UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended~~June 30, 2018~~March 31, 2019

¨ TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT

For the transition period from _________ to __________________

000-21777
(Commission File Number)

GOLDEN QUEEN MINING CO. LTD.

(Exact name of registrant as specified in its charter)

British Columbia, Canada	Not Applicable
(State or other jurisdiction of incorporation)	(IRS Employer Identification) No.)

2300 – 1066 West Hastings Street

Vancouver, British Columbia

V6E 3X2 Canada

(Address of principal executive offices)

Issuer’s telephone number, including area code:(778) 373-1557

Former name, former address and former fiscal year, if changed since last report:N/A

Check whether the registrant (1) filed all reports required to be filed by sections 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No¨

Check 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). Yesx No¨

Check whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. Large accelerated filer¨ Accelerated filer¨ Non-accelerated filer¨ Smaller reporting companyx Emerging growth company¨

Check whether the registrant is a shell company, as defined in Rule 12b-2 of the Exchange Act. Yes¨ Nox

State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date:As at ~~August 9, 2018,~~May 6, 2019, the registrant’s outstanding common stock consisted of 300,101,444 shares.

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:		Trading Symbol(s)		Name of each exchange on which registered:
NONE		OTCQX:GQMNF		NONE

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Golden Queen Mining Co. Ltd.

Condensed Consolidated Interim Financial Statements

~~June 30, 2018~~March 31, 2019

(US dollars – Unaudited)

GOLDEN QUEEN MINING CO. LTD.

Condensed Consolidated Interim Balance Sheets

(amounts expressed in thousands of US dollars - Unaudited)

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Assets
Current assets:
Cash	$	10,538		$	2,937		$	5,675		$	5,725
Inventories (Note 4)		17,108			9,028			32,984			25,031
Prepaid expenses and other current assets		792			699			531			467
Total current assets		28,438			12,664			39,190			31,223
Property, plant, equipment and mineral interests (Note 5)		141,407			141,848
Restricted cash (Note 5)								1,008			1,005
Deferred financing cost (Note 13(v))								2,659			3,314
Property, plant, equipment and mineral interests (Note 6)								134,769			135,818
Advance minimum royalties		304			304			497			497
Inventories (Note 4)								5,279			6,913
Total Assets	$	170,149		$	154,816		$	183,402		$	178,770
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	5,249		$	6,984		$	8,491		$	6,899
Credit facility (Note 12 (v))		-			3,000
Current portion of note payable (Note 12 (ii))		24,512			7,712
Current portion of loan payable (Note 6)		8,096			7,629
Derivative liability – Warrants (Note 7)		373			441
Interest payable								1,637			773
Credit facility (Note 13(v))								10,000			-
Current portion of note payable (Note 13(ii))								25,481			24,690
Current portion of loan payable (Note 7)								5,381			6,578
Derivative liabilities (Note 8)								3,540			3,390
Total current liabilities		38,230			25,766			54,530			42,330
Note payable (Note 12 (ii))		-			22,387
Loan payable (Note 6)		8,306			9,614
Asset retirement obligation (Note 8)		2,413			1,838
Credit facility (Note 13(v))								-			5,000
Loan payable (Note 7)								4,810			5,622
Asset retirement obligation (Note 9)								2,966			2,497
Deferred tax liability		8,197			8,197			8,588			8,588
Total liabilities		57,146			67,802			70,894			64,037
Temporary Equity
Redeemable portion of non-controlling interest (Note 12 (iv))		23,250			24,214
Redeemable portion of non-controlling interest (Note 13(iv))								24,305			24,286
Shareholders’ Equity
Common shares, no par value, unlimited shares authorized (2017 - unlimited); 300,101,444 (2017 – 111,048,683) shares issued and outstanding (Note 9)		95,494			71,126
Common shares, no par value, unlimited shares authorized (2018 - unlimited); 300,101,444 (2018 – 300,101,444) shares issued and outstanding (Note 10)								95,575			95,575
Additional paid-in capital		43,933			43,853			44,029			44,002
Deficit accumulated		(94,549	)		(88,500	)		(97,859	)		(95,559	)
Total shareholders’ equity attributable to GQM Ltd.		44,878			26,479			41,745			44,018
Non-controlling interest (Note 9 (iv))		44,875			36,321
Non-controlling interest (Note 13(iv))								46,458			46,429
Total Shareholders’ Equity		89,753			62,800			88,203			90,447
Total Liabilities, Temporary Equity and Shareholders’ Equity	$	170,149		$	154,816		$	183,402		$	178,770

Going Concern (Note 2)

Commitments and Contingencies (Notes 14 and 16)

Subsequent Events (Note ~~13)~~17)

Approved by the Directors:


“~~Thomas~~Paul M. ~~Clay”~~Blythe”		“Bryan A. Coates”
~~Thomas~~Paul M. ~~Clay,~~Blythe, Director		Bryan A. Coates, Director

See Accompanying Notes to the Condensed Consolidated Interim Financial Statements

GOLDEN QUEEN MINING CO. LTD.

Condensed Consolidated Interim Statements of ~~Income (Loss)~~Loss and Comprehensive ~~Income (Loss)~~Loss

(amounts expressed in thousands of US dollars, except shares amounts - Unaudited)

Three Months
Ended
June 30, Three Months
Ended
June 30, Six Months
Ended
June 30, Six Months
Ended
June 30,
2018 2017 2018 2017
Revenues
Sales $ 14,485 $ 16,882 $ 24,070 $ 31,686

Cost of Sales
Direct mining costs (8,130 ) (13,367 ) (21,146 ) (24,929 )
Depreciation and depletion (Note 5) (3,364 ) (2,742 ) (6,340 ) (5,498 )
Income (loss) from mine operations 2,991 773 (3,416 ) 1,259

General and administrative expenses (Note 10) (879 ) (712 ) (2,133 ) (2,128 )
Operating income (loss) 2,112 61 (5,549 ) (869 )

Other income (expenses)
Gain (loss) on derivative instruments (Note 7) (70 ) 2,375 68 1,894
Finance expense (Note 12 (iii) and 12 (v)) (1,441 ) (1,250 ) (2,974 ) (2,297 )
Interest income 37 37 72 63
Other expenses (34 ) (31 ) (76 ) (415 )
Total other income (expenses) (1,508 ) 1,131 (2,910 ) (755 )
Net and comprehensive income (loss) for the period $ 604 $ 1,192 $ (8,459 ) $ (1,624 )
Less: Net and comprehensive loss (income) attributable to the non-controlling interest for the period (Note 12 (iv)) (1,236 ) (230 ) 2,410 159
Net and comprehensive income (loss) attributable to Golden Queen Mining Co Ltd. for the period $ (632 ) $ 962 $ (6,049 ) $ (1,465 )
Income (loss) per share – basic (Note 11) $ (0.00 ) $ 0.01 $ (0.02 ) $ (0.01 )
Income (loss) per share – diluted (Note 11) $ (0.00 ) $ 0.01 $ (0.02 ) $ (0.01 )

Weighted average number of common shares outstanding - basic 300,101,444 111,148,683 244,772,735 112,360,179
Weighted average number of common shares outstanding - diluted 300,101,444 111,148,683 244,772,735 112,360,179

