UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~February~~August 2931, ~~2016~~ 2016

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

For the transition period from _____ to ~~_____Commission~~ ~~File Number: 000-50907~~ _____

Commission File Number: 000-50907

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

Nevada	98-0430222
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
P.O. Box 33507,
Plot 82A, ITV Road, Mikocheni Light Industrial Area,	N/A
Dar es Salaam, the United Republic of Tanzania
(Address of principal executive offices)	(Zip Code)

P.O. Box 33507,
Plot 82A, ITV Road, Mikocheni Light Industrial Area,	N/A
Dar es Salaam, the United Republic of Tanzania
(Address of principal executive offices)	(Zip Code)

+255 222 70 00 84
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

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

~~State~~Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: ~~321~~ 2,~~416~~142,~~654~~ 778 shares of common stock as of ~~April~~October 810, 2016.

HANDENI GOLD INC. ~~(FORMERLY DOUGLAS LAKE MINERALS INC.)~~

Quarterly Report On Form 10-Q For ~~The~~the Quarterly Period Ended ~~February~~August 2931, 2016

INDEX

PART I – FINANCIAL INFORMATION		2
Item 1.	Financial Statements	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	3130
Item 4.	Controls and Procedures	3130
PART II – OTHER INFORMATION		3130
Item 1.	Legal Proceedings	3130
Item 1A.	Risk Factors	3231
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	3231
Item 3.	Defaults Upon Senior Securities	3231
Item 4.	Mine Safety Disclosures	3231
Item 5.	Other Information	3231
Item 6.	Exhibits	3231

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements that involve risks and uncertainties. Forward-looking statements in this quarterly report include, among others, statements regarding our capital needs, business plans and expectations. Such forward-looking statements involve risks and uncertainties regarding the market price of gold, availability of funds, government regulations, permitting, common share prices, operating costs, capital costs, outcomes of ore reserve development, recoveries and other factors. Forward-looking statements are made, without limitation, in relation to operating plans, property exploration and development, availability of funds, environmental reclamation, operating costs and permit acquisition. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “expect”, “plan”, “intend”, “anticipate”, “believe”, “estimate”, “predict”, “potential” or “continue”, the negative of such terms or other comparable terminology. Actual events or results may differ materially. In evaluating these statements, you should consider various factors, including the risks outlined in our annual report on Form 10-K for the year ended May 31, ~~2015~~2016, and, from time to time, in other reports that we file with the Securities and Exchange Commission (the “SEC”). These factors may cause our actual results to differ materially from any forward-looking statement. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

The following unaudited interim consolidated financial statements of Handeni Gold Inc. (sometimes referred to as “we”, “us” or “our Company”) are included in this quarterly report on Form 10-Q:

	Page
Consolidated Balance Sheets	3
Interim Consolidated Statements of Operations and Comprehensive Loss	4
Interim Consolidated Statements of Cash Flows	5
Notes to the Interim Consolidated Financial Statements	6

Handeni Gold Inc.
Consolidated Balance Sheets
(Expressed in U.S. dollars)

		February 29, 2016			May 31, 2015
		August 31, 2016			May 31, 2016
		(Unaudited)			(Audited)
ASSETS
Current Assets
Cash	$	7679,~~662~~530		$	8552,~~985~~373
Amounts receivable (Note 3)		3819,~~929~~331			3814,~~751~~142
Prepaid expenses and deposits (Note 4)		310,~~325~~345			~~306~~1,941
Total Current Assets		~~118~~109,~~916~~206			~~125~~68,~~042~~456
Restricted cash equivalent (Note 5)		1213,~~749~~152			13,~~858~~158
Mineral licenses (Note 6)		1,~~650~~415,000			1,~~650~~415,000
Property and equipment, net (Note 7)		465			1,474
Equipment, net (Note 7)		251			358
TOTAL ASSETS	$	1,~~782~~537,~~130~~609		$	1,~~790~~496,~~374~~972
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current Liabilities
Accounts payable and accrued liabilities	$	5679,~~389~~841		$	5272,~~785~~880
Accounts payable and accrued liabilities - related parties (Note 8 (b) and (d))		~~451~~457,000			~~454~~451,~~615~~000
Total Current Liabilities		507,389			507,400
Current portion of loans from related parties (Note 8 (a))		-			1,625,000
Loans from related parties (Note 8 (a))		1,655,000			1,340,000
Total Current Liabilities		536,841			2,148,880
TOTAL LIABILITIES		2,162,389			1,847,400
Loans from related parties - Long-term portion (Note 8 (a)(iv))		1,825,000			90,000
Total Liabilities		2,361,841			2,238,880
Nature of Operations and Going Concern (Note 1)
Commitments and Contingencies (Notes 11)
Stockholders' Deficiency
Common stock (Note 9)
Authorized: 500,000,000 shares, $0.001 par value Issued and outstanding: 321,416,654 shares (May 31, 2015 – 321,416,654 shares)		321,417			321,417
Authorized: 500,000,000 shares, $0.001 par value Issued and outstanding: 2,142,778 shares (May 31, 2016 – 2,142,778 shares)		2,143			2,143
Additional paid-in capital (Note 9)		116,~~414~~734,~~824~~098			116,~~414~~734,~~824~~098
Donated capital (Note 8 (a))		~~429~~556,~~164~~736			~~314~~502,~~982~~897
Deficit accumulated during the exploration stage		(118,117,~~545,664~~209	)		(117,~~108~~981,~~249~~046	)
Total Stockholders' Deficiency		(~~380~~824,~~259~~232	)		(57741,~~026~~908	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY	$	1,~~782~~537,~~130~~609		$	1,~~790~~496,~~374~~972

(The accompanying notes are an integral part of these interim consolidated financial statements)

Handeni Gold Inc.
Interim Consolidated Statements of Operations and Comprehensive Loss
(Expressed in U.S. dollars)
(Unaudited)

		For the Three Months Ended,						~~For the Nine Months Ended,~~
		February 29, 2016			February 28, 2015			February 29, 2016			February 28, 2015
		August 31, 2016			August 31, 2015
Revenue	$	-		$	-		$	-		$	-
Expenses
Consulting fees		1,350			31,~~610~~350			~~4,050~~			~~14,530~~
Depreciation		107			~~14,557~~795			~~1,009~~			~~52,719~~
Exploration expenses		17,625			35,925			122,197			174,245
Exploration expenses (Note 8 (b))		29,270			20,303
General and administrative		41,568			110,450			133,979			340,655
General and administrative (Note 8 (c))		43,634			47,868
Impairment of mineral property		-			-			-			-
Interest expense (Note 8 (a))		53,839			36,007
Interest expense		40,403			28,638			114,182			82,795
Professional		15,046			3,347
Professional		19,661			57,198			31,057			107,013
Rent (Note 8 (b))		26,559			36,411
Rent		440			332			38,434			58,875
Travel and investor relations		174			165
Travel and investor relations		975			4,871			3,172			32,037
Total Expenses		169,979			146,246
Total Expenses		122,129			255,581			448,080			862,869
Loss From Operations		(169,979	)		(146,246	)
Loss From Operations		(122,129	)		(255,581	)		(448,080	)		(862,869	)
Other Income (Expenses)
Other Income (Expenses)
Gain on disposal of equipment (Note 7)		35,000			10,000
Gain on disposal of equipment		653			-			10,653			20,058
Interest income		8			12
Impairment of marketable securities		-			(53,600	)		-			(140,000	)
Loss on write-off of amounts receivable (Note 3)		(1,192	)		-
Loss on marketable securities		-			(20,000	)		-			(20,000	)
Total Other Expenses		33,816			10,012
Interest income		-			28			12			123
Net Loss and Comprehensive Loss	$	(136,163	)	$	(136,234	)
Total Other Income (Expenses)		653			(73,572	)		10,665			(139,819	)
Net Loss per Share - Basic and Diluted	$	(0.06	)	$	(0.06	)
Net Loss and Comprehensive Loss	$	(121,476	)	$	(329,153	)	$	(437,415	)	$	(1,002,688	)
Basic and Diluted Weighted Average Number of Common Shares Outstanding (Note 9)		2,142,778			2,142,778
Net Loss per Share - Basic and Diluted	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic and Diluted Weighted Average Number of Common Shares Outstanding		321,416,654			321,416,654			321,416,654			321,416,654

(The accompanying notes are an integral part of these interim consolidated financial statements)

Handeni Gold Inc.
Interim Consolidated Statements of Cash Flows
(Expressed in U.S. dollars)
(Unaudited)

		For the Nine Months Ended,
		For the Three Months Ended,
		February 29, 2016			February 28, 2015
		August 31, 2016			August 31, 2015
CASH AND CASH EQUIVALENTS PROVIDED BY (USED IN):
CASH PROVIDED BY (USED IN):
Operating Activities:
Net loss	$	(~~437~~136,~~415~~163	)	$	(1136,~~002,688~~234	)
Adjustments for non-cash items in net loss:
Depreciation		~~1,009~~107			~~52,719~~795
Donated capital, services, interest and rent		114,182			82,795
Donated capital, services, interest and rent (Note 8 (a))		53,839			36,007
Impairment of marketable securities		-			140,000
Loss on unrealized foreign exchange		6			813
Loss on marketable securities		-			20,000
Loss on write-off of amounts receivable		1,192			-
Loss on unrealized foreign exchange		1,109			2,332
Gain on disposal of equipment		(35,000	)		(10,000	)
Gain on disposal of equipment		(10,653	)		(20,058	)
Changes in non-cash operating working capital:
Amounts receivable		(~~178~~6,381	)		(21,~~015~~572	)
Prepaid expenses and deposits		(38,~~019~~404	)		(10,~~439~~181	)
Accounts payable and accrued liabilities		36,~~604~~961			~~(43,327~~173	)
Due to related parties		(36,~~615~~000	)		~~145~~(3,~~000~~615	)
Cash Used in Operating Activities		(~~334~~117,~~976~~843	)		(~~614~~123,~~803~~814	)
Investing Activities:
Proceeds from disposal of equipment		1035,~~653~~000			2010,~~209~~000
Redemption of restricted cash equivalent		-			10,384
Cash Provided by Investing Activities		35,000			10,000
Cash Provided by Investing Activities		10,653			30,593
Financing Activities:
Loan from a related party		~~315~~110,000			~~134~~135,~~317~~000
Cash Provided by Financing Activities		~~315~~110,000			~~134~~135,~~317~~000
Decrease in cash and cash equivalents		(9,323	)		(449,893	)
Increase in cash		27,157			21,186
Cash, at beginning of the period		85,985			532,694
Cash, at beginning of the year		52,373			85,985
Cash, at end of the period	$	76,662		$	82,801
Cash, at end of the year	$	79,530		$	107,171

(The accompanying notes are an integral part of these interim consolidated financial statements)

Handeni Gold Inc. Notes to the Interim Consolidated Financial Statements as of ~~February~~August 2931, 2016 (Expressed in U.S. dollars) (Unaudited)

1.	Nature of Operations and Going Concern
	The Company was incorporated in the State of Nevada on January 5, 2004. On February 14, 2012, the Company changed its name from Douglas Lake Minerals Inc. to Handeni Gold Inc. (the “Company”). The Company’s principal business is the acquisition and exploration of mineral resources located in Tanzania, Africa. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.
	These consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders, the ability of the Company to obtain necessary equity financing to continue operations and to determine the existence, discovery and successful exploitation of economically recoverable reserves in its resource properties, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations.
	As at February 29, 2016, the Company has not generated any revenues and has accumulated losses of $117,545,664 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company plans to raise equity and/or debt financing to fund its operations which may result in substantial dilution to the Company’s stockholders or may not be available, if at all, in amounts or on terms acceptable to the Company. If additional capital is not obtained, the Company may be forced to cease operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
	As at August 31, 2016, the Company has not generated any revenues, has a working capital deficiency of $427,635 and has accumulated losses of $118,117,209 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The Company plans to raise equity and/or debt financing to fund its operations which may result in substantial dilution to the Company’s stockholders or may not be available, if at all, in amounts or on terms acceptable to the Company. If additional capital is not obtained, the Company may be forced to cease operations. These consolidated financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Such adjustments could be material.
2.	Summary of Significant Accounting Policies

2a) Basis of Presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. ~~Summary~~dollars. These consolidated financial statements include the accounts of ~~Significant~~the ~~Accounting~~Company ~~Policies~~and its subsidiaries described as follows. In June 2011, the Company incorporated in Tanzania a wholly-owned subsidiary, HG Limited (formerly DLM Tanzania Limited), which undertakes mineral property exploration activities in Tanzania. The Company also has a wholly-owned non-operating Tanzanian subsidiary (Douglas Lake Tanzania Limited). All significant intercompany transactions and balances have been eliminated. The Company’s fiscal year-end is May 31. b) Interim Consolidated Financial Statements The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended May 31, 2016, included in the Company’s Annual Report on Form 10-K filed on August 19, 2016 with the SEC. The interim financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at August 31, 2016, and the results of its operations and cash flows for the interim period ended August 31, 2016. The results of operations for the three months ended August 31, 2016 are not necessarily indicative of the results to be expected for future quarters or the full year. c) Use of Estimates The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability and useful life of long-lived assets, mineral prospecting licenses, stock-based compensation, deferred income tax asset valuation allowances and contingent liabilities. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

a)6 Basis of Presentation These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in U.S. dollars. These consolidated financial statements include the accounts of the Company and its subsidiaries described as follows. In June 2011, the Company incorporated in Tanzania a wholly-owned subsidiary, HG Limited (formerly DLM Tanzania Limited), which undertakes mineral property exploration activities in Tanzania. The Company also has a wholly-owned non-operating Tanzanian subsidiary (Douglas Lake Tanzania Limited). All significant intercompany transactions and balances have been eliminated. The Company’s fiscal year-end is May 31. b) Interim Consolidated Financial Statements The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q. They do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended May 31, 2015, included in the Company’s Annual Report on Form 10-K filed on August 21, 2015 with the SEC. The interim financial statements included herein are unaudited; however, they contain all normal recurring accruals and adjustments that, in the opinion of management, are necessary to present fairly the Company’s financial position at February 29, 2016, and the results of its operations and cash flows for the interim period ended February 29, 2016. The results of operations for the three months and nine months ended February 29, 2016 are not necessarily indicative of the results to be expected for future quarters or the full year. c) Use of Estimates The preparation of consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to the recoverability and useful life of long-lived assets, mineral prospecting licenses, stock-based compensation, deferred income tax asset valuation allowances and contingent liabilities. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. d) Basic and Diluted Net Income (Loss) Per Share The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

6Handeni Gold Inc. Notes to the Interim Consolidated Financial Statements as of August 31, 2016 (Expressed in U.S. dollars) (Unaudited)

Handeni Gold Inc. Notes to the Interim Consolidated Financial Statements as of February 29, 2016 (Expressed in U.S. dollars) (Unaudited)

2.	Summary of Significant Accounting Policies (continued)

	d)	Basic and Diluted Net Income (Loss) Per Share

		The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share which requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net income (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti-dilutive.

		The Company retroactively adjusted the number of common shares outstanding in accordance with ASC 260-10-55-12, Earnings per Share – Implementation Guidance and Illustrations. ASC 260-10-55-12 requires the computations of basic and diluted EPS shall be adjusted retroactively for all periods presented to reflect that change in capital structure, if the number of common shares outstanding increases as a result of a stock dividend or stock split or decreases as a result of a reverse stock split. If changes in common stock resulting from stock dividends, stock splits, or reverse stock splits occur after the close of the period but before the consolidated financial statements are issued or are available to be issued, the per-share computations for those and any prior-period consolidated financial statements presented shall be based on the new number of shares. If per-share computations reflect such changes in the number of shares, that fact shall be disclosed.

	e)	Comprehensive Income (Loss)

		ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive income (loss) and its components in the consolidated financial statements. As at August 31, 2016, the Company has no component of other comprehensive income (loss) and accumulated other comprehensive income (loss).

	f)	Cash and Cash Equivalents

		Cash and cash equivalents are carried at fair value and they comprise cash on hand, deposits held with banks and other highly liquid investments. Highly liquid investments are readily convertible to cash and generally have maturities of three months or less from the time acquired. The Company places its cash and cash equivalents with high quality financial institutions which the Company believes limits credit risk.

	g)	Equipment

		Property and equipment consists of office equipment, automobiles and computer software recorded at cost and depreciated on a straight- line basis as follows:

2. Summary of Significant Accounting Policies (continued)

Automobile equipment	3 years
Camp and equipment	3 years
Office furniture and equipment	3 years
Software	1 year

e) Comprehensive Income (Loss) ASC 220, Comprehensive Income establishes standards for the reporting and display of comprehensive income (loss) and its components in the consolidated financial statements. As at February 29, 2016, the Company has no component of other comprehensive income (loss) and accumulated other comprehensive income (loss). f) Cash and Cash Equivalents Cash and cash equivalents are carried at fair value and they comprise cash on hand, deposits held with banks and other highly liquid investments. Highly liquid investments are readily convertible to cash and generally have maturities of three months or less from the time acquired. The Company places its cash and cash equivalents with high quality financial institutions which the Company believes limits credit risk. g) Marketable Securities The Company reports investments in marketable equity securities at fair value based on quoted market prices. All investment securities are designated as available for sale with unrealized gains and losses included in stockholders’ equity. Realized gains and losses are accounted for based on the specific identification method. The Company periodically reviews these investments for other-than-temporary declines in fair value based on the specific identification method. When an other-than-temporary decline has occurred, unrealized losses that are other than temporary are recognized in earnings. When determining whether a decline is other-than-temporary, the Company examines (i) the length of time and the extent to which the fair value of an investment has been lower than its carrying value; (ii) the financial condition and near-term prospects of the investee, including any specific events that may influence the operations of the investee such as changes in technology that may impair the earnings potential of the investee; and (iii) the Company’s intent and ability to retain its investment in the investee for a sufficient period of time to allow for any anticipated recovery in market value. The Company generally believes that an other-than-temporary decline has occurred when the fair value of the investment is below the carrying value for one year, absent of evidence to the contrary. h) Property and Equipment Property and equipment consists of office equipment, automobiles and computer software recorded at cost and depreciated on a straight- line basis as follows:

	h)	Mineral Property Costs

		The Company has been in the exploration stage since its inception on January 5, 2004 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral prospecting licenses and mineral property acquisition costs are initially capitalized in accordance with ASC 805-20-55-37, Whether Mineral Rights are Tangible or Intangible Assets. The Company assesses the carrying costs for impairment under ASC 360-10-35-21, Accounting for Impairment or Disposal of Long-Lived Assets, whenever events or changes in circumstances indicate that the carrying costs may not be recoverable.

		When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are 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.

	i)	Long-Lived Assets

		In accordance with ASC 360, Property, Plant and Equipment the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life.

	Automobiles	3 years
	Camp and equipment	3 years
	Office furniture and equipment	3 years
	Software	1 year

	i)	Mineral Property Costs
		The Company has been in the exploration stage since its inception on January 5, 2004 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral prospecting licenses and mineral property acquisition costs are initially capitalized. The Company assesses the carrying costs for impairment under ASC 360, Property, Plant, and Equipment, whenever events or changes in circumstances indicate that the carrying costs may not be recoverable.
		When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are 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.
	j)	Long-Lived Assets
		In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

Handeni Gold Inc.
Notes to the Interim Consolidated Financial Statements as of August 31, 2016
(Expressed in U.S. dollars)
(Unaudited)

2.	Summary of Significant Accounting Policies (continued)

	i)	Long-Lived Assets (continued)

		Recoverability is assessed based on the carrying amount of the asset and its fair value, which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, specific third-party appraisal in certain instances, and evaluation of the project characteristics and level of advancement. If the Company is unable to estimate the sum of the undiscounted future net cash flows, it will adopt a market approach to estimate fair value by using a combination of observed market value metrics based on comparable transactions. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.

	j)	Asset Retirement Obligations

		The Company accounts for asset retirement obligations in accordance with the provisions of ASC 440, Asset Retirement and Environmental Obligations, which requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The Company did not have any asset retirement obligations as of August 31, 2016 and May 31, 2016.

	k)	Financial Instruments

		ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs, and the fair value of financial instruments, which include cash, restricted cash equivalent, restricted marketable securities, and accounts payable were estimated to approximate their carrying values due to the immediate or short-term maturities of these financial instruments.

		The Company’s operations are in Canada and Africa, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.

	l)	Income Taxes

		The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

	m)	Foreign Currency Translation

		The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average rates are used to translate revenues and expenses.

		Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

		To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Canadian dollars (“Cdn$”) and Tanzanian shillings. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.

	n)	Stock-based Compensation

		The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options.

		ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations and comprehensive loss over the requisite service period.

		All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.

