; and

	●	The Company shall be entitled to 90% of the cash flow from production at the Lucky Shot project until it recovers its US$10 million initial capital investment, and 80% of the cash flow from production thereafter until it recovers any of its initial investment that exceeds $10 million, and thereafter shall be entitled to 70% of project cash flows. Miranda shall be entitled to 10%, 20% and 30%, respectively, of the Lucky Shot cash flow.

The Company plans to complete initial engineering, resource, permitting, and economic studies during the initial earn-in period with a goal to bring the Lucky Shot project, beginning initially in the Coleman area gold resource area, into production as soon as possible. Expansion and exploration drilling is planned during construction and during commercial production and is expected to expand the initial known mineralization well beyond the current levels.

On January 15, 2015, and January 6, 2016 the Company paid $150,000 for a Lease Agreement between Miranda USA Inc. and a private company, and the amount was included in prepaid expenses and expensed over 12 months. In addition, the Company is committed to paying $150,000 each year on January 15. The purpose of this lease is to afford Miranda USA Inc. the opportunity to enter onto and produce minerals from certain patented and State of Alaska mining claims located in the State of Alaska. This lease is to be transferred by Miranda to the joint venture upon the Company earning its initial 20% interest.

On May 25, 2016, the Company received formal notice from Miranda that the Company has acquired a permanent 20% interest in the Lucky Shot project by virtue of meeting the initial earning required expenditures.

The Company engaged third party consultants to complete a Preliminary Feasibility Study on its Lucky Shot Project. The Preliminary Feasibility Study for the Lucky Shot Project was completed December 31, 2016. The study concludes, “The Project is projected to have robust economics at the base case gold and silver prices of $1,175/oz. and $15.00/oz. respectively. The Project would be economically viable based on the parameters considered in this study. The base case scenario produces approximately 79,100 salable ounces of gold and 7,700 salable ounces of silver over a 4.5-year period. The Project is most sensitive to the gold price and to operating costs, but not as sensitive to capital costs. The base case economic analysis of the Project shows an After-Tax NPV-10 of $5.28 million using a 200-tonne/day crushing/grinding/gravity separation plant. The total required initial and working capital is $16.2 million and reaches pay-back in 1.9 years at an after tax IRR of 21.8%.”

On July 8, 2016, the Company purchased for $100,507 a 30-acre parcel of private, undeveloped land in Alaska near the Lucky Shot project for the siting of a gold recovery plant.

During August 2016, the Company conducted assessment work on the project’s State of Alaska claim blocks. One 640-foot surface core drill hole was completed in an area underlain by the eastern extension of the Murphy Vein block. This drill hole was designed to test the concept that the zone encountered in the 2005 – 2009 prior owner drilling program extends across the valley floor at a depth of about 350 feet. The success of the drill hole provides a much larger resource target area for future exploration drilling.

During the period, a mining contractor mobilized temporary equipment and initiated underground rehabilitation work on the Enserch adit. The contractor slashed the existing 9 by 9-foot tunnel to an increased area of 12 by 12 feet for a total distance of 800 feet. The contractor helped to establish a safety program and provided a safety plan to the relevant regulators.

Additional work included: The portal area was enlarged with fill material and approximately 1000 feet of road access to the portal has been improved including construction of berms and widening of the running surface to accommodate larger equipment. The man-camp has been leased from the owner and a new diesel fired generator has been installed to provide power. At the Enserch portal, several portable connex containers have been installed and tools, parts, and supplied fitted in them. A guard shack has been erected at the entrance to the portal area to control access. A new portal ventilation access was excavated and a ventilation fan and fan bagging installed. A heavy equipment repair area was refurbished in the old Enserch mill building. This building will not be used for milling but rather to repair large equipment. An avalanche control plan was engineered and a geotechnical study was completed to address ground support plans and rock bolting underground. A rock dump near the portal is being constructed from the waste rock from the adit enlargement. A 400 Kw generator has been purchased and installed at the portal for electrical power during the startup period. A compressor, portable refuse station, and a small project office were installed near the portal. MSHA plans and submittals were completed and made to the federal agency and approved for operation. A detailed design was engineered and completed for a 2800 feet ramp from the enlarged Enserch adit at a run rate of 15% up approximately 300 vertical feet to the Coleman ore deposit. A service company was hired to provide camp cooking and cleaning services for the underground miners. A 2.2 cu yd underground loader wad refurbished and brought into good working order. A new small equipment repair shop 40 ft x 60 ft fabric structure was ordered and shipped to the project and at the portal area a cement slab poured for the structure to sit on. A series of mine-related electrical switch gears, transformers and distribution equipment items were purchased in used condition and are undergoing a refurbishment by a contractor in Salt Lake City. A list of mine and mechanic new tools and supplies were purchased. A used, good condition ATCO change house building was purchased and installed near the man-camp for underground miners to use including lockers and furnishments. A diesel fuel storage tank was purchased and installed at the mine portal area. Two blasting powder magazines were leased from the supplier and located near the portal. Conceptual design of the gold recovery plant, preliminary design and engineering of the plant, metallurgical test work of ore material, detailed engineering and design of the plant and construction drawings and equipment selection engineering. A new pre-engineered metal clad building was erected and insulated. A septic system was designed and built. A water well was drilled, tested, and plumped with a pump and pipeline to the building. Access to the local power company line near the entrance to the site was secured. Engineering and completion of detailed construction drawing for the interior layout of the mill equipment was undertaken. A list of equipment to be purchased for the gold recovery plant interior was compiled and at least two independent price quotations solicited from suppliers. A new pre-engineered mezzanine level structural steel and decking for inside the building was designed, purchased and shipped to site. An ore storage Quonset building 100 ft x 40 ft was purchased and shipped to site.