	Three Months Ended March 31,			Three Months Ended March 31,
	2019			2018
Revenues
Metal Sales	$	16,979		$	9,585

Cost of Sales
Direct mining costs		(12,284	)		(13,016	)
Depreciation and depletion (Note 6)		(2,566	)		(2,976	)
Accretion expense		(52	)		(42	)
Income (Loss) from mine operations		2,077			(6,449	)

General and administrative expenses (Note 11)		(1,832	)		(1,254	)
Operating income (loss)		245			(7,703	)

Other income (expenses)
(Loss) gain on derivative instruments (Note 8)		(150	)		138
Finance expense (Note 13(iii))		(2,420	)		(1,533	)
Interest income		73			35
Total other income (expenses)		(2,497	)		(1,360	)
Net and comprehensive loss for the period		(2,252	)		(9,063	)
Less: Net and comprehensive (income) loss attributable to the non-controlling interest for the period (Note 13(iv))		(48	)		3,646
Net and comprehensive loss attributable to Golden Queen Mining Co Ltd. for the period	$	(2,300	)	$	(5,417	)
Loss per share – basic (Note 12)	$	(0.01	)	$	(0.03	)
Loss per share – diluted (Note 12)	$	(0.01	)	$	(0.03	)

Weighted average number of common shares outstanding -basic		300,101,444			188,829,263
Weighted average number of common shares outstanding - diluted		300,101,444			188,829,263

See Accompanying Notes to the Condensed Consolidated Interim Financial Statements

GOLDEN QUEEN MINING CO. LTD.

Condensed Consolidated Interim Statements of Shareholders’ Equity,

Non-controlling Interest and Redeemable Portion of Non-controlling Interest

(amounts expressed in thousands of US dollars, except shares ~~amounts-~~amounts - Unaudited)

	Common shares		Amount		Additional Paid-in Capital		Deficit Accumulated			Total Shareholders’ Equity attributable to GQM Ltd			Non- controlling Interest			Total Shareholders’ Equity			Redeemable Portion of Non- controlling Interest
Balance, December 31, 2016		111,048,683	$	71,067	$	43,652	$	(87,335	)	$	27,384		$	39,327		$	66,711		$	26,220
Issuance of common shares (Note 9)		100,000		59		-		-			59			-			59			-
Stock-based compensation		-		-		85		-			85			-			85			-
Net loss for the period		-		-		-		(1,465	)		(1,465	)		(95	)		(1,560	)		(64	)
Balance, June 30, 2017		111,148,683	$	71,126	$	43,737	$	(88,800	)	$	26,063		$	39,232		$	65,295		$	26,156
																						Common shares		Amount			Additional Paid-in Capital		Deficit Accumulated			Total Shareholders’ Equity attributable to GQM Ltd			Non- controlling Interest			Total Shareholders’ Equity			Redeemable Portion of Non- controlling Interest
Balance, December 31, 2017		111,148,683	$	71,126	$	43,853	$	(88,500	)	$	26,479		$	36,321		$	62,800		$	24,214			111,148,683	$	71,126		$	43,853	$	(88,500	)	$	26,479		$	36,321		$	62,800		$	24,214
Issuance of common shares (Note 9)		188,952,761		24,368		-		-			24,368			-			24,368			-
Issuance of common shares (Note 10)																							188,952,761		24,368			-		-			24,368			-			24,368			-
Capital contribution from non-controlling interest		-		-		-		-			-			10,000			10,000			-			-		-			-		-			-			10,000			10,000			-
Stock-based compensation		-		-		80		-			80			-			80			-			-		-			45		-			45			-			45			-
Net loss for the period		-		-		-		(6,049	)		(6,049	)		(1,446	)		(7,495	)		(964	)		-		-			-		(5,417	)		(5,417	)		(2,188	)		(7,605	)		(1,458	)
Balance, June 30, 2018		300,101,444	$	95,494	$	43,933	$	(94,549	)	$	44,878		$	44,875		$	89,753		$	23,250
Balance, March 31, 2018																							300,101,444	$	95,494		$	43,898	$	(93,917	)	$	45,475		$	44,133		$	89,608		$	22,756

Balance, December 31, 2018																							300,101,444	$	95,575		$	44,002	$	(95,559	)	$	44,018		$	46,429		$	90,447		$	24,286
Stock-based compensation																							-		-			27		-			27			-			27			-
Net loss for the period																							-		-	��		-		(2,300	)		(2,300	)		29			(2,271	)		19
Balance, March 31, 2019																							300,101,444	$	95,575		$	44,029	$	(97,859	)	$	41,745		$	46,458		$	88,203		$	24,305

See Accompanying Notes to the Condensed Consolidated Interim Financial Statements

GOLDEN QUEEN MINING CO. LTD.

Condensed Consolidated Interim Statements of Cash Flows

(amounts expressed in thousands of US dollars - Unaudited)

	Six Months Ended June 30,			Six Months Ended June 30,			Three Months Ended March 31,			Three Months Ended March 31,
	2018			2017			2019			2018
Operating Activities
Net loss for the period	$	(8,459	)	$	(1,624	)	$	(2,252	)	$	(9,063	)
Adjustment to reconcile net loss to cash used in operating activities:
Depreciation and depletion		6,340			5,498			2,566			2,976
Amortization of debt discount and interest accrual		1,124			740			1,473			555
Accretion expense		83			62			52			42
Change in fair value of derivative liabilities (Note 7)		(68	)		(1,894	)
Change in fair value of derivative liabilities (Note 8)								150			(138	)
Stock based compensation		80			85			27			45
Unrealized foreign exchange		(37	)		(7	)
Non-cash finder fees		-			59
Unrealized foreign exchange gain								(3	)		(43	)
Changes in non-cash working capital items:
Receivables		-			12
Prepaid expenses & other current assets		(93	)		18			(64	)		14
Inventory		(8,080	)		(1,458	)		(5,388	)		(900	)
Accounts payable & accrued liabilities		(1,598	)		2,687			1,595			(1,595	)
Interest payable		-			1,272			837			713
Cash generated from (used in) operating activities		(10,708	)		5,450
Cash used in operating activities								(1,007	)		(7,394	)
Investment activities:
Additions to property, plant, equipment and mineral interests		(2,394	)		(9,479	)		(2,031	)		(2,071	)
Cash used in investing activities		(2,394	)		(9,479	)		(2,031	)		(2,071	)
Financing activity:
Issuance of common shares (Note 9)		24,368			-
Issuance of common shares (Note 10)								-			24,368
Proceeds from credit facility								5,000			-
Repayment of credit facility		(3,000	)		-			-			(3,000	)
Repayments of loan payable (Note 6)		(3,954	)		(2,988	)
Repayments of note payable and accrued interest (Note 12 (ii))		(6,711	)		-
Repayments of loan payable (Note 7)								(2,009	)		(1,898	)
Repayments of note payable and accrued interest (Note 13(ii))								-			(4,712	)
Capital contribution from non-controlling interest		10,000			-			-			10,000
Cash generated from (used in) financing activities		20,703			(2,988	)
Net change in cash and cash equivalents		7,601			(7,017	)
Cash and cash equivalents, beginning balance		2,937			13,301
Cash and cash equivalents, ending balance	$	10,538		$	6,284
Cash generated from financing activities								2,991			24,758
Net change in cash, cash equivalents and restricted cash								(47	)		15,293
Cash, cash equivalents and restricted cash, beginning balance								6,730			2,937
Cash, cash equivalents and restricted cash, ending balance							$	6,683		$	18,230

