EXHIBIT 99.1

CORAL GOLD RESOURCES LTD.

(an Exploration Stage Company)

Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian Dollars)

(Unaudited)

 

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL REPORTING

The Condensed Consolidated Interim Financial Statements of Coral Gold Resources Ltd. (the “Company”) are the responsibility of the Company’s management. The Condensed Consolidated Interim Financial Statements are prepared in accordance with International Financial Reporting Standards, and reflect management’s best estimates and judgment based on information currently available.

Management has developed, and is maintaining, a system of internal controls to ensure that the Company’s assets are safeguarded, transactions are authorized and properly recorded, and financial information is reliable.

The Board of Directors is responsible for ensuring management fulfills its responsibilities. The Audit Committee reviews the results of the annual audit and reviews the condensed consolidated interim financial statements prior to their submission to the Board of Directors for approval.

The condensed consolidated interim financial statements as at October 31, 2016 and 2015 and for the nine months then ended have not been audited or reviewed.

“David Wolfin”	“Malcolm Davidson”
David Wolfin	Malcolm Davidson, CPA, CA
President & CEO	Chief Financial Officer
December 22, 2016	December 22, 2016

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CORAL GOLD RESOURCES LTD.

Condensed Consolidated Interim Statements of Financial Position

(Expressed in Canadian dollars)

	Note	October 31, 2016			January 31, 2016
		(Unaudited)
Assets
Current assets
Cash and cash equivalents		$	185,569		$	599,964
Other amounts receivable			11,400			4,887
Prepaid expenses			65,443			13,864
			262,412			618,715
Exploration and Evaluation Assets	4		19,300,886			19,192,353
Property and Equipment	5		93,040			94,696
Investments	6		140,502			92,746
Reclamation Bonds	7		85,830			89,638
Total Assets		$	19,882,670		$	20,088,148
Liabilities
Current liabilities
Accounts payable and accrued liabilities		$	78,756		$	64,324
Amounts payable to related parties	10b		91,747			84,313
			170,503			148,637
Reclamation Provision	11		631,607			645,153
Deferred Tax Liability			620,000			620,000
Total liabilities			1,422,110			1,413,790
Equity
Share Capital	8		45,527,525			45,367,275
Equity Reserves			1,103,571			1,086,046
Accumulated Other Comprehensive Income			88,384			40,628
Accumulated Deficit			(28,269,240	)		(27,829,911	)
Equity Attributable to Equity Holders of the Company			18,450,240			18,664,038
Equity Attributable to Non-Controlling Interests			10,320			10,320
Total Equity			18,460,560			18,674,358
Total Liabilities and Equity		$	19,882,670		$	20,088,148

Commitments – Note 13

Subsequent Events – Note 18

Approved by the Board of Directors on December 22, 2016:

/s/ David Wolfin Director /s/ Gary Robertson Director

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

 

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CORAL GOLD RESOURCES LTD.

Condensed Consolidated Interim Statements of Operations and Comprehensive Loss

For the three and nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

		Three months ended October 31,						Nine months ended October 31,
	Note	2016			2015			2016			2015
Operating and Administrative Expenses
Consulting fees		$	15,415		$	-		$	17,915		$	2,663
Depreciation			552			572			1,655			1,717
Directors' fees			4,500			4,500			13,500			13,500
Finance costs	11		4,580			4,462			13,550			12,700
Investor relations			29,759			4,751			84,557			6,548
Listing and filing fees			8,385			19,009			21,174			34,506
Management fees			7,500			7,500			22,500			22,500
Office and miscellaneous			9,590			1,176			29,569			7,805
Professional fees			44,231			21,030			91,102			53,391
Salaries and benefits			24,674			19,742			68,052			51,670
Share-based payments	9		845			3,489			71,775			147,538
Travel			7,478			842			12,799			3,384
			157,509			87,073			448,148			357,922
Loss before other items			(157,509	)		(87,073	)		(448,148	)		(357,922	)
Other items
Interest and other income			11			12			32			106
Foreign exchange gain (loss)			(1,182	)		9,240			8,787			(3,501	)
Gain on sale of investment	6		-			-			-			27,059
Gain on forgiveness of debt			-			-			-			5,250
Net Loss			(158,860	)		(77,821	)		(439,329	)		(329,008	)
Other comprehensive income
Unrealized gain (loss) on investment securities	6		(15,070	)		(54,913	)		47,756			(11,760	)
Total comprehensive income (loss)		$	(173,750	)	$	(132,734	)	$	(391,573	)	$	(340,768	)
Loss per share (basic and diluted)		$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)
Weighted average number of common shares outstanding			48,848,448			44,765,554			48,243,872			43,481,587

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

 

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CORAL GOLD RESOURCES LTD.

Condensed Consolidated Interim Statements of Changes in Equity

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

	Note	Number of Common Shares		Share Capital Amount			Reserve for Stock Options			Reserve for Warrants			Total Reserves			Accumulated Other Comprehensive			Accumulated Deficit			Total Equity
Balance, January 31, 2015			42,825,337	$	45,205,901		$	768,274		$	1,916,575		$	2,684,849		$	87,588		$	(29,723,877	)	$	18,264,781
Common shares issued for cash:
Private placements	8		3,500,000		-			-			175,000			175,000			-			-			175,000
Less: Share issuance costs	8		-		(1,006	)		-			-			-			-			-			(1,006	)
Share-based payments	9		-		-			3,842			143,696			147,538			-			-			147,538
Transfer of expired options and warrants	8		-		-			-			(1,762,975	)		(1,762,975	)		-			1,762,975			-
Unrealized gain on investment securities, net of tax	6		-		-			-			-			-			(11,760	)		-			(11,760	)
Loss for the period			-		-			-			-			-			-			(329,008	)		(329,008	)
Balance, October 31, 2015			46,325,337	$	45,204,895		$	772,116		$	472,296		$	1,244,412		$	75,828		$	(28,289,910	)	$	18,235.225
Balance, January 31, 2016			47,825,337	$	45,367,275		$	663,720		$	422,326		$	1,086,046		$	40,628		$	(27,829,911	)	$	18,674,358
Common shares issued for cash:
Exercise of stock options	8		25,000		10,250			(4,250	)		-			(4,250	)		-			-			6,000
Exercise of warrants	8		1,000,000		150,000			-			(50,000	)		(50,000	)		-			-			100,000
Share-based payments	9		-		-			71,775			-			71,775			-			-			71,775
Unrealized gain on investment securities, net of tax	6		-		-			-			-			-			47,756			-			47,756
Loss for the period			-		-			-			-			-			-			(439,329	)		(439,329	)
Balance, October 31, 2016			48,840,337	$	45,527,525		$	731,245		$	372,326		$	1,103,571		$	88,384		$	(28,269,240	)	$	18,460,560

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

 

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CORAL GOLD RESOURCES LTD.