Detailed design and engineering work for the gold recovery plant was continued through the reporting period. The gravity only gold recovery plant design and final engineering is near complete and ready for construction drawings and plant to be completed. Logistics analyses have been completed for shipment of required plant equipment, materials and supplies from various vendors to the project site. The mine engineering work continued for the period on portal and surface logistics and requirements.

On Feb 15, 2017 the Company entered into a convertible preferred note and investment agreement (“Agreement”) with CRH Mezzanine Pte. Ltd., a Singapore private limited company and CRH Funding II Pte. Ltd., a Singapore private limited company (collectively, “CRH”) for a $2,000,000 convertible preferred note and a $11,250,000 gold and silver prepayment arrangement for the Company’s Lucky Shot Gold Project (the “Streaming Agreement”).

Concurrent with the closing and funding of the convertible preferred note, the Company and Miranda U.S.A., Inc., a wholly-owned subsidiary of Miranda Gold Corp of Canada, executed a joint venture operating agreement and formed Alaska Gold Torrent LLC, an Alaska limited liability company under which the Company now owns a seventy percent (70%) undivided interest in the Project.

Under the terms of the Agreement, the Company borrowed $2,000,000 from the Preferred Note Investor evidenced by convertible preferred notes which will convert into 15% of the shares of common stock of the Company on a post-money basis on the earlier of: (i) a Canadian Going Public Transaction or (ii) funding of the Gold and Silver Prepayment Agreement and following an equity raise by the Company of $5,000,000 or more of which $2,000,000 will be the conversion of the preferred notes. The obligations under the preferred notes are secured by a first priority security interest in all of the assets of the Company pursuant to the terms of a security and pledge agreement.

The Company also entered into the Streaming Arrangement among the Stream Investor, the Company, Miranda and Alaska Gold Torrent LLC, under which the Stream Investor will invest up to US$11,250,000, which will be credited to the Company’s investment in Alaska Gold Torrent LLC, as follows:

	(i)	US$6,500,000 upon satisfaction of certain Tranche 1 conditions; and,

	(ii)	US$4,750,000 upon satisfaction of certain Tranche 2 conditions including receipt of all necessary permits.

The obligations of Alaska Gold Torrent LLC under the Streaming Agreement are secured by a deed of trust, and guaranteed by the Company. In consideration of the $11,250,000 investment by the Stream Investor, Alaska Gold Torrent LLC’s Project will deliver 18% of its annual production of refined gold and silver to the Stream Investor until it has received 20,000 Ounces of gold equivalent; 10% of the annual production until an additional 5,000 Ounces have been delivered; and 5% of the annual production thereafter coming from the patented mining claims of Alaska Gold Torrent LLC and 2.5% of the production coming from the unpatented mining claims. The delivery of Ounces and the repayments under the Gold and Silver Prepayment Agreement shall be borne entirely from the Company’s interest from its Alaska Gold Torrent LLC allocations and cash distributions. Miranda shall be entitled to receive it allocations and the resulting cash distributions using calculations that determine the after-tax cash flow distributions that would have occurred on an “all equity” basis showing cash distributions and allocations assuming the financing had not occurred. The Company is entitled to 90% of the Alaska Gold Torrent LLC cash flow until $10,000,000 is returned, 80% until the remainder of its investment in Alaska Gold Torrent LLC in excess of $10,000,000 is returned and 70% thereafter.

Alaska Gold Torrent LLC is subject to certain events of default under the Gold and Silver Prepayment Agreement including if, from the date of the Tranche 1 drawdown, Alaska Gold Torrent LLC fails to produce at least 5,000 Ounces and deliver to the Stream Investor at least 1,000 Ounces by the 18th month; produce at least 10,000 and deliver to the Stream Investor at least 2,000 Ounces by the 24th month; produce 20,000 and deliver to the Stream Investor at least 4,000 Ounces by the 36th month; deliver to the Stream Investor at least 10,000 Ounces by the 48th month; deliver to the Stream Investor at least 19,400 Ounces by the 60th month; and deliver to the Stream Investor at least 23,900 Ounces by the 72nd month.

In consideration for the commitments under the Agreement, the Company issued the Preferred Note Investor common stock purchase warrants to purchase two million shares of common stock of the Company at an exercise price of US$0.50 per share for a period of three years from the date of issuance. In conjunction with the transaction, the Company and the Preferred Note Investor also entered into an Investor Rights Agreement, and an Indemnity Agreement. The convertible preferred note and warrants were issued in reliance upon the exemption from registration afforded by Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D as promulgated by the SEC under the Securities Act.

As part of the Agreement, CRH nominated Mr. Pat Okita, PhD to join the Gold Torrent board of directors and the board has unanimously approved his appointment. Mr Okita joins the board effective Feb 15, 2017

On February 14, 2017 the Company received $1,900,000 in proceeds from the note, net of CRH’s legal expenses, to be used as part of the Company’s initial investment in the Project.