Supplementary Disclosure of Cash Flow Information

	Three Months Ended June 30,		Three Months Ended June 30,		Three Months Ended March 31,		Three Months Ended March 31,
	2018		2017		2019		2018
Cash paid during the period for:
Interest on loan payable	$	401	$	285
Interest on loan and note payable					$	109	$	235
Non-cash financing and investing activities:
Asset retirement costs charged to mineral property interests	$	575	$	173	$	417	$	349
Mining equipment acquired through issuance of debt	$	3,113	$	2,551	$	-	$	514
Mineral property expenditures included in accounts payable	$	100	$	1,081	$	-	$	165
Non-cash finders’ fee	$	-	$	59
Extension fee added to principal balance					$	75	$	-
Non-cash amortization of discount and interest expense	$	1,124	$	740	$	1,473	$	555
Interest payable converted to principal balance	$	-	$	922

See Accompanying Notes to the Condensed Consolidated Interim Financial Statements

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

Nature of Business

Golden Queen Mining Co. Ltd. (“Golden Queen”, “GQM Ltd.” or the “Company”) is engaged in the operation of the Soledad Mountain Mine (“the Mine”), located in the Mojave Mining District, Kern County, California. The Company owns 50% of Golden Queen Mining Company, LLC (“GQM LLC”), the operator of the Mine. The remaining 50% is owned by Gauss LLC (“Gauss”).

Basis of Presentation and Going Concern

These unaudited condensed consolidated interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). applicable to going concern. The accounting policies followed in preparing these condensed consolidated interim financial statements are those used by the Company as set out in the audited consolidated financial statements for the year ended December 31, ~~2017~~2018 other than noted below.

Certain information and note disclosures normally included for annual consolidated financial statements prepared in accordance with US GAAP have been omitted. These unaudited condensed consolidated interim financial statements should be read together with the audited consolidated financial statements of the Company for the year ended December 31, ~~2017.~~2018.

In the opinion of Management, all adjustments considered necessary (including reclassifications and normal recurring adjustments) to present fairly the financial position, results of operations and cash flows as at ~~June 30, 2018~~March 31, 2019 and for all periods presented, have been included in these unaudited condensed consolidated interim financial statements. The interim results are not necessarily indicative of results for the full year ending December 31, ~~2018,~~2019, or future operating periods.

The Company’s access to the net assets of GQM LLC is determined by the Board of Managers of GQM LLC. The Board of Managers is not controlled by the Company and therefore there is no guarantee that any access to the net assets of GQM LLC would be provided to the Company in order to continue as a going concern. The Board of Managers of GQM LLC determine when and if distributions from GQM LLC are made to the holders of its membership units at their sole discretion.

~~The~~

Under the terms of the Note Payable, the Company iswas originally required to pay the following amounts to the Clay Group on the following dates: ~~$1.7 million of interest and principal on July 1, 2018 (paid on June 29, 2018); $1.7 million of interest and principal on and October 1, 2018,~~ $1.7 million of interest and principal on January 1, 2019, $3.9 million of interest and principal on April 1, 2019 and $21.7 million of interest and principal on May 21, 2019. InOn December 27, 2018, the ~~six~~Company and the Clay Group agreed to postpone the January 1, 2019 payment of $1.7 million of interest and principal until February 1, 2019 for a restructuring fee of $125. On January 31, 2019, the Company and the Clay Group agreed to an additional extension to February 8, 2019 for a restructuring fee of $75. On February 9, 2019, the parties agreed to defer the payments of all principal and interest mentioned above until completion of a proposed transaction involving the sale of our 50% ownership in Soledad Mountain (see Note 16).

As at March 31, 2019, the Company had a working capital deficit of $15.3 million and during the three months ended ~~June 30, 2018,~~March 31, 2019, the cash used in operating activities was ~~$10.3 million, however, management believes the~~$1.0 million. The Company ~~will be able to meet its financial obligations for the 12 months period following the date of these financial statements except that it~~ is currently ~~unlikely~~unable to repay the ~~Company will be able to reimburse~~interest and principal payments due on the ~~final two payments of $3.9 million and $21.7 million on April 1, 2019 and May 21, 2019 respectively.~~November 2017 Loan. The Company ~~will need to receive~~relies on cash distributions from GQM LLC to service its debt and such distributions are contingent on GQM LLC’s ability to generate positive cash flows. The Company reviewed the ~~mine plan in light~~2019 budget and Life of Mine Plan and the results for the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and has determined it is unlikely it will receive sufficient distributions from GQM LLC ~~during this fiscal year~~ to service its debt in early 2019. This situation raises substantial doubt about the Company’s ability to continue as a going concern. Consequently, insince the third quarter of 2018, the Company had pursued discussions with the Clay Group to restructure the reimbursement of the ~~last~~ debt ~~payment will be initiated. While the Company has been successful in re-negotiating the debt repayment terms~~payments. The discussions terminated with the ~~Clay Group in the past, there can be no assurance that will be achieved going forward.~~February 9, 2019 proposed transaction (see Note 16).

The unaudited condensed consolidated interim financial statements do not reflect adjustments to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used, that would be necessary if the company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

Summary of Accounting Policies and Estimates and Judgements

The preparation of financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and judgements have been made by Management in several areas including the accounting for the joint venture transaction and determination of the temporary and permanent non-controlling interest, the recoverability of mineral properties interests, royalty obligations, inventory valuation, asset retirement obligations, and derivative liability – warrants. Actual results could differ from those estimates.

New Accounting Pronouncements

Adopted

(i)

In May 2014, the FASB issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606).” The amendments in ASU 2014-09 affect any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). This ASU superseded the revenue recognition requirements in Topic 605, Revenue Recognition, and most industry-specific guidance, and creates a Topic 606, Revenue from Contracts with Customers. The new standard provides a five-step approach to be applied to all contracts with customers and also requires expanded disclosures about revenue recognition.

The Company has completed its assessment of the impact of the new revenue standard on the Company's consolidated financial statements and disclosures. The Company has completed the review of all contracts and determined that the adoption of this guidance has no material impact on amounts and timing of revenue recognition. The Company's revenue arises from contracts with customers in which the delivery of doré is the single performance obligation under the customer contract. Product pricing is determined at the point when contract is created by reference to active and freely traded commodity markets, for example, the London Bullion Market for both gold and silver. The Company enters into the contracts with parties who have an ability and intention to meet its obligations with respect to consideration payment, thus ensuring the collectability of such consideration. These contracts are not modified and contain no variable consideration.

~~(ii)~~

In August 2016, ASC guidance was issued to amend the classification of certain cash receipts and cash payments in the statement of cash flows. The new guidance was effective for the Company’s fiscal year and interim periods beginning after December 15, 2017. The Company adopted the guidance effective January 1, 2018 and has retrospectively applied this guidance for all periods presented. There was no material impact from adoption of this guidance.