Condensed Consolidated Interim Statements of Cash Flows

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

	Note	2016			2015
CASH PROVIDED BY (USED IN):
Operating Activities
Net loss		$	(439,329	)	$	(329,008	)
Adjustments for non-cash items:
Depreciation			1,655			1,717
Share-based payments			71,775			147,538
Foreign exchange (gain) loss			(22,543	)		16,933
Finance costs			13,550			12,700
Gain on sale of investments			-			(27,059	)
Gain on forgiveness of debt			-			(5,250	)
			(411,142	)		(182,429	)
Net change in non-cash working capital	15		(60,459	)		1,646
			(435,350	)		(180,783	)
Investing Activities
Expenditures on exploration and evaluation assets			(84,300	)		(179,238	)
Proceeds on sale of investments			-			33,385
Increase in reclamation bond			-			571,497
			(84,300	)		425,644
Cash flows from financing activities
Issuance of shares for cash, net			106,000			173,994
Cash provided by financing activities			106,000			173,994
Effect of exchange rate fluctuations on cash and equivalents			(745	)		101
Net increase (decrease) in cash and equivalents			(414,395	)		418,956
Cash and cash equivalents, beginning of period			599,964			147,575
Cash and cash equivalents, end of period		$	185,569		$	566,531
Supplementary Cash Flow Disclosures
Cash paid during the period for:
Interest expense		$	-		$	-
Income taxes		$	-		$	-
Expenditures on exploration and evaluation assets included in amounts payable to related parties, net		$	2,128		$	907
Expenditures on mineral properties included in accounts payable, net		$	33,698		$	11,955

The accompanying notes are an integral part of the Condensed Consolidated Interim Financial Statements

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

1. NATURE AND CONTINUANCE OF OPERATIONS

 

Coral Gold Resources Ltd. (the “Company”) was incorporated in 1988 under the Company Act of British Columbia and is primarily involved in the exploration and development of its mineral properties. The Company’s head office and principal place of business is Suite 900, 570 Granville Street, Vancouver, BC, Canada. The Company’s common shares are traded on the TSX-V, OTCBB, and the Frankfurt Stock Exchange.

The business of mining and exploring for minerals involves a high degree of risk, and there can be no assurance that current exploration programs will result in profitable mining operations. The recoverability of the carrying value of exploration and evaluation assets and the Company's ability to continue as a going concern is dependent upon the preservation of its interest in the underlying properties, the discovery of economically recoverable reserves, the achievement of profitable operations, or the ability of the Company to raise alternative financing.

These Condensed Consolidated Interim Financial Statements have been prepared on a going concern basis, which assumes that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. As at October 31, 2016, the Company had working capital of $91,909 and accumulated losses of $28,269,240. The Company has not yet generated any revenues from its operations. The Company is required to raise new financing through the sale of shares or issuance of debt to continue with its operations and to develop its mineral properties. Although management intends to secure additional financing, there is no assurance that management will be successful in its efforts to secure additional financing or that it will ever develop a self-supporting business. These factors together form a material uncertainty which may raise significant doubt about the Company’s ability to continue as a going concern. These Condensed Consolidated Interim Financial Statements do not include any adjustments that might result from the outcome of this uncertainty.

2. BASIS OF PRESENTATION

 

These condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard (“IAS”) 34 - Interim Financial Reporting under International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). These condensed consolidated interim financial statements follow the same accounting policies and methods of application as the most recent annual consolidated financial statements of the Company, except for the accounting policies which have changed as a result of the adoption of new and revised standards and interpretations which are effective February 1, 2016. These condensed consolidated interim financial statements do not contain all of the information required for full annual financial statements. Accordingly, these condensed consolidated interim financial statements should be read in conjunction with the Company’s January 31, 2016 annual consolidated financial statements, which were prepared in accordance with IFRS as issued by the IASB.

Foreign Currency Translation

The functional and reporting currency of the Company and its subsidiaries is the Canadian dollar. Transactions in currencies other than the Company’s functional currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each financial position reporting date, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at the date of the statement of financial position. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency translation differences are recognized in net loss for the period.

The preparation of these Condensed Consolidated Interim Financial Statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities at the date of the Condensed Consolidated Interim Financial Statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates under different assumptions and conditions.

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

2. BASIS OF PRESENTATION (continued)

 

Significant Accounting Judgements and Estimates

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the statement of financial position date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

a)	Going concern
	Determining if the Company has the ability to raise the financing required to continue as a going concern is a judgment made by management. Further disclosure is included in Note 1.
b)	Impairment of equipment and exploration and evaluation assets
	Management considers both external and internal sources of information in assessing whether there are any indications that the Company’s equipment and exploration and evaluation assets are impaired. External sources of information management considers include changes in the market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount of its equipment and mining interests.
c)	Depreciation rate for equipment
	Depreciation is allocated based on assumed asset lives. Should the asset life or depreciation rates differ from the initial estimate, an adjustment would be made in the consolidated statements of operations and comprehensive loss.
d)	Estimated reclamation provisions
	The Company’s provision for decommissioning liabilities represents management’s best estimate of the present value of the future cash outflows required to settle estimated reclamation and site closure costs. The provision reflects estimates of future costs, inflation, and assumptions of risks associated with the future cash outflows, and the applicable risk free interest rates for discounting the future cash outflows. Changes in the above factors can result in a change to the provision recognized by the Company.
e)	Valuation of share based payments
	The Company uses the Black Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input of subjective assumptions including expected price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Company’s earnings and equity reserves.
f)	Recognition and measurement of deferred tax assets and liabilities
	Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. Weight is attached to tax planning opportunities that are within the Company’s control, and are feasible and implementable without significant obstacles. The likelihood that tax positions taken will be sustained upon examination by applicable tax authorities is assessed based on individual facts and circumstances of the relevant tax position evaluated in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets/liabilities.