On September 27, 2017, the Company and the Stream Investor agreed, after the satisfaction by the Company of a majority of the Tranche 1 closing conditions, to amend certain provisions of the Streaming Agreement and concurrently close on one-half of Tranche 1 in the amount of $3,250,000. The second half, also in the amount of $3,250,000, has been consummated on August 8, 2017 upon satisfaction of the final closing conditions.

As at December 31, 2017, mineral property interest consists of:

Mineral property leases

4,285,714

Cumulative Funding to Alaska Gold Torrent LLC:

As at December 31, 2017, the Company provided funding to Alaska Gold Torrent, LLC in the total amount of $9,886,925. This consists of cumulative acquisition, exploration, engineering costs and capital contributions of $2,886,925 as at March 31, 2017, and $7,000,000 in additional funding during the three months ended December 31, 2017:

As at March 31, 2017	$	2,886,925
Current period funding		500,000
Tranche 1 Streaming Agreement financing		6,500,000
	$	9,886,925

On August 28, 2017, Gold Torrent, Inc. and its subsidiary Alaska Gold Torrent, LLC, entered into a Mining Services Agreement with Mining & Environmental Services, LLC (“MES”) for development of the Registrant’s Luck Shot Mine, and other related mining services, including the development of the land located around the mine. If fully completed, it is estimated the Registrant will pay approximately $4,500,000 for such services. The Agreement contains customary representations, warranties and covenants by the parties for like transactions. On November 14, 2017 the Company issued a notice of suspension to MES due to the decision to slow down activities for the winter period and until further funding could be arranged. On November 20, 2017 the MES contract was terminated for convenience.

Planning continues for project permitting, staffing, training and project initiation.

On February 9, 2018, the Company entered into a binding letter agreement (“Letter Agreement”) that amends certain terms and obligations of the parties in connection with the Prepayment Agreement.

The Letter Agreement with CRH adds a new defined term Required Capital that means the amount of capital that the Company is anticipating raising from the capital markets through a non-brokered private placement to complete the construction and development of the Lucky Shot Project to Commercial Production. Before Alaska Gold Torrent LLC can make the US$4.75 million Second Tranche draw, the Required Capital shall be at least US$10 million, or greater amount, as determined by the Company, or stated in the updated preliminary feasibility analysis that the Company is currently conducting. The second tranche closing date must occur before March 31, 2018 or AGT is subject to default under the terms of the credit facility.

	(i)	The Letter Agreement also adds an additional condition precedent to the advance of the second tranche requiring that the Company shall have raised the Required Capital and have received the full amount of such Required Capital in escrow or in cash, and be in compliance with all conditions in related subscription agreements, subscription receipts agreements, and subscription receipt certificates.

	(ii)	The Letter Agreement also amends the Royalty Rate CRH receives of the Produced Minerals until such time that AGT has delivered a cumulative total of 23,000 Gold Equivalent Ounces to CRH. On any gold and silver production through May 31, 2019, the percentage determined by the month in which the AGT reaches Commercial Production, is based on the following schedule:

	●	14% if Seller reaches Commercial Production before November 30, 2018

	●	15% if Seller reaches Commercial Production in December 2018

	●	16% if Seller reaches Commercial Production in January 2019

	●	17% if Seller reaches Commercial Production in February 2019

	●	18% if Seller reaches Commercial Production in March or April 2019

	●	19% if Seller reaches Commercial Production in May 2019

	●	20% if Seller reaches Commercial Production in June 2019 or later

	●	And on production after May 31, 2019 and before the Seller has delivered 23,000 Gold Equivalent Ounces to the Purchaser, the percentage that is the greater of 18% or the percentage determined in the schedule above.

(iii)

The Letter Agreement adds an additional condition to Alaska Gold Torrent LLC events of default that if Alaska Gold Torrent LLC has not reached Commercial Production of at least 650 ounces of gold per month by May 31, 2019; or after which date, fails for two consecutive months to maintain Commercial Production.

The Letter Agreement provides that the Company is subject to default provisions under the credit facility in the event that the additional capital is not raised by the Company by March 31, 2018. There can be no assurances that the Company will be successful in raising the additional capital or that it will be to raise capital on terms that are favourable to the Company. Funding is subject to market conditions, gold price changes, and other factors out of the Company’s control. In addition, since the Company has limited funds, it has suspended all development activities until the required funding can be secured.

The Company) entered on October 19, 2017 into an Agreement and Plan of Merger with Gold Torrent Canada Inc., a wholly-owned subsidiary of the Company organized under the laws of the Province of British Columbia, Canada and US Merger Co, a Nevada corporation and wholly-owned subsidiary of Gold Torrent Canada. Pursuant to the terms of the Merger Agreement, the parties would effect a merger transaction that will effectively change the jurisdiction of incorporation of the corporate parent from Nevada to British Columbia, Canada

Since our inception, we have incurred operational losses. We have also accumulated net losses since our inception and incurred a net loss for the most recent audited and interim periods. To finance our operations, we have received advances from related parties, loan payables and completed several rounds of financing, raising $9,128,775 through private placements of our common stock and investors funding.

Results of Operations

For the Three Months ended December 31, 2017

During the three months ended December 31, 2017, we recognized $2,594 interest income, compared to $nil during the same period in the prior year.

During the three month period ended December 31, 2017, we recognized a loss from continuing operations of $2,354,136, compared to a loss of $466,445 during the same period in the prior year.