~~Not Yet Adopted~~

~~(iii)~~

February 2016, FASB issued ASC 842 that requires lessees to recognize lease assets and corresponding lease liabilities on the balance sheet for all leases with terms of more than 12 months. The update, which supersedes existing lease guidance, will continue to classify leases as either finance or operating, with the classification determining the pattern of expense recognition in the income statement.

The ASU ~~will be~~was effective for annual and interim periods beginning January 1, 2019 ~~with early adoption permitted,~~ and is applicable on a modified retrospective ~~basis with various optional practical expedients.~~basis. The Company ~~is currently assessing~~adopted the guidance effective January 1, 2019 and has applied the guidance on a modified retrospective basis. There was an immaterial impact on the financial statements from adoption of this ~~standard.~~guidance.

~~GOLDEN QUEEN MINING CO. LTD.~~Not Yet Adopted

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~None

Inventories

Inventories consist primarily of production from the Company’s operation, in varying stages of the production process and supplies and spare parts, all of which are presented at the lower of cost or net realizable value. Inventories of the Company are comprised of:

	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Stockpile inventory	$	2,431	$	201	$	10,353	$	6,913
In-process inventory		11,808		6,495		24,149		21,607
Dore inventory		647		320		892		761
Supplies and spare parts		2,222		2,012		2,869		2,663
	$	17,108	$	9,028	$	38,263	$	31,944

Current portion					$	32,984	$	25,031
Non-current portion					$	5,279	$	6,913

The rate of recovery of gold and silver from the leach pad is a significant area of estimation. Whilst inventory is shown as a current asset it is probable that some portion of the gold and silver on the leach pad will be recovered more than a year from the balance sheet date, depending on the length of the leaching cycle and on management's strategy for optimizing the recovery from the leach pad.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

Restricted Cash

The Company’s restricted cash consists of the following:

		March 31, 2019				December 31, 2018
Certificate of Deposit		$	1,008			$	1,005

The surety required a certificate of deposit to bond reclamation requirements of regulatory agencies. (see Note 9)

Property, Plant, Equipment and Mineral Interests

Property, plant and equipment and mineral interests, are depreciated and depleted using either the units-of-production or straight-line method over the shorter of the estimated useful life of the asset or the expected life of mine. Assets under construction in progress are recorded at cost and re-allocated to its corresponding category when they become available for use.

	Land			Mineral property interest and claims		Mine development			Machinery and equipment			Buildings and infrastructure			Construction in progress			Interest capitalized		Total			Land			Mineral property interest and claims		Mine development		Machinery and equipment			Buildings and infrastructure			Construction in progress			Interest capitalized		Total
Cost
At December 31, 2016	$	3,893		$	4,241	$	42,033		$	60,201		$	28,604		$	543		$	5,886	$	145,401
Additions		98			817		354			17			-			19,597			-		20,883
Transfers		-			222		8,625			11,239			-			(20,086	)		-		-
Disposals		(22	)		-		(239	)		(1,391	)		(207	)		-			-		(1,859	)
At December 31, 2017	$	3,969		$	5,280	$	50,773		$	70,066		$	28,397		$	54		$	5,886	$	164,425		$	3,969		$	5,280	$	50,773	$	70,066		$	28,397		$	54		$	5,886	$	164,425
Additions		39			5		492			-			-			5,346			-		5,882			173			5		492		-			-			6,902			-		7,572
Transfers		-			-		-			4,454			-			(4,454	)		-		-			(5	)		550		711		5,375			48			(6,679	)		-		-
Disposals		-			-		-			(6	)		-			-			-		(6	)		-			-		-		(213	)		-			-			-		(213	)
At June 30, 2018	$	4,008		$	5,285	$	51,265		$	74,514		$	28,397		$	946		$	5,886	$	170,301
At December 31, 2018																							$	4,137		$	5,835	$	51,976	$	75,228		$	28,445		$	277		$	5,886	$	171,784
Additions																								132			-		416		89			-			1,862			-		2,499
Disposals																								-			-		-		-			(50	)		-			-		(50	)
At March 31, 2019																							$	4,269		$	5,835	$	52,392	$	75,317		$	28,395		$	2,139		$	5,886	$	174,233

Accumulated depreciation and depletion
At December 31, 2016	$	-		$	67	$	971		$	7,129		$	2,679		$	-		$	5	$	10,851
Additions		-			261		2,444			6,489			2,358			-			466		12,018
Disposals		-			-		-			(265	)		(27	)		-			-		(292	)
At December 31, 2017	$	-		$	328	$	3,415		$	13,353		$	5,010		$	-		$	471	$	22,577		$	-		$	328	$	3,415	$	13,353		$	5,010		$	-		$	471	$	22,577
Additions		-			106		1,039			3,792			1,177			-			203		6,317			-			278		2,682		7,789			2,357			-			430		13,536
Disposals		-			-		-			-			-			-			-		-			-			-		-		(147	)		-			-			-		(147	)
At June 30, 2018	$	-		$	434	$	4,454		$	17,145		$	6,187		$	-		$	674	$	28,894
At December 31, 2018																							$	-		$	606	$	6,097	$	20,995		$	7,367		$	-		$	901	$	35,966
Additions																								-			55		772		1,981			582			-			108		3,498
At March 31, 2019																							$	-		$	661	$	6,869	$	22,976		$	7,949		$	-		$	1,009	$	39,464

Carrying values
At December 31, 2017	$	3,969		$	4,952	$	47,358		$	56,713		$	23,387		$	54		$	5,415	$	141,848
At June 30, 2018	$	4,008		$	4,851	$	46,811		$	57,369		$	22,210		$	946		$	5,212	$	141,407
At December 31, 2018																							$	4,137		$	5,229	$	45,879	$	54,233		$	21,078		$	277		$	4,985	$	135,818
At March 31, 2019																							$	4,269		$	5,174	$	45,523	$	52,341		$	20,446		$	2,139		$	4,877	$	134,769

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

6.7.

Loan Payable

As at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017,~~2018, equipment financing balances are as follows:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Balance, beginning of the period	$	17,243		$	15,150		$	12,200		$	17,243
Additions		3,751			10,727			-			3,751
Principal repayments								(2,009	)		(8,156
Down payments and taxes		(638	)		(1,839	)		-			(638	)
Settlements		-			(603	)
Principal repayments		(3,954	)		(6,192	)
Balance, end of the period	$	16,402		$	17,243		$	10,191		$	12,200

Current portion	$	8,096		$	7,629		$	5,381		$	6,578
Non-current portion	$	8,306		$	9,614		$	4,810		$	5,622

The terms of the equipment financing agreements are as follows:

	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Total acquisition costs	$	39,443	$	35,692	$	39,443	$	39,443
Interest rates		0.00% ~ 4.50%		0.00% ~ 4.50%		0.00% ~ 4.50%		0.00% ~ 4.50%
Monthly payments	$	5 ~ 74	$	5 ~ 74	$	5 ~ 74	$	5 ~ 74
Average remaining life (years)		2.41		2.13		1.27		1.27

For the ~~six~~three months ended ~~June 30, 2018,~~March 31, 2019, the Company made total down payments of ~~$638~~$nil (December 31, ~~2017~~2018– ~~$1,839)~~$638). The down payments ~~consist~~consisted of the sales tax on the assets and a 10% payment of the pre-tax purchase price. All of the loan agreements are for a term of four years, except two which are for three years, and are secured by the underlying asset.