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

3. SIGNIFICANT ACCOUNTING POLICIES

 

Basis of Consolidation

The Condensed Consolidated Interim Financial Statements include the accounts of the Company and its US subsidiaries.

	Ownership Interest		Jurisdiction	Nature of Operations
Coral Resources, Inc.	100%		Nevada, USA	Exploration Company
Coral Energy Corporation	100%		California, USA	Holding Company
Marcus Corporation		98.49%	Nevada, USA	Holding Company

Intercompany balances and transactions, including unrealized income and expenses arising from intercompany transactions are eliminated in preparing the Condensed Consolidated Interim Financial Statements.

Share-based payment transactions

The share option plan allows Company employees, directors, officers, and consultants to acquire shares of the Company. All options granted are measured at fair value, and are recognized in expenses as share-based payments with a corresponding increase in equity reserves. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee.

The fair value of employee options is measured at grant date, and each tranche is recognized using the graded vesting method over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. For non-employees, share-based payments are measured at the fair value goods and services received or the fair value or the fair value of the equity instruments issued, if it is determined the fair value cannot be reliably measured, and are recorded at the date the goods or services are received. The fair value of the options is accrued and charged either to operations or exploration and evaluation assets, with the offset credit to equity reserves. This includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. Upon the expiration or cancellation of unexercised stock options, the Company will transfer the value attributed to those stock options from equity reserves to deficit.

Provisions

Provisions are recognized where a legal or constructive obligation has been incurred as a result of past events, it is probable that an outflow of resources embodying economic benefit will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. If material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. The increase in any provision due to passage of time is recognized as accretion expense.

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

 

Reclamation provision

The Company records the present value of estimated costs of legal and constructive obligations required to restore mineral properties in the period in which the obligation is incurred. The nature of these restoration activities includes dismantling and removing structures, rehabilitating mines and restoration, reclamation and re-vegetation of affected areas. The reclamation provisions are initially recorded with corresponding increase to the carrying amount of related mineral properties.

When the liability is initially recognized, the present value of the estimated cost is capitalized by increasing the carrying amount of the related mineral property. Over time, the discounted liability is increased for the change in present value based on the risk-free interest rate applicable to the future cash outflows, which is accreted over time through periodic charges to income or loss.

Loss per share

The Company presents basic and diluted loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted loss per share is determined by adjusting the loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all dilutive potential common shares. In the Company's case, diluted loss per share is the same as basic loss per share as the effects of including all outstanding options and warrants would be anti-dilutive.

New accounting standards adopted by the Company

There were no new or revised accounting standards applicable to the Company scheduled for mandatory adoption on February 1, 2016, and thus no standards were adopted in the current year.

Accounting Standards and Amendments Issued But Not Yet Effective

The following accounting standards were issued but not yet effective as of October 31, 2016:

IFRS 10 Consolidated Financial Statements

The amendments to IFRS 10 require a full gain or loss to be recognized when a transaction involves a business (whether it is housed in a subsidiary or not), while a partial gain or loss would be recognized when a transaction involves assets that do not constitute a business, even if the assets are housed in a subsidiary. The amendments have been adopted by the Company effective January 1, 2016 with no significant impact on its consolidated financial statements.

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

3. SIGNIFICANT ACCOUNTING POLICIES (continued)

 

IFRS 15 – Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 – Revenue from Contracts with Customers ("IFRS 15") which supersedes IAS 11 – Construction Contracts, IAS 18 – Revenue, IFRIC 13 – Customer Loyalty Programmes, IFRIC 15 – Agreements for the Construction of Real Estate, IFRIC 18 – Transfers of Assets from Customers, and SIC 31 – Revenue – Barter Transactions Involving Advertising Services. IFRS 15 establishes a comprehensive five-step framework for the timing and measurement of revenue recognition. The standard is effective for annual periods beginning on or after January 1, 2018. The Company is currently evaluating the impact the final standard may have on its consolidated financial statements.

IFRS 9 – Financial Instruments

The IASB intends to replace IAS 39 – Financial Instruments: Recognition and Measurement in its entirety with IFRS 9 – Financial Instruments (“IFRS 9”) which is intended to reduce the complexity in the classification and measurement of financial instruments. In February 2014, the IASB tentatively determined that the revised effective date for IFRS 9 would be January 1, 2018. The Company is currently evaluating the impact the final standard may have on its consolidated financial statements.

IFRS 7 Financial instruments: Disclosure

IFRS 7 was amended to require additional disclosures on transition from IAS 39 to IFRS 9. The standard is effective on adoption of IFRS 9, which is effective for annual periods commencing on or after January 1, 2018. The Company is currently evaluating the impact this standard is expected to have on its consolidated financial statements.

IFRS 16 Leases

IFRS 16 was issued on January 13, 2016, and will be effective for accounting periods beginning on or after January 1, 2019. Early adoption is permitted, provided the Company has adopted IFRS 15. This standard sets out a new model for lease accounting. The Company is currently evaluating the impact the final standard is expected to have on its consolidated financial statements.