~~Handeni~~8 ~~Gold Inc. Notes to the Interim Consolidated Financial Statements as of February 29, 2016 (Expressed in U.S. dollars) (Unaudited)~~

2Handeni Gold Inc. ~~Summary~~Notes to the Interim Consolidated Financial Statements as of ~~Significant~~August ~~Accounting~~31, ~~Policies~~2016 (~~continued~~Expressed in U.S. dollars) (Unaudited)

k) Asset Retirement Obligations The Company accounts for asset retirement obligations in accordance with the provisions of ASC 440, Asset Retirement and Environmental Obligations, which requires the Company to record the fair value of an asset retirement obligation as a liability in the period in which it incurs a legal obligation associated with the retirement of tangible long-lived assets that result from the acquisition, construction, development and/or normal use of the assets. The Company did not have any asset retirement obligations as of February 29, 2016 and May 31, 2015. l) Financial Instruments ASC 825, Financial Instruments, requires an entity to maximize the use of observable inputs, and the fair value of financial instruments, which include cash, restricted cash equivalent, restricted marketable securities, and accounts payable were estimated to approximate their carrying values due to the immediate or short-term maturities of these financial instruments. The Company’s operations are in Canada and Africa, which results in exposure to market risks from changes in foreign currency rates. The financial risk is the risk to the Company’s operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk. m) Income Taxes The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income Taxes. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized. n) Foreign Currency Translation The functional and reporting currency of the Company is the United States dollar. Monetary assets and liabilities denominated in foreign currencies are translated to United States dollars in accordance with ASC 830, Foreign Currency Translation Matters, using the exchange rate prevailing at the consolidated balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. To the extent that the Company incurs transactions that are not denominated in its functional currency, they are undertaken in Canadian dollars (“Cdn$”) and Tanzanian shillings. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations. o) Stock-based Compensation The Company records stock-based compensation in accordance with ASC 718, Compensation – Stock Based Compensation, and ASC 505, Equity Based Payments to Non-Employees, which requires the measurement and recognition of compensation expense based on estimated fair values for all share-based awards made to employees and directors, including stock options. ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the Company’s expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviours. The value of the portion of the award that is ultimately expected to vest is recognized as an expense in the consolidated statement of operations and comprehensive loss over the requisite service period. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable. p) Reclassification Certain reclassifications have been made to the prior periods’ consolidated financial statements to conform to the current period’s presentation.

2.	Summary of Significant Accounting Policies (continued)

	o)	Reclassification

		Certain reclassifications have been made to the prior periods’ consolidated financial statements to conform to the current period’s presentation.

	p)	Recently Issued Accounting Pronouncements

		The Company has adopted all new accounting pronouncements that are mandatorily effective and none have a material impact on its consolidated financial statements.

		New accounting pronouncements effective June 1, 2016

		The Company does not believe that there are any new accounting pronouncements that have been issued that are expected to have a material impact on its financial position or results of operations.

83. Amounts Receivable The components of amounts receivable are as follows:

Handeni Gold Inc. Notes to the Interim Consolidated Financial Statements as of February 29, 2016 (Expressed in U.S. dollars) (Unaudited)

	August 31, 2016	May 31, 2016
	$	$

Recoverable goods and services / harmonized sales tax	19,331	14,058
Other receivable	-	84

	19,331	14,142

2. Summary of Significant Accounting Policies (continued)

	The Company had recoverable value added tax (“VAT”) of $29,268 (TZS 63,703,026) as at August 31, 2016 and $28,002 (TZS 61,107,912) as at May 31, 2016. In January 2015, the Company submitted VAT refund certificates to the Tanzania Revenue Authority (“TRA”) requesting TZS 49,061,634 recoverable VAT refund. In June 2016, the Company received a letter from TRA dated May 2, 2016 to reject the refund application of TZS 49,061,634 based on changed interpretation on the provisions of subsection (2) of section 17 of the VAT Act cap 148 (repealed) whereby to consider a person to be eligible for VAT refund, such person must have the VAT charged on the supplies made for the period of the refund. The Company has filed a Notice of Objection to appeal TRA’s decision. Expecting difficulties to challenge TRA’s decision, the Company wrote off $1,192 of recorded revocable VAT as at August 31, 2016 and $28,002 of recorded recoverable VAT as at May 31, 2016, respectively.

4.	Prepaid Expenses and Deposits

	The components of prepaid expenses and deposits are as follows:

q)	Recently Issued Accounting Pronouncements
		August 31, 2016	May 31, 2016
	The Company has adopted all new accounting pronouncements that are mandatorily effective and none have a material impact on its consolidated financial statements.
		$	$
	New accounting pronouncements effective June 1, 2015
General and administrative		10,292	1,888
	During the year ended May 31, 2015, the Company elected to early adopt Accounting Standards Update No. 2014- 10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. The adoption of this standard allowed the Company to remove the previously disclosed inception-to-date information and all references to exploration stage.
Rent		53	53
	The Company does not believe that there are any other new accounting pronouncements that have been issued that are expected to have a material impact on its financial position or results of operations.
		10,345	1,941

3. Amounts Receivable

5.	Restricted Cash Equivalent

	As of August 31, 2016, the Company has pledged a GIC of $13,152 ($17,250 CAD) (May 31, 2016: $13,158 ($17,250 CAD)) as security held on a corporate credit card. The $6 difference compared to May 31, 2016 is attributed to loss on unrealized Canadian dollar foreign exchange.

6.	Mineral Properties and Licenses

	Handeni Properties, Tanzania, Africa

	a)	Prospecting Licenses (“PLs”)

		On September 21, 2010, the Company completed a Mineral Property Acquisition Agreement with IPP Gold Limited (“IPP Gold”), and the Company acquired four PLs totaling approximately 800 square kilometers, located in the Handeni District of Tanzania (the “Handeni Properties”). IPP Gold retained a 2.5% net smelter royalty (“NSR”) on the Handeni Properties and the Company has the option to reduce the NSR to 1.25% by paying $5,000,000. If the NSR is reduced to 1.25% the maximum NSR for any year is capped at $1,000,000. In any year the NSR payment is less than $1,000,000 the difference between the actual NSR payment and $1,000,000 will be carried forward to subsequent years. In addition if the London spot price for gold is equal to or greater than $1,500 then the NSR will increase from 2.5% to 3%. The Company issued 888,889 (133,333,333 pre-consolidation) restricted shares of common stock to IPP Gold to acquire the Handeni Properties and no further payments to IPP Gold in shares or cash are required.

~~The~~9 ~~components of amounts receivable are as follows:~~

	February 29,	May 31,
	2016	2015
	$	$
Recoverable value added tax	28,367	28,797
Recoverable goods and services / harmonized sales tax	9,762	9,830
Other receivable	800	124
	38,929	38,751

Handeni Gold Inc.
Notes to the Interim Consolidated Financial Statements as of August 31, 2016
(Expressed in U.S. dollars)
(Unaudited)

46. ~~Prepaid~~Mineral ~~Expenses~~Properties and ~~Deposits~~Licenses (continued) Handeni Properties, Tanzania, Africa (continued)

The components of prepaid expenses and deposits are as follows:

	a)	Prospecting Licenses (“PLs”) (continued)

		On September 1, 2010, the Company entered into a Transaction Fee Agreement with a consultant for services related to soliciting offers from and in assisting in the negotiation with potential Company financiers, purchasers, acquisition targets and/or joint venture development partners (each such party being a “Potential Investor”). The initial term of the agreement was a period of 60 days and automatically renews monthly unless otherwise specifically renewed in writing by each party or terminated by the Company. Pursuant to the agreement, the Company agreed to pay the consultant a transaction fee for each completed property acquisition transaction in Tanzania (a “Completed Transaction”). The transaction fee is 12.5% of the shares issuable under each Completed Transaction, payable in restricted common shares at the lowest priced security issuable under each Completed Transaction. On September 30, 2010, the Company issued 111,111 (16,666,667 pre-consolidation) restricted shares of common stock pursuant to the Transaction Fee Agreement in relation to the acquisition of the Handeni Properties.

		The fair value of the 888,889 (133,333,333 pre-consolidation) shares of the Company’s common stock issued to IPP Gold pursuant to the Acquisition Agreement and the 111,111 (16,666,667 pre-consolidation) shares of the Company’s common stock issued pursuant to the Transaction Fee Agreement totaled $60,000,000. On November 30, 2010, the capitalized acquisition costs of the Handeni Properties were tested for impairment by the Company’s management as required by ASC 360. Management determined that no positive cash flows from the Handeni Properties could be identified or supported and a full impairment loss was recognized in expenses for the $60,000,000 acquisition cost.

		Under Tanzanian law, 50% of the area of PLs need to be relinquished following a period of three years after allocation of the PLs to the Company (1998 Mining Act applicable to the Companies’ PLs). The Company has received four renewal PLs of the renewal areas under PL6742/2010, PL6744/2010, PL6743/2010 and PL6779/2010 effective on October 5, 2013, September 13, 2013, October 13, 2013 and September 13, 2013, respectively. These four PLs namely PL6742/2010 (4/10/2016), PL6743/2010 (12/10/2016), PL6744/2010 (12/09/2016) and PL6779/2010 (12/09/2016) are valid with their current sizes to dates indicated in brackets. Following these dates each of the PLs sizes need to be reduced by 50% according to Tanzanian mining law. HNDI is currently delineating the new PL outlines, to comply with a 50% reduction in size, in collaboration with the Ministry of Energy and Minerals, a process that should be finished during the month of October 2016. The total area occupied by the renewal licenses is approximately 359.80 km²or 45% of the original area.

		In addition to the renewal areas, the Company had also applied for the remainder of the license areas and has received four additional PLs under PL9853/2014, PL10000/2014, PL10262/2014 and PL10409/2014 effective on July 2, 2014, July 22, 2014, September 25, 2014 and December 2, 2014, respectively. These four PLs are valid for four years and cover areas of 63.23 km². The Company now holds a total license area of approximately 423.03 km²(53% of its original 800 km²license area).

	b)	Primary Mining Licenses (“PMLs”)

		On August 5, 2011, the Company entered a Mineral Property Acquisition Agreement (the “2011 Acquisition Agreement”) with Handeni Resources Limited (“Handeni Resources”), a limited liability company registered under the laws of Tanzania. The Chairman of the Board of Directors of the Company has an existing ownership and/or beneficial interest(s) in Handeni Resources. Pursuant to the 2011 Acquisition Agreement, the Company had an exclusive option to acquire from Handeni Resources a 100% interest in mineral licenses covering an area of approximately 2.67 square kilometers to the east of Magambazi Hill, which is adjacent to the area covered by the Company’s four existing PLs in the Handeni District.

		On November 30, 2011, the Company completed the 2011 Acquisition Agreement and issued 100,000 (15,000,000 pre-consolidation) restricted common shares to Handeni Resources as payment. As at November 30, 2011, the fair market price of the Company’s common stock was $0.11 per share; accordingly, the Company recorded a total fair market value of $1,650,000 as the mineral licenses acquisition cost.

		To comply with the laws and regulations of the Republic of Tanzania whereby foreign companies may not own PMLs, on July 19, 2012, the Company entered into an Addendum agreement to the 2011 Acquisition Agreement whereby Handeni Resources, on behalf of the Company, administers the 32 PMLs until such time as a mining license on the 32 PMLs (2.67 km²) have been allocated. During this period Handeni Resources is conducting exploration and mining activities on the PMLs as directed by the Company.

		As at May 31, 2016, the Company had recognized an impairment loss of $235,000 with respect to the carrying value of its mineral licenses as a result of management’s intention to let four of the 32 PMLs pertaining to the Handeni Properties lapse. This impairment loss represents the write-off of the original acquisition cost relating to these four PMLs. As the intention to let these four PMLs lapse was considered an indicator of impairment, management performed a recoverability test for the remaining 28 PMLs and noted that their carrying value did not exceed their estimated fair value, thereby resulting in no additional impairment loss.

	February 29,	May 31,
	2016	2015
	$	$
General and administrative	3,325	-
Rent	-	306
	3,325	306

During the three months ended August 31, 2016, the Company paid $1,800 (the three months ended August 31, 2015: $1,223) in annual rental and licenses renewal fees for PLs. Such license related fees have been recorded as exploration expenses on the consolidated statement of operations and comprehensive loss.

5.10 ~~Restricted Cash Equivalent~~

AsHandeni ofGold ~~February~~Inc. ~~29,~~Notes ~~2016,~~to the ~~Company~~Interim Consolidated ~~has~~Financial ~~pledged~~Statements aas ~~GIC~~ of ~~$12,749~~August ~~(May~~ 31, ~~2015:~~2016 ~~$13,858)~~(Expressed asin ~~security held on a corporate credit card~~U.S. ~~The $1,109 difference compared to May 31, 2015 is~~dollars) ~~attributed~~(Unaudited) ~~to loss on unrealized Canadian dollar foreign exchange.~~

67. ~~Mineral Properties and Licenses~~Equipment

Handeni Properties, Tanzania, Africa

	August 31, 2016			May 31, 2016
		Accumulated	Net Book	Net Book
	Cost	Depreciation	Value	Value
	$	$	$	$
Automobile vehicles	139,169	139,169	-	-
Camp and equipment	197,011	197,011	-	-
Office furniture and equipment	100,222	99,971	251	358
Software	7,930	7,930	-	-

	444,332	444,081	251	358

	a)	Prospecting Licenses (“PLs”)
		On September 21, 2010, the Company completed a Mineral Property Acquisition Agreement with IPP Gold Limited (“IPP Gold”), and the Company acquired four PLs totaling approximately 800 square kilometers, located in the Handeni District of Tanzania (the “Handeni Properties”). IPP Gold retained a 2.5% net smelter royalty (“NSR”) on the Handeni Properties and the Company has the option to reduce the NSR to 1.25% by paying $5,000,000. If the NSR is reduced to 1.25% the maximum NSR for any year is capped at $1,000,000. In any year the NSR payment is less than $1,000,000 the difference between the actual NSR payment and $1,000,000 will be carried forward to subsequent years. In addition if the London spot price for gold is equal to or greater than $1,500 then the NSR will increase from 2.5% to 3%. The Company issued 133,333,333 restricted shares of common stock to IPP Gold to acquire the Handeni Properties and no further payments to IPP Gold in shares or cash are required.
		On September 1, 2010, the Company entered into a Transaction Fee Agreement with a consultant for services related to soliciting offers from and in assisting in the negotiation with potential Company financiers, purchasers, acquisition targets and/or joint venture development partners (each such party being a “Potential Investor”). The initial term of the agreement was a period of 60 days and automatically renews monthly unless otherwise specifically renewed in writing by each party or terminated by the Company. Pursuant to the agreement, the Company agreed to pay the consultant a transaction fee for each completed property acquisition transaction in Tanzania (a “Completed Transaction”). The transaction fee is 12.5% of the shares issuable under each Completed Transaction, payable in restricted common shares at the lowest priced security issuable under each Completed Transaction. On September 30, 2010, the Company issued 16,666,667 restricted shares of common stock pursuant to the Transaction Fee Agreement in relation to the acquisition of the Handeni Properties.

	During the three months ended August 31, 2016, the Company sold certain of its fully amortized equipment and recognized a gain on disposal of $35,000 (the year ended May 31, 2016: $10,653) in the consolidated statement of operations and comprehensive loss.

8.	Related Party Transactions

a)	The Company has entered into the following facility agreements with related parties:

	i)	On December 7, 2012, and as amended on September 4, 2013, June 18, 2014, March 20, 2015 and August 30, 2016, the Company entered into a facility agreement with IPP Ltd., a private company controlled by the Chairman of the Company. The funding is in the form of an interest-free unsecured loan to the Company of up to $720,000 due December 31, 2018. As of August 31, 2016 and May 31, 2016, IPP Ltd. has fully advanced $720,000 to the Company pursuant to this facility agreement.

	ii)	On October 9, 2013, and as amended on June 18, 2014, March 20, 2015 and August 30, 2016, the Company entered into a facility agreement with Consultancy & Finance Company Associates Ltd. (“C&F”), a private company controlled by the Chairman of the Company. The funding is in the form of an interest-free unsecured loan to the Company of up to $405,000. During the current period the due date has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. As of August 31, 2016 and May 31, 2016, C&F has fully advanced $405,000 to the Company pursuant to this facility agreement.

	iii)	On November 20, 2014, and as amended on August 30, 2016, the Company entered into a facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $500,000. During the current period, the due date has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. As of August 31, 2016 and May 31, 2016, C&F has fully advanced $500,000 to the Company pursuant to this facility agreement.

	iv)	On January 16, 2016, the Company entered into an additional facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $360,000. During the current period the due date has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of August 31, 2016 and May 31, 2016, C&F has advanced $200,000 and $90,000 respectively to the Company pursuant to this facility agreement.

~~Handeni~~For ~~Gold~~the ~~Inc~~three months ended August 31, 2016, $53,839 of deemed interest was calculated at an annual interest rate of 12% (three months ended August 31, 2015: $36,007 calculated at an annual interest rate of 12%). ~~Notes~~Such todeemed interest approximates the ~~Interim~~fair ~~Consolidated Financial~~market ~~Statements~~value of the borrowings, and was recorded as interest expense and donated capital. b) The Company’s President and Chief Executive Officer (the “CEO”) has incurred $Nil of ~~February~~administration 29and professional services fees during the three months ended August 31, 2016 and 2015. As at August 31, 2016 and May 31, 2016, accounts payable included $306,000 of unpaid CEO fees. During the three months ended August 31, 2016, the Company paid $26,400 (~~Expressed~~the three months ended August 31, 2015: $36,000) representing 60% of annual rental expenses associated with renting the CEO’s family house in UTanzania, pursuant to the underlying Executive Services Agreement.S In addition, during the three months ended August 31, 2016 and 2015, the Company incurred geological service fees of $9,000 to a private company controlled by a person who is related to the CEO. ~~dollars~~This amount is included in exploration expenses. As at August 31, 2016, accounts payable included $6,000 (May 31, 2016, $Nil) of unpaid fees. c) During the three months ended August 31, 2016, the Company incurred administration and consulting services fees of $17,344 (~~Unaudited~~the three months ended August 31, 2015: $17,737) to a private company controlled by the Company’s Chief Financial Officer (the “CFO”). The Company also incurred salary of $10,406 (the three months ended August 31, 2015: $10,561) to the Company’s CFO. These amounts are included in general and administrative expense. d) During the three months ended August 31, 2016 and 2015, the Company incurred $Nil of directors’ fees. As at August 31, 2016 and May 31, 2016, accounts payable included $145,000 of unpaid independent directors’ fees.

6.11 ~~Mineral Properties and Licenses (continued)~~

Handeni ~~Properties,~~Gold ~~Tanzania~~Inc. Notes to the Interim Consolidated Financial Statements as of August 31, ~~Africa~~2016 (Expressed in U.S. dollars) (~~continued~~Unaudited)

	a)	Prospecting Licenses (“PLs”) (continued)
9.	Common Stock and Additional Paid-in Capital
		The fair value of the 133,333,333 shares of the Company’s common stock issued to IPP Gold pursuant to the Acquisition Agreement and the 16,666,667 shares of the Company’s common stock issued pursuant to the Transaction Fee Agreement totaled $60,000,000.
	The authorized common stock of the Company consists of 500,000,000 shares, with $0.001 par value. On June 8, 2016, the Company effected a reverse stock split (the “Reverse Split”) of its issued and outstanding shares of common stock, in which one (1) new share was exchanged for one-hundred-fifty (150) old shares (1:150), as set for in a Certificate of Amendment to the Company’s Articles of Incorporation effected and filed on May 24, 2016 with the Nevada Secretary of State.
		On November 30, 2010, the capitalized acquisition costs of the Handeni Properties were tested for impairment by the Company’s management as required by ASC 360. Management determined that no positive cash flows from the Handeni Properties could be identified or supported and a full impairment loss was recognized in expenses for the $60,000,000 acquisition cost.
	As a result of the Reverse Split, the Company’s issued and outstanding shares of common stock have decreased from 321,416,653 shares of common stock to 2,142,778 shares of common stock. The Company gave retroactive effect in the consolidated financial statements for the Reverse Split at May 31, 2016.
		Under Tanzanian law, 50% of the area of PLs need to be relinquished following a period of three years after allocation of the PLs to the Company (1998 Mining Act applicable to the Companies’ PLs). The Company has received four renewal PLs of the renewal areas under PL6742/2010, PL6744/2010, PL6743/2010 and PL6779/2010 effective on October 5, 2013, September 13, 2013, October 13, 2013 and September 13, 2013, respectively. These four PLs are valid until October 4, 2016, September 12, 2016, October 12, 2016 and September 12, 2016, respectively. The total area occupied by the renewal licenses is approximately 359.80 km2 or 45% of the original area.
	During the three months ended August 31, 2016, the Company had no changes in its common stock and additional paid-in capital.
		In addition to the renewal areas, the Company had also applied for the remainder of the license areas and has received four additional PLs under PL9853/2014, PL10000/2014, PL10262/2014 and PL10409/2014 effective on July 2, 2014, July 22, 2014, September 25, 2014 and December 2, 2014, respectively. These four PLs are valid for four years and cover areas of 63.23 km2. The Company now holds a total license area of approximately 423.03 km2 (53% of its original 800 km2 license area).
10.	Stock Options
	b)	Primary Mining Licenses (“PMLs”)
	The Company adopted a Stock Option Plan, dated November 29, 2010 (the “November 2010 Stock Incentive Plan”), under which the Company is authorized to grant stock options to acquire up to a total of 266,667 (40,000,000 pre-consolidation) shares of common shares. The stock options outstanding are exercisable for cash or on a cashless exercise basis using a prorated formula whereby the number of shares issuable is equal to (a) the average closing price for the five days prior to exercise date (“ACP”) in excess of the exercise price, divided by (b) the exercise price multiplied by (c) the number of options exercised.
		On August 5, 2011, the Company entered a Mineral Property Acquisition Agreement (the “2011 Acquisition Agreement”) with Handeni Resources Limited (“Handeni Resources”), a limited liability company registered under the laws of Tanzania. The Chairman of the Board of Directors of the Company has an existing ownership and/or beneficial interest(s) in Handeni Resources. Pursuant to the 2011 Acquisition Agreement, the Company had an exclusive option to acquire from Handeni Resources a 100% interest in mineral licenses covering an area of approximately 2.67 square kilometers to the east of Magambazi Hill, which is adjacent to the area covered by the Company’s four existing PLs in the Handeni District.
	During the three months ended August 31, 2016 and 2015, there were no stock options granted or exercised. As at August 31, 2016 and May 31, 2016, there were no intrinsic values attributed to outstanding options, all stock options were fully vested, and the Company had 71,333 (10,700,000 pre-consolidation) shares of common stock available to be issued under the November 2010 Stock Incentive Plan.
		On November 30, 2011, the Company completed the 2011 Acquisition Agreement and issued 15,000,000 restricted common shares to Handeni Resources as payment. As at November 30, 2011, the fair market price of the Company’s common stock was $0.11 per share; accordingly, the Company recorded a total fair market value of $1,650,000 as the mineral licenses acquisition cost.
	The following table summarizes the continuity of the Company’s stock options:
		To comply with the laws and regulations of the Republic of Tanzania whereby foreign companies may not own PMLs, on July 19, 2012, the Company entered into an Addendum agreement to the 2011 Acquisition Agreement whereby Handeni Resources, on behalf of the Company, administers the 32 PMLs until such time as a mining license on the 32 PMLs (2.67 km2) have been allocated. During this period Handeni Resources is conducting exploration and mining activities on the PMLs as directed by the Company.