The following table outlines the principal payments to be made for each of the remaining years:

Years	Principal Payments		Principal Payments
2019	$	6,203	$	4,220
2020		3,619		3,204
2021		1,998		2,184
2022		534		583
Total	$	12,354	$	10,191

7.8.

Derivative Liabilities

Share Purchase Warrants ~~– Clay loans (Related Party (see Note 12 (ii))~~

~~On June 8, 2015, the~~The Company ~~issued~~has 10,000,000 share purchase warrants ~~to the Clay Group (the “June 2015 Warrants”) in connection with the June 2015 Loan. On February 22, 2018, the Company completed a rights offering~~outstanding exercisable at a$0.7831 per share price lower than the original exercise price of $0.95 of the June 2015 Warrants. As per an anti-dilution provision included in the June 2015 Loan agreement, the exercise price of the June 2015 Warrants was revised to $0.7831 on the rights offering completion date. The expiry date of June 8, 2020 of the June 2015 Warrants remains unchanged.

~~On November 18, 2016, the Company issued~~and 8,000,000 share purchase warrants ~~to the Clay~~outstanding exercisable at $0.665 per share (the “Clay Group ~~(the “November 2016 Warrants”~~share purchase warrants”) ~~in connection~~. The Company has an additional 6,317,700 share purchase warrants outstanding with ~~the November 2016 Loan. On February 22, 2018, the Company completed a rights offering at a share price lower than the original~~an exercise price of ~~$0.85 of the November 2016 Warrants. As~~C$2.00 per an anti-dilution provision included in the November 2016 Loan agreement, the exercise price of the November 2016 Warrants was revised to $0.6650 on the rights offering completion date. The expiry date of November 18, 2021 of the November 2016 Warrants remains unchanged.

~~GOLDEN QUEEN MINING CO. LTD.~~

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~

~~Derivative Liabilities (liabilities)~~

share. The share purchase warrants meet the definition of a derivative liability instrument as the exercise price is not a fixed price as described above. Therefore, the settlement feature does not meet the “fixed-for-fixed” criteria outlined in ASC 815-40-15.

The fair value of the derivative liabilities related to the ~~Clay Group~~ share purchase warrants as at ~~June 30, 2018~~March 31, 2019 was ~~$372~~$63 (December 31, ~~2017~~2018– ~~$439)~~$76). The derivative liabilities were calculated using the ~~binomial~~Black-Scholes pricing valuation model with the following weighted average assumptions:

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

Derivative Liabilities (continued)

Warrants derivative liabilities	March 31, 2019			December 31, 2018
Risk-free interest rate		1.37	%		1.37	%
Expected life of derivative liability		1.44 years			1.69 years
Expected volatility		173.18	%		93.96	%
Dividend rate		0.00	%		0.00	%

GQM LLC Warrants (Note 13(v))

In connection with the 2018 Credit Facility (Note 14(v)), GQM LLC issued 21,486 warrants (the “GQM LLC Warrants”), with each warrant entitling the holder to purchase a unit of GQM LLC for a period of five (5) years at an exercise price of $475.384 per unit.The warrants are classified as a derivative liability due to a clause in the warrant agreement that offers the warrant holders price protection. The fair value of the derivative liabilities related to the warrants as at March 31, 2019 was $3,477 (December 31, 2018 - $3,314). The derivative liability was calculated using the Black-Scholes pricing valuation ~~models with the following assumptions:~~model.

Warrants related to June 2015 Loan
June 30,
2018

December 31,
2017

Risk-free interest rate 1.91 % 1.73 %
Expected life of derivative liability 1.94 years 2.44 years
Expected volatility 69.67 % 78.59 %
Dividend rate 0.00 % 0.00 %

Warrants related to November 2016 Loan	June 30, 2018			December 31, 2017
GQM LLC Warrants derivative liability							March 31, 2019			December 31, 2018
Risk-free interest rate		1.98	%		1.73	%		2.23	%		2.65	%
Expected life of derivative liability		3.40 years			3.89 years			4.75 years			4.89 years
Expected volatility		74.75	%		75.69	%		20.00	%		20.00	%
Dividend rate		0.00	%		0.00	%		0.00	%		0.00	%

The change in the derivative ~~share purchase warrants~~liabilities is as follows:

	June 30, 2018			December 31, 2017			March 31, 2019		December 31, 2018
Balance, beginning of the period	$	439		$	5,458		$	3,390	$	441
GQM LLC Warrants (Note 13(v))								-		3,314
Change in fair value		(67	)		(5,019	)		150		(365	)
Balance, end of the period	$	372		$	439		$	3,540	$	3,390

~~Share Purchase Warrants~~

On July 25, 2016, the Company issued 6,317,700 share purchase warrants with an exercise price of C$2.00 and an expiry date of July 25, 2019. As at June 30, 2018, the Company re-measured the share purchase warrants and determined the fair value of the derivative liability to be $1 (December 31, 2017 - $2).

8.9.

Asset Retirement Obligations

Reclamation Financial Assurance

~~The Company~~GQM LLC is required to provide the Bureau of Land Management, the State Office of Mine Reclamation and Kern County with a revised reclamation cost estimate annually. The financial assurance is adjusted once the cost estimate is approved.

This estimate, once approved by state and county authorities, forms the basis of reclamation financial assurance. The reclamation assurance provided as at ~~June 30, 2018~~March 31, 2019 was $1,749 (December 31, ~~2017~~2018– ~~$1,465)~~$1,749).

~~The Company~~GQM LLC is also required to provide financial assurance with the Lahontan Regional Water Quality Control Board (the “Regional Board”) for closure and reclamation costs related to the lined impoundments, which are defined as the Stage 1 and Stage 2 heap leach pads, the overflow pond, and the solution collection channel. The reclamation financial assurance estimate as at ~~June 30, 2018 is~~March 31, 2019 was $2,450 (December 31, ~~2017~~2018– ~~$1,869)~~$2,450).

~~GOLDEN QUEEN MINING CO. LTD.~~

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~

~~Asset Retirement Obligations (continued)~~

In addition to the above, ~~the Company~~GQM LLC is required to obtain and maintain financial assurance for initiating and completing corrective action and remediation of a reasonably foreseeable release from the Project’s waste management units as required by the Regional Board. The reclamation financial assurance estimate as at ~~June 30, 2018~~March 31, 2019 is ~~$278~~$320 (December 31, ~~2017~~2018– $278).