 

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

4. EXPLORATION AND EVALUATION ASSETS

 

The Company has accumulated the following acquisition and exploration expenditures:

	Robertson Property			Ruf and Norma Sass Claims		Other		Total
Balance, January 31, 2015	$	19,093,107		$	59,627	$	3	$	19,152,737
Exploration costs during the period:
Acquisition costs		37,157			31,873		-		69,030
Exploration costs during 2016:
Consulting		44,880			-		-		44,880
Lease payments		27,997			-		-		27,997
Taxes, licenses and permits		101,927			8,301		-		110,228
Impairment write-down		(212,519	)		-		-		(212,519	)
Balance, January 31, 2016	$	19,092,549		$	99,801	$	3	$	19,192,353
Exploration costs during the period:
Consulting		29,381			21,540		-		50,921
Lease payments		27,714			-		-		27,714
Mapping		330			-		-		330
Taxes, licenses and permits		7,451			22,117		-		29,568
Balance, October 31, 2016	$	19,157,425		$	143,458	$	3	$	19,300,886

The Company has certain interests in 688 patented and unpatented lode mining claims located in Lander County, Nevada, subject to net smelter returns (“NSR”) on production ranging from 4% to 10%, and which certain leases provide for advanced royalty payments.

a) Robertson Property

On June 21, 2016, Coral announced that it had entered into a purchase and sale agreement (the “Agreement”) with Barrick Cortez Inc. (“Barrick”), a subsidiary of Barrick Gold Corp., for the sale of the Robertson Property in Lander County, Nevada, to Barrick in consideration of:
1.	The payment to Coral of US$15.75 million (Cdn $20.72 million based on the current exchange rate) in cash (the “Cash Consideration”) on closing;
2.	The return of 4,150,000 common shares of Coral held by Barrick (which represent approximately 8.7% of the Company’s basic common shares outstanding as of June 20, 2016) for cancellation by the Company (the “Share Reduction”); and
3.	A sliding scale 1% to 2.25% net smelter returns royalty (the “NSR”) on the Robertson Property, payable quarterly, subject to potential advance royalty payments as outlined below, as well as a right of first refusal enabling Barrick to acquire the NSR in the event that the Company wishes to sell the NSR to any third party (the “Transaction”).

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

4. EXPLORATION AND EVALUATION ASSETS (continued)

a) Robertson Property (continued)

 

The sliding scale NSR rate will be determined based on the observed gold price during each quarterly period based on the average LBMA Gold Price PM during the quarterly period, as follows:

Average Gold Price/Oz During the Quarter (USD)	Applicable NSR Royalty Rate
Up to and including $1,200.00		1.00	%
$1,200.01 to $1,400.00		1.25	%
$1,400.01 to $1,600.00		1.50	%
$1,600.01 to $1,800.00		1.75	%
$1,800.01 to $2,000.00		2.00	%
Over $2,000.00		2.25	%

Pursuant to the Agreement, in the event that the Robertson Property is not placed into production by December 31, 2023, then beginning on January 1, 2024, and continuing on an annual basis thereafter until the earlier of (i) the date commercial production commences and (ii) January 2, 2033, Barrick will make advance royalty payments to Coral Gold of US$0.5M, which will be non-refundable and fully credited against any future obligations under the NSR.

Barrick will also assume all liabilities relating to the Robertson Property, and will provide replacement security for the reclamation bond.

Completion of the Transaction is subject to customary closing conditions, including TSX Venture Exchange acceptance and the approval of the shareholders of the Company by special resolution. The board of directors of Coral (the “Board”) has considered all relevant factors and unanimously determined that the Transaction is in the best interests of the Company and its shareholders. The Company has held a general meeting of shareholders on July 22, 2016, in which the sale of the Robertson Property was approved by 99.65% of votes.

The Robertson Property to be purchased by Barrick includes the properties also known as the Core, Gold Ridge, Excluded and the RUF mining claims, but does not include the properties known as the Norma, Sass, Eagle and JDN mining claims, which will remain the property of Coral. The Robertson Property is located in eastern Lander County, Nevada, sixty miles southwest of Elko. The property spans approximately 8,480 acres, comprised of 415 claims and 9 patented claims. Consolidation of the ownership of the Robertson Property will allow the project to benefit from Barrick’s Cortez operation.

The Robertson property is comprised of four contiguous claim groups known as the Core claims, Gold Ridge claims, Excluded claims, and Ruf claims.

In an agreement dated March 5, 2014, the Company granted Barrick Gold Exploration Inc. an option to purchase a 60% interest in 108 claims on the west side of the Core claims. This agreement was terminated in May 15, 2015.

(1) Core Claims

 

The Company holds an interest in 338 patented and unpatented lode mining claims. The Company owns 284 of these claims outright, of which 39 unpatented lode claims are owned by the Company’s 98.49% owned subsidiary, Marcus Corporation.

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

4. EXPLORATION AND EVALUATION ASSETS (continued)

 

a) Robertson Property (continued)

 

The remaining 54 claims are leased by the Company as follows:

(i) Chachas/Moore Lease

The Company assumed an option-to-purchase agreement dated November 30, 1975 related to 13 mineral claims, which form part of the Core claims of the Robertson Property. The total purchase price of the claims is US$2,000,000, which is payable in installments of US$1,000 per month until paid in full.

The property is subject to an 8% NSR. Any NSR royalty payments paid to the lessors are credited against the minimum monthly payments for a period equal to the value of the royalties paid at a rate of US$1,000 per month.

(ii) Blue Nugget, Lander Ranch, and Norma Sass Claims

The Company entered a mineral lease and option-to-purchase agreement with respect to 9 Blue Nugget claims, 27 Lander Ranch claims, 24 Norma claims, and 11 Sass claims, of which the Blue Nugget and Lander Ranch claims form part of the Core claims of the Robertson Property, and the Norma and Sass claims form part of the Norma Sass Property (Note 4b). Pursuant to the fifth amending agreement, the term of the lease was extended to April 21, 2013 and was left to expire. The total purchase price of the claims is US$1,500,000, which is payable in annual installments of $500 per claim until paid in full.

In October 2015, the Company entered into a revised mining lease agreement to lease 9 Blue Nugget claims and 27 Lander Ranch claims (the “Property”) for a term of ten years, which replaces the agreement above. In consideration of the lease, the Company agreed to keep the claims in good standing by paying the annual federal and local claim maintenance fees, commencing with the 2015-2016 assessment year. The Company also has the option to purchase all of the owner’s right, title, and interest in the Property, including owner’s reserved royalty, for the sum of US$108,000 within twelve months of the agreement date. In each year thereafter, the option price will be increased by 10% or US$10,800. The owner reserves the right to continue exploration, development, mining, and sale of turquoise on the Property, and agrees to defend, indemnify, and hold the Company harmless from all claims, demands, and liabilities arising from these activities.