During the nine months ended February 29, 2016, the Company paid $69,162 (the nine months ended February 28, 2015: $62,584) in annual rental and licenses renewal fees for PLs and PMLs. Such license related fees have been recorded as exploration expenses.

		Weighted	Weighted Average	Aggregate
	Number of	Average	Remaining	Intrinsic
	Options	Exercise Price	Contractual Terms	Value
	#	$	(years)	$
Outstanding, May 31, 2015	188,667	35.10	5.56	-
Outstanding, May 31, 2016	188,667	35.10	4.56	-
Outstanding and exercisable, August 31, 2016	188,667	35.10	4.31	-

711. ~~Property~~Fair Value Measurements ASC 820, Fair Value Measurements and ~~Equipment~~Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. 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. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

	February 29, 2016			May 31, 2015
		Accumulated	Net Book	Net Book
	Cost	Depreciation	Value	Value
	$	$	$	$
Automobile vehicles	230,337	230,337	-	-
Camp and equipment	197,011	197,011	-	-
Office furniture and equipment	100,222	99,757	465	1,252
Software	7,930	7,930	-	222
	535,500	535,035	465	1,474

Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities.

10Level 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

~~Handeni~~Level ~~Gold~~3 ~~Inc.~~applies ~~Notes~~to assets or liabilities for which there are unobservable inputs to the ~~Interim~~valuation ~~Consolidated~~methodology ~~Financial~~that ~~Statements~~are assignificant to the measurement of ~~February~~the ~~29,~~fair ~~2016~~value ~~(Expressed~~of inthe ~~U.S.~~assets ~~dollars)~~or ~~(Unaudited)~~liabilities.

8Pursuant to ASC 820, the fair value of cash and restricted cash equivalent are determined based on Level 1 inputs, which consist of quoted prices in active markets for identical assets. ~~Related~~As ~~Party~~at August ~~Transactions~~31, 2016 and May 31, 2016, there were no Level 2 and Level 3 inputs and no liabilities measured at fair value on a recurring basis presented on the Company’s consolidated balance sheets.

a)	The Company has entered into the following facility agreements with related parties:
	i)	On December 7, 2012, and as amended on September 4, 2013, June 18, 2014 and March 20, 2015, the Company entered into a facility agreement with IPP Ltd., a private company controlled by the Chairman of the Company. The funding is in the form of an interest free unsecured loan to the Company of up to $720,000 due May 31, 2017. As of February 29, 2016 and May 31, 2015, IPP Ltd. has fully advanced $720,000 to the Company pursuant to this facility agreement.
	ii)	On October 9, 2013, and as amended on June 18, 2014 and March 20, 2015, the Company entered into a facility agreement with Consultancy & Finance Company Associates Ltd. (“C&F”), a private company controlled by the Chairman of the Company. The funding is in the form of an interest free unsecured loan to the Company of up to $405,000 due May 31, 2017. As of February 29, 2016 and May 31, 2015, C&F has fully advanced $405,000 to the Company pursuant to this facility agreement.
	iii)	On November 20, 2014, the Company entered into a facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $500,000 due May 31, 2017. As of February 29, 2016, C&F has fully advanced $500,000 (May 31, 2015: $215,000) to the Company pursuant to this facility agreement.
	iv)	On January 16, 2016, the Company entered into an additional facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $360,000 due December 31, 2018. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of February 29, 2016, C&F has advanced $30,000 to the Company pursuant to this facility agreement.
		For the nine months ended February 29, 2016, $114,182 (nine months ended February 28, 2015: $82,795) of deemed interest was calculated at an annual interest rate of 10% which approximates the fair market value of the borrowings, and was recorded as interest expense and donated capital.
b)	The Company’s President and Chief Executive Officer (the “CEO”) has voluntarily waived the CEO services fees for one year effective as of June 1, 2015. As a result, the Company incurred $Nil of administration and professional services fees to the CEO during the nine months ended February 29, 2016 (nine months ended February 28, 2015: $108,000). As at February 29, 2016 and May 31, 2015, accounts payable included $306,000 of unpaid CEO fees.
	During the nine months ended February 29, 2016 and February 28, 2015, the Company paid $36,000 representing 60% of annual rental expenses associated with renting the CEO’s family house in Tanzania, pursuant to the Executive Services Agreement.
	In addition, during the nine months ended February 29, 2016 and February 28, 2015, the Company paid geological service fees of $27,000 to a private company controlled by a person who is related to the CEO.
c)	During the nine months ended February 29, 2016, the Company incurred administration and professional services fees of $81,227 (nine months ended February 28, 2015: $96,179) to the Company’s Chief Financial Officer (the “CFO”).
d)	During the nine months ended February 29, 2016, the Company’s Board of Directors reached a directors’ resolution, effective June 1, 2015, which ratified the waiver of the Company’s monetary directors’ fees. As such, during the nine months ended February 29, 2016, the Company incurred $Nil of directors’ fees (nine months ended February 28, 2015: $60,000). As at February 29, 2016 and May 31, 2015, accounts payable included $145,000 of unpaid independent directors’ fees.

Management believes that the recorded values of all of the Company’s other financial instruments approximate their current fair values because of their nature and respective maturity dates or durations. Assets measured at fair value on a recurring basis were presented on the Company’s consolidated balance sheets as of August 31, 2016 and May 31, 2016, as follows:

9.12 ~~Common Stock and Additional Paid-in Capital~~

~~The~~Handeni ~~authorized~~Gold ~~common stock of the Company consists of 500,000,000 shares, with $0~~Inc.~~001~~ ~~par~~Notes ~~value.~~to ~~During~~ the ~~nine~~Interim Consolidated ~~months~~Financial ~~ended~~Statements ~~February~~as ~~29,~~of ~~2016~~August ~~and the year ended May~~ 31, ~~2015,~~2016 ~~the~~(Expressed ~~Company had no changes~~ in ~~its~~U.S. ~~common~~dollars) (Unaudited) ~~stock and additional paid-in capital.~~

1011. ~~Stock~~Fair ~~Options~~Value Measurements (continued)

The Company adopted a Stock Option Plan, dated November 29, 2010 (the “November 2010 Stock Incentive Plan”), under which the Company is authorized to grant stock options to acquire up to a total of 40,000,000 shares of common shares. The stock options outstanding are exercisable for cash or on a cashless exercise basis using a prorated formula whereby the number of shares issuable is equal to (a) the average closing price for the five days prior to exercise date (“ACP”) in excess of the exercise price, divided by (b) the exercise price multiplied by (c) the number of options exercised.

		Fair Value Measurements Using
		Quoted Prices in Active			Balance as of		Quoted Prices in Active			Balance as of
		Markets For Identical			August 31,		Markets For Identical			May 31,
		Instruments (Level 1	)		2016		Instruments (Level 1	)		2016
Assets:
Cash	$	79,530		$	79,530	$	52,373		$	52,373
Restricted cash equivalent		13,152			13,152		13,158			13,158

Total assets measured at fair value	$	92,682		$	92,682	$	65,531		$	65,531

~~During~~12. ~~the~~Segment ~~nine~~Disclosures ~~months~~The ~~ended~~Company ~~February 29,~~operates ~~2016~~in ~~and~~one ~~February~~reportable 28segment, ~~2015,~~being ~~there~~the ~~were~~acquisition noand ~~stock~~exploration ~~options~~of ~~granted~~mineral ~~or exercised~~properties. AsSegmented atinformation ~~February~~has ~~29,~~been ~~2016~~compiled ~~and~~based ~~May~~on ~~31,~~the ~~2015,~~geographic ~~there~~regions ~~were~~that ~~no intrinsic values attributed to outstanding options, all stock options were fully vested, and~~ the Company ~~had~~and ~~10,700,000~~its ~~shares~~subsidiary ofregistered ~~common~~and ~~stock~~performed ~~available~~exploration toand beadministration ~~issued under~~activities. ~~the~~Assets ~~November~~by ~~2010~~geographical ~~Stock~~segment ~~Incentive~~are ~~Plan.~~as follows:

		Canada		Tanzania, Africa		Total
Current assets	$	39,716	$	69,490	$	109,206
Restricted cash equivalent		13,152		-		13,152
Mineral licenses		-		1,415,000		1,415,000
Equipment, net		-		251		251
Total assets, at August 31, 2016	$	52,868	$	1,484,741	$	1,537,609

Handeni Gold Inc. Notes to the Interim Consolidated Financial Statements as of February 29, 2016 (Expressed in U.S. dollars) (Unaudited)

		Canada		Tanzania, Africa		Total
Current assets	$	42,193	$	26,263	$	68,456
Restricted cash equivalent		13,158		-		13,158
Mineral licenses		-		1,415,000		1,415,000
Equipment, net		-		358		358
Total assets, at May 31, 2016	$	55,351	$	1,441,621	$	1,496,972

~~10.~~13 ~~Stock Options (continued)~~

~~The~~Item ~~following~~2. ~~table~~Management’s ~~summarizes~~Discussion ~~the continuity~~and Analysis of ~~the~~Financial ~~Company’s~~Condition ~~stock~~and ~~options:~~Results of Operations

		Weighted	Weighted Average	Aggregate
	Number of	Average	Remaining	Intrinsic
	Options	Exercise Price	Contractual Terms	Value
	#	$	(years)	$
Outstanding, May 31, 2014	28,300,000	0.23	6.56	-
Outstanding, May 31, 2015	28,300,000	0.23	5.56	-
Outstanding and exercisable, February 29, 2016	28,300,000	0.23	4.81	-

The following discussion of our financial condition, changes in financial condition and results of operations for the three months ended August 31, 2016 and 2015 should be read in conjunction with our unaudited interim consolidated financial statements and related notes for the three months ended August 31, 2016 and 2015 included herewith and our audited consolidated financial statements as at May 31, 2016 and 2015 included in our Annual Report on Form 10-K for our fiscal year ended May 31, 2016 as filed with the SEC. All financial information in this Management’s Discussion and Analysis (“MD&A” or the “discussion”) is expressed and prepared in conformity with U.S. generally accepted accounting principles. All dollar references are to the U.S. dollar, the Company’s reporting currency, unless otherwise noted. Some numbers in this MD&A have been rounded to the nearest thousand for discussion purposes.

11.	Commitments and Contingencies
	On February 8, 2012, Ruby Creek Resources Inc. (“RCR”) filed a lawsuit against the Company in the Supreme Court, State of New York, in which RCR alleged that the Company participated in a fraudulent transfer of certain mineral property interests in Mkuvia Alluvial Gold Project that RCR had the right to purchase pursuant to a series of agreements with the Company. The Mkuvia Alluvial Gold Project was comprised of four PLs covering a total area of 380 square kilometers located in the Nachingwea District, Lindi Region of the Republic of Tanzania.
	On January 13, 2015, the Company reached a binding settlement of its litigation with RCR, and is currently waiting for RCR to finalize the formal settlement documentation. The settlement does not require any monetary payment by the Company to RCR. Under the terms of the settlement, the Company will turn over its interest in Ruby Creek Resources (Tanzania) Limited and has agreed to return the 4,000,000 shares of restricted RCR common stock to RCR. Such 4,000,000 shares were issued to the Company on December 16, 2010 as partial consideration to purchase the mineral property interests under the agreements between RCR and the Company. The initial fair market value of these shares was $2,760,000 based on RCR’s quoted stock price on the issuance date. Both parties have agreed to dismiss their respective claims, with prejudice, and the litigation is now concluded.
12.	Fair Value Measurements
	ASC 820, Fair Value Measurements and Disclosures, requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes a fair value hierarchy based on the level of independent, objective evidence surrounding the inputs used to measure fair value. 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. ASC 820 prioritizes the inputs into three levels that may be used to measure fair value:

FORWARD-LOOKING STATEMENTS

~~Level~~This 1MD&A ~~applies~~contains forward-looking statements that involve risks, uncertainties and assumptions with respect to ~~assets~~the orCompany’s ~~liabilities~~activities ~~for~~and ~~which~~future ~~there~~financial results, which are ~~quoted~~made ~~prices~~based upon management’s current expectations and beliefs. These forward-looking statements involve risks and uncertainties, including statements regarding the Company’s capital needs, business plans and expectations. Our actual results may differ materially from those anticipated in ~~active~~these ~~markets~~forward-looking ~~for~~statements ~~identical~~as a result of many ~~assets~~factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere in this annual report. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Management disclaims any obligation to publicly update these statements, or disclose ~~liabilities~~any difference between its actual results and those reflected in these statements. Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.

~~Level~~Overview 2 applies to assets or liabilities for which there are inputs other than quoted prices that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data.

~~Level~~We 3are ~~applies~~engaged toin ~~assets~~the oracquisition and exploration of mineral ~~liabilities~~properties. ~~for~~Our principal area of focus is the Handeni Gold Project located in the Handeni district, within the Tanga region of the Republic of Tanzania in East Africa, in which ~~there~~we ~~are~~have ~~unobservable~~interests ~~inputs~~in mineral claims through prospecting licenses (“PLs”) and/or primary mining licenses (“PMLs”) issued by the government of the Republic of Tanzania. None of our mineral claims contain any substantiated mineral deposits, resources or reserves of minerals to date. Exploration has been carried out on these claims, in particular the ~~valuation~~eight ~~methodology~~PLs in ~~that~~the Handeni District. Accordingly, additional exploration of these mineral claims is required before any conclusion can be drawn as to whether any commercially viable mineral deposit may exist on any of our mineral claims. Our plan of operations is to continue exploration and drilling work when funds are available ~~significant~~in order to ~~the~~ascertain ~~measurement~~whether our mineral claims warrant further advanced exploration to determine whether they possess commercially exploitable deposits of ~~the~~minerals. ~~fair~~We ~~value~~will not be able to determine whether or not any of ~~the~~our mineral ~~assets~~claims contain a commercially exploitable mineral deposit, resource or ~~liabilities.~~reserve, until appropriate exploratory work has been completed and an economic evaluation based on that work concludes economic viability.

~~Pursuant~~We toare ~~ASC~~considered ~~820,~~an ~~the~~exploration ~~fair~~or ~~value~~exploratory ~~of cash~~stage company, because ~~restricted~~we ~~cash~~are ~~equivalent~~involved in the examination and ~~restricted~~investigation ~~marketable~~of ~~securities~~land ~~are~~that we ~~determined~~believe ~~based~~may oncontain ~~Level~~valuable ~~1 inputs~~minerals, ~~which~~for ~~consist~~the purpose of ~~quoted~~discovering ~~prices~~the presence inof ~~active markets~~ore, ~~for~~if ~~identical~~any, ~~assets~~and its extent. AsThere atis ~~February~~no ~~29,~~assurance ~~2016~~that ~~and~~a commercially ~~May~~viable ~~31,~~mineral ~~2015,~~deposit ~~there were~~exists noon ~~Level~~the 2properties ~~and~~underlying ~~Level~~our mineral 3claim ~~inputs~~interests, and noconsiderable ~~liabilities~~further ~~measured~~exploration atwill ~~fair~~be ~~value on~~required before a ~~recurring~~final ~~basis~~evaluation ~~presented~~as onto the ~~Company’s~~economic ~~consolidated~~and ~~balance~~legal ~~sheet~~feasibility for our future exploration is determined.

~~Management~~Illegal ~~believes~~artisanal ~~that~~activity on the ~~recorded~~Company’s license areas is a ~~values~~continuous ofand ~~all~~remaining ofconcern to the ~~Company~~company’s ~~other~~interests ~~financial~~in ~~instruments~~the ~~approximate~~Handeni district. ~~their~~During the past 2 years illegal artisanal activities on our properties ~~current~~seriously ~~fair~~interfered ~~values~~with ~~because~~the ofcompany’s ~~their~~exploration ~~nature~~programs as outlined in our quarterly reports. The Company has and ~~respective~~is ~~maturity~~addressing ~~dates~~this orissue with responsible ~~durations.~~local, ~~Assets~~regional ~~measured~~and atcentral ~~fair~~government ~~value~~authorities on a ~~recurring~~continuous basis. The Company was given assurances by the Ministry of Energy and Minerals (the “MEM”) that illegal artisanal miners would be removed from our target areas, including Mjembe and Target 5 following an agreed date of at first 24 November 2015, then postponed to April 2, 2016.The Company can now gladly report that on 16 and 20 June 2016 illegal miners were ~~presented~~removed by governmental authorities and the police force from two of our target areas namely Ngwila and Mjembe. The Company is establishing a base camp on the Mjembe site to continue with exploration and to secure the site from interference by illegal artisanal miners. Although the Company’s ~~consolidated~~is ~~balance~~relieved ~~sheets~~that asthe ofTanzanian ~~February~~government 29acted to protect our legal interests, ~~2016~~we are of the opinion that much more needed to be done to address the illegal artisanal problem with the aim of having a long term solution. The Company will continue to follow all available legal structures to protect our exploration assets whilst at the same time work with authorities and ~~May~~artisanal miners ~~31,~~to further the interest of both parties based on a secure legal ~~2015,~~framework. Not Handeni Gold Inc.or Tanzania as ~~follows:~~a country can afford the sterilization of its mining assets by unbridled illegal artisanal activity as it is currently conducted.

					Fair Value Measurements Using
		Quoted Prices in Active			Balance as of		Quoted Prices in Active			Balance as of
		Markets For Identical			February 29,		Markets For Identical			May 31,
		Instruments (Level 1	)		2016		Instruments (Level 1	)		2015
Assets:
Cash	$	76,662		$	76,662	$	85,985		$	85,985
Restricted cash equivalent		12,749			12,749		13,858			13,858
Total assets measured at fair value	$	89,411		$	89,411	$	99,843		$	99,843

Our Mineral Claims

12Handeni District Gold Project

~~Handeni~~Location ~~Gold~~and ~~Inc.~~Access ~~Notes to the Interim Consolidated Financial Statements as of February 29, 2016 (Expressed in U.S. dollars) (Unaudited)~~

13The Handeni Gold properties lie within the historic Handeni artisanal gold mining district, located in Tanga Province, roughly 175 km northwest of Tanzania’s largest city, Dar Es Salaam, and 100 km southwest of the more northerly coastal city of Tanga (Fig. ~~Segment~~1). ~~Disclosures~~The road from Dar Es Salaam to Tanga is paved; the secondary road that heads northwest from this road to the town of Handeni, a distance of 65 km, has recently been paved. The Handeni properties are located roughly 35 km south of the town of Handeni along a secondary gravel road. From this point, a number of dirt roads head south across various portions of the Handeni property and beyond. Driving time from Dar Es Salaam to the Handeni Gold properties is approximately five hours, depending on traffic and the weather.

~~The~~20 Company operates in one reportable segment, being the acquisition and exploration of mineral properties. Segmented information has been compiled based on the geographic regions that the Company and its subsidiary registered and performed exploration and administration activities. Assets by geographical segment are as follows:

		Canada		Tanzania, Africa		Total
Current assets	$	63,811	$	55,105	$	118,916
Restricted cash equivalent		12,749		-		12,749
Mineral licenses		-		1,650,000		1,650,000
Equipment, net		-		465		465
Total assets, at February 29, 2016	$	76,560	$	1,705,570	$	1,782,130
		Canada		Tanzania, Africa		Total
Current assets	$	61,447	$	63,595	$	125,042
Restricted cash equivalent		13,858		-		13,858
Mineral licenses		-		1,650,000		1,650,000
Property and equipment, net		332		1,142		1,474
Total assets, at May 31, 2015	$	75,637	$	1,714,737	$	1,790,374

Prospecting Licenses (PLs)

13Currently, our primary focus is on the undivided 100% legal, beneficial and registerable interest in and to eight PLs, located in the Handeni District of Tanzania. The total area held by the Company in the Handeni district is now 423.03 km2 (Fig. 2) (Table 1).

~~Item~~Table 2.1: ~~Management’s~~List ~~Discussion~~of ~~and~~Prospecting ~~Analysis~~Licenses, ofHandeni ~~Financial~~Property ~~Condition~~(prior to ~~and~~the ~~Results~~2013 renewal of ~~Operations~~the licenses)

The following discussion of our financial condition, changes in financial condition and results of operations for the three months and nine months ended February 29, 2016 and February 28, 2015 should be read in conjunction with our unaudited interim financial statements and related notes for the three months and nine months ended February 29, 2016 and February 28, 2015 included herewith and our audited consolidated financial statements as at May 31, 2015 and 2014 included in our Annual Report on Form 10-K for our fiscal year ended May 31, 2015 as filed with the SEC. All financial information in this Management’s Discussion and Analysis (“MD&A” or the “discussion”) is expressed and prepared in conformity with U.S. generally accepted accounting principles. All dollar references are to the U.S. dollar, the Company’s reporting currency, unless otherwise noted. Some numbers in this MD&A have been rounded to the nearest thousand for discussion purposes.