~~The Company~~As at March 31, 2019 GQM LLC had entered into ~~$4,921 (2017~~$5,507 (December 31, 2018–$~~3,612)~~4,921) in surety bond agreements in order to release its reclamation ~~deposits. The Company~~deposits and a bond for power of $443 (December 31, 2018 - $443). GQM LLC pays a yearly premium of ~~$101 (2017~~$100 (2018– ~~$90)~~$100). Golden Queen Ltd. has provided a corporate guarantee on the surety bonds. In addition, a certificate of deposit for $1,000 was posted as collateral to reclamation bonding in 2018.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

Asset Retirement Obligations (continued)

Asset Retirement Obligation

The total asset retirement obligation as at ~~June 30, 2018,~~March 31, 2019 was ~~$2,413~~$2,966 (December 31, ~~2017~~2018– ~~$1,838)~~$2,497).

The Company estimated its asset retirement obligations based on its understanding of the requirements to reclaim and remediate its property based on its activities to date. As at ~~June 30, 2018,~~March 31, 2019, the Company estimates the cash outflow related to these reclamation activities will be incurred in ~~2028.~~2029. Reclamation provisions are measured at the expected value of future cash flows discounted to their present value using a discount rate based on a credit adjusted risk-free interest rate of ~~8.34%~~7.9% and an inflation rate of ~~2.41%~~2.4%.

The following is a summary of asset retirement obligations:

	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Balance, beginning of the period	$	1,838	$	1,366	$	2,497	$	1,838
Accretion		83		126		52		167
Changes in cash flow estimates		492		346		417		492
Balance, end of the period	$	2,413	$	1,838	$	2,966	$	2,497

9.10.

Share Capital

The Company’s common shares outstanding are no par value, voting shares with no preferences or rights attached to them.

Common shares

On January 17, 2017, the Company issued 100,000 shares for a total of $59 as finder fees which were recognized in general and administrative expenses in connection with the declaration of commercial production in December 2016.

On February 22, 2018, the Company closed a rights offering and issued 188,952,761 shares for total gross proceeds of $25,036. The Company paid associated fees of ~~$668~~$587 which were classified as share issue costs.

Stock options

The Company’s current stock option plan (the “Plan”) was adopted by the Company in 2013 and approved by shareholders of the Company in 2013. The Plan provides a fixed number of 7,200,000 common shares of the Company that may be issued pursuant to the grant of stock options. The exercise price of stock options granted under the Plan shall be determined by the Company’s Board of Directors (the “Board”) but shall not be less than the volume-weighted, average trading price of the Company’s shares on the Toronto Stock Exchange (“TSX”) for the five (5) trading days immediately prior to the date of the grant. The expiry date of a stock option shall be the date so fixed by the Board subject to a maximum term of five (5) years.

~~GOLDEN QUEEN MINING CO. LTD.~~

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~

~~Share Capital (continued)~~

~~Stock options (continued)~~

The Company has elected to use the Black-Scholes option pricing model to determine the fair value of stock options granted. The compensation expense is amortized on a straight-line basis over the requisite service period, which approximates the vesting period.

The following is a summary of stock option activity during the ~~six~~three months ended ~~June 30, 2018:~~

Shares Weighted Average
Exercise Price per
Share
Options outstanding, December 31, 2016 1,555,000 $ 0.85
Options granted 1,605,001 $ 0.38
Options forfeited (166,667 ) $ 0.64
Options expired (393,333 ) $ 1.13
Options outstanding, December 31, 2017 2,600,001 $ 0.54
Options forfeited (75,000 ) $ 0.29
Options expired (50,000 ) $ 1.16
Options outstanding, June 30, 2018 2,475,001 $ 0.53

On March 14, 2017, the former CFO of the Company resigned. 146,667 stock options were forfeited on this date as they did not meet the vesting conditions. Accordingly, the share-based compensation associated with the unvested stock options was reversed. The expiry date of 393,333 stock options that had vested was modified to June 14, 2017 pursuant to the terms of the employment agreement. These stock options were not exercised, thus expired during31, 2019 and the year ended December 31, ~~2017.~~2018:

On March 20, 2017, the Company granted 400,002 options to the Company’s new Chief Financial Officer (“CFO”) which are exercisable at a price of $0.65 for a period of five years from the date of grant. 133,334 options vested on March 20, 2018, 133,334 options vest on March 20, 2019 and 133,334 options vest on March 20, 2020.

~~The fair value of stock options granted as above was calculated using the following weighted average assumptions:~~

	~~2017~~
~~Expected life (years)~~		~~5.00~~
~~Interest rate~~		~~1.18% ~ 1.70~~	%
~~Volatility~~		~~77.29% ~ 79.17~~	%
~~Dividend yield~~		~~0.00~~	%

	Shares			Weighted Average Exercise Price per Share
Options outstanding, December 31, 2017		2,600,001		$	0.54
Options forfeited		(75,000	)	$	0.29
Options expired		(200,000	)	$	1.48
Options outstanding, March 31, 2019 and December 31, 2018		2,325,001		$	0.46

During the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company recognized ~~$35 and $80 (the three and six months ended June 30, 2017~~$27 (2018 - ~~$52 and $85)~~$45) in stock-based compensation relating to the vesting of employee stock ~~options that were issued and/or had vesting terms.~~

options.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

9.10.

Share Capital (continued)

Stock options (continued)

The following table summarizes information about stock options outstanding and exercisable as at ~~June 30, 2018:~~March 31, 2019:

Expiry Date	Number Outstanding		Number Exercisable		Remaining Contractual Life (years)		Exercise Price		Number Outstanding		Number Exercisable		Remaining Contractual Life (years)		Exercise Price
September 3, 2018		150,000		150,000		0.18	$	1.59
September 8, 2020		430,000		430,000		2.19	$	0.58		430,000		430,000		1.44	$	0.58
November 30, 2021		365,000		121,666		3.42	$	0.66		365,000		243,332		2.67	$	0.66
March 20, 2022		400,002		133,334		3.72	$	0.65		400,002		266,668		2.97	$	0.65
October 20, 2022		1,129,999		-		4.31	$	0.29		1,129,999		376,666		3.56	$	0.29
Balance, June 30, 2018		2,475,001		835,000		3.47
										2,325,001		1,316,666		2.91

As at ~~June 30, 2018,~~March 31, 2019, the aggregate intrinsic value of the outstanding exercisable options was $nil (December 31, ~~2017~~2018– $nil).

Warrants

As at ~~June 30, 2018,~~March 31, 2019, 24,317,700 warrants were outstanding (December 31, ~~2017~~2018 – 24,317,700).

The following table summarizes information about share purchase warrants ~~outstanding:~~outstanding as at March 31, 2019:

Expiry Date	Number Outstanding		Remaining Contractual Life (years)		Exercise Price		Number Outstanding		Remaining Contractual Life (years)		Exercise Price
June 8, 2020		10,000,000		2.19	$	0.7831		10,000,000		1.19	$	0.7831
July 25, 2019⁽¹⁾		6,317,700		1.32	C$	2.0000		6,317,700		0.32	C$	2.0000
November 18, 2021		8,000,000		3.64	$	0.6650		8,000,000		2.64	$	0.6650
Balance, June 30, 2018		24,317,700		2.44
								24,317,700		1.44

⁽¹⁾

Non-tradable share purchase warrants.