(iii) Northern Nevada Lease

The Company entered a mineral lease with respect to 12 claims, which form part of the Core claims of the Robertson Property with an indefinite term. The claims are subject to a 4% NSR for which the Company is required to make minimum annual advanced royalty payments in the amount of $9,600 per year throughout the term of the lease. Of these 12 claims, 5 are part of the Core claims and 7 are part of Gold Ridge claims.

-14-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

4. EXPLORATION AND EVALUATION ASSETS (continued)

 

a) Robertson Property (continued)

 

(2) Gold Ridge Claims

 

Of the 108 claims, 95 are owned outright and 13 are held under leases as follows.

(i) Breckon Lease June Claims

The Company entered a mineral lease and option-to-purchase agreement granting it the exclusive rights to explore, develop, and exploit six lode mining claims, which form part of the Gold Ridge claims of the Robertson Property. The agreement is for an initial term of four years expiring on March 22, 2012 in consideration of the payment of an annual rent of US$25,000, renewable in successive four-year terms, provided that the rent will increase by US$5,000 every four years. The agreement was renewed in March 2012 until March 2016, with annual rent of US$30,000.

The property is subject to a 3% NSR royalty, subject to the Company’s exclusive right to purchase the NSR for US$1,000,000 per percentage point. The Company also has the exclusive right to purchase the property, subject to the NSR, for US$1,000,000.

In March 2016, the Company determined that the six lode mining claims that were leased under the Breckon Lease June Claims were insignificant to the property and did not warrant additional expenditure for lease payments and claims maintenance. The Company concluded that these claims were not required to maintain the value of the other claims and therefore the costs incurred to date on those claims should be written off. The value attributed to the claims that were written off was $212,519.

(ii) Northern Nevada Lease

7 of the 12 lease claims are included in the Gold Ridge claims.

(3) Excluded Claims (previously referred to as Carve-out Claims) – 39% carried interest

 

By Agreement dated May 16, 1996, the Company granted Amax Gold Exploration Inc. (“Amax”) an option to purchase a 61% interest in 132 claims (originally 219 claims). Amax exercised the option by paying twice the amount the Company had incurred in exploration expenditures on the property. Under the terms of the Agreement, the Company has a 39% carried interest.

The Amax 61% interest was subsequently acquired by Cortez GML, and is currently owned by Barrick Gold Corporation.

(4) Ruf Claims – 100% owned

 

By an amended option agreement dated September 13, 1995, the Company granted Levon Resources Ltd., a company related by common directors, an option to purchase a 50% interest in 58 claims including 23 Ruf, 24 Norma and 11 Sass Claims (Notes 4a(1)(ii) and 4c), of which the Ruf claims form a portion of the Robertson Property and the Norma Sass claims constitute the Norma Sass Property. On December 31, 2002, the Agreement was amended whereby Levon earned a 33.33% interest in these claims. On January 25, 2016, the Company and Levon entered into a Settlement and Property Transfer Agreement, wherein the Company acquired Levon’s undivided 1/3 interest in the Norma, Sass and Ruf mining claims, and Levon’s 1/2 interest in the Eagle mining claims, all located in Lander County, Nevada, in consideration of the Company’s forgiveness of USD$53,258 in debt owed by Levon to the Company. Expenditures incurred on the Ruf claims have been classified to Ruf and Norma Sass claims in the exploration expenditure table. A third party holds a 3% NSR royalty from some of these mining claims, up to a limit of US$1,250,000.

-15-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

4. EXPLORATION AND EVALUATION ASSETS (continued)

 

b) Norma Sass Property – 100% interest

 

The Company holds a 100% interest in the 38 Norma Sass mining claims located in Lander County, Nevada.

c) JDN Hilltop Crest – 100% interest

 

The Company holds a 100% interest in 27 claims in the Hilltop District, Lander County, Nevada.

d) Eagle Claims – 100% interest

 

The Company holds a 100% interest in 45 claims in the Eagle Claims situated in the Shoshone Range, Lander County, Nevada.

Realization of Exploration and Evaluation Assets

The investment in and expenditures on exploration and evaluation assets comprise a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal. Resource exploration and development is highly speculative and involves inherent risks. While the rewards can be substantial if an ore body is discovered, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.

The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values.

Title to Exploration and Evaluation Assets Interests

Although the Company has taken steps to verify the title to exploration and evaluation assets in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements or transfers and title may be affected by undetected defects.

Environmental

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material, and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. The Company is not aware of any existing environmental problems related to any of its current or former properties that may result in material liability to the Company other than the amount presented and disclosed as a reclamation provision in these Condensed Consolidated Interim Financial Statements.

Environmental legislation is becoming increasingly stringent, and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of exploration and development on the mineral properties, the potential for production on the property may be diminished or negated.

-16-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

5. PROPERTY AND EQUIPMENT

 

	Land		Buildings		Vehicles		Computer Hardware		Equipment		TOTAL
COST	$		$		$		$		$		$
Balance at January 31, 2015		84,127		18,708		6,920		5,926		3,459		119,140
Additions		-		-		-		-		-		-
Balance at January 31, 2016		84,127		18,708		6,920		5,926		3,459		119,140
Additions		-		-		-		-		-		-
Balance at October 31, 2016		84,127		18,708		6,920		5,926		3,459		119,140
ACCUMULATED DEPRECIATION
Balance at January 31, 2015		-		7,952		6,920		5,468		1,814		22,154
Depreciation		-		1,871		-		91		329		2,291
Balance at January 31, 2016		-		9,823		6,920		5,559		2,143		24,445
Depreciation		-		1,403		-		55		197		1,655
Balance at October 31, 2016		-		11,226		6,920		5,614		2,340		26,100
CARRYING VALUE
At January 31, 2016		84,127		8,885		-		367		1,316		94,695
At October 31, 2016		84,127		7,482		-		312		1,119		93,040