Our net loss per share for the three months ended December 31, 2017 was $0,09. Our net loss per share for the three months ended December 31, 2016 was $0.04,

During the three months ended December 31, 2017, we incurred total expenses of $2,356,730, compared to total expenses of $466,445 during the same period in the prior year.

Our total expenses during the three months ended December 31, 2017 consisted of $34,811 in accounting and legal fees, $1,330,321 in development costs, $411,991 in executive compensation and payroll, $19,940 in Professional Services, $64,118 in insurance, $125,000 in share based payments, $Nil in Advertising, $17,289 in licenses and fees, $289,434 in bank charges and interest, $1,840 in amortization, $18,780 in travel costs, and $43,206 in office expenses. For the same period ended December 31, 2016, we incurred expenses of $21,311 in accounting and legal fees, $308,731 in exploration and evaluation costs, $121,250 in executive compensation, $4,614 in licenses and fees, $208 in bank charges and finance fees, $8,743 in travel costs, and $1,588 in office expenses. Our total expenses are significantly higher for nearly all expenses. The increase in expenses is mainly due to the increased activities and progress of the Lucky Shot property start up.

For the Nine Months ended December 31, 2017

During the Nine months ended December 31, 2017, we recognized $2,594 in interest income, compared to $nil during the same period in the prior year.

During the Nine month period ended December 31, 2017, we recognized a loss from continuing operations of $8,107,624, compared to a loss of $1,214,456 during the same period in the prior year.

Our net loss per share for the Nine months ended December 31, 2017 was $0.32. Our net loss per share for the Nine months ended December 31, 2016 was $0.09,

During the Nine months ended December 31, 2017, we incurred total expenses of $8,110,218, compared to total expenses of $1,280,456 during the same period in the prior year.

Our total expenses during the Nine months ended December 31, 2017 consisted of $209,132 in accounting and legal fees, $3,488,082 in development costs, $1,134,166 in executive compensation and payroll, $2,449,000 in share based payments, $278,013 in insurance, $12,049 in Advertising, $28,980 in licenses and fees, $290,227 in bank charges and interest, $5,521 in amortization, $43,682 in Professional Services, $1,432 in Property tax, $57,322 in travel costs, and $112,612 in office expenses.

For the same period ended December 31, 2016, we incurred expenses of $96,864 in accounting and legal fees, $723,091 in exploration and evaluation costs, $363,750 in executive compensation, $55,113 in licenses and fees, $1,792 in bank charges and interest, $31,938 in travel costs, and $7,908 in office expenses. Our total expenses are significantly higher for nearly all expenses. The increase in expenses is mainly due to the increased activities and progress of the Lucky Shot property start up.

Liquidity and Capital Resources

We have limited operational history, and did not generate any revenues. As of December 31, 2017, we had $1,316,452 in cash, $747,639 in advances and $25,836 in prepaid expenses for a total of $2,089,927 in current assets and $1,011,759 in current liabilities and a working capital of $1,078,168.

As of December 31, 2017, we had $6,245,626 in long term assets, $8,500,000 in long term liabilities As of December 31, 2017, we had an accumulated deficit of $9,995,879. We are dependent on funds raised through equity financing, related parties, and loan payables. Our operations were funded by equity financing and stream agreement funding. We anticipate that we will incur substantial losses for the foreseeable future and our ability to generate any revenues in the next 12 months continues to be uncertain.

During the Nine months ended December 31, 2017, we used $6,093,180 in cash on continuing operating activities, and used $1,560,028 in investing activities and received net $7,384,975 from cash provided by financing activities and reduced cash by $268,232. During the same period in fiscal 2016 we used $1,078,789 in cash on continuing operating activities, and received net $1,116,207 from cash provided by financing activities and increased cash by $63,089.

During the Nine months ended December 31, 2017, we received $884,975 in proceeds from issuance of common stock, and $6,500,000 in gold pre-purchase. We received $4,285,714 in mineral property leases from Miranda USA Inc. For the period ending December 31, 2016 we made payments of approximately $93,793 on the outstanding stockholders’ loan balance and received an additional $1,210,000 in proceeds from issuance of common stock. For the period ending December 31, 2017 the Company has accrued interest of $185,458 and amortization of $5,521(March 31, 2016 - $936 and $nil).

During the Nine months ended December 31, 2017, our monthly cash requirements to fund our operating activities, including advances from former related parties, was approximately $674,417 compared to approximately $119,865 during the same period in fiscal 2016. In the absence of the continued sale of our common stock or advances from the former or new related parties, our cash of $1,316,452 as of December 31, 2017 is insufficient to cover our current monthly burn rate for the foreseeable future and just enough to pay our current liabilities balance of $1,011,759.

Future Financings

The Company entered into the Streaming Arrangement among the Stream Investor, the Company, Miranda and Alaska Gold Torrent LLC, under which the Stream Investor will invest up to US$11,250,000, which will be credited to the Company’s investment in Alaska Gold Torrent LLC, as follows:

	(i)	US$6,500,000 upon satisfaction of certain Tranche 1 conditions; and,

	(ii)	US$4,750,000 upon satisfaction of certain Tranche 2 conditions including receipt of all necessary permits.