In addition, as at March 31, 2019, the Company had 21,486 GQM LLC Warrants (Note 13(v)) outstanding, with each warrant entitling the holder to purchase a unit of GQM LLC for a period of five (5) years at an exercise price of $475.384 per unit.

~~10.~~11.

General and Administrative Expenses

General and administrative expenses are incurred to support the administration of the business that are not directly related to production. Significant components of general and administrative expenses are comprised of the following:

Three Months
Ended
June 30, Three Months
Ended
June 30, Six Months
Ended
June 30, Six Months
Ended
June 30,
2018 2017 2018 2017
Audit, legal and professional fees $ 169 $ 108 $ 409 $ 396
Salaries and benefits and director fees 180 140 683 700
Regulatory fees and licenses 46 17 125 70
Insurance 144 114 283 247
Corporate administration 340 333 633 715
$ 879 $ 712 $ 2,133 $ 2,128

	Three Months Ended March 31,		Three Months Ended March 31,
	2019		2018
Audit, legal and professional fees	$	103	$	240
Salaries and benefits and director fees		799		503
Regulatory fees and licenses		25		79
Insurance		171		139
Corporate administration		268		293
Transaction costs (Note 16)		466		-
	$	1,832	$	1,254

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

~~11.~~12.

Loss Per Share

Three Months
Ended
June 30, Three Months
Ended
June 30, Six Months
Ended
June 30, Six Months
Ended
June 30,
2018 2017 2018 2017
Numerator:
Net income (loss) attributable to the shareholders of the Company - numerator for basic and diluted $ (632 ) $ 962 $ (6,049 ) $ (1,465 )
Denominator:
Weighted average number of common
shares outstanding -basic and diluted 300,101,444 111,148,683 244,772,735 112,360,179

Income (loss) per share – basic and diluted $ (0.00 ) $ 0.01 $ (0.02 ) $ (0.01 )

	Three Months Ended March 31,			Three Months Ended March 31,
	2019			2018
Numerator:
Net loss attributable to the shareholders of the Company - numerator for basic and diluted loss per share	$	(2,300	)	$	(5,417	)
Denominator:
Weighted average number of common shares outstanding -basic and diluted		300,101,444			188,829,263

Loss per share – basic and diluted	$	(0.01	)	$	(0.03	)

Weighted average number of shares for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 excludes ~~2,475,001~~2,325,001 options (December 31, ~~2017~~2018– ~~2,600,001)~~2,325,001) and 24,317,700 warrants (December 31, ~~2017~~2018 – 24,317,700) that were antidilutive.

~~12.~~13.

Related Party Transactions

Except as noted elsewhere in these consolidated financial statements, related party transactions are disclosed as follows:

(i)

Compensation of Key Management Personnel, Transactions with Related Parties and Related Party Balances

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company recognized ~~$104 and $299 (for the three and six months ended June 30, 2017~~$361 (2018–$~~78 and $278)~~195) salaries and fees for ~~Officers and Directors.~~

~~As at June 30, 2018, $nil (December 31, 2017~~– ~~$38) was included in prepaid expenses and other current assets for closing fees paid to related parties.~~

~~As at June 30, 2018, $28 (December 31, 2017~~–$463 for amended fees and accrued interest payable to related parties) was included in accounts payable and accrued liabilities for accrued interest payable to related parties and salaries and fees payable to Officers and Directors.

(ii)

Note Payable

~~On November 18, 2016, the~~

2019. On ~~November 10, 2017,~~December 27, 2018, the Company and the Clay Group agreed to amend the ~~November 2016~~Clay Group Loan, ~~by reducing~~extending the ~~2018 quarterly and~~due date of $1.7 million of principal as well as interest from the original due date of January 1, 2019 ~~Q1 principal payments from $2,500~~ to ~~$1,000, adding the reduction~~February 1, 2019. An extension fee of ~~such payments pro-rata~~$125 was added to the ~~remaining~~principal amount owing. On February 1, 2019, ~~payments,~~the due date was extended to February 8, 2019 for an extension fee of $75 that was added to the principal amount owing. On February 8, 2019, the due dates of principal and ~~increasing~~interest on the ~~annual interest rate from 8% to 10% effective January 1, 2018 (the “November 2017 Loan”)~~Clay Group Loan were extended until completion of the proposed transaction (Note 16). ~~This amendment was~~The amendments were accounted for as a debt ~~modification.~~modifications.

The following table summarizes activity on the notes payable:

	March 31, 2019			December 31, 2018
Balance, beginning of the year	$	24,690		$	30,099
Accretion of discount on loans		526			2,040
Capitalized financing, extension and legal fees		(75	)		(125	)
Extension fee added to principal		75			125
Accretion of capitalized financing, extension and legal fees		265			262
Repayment of loans and interest		-			(7,711
Balance, end of the year	$	25,481		$	24,690

Current portion	$	25,481		$	24,690
Non-current portion	$	-		$	-

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

~~12.~~13.

Related Party Transactions (continued)

~~(ii)~~

~~Note Payable (continued)~~

June 30,
2018

December 31,
2017

Balance, beginning of the period $ 30,099 $ 26,347
Interest payable transferred to principal balance - 2,212
Accretion of discount on loans 994 1,940
Capitalized financing and legal fees - (400 )
Accretion of capitalized financing and legal fees 130 -
Repayment of loans and interest (6,711 ) -
Balance, end of the period $ 24,512 $ 30,099

Current portion $ 24,512 $ 7,712
Non-current portion $ - $ 22,387

(iii)

Amortization of Discounts and Interest Expense

The following table summarizes the amortization of ~~discounts~~discount and interest on ~~loan:~~loans:

	Three Months Ended June 30,		Three Months Ended June 30,		Six Months Ended June 30,		Six Months Ended June 30,		Three Months Ended March 31,		Three Months Ended March 31,
	2018		2017		2018		2017		2019		2018
Accretion of the Nov 2017 Loan discount	$	504	$	454	$	994	$	740
Accretion of the Clay Group Loan discount									$	526	$	490
Accretion of capitalized financing and legal fees		66		-		130		-		265		65
Interest expense related to the Nov 2017 Loan		695		646		1,409		1,272
Closing and commitment fees related to the Credit Facility		10		-		40		-
Amortization of deferred financing fees										655		-
Interest expense related to the Clay Group Loan										658		713
Interest expense related to the 2018 Credit Facility										180		-
Closing and commitment fees related to credit facilities										27		30
Interest expense related to Komatsu financial loans⁽¹⁾		166		150		401		285		109		235
Accretion of discount and interest on loan	$	1,441	$	1,250	$	2,974	$	2,297	$	2,420	$	1,533

⁽¹⁾

Komatsu is not a related party and has only been included in the above table to reconcile the total interest expense incurred for the period … to the amounts capitalized and expensed.

(iv)

Joint Venture Transaction

The Company has presented Gauss’ ownership in GQM LLC as a non-controlling interest amount on the balance sheet within the equity section. However, there are terms in the agreement that provide for the exit from the investment in GQM LLC for an initial member whose interest in GQM LLC becomes less than 20%.

If a member becomes less than a 20% interest holder, its remaining interest will (ultimately) be terminated through one of 3 events at the non-diluted member’s option:

Through conversion to a net smelter royalty (“NSR”);

Through a buy-out (at fair value) by the non-diluted member; or

Through a sale process by which the diluted member’s interest is sold.