-17-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

6. INVESTMENTS

 

At October 31, 2016, the Company held shares as follows:

	Number of Shares		Cost		Accumulated Unrealized Gain (Loss)			Fair Value
Available-for-sale shares:
Levon Resources Ltd.		220,000	$	11,637	$	85,163		$	96,800
VBI Vaccines Inc. (formerly SciVac Therapeutics Inc.)		11,000		23,274		19,736			43,010
Great Thunder Gold Corp.		17,291		1,297		(605	)		692
			$	36,208	$	104,293		$	140,502

At January 31, 2016, the Company held shares as follows:

	Number of Shares		Cost		Accumulated Unrealized Gain (Loss)			Fair Value
Available-for-sale shares:
Levon Resources Ltd.		200,000	$	11,637	$	19,163		$	30,800
SciVac Therapeutics Inc.		440,000		23,274		38,326			61,600
Great Thunder Gold Corp.		17,291		1,297		(951	)		346
			$	36,208	$	56,538		$	92,746

In the nine months ended October 31, 2016, SciVac Therapeutics Inc. (“SciVac”) completed a transaction with VBI Vaccines Inc. (“VBI”). The transaction resulted in a reverse-takeover of SciVac and VBI will continue as the surviving corporation. SciVac changed its name to VBI Vaccines Inc. and its trading symbol on the TSX to “VBV”, and listed its shares on the Nasdaq Capital Market. In connection with the transaction a 1:40 share consolidation of SciVac shares was effected on April 29, 2016 and SciVac’s shares began trading on a split-adjusted basis at market open on May 2, 2016. Prior to the transaction, the Company held 440,000 common shares of SciVac and upon completion is holding 11,000 common shares of VBI.

During the nine months ended October 31, 2016, the Company recorded an unrealized gain of $47,756 (2015 – loss of $11,760) on investments, representing the change in fair value during the period.

Certain directors of Levon and Great Thunder Gold Corp. (formerly Mill Bay Ventures Inc.) are also directors of the Company.

During the year ended January 31, 2016, Levon completed a transaction with SciVac Therapeutics Inc. resulting in the exchange of 0.5 of a common share of Levon for each previous Levon common share held, and the issuance of one new SciVac common share for each previous Levon common share held.

-18-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

7. RECLAMATION BONDS

 

Under the Bureau of Land Management of the United States (the “Bureau”), the Company is required to hold reclamation bonds that cover the estimated cost to reclaim the ground disturbed.

As at October 31, 2016, the total reclamation deposits were $85,830 (US$64,000) (January 31, 2016 - $89,638 (US$64,000)). Interest is accrued on the reclamation deposit at a monthly weighted average rate of 0.05% (2016 - 0.05%).

8. SHARE CAPITAL

 

a) Authorized

 

Unlimited common shares without par value. All shares outstanding are fully paid.

b) Issued during 2017 and 2016

 

On August 19, 2016, the Company issued 10,000 common shares upon the exercise of 10,000 stock options at an exercise price of $0.24 for gross proceeds of $2,400.

On July 21, 2016, the Company issued 15,000 common shares upon the exercise of 15,000 stock options at an exercise price of $0.24 for gross proceeds of $3,600.

On July 11, 2016, the Company issued 1,000,000 common shares upon the exercise of 1,000,000 warrants at an exercise price of $0.10 for gross proceeds of $100,000.

On January 14, 2016, the Company closed a non-brokered private placement of 1,500,000 units at a price of $0.05 per unit for gross proceeds of $75,000. Each unit consists of one common share and one non-transferrable share purchase warrant.

On September 10, 2015, the Company closed a non-brokered private placement of 3,500,000 units at a price of $0.05 per unit for gross proceeds of $175,000. Each unit consists of one common share and one non-transferrable share purchase warrant.

c) Share purchase warrants and compensation options

 

On January 14, 2016, the Company issued 1,500,000 share purchase warrants as part of a non-brokered private placement. Each warrant entitles the investor to purchase one additional common share in the capital of the Company at an exercise price of $0.10 for a term of two years expiring on January 14, 2018.

On September 10, 2015, the Company issued 3,500,000 share purchase warrants as part of a non-brokered private placement. Each warrant entitles the investor to purchase one additional common share in the capital of the Company at an exercise price of $0.10 for a term of two years expiring on September 10, 2017.

On July 13, 2015, the TSX Venture Exchange approved an extension of the expiry date of the warrants issued pursuant to the private placement that closed on July 17, 2013 by three years from July 17, 2015 to July 17, 2018. All other terms remained the same.

As a result of the extension, the Company recorded an additional aggregate fair value compensation cost in the amount of $143,697, which has been estimated using the Black-Scholes option pricing model with the following assumptions for the fair value of the amended warrants at the date of the amendment: risk-free interest rate of 0.38%, dividend yield of 0%, volatility of 100.44%, and an expected life of 3 years.

-19-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

8. SHARE CAPITAL (continued)

 

c) Share purchase warrants and compensation options (continued)

 

A summary of the share purchase warrants and compensation options issued, exercised and expired during the periods ended October 31, 2016 and January 31, 2016 is as follows:

	Number of Warrants			Weighted Average Exercise Price
Balance, January 31, 2015		10,113,620		$	0.53
Issued		5,000,000		$	0.10
Expired		(6,464,120	)	$	0.75
Balance, January 31, 2016		8,649,500		$	0.12
Exercised		(1,000,000	)	$	0.10
Balance, October 31, 2016		7,649,500		$	0.12

	Exercise Price		Warrants Outstanding and Exercisable
Expiry Date	per Share		October 31, 2016		January 31, 2016
September 10, 2017	$	0.10		2,500,000		3,500,000
July 17, 2018	$	0.15		3,649,500		3,649,500
January 14, 2018	$	0.10		1,500,000		1,500,000
				7,649,500		8,649,500

-20-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

8. SHARE CAPITAL (continued)

 

d) Stock options

 

The Company’s stock option plan provides for the granting of options to directors, officers, employees and consultants. Under the terms of the option plan, options issued will not exceed 10% (2015 - 10%) of the issued and outstanding shares from time to time. The option price under each option is not less than the discounted market price on the grant date. The expiry date for each option is set by the Board of Directors at the time of issue and cannot be more than ten years after the grant date. All options vest 100% on the grant date unless a vesting schedule is set by the Board of Directors at the time of issue.