PL No.	Area (Sq Km)	Issue Date	Original Recipient	Transfer Date (To IPP Gold)	Transfer Date (To Handeni Gold)	Expiry Date	Renewal Date
6742/2010	197.98	05/10/10	Diamonds Africa Ltd.	18/11/10	12/12/10	04/10/13	05/10/13
6743/2010	195.48	13/10/10	Gold Africa Ltd.	18/11/10	12/12/10	12/10/13	13/10/13
6744/2010	198.70	13/09/10	M-Mining Ltd.	18/11/10	12/12/10	12/09/13	13/09/13
6779/2010	197.74	13/09/10	Tanzania Gem Center Ltd.	18/11/10	12/12/10	12/09/13	13/09/13

~~FORWARD-LOOKING~~21 ~~STATEMENTS~~

~~This~~Following ~~MD&A~~the ~~contains~~2013 ~~forward-looking~~renewal ~~statements~~of ~~that involve~~the ~~risks,~~properties ~~uncertainties~~ and ~~assumptions~~acquisition ~~with~~of PLs ~~respect~~in to the ~~Company’s activities and future financial results, which are made based upon management’s~~ current ~~expectations and beliefs. These forward-looking statements involve risks and uncertainties~~period, ~~including statements regarding~~ the Company’s ~~capital~~now ~~needs, business~~holds ~~plans~~interests ~~and expectations. Our actual results may differ materially from those anticipated~~ in ~~these~~PLs ~~forward-looking~~with ~~statements~~ details as adescribed ~~result of many factors, including, but not limited to, those set forth under “Risk Factors” and elsewhere~~ in ~~this~~Table annual report. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Management disclaims any obligation to publicly update these statements2, ~~or disclose any difference between its actual results and those reflected in these statements~~below. ~~Given these uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.~~

~~Overview~~Table 2: Handeni Gold Prospecting Licenses

We are engaged in the acquisition and exploration of mineral properties. Our principal area of focus is the Handeni Gold Project located in the Handeni district, within the Tanga region of the Republic of Tanzania in East Africa, in which we have interests in mineral claims through prospecting licenses (“PLs”) and/or primary mining licenses (“PMLs”) issued by the government of the Republic of Tanzania.

PL Number	Granted Date	Expiry Date	Area Size (km²)
6742/2010	5/10/2013	4/10/2016	70.32
6743/2010	13/10/2013	12/10/2016	95.08
6744/2010	13/9/2013	12/9/2016	97.56
6779/2010	13/9/2013	12/9/2016	96.84
9853/2014	2/7/2014	1/7/2018	12.32
10000/2014	22/7/2014	21/7/2018	33.62
10262/2014	25/9/2014	24/9/2018	6.97
10409/2014	02/12/2014	01/12/2018	10.32

~~None~~During ofSeptember ~~our~~and ~~mineral~~October ~~claims~~of ~~contain any substantiated mineral deposits~~2016, ~~resources~~the orcompany ~~reserves~~will ofneed ~~minerals~~ to ~~date. Exploration has been~~ ~~carried~~(by ~~out~~Tanzanian onlaw) ~~these~~reduce ~~claims, in particular~~ the ~~eight~~areas ~~PLs in the Handeni District. Accordingly, additional exploration~~ of ~~these~~some ~~mineral claims is required before any conclusion can be drawn as to whether any commercially viable mineral deposit may exist on any~~ of our ~~mineral~~PL’s ~~claims.~~by ~~Our~~50% ~~plan~~which ~~of operations~~will ~~is to continue exploration and drilling work when funds are available~~result in ~~order~~the tocompany ~~ascertain~~holding ~~whether~~an ~~our~~area ~~mineral claims warrant further advanced exploration to determine whether they possess commercially exploitable deposits~~ of ~~minerals.~~approximately We211 ~~will~~km2 ~~not be able to determine whether or not any of our mineral~~as ~~claims~~prospecting contain a commercially exploitable mineral deposit, resource or reserve, until appropriate exploratory work has been completed and an economic evaluation based on that work concludes economic viabilitylicenses.

WeTo ~~are~~expand ~~considered~~its anoperations ~~exploration~~to ~~or exploratory stage company, because we are involved in~~ the ~~examination~~Lake ~~and~~Victoria ~~investigation~~gold ~~of land that we believe may contain valuable minerals~~fields, ~~for~~ the ~~purpose of discovering the~~ ~~presence~~company ofapplied ~~ore,~~for ifa ~~any,~~prospecting ~~and~~license ~~its~~(PL11157/2016) ~~extent.~~bordering ~~There~~an ~~is no assurance that a~~active ~~commercially~~mining ~~viable~~site ~~mineral~~with ~~deposit exists on~~ the ~~properties~~ore ~~underlying~~zone ~~our mineral~~potentially ~~claim~~extending ~~interests, and considerable further exploration will be required before a final evaluation as~~ to the ~~economic~~PL ~~and~~of ~~legal feasibility for our future exploration is determined~~interest.

~~Illegal~~Primary ~~artisanal~~Mining ~~activity~~Licenses on the Company’s license areas is increasing and is a growing concern to the company’s interests in the Handeni district. The illegal artisanal activities on our properties are now seriously interfering with the company’s exploration programs. The Company has and is addressing this issue with responsible local, regional and central government authorities. To date nothing materialized from assurances by the Ministry of Energy and Minerals (~~the “MEM”~~PMLs) that illegal artisanal miners would be removed following an agreed date of at first 24 November 2015, then postponed to April 2, 2016 for the illegal small scale miners to be off the company’s property and some prime targets, including Mjembe and Target 5. To date, the illegal miners have not been removed. In fact, the activities of illegal miners increased. The Company also addressed the aspect of the extremely dangerous and unsafe conditions under which illegal artisanal mining is taking place in the Handeni district with the MEM. The Company will continue to follow all available legal structures to protect the company’s interests. It is of serious concern to the Company that the Tanzanian government seems to be highly reluctant to act on these issues, clearly violating the company’s legal rights on our licenses.

~~Our~~On ~~Mineral~~November ~~Claims~~30, 2011, the Company acquired from Handeni Resources a 100% interest in primary mining licenses covering an area of approximately 2.67 square kilometers to the east of Magambazi Hill (Figs. 2 and 4). To comply with the laws and regulations of the Republic of Tanzania whereby foreign companies may not own PMLs, on July 19, 2012, the Company:

Handeni District Gold Project

	(1)	entered into an Addendum agreement to the 2011 Acquisition Agreement whereby Handeni Resources will administer the 32 PMLs until such time as a mining license (“ML”) on the 32 PMLs (2.67 km²) have been allocated; and

	(2)	during this period Handeni Resources will be conducting exploration and mining activities on the PMLs as directed by the Company.

~~Location~~An enlargement of the “excluded area” as delineated on Fig. 2 is presented below (Fig. 3). An area within the outline of the 32 PML’s without a PML number (Fig. 3) has now been confirmed to be part of PL6743/2010. The block of 32 PMLs, shown in grey below, belongs to the Company as described above and ~~Access~~are being explored.

~~The~~West ~~Handeni Gold properties lie within the historic Handeni artisanal gold mining district, located in Tanga Province, roughly 175 km northwest~~ of ~~Tanzania’s largest city, Dar Es Salaam, and 100 km southwest of~~ the ~~more~~ ~~northerly~~western ~~coastal~~border ~~city~~ of ~~Tanga~~PL ~~(Fig.~~6743/2010 ~~1).~~are ~~The~~several ~~road from Dar Es Salaam to~~more ~~Tanga~~PMLs ~~is paved; the secondary road~~ that ~~heads~~do ~~northwest~~not ~~from~~belong ~~this road~~ to the ~~town~~ ofCompany. ~~Handeni,~~The aarea ~~distance~~colored ofin 65green ~~km, has recently been paved~~(Fig. ~~The~~3) ~~Handeni property~~ is ~~located roughly 35 km south of the town of Handeni along~~ a ~~secondary~~ ~~gravel~~unitized ~~road.~~block ~~From~~of ~~this~~four ~~point,~~PMLs athat ~~number~~were ofapparently ~~dirt~~acquired ~~roads~~by ~~head~~Canaco ~~south across various~~Resources ~~portions~~Inc. of(“CRI”) ~~the~~(now ~~Handeni~~East ~~property~~Africa ~~and~~Metals ~~beyond~~Inc.) ~~Driving time~~ from ~~Dar~~their ~~Es Salaam to the Handeni Gold properties is approximately five hours, depending on traffic and the weather~~owners.

2022

~~Prospecting~~Handeni ~~Licenses~~District ~~(PLs)~~Project

~~Currently,~~We ~~our~~obtained ~~primary~~a ~~focus~~Technical isReport on the ~~undivided~~Handeni ~~100%~~Property ~~legal,~~(the ~~beneficial~~“Handeni ~~and~~Report”), ~~registerable~~dated ~~interest~~April in25, ~~and~~2011, toas ~~eight~~prepared ~~PLs,~~at ~~located~~our inrequest ~~the~~by ~~Handeni~~Avrom E. ~~District~~Howard, ofMSc, ~~Tanzania.~~FGA, ~~The~~PGeol ~~total~~(Ontario), ~~area~~Principal ~~held~~Consultant byat ~~the~~Nebu ~~Company~~Consulting LLC. Mr. Howard is a Qualified Person in ~~the~~accordance ~~Handeni~~with ~~district~~Canadian National Instrument is43-101 ~~now~~“Standards ~~423.03~~for ~~km2~~Disclosure of Mineral Projects” and its Companion Policy (~~Fig.~~collectively, 2“NI 43-101”) and is a Practicing Professional Geologist registered with the Association of Professional Geoscientists of Ontario (~~Table~~registration 1number 0380).

~~Table~~Subsequent 1:to ~~List~~the publishing of ~~Prospecting~~the ~~Licenses~~April 25, ~~Handeni~~2011 ~~Property~~NI ~~(prior~~43-101 toreport by Mr. Howard, the ~~2013~~Company ~~renewal~~produced numerous in-house technical reports and is in the process of compiling an updated NI 43-101 report that will include the ~~licenses~~updated model for mineralization on our Handeni property. The drilling conducted by the Company was done implementing and following Quality Control and Quality Assessment procedures recommended by SRK (Stephen, Robertson and Kirsten).

PL No.	Area (Sq Km)	Issue Date	Original Recipient	Transfer Date (To IPP Gold)	Transfer Date (To Handeni Gold)	Expiry Date	Renewal Date
6742/2010	197.98	05/10/10	Diamonds Africa Ltd.	18/11/10	12/12/10	04/10/13	05/10/13
6743/2010	195.48	13/10/10	Gold Africa Ltd.	18/11/10	12/12/10	12/10/13	13/10/13
6744/2010	198.70	13/09/10	M-Mining Ltd.	18/11/10	12/12/10	12/09/13	13/09/13
6779/2010	197.74	13/09/10	Tanzania Gem Center Ltd.	18/11/10	12/12/10	12/09/13	13/09/13

Property Description

21 General

~~Following~~Exploration, ~~the~~mining ~~2013~~and ~~renewal~~related ofactivities ~~the~~is ~~properties~~regulated and controlled ~~acquisition~~under the Mining Act of ~~PLs~~ 1998 (revised in 2010) (the ~~current~~“Mining ~~period~~Act”). Tanzania is Africa’s fourth leading gold producer, ~~the~~with ~~Company~~several ~~now~~major ~~holds~~companies producing ~~interests~~and exploring for gold, mostly in ~~PLs~~northwestern ~~with~~Tanzania, ~~details~~south of Lake Victoria, in an area informally known as ~~described~~the inLake ~~Table~~Victoria 2,gold ~~below~~belt.

~~Table~~The 2: Handeni ~~Gold~~Property ~~Prospecting Licenses~~

PL Number	Granted Date	Expiry Date	Area Size (km2)
6742/2010	5/10/2013	4/10/2016	70.32
6743/2010	13/10/2013	12/10/2016	95.08
6744/2010	13/9/2013	12/9/2016	97.56
6779/2010	13/9/2013	12/9/2016	96.84
9853/2014	2/7/2014	1/7/2018	12.32
10000/2014	22/7/2014	21/7/2018	33.62
10262/2014	25/9/2014	24/9/2018	6.97
10409/2014	02/12/2014	01/12/2018	10.32

The increase in gold prices at the turn of the century and consequent increase in artisanal gold mining activity in the Handeni area led to the discovery of deposits of placer gold, in turn leading in 2003 to a classic gold rush. The discovery and mining of lode deposits followed, soon after, along with the growth of a shanty mining town at the northern base of Magambazi Hill.

~~Primary~~Between ~~Mining~~2005 ~~Licenses~~and ~~(PMLs)~~2010, IPP Gold carried out exploration over its Prospecting Reconnaissance License leading to the upgrading of its holdings from one PLR to four PL’s of 800 km2, in August 2010. Exploration work included airborne magnetic and radiometric surveys, ground magnetic surveys, reconnaissance geological mapping, soil sampling, pitting and trenching. It is these four PLs that were acquired by the Company from IPP Gold under the September 2010 agreement.Geological SettingRegional GeologyRegional geological mapping programs led to the recognition of several major litho-structural provinces from Archean to recent age in Tanzania. The Archean craton covers most of the western two thirds of the country, roughly bounded to the east by the East African Rift. Archean rocks host all of the country’s kimberlite pipes and contained lode diamond deposits, and most of its lode gold deposits. The Archean basement terrain is bounded to the east and west by a series of Proterozoic mobile belts; this area, particularly that to the east, hosts most of the country’s wide variety of colored gemstone deposits. Some recent research suggests that portions of this assumed Proterozoic terrane may actually consist of Archean crust that has undergone a later phase of higher grade metamorphism.

OnThe ~~November~~Handeni ~~30,~~district ~~2011,~~forms ~~the~~part ~~Company~~of ~~acquired~~the ~~from~~Tanzanian ~~Handeni~~Mozambique ~~Resources~~belt. aThe ~~100%~~belt ~~interest~~was insubjected ~~primary~~to ~~mining~~four ~~licenses~~tectonothermal ~~covering~~events anat ~~area~~830-800Ma, of~760Ma, ~~approximately~~630-580Ma 2and 560-520Ma.67 ~~square~~All ~~kilometers~~except to the ~~east~~last ofattained ~~Magambazi~~upper ~~Hill~~amphibolite ~~(Figs.~~/ granulite 2grade ~~and 3)~~metamorphic conditions. ToProperty ~~comply~~Geology ~~with~~The ~~the~~Handeni ~~laws~~area is ~~and~~situated ~~regulations~~in of the ~~Republic~~Palaeoproterozoic, ofUsugaran/Ubendian ~~Tanzania~~Metamorphic ~~whereby~~Terrane of ~~foreign~~Tanzania, ~~companies~~along ~~may~~the ~~not~~northern ~~own~~extension ~~PMLs,~~of onthe ~~July~~north-trending ~~19,~~Proterozoic Mozambique ~~2012,~~Mobile ~~the Company:~~ Belt.

	(1)	entered into an Addendum agreement to the 2011 Acquisition Agreement whereby Handeni Resources will administer the 32 PMLs until such time as a mining license (“ML”) on the 32 PMLs (2.67 km2) have been allocated; and
	(2)	during this period Handeni Resources will be conducting exploration and mining activities on the PMLs as directed by the Company.

The geology of the Handeni area comprises amphibolite to granulite facies metamorphic rocks interpreted to originally have formed a sequence of ultramafic to felsic volcanic flows, black shales and quartz-bearing sedimentary rocks. It is furthermore interpreted to comprise a metamorphosed/overprinted eastern extension/remnant of the Lake Victoria cratonic greenstone belt. High grade metamorphism has converted these original lithologies to a variety of metamorphic equivalents, including biotite-hornblende-garnet-pyroxene gneiss, migmatitic augen garnet- hornblende-pyroxene gneiss, quartzo-feldspathic hornblende-biotite-pyroxene gneiss, pyroxene-hornblende-biotite-garnet granulite and others.

AnRecent ~~enlargement~~research ofby geologists from the ~~“excluded~~University ~~area”~~of asWestern Australia ~~delineated~~suggests onthat ~~Fig.~~much ~~2 is~~of ~~presented~~what ~~below~~has previously been considered to be of Proterozic age (~~Fig.~~Usagaran 3System) may in fact be overprinted Archean crust. AnThis hypothesis ~~area~~has ~~within~~been ~~the~~invoked ~~outline~~to ofhelp interpret the 32geology ~~PML’s~~within ~~without a~~which ~~PML~~gold ~~number~~in this ~~(Fig.~~area 3)is ~~has~~found ~~now~~and ~~been~~as ~~confirmed~~the tobasis befor ~~part~~an ofanalogy ~~PL6743/2010.~~between ~~The~~this gold ~~block~~mineralization ofand 32that ~~PMLs~~found in less metamorphosed, ~~shown~~bona fide Archean rocks in the ~~grey~~Lake ~~below~~Victoria gold district, ~~belongs~~a few hundred km to the ~~Company~~northwest. asHowever, this ~~described~~is ~~above~~a hypothesis only, one that may be used for exploration modeling ~~and~~purposes ~~are~~but ~~being~~one ~~explored~~that still requires more work.

~~West~~Mineralization of the western border of PL 6743/2010 are several more PMLs that do not belong to the Company. The area colored in green (Fig. 3) is a unitized block of four PMLs that were apparently acquired by Canaco Resources Inc. (“CRI”) (now East Africa Metals Inc.) from their owners.

The Handeni ~~District~~property ~~Project~~is at an early stage of exploration. There are no known mineral resources or reserves on the Handeni property, nor are there any known economically mineable deposits on the property. Gold is found within garnet-amphibolite zones within biotite-feldspar gneiss at three k n o w n locations in the Company’s property, locations where historical lode gold occurrences have been documented. Gold occurs in quartz veins as well as within the garnet amphibolites adjacent to the quartz veins. Proof of this association is informally corroborated by the testimony of local, illegal artisanal miners, who recover gold both from quartz veins and gold-bearing gneiss that is not quartz vein bearing. Gold in the Company’s property has also been documented in soils and placers, at a variety of locations, as well.

We23 obtained a Technical Report on the Handeni Property (the “Handeni Report”), dated April 25, 2011, as prepared at our request by Avrom E. Howard, MSc, FGA, PGeol (Ontario), Principal Consultant at Nebu Consulting LLC. Mr. Howard is a Qualified Person in accordance with Canadian National Instrument 43-101 “Standards for Disclosure of Mineral Projects” and its Companion Policy (collectively, “NI 43-101”) and is a Practicing Professional Geologist registered with the Association of Professional Geoscientists of Ontario (registration number 0380).

22Our geophysical and structural geological interpretation on which the drilling program conducted in 2012 was based, supported the mineralization model described above in broad terms.

~~Subsequent~~Whereas togold ~~the~~was ~~publishing~~known ofin the ~~April~~Handeni ~~25,~~area ~~2011~~prior NIto ~~43-101~~the arrival ~~report~~in by2005 ~~Mr.~~of ~~Howard,~~ the Company’s ~~produced~~predecessor, ~~numerous~~IPP ~~in-house~~Gold, ~~technical~~there ~~reports and~~ is inno ~~the~~history ~~process~~ of ~~compiling~~any formal anexploration ~~updated~~in ~~NI 43-101 report that will include~~ the ~~updated~~area ~~model~~aside ~~for~~from ~~mineralization~~limited onwork ~~our~~at ~~Handeni~~Magambazi ~~property.~~Hill ~~The drilling~~itself ~~conducted~~and by the ~~Company~~work ~~was~~conducted ~~done~~in ~~implementing~~recent ~~and~~years ~~following Quality Control and Quality Assessment procedures recommended~~ by ~~SRK~~Canaco (~~Stephen,~~East ~~Robertson~~African ~~and Kirsten~~Metals) in the region.

~~Property~~Handeni ~~Description~~Gold’s intensive early exploration program following the Company’s September 2010 agreement with IPP achieved the following in terms of mineralization on the properties:

~~General~~• It outlined a number of locations where intensive placer and illegal artisanal gold mining took place within the Handeni property, notably the Kwandege, Magambazi and Mjembe areas. • A helicopter based TEM electromagnetic and radiometric aerial survey program clearly delineated subsurface geological features of importance to gold and base metal mineralization in this high grade metamorphic terrain. The data proved to be invaluable in the definition of structurally important sites and target definition and was key in defining areas for ground geophysical surveys including ground magnetics, - radiometrics and I.P (Induced Polarization Surveys). Based on this exploration, priority drill targets were selected including Magambazi East as well as the Kwandege targets that were subsequently drilled. • Twenty-eight (28) diamond core holes (5,347 meters) were drilled on the Magambazi East and related targets and delineated a gold enriched mineralization zone extending for a distance of approximately 500 meters to the south east of the Magambazi Hill mineralization as defined by CRI. Based on drill data and re-interpretation of this target we are now convinced that the gold potential of this target may be proven or disproven with drilling of 5 directional drill holes. • Thirty-seven (37) drill holes (4,989 meters in total) have been drilled on the Kwandege mineralized zone, completing the first phase drilling program on this project. Twenty-six of the 32 drill holes on the main Kwandege target yielded gold assay values of more than 0.5 g/t over a one-meter interval or thicker intersection, whereas four of the remaining holes had anomalous gold values of up to 0.49 g/t. An important feature of the Kwandege target is the fact that low level gold values (0.5 g/t to 1 g/t) were encountered in numerous intersections in the drill holes and also confirmed by the latest assay results. Anomalous gold with some potentially economic intersections have been encountered in an E - W (strike) direction of 1,501 meters (based on the results of the completed phase 1 drilling program). The open ended nature of the mineralization in an E-W direction was confirmed. Recently acquired data confirms the potential of the Kwandege target area as part of a much larger structure with high gold potential. In terms of our new geological model continued drilling on the Kwandege target is highly recommended. • The results of the soil sampling program on Target 5 yielded gold in soil values of up to 200 ppb. Au (gold) assay results received for 2331 samples coincides with a magnetic and electro-magnetic geophysical anomaly on surface over an area of approximately 1.8 km (N-S) by 900 m (E-W). The evaluation of this target is to be continued by pitting, trenching and ground IP. The exploration on this target was interrupted by the on-going activity of illegal artisanal miners. The activity of these miners and the fact that their activity might lead to the sterilization of a potentially viable gold deposit forced the company to avoid work on the site as our activities may provide clues as to our interpretation of the mineralization. It is hoped that the evacuation of miners from the Mjembe target by authorities as described above will discourage illegal artisanal activity on Target 5. • Data collected from our intensive efforts to delineate alluvial gold mineralization with economic potential yielded the following:

~~Exploration,~~a) ~~mining~~The ~~and~~fluvial ~~related~~environment ~~activities~~has the largest potential for the extraction of coarse grained gold in the Handeni area. b) A large proportion of gold is ~~regulated~~contained ~~and controlled~~as ~~under~~fine grained gold. This conclusion was based on the ~~Mining~~fact ~~Act~~that geochemically analyzed samples of ~~1998~~the ~~(revised~~same locations as the bulk sampled areas yielded significantly higher gold values. c) Some specific horizons in ~~2010~~the fluvial horizon yield higher values than others. d) (Allowing for a mere 50% efficiency of the ~~“Mining~~applied ~~Act”~~processes, the overburden, the grade as well as consistency of gold on the alluvial targets evaluated thus far our results indicated that secondary gold mineralization is not economically mineable. e) Recent activities of illegal artisanal miners on our Ngwila alluvial target provided a classic example of the disastrous effect of illegal artisanal miners on a potential viable gold deposit. Within a period of 2 months the activity of a thousand or more illegal miners led to the almost certain sterilization of a low grade alluvial gold deposit by unplanned pitting and excavation along a strike distance of more than 1 km. Although the illegal activity was stopped by authorities, exploration and potential resource determination on this deposit will now require a substantially larger exploration budget.