Alaska Gold Torrent LLC is subject to certain events of default under the Gold and Silver Prepayment Agreement including if, from the date of the Tranche 1 drawdown, Alaska Gold Torrent LLC fails to produce at least 5,000 and deliver to the Stream Investor at least 1,000 Ounces by the 18th month; produce at least 10,000 and deliver to the Stream Investor at least 2,000 Ounces by the 24th month; produce 20,000 and deliver to the Stream Investor at least 4,000 Ounces by the 36th month; deliver to the Stream Investor at least 10,000 Ounces by the 48th month; deliver to the Stream Investor at least 19,400 Ounces by the 60th month; and deliver to the Stream Investor at least 23,900 Ounces by the 72nd month.

The development plan is to initiate gold production based on the PFS and not based on a full feasibility study of the mineral reserves demonstrating that level of economic and technical viability. In October 2017, the Company determined that the total PFS-stated capital required to develop the project would be increased about 40% from approximately $18.5 million to approximately $26.5 million. The Company presented the capital increase to its partner Miranda and to the Stream Investor for approval. On October 22, 2017, our partner approved the new capital budget. The Stream Investor is working with the Company to provide its approval contingent upon the Company and Miranda providing the additional funds. The capital budget adjustment is based on an internal review of all capital costs incurred and expected to be incurred and consideration of local Alaska-based costs for labor, supplies and engineering that would be part of the development costs. Readers are cautioned that there is increased uncertainty and higher risk of economic and technical failure associated with such production decisions.

The Registrant, Alaska Gold and the Stream Investor agreed, after the satisfaction by the Registrant of a majority of the Tranche 1 closing conditions, to amend certain provisions of the Streaming Agreement and concurrently close on one-half of Tranche 1 in the amount of $3,250,000. It is anticipated that the second half of the first tranche, also in the amount of US $3,250,000, will be consummated on or about thirty (30) days, upon satisfaction of the final closing conditions.

On August 8, 2017, the closing conditions were met and the second amount of $3,250,000 was received. On November 13, 2017, the Company and Stream Investor agreed to defer drawing upon Tranche 2 until additional funds are secured to complete the project. The Company issued suspension notices to certain contractors and service providers and has undertaken a plan to conserve cash and reduce expenditures.

We have not generated any revenues, have achieved losses since our inception, and rely upon the sale of our securities, loans and advances from related parties to fund our operations. We anticipate that we will incur substantial losses for the foreseeable future, and we are dependent upon outside financing to carry out our operations. The Company’s continuance as a going concern is dependent on the success of the efforts of its directors and principal stockholders in providing financial support in the short-term, securing additional financing, and achieving profitable operations. In the event that such resources are not secured, the assets may not be realized or liabilities discharged at their carrying amounts, and the difference from the carrying amounts reported in these consolidated financial statements could be material. Our unaudited consolidated interim financial statements for the period ended December 31, 2017 have been prepared on a going concern basis and do not include any adjustments that might result from the outcome of this uncertainty.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements.

Critical Accounting Policies

Our unaudited interim financial statements are affected by the accounting policies used and the estimates and assumptions made by management during their preparation. A complete summary of these policies is included in Note 2 of the notes to our unaudited interim financial statements. We have identified below the accounting policies that are of particular importance in the presentation of our financial position, results of operations and cash flows, and which require the application of significant judgment by our management.

Foreign Currency Translation

Our unaudited financial statements are presented in United States dollars. Transactions in currencies other than the U.S. dollar are translated into U.S. dollars at the exchange rate in effect at the balance sheet date for monetary assets and liabilities, and at historical exchange rates for non-monetary assets and liabilities. Expenses are translated at the average rates for the period, excluding amortization, which is translated on the same basis as the related assets. Resulting translation gains or losses are reflected in net loss.

Share-Based Payments

Recent Accounting Guidance Adopted

The Company has adopted Accounting Standards Update (“ASU”) 2014-10, Development Stage Entities, which eliminates certain financial reporting requirements. As such, these interim financial statements no longer present inception-to-date information on the statements of operations, cash flows, and stockholders’ deficiency. In addition, these interim financial statements are no longer labeled as a, “development stage entity”.

In August 2014, the Financial Accounting Standards Board (“FASB”) issued ASU 2014-15, Presentation of Financial Statements-Going Concern. This ASU is intended to define management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and to provide related footnote disclosures. It is effective for annual periods beginning after December 15, 2016, with early adoption permitted. The Company does not expect it to have a material effect on the Company’s financial condition, results of operations, and cash flows.

In April 2014, the FASB issued ASU 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. This ASU amends ASC 360, Property, Plant and Equipment and expands the disclosures for discontinued operations, and requires new disclosures for disposals of individually significant components that do not meet the new definition of a discontinued operation and are classified as assets held for sale. These provisions are effective for annual and interim periods beginning after December 15, 2014. The Company does not expect it to have a material effect on the Company’s financial condition, results of operations, and cash flows.

Inflation

The amounts presented in the unaudited interim financial statements do not provide for the effect of inflation on our operations or financial position. The net operating losses shown would be greater than reported if the effects of inflation were reflected either by charging operations with amounts that represent replacement costs or by using other inflation adjustments.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by 17 C.F.R. 229 (10)(f)(i) and are not required to provide information under this item.

Item 4. Controls and Procedures

Disclosure Controls

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) designed to provide reasonable assurance the information required to be reported in our Exchange Act filings is recorded, processed, summarized and reported within the time periods specified and pursuant to Securities and Exchange Commission (“SEC”) rules and forms, including controls and procedures designed to ensure that this information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

As of the end of the period covered by this report, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were not effective to ensure that information we are required to disclose in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.

Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining effective internal control over financial reporting. Under the supervision of our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over consolidated financial reporting as of December 31, 2017 using the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In our assessment of the effectiveness of internal control over financial reporting as of March 31, 2016, we determined that there were significant deficiencies that constituted material weaknesses, as described below.

1.	We do not have a majority of independent directors. As of June 27, 2016 we instituted policies for corporate code of conducts, whistle blower and a corporate governance and insider trading.

2.	All cash management is conducted solely by one officer and confirmed by a second officer, which may result in the misappropriation of funds.

3.	The lack of independent directors exercising an oversight role increases the risk of management override and potential fraud.

4.	We are in the development stage with limited resources and limited monitoring of internal control and assessment of risk is conducted.

Management continuously evaluates remediation plans for the above control deficiencies.

In light of the existence of these control deficiencies, management concluded that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis by the company’s internal controls.

As a result, management has concluded that we did not maintain effective internal control over financial reporting as of December 31, 2017 based on criteria established in Internal Control—Integrated Framework (2013) issued by COSO.

Changes in Internal Control

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the Three months ended December 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

We are not aware of any legal proceedings to which we are a party or of which our property is the subject. None of our directors, officers, affiliates, any owner of record or beneficially of more than 5% of our voting securities, or any associate of any such director, officer, affiliate or security holder are: (i) a party adverse to us in any legal proceedings, or (ii) have a material interest adverse to us in any legal proceedings. We are not aware of any other legal proceedings that have been threatened against us.

ITEM 1A RISK FACTORS

This Quarterly Report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this report.

Risks Related to Gold Torrent US’s Business

The fact that we have not earned any operating revenues since our incorporation raises substantial doubt about our ability to continue to operate our business.

We have not generated any revenue from operations since our incorporation. During the year ended March 31, 2017, we incurred a net loss of $1,946,671 and during the three-month period ended September 30, 2017 we incurred a net loss attributable to stockholders of $2,552,403. Gold Torrent US has incurred losses since inception and has an accumulated deficit of $7,645,135 (March 31, 2017 - $3,987,428) as of September 30, 2017, with limited resources and limited source of operating cash flows. As at September 30, 2017, the Company has a working capital of $3,684,152 (March 31, 2017 - $906,324).We anticipate that we will continue to incur operating expenses without revenues unless and until we are able to extract and sale gold from the Lucky Shot Project. These factors raise substantial doubt about the ability of Gold Torrent US (or Gold Torrent Canada after the completion of the Redomicile Transaction) to continue as a going concern. Both Gold Torrent US’s and Gold Torrent Canada’s (after the completion of the Redomicile Transaction) continuance as a going concern is dependent on the success of the efforts of our directors and executive officers in providing financial support in the short-term, raising additional capital through equity or debt financing from third parties, and achieving profitable operations. We have traditionally raised our operating capital from sales of equity and debt securities, but there can be no assurance that we will continue to be able to do so. The unpredictable economy in the United States and the resulting volatile markets may make it more difficult for us to raise capital as and when we need it, and it is difficult for us to assess the impact this might have on our operations or liquidity and to determine whether the prices we might receive on the sale of gold extracted from the Lucky Shot Project would exceed the cost of mineral exploration and development. If we cannot raise the funds that we require to continue development of the Lucky Shot Project, we may be forced to delay, scale back, or eliminate our operational activities associated with such project. If any of these were to occur, there is a substantial risk that our business would fail.

The exploration and development of the Lucky Shot Project involves significant financial risks over a prolonged period of time.

The exploration and development of the potential deposits at the Lucky Shot Project involves significant financial risks over a prolonged period of time, which even if there is a combination of careful evaluation, experience and knowledge may not be eliminated. While discovery of a deposit may result in substantial rewards, few properties are ultimately developed into economically viable operating mines. The Lucky Shot Project may not contain economically recoverable volumes of recoverable gold deposits in sufficient quality or quantity. Even if there are economically recoverable deposits, delays in the construction and commissioning of the Lucky Shot Project or other technical difficulties may make the deposits difficult to extract. Further, exploration and development of the Lucky Shot Project may be disrupted, damaged or delayed by a variety of risks and hazards which are beyond our control, and major expenditure may be required to establish reserves by drilling and in constructing mining and processing facilities at the Lucky Shot Project site. Consequently, it is impossible to ensure that preliminary feasibility studies or definitive feasibility studies at the Lucky Shot Project will result in a profitable commercial mining operation at the Lucky Shot Project, or that the expenditures made towards the search and evaluation of mineral deposits will result in discoveries of economically viable quantities of gold at the Lucky Shot Project.

We will require additional capital in order to further develop the Lucky Shot Project into a producing mine. If we cannot raise this additional capital, we will not be able to extract the reserve and our business could fail.

In order to properly extract mineral resources from the Lucky Shot Project we will be required to expend substantial sums of money to establish the extent of the gold reserves, develop processes to extract such gold reserves and develop extraction and processing facilities and infrastructure. In particular, we estimate that total additional expenditures required to reach commercial production of gold from the Lucky Shot Project is $19.25 million. Since as of September 30, 2017, our working capital consisted of $3,684,152, we will require additional sources of funding in order for the Lucky Shot Project to reach commercial production of gold. We currently have not identified where such sources of funding will come from and consequently there can be no assurance that we will be able to raise the funds required for development of the Lucky Shot Project on a timely basis, or at all. If we cannot raise the necessary capital to complete the necessary facilities and infrastructure at the Lucky Shot Project, our business may fail.