For the periods ended October 31, 2016 and January 31, 2016 stock option activity is summarized as follows:

	Number of Options			Weighted Average Exercise Price
Balance, January 31, 2015		3,970,000		$	0.38
Granted		500,000		$	0.18
Cancelled		(355,000	)	$	1.19
Expired		(945,000	)	$	0.27
Balance, January 31, 2016		3,170,000		$	0.28
Exercised		(25,000	)	$	0.24
Balance, October 31, 2016		3,145,000		$	0.28

A summary of stock options outstanding as at October 31, 2016 is as follows:

Number Outstanding	Exercise Price		Weighted Average Remaining Contractual Life (years)		Expiry Date
800,000	$	0.400		0.31	February 22, 2017
600,000	$	0.300		0.95	October 12, 2017
1,245,000	$	0.240		2.37	March 14, 2019
100,000	$	0.125		3.93	October 6, 2020
100,000	$	0.150		3.93	October 6, 2020
100,000	$	0.175		3.93	October 6, 2020
100,000	$	0.200		3.93	October 6, 2020
100,000	$	0.225		3.93	October 6, 2020
3,145,000	$	0.282		1.82

As at October 31, 2016, 3,045,000 options were exercisable at a weighted-average exercise price of $0.284.

The weighted average remaining contractual life of stock options outstanding and exercisable as at October 31, 2016 was 1.75 years.

-21-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

9. SHARE-BASED PAYMENTS

On October 6, 2015, the Company granted incentive stock options for the purchase of up to 500,000 common shares to a consultant. These 500,000 stock options have the following prices and vesting terms, and are exercisable on or before October 6, 2020:

- 100,000 at a price of $0.125 vesting after three months

- 100,000 at a price of $0.15 vesting after six months

- 100,000 at a price of $0.175 vesting after nine months

- 100,000 at a price of $0.20 vesting after twelve months

- 100,000 at a price of $0.225 vesting after fifteen months

On March 14, 2014, the Company granted incentive stock options for the purchase of up to 1,420,000 common shares at a price of $0.24 per share to directors, officers, consultants, and employees of the Company. 50,000 of these stock options are exercisable on or before March 14, 2015, and 1,370,000 stock options are exercisable on or before March 14, 2019.

The Company recorded total share-based payments of $71,775 for the grant and vesting of stock options during the nine months ended October 31, 2016 (2015 - $3,842) as follows:

	2016		2015
Directors, officers and employees	$	-	$	-
Investor relations		-		203
Consultants		71,775		3,639
	$	71,775	$	3,842

Option pricing requires the use of highly subjective estimates and assumptions including the expected stock price volatility. Changes in the underlying assumptions can materially affect the fair value estimates. There were no options granted during the nine months ended October 31, 2016.

	2016		2015
Weighted average assumptions:
Risk-free interest rate		-		0.75	%
Expected dividend yield		-		-
Expected option life (in years)		-		4.94
Expected stock price volatility		-		93.50	%
Forfeiture rate		-		-
Weighted average fair value at grant date		-	$	0.06

Expected volatility was forecasted based on the historical volatility of the Company.

-22-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

10. RELATED PARTY TRANSACTIONS AND BALANCES

 

Related party transactions are measured at the estimated fair values of the services provided or goods received. Related party transactions not disclosed elsewhere in these financial consolidated statements are as follows:

a) Key Management Compensation

 

Key management personnel include the members of the Board of Directors and officers of the Company, who have the authority and responsibility for planning, directing and controlling the activities of the Company. The remuneration of directors and officers for the nine months ended October 31 was as follows:

	2016		2015
Salaries, bonuses, fees and benefits
Members of the Board of Directors	$	48,901	$	50,398
Other members of key management		25,999		19,533
Share-based payments
Members of the Board of Directors		-		-
Other members of key management		-		-
	$	74,900	$	69,931

b) In the normal course of operations the Company transacts with companies with directors or officers in common. At October 31, 2016 and January 31, 2016, the following amounts are payable to (receivable from) related parties:

 

	October 31, 2016			January 31, 2016
Directors	$	84,000		$	70,500
Oniva International Services Corp.		8,419			8,401
Sampson Engineering Inc.		2,128			1,212
Frobisher Securities Ltd.		(2,800	)		4,200
	$	91,747		$	84,313

The amounts included above are unsecured, non-interest bearing with no fixed terms of repayment.

c) Other related party transactions

 

The Company has a cost-sharing agreement to reimburse Oniva International Services Corp. (“Oniva”), as described in Note 13. The transactions with Oniva during the nine months ended October 31 are summarized below:

	2016		2015
Salaries and benefits	$	67,827	$	51,386
Office and miscellaneous		29,225		19,731
	$	97,152	$	71,117

-23-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

11. RECLAMATION PROVISION

 

The Company’s reclamation provision relates to the reclamation work required by the Bureau to be performed on the Robertson Property.

Management estimates the total undiscounted inflation-adjusted amount of cash flows required to settle its reclamation provision to be approximately $606,408 (US$452,172) (January 31, 2016 - $633,312 (US$452,172)), which is expected to be incurred during 2018. The risk-free rate of 3% (January 31, 2016 – 3%) was used to calculate the present value of the reclamation provision.

A reconciliation of the reclamation provision is as follows:

	October 31, 2016			January 31, 2016
Beginning balance	$	645,153		$	566,410
Unwinding of discount		13,549			17,389
Change in estimates		-			-
Change in foreign exchange rate		(27,095	)		61,354
	$	631,605		$	645,153

12. COMMITMENTS

 

The Company has a cost-sharing agreement to reimburse Oniva for a percentage of its overhead expenses, to reimburse 100% of its out-of-pocket expenses incurred on behalf of the Company, and to pay a percentage fee based on the total overhead and corporate expenses. The agreement may be terminated with one-month’s notice by either party. Transactions and balances with Oniva are disclosed in Note 11.