~~Tanzania~~• isThe ~~Africa’s~~exploration ~~fourth~~results ~~leading~~on our Mjembe target defined a significant potential gold ~~producer,~~mineralization zone with ~~several major~~a ~~companies~~high ~~producing~~correlation between geochemical, structural and ~~exploring~~geophysical ~~for~~data. ~~gold,~~Mjembe ~~mostly~~will inbe ~~northwestern Tanzania,~~the ~~south~~Company’s ofprimary ~~Lake~~target ~~Victoria,~~during inthe an2016/2017 field season. The potential of this area ~~informally~~has ~~known~~been asexploited ~~the~~by ~~Lake Victoria~~illegal ~~gold~~artisanal ~~belt~~miners. As described above the area has now been secured and our exploration activities are continuing.

~~The~~Exploration ~~Handeni~~conducted ~~Property~~during the past three months included:

The ~~increase~~company inis ~~gold~~currently ~~prices~~focusing atexploration ~~the~~on ~~turn~~its Mjembe target area (Target 7). Our evaluation of the ~~century~~Mjembe ~~and~~target areas is that gold ~~consequent~~is ~~increase~~present in ~~artisanal~~rocks formed during ductile, transitional and brittle deformation episodes – a classical example of mobilization and remobilization of gold ~~mining~~over ~~activity~~a long interm period of geological deformation and metamorphism. Exploration on Target 7 (Mjembe) was highly successful and 3 potential drill sites have been delineated within the ~~Handeni~~larger Mjembe target area. ~~led~~A tolimited grab sampling program was conducted on illegal artisanal sites within the ~~discovery~~Mjembe target. The results in these primary source rocks are highly encouraging with visible gold present in many of ~~deposits~~the samples. Twelve grab samples (12 kg each) on illegal artisanal mine dumps yielded gold values of ~~placer~~between 2 and 7 grams per ton. These mine dumps are providing minimum values for gold as they represent an un-concentrated mixture of “ore zone”, inhanging ~~turn~~wall ~~leading~~and infoot ~~2003~~wall material. HNDI is currently planning an exploration shaft to enable the company to gain a ~~classic~~better ~~gold~~understanding ~~rush~~of the nature of the structural geology on the Mjembe-1 project as well as to conduct bulk sampling on the mineralization zone. ~~The~~Whole ~~discovery~~rock samples collected from a 60 m long and ~~mining~~up ofto ~~lode~~10 ~~deposits~~m ~~followed,~~deep ~~soon~~trench ~~after,~~dug ~~along~~on our Mjembe-1 target ~~with~~yielded ~~the~~gold ~~growth~~values of aup ~~shanty~~to ~~mining~~6,1 ~~town~~g/t aton specific horizons. The trench provided the ~~northern~~necessary ~~base~~geological input to effectively determine the position of ~~Magambazi~~the exploration ~~Hill~~shaft.

~~Between~~24 2005 and 2010, IPP Gold carried out exploration over its Prospecting Reconnaissance License leading to the upgrading of its holdings from one PLR to four PL’s of 800 km2, in August 2010. Exploration work included airborne magnetic and radiometric surveys, ground magnetic surveys, reconnaissance geological mapping, soil sampling, pitting and trenching. It is these four PLs that were acquired by the Company from IPP Gold under the September 2010 agreement.

~~Geological~~• ~~Setting~~The Company is still experiencing illegal mining activities on its Mjembe targets despite the fact that exploration on this target is now continuing as reported above. • XRF analyses and evaluation of drill core on the Magambazi East and Kwandege sites continued. • An updated NI43-101 is being compiled. Based on the strategic and confidential nature of the results contained in this report and the Company’s experiences gained over the past three years related to the securing of our exploration targets, it is deemed in the company’s interest not to publish this report at this stage. • The Company now has 5 high potential drill targets of the 17 areas investigated in detail on its approximately 423 km2 license areas in the Handeni district. Significant anomalous results have been achieved on 3 additional targets. • Detail geological mapping on the Gole sheath fold, a structural feature of 11 km by 4.5 km (Targets 12, 13, 14 and 17), have commenced and is continuing. Potential gold bearing amphibolite zones have been identified, which will be the focus of further investigation. Due to a lack of funding the Gole target will most likely not be further explored during the 2016/2017 field season. • Further detailed mapping was conducted on Target 16. This was followed by gold assays using specialized geochemical techniques to test the potential of increasing the effectivity of the Company’s soil sampling program. The results were highly successful and the Company will implement this technique on Target 10 when funds become available.

~~Regional~~Compliance ~~Geology~~with Government Regulation

~~Regional~~We ~~geological~~are ~~mapping~~subject ~~programs~~to ~~led~~local tolaws ~~the~~and ~~recognition~~regulation ofgoverning the ~~several~~exploration, ~~major~~development, ~~litho-structural~~mining, ~~provinces~~production, ~~from~~importing ~~Archean~~and toexporting ~~recent~~of minerals; ~~age~~taxes; inlabor ~~Tanzania. The~~standards; ~~Archean~~occupational ~~craton~~health; ~~covers~~waste ~~most~~disposal; protection of the ~~western~~environment; ~~two~~mine ~~thirds~~safety; oftoxic ~~the~~substances; ~~country,~~and ~~roughly~~other matters. ~~bounded~~We torequire ~~the~~licenses ~~east~~and bypermits ~~the~~to ~~East~~conduct ~~African~~exploration ~~Rift.~~and ~~Archean~~mining ~~rocks~~operations. Amendments ~~host~~to ~~all~~current oflaws ~~the country’s~~and ~~kimberlite~~regulations ~~pipes~~governing operations and ~~contained~~activities of ~~lode~~mining ~~diamond~~companies ~~deposits,~~or ~~and~~more ~~most~~stringent ofimplementation ~~its lode~~thereof ~~gold~~could ~~deposits.~~have ~~The~~a material ~~Archean~~adverse ~~basement~~impact ~~terrain~~on isour ~~bounded~~Company. toApplicable ~~the~~laws ~~east~~ and ~~west~~regulations will byrequire aus ~~series~~to ofmake ~~Proterozoic~~certain ~~mobile~~capital ~~belts;~~and ~~this~~operating ~~area,~~expenditures ~~particularly that~~ to ~~the~~initiate new ~~east,~~operations. ~~hosts~~Under ~~most~~certain ofcircumstances, ~~the~~we ~~country’s~~may ~~wide~~be ~~variety~~required ofto ~~colored~~close ~~gemstone deposits.~~an ~~Some~~operation ~~recent~~once ~~research~~it ~~suggests~~is ~~that~~started ~~portions~~until ofa ~~this~~particular ~~assumed~~problem ~~Proterozoic~~is ~~terrane may~~remedied ~~actually~~or ~~consist~~to undertake ofother ~~Archean~~remedial ~~crust~~actions. ~~that~~This ~~has~~would ~~undergone~~have a ~~later~~material ~~phase~~adverse ofeffect ~~higher~~on ~~grade~~our ~~metamorphism.~~results and financial condition.

~~The~~Four ~~Handeni~~of ~~district~~our ~~forms~~mineral ~~part~~interests ofin Tanzania are currently held under PLs granted pursuant to the ~~Tanzanian~~Mining ~~Mozambique~~Act for an initial period of three ~~belt~~years and are renewable in two successive periods of two years only. The remaining ~~belt~~four ~~was~~PL’s ~~subjected~~are tobeing ~~four~~held ~~tectonothermal~~under ~~events~~the at2010 ~~830-800Ma,~~Mining ~~~760Ma~~Act and are valid for an initial period of 4 years (the initial period expiring in 2018 (Table 2)). Following this the first renewal is for 3 years and the second renewal for 2 years, each renewal accompanied by a mandatory relinquishment of at least 50% of ~~630-580Ma~~the license area. The application fees are $300 on initial application and ~~560-520Ma~~$300 for each renewal. ~~All~~There ~~except~~is ~~the~~a ~~last~~preparation ~~attained~~fee ~~upper~~of ~~amphibolite~~$500 applicable on each license. The annual rent for the licenses are $100/km2 (initial period), ~~granulite~~$150/km2 ~~grade~~(1st ~~metamorphic~~renewal) ~~conditions.~~and $200/km2 (2nd renewal).

~~Property~~All ~~Geology~~PLs in Tanzania require the holder to employ and train local residents, typically amounting to $5,000 per year, and make exploration expenditures, as set out in the Mining Act. At each renewal, at least 50% of our licensed area must be relinquished. If we wish to keep the relinquished one-half portion, we must file a new application for the relinquished portion.

The ~~Handeni~~geographical area covered by a PL may contain one or more previously granted PML’s. A PML is ~~situated~~a inmining ~~the~~license ~~Palaeoproterozoic,~~granted only to a Tanzanian ~~Usugaran/Ubendian~~citizen ~~Metamorphic~~consisting ~~Terrane~~of an area of ~~Tanzania~~not to exceed 10 hectares. Once a PL is granted, ~~along~~no additional PMLs can be granted within the ~~northern~~geographical ~~extension~~area covered by the PL. The PL is subject to the rights of previously granted and existing PMLs. The holder of a PL will have to work around the ~~north–trending~~geographical ~~Proterozoic~~area ~~Mozambique~~of ~~Mobile~~the PML ~~Belt~~unless the PL holder acquires the PML and any rights to the land covered by the PML.

~~The~~We ~~geology~~must ofhold ~~the~~a ~~Handeni~~mining ~~area~~license ~~comprises~~to ~~amphibolite~~carry ~~to granulite~~out ~~facies~~mining ~~metamorphic~~activities, which ~~rocks~~are ~~interpreted~~granted only to ~~originally~~the ~~have~~holder ~~formed~~of a PL covering a particular area. A ~~sequence~~mining oflicense ~~ultramafic~~is togranted ~~felsic~~for ~~volcanic~~a ~~flows,~~period ~~black~~of ~~shales~~25 ~~and~~years ~~quartz-bearing sedimentary~~or ~~rocks~~the life of the mine. It is ~~furthermore~~renewable ~~interpreted~~after to10 ~~comprise~~years for a ~~metamorphosed/overprinted~~ ~~eastern~~period ~~extension/remnant~~not ofexceeding ~~the~~15 ~~Lake~~years. ~~Victoria~~Other than the ~~cratonic~~PMLs ~~greenstone~~being ~~belt~~held under Handeni Resources, we do not hold any mining licenses, only PLs. ~~High~~An ~~grade~~application ~~metamorphism~~for ~~has~~the ~~converted~~32 ~~these~~PMLs ~~original~~being held under agreement by Handeni ~~lithologies~~Resources to be changed into a ~~variety~~mining oflicense ~~metamorphic~~(ML) ~~equivalents,~~is ~~including~~underway. Prospecting and ~~biotite-hornblende-garnet-pyroxene~~mining ~~gneiss,~~license ~~migmatitic~~holders ~~augen~~must ~~garnet-~~submit regular reports in accordance with mining ~~hornblende-pyroxene~~regulations. ~~gneiss~~Upon commercial production, ~~quartzo-feldspathic~~the ~~hornblende-biotite-pyroxene~~government of Tanzania imposes a ~~gneiss,~~royalty ~~pyroxene-hornblende-biotite-garnet~~on ~~granulite~~the gross value of all production at the rate of 3% of all gold produced. The applicable regulatory body in Tanzania is the Ministry of Energy and ~~others~~Minerals.

~~Recent~~In ~~research~~July by1999, ~~geologists~~environmental ~~from~~management and protection regulations under the ~~University~~Mining ofAct ~~Western Australia~~came ~~suggests~~into ~~that~~force. ~~much~~An ofenvironmental ~~what~~impact statement ~~has~~and ~~previously~~an ~~been~~environmental ~~considered~~management toplan bemust ofaccompany special mining ~~Proterozic~~license, ~~age~~mining ~~(Usagaran~~license ~~System)~~and ~~may~~gemstone inmining ~~fact~~license beapplications ~~overprinted~~for ~~Archean~~mineral ~~crust~~rights. ~~This hypothesis~~In ~~has~~addition ~~been~~to ~~invoked~~the establishment toof ~~help~~environmental ~~interpret~~regulations, the ~~geology~~Tanzanian ~~within~~government ~~which~~has improved ~~gold~~management ~~in this~~procedures ~~area~~for iseffective ~~found~~monitoring and asenforcement ~~the~~of ~~basis~~these regulations ~~for~~by anstrengthening ~~analogy~~the ~~between~~institutional ~~this~~capacity, ~~gold~~especially in the field ~~mineralization~~offices. ~~and~~The ~~that~~government ~~found~~has inprovided ~~less~~rules ~~metamorphosed,~~for ~~bona~~the ~~fide~~creation ~~Archean~~of ~~rocks~~reclamation infunds ~~the~~to ~~Lake~~reinstate ~~Victoria~~land ~~gold~~to ~~district,~~alternative auses ~~few~~after ~~hundred~~mining kmand toit ~~the~~has ~~northwest.~~developed guidelines ~~However~~for mining in restricted areas, ~~this~~ issuch aas ~~hypothesis~~forest ~~only~~reserves, ~~one~~national parks, ~~that~~near ~~may~~sources beof ~~used~~water ~~for~~and ~~exploration~~other ~~modeling~~designated areas. These regulations have ~~purposes~~not ~~but~~had ~~one~~any ~~that~~material ~~still~~effect ~~requires~~on ~~more~~our ~~work~~operations to date.

~~Mineralization~~25

~~The~~Competition Handeni property is at an early stage of exploration. There are no known mineral resources or reserves on the Handeni property, nor are there any known economically mineable deposits on the property. Gold is found within garnet-amphibolite zones within biotite-feldspar gneiss at three k n o w n locations in the Company’s property, locations where historical lode gold occurrences have been documented. Gold occurs in quartz veins as well as within the garnet amphibolites adjacent to the quartz veins. Proof of this association is informally corroborated by the testimony of local, illegal artisanal miners, who recover gold both from quartz veins and gold-bearing gneiss that is not quartz vein bearing. Gold in the Company’s property has also been documented in soils and placers, at a variety of locations, as well.

~~Our~~We ~~geophysical~~operate in a highly competitive industry, competing with other mining and ~~structural~~exploration ~~geological~~companies, ~~interpretation~~and oninstitutional and individual investors, which are actively seeking minerals exploration properties throughout the ~~drilling~~world ~~program~~together ~~conducted~~with inthe ~~2012~~equipment, ~~was~~labour ~~based~~and materials required to exploit such properties. Many of our competitors have financial resources, ~~supported~~staff and facilities substantially greater than ours. The principal area of competition is encountered in the financial ability to cost effectively acquire prime minerals ~~mineralization~~exploration ~~model~~prospects ~~described~~and ~~above~~then exploit such prospects. Competition for the acquisition of minerals exploration properties is intense, with many properties available in ~~broad~~a ~~terms~~competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of this competition. No assurance can be given that a sufficient number of suitable minerals exploration properties will be available for acquisition, exploration and development.

23Employees

~~Whereas~~Other ~~gold~~than ~~was~~our ~~known~~directors inand ~~the~~executive ~~Handeni~~officers, ~~area~~we ~~prior~~had approximately tofour ~~the~~full-time ~~arrival in~~equivalent ~~2005~~employees ofand ~~the~~consultants ~~Company’s~~located ~~predecessor,~~in Tanzania ~~IPP~~as ~~Gold~~of August 31, ~~there~~2016. isWe noalso ~~history~~utilize ofindependent ~~any~~geologists and ~~formal~~consultants ~~exploration~~on ina ~~the~~contract ~~area~~basis ~~aside~~to ~~from~~conduct ~~limited~~the work atprograms ~~Magambazi~~on ~~Hill~~our ~~itself~~mineral ~~and~~properties ~~the work conducted~~ in ~~recent~~order ~~years~~to bycarry ~~Canaco~~out ~~(East~~our ~~African~~plan ~~Metals)~~of ~~in the region~~operations.

~~Handeni~~Research ~~Gold’s~~and ~~intensive~~Development ~~early~~Expenditures ~~exploration program following the Company’s September 2010 agreement with IPP achieved the following in terms of mineralization on the properties:~~

•We It outlined a number of locations where intensive placer and illegal artisanal gold mining took place within the Handeni property, notably the Kwandege, Magambazi and Mjembe areas. • A helicopter based TEM electromagnetic and radiometric aerial survey program clearly delineated subsurface geological features of importance to gold and base metal mineralization in this high grade metamorphic terrain. The data proved to be invaluable in the definition of structurally important sites and target definition and was key in defining areas for ground geophysical surveys including ground magnetics, - radiometrics and I.P (Induced Polarization Surveys). Based on this exploration, priority drill targets were selected including Magambazi East as well as the Kwandege targets that were subsequently drilled. • Twenty-eight (28) diamond core holes (5,347 meters) were drilled on the Magambazi East and related targets and delineated a gold enriched mineralization zone extending for a distance of approximately 500 meters to the south east of the Magambazi Hill mineralization as defined by CRI. Based on drill data and re-interpretation of this target we are now convinced that the gold potential of this target may be proven or disproven with drilling of 5 directional drill holes. • Thirty-seven (37) drill holes (4,989 meters in total) have ~~been~~not ~~drilled~~incurred onany ~~the~~research Kwandege mineralized zone, completing the first phase drilling program on this project. Twenty-six of the 32 drill holes on the main Kwandege target yielded gold assay values of more than 0.5 g/t over a one-meter interval or ~~thicker~~development ~~intersection,~~expenditures since whereas four of the remaining holes had anomalous gold values of up to 0.49 g/t. An important feature of the Kwandege target is the fact that low level gold values (0.5 g/t to 1 g/t) were encountered in numerous intersections in the drill holes and also confirmed by the latest assay results. Anomalous gold with some potentially economic intersections have been encountered in an E - W (strike) direction of 1,501 meters (based on the results of the completed phase 1 drilling program). The open ended nature of the mineralization in an E-W direction was confirmed. Recently acquired data confirms the potential of the Kwandege target area as part of a much larger structure with high gold potential. In terms of our ~~new geological model continued drilling on the Kwandege target is highly recommended~~incorporation. • The results of the soil sampling program on Target 5 yielded gold in soil values of up to 200 ppb. Au (gold) assay results received for 2331 samples coincides with a magnetic and electro-magnetic geophysical anomaly on surface over an area of approximately 1.8 km (N-S) by 900 m (E-W). The evaluation of this target is to be continued by pitting, trenching and ground IP. • Data collected from our intensive efforts to delineate alluvial gold mineralization with economic potential yielded the following:

a)Subsidiaries The fluvial environment has the largest potential for the extraction of coarse grained gold in the Handeni area. b) A large proportion of gold is contained as fine grained gold. This conclusion was based on the fact that geochemically analyzed samples of the same locations as the bulk sampled areas yielded significantly higher gold values. c) Some specific horizons in the fluvial horizon yield higher values than others. d) Allowing for a mere 50% efficiency of the applied processes, the overburden, the grade as well as consistency of gold on the alluvial targets evaluated thus far our results indicated that secondary gold mineralization is not economically mineable.

• The ~~exploration~~Company ~~results~~has ontwo ~~our~~subsidiaries, ~~Mjembe~~both ~~target~~of ~~defined~~which aare ~~significant~~Tanzanian companies: ~~potential~~(i) ~~gold~~HG ~~mineralization~~Limited ~~zone~~(formerly ~~with~~DLM aTanzania ~~high~~Limited); ~~correlation between geochemical, structural~~ and ~~geophysical~~(ii) ~~data.~~Douglas ~~Mjembe~~Lake Tanzania ~~will~~Limited, bewhich ~~the~~is ~~Company’s primary target during the 2015/2016 field season~~inactive. ~~The potential of this area has been exploited by illegal artisanal miners.~~

~~Exploration~~Plan ~~conducted~~of ~~during~~Operations ~~the nine months ended February 29, 2016:~~

•Our Aplan ~~limited grab sampling program was conducted on illegal artisanal sites within the Mjembe target. The results~~ of ~~this~~operations ~~will~~through beour ~~available~~fiscal ~~shortly.~~year •ending ~~Evaluation~~May ~~of gold mining pml’s in the Kilindi district commenced with a visit to the sites and a grab sampling program~~31, 2017 ~~aiming~~is to ~~incorporate~~continue ~~high potential properties into the company’s license portfolio. The company decided not~~ to ~~pursue~~focus ~~with work~~ on ~~these properties. • Mapping of~~ the ~~Gole~~exploration ~~structure is continuing as announced. • XRF analyses and evaluation~~ of ~~drill~~our ~~core~~Handeni onmineral ~~the~~property in ~~Magambazi~~Tanzania, ~~East~~ and ~~Kwandege sites continued. • An updated NI43-101 is being compiled. • Our planned exploration on~~ the ~~Mjembe~~budget ~~and~~for ~~Target~~this 5plan ~~areas~~requires ~~were~~approximately ~~postponed due to serious interference by illegal artisanal mining activities~~$0.6 ~~This~~million for ~~situation~~our ~~escalated~~plan toof the ~~extent~~exploration ~~that~~ work, on$100,000 ~~the~~for ~~targets~~mineral islicenses ~~counterproductive~~fees asand ~~sites~~a minimum ~~are~~of ~~simply being occupied by illegal artisanal activity~~$0.5 Asmillion ~~outlined~~for ~~above,~~our ~~the~~general ~~company~~and ~~has~~administration ~~engaged all relevant authorities in an effort to resolve the situation~~expenses, professional ~~but~~and toconsulting ~~date~~fees ~~all~~and ~~deadlines~~other ~~set~~operating ~~by authorities whereby illegal miners would be removed, were simply ignored~~expenses.