The Company entered into an amendment (“Letter Agreement”) to the project debt facility. The Letter Agreement with the lender adds a new defined term Required Capital that means the amount of capital that the Company is anticipating raising from the capital markets through a non-brokered private placement to complete the construction and development of the Lucky Shot Project to Commercial Production. Before we can draw upon the Second Tranche of the credit facility, the Required Capital shall be at least US$10 million, or such greater amount, as determined by the Company, or stated in the updated preliminary feasibility analysis that the is currently being conducted. The second tranche closing date must occur before March 31, 2018 or we are subject to default under the terms of the credit facility. The Company is subject to default provisions under the credit facility in the event that the additional capital is not raised by the Company by March 31, 2018. In addition, we have limited funds and therefore have suspended all development activities until financing can be secured. There can be no assurances that the Company will be successful in raising the additional capital that is subject to market conditions, gold price changes, and other factors out of the Company’s control.

Mineral exploration and development is subject to extraordinary operating risks. We do not currently insure against these risks. In the event of a cave-in or similar occurrence, our liability may exceed our resources, which would have an adverse impact on our company.

Mineral exploration, development and production involves many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. Our operations will be subject all of the hazards and risks inherent in the development and production of a mineral reserve, including but not limited to: liability for pollution or other environmental hazards, explosions, fires, equipment failures, industrial accidents, or cave-ins or similar hazards against which we cannot insure or against which we may elect not to insure. Any such event could result in work stoppages and damage to property, including damage to the environment, or could result in personal injury or death. We may also be liable for the mining activities of previous miners and previous exploration works on the property where the Lucky Shot Project is located. Although we intend to maintain insurance in accordance with industry practice, we do not currently maintain insurance coverage against all of these operating hazards. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production of a mineral property is not general available to us or to other companies in the mining industry on acceptable terms. The payment of any liabilities that may arise from any such occurrence would likely have a material adverse impact on our company.

Our business operations expose us to risks of litigation.

Legal proceedings may arise from time to time in the course of our business. There have been a number of cases where the rights and privileges of mining and exploration companies have been the subject of litigation. Our board of directors cannot preclude that such litigation may not be brought against Gold torrent US in the future from time to time or that it may not be subject to any other form of litigation. We may find it difficult, impossible or very costly to enforce the rights it may have under agreements it may enter into.

Mineral operations are subject to applicable law and government regulation, which could restrict or prohibit the exploration and development of mineral resources. If we cannot extract any mineral resources from the Lucky Shot Project our business may fail.

Both mineral exploration and extraction require permits from various foreign, federal, state, provincial and local governmental authorities and are governed by laws and regulations, including those with respect to prospecting, mine development, mineral production, transport, export, taxation, labor standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety and other matters. There can be no assurance that we will be able to obtain or maintain any of the permits required for the continued exploration at our Lucky Shot Project or for the construction and operation of a mine on our Lucky Shot Project at an economically viable cost. If we cannot accomplish these objectives, our business could fail. Although we believe that we are in compliance with all material laws and regulations that currently apply to our activities, we can give no assurance that we can continue to remain in compliance. Current laws and regulations could be amended and we might not be able to comply with them, as amended. Further, there can be no assurance that we will be able to obtain or maintain all permits necessary for our future operations, or that we will be able to obtain them on reasonable terms. To the extent such approvals are required and are not obtained, we may be delayed or prohibited from proceeding with planned exploration or development of our mineral properties.

The development of the Lucky Shot Project will depend on adequate local infrastructure.

Our development and exploration activities in connection with the Lucky Shot Project depend on adequate local infrastructure, including reliable road, power sources and water supply. Our inability to secure adequate water and power resources, as well as other events outside of its control, such as unusual weather, sabotage, government or other interference in the maintenance or provision of such infrastructure, could adversely affect our operations and financial condition.

Mineral prices are subject to dramatic and unpredictable fluctuations and the economic viability of our Lucky Shot Project cannot be accurately predicted.

We expect to derive revenues from the extraction and sale of gold extracted from the Lucy Shot Project. The price of this commodity has fluctuated widely in recent years and is affected by numerous factors beyond our control, including international, economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, speculative activities and increased production due to new extraction developments and improved extraction and production methods. The effect of these factors are based on the price of precious metals and therefore the economic viability of any of our exploration properties cannot accurately be predicted. Additionally, a significant fall in gold prices could lead to a significant fall in our cash flow and/or a delay in exploration and production or even abandonment of the Lucky Shot Project, which would have a material adverse impact on our operating results and financial condition.

We have a limited operating history on which to base an evaluation of our business and prospects and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

We have never had any revenues from our operations since 2013 when we changed our business from the development of mobile monetization solutions and applications to the exploration and development of gold mining projects and/or royalty or streaming interests in low capital intensity, late-stage mining projects in North America. We have no way to evaluate the likelihood of whether we will be able to build or operate a mine successfully. We anticipate that we will continue to incur operating costs without realizing any revenues during the period when we are developing the Lucky Shot Project. If we are unable to generate significant revenues from mining operations at the Lucky Shot Project, we will not be able to earn profits or continue operations. At this early stage of our operation, we also expect to face the risks, uncertainties, expenses and difficulties frequently encountered by companies at the start up stage of their business development. We cannot be sure that we will be successful in addressing these risks and uncertainties and our failure to do so could have a materially adverse effect on our financial condition. There is no history upon which to base any assumption as to the likelihood that we will prove successful and we can provide investors with no assurance that we will generate any operating revenues or ever achieve profitable operations.