The net assets of GQM LLC as at ~~June 30,~~December 31, 2018 and ~~December 31,~~ 2017 are as follows:

~~GOLDEN QUEEN MINING CO. LTD.~~

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~

~~12.~~

~~Related Party Transactions (continued)~~

~~(iv)~~

~~Joint Venture Transaction (continued)~~

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Assets, GQM LLC	$	160,379		$	149,095		$	176,635		$	171,334
Liabilities, GQM LLC		(24,130	)		(28,024	)		(24,782	)		(29,904	)
Net assets, GQM LLC	$	136,249		$	121,071		$	151,853		$	141,430

The liabilities of GQM LLC do not have recourse to the general credit of Golden Queen except for ~~$2,203~~$349 for ~~two~~a mining drill ~~loans~~loan and ~~$4,228~~$5,507 in surety bond agreements.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

13.

Related Party Transactions (continued)

(iv)

Joint Venture Transaction (continued)

Non-Controlling Interest

The carrying value of the non-controlling interest is adjusted for net income and loss, distributions and contributions pursuant to ASC 810-10 based on the same percentage allocation used to calculate the initial book value of temporary equity.

Three Months
Ended
June 30, Three Months
Ended
June 30, Six Months
Ended
June 30, Six Months
Ended
June 30,
2018 2017 2018 2017
Net and comprehensive income (loss) in GQM LLC $ 2,475 $ 462 $ (4,819 ) $ (317 )
Non-controlling interest percentage 50 % 50 % 50 % 50 %
Net and comprehensive income (loss) attributable to non-controlling interest $ 1,238 $ 230 $ (2,410 ) $ (159 )
Net and comprehensive income (loss) attributable to permanent non-controlling interest $ 743 $ 138 $ (1,446 ) $ (95 )
Net and comprehensive income (loss) attributable to temporary non-controlling interest $ 495 $ 92 $ (964 ) $ (64 )

							Three Months Ended March 31,			Three Months Ended March 31,
							2019			2018
Net and comprehensive income (loss) in GQM LLC							$	95		$	(7,294	)
Non-controlling interest percentage								50	%		50	%
Net and comprehensive income (loss) attributable to non-controlling interest							$	48		$	(3,646	)
Net and comprehensive income (loss) attributable to permanent non-controlling interest							$	29		$	(2,188	)
Net and comprehensive income (loss) attributable to temporary non-controlling interest							$	19		$	(1,458	)

	Permanent Non- Controlling Interest			Temporary Non- Controlling Interest			Permanent Non-Controlling Interest			Temporary Non-Controlling Interest
Carrying value of non-controlling interest, December 31, 2017	$	36,321		$	24,214		$	36,321		$	24,214
Capital contribution		10,000			-			10,000			-
Net and comprehensive loss for the period		(1,446	)		(964	)
Carrying value of non-controlling interest, June 30, 2018	$	44,875		$	23,250
Net and comprehensive income for the year								108			72
Carrying value of non-controlling interest, December 31, 2018							$	46,429		$	24,286
Net and comprehensive income for the period								29			19
Carrying value of non-controlling interest, March 31, 2019							$	46,458		$	24,305

(v)

Credit Facility

On ~~May 23, 2017,~~October 12, 2018, GQM LLC entered into ~~a $5,000 one-year revolving credit~~an agreement ~~(the “Credit Facility”) in which~~with Gauss Holdings LLC and Auvergne LLC ~~agreed to extend~~(the “Lenders”) whereby the Lenders are providing GQM LLC a revolving credit loan facility (the “2018 Credit Facility”) in the ~~form~~amount of ~~loans to GQM LLC.~~$20 million. The 2018 Credit Facility ~~commenced on July 1, 2017,~~ bears interest at a rate of ~~12%~~8% per annum and in addition, is subject to a commitment fee of 1% per ~~annum. For~~annum on available loan balance. As per terms of the ~~three and six months ended June 30, 2018,~~agreement, GQM LLC ~~paid~~accrued commitment fees of ~~$30 (2017 – $nil)~~$45 for the year ended December 31, 2018. The loan matures March 31, 2020. As at March 31, 2019, GQM LLC had drawn $10,000 (December 31, 2018 - $5,000) from the 2018 Credit Facility and accrued interest of $327 (December 31, 2018 - $121). Subsequent to the period end GQM LLC drew an additional $5,000 from the 2018 Credit Facility (Note 17).

In connection with the 2018 Credit Facility, the Lenders were issued 21,486 warrants (the “GQM LLC Warrants”), with each warrant entitling the holder to purchase a unit of GQM LLC for a period of five (5) years at an exercise price of $475.384 per unit.The warrants are classified as a derivative liability due to a clause in the warrant agreement that offers the warrant holders price protection (Note 8). The ~~balance~~fair value of GQM LLC Warrants at the issuance date of $3,314 is accounted for as a finance cost and amortized to the statement of loss over the term of the 2018 Credit Facility. During the three months ended March 31, 2019, the Company recorded amortization expense of $655.

The GQM LLC Warrants represent a fully-diluted 7.5% interest in the equity of GQM LLC. If the GQM LLC warrants are exercised, the Company’s interest in GQM LLC will be diluted to 46.25%. The Company’s current interest in GQM LLC is 50%.

The 2018 Credit Facility ~~was $3,000 as at December 31, 2017. The Credit Facility expired on May 22, 2018.~~

is secured by a pledge of the Company’s equity interest in GQM LLC.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three ~~and Six~~ Months Ended ~~June 30,~~March 31, 2019 and 2018 ~~and 2017~~

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

~~13.~~14.

Commitments and Contingencies

Royalties

The Company has acquired a number of mineral property interests outright. It has acquired exclusive rights to explore, develop and mine other portions of the Mine under various mining lease agreements with landowners. Royalty amounts due to each landholder over the life of the Mine vary with each property.

Compliance with Environmental Regulations

The Company’s exploration and development activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties, but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays or affect the economics of a mine, and cause changes or delays in the Company’s activities.

Corporate Guaranties

The Company has provided corporate guaranties for two of GQM LLC’s mining drill loans. The Company has also provided a corporate guaranty for GQM LLC’s surety bonds.

~~14.~~15.

Financial Instruments

Fair Value Measurements

All financial assets and financial liabilities are recorded at fair value on initial recognition. Transaction costs are expensed when they are incurred, unless they are directly attributable to the acquisition of qualifying assets, in which case they are added to the costs of those assets until such time as the assets are substantially ready for their intended use or sale.

The three levels of the fair value hierarchy are as follows:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

June 30, 2018
Total Level 1 Level 2 Level 3
Liabilities:
Share purchase warrants – Related Party (see Note 7) $ 372 $ - $ 372 $ -
Share purchase warrants – (see Note 7) 1 - 1 -
$ 373 $ - $ 373 $ -

December 31, 2017
Total Level 1 Level 2 Level 3
Liabilities:
Share purchase warrants – Related Party (see Note 7) $ 439 $ - $ 439 $ -
Share purchase warrants – (see Note 7) 2 