24Handeni Gold Inc. has clearly identifiable goals for its exploration program in Tanzania, which has been adapted to reflect recent changes in the situation on the ground and our exploration activities:

~~Exploration~~a) The company will now focus on its outlined drill targets for the next financial year, including Mjembe, Targets 5 and Target 16. b) Intensive exploration on the larger Mjembe target area will be conducted, ~~during~~including ground geophysics with the ~~fiscal~~aim of outlining additional drill targets on the structure. c) Reduce the Company’s license holding in the Handeni district by at least 50% reduction of our currently held license areas. d) Acquire additional licenses bordering our target areas for reconnaissance work for a one year ~~2015:~~period. Relinquish those with low potential after one year. e) Continue efforts to secure funding for drilling on drill targets.

•Other ~~The~~low ~~Company~~cost now has 5 high potential drill targets of the 17 areas investigated in detail on its approximately 423 km2 license areas in the Handeni district. Significant anomalous results have been achieved on 3 additional targets. • In addition to the geological and geophysical maps produced using remote sensing techniques, a total of 143 km2 (35%) of the license area has been mapped in detail (1:2500 and 1:5000 scale). To date, a total of 37,153 drill and soil samples were taken of which 16,212 were assayed for gold and 19,992 by XRF. • Target 5 is now a fully fledged drill target based on the geochemistry and geophysics results obtained. Grab samples on this target yielded a maximum of 3.12 g/t of gold. As outlined below (under “Risk Factors – Risks Related to Our Company”), Target 5 is now under threat of being taken over by illegal artisanal mining operations. • Nine hundred and thirty five (935) soil samples collected on Target 6 have been analysed by XRF. The results are discouraging and this target did not receive priority status. • Exploration on Target 7 (Mjembe) was highly successful and 3 potential drill sites have been delineated within the larger Mjembe target area. The Company is experiencing serious interference and illegal mining activities on all of its Mjembe targets which pose a serious restriction on our exploration activities ~~and~~being ~~the~~conducted ~~future of our exploration~~ on this target as reported under “Risk Factors - Risks Related to Our Company”. • Target 8 has been mapped in detail covering an area of approximately 36 km2. The Company is currently evaluating this target for selection of a continuous ~~soil~~basis ~~sampling and potential detail geophysics program. The outcome of this will be based~~ on ~~prioritizing this area in relation to~~ the Gole structure program as discussed below. • Target 10 has been mapped in detail and 674 soil samples taken of which 149 were selected based on our XRF screening technique. Although some elevated gold values were obtained the Company will follow this area up utilizing a newly developed assay technique developed and successfully applied to target 16 as reported below. Due to a lack of funding we cannot immediately embark on this planned work. • Mapping and XRF analyses on 793 samples from Target 15 (Dolly) have been completed. Mineralization and structural features on this anomaly show many similarities with that of Magambazi hill. • Geological mapping on target 16 has been completed and a preliminary 1,923 soil samples taken. Of these 20 high priority samples were selected for evaluation of a specialized technique designed to detect gold anomalies in geological terrains with a complex gold in soil distribution profile. The results were highly encouraging and values of up to 8 g/t in soils were obtained. The Company will undoubtedly apply this technique to some selected other targets as funding becomes available. • Detail geological mapping on the Gole sheath fold, a structural feature of 11 km by 4.5 km (Targets 12, 13, 14 and 17), have commenced and is continuing. Potential gold bearing amphibolite zones have been identified, which will be the focus of further investigation. • Further detailed mapping was conducted on Target 16. This was followed by gold assays using specialized geochemical techniques to test the potential of increasing the effectivity of the Company’s ~~soil~~Handeni ~~sampling~~licenses ~~program.~~include: ~~The results were highly successful and the Company will implement this technique on Target 10 when funds become available.~~

~~Compliance~~a) ~~with~~Identification ~~Government~~of ~~Regulation~~potential alluvial mining areas other than those currently known and being evaluated by utilizing remote sensing activities. b) A detailed interpretation of already collected geophysical data. c) A petrological, geochemical and mineralogical investigation of the Kwandege drill core to understand the style of gold mineralization at this locality. d) The planning and siting of drill holes as a follow up Reverse Circulation program to evaluate the near – surface potential of the Kwandege target.

WeThe ~~are~~estimated ~~subject~~budget tofor ~~local laws and regulation governing~~ the ~~exploration,~~ ~~development,~~completion ~~mining, production, importing and exporting~~ of ~~minerals;~~ ~~taxes;~~these ~~labor standards; occupational health; waste disposal; protection of the environment; mine safety; toxic substances; and other matters. We require licenses and permits to conduct~~ exploration ~~and mining operations.~~ ~~Amendments~~programs to current laws and regulations governing operations and activities of mining companies or more stringent implementation thereof could have a material adverse impact on our Company. Applicable laws and regulations will require us to make certain capital and operating expenditures to initiate new operations. Under certain circumstances, we may be required to close an operation once it is ~~started~~provided ~~until a particular problem is remedied or to undertake other remedial actions. This would have a material adverse effect on our results and financial condition.~~below:

~~Four~~26 of our mineral interests in Tanzania are currently held under PLs granted pursuant to the Mining Act for an initial period of three years and are renewable in two successive periods of two years only. The remaining four PL’s are being held under the 2010 Mining Act and are valid for an initial period of 4 years (the initial period expiring in 2018 (Table 2)). Following this the first renewal is for 3 years and the second renewal for 2 years, each renewal accompanied by a mandatory relinquishment of at least 50% of the license area. The application fees are $300 on initial application and $300 for each renewal. There is a preparation fee of $500 applicable on each license. The annual rent for the licenses are $100/km2 (initial period), $150/km2 (1st renewal) and $200/km2 (2nd renewal).

All PLs in Tanzania require the holder to employ and train local residents, typically amounting to $5,000 per year, and make exploration expenditures, as set out in the Mining Act. At each renewal, at least 50% of our licensed area must be relinquished. If we wish to keep the relinquished one-half portion, we must file a new application for the relinquished portion.

EXPLORATION WORK	BUDGET (US$)
Ground Geophysics	10,000
Mapping, trenching, sampling, etc.	20,000
Drilling	350,000
Geologists, field personnel and general exploration	150,000
Sundry & contingencies	50,000
TOTAL	$580,000

25Our exploration efforts are severely restricted by a cash-flow problem as well as by the efforts to curb the activity of illegal artisanal mining activities. To this extent the company has only spent limited funding on exploration of our planned 2017 and 2016 operations. Solving the illegal artisanal mining situation on the Mjembe target has now enabled the company to focus our efforts on this target which is well defined and the target that will most likely yield further positive results with a relatively low input of cash.

~~The~~For ~~geographical~~the ~~area~~three ~~covered~~months byended aAugust PL31, ~~may~~2016, ~~contain~~the ~~one~~Company ~~or more~~used ~~previously~~$118,000 ~~granted~~cash ~~PML’s~~in operating activities. AAt ~~PML~~August is31, a2016, ~~mining~~we ~~license~~had ~~granted~~cash ~~only~~of $80,000 toand a ~~Tanzanian citizen~~working ~~consisting~~capital deficit of an$428,000. ~~area~~In addition, we have a total of ~~not~~$160,000 funds available to ~~exceed~~be 10withdrawn ~~hectares.~~pursuant ~~Once~~to a PLfacility isagreement ~~granted,~~with noa ~~additional~~related ~~PMLs~~party. ~~can~~We beassume ~~granted~~$457,000 ~~within~~of ~~the~~payables ~~geographical~~due ~~area~~to ~~covered~~related parties bywould ~~the~~not ~~PL.~~be ~~The~~demanded PLto ispay ~~subject~~in to the ~~rights~~next offiscal ~~previously~~year. ~~granted~~As ~~and~~such, ~~existing~~we estimated that ~~PMLs.~~we ~~The~~will ~~holder~~still ofneed a PLminimum ~~will~~of ~~have~~$1 tomillion ~~work~~additional ~~around~~funds ~~the~~in ~~geographical~~order ~~area~~to ~~of the~~cover ~~PML~~our ~~unless~~planned ~~the~~operations PLover ~~holder~~the ~~acquires~~fiscal ~~the~~year ~~PML~~ending ~~and~~May ~~any~~31, ~~rights~~2017. toOur ~~the~~actual expenditures ~~land~~may ~~covered~~exceed ~~by the~~our ~~PML~~estimations.

We ~~must~~anticipate ~~hold~~that awe ~~mining~~will ~~license~~not togenerate ~~carry~~any ~~out~~revenues ~~mining activities, which are granted only to the holder of a PL covering a particular area. A mining license is granted~~ for ~~a period of 25 years or the life of the mine. It~~so islong ~~renewable~~as ~~after~~we 10are ~~years~~an ~~for~~exploration astage ~~period not exceeding 15 years~~company. ~~Other than the PMLs being held under Handeni Resources~~Accordingly, we dowill ~~not hold any mining licenses, only PL’s. An application for the 32 PMLs being held under agreement by Handeni Resources to~~ be ~~changed~~required ~~into a mining license (ML) is underway. Prospecting and~~to ~~mining~~obtain ~~license~~additional ~~holders~~financing ~~must submit regular reports~~ in ~~accordance~~order ~~with~~to ~~mining regulations.~~pursue ~~Upon~~our ~~commercial~~plan ~~production, the government~~ of ~~Tanzania imposes a royalty on the gross value of all production at the rate of 3% of all gold produced~~operations. ~~The applicable regulatory body in Tanzania is the Ministry of Energy and Minerals.~~

InWe ~~July~~believe ~~1999,~~that ~~environmental~~external ~~management~~debt ~~and~~financing ~~protection~~will not be an ~~regulations~~alternative ~~under~~for ~~the~~funding ~~Mining~~our ~~Act~~next ~~came~~fiscal ~~into~~year ~~force.~~exploration, Anas ~~environmental~~we ~~impact~~do not have ~~statement~~significant ~~and~~tangible anassets ~~environmental~~to ~~management~~secure ~~plan~~any ~~must~~debt ~~accompany~~financing. ~~special~~Therefore, ~~mining~~we ~~license,~~anticipate ~~mining~~that ~~license~~additional ~~and~~funding ~~gemstone~~will ~~mining~~be ~~license~~in ~~applications~~the ~~for~~form ~~mineral~~of further related ~~rights.~~parties Indebt ~~addition~~financing toand/or equity financing from the ~~establishment~~sale of ~~environmental~~our ~~regulations, the~~common ~~Tanzanian~~stock. ~~government~~We ~~has~~cannot ~~improved~~provide ~~management~~investors ~~procedures~~with ~~for~~any ~~effective~~assurance ~~monitoring~~that we will be able to ~~and~~obtain ~~enforcement~~sufficient offinancing ~~these~~to ~~regulations~~fund byour ~~strengthening~~acquisition ~~the~~and ~~institutional~~exploration program ~~capacity,~~going ~~especially~~forward. inIn the ~~field~~absence ~~offices.~~of ~~The~~sufficient ~~government~~funding, ~~has~~we ~~provided~~will ~~rules~~not ~~for~~be able to ~~the~~continue ~~creation~~acquisition and exploration of ~~reclamation~~mineral ~~funds~~claims toand ~~reinstate~~we ~~land~~will be forced to abandon ~~alternative~~our ~~uses~~mineral ~~after mining~~claims and itour ~~has~~plan ~~developed~~of ~~guidelines~~operations. ~~for~~Even ~~mining~~if we are successful in ~~restricted~~obtaining ~~areas,~~financing ~~such~~to ~~as forest~~fund ~~reserves,~~our ~~national~~acquisition ~~parks~~and exploration program, ~~near~~there ~~sources~~is no ofassurance ~~water~~that ~~and~~we ~~other~~will ~~designated areas.~~obtain ~~These~~the ~~regulations~~funding ~~have~~necessary ~~not~~to ~~had~~pursue any ~~material~~advanced exploration ~~effect~~of onany ~~our~~mineral ~~operations to date~~claims.

~~Competition~~Results of Operations

We ~~operate~~have inhad ano ~~highly~~operating ~~competitive~~revenues ~~industry, competing with other mining~~ and ~~exploration~~accumulated ~~companies,~~net ~~and~~loss ~~institutional and individual~~of ~~investors,~~$118 ~~which~~million ~~are~~since ~~actively~~our ~~seeking~~inception ~~minerals~~(January ~~exploration properties throughout the world together with the equipment~~5, ~~labour~~2004) ~~and materials required~~ to ~~exploit such~~August ~~properties. Many of our competitors have financial resources~~31, ~~staff and facilities substantially greater than ours~~2016. The ~~principal area of competition is~~ ~~encountered~~following intable ~~the~~sets ~~financial~~out ~~ability~~our tolosses ~~cost~~from ~~effectively~~operations ~~acquire prime minerals exploration prospects and then exploit such prospects. Competition~~ for the ~~acquisition~~ ofperiods ~~minerals exploration properties is intense, with many properties~~indicated: available in a competitive bidding process in which we may lack technological information or expertise available to other bidders. Therefore, we may not be successful in acquiring, exploring and developing profitable properties in the face of this competition. No assurance can be given that a sufficient number of suitable minerals exploration properties will be available for acquisition, exploration and development.

Employees

		For the Three Months Ended,

		August 31, 2016			August 31, 2015
Revenue	$	-		$	-
Expenses
Consulting fees		1,350			1,350
Depreciation		107			795
Exploration expenses (Note 8 (b))		29,270			20,303
General and administrative (Note 8 (c))		43,634			47,868
Interest expense (Note 8 (a))		53,839			36,007
Professional		15,046			3,347
Rent (Note 8 (b)		26,559			36,411
Travel and investor relations		174			165
Total Expenses		169,979			146,246
Loss From Operations	$	(169,979	)	$	(146,246	)

~~Other~~Three ~~than~~Months ~~our~~Ended ~~directors~~August ~~and executive officers~~31, ~~we had approximately four full-time equivalent employees and consultants located in Tanzania as of February 29,~~ 2016. WeCompared ~~also utilize independent geologists and consultants on a contract basis~~ to ~~conduct the work programs on our mineral~~Three ~~properties~~Months inEnded ~~order~~August to31, ~~carry~~2015 ~~out our plan of operations.~~

~~Research~~Our net loss for the three months ended August 31, 2016 was $136,000, compared to $136,000 for the same period ended August 31, 2015, the difference is mainly due to gain on disposal of equipment increased by $25,000 for the three months ended August 31, 2016 and ~~Development~~our ~~Expenditures~~operating expenses for the three months ended August 31, 2016 increased by $24,000 to $170,000 from $146,000 for the same period ended February 29, 2015. The main operating expenses changes are as follows:

Weour ~~have~~consulting, ~~not~~general ~~incurred~~and ~~any~~administrative ~~research~~fees ordecreased ~~development~~by ~~expenditures~~$4,000 to ~~since~~ $45,000 ~~our~~during ~~incorporation.~~the period ended August 31, 2016 (three months ended August 31, 2015 - $49,000), primarily due to fund limitation and continuing cost management;

~~Subsidiaries~~27

~~The~~our ~~Company~~exploration ~~has~~expenses ~~two~~increased ~~subsidiaries~~by $9,000 ~~both~~to of$29,000 ~~which~~during ~~are~~the ~~Tanzanian~~three ~~companies:~~ months ~~(i)~~ended HGAugust ~~Limited~~31, 2016 (~~formerly~~three ~~DLM~~months ~~Tanzania~~ended ~~Limited);~~August ~~and~~31, ~~(ii)~~2015 ~~Douglas~~- ~~Lake~~$20,000). ~~Tanzania~~ Our ~~Limited,~~funding ~~which~~limitations iscaused ~~inactive.~~our reduced exploration activities;
~~Plan~~depreciation fees decreased by $700 to $100 during the three months ended August 31, 2016 (three months ended August 31, 2015 - $800) mainly because the majority of ~~Operations~~our equipment was fully depreciated;
~~Our~~interest ~~plan~~expenses ofincreased ~~operations~~by ~~through our fiscal year ending May 31~~$18, ~~2016~~000 is to ~~continue~~$54,000 toduring ~~focus on~~ the ~~exploration~~three ~~of our Handeni mineral property~~months in ended ~~Tanzania~~August 31, ~~and~~2016 ~~the~~(three ~~budget~~months ~~for~~ended ~~this~~August ~~plan~~31, ~~requires~~2015 ~~approximately~~- $~~0.6~~36,000), ~~million~~which ~~for~~ represented ~~our~~deemed ~~plan~~interest ofon ~~the~~increased ~~exploration~~interest ~~work,~~free ~~$100,000~~unsecured ~~for~~loans ~~mineral licenses fees and a~~from ~~minimum~~ related ~~of $0~~parties.6 ~~million~~Such ~~for~~deemed ~~our~~interest ~~general~~was ~~and~~recorded ~~administration~~as ~~expenses, professional~~donated ~~and~~capital; ~~consulting fees and other operating expenses.~~
~~Handeni~~our ~~Gold~~professional ~~Inc.~~fees ~~has~~increased ~~clearly~~by ~~identifiable~~$12,000 ~~goals~~to ~~for~~$15,000 ~~its~~during the three ~~exploration~~ months ~~program~~ended inAugust ~~Tanzania:~~31, 2016 (three months ended August 31, 2015 - $3,000) primarily due to increased legal fees on capital reorganization;

As previously reported, the Company will focus on its regional target identification for the remainder of the fiscal year 2016 on the Gole 11 km by 4.5 km sheath fold, a feature with a combination of geological elements rendering it having high potential for gold mineralization based on experience in the district. This will conclude the Company’s regional target identification program in the Handeni area. Due to the political uncertainties related to illegal artisanal mining activities on our properties, we are only conducting mapping on this area without any soil or lithological sampling being carried out. This policy will remain in place until the illegal artisanal situation has been normalized by the current Tanzanian government.

Continue exploration on drill targets simultaneously with the completing of the regional program.

our rent expenses were less than $500 during the three months ended August 31, 2016 and 2015 mainly due to our fund limitation caused our Tanzania and Canadian office space limitation; Included in the rent for the three months ended August 31, 2016, there was $26,400 (three months ended August 31, 2015: $36,000) representing 60% of the rental expense associated with renting our CEO’s family house in Tanzania;

26our travel and investor relations expenses were less than 200 during the three months ended August 31, 2016 and 2015 mainly due to our funding limitations.

c)	Reduce the Company’s license holding in the Handeni district significantly by the end of the calendar year 2016 to include only identified drill targets.
d)	Continue efforts to secure funding for drilling on drill targets.

Liquidity and Capital Resources

~~Illegal~~The ~~artisanal~~Company ~~activity~~has onbeen ~~the~~reviewing ~~Company’s~~its ~~license~~budgets ~~areas~~for isits current ~~increasing~~business needs and its further exploration. ~~The~~We ~~Company~~estimate ~~has~~that ~~been~~our ~~and~~total expenditures isfor ~~addressing~~our ~~this~~fiscal ~~issue~~year ~~with~~ending ~~responsible local~~May ~~and~~31, ~~central~~2017 ~~government~~will ~~authorities~~be asapproximately ~~well~~$1 million, as ~~related~~outlined ~~foreign~~above ~~embassies~~under the heading “Plan of Operations”. At August 31, ~~The~~2016, ~~Company~~we ~~will~~had ~~follow~~cash ~~all~~of ~~available~~$80,000, ~~legal~~a ~~structures~~working tocapital ~~protect~~deficit ~~its~~of $428,000. We believe ~~interests~~that we have insufficient capital to fund our plan of operations.

~~Other~~On ~~low~~January ~~cost~~16, ~~exploration~~2016, ~~activities~~the ~~being~~Company ~~conducted~~entered oninto a credit facility ~~continuous~~agreement ~~basis~~with ona private company controlled by our Chairman of the Board of Directors. The funding is in the form of an interest-free unsecured loan to the Company’s ~~Handeni~~of ~~licenses~~up ~~include:~~to $360,000 due December 31, 2018. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of the date of this report, we received a total of $200,000, with $160,000 available to be withdrawn pursuant to this facility agreement.

a)We ~~Identification~~have ofnot ~~potential~~generated ~~alluvial~~revenues ~~mining~~since ~~areas~~the ~~other~~date ~~than~~of ~~those~~inception ~~currently~~on January ~~known~~5, 2004, and ~~being~~our ~~evaluated~~cash byhas ~~utilizing~~been ~~remote~~generated ~~sensing~~primarily ~~activities.~~from b)the Asale ~~detailed interpretation~~ of ~~already~~our securities. ~~collected~~We ~~geophysical~~anticipate ~~data,~~that ~~specifically~~we ~~aimed~~will atnot ~~Target~~generate 8any ~~and~~revenue ~~the~~in ~~Mjembe~~near ~~target~~future. We c)anticipate Athat ~~petrological,~~additional ~~geochemical~~funding ~~and~~will ~~mineralogical~~be ~~investigation~~in of the ~~Kwandege~~form ~~drill~~of ~~core~~equity tofinancing from ~~understand~~ the ~~style~~sale of ~~gold~~our ~~mineralization~~common atstock, ~~this~~related ~~locality.~~parties d)debt ~~The~~financing, ~~planning~~joint ventures ~~and~~or ~~siting~~some combination of ~~drill~~these ~~holes~~or asother ameans. ~~follow~~We upbelieve ~~Reverse~~that ~~Circulation~~external debt ~~program~~financing towill ~~evaluate~~not ~~the~~be ~~near~~an –alternative ~~surface~~at ~~potential~~this stage for funding additional phases of ~~the~~our ~~Kwandege~~exploration ~~target~~as we do not have significant tangible assets to secure any debt financing.