We are reliant on the Lucky Shot Project for our future operating revenues

Currently, we rely only on our interests in the Lucky Shot Project for potential operating revenues. As a result, unless we acquire additional property interests, any adverse developments affecting the Lucky Shot Project could have a material adverse effect upon us and would materially and adversely affect the potential mineral resource production, profitability, financial performance and results of our operations

Our development plan to initiate gold production on the Lucky Shot Project is based on a preliminary feasibility study and not based on a full feasibility study of the mineral reserves demonstrating an adequate level of economic and technical viability.

Although we have completed a preliminary feasibility study on the Lucky Shot Project, we have not completed a full feasibility study, nor do we have any intention of completing such a full feasibility study prior to developing the Lucky Shot Project for the extraction of resources. Consequently, we can give no assurances that the results of the preliminary feasibility study accurately reflect the Lucky Shot Project’s potential mineral reserves or otherwise the level of economic or technical viability of the Lucky Shot Project. If the mineral reserves on the Lucky Shot Project are not economically viable our investment in the Lucky Shot Project will likely fail to generate any positive returns.

Our joint venture arrangement with Miranda may negatively impact the development of the Lucky Shot Project

We have entered into a joint venture arrangement with Miranda for the development of the Lucky Shot Project. If Miranda does not meet its obligations under our joint venture arrangement with them we may suffer additional costs or other losses and the development of the Lucky Shot Project could be delayed or ended.

Our internal computer systems may fail or suffer security breaches.

Despite the implementation of security measures, our internal computer systems are vulnerable to damage from computer viruses and unauthorized access. Although to our knowledge we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our business operations.

We are dependence on key executives, personnel and contractors

Our success to a significant extent depends on Gold Torrent US’ directors, management and other key personnel and contractors. Our board of directors believes that our future success will depend largely on our ability to attract and retain highly skilled and qualified personnel and contractors and to expand, train and manage its employee and contractor base. There can be no guarantee that suitably skilled and qualified individuals will be identified and employed or contracted on satisfactory terms or at all. If we fail to recruit or retain the necessary personnel or contractors, or if we loses the services of any of our key executives, our business could be materially and adversely affected.

Our directors or officers may become subject to conflicts of interest

Certain of the our directors and officers may serve from time to time as directors, officers, promoters and members of management of other companies involved in natural resource exploration and development and therefore it is possible that a conflict may arise between their duties as a director or officer of Gold Torrent US and their duties as a director, officer, promoter or member of management of such other companies.

Item 2. Unregistered Sales of Equity Securities

All of the securities set forth above were issued without registration under the Securities Act of 1933, as amended, in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act or the provisions of Rule 504 of Regulation D promulgated under the Securities Act. The securities have not been registered under the Securities Act or any other applicable securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act. The Company did not utilize an underwriter of placement agent in connection with the Offering of any of its securities.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

On February 9, 2018, the Company entered into a binding letter agreement (“Letter Agreement”) that amends certain terms and obligations of the parties in connection with the prepayment agreement with CRH Mezzanine Pte. Ltd., a Singapore private limited company and CRH Funding II Pte. Ltd., a Singapore private limited company (collectively, “CRH”) (the “Prepayment Agreement”).

The Letter Agreement also adds an additional condition precedent to the advance of the second tranche requiring that the Company shall have raised the Required Capital and have received the full amount of such Required Capital in escrow or in cash, and be in compliance with all conditions in related subscription agreements, subscription receipts agreements, and subscription receipt certificates.

The Letter Agreement also amends the Royalty Rate CRH receives of the Produced Minerals until such time that AGT has delivered a cumulative total of 23,000 Gold Equivalent Ounces to CRH. On any gold and silver production through May 31, 2019, the percentage determined by the month in which the AGT reaches Commercial Production, is based on the following schedule:

	●	14% if Seller reaches Commercial Production before November 30, 2018

	●	15% if Seller reaches Commercial Production in December 2018

	●	16% if Seller reaches Commercial Production in January 2019

	●	17% if Seller reaches Commercial Production in February 2019

	●	18% if Seller reaches Commercial Production in March or April 2019

	●	19% if Seller reaches Commercial Production in May 2019

	●	20% if Seller reaches Commercial Production in June 2019 or later

	●	And on production after May 31, 2019 and before the Seller has delivered 23,000 Gold Equivalent Ounces to the Purchaser, the percentage that is the greater of 18% or the percentage determined in the schedule above.

The foregoing description of the terms and conditions of the Letter Agreement is only a summary and is qualified in its entirety by the full text of the Letter Agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q, and which is incorporated herein by reference.

Item 6. Exhibits

Exhibit Number		Exhibit Description

10.1		Letter Agreement dated February 9, 2018

31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*

32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 **

32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 8**

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 Presentation Linkbase*

* Filed herewith.

** Furnished herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 14, 2018	GOLD TORRENT, INC.

	By:	/s/ Daniel Kunz
		Daniel Kunz
		Chief Executive Officer and Chairman

	By:	/s/ Alexander Kunz
		Alexander Kunz
		Chief Financial Officer and Director

Gold Torrent, Inc. - FORM 10-Q - February 14, 2018

Attached files

Gold Torrent, Inc. Reports