13. FINANCIAL INSTRUMENTS

 

The fair values of the Company’s cash and cash equivalents, amounts receivable from a related party, accounts payable, and amounts payable to related parties approximate their carrying values due to the short-term nature of these instruments. Investment securities are accounted for at fair value based on quoted market prices.

The Company’s financial instruments are exposed to certain financial risk, credit risk, liquidity risk, and market risk.

a) Credit risk

 

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company’s cash and cash equivalents is exposed to credit risk. The Company is not exposed to significant credit risk on amounts receivable (excluding GST). 

The Company manages credit risk, in respect of cash, by maintaining the majority of cash at high credit rated Canadian financial institutions.

-24-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

13. FINANCIAL INSTRUMENTS (continued)

 

a) Credit risk (continued)

 

Concentration of credit risk exists with respect to the Company’s cash and cash equivalents and reclamation deposits as the majority of the amounts are held with a single Canadian and US financial institution. The Company’s concentration of credit risk, and maximum exposure thereto, is as follows:

	October 31, 2016		January 31, 2016
Cash held at major financial institutions
Canada – cash	$	31,716	$	199,934
US - cash		153,853		400,030
		185,569		599,964
Reclamation deposits held at major financial institutions		85,830		89,638
Total cash and reclamation deposits	$	271,399	$	689,602

b) Liquidity risk

 

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due.

The Company manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities. The Company had working capital of $91,909 at October 31, 2016 (January 31, 2016 - $470,078). The Company has cash at October 31, 2016 in the amount of $185,569 (January 31, 2016 - $599,964) in order to meet short-term business requirements. At October 31, 2016, the Company had current liabilities of $170,503 (January 31, 2016 - $148,637). Accounts payable have contractual maturities of approximately 30 days and are subject to normal trade terms. Amounts due to related parties are without stated terms of interest or repayment.

The Company will require significant cash funding to conduct its planned exploration programs, meet its administrative overhead costs, and maintain its mineral properties in 2017.

 

-25-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

13. FINANCIAL INSTRUMENTS (continued)

 

c) Market risk

 

Market risk consists of interest rate risk, foreign currency risk, and other price risk. These are discussed further below.

Interest rate risk

Interest rate risk consists of two components:

(i) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

(ii) To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is exposed to interest rate price risk with respect to reclamation deposits as they bear interest at market rates. However, given the stated rates of interest are fixed, the Company is not exposed to significant interest rate price risk as at October 31, 2016 and January 31, 2016.

Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The Company is exposed to foreign currency risk to the extent that monetary assets and liabilities are denominated in foreign currency.

The Company is exposed to foreign currency risk with respect to cash, other amounts receivable, accounts payable and accrued liabilities, and amounts payable to related parties, as a portion of these amounts are denominated in US dollars as follows:

	October 31, 2016			January 31, 2016
Cash	US$	114,721		US$	285,613
Other amounts receivable		173			149
Amounts receivable from related parties		-			-
Reclamation bonds		64,000			64,000
Accounts payable		(25,281	)		(3,317	)
Net exposure	US$	153,613		US$	346,445
Canadian dollar equivalent	$	206,010		$	485,231

Based on the net Canadian dollar denominated asset and liability exposures as at October 31, 2016, a 10% (January 31, 2016 – 10%) fluctuation in the Canadian/US exchange rates will impact the Company’s net loss and comprehensive loss by approximately $20,601 (January 31, 2016 - $48,523).

The Company manages foreign currency risk by minimizing the value of financial instruments denominated in foreign currency. The Company has not entered into any foreign currency contracts to mitigate this risk.

-26-

CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

13. FINANCIAL INSTRUMENTS (continued)

 

c) Market risk

 

Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is exposed to other price risk with respect to its investment securities, as they are carried at fair value based on quoted market prices.

The Company’s ability to raise capital to fund mineral resource exploration is subject to risks associated with fluctuations in mineral resource prices. Management closely monitors commodity prices, individual equity movements and the stock market to determine the appropriate course of action to be taken by the Company.

d) Classification of Financial instruments

 

IFRS 7 ‘Financial Instruments: Disclosures’ establishes a fair value hierarchy that prioritizes the input to valuation techniques used to measure fair value as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The following table sets forth the Company’s financial assets measured at fair value on a recurring basis by level within the fair value hierarchy as at October 31, 2016:

	Level 1		Level 2		Level 3
Cash and cash equivalents	$	185,569		-		-
Investments in Marketable Securities		140,502		-		-
	$	326,071		-		-

14. CAPITAL MANAGEMENT

 

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the exploration and development of its properties and to maintain flexible capital structure for its projects for the benefit of its stakeholders. In the management of capital, the Company includes the components of shareholders’ equity.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares or adjust the amount of cash and cash equivalents. Management reviews the capital structure on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company is not subject to externally imposed capital requirements. There were no changes to the Company’s capital management during the nine months ended October 31, 2016.

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CORAL GOLD RESOURCES LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the nine months ended October 31, 2016 and 2015

(Expressed in Canadian dollars) (Unaudited)

15. ADDITIONAL CASH FLOW DISCLOSURES

 

The net change in non-cash working capital is comprised of the following:

	October 31, 2016			October 31, 2015
Other amounts receivable	$	(6,513	)	$	10,451
Prepaid expenses		(51,579	)		(29	)
Accounts payable and accrued liabilities		(8,885	)		(12,212	)
Amounts payable to related parties		6,518			858
	$	(60,459	)	$	1,646

16. SEGMENTED INFORMATION

 

The Company operates one operating segment, mineral exploration and development activities. The Company is in the exploration stage and, accordingly, has no reportable revenues for the nine months ended October 31, 2016 and January 31, 2016.

The Company has non-current assets in the following geographic locations:

	October 31, 2016		January 31, 2016
Canada	$	141,934	$	94,431
USA		19,478,324		19,375,002
	$	19,620,258	$	19,469,433

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