~~The~~We ~~estimated~~cannot ~~budget~~provide ~~for~~investors with any assurance that we will be able to raise sufficient funding to continue our acquisition and exploration program going forward. If we are not able to obtain financing in the ~~completion~~amounts required or on terms that are acceptable to us, we may be forced to scale back, or abandon, our plan of ~~these~~operations. Even if we are successful in obtaining equity and/or debt financing to fund our acquisition and exploration program, ~~programs~~there is ~~provided~~no ~~below:~~assurance that we will obtain the funding necessary to pursue any advanced exploration of any mineral claims. If we do not continue to obtain additional funding, we will be forced to abandon our mineral claims and our plan of operations.

EXPLORATION WORK	BUDGET (US$)
Ground Geophysics	10,000
Mapping, trenching, sampling, etc.	20,000
Drilling	350,000
Geologists, field personnel and general exploration	150,000
Sundry & contingencies	50,000
TOTAL	$580,000

Net Cash Used in Operating Activities

~~Our~~Net ~~exploration efforts are severely restricted by a~~ cash~~-flow problem~~ asused ~~well~~in asoperating ~~by the activity of illegal artisanal mining~~ activities. ~~To this~~decreased ~~extent~~by ~~the company has only spent~~ $~~122~~ 6,000 ~~dollars on exploration of our~~to ~~planned~~$118,000 ~~2016~~during ~~operations. Solving~~ the ~~illegal~~three ~~artisanal~~months ~~mining~~ended ~~situation~~August on31, ~~the Mjembe~~2016, ~~target~~as ~~will~~compared ~~enable the company~~ to ~~focus our efforts on this target which~~$124,000 isduring ~~well defined and~~ the ~~target~~same ~~that~~period ~~will~~in ~~most likely yield further positive results with a relatively low input of cash~~2015.

~~For~~Net ~~the~~Cash ~~nine~~Used ~~months ended February 29, 2016, the Company used $335,000 cash~~ in ~~operating~~Investing ~~activities.~~Activities At February 29, 2016, we had cash of $77,000 and a working capital deficit of $388,000. In addition, we have a total of $330,000 funds available to be withdrawn pursuant to a facility agreement with a related party. As such, we estimated that we will still need a minimum of $1 million additional funds in order to cover our planned operations over the fiscal year ending May 31, 2016. Our actual expenditures may exceed our estimations.

WeNet ~~anticipate~~cash ~~that~~provided wein ~~will~~investing ~~not~~activities ~~generate~~was ~~any~~$35,000 ~~revenues for so~~during ~~long~~the asthree wemonths ~~are~~ended anAugust ~~exploration~~31, ~~stage~~2016 ~~company.~~(August ~~Accordingly~~31, we2015: ~~will~~10,000) bedue ~~required~~ to proceeds ~~obtain~~from ~~additional~~disposal ~~financing in order to pursue our plan~~ of ~~operations~~automobile vehicles.

WeNet ~~believe~~Cash that external debt financing will not be an alternative for funding our next fiscal year exploration, as we do not have significant tangible assets to secure any debt financing. Therefore, we anticipate that additional funding will be in the form of further related parties debt financing and/or equity financing from ~~the~~Financing ~~sale~~Activities of our common stock. We cannot provide investors with any assurance that we will be able to obtain sufficient financing to fund our acquisition and exploration program going forward. In the absence of sufficient funding, we will not be able to continue acquisition and exploration of mineral claims and we will be forced to abandon our mineral claims and our plan of operations. Even if we are successful in obtaining financing to fund our acquisition and exploration program, there is no assurance that we will obtain the funding necessary to pursue any advanced exploration of any mineral claims.

~~Results~~During the three months ended August 31, 2016, we received $110,000 (August 31, 2015: $135,000) in loans pursuant to facility agreements with related parties. We have funded our business to date primarily from sales of ~~Operations~~our common stock and loans from related parties.

WeThere ~~have~~are ~~had~~ no ~~operating~~assurances ~~revenues~~that ~~and~~we ~~accumulated~~will ~~net~~be ~~loss~~able ~~of $118~~to ~~million~~achieve ~~since~~further sales of our ~~inception~~common ~~(January~~stock 5,or ~~2004)~~any toother ~~February~~form ~~29,~~of ~~2016~~additional financing. ~~The~~If we are ~~following~~unable ~~table~~to ~~sets~~achieve ~~out~~the financing necessary to continue our ~~losses~~plan ~~from~~of operations, then ~~for~~we will not be able to continue our exploration of the ~~periods~~property ~~indicated:~~underlying our mineral claim interest and our venture will fail.

2728

		For the Three Months Ended,						For the Nine Months Ended,
		February 29, 2016			February 28, 2015			February 29, 2016			February 28, 2015
Revenue	$	-		$	-		$	-		$	-
Expenses
Consulting fees		1,350			3,610			4,050			14,530
Depreciation		107			14,557			1,009			52,719
Exploration expenses		17,625			35,925			122,197			174,245
General and administrative		41,568			110,450			133,979			340,655
Interest expense		40,403			28,638			114,182			82,795
Professional		19,661			57,198			31,057			107,013
Rent		440			332			38,434			58,875
Travel and investor relations		975			4,871			3,172			32,037
Total Expenses		122,129			255,581			448,080			862,869
Loss From Operations	$	(122,129	)	$	(255,581	)	$	(448,080	)	$	(862,869	)

Going Concern

~~Three~~We ~~Months~~have ~~Ended~~not ~~February~~attained ~~29,~~profitable ~~2016~~operations ~~Compared~~and are dependent upon obtaining financing to ~~Three~~pursue any extensive exploration activities. The ~~Months~~Company ~~Ended~~has ~~February~~not 28generated any revenues and has accumulated losses of $118 million since inception to August 31, ~~2015~~2016. In addition, we had working capital deficit of $428,000 as of August 31, 2016.

~~Our~~Future net loss for the three months ended February 29, 2016 was $121,000, compared to $329,000 for the same period ended February 28, 2015, the difference is mainly due to $74,000 permanent impairment of and loss on marketable securities recorded during the three months ended February 28, 2015 and our operating expenses for the three months ended February 29, 2016 decreased by $134,000 to $122,000 from $256,000 for the same period ended February 29, 2015. The main operating expenses changes are as follows: Financings

•We ~~our~~anticipate consulting, general and administrative fees decreased by $71,000 to $43,000 during the period ended February 29, 2016 (three months ended February 28, 2015 - $114,000), primarily due to fund limitation and continuing cost management; effective June 1, 2015, the Company has stopped incurring directors’ fees and the CEO service fees; At February 29, 2016, $451,000 (May 31, 2015 - $455,000) of general and administrative fees remained as payables due to ~~related~~rely ~~parties;~~on •equity ~~our~~sales exploration expenses decreased by $18,000 to $18,000 during the three months ended February 29, 2016 (three months ended February 28, 2015 - $36,000) mainly due to our further reduced exploration activities caused by our funding limitations; • depreciation fees decreased by $14,400 to $100 during the three months ended February 29, 2016 (three months ended February 28, 2015 - $14,500) mainly because the majority of our ~~equipment was fully depreciated; • interest expenses increased by $12~~common shares,~~000~~ todebt ~~$40,000~~financing ~~during the three months ended February 29, 2016 (three months ended February 28, 2015 - $28,000), which represented deemed interest on increased interest free unsecured loans~~ from ~~related parties. Such deemed interest was recorded as donated capital; •~~ our ~~professional~~related ~~fees decreased by $38~~parties,~~000~~ toand/or ~~$19,000~~other ~~during~~financing ~~the~~in ~~three months ended February 29, 2016 (three months ended February 28, 2015 - $57,000) primarily due~~ order to ~~decreased~~continue ~~legal fees; • our rent expenses were less than $500 during the three months ended February 29, 2016 and February 28, 2015 mainly due~~ to ~~our~~ fund ~~limitation caused~~ our ~~Tanzania~~business ~~and~~operations ~~Canadian~~through ~~office space limitation; •~~ our ~~travel~~next ~~and~~fiscal ~~investor~~year ~~relations~~ending May ~~expenses decreased by $4~~31,~~000~~ to2017. ~~$1,000~~Issuances ~~during~~of ~~the~~additional ~~three~~shares ~~months~~will ~~ended~~result ~~February~~in ~~29,~~dilution ~~2016~~to ~~(three~~our existing ~~months ended February 28, 2015 - $5,000)~~shareholders. There ~~were~~is ~~almost~~no ~~none~~assurance ofthat ~~investor~~we ~~relations~~will ~~expenses~~achieve ~~during~~any ~~the~~additional sales ~~three~~of ~~months~~our ~~ended~~equity ~~February~~securities ~~29,~~or ~~2016~~arrange ~~and~~for ~~February~~debt ~~28,~~or ~~2015~~other ~~mainly~~financing ~~due~~ to fund our ~~funding~~planned ~~limitations~~exploration activities.

~~Nine~~Off-Balance ~~Months~~Sheet ~~Ended~~Arrangements ~~February 29, 2016 Compared to Nine Months Ended February 28, 2015~~

~~Our~~We ~~net~~have ~~loss~~no ~~for~~significant ~~the~~off-balance ~~nine~~sheet ~~months~~arrangements ~~ended~~that ~~February~~have or ~~29,~~are ~~2016~~reasonably ~~was $437,000,~~likely ~~compared~~ to ~~$1,003,000~~have ~~for~~a ~~the~~current ~~same~~or ~~period~~future ~~ended~~effect ~~February~~on ~~28,~~our ~~2015,~~financial ~~the difference is mainly due to $160~~condition,~~000~~ ~~permanent~~changes ~~impairment~~in offinancial ~~and loss on marketable securities recorded during the nine months ended February 28~~condition, ~~2015 and~~revenues ~~our~~or ~~operating~~ expenses ~~for the nine months ended February 29~~, ~~2016~~results ~~decreased~~of ~~by $415~~operations,~~000~~ ~~to $448~~liquidity,~~000~~ ~~from~~capital ~~$863,000~~expenditures ~~for~~or ~~the~~capital ~~same~~resources ~~period~~that ~~ended~~is material ~~February~~to ~~28, 2015~~stockholders. ~~The main changes in operating expenses are as follows:~~

•Related ~~our~~Party ~~consulting,~~Transactions general and administrative fees decreased by $217,000 to $138,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $355,000), primarily due to fund limitation and continuing cost management; effective June 1, 2015, the Company has stopped incurring directors’ fees and the CEO service fees; At February 29, 2016, $451,000 (May 31, 2015 - $455,000) of general and administrative fees remained as payables due to related parties; • our exploration expenses decreased by $52,000 to $122,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $174,000) mainly due to our further reduced exploration activities caused by our funding limitations; • depreciation fees decreased by $52,000 to $1,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $53,000) mainly because the majority of our equipment was fully depreciated;

28The details of related party transactions are disclosed in footnote 8 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended August 31, 2016 (Item 1, above).

•Segment ~~interest~~Disclosures expenses increased by $31,000 to $114,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $83,000), which represented deemed interest on increased interest free unsecured loans from related parties. Such deemed interest was recorded as donated capital; • our professional fees decreased by $76,000 to $31,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $107,000) primarily due to decreased legal fees; • our office rent expenses decreased by $21,000 to $38,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $59,000) mainly because our Tanzania and Canadian offices have been moved to small office spaces; Included in the rent, there was $36,000 representing 60% of the rental expense associated with renting our CEO’s family house in Tanzania; • our travel and investor relations expenses decreased by $29,000 to $3,000 during the nine months ended February 29, 2016 (nine months ended February 28, 2015 - $32,000) primarily due to travel expenses incurred for an in-person Board of Directors meeting held in Dar er Salaam, Tanzania in the period ended February 28, 2015. There were almost none of investor relations expenses during the period ended 2016 and 2015 mainly due to our funding limitations.

~~Liquidity~~The Company operates in one reportable segment, located in Tanzania Africa, being the acquisition and ~~Capital~~exploration ~~Resources~~of mineral properties. The details of segment disclosures are disclosed in footnote 12 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended August 31, 2016 (Item 1, above).

The Company has been reviewing its budgets for its current business needs and its further exploration. We estimate that our total expenditures for our fiscal year ending May 31, 2016 will be approximately $1.3 million, as outlined above under the heading “Plan of Operations”. At February 29, 2016, we had cash of $77,000, a working capital deficit of $388,000. We believe that we have insufficient capital to fund our plan of operations.Inflation

OnWe ~~January~~do ~~16,~~not ~~2016,~~believe ~~the~~that ~~Company~~inflation ~~entered~~has ~~into~~had a ~~credit~~significant ~~facility~~impact ~~agreement~~on ~~with a private company controlled by~~ our ~~Chairman~~consolidated ofresults ~~the Board~~ of ~~Directors.~~ ~~The~~operations ~~funding~~or isfinancial ~~in the form of an interest-free unsecured loan to the Company of up to $360,000 due December 31, 2018~~condition. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of the date of this report, we received a total of $30,000, with $330,000 available to be withdrawn pursuant to this facility agreement.

WeContractual ~~received~~Obligations approximately $10,000 of recoverable goods and services tax/harmonized sales tax from Canada Revenue Agency during the nine months ended February 29, 2016. Based on requirements of the Tanzania Revenue Authority (“TRA”), we had submitted recoverable value added tax (“VAT”) refund certificates in January 2015 with TRA to request a VAT refund of $23,000 (TZS 49,061,634). However, as of the date of this report, we have not received the claimed refund yet.

Asa) atOn ~~February~~December 297, 2012, and as amended on September 4, 2013, June 18, 2014, March 20, 2015 and August 30, 2016, ~~there~~the ~~was~~Company ~~$28~~entered into a facility agreement with IPP Ltd.,~~000~~ a private company controlled by the Chairman of ~~recoverable~~the ~~VAT paid~~Company. The funding is in ~~Tanzania~~the ~~and~~form of an interest free unsecured loan to the Company of up to $10720,000. During the current period the due date has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. As of ~~recoverable~~the ~~harmonized~~date ~~sales~~of ~~tax~~this ~~(“HST”~~report, IPP Ltd. has fully advanced $720,000 to the Company pursuant to this facility agreement. b) /On ~~goods~~ October 9, 2013, and ~~services~~as ~~tax~~amended on June 18, 2014, March 20, 2015 and August 30, 2016, the Company entered into a facility agreement with Consultancy & Finance Company Associates Ltd. (“~~GST~~C&F”), ~~paid~~a private company controlled by the Chairman of the Company. The funding is in ~~Canada~~the form of an interest free unsecured loan to the Company of up to $405,000. ~~Such~~During ~~recoverable~~the ~~amounts~~current ~~were~~period ~~included in~~the ~~our~~due ~~working~~date ~~capital~~has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. As of the date of this report, C&F has fully advanced $405,000 to the Company pursuant to this facility agreement. c) On November 20, 2014, and ~~expected~~as amended on August 30, 2016, the Company entered into a facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to bethe ~~refunded~~Company ~~during~~of up to $500,000. During the ~~fiscal~~current ~~year~~ period the due date has been extended from May 31, 2017 to December 31, 2018 without any interest or penalties. As of the date of this report, C&F has fully advanced $500,000 to the Company pursuant to this facility agreement. d) On January 16, 2016, the Company entered into an additional facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $360,000 due December 31, 2018. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of the date of this report, C&F has advanced $200,000 to the Company pursuant to this facility agreement.

WeCritical ~~have~~Accounting not generated revenues since the date of inception on January 5, 2004, and our cash has been generated primarily from the sale of our securities. We anticipate that we will not generate any revenue in near future. We anticipate that additional funding will be in the form of equity financing from the sale of our common stock, related parties debt financing, joint ventures or some combination of these or other means. We believe that external debt financing will not be an alternative at this stage for funding additional phases of our exploration as we do not have significant tangible assets to secure any debt financing.Policies

WeOur ~~cannot~~consolidated ~~provide~~financial ~~investors~~statements ~~with~~and ~~any~~accompanying ~~assurance that we will be~~notes ~~able~~have tobeen ~~raise~~prepared ~~sufficient~~in ~~funding~~accordance towith ~~continue~~United ~~our~~States ~~acquisition~~generally ~~and exploration~~accepted ~~program~~accounting ~~going~~principles ~~forward.~~applied ~~If we are not able to obtain financing in the amounts required or~~ on ~~terms~~a ~~that~~consistent ~~are~~basis. ~~acceptable~~The topreparation ~~us, we may be forced to scale back,~~of orconsolidated ~~abandon,~~financial ~~our~~statements ~~plan~~in ofconformity ~~operations~~with U.S. ~~Even~~generally ~~if we are successful in obtaining~~accepted ~~equity~~accounting ~~and/or~~principles ~~debt~~requires ~~financing~~management to ~~fund~~make ~~our~~estimates ~~acquisition~~ and ~~exploration~~assumptions ~~program,~~that ~~there~~affect isthe noreported ~~assurance~~amounts ~~that~~of weassets ~~will~~and ~~obtain~~liabilities, the ~~funding~~disclosure ~~necessary to pursue any~~of ~~advanced~~contingent ~~exploration~~assets ofand ~~any~~liabilities ~~mineral~~at ~~claims.~~the Ifdate weof dothe ~~not~~consolidated ~~continue to obtain~~financial ~~additional~~statements ~~funding,~~and wethe ~~will~~reported beamounts ~~forced~~of torevenues ~~abandon our mineral claims~~ and ~~our~~expenses ~~plan~~during the ofreporting ~~operations~~periods.

~~Net~~We ~~Cash~~regularly ~~Used~~evaluate inthe ~~Operating~~accounting ~~Activities~~policies and estimates that we use to prepare our consolidated financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

~~Net cash used in operating activities decreased by $280,000 to $335,000 during the nine months ended February~~ 29, ~~2016, as compared to $615,000 during the same period in 2015.~~

~~Net~~The ~~Cash~~critical ~~Used~~accounting policies are disclosed in ~~Investing~~footnote ~~Activities~~2 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended August 31, 2016 (Item 1, above).

~~Net~~We ~~cash~~believe ~~provided in investing activities was $11,000 during~~ the ~~nine~~critical ~~months~~accounting ~~ended~~policies ~~February~~require ~~29,~~us ~~2016 (February 28, 2015: 20,000) due~~ to ~~proceeds~~ ~~from disposal of automobile vehicles. In addition, during the nine~~make ~~months~~significant ~~ended~~judgments ~~February~~and ~~28,~~estimates ~~2015,~~in the ~~Company~~preparation ~~received~~of ~~$10,000~~our ~~from redemption of~~consolidated ~~restricted~~financial ~~cash equivalent~~statements.

~~Net~~Item ~~Cash~~3. ~~from~~Quantitative ~~Financing~~and ~~Activities~~Qualitative Disclosures About Market Risk

~~During~~Not ~~the~~required ~~nine~~because ~~months ended February 29, 2016,~~ we ~~received $315,000~~are ~~(February~~a ~~28,~~smaller ~~2015:~~reporting ~~$134,000) in loans pursuant to facility agreements with related parties~~company. ~~We have funded our business to date primarily from sales of our common stock and loans from related parties.~~

29Item 4. Controls and Procedures

~~There~~Disclosure ~~are~~Controls no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our exploration of the property underlying our mineral claim interest and ~~our~~Procedures ~~venture will fail.~~

~~Going~~An ~~Concern~~evaluation was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”), Reyno Scheepers, and the Company’s Chief Financial Officer (“CFO”), Melinda Hsu, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act as of the end of the period covered by this report. Based upon the evaluation, the Company’s CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report (that is, as of February 28, 2015), due to the material weaknesses in our internal control over financial reporting as disclosed in the Company’s annual report for our fiscal year ended May 31, 2016, which have not been completely resolved as of August 31, 2016.

WeManagement ~~have~~believes ~~not~~that ~~attained~~the ~~profitable~~material ~~operations~~weaknesses ~~and~~did ~~are~~not ~~dependent~~have a ~~upon~~material ~~obtaining~~impact ~~financing~~on tothe ~~pursue~~Company’s ~~any~~financial ~~extensive~~results ~~exploration~~and ~~activities.~~information ~~The~~required to ~~Company~~be ~~has~~disclosed ~~not~~by ~~generated~~the ~~any~~Company ~~revenues~~in ~~and~~its ~~has~~reports. ~~accumulated~~However, ~~losses~~management ofbelieves ~~$118~~that ~~million~~these ~~since~~material ~~inception~~weaknesses toresulting ~~February~~in ~~29,~~ineffective ~~2016.~~oversight ~~For~~in ~~these reasons our auditors~~the ~~stated~~establishment inand ~~their~~monitoring ~~report~~of onrequired ~~our~~internal ~~audited~~control ~~consolidated~~over financial reporting ~~statements~~can ~~for~~impact the ~~year~~ ~~ended~~Company’s ~~May~~consolidated ~~31,~~financial ~~2015~~statements ~~that~~for ~~they~~future years. ~~have~~As ~~substantial~~a ~~doubt~~result wematerial ~~will~~errors becould ~~able to continue as a going concern~~occur.

~~Future~~Changes ~~Financings~~in Internal Control Over Financial Reporting

WeThere ~~anticipate~~were ~~continuing~~no changes to ~~rely on equity sales of~~ our ~~common shares,~~internal ~~debt~~control ~~financing~~over ~~from our related parties, and/or other financing in order~~financial toreporting ~~continue~~that tooccurred ~~fund~~during our ~~business operations through our next~~ fiscal ~~year~~quarter ~~ending May~~ended August 31, ~~2017.~~2016 ~~Issuances of additional shares will result in dilution to our existing shareholders. There is no assurance~~ that ~~we will achieve any additional~~ ~~sales~~have ofmaterially ~~our~~affected, ~~equity securities~~ or ~~arrange~~are ~~for~~reasonably ~~debt~~likely orto ~~other~~materially ~~financing~~affect, ~~to fund~~ our internal ~~planned~~control ~~exploration~~over ~~activities~~financial reporting.

~~Off-Balance~~PART ~~Sheet~~II ~~Arrangements~~– OTHER INFORMATION

WeItem have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders1. Legal Proceedings

~~Related~~Except ~~Party~~as ~~Transactions~~disclosed below, management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this quarterly report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

The details of related party transactions are disclosed in footnote 8 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended February 29, 2016 (Item 1, above).

a)	On February 8, 2012, Ruby Creek Resources Inc. (“RCR”) filed a lawsuit against the Company in the Supreme Court, State of New York, in which RCR alleges that the Company participated in a fraudulent transfer of certain mineral property interests in Tanzania that RCR had the right to purchase pursuant to a series of agreements with the Company. The Company is of the view that such allegations were without merit and vigorously contested the action.

	On February 23, 2012, the Company filed a lawsuit against RCR in the Supreme Court of British Columbia (the “British Columbia Action”), seeking relief for RCR’s breach of its payment obligations under the above-referenced agreements and seeking an order that RCR remove the U.S. restrictive legend from 4,000,000 RCR shares issued to the Company under the agreements.

	In addition to the British Columbia Action, on May 21, 2012 in answering RCR’s claim in New York, the Company counterclaimed against RCR on the basis of the alleged breaches set out in the British Columbia Action (the “New York Counter Claim”). On November 19, 2012, the British Columbia Action was dismissed on the grounds that the Court in British Columbia did not have jurisdiction and further that the dismissal was without prejudice to either of the Company’s and RCR’s respective actions in New York against one another. This Order was granted by consent of both the Company and RCR.

	On January 13, 2015, the Company and RCR reached a binding settlement regarding the above-referenced litigation. The settlement does not require any monetary payment by the Company to RCR. Under the terms of the settlement, the Company will turn over its interest in Ruby Creek Resources (Tanzania) Limited and has agreed to return to RCR the 4,000,000 shares of restricted RCR common stock previously issued to the Company. Both parties have agreed to dismiss their respective claims, with prejudice, and the litigation is now concluded. Although the Company has not yet received formal settlement documents from RCR as agreed, the settlement is binding and the litigation is concluded.

b)	On October 25, 2012, Craig Alford filed a lawsuit against the Company in the Supreme Court of British Columbia for breach of an alleged employment agreement. Mr. Alford claims the agreement was for a term of three years, commencing on March 1, 2011, with a monthly salary of $12,500. Mr. Alford claims that the Company wrongfully terminated the agreement in October 2011 and is seeking judgment in the amount of $362,500. The Company is of the view that the allegation is without merit and intends to vigorously contest the action. On February 4, 2013 the Company filed its response to Mr. Alford’s claim with the Supreme Court of British Columbia.

~~Segment~~30 ~~Disclosures~~

The Company operates in one reportable segment, located in Tanzania Africa, being the acquisition and exploration of mineral properties. The details of segment disclosures are disclosed in footnote 13 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended February 29, 2016 (Item ~~1, above)~~1A. Risk Factors

~~Inflation~~Not required because we are a smaller reporting company.

WeItem do2. ~~not~~Unregistered ~~believe~~Sales ~~that~~of ~~inflation~~Equity ~~has~~Securities ~~had~~and aUse ~~significant impact on our consolidated results~~ of ~~operations or financial condition.~~Proceeds

~~Contractual~~None. ~~Obligations~~

a)Item ~~On December 7, 2012, and as amended on September 4, 2013, June 18, 2014 and March 20, 2015, the Company entered into a facility agreement with IPP Ltd~~3., aDefaults ~~private~~Upon ~~company~~Senior controlled by the Chairman of the Company. The funding is in the form of an interest free unsecured loan to the Company of up to $720,000 due May 31, 2017. As of the date of this report, IPP Ltd. has fully advanced $720,000 to the Company pursuant to this facility agreement. b) On October 9, 2013, and as amended on June 18, 2014 and March 20, 2015, the Company entered into a facility agreement with Consultancy & Finance Company Associates Ltd. (“C&F”), a private company controlled by the Chairman of the Company. The funding is in the form of an interest free unsecured loan to the Company of up to $405,000 due May 31, 2017. As of the date of this report, C&F has fully advanced $405,000 to the Company pursuant to this facility agreement. c) On November 20, 2014, the Company entered into a facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $500,000 due May 31, 2017. As of the date of this report, C&F has fully advanced $500,000 to the Company pursuant to this facility agreement. d) On January 16, 2016, the Company entered into an additional facility agreement with C&F. The funding is in the form of an interest-free unsecured loan to the Company of up to $360,000 due December 31, 2018. A maximum amount of $30,000 may be drawn by the Company per calendar month. As of the date of this report, C&F has advanced $30,000 to the Company pursuant to this facility agreement. e) On June 23, 2014, the Company’s Tanzania subsidiary, HG Limited, entered into a lease agreement associated with renting our Chief Executive Officer’s (the “CEO”) family house in Tanzania. The lease is for a period of 24 months commencing on August 1, 2014 and expiring July 31, 2016 extendable for one year till July 31, 2017 by mutual agreement. The annual rent is $60,000, of which 40% ($24,000) should be reimbursed by another Company which is related to the Chairman of the Company and the CEO has been also working for. As of the nine months ended February 29, 2016, the Company paid $60,000 rent and received $24,000 reimbursement for the second year of lease period, pursuant to this lease agreement. The lease agreement may be terminated by first giving notice not less than three months.Securities

30None.

~~Critical~~Item ~~Accounting~~4. ~~Policies~~Mine Safety Disclosures

~~Our~~Not ~~consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis~~applicable. The preparation of consolidated financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods.

WeItem ~~regularly evaluate the accounting policies and estimates that we use to prepare our consolidated financial statements~~5. InOther general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management. Information

~~The critical accounting policies are disclosed in footnote 2 of our Company’s interim unaudited consolidated financial statements for the fiscal quarter ended February 29, 2016 (Item 1, above)~~None.

WeItem ~~believe the critical accounting policies require us to make significant judgments and estimates in the preparation of our consolidated financial statements~~6. Exhibits

~~Item~~The 3.following ~~Quantitative~~exhibits ~~and~~are ~~Qualitative~~filed ~~Disclosures~~with ~~About~~this ~~Market~~Quarterly ~~Risk~~Report on Form 10-Q:

Not required because we are a smaller reporting company.

Exhibit	Description of Exhibit
Number

3.1⁽¹⁾	Articles of Incorporation.
3.2⁽¹²⁾	Certificate of Amendment to Articles of Incorporation.
3.3⁽²¹⁾	Articles of Merger as filed with the Nevada Secretary of State.
3.3⁽³⁾	Amended Bylaws, as amended on September 5, 2006.
10.1⁽⁴⁾	Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.2⁽⁴⁾	Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.3⁽⁴⁾	Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.4⁽⁵⁾	Amendment No. 1 to Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.5⁽⁵⁾	Amendment No. 1 to Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.6⁽⁵⁾	Amendment No. 1 to Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.7⁽⁶⁾	Amendment No. 2 to Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.8⁽⁶⁾	Amendment No. 2 to Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.9⁽⁶⁾	Amendment No. 2 to Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.10⁽⁷⁾	Strategic Alliance Agreement between the Company and Canaco Resources Inc.
10.11⁽⁸⁾	Option Agreement between the Company and Canaco Resources Inc.
10.12⁽⁹⁾	Amendment No. 1 to Strategic Alliance Agreement between the Company and Canaco Resources Inc.
10.13⁽⁹⁾	Kwadijava Option Agreement.
10.14⁽⁹⁾	Negero Option Agreement.
10.15⁽¹⁰⁾	Joint Venture Agreement with Mkuvia Maita.
10.16⁽¹¹⁾	2007 Stock Incentive Plan.
10.17⁽¹⁴⁾	2008 Stock Incentive Plan.
10.18⁽¹¹⁾	Consulting Agreement with Harpreet Sangha.
10.19⁽¹¹⁾	Consulting Agreement with Rovingi.
10.20⁽¹³⁾	Joint Venture Agreement with Mkuvia Maita dated June 5, 2009.
10.21⁽¹⁵⁾	Agreement with Ruby Creek Resources, Inc. dated November 7, 2009.
10.22⁽¹⁶⁾	Purchase Agreement with Ruby Creek Resources, Inc., dated for reference May 19, 2010.
10.23⁽¹⁷⁾	August 2010 Stock Incentive Plan.
10.24⁽¹⁸⁾	Mineral Property Acquisition Agreement between the Company and IPP Gold Limited, dated September 15, 2010, ratified by the Company’s Board of Directors on September 21, 2010.
10.26⁽¹⁹⁾	November 2010 Stock Incentive Plan.
10.27⁽²⁰⁾	Mineral Property Acquisition Agreement between the Company and Handeni Resources Limited, dated August 5, 2011.
10.28⁽²²⁾	Executive Consulting Services Agreement between the Company and Amica Resource Inc., dated February 28, 2012.

~~Item~~31 ~~4. Controls and Procedures~~

Disclosure Controls and Procedures

10.29⁽²³⁾	Unsecured Term Loan Facility Agreement between the Company and IPP Ltd. dated December 7, 2012
10.30⁽²⁴⁾	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated October 9, 2013
10.31⁽²⁵⁾	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated November 20, 2014
10.32⁽²⁶⁾	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated January 16, 2016
14.1⁽²⁾	Code of Ethics.

21.1	Subsidiaries of the Registrant: a. Douglas Lake Tanzania Limited (Tanzania); and b. HG Limited (Tanzania) (formerly: DLM Tanzania Limited (Tanzania)).

31.1*	Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

An* ~~evaluation~~Filed was performed under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (“CEO”), Reyno Scheepers, and the Company’s Chief Financial Officer (“CFO”), Melinda Hsu, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Rules 13a-15(b) and 15d-15(b) under the Exchange Act as of the end of the period covered by this reportherewith. Based upon the evaluation, the Company’s CEO and CFO have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective as of the end of the period covered by this report (that is, as of February 28, 2015), due to the material weaknesses in our internal control over financial reporting as disclosed in the Company’s annual report for our fiscal year ended May 31, 2015, which have not been completely resolved as of February 29, 2016.

Management believes that the material weaknesses did not have a material impact on the Company’s financial results and information required to be disclosed by the Company in its reports. However, management believes that these material weaknesses resulting in ineffective oversight in the establishment and monitoring of required internal control over financial reporting can impact the Company’s consolidated financial statements for future years. As a result material errors could occur.

(1)	Incorporated by reference to Form SB-2 Registration Statement filed on July 22, 2004.
(2)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2005.
(3)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2006.
(4)	Incorporated by reference to Current Report on Form 8-K filed on August 4, 2005.
(5)	Incorporated by reference to Current Report on Form 8-K filed on November 21, 2005.
(6)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended November 30, 2005.
(7)	Incorporated by reference to Current Report on Form 8-K filed on May 4, 2006.
(8)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended August 31, 2006.
(9)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended August 31, 2007.
(10)	Incorporated by reference to Current Report on Form 8-K filed on August 6, 2008.
(11)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2007.
(12)	Incorporated by reference to Current Report on Form 8-K filed on January 27, 2009
(13)	Incorporated by reference to Current Report on Form 8-K filed on July 16, 2009
(14)	Incorporated by reference to Registration Statement Form S-8 filed on December 30, 2008.
(15)	Incorporated by reference to Current Report on Form 8-K filed on November 13, 2009.
(16)	Incorporated by reference to Current Report on Form 8-K filed on June 21, 2010.
(17)	Incorporated by reference to Annual Report on Form 10-K for the year ended May 31, 2010.
(18)	Incorporated by reference to Current Report on Form 8-K filed on September 27, 2010.
(19)	Incorporated by reference to Annual Report on Form 10-K for the year ended May 31, 2011.
(20)	Incorporated by reference to Current Report on Form 8-K filed on August 10, 2011.
(21)	Incorporated by reference to Current Report on Form 8-K filed on February 15, 2012.
(22)	Incorporated by reference to Current Report on Form 8-K filed on March 2, 2012.
(23)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2012.
(24)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2013.
(25)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2014.
(26)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended February 29, 2016.

~~Changes~~32 ~~in Internal Control Over Financial Reporting~~

~~There~~SIGNATURES were no changes to our internal control over financial reporting that occurred during our fiscal quarter ended February 29, 2016 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

~~Item~~HANDENI 1GOLD INC. ~~Legal Proceedings~~

Except as disclosed below, management is not aware of any legal proceedings contemplated by any governmental authority or any other party involving us or our properties. As of the date of this quarterly report, no director, officer or affiliate is (i) a party adverse to us in any legal proceeding, or (ii) has an adverse interest to us in any legal proceedings. Management is not aware of any other legal proceedings pending or that have been threatened against us or our properties.

	By:	“Reyno Scheepers”
		Reyno Scheepers
		President, Chief Executive Officer (Principal Executive Officer) and a director

	By:	“Melinda Hsu”
		Melinda Hsu
		Chief Financial Officer (Principal Financial Officer and Principal Accounting
		Officer), Secretary and Treasurer


		Date: October 10, 2016

a)	On February 8, 2012, Ruby Creek Resources Inc. (“RCR”) filed a lawsuit against the Company in the Supreme Court, State of New York, in which RCR alleges that the Company participated in a fraudulent transfer of certain mineral property interests in Tanzania that RCR had the right to purchase pursuant to a series of agreements with the Company. The Company is of the view that such allegations were without merit and vigorously contested the action.
	On February 23, 2012, the Company filed a lawsuit against RCR in the Supreme Court of British Columbia (the “British Columbia Action”), seeking relief for RCR’s breach of its payment obligations under the above-referenced agreements and seeking an order that RCR remove the U.S. restrictive legend from 4,000,000 RCR shares issued to the Company under the agreements.
	In addition to the British Columbia Action, on May 21, 2012 in answering RCR’s claim in New York, the Company counterclaimed against RCR on the basis of the alleged breaches set out in the British Columbia Action (the “New York Counter Claim”). On November 19, 2012, the British Columbia Action was dismissed on the grounds that the Court in British Columbia did not have jurisdiction and further that the dismissal was without prejudice to either of the Company’s and RCR’s respective actions in New York against one another. This Order was granted by consent of both the Company and RCR.

On January 13, 2015, the Company and RCR reached a binding settlement regarding the above-referenced litigation. The settlement does not require any monetary payment by the Company to RCR. Under the terms of the settlement, the Company will turn over its interest in Ruby Creek Resources (Tanzania) Limited and has agreed to return to RCR the 4,000,000 shares of restricted RCR common stock previously issued to the Company. Both parties have agreed to dismiss their respective claims, with prejudice, and the litigation is now concluded. Although the Company has not yet received formal settlement documents from RCR as agreed, the settlement is binding and the litigation is concluded. b) On October 25, 2012, Craig Alford filed a lawsuit against the Company in the Supreme Court of British Columbia for breach of an alleged employment agreement. Mr. Alford claims the agreement was for a term of three years, commencing on March 1, 2011, with a monthly salary of $12,500. Mr. Alford claims that the Company wrongfully terminated the agreement in October 2011 and is seeking judgment in the amount of $362,500. The Company is of the view that the allegation is without merit and intends to vigorously contest the action. On February 4, 2013 the Company filed its response to Mr. Alford’s claim with the Supreme Court of British Columbia.

Item 1A.	Risk Factors
Not required because we are a smaller reporting company.
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3.	Defaults Upon Senior Securities
None.
Item 4.	Mine Safety Disclosures
Not applicable.
Item 5.	Other Information
None.
Item 6.	Exhibits

The following exhibits are filed with this Quarterly Report on Form 10-Q:

Exhibit	Description of Exhibit
Number
3.1(1)	Articles of Incorporation.
3.2(12)	Certificate of Amendment to Articles of Incorporation.
3.3(21)	Articles of Merger as filed with the Nevada Secretary of State.
3.3(3)	Amended Bylaws, as amended on September 5, 2006.
10.1(4)	Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.2(4)	Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.3(4)	Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.4(5)	Amendment No. 1 to Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.5(5)	Amendment No. 1 to Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.6(5)	Amendment No. 1 to Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.7(6)	Amendment No. 2 to Asset Purchase Agreement with KBT Discovery Group Tanzania Ltd.
10.8(6)	Amendment No. 2 to Asset Purchase Agreement with Hydro-Geos Consulting Group Tanzania Ltd.
10.9(6)	Amendment No. 2 to Asset Purchase Agreement with Megadeposit Explorers Ltd.
10.10(7)	Strategic Alliance Agreement between the Company and Canaco Resources Inc.
10.11(8)	Option Agreement between the Company and Canaco Resources Inc.
10.12(9)	Amendment No. 1 to Strategic Alliance Agreement between the Company and Canaco Resources Inc.
10.13(9)	Kwadijava Option Agreement.
10.14(9)	Negero Option Agreement.
10.15(10)	Joint Venture Agreement with Mkuvia Maita.

10.16(11)	2007 Stock Incentive Plan.
10.17(14)	2008 Stock Incentive Plan.
10.18(11)	Consulting Agreement with Harpreet Sangha.
10.19(11)	Consulting Agreement with Rovingi.
10.20(13)	Joint Venture Agreement with Mkuvia Maita dated June 5, 2009.
10.21(15)	Agreement with Ruby Creek Resources, Inc. dated November 7, 2009.
10.22(16)	Purchase Agreement with Ruby Creek Resources, Inc., dated for reference May 19, 2010.
10.23(17)	August 2010 Stock Incentive Plan.
10.24(18)	Mineral Property Acquisition Agreement between the Company and IPP Gold Limited, dated September 15, 2010, ratified by the Company’s Board of Directors on September 21, 2010.
10.26(19)	November 2010 Stock Incentive Plan.
10.27(20)	Mineral Property Acquisition Agreement between the Company and Handeni Resources Limited, dated August 5, 2011.
10.28(22)	Executive Consulting Services Agreement between the Company and Amica Resource Inc., dated February 28, 2012.
10.29(23)	Unsecured Term Loan Facility Agreement between the Company and IPP Ltd. dated December 7, 2012
10.30(24)	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated October 9, 2013
10.31(25)	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated November 20, 2014
10.32*	Unsecured Term Loan Facility Agreement between the Company and Consultancy & Finance Company Associates Ltd. dated January 16, 2016
14.1(2)	Code of Ethics.
21.1	Subsidiaries of the Registrant:
	a. Douglas Lake Tanzania Limited (Tanzania); and
	b. HG Limited (Tanzania) (formerly: DLM Tanzania Limited (Tanzania)).
31.1*	Certifications of Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certifications of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certifications of Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*	Certifications of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed herewith.
(1)	Incorporated by reference to Form SB-2 Registration Statement filed on July 22, 2004.
(2)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2005.
(3)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2006.
(4)	Incorporated by reference to Current Report on Form 8-K filed on August 4, 2005.
(5)	Incorporated by reference to Current Report on Form 8-K filed on November 21, 2005.
(6)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended November 30, 2005.
(7)	Incorporated by reference to Current Report on Form 8-K filed on May 4, 2006.
(8)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended August 31, 2006.
(9)	Incorporated by reference to Quarterly Report on Form 10-SB for quarterly period ended August 31, 2007.
(10)	Incorporated by reference to Current Report on Form 8-K filed on August 6, 2008.
(11)	Incorporated by reference to Annual Report on Form 10-KSB for year ended May 31, 2007.
(12)	Incorporated by reference to Current Report on Form 8-K filed on January 27, 2009
(13)	Incorporated by reference to Current Report on Form 8-K filed on July 16, 2009
(14)	Incorporated by reference to Registration Statement Form S-8 filed on December 30, 2008.
(15)	Incorporated by reference to Current Report on Form 8-K filed on November 13, 2009.
(16)	Incorporated by reference to Current Report on Form 8-K filed on June 21, 2010.
(17)	Incorporated by reference to Annual Report on Form 10-K for the year ended May 31, 2010.
(18)	Incorporated by reference to Current Report on Form 8-K filed on September 27, 2010.
(19)	Incorporated by reference to Annual Report on Form 10-K for the year ended May 31, 2011.
(20)	Incorporated by reference to Current Report on Form 8-K filed on August 10, 2011.
(21)	Incorporated by reference to Current Report on Form 8-K filed on February 15, 2012.
(22)	Incorporated by reference to Current Report on Form 8-K filed on March 2, 2012.
(23)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2012.
(24)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended August 31, 2013.
(25)	Incorporated by reference to Quarterly Report on Form 10-Q for the quarterly period ended November 30, 2014.

SIGNATURES

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

HANDENI GOLD INC. By: “Reyno Scheepers” Reyno Scheepers President, Chief Executive Officer (Principal Executive Officer) and a director By: “Melinda Hsu” Melinda Hsu Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer), Secretary and Treasurer

Date: April 8, 2016

Filing Compare · HANDENI GOLD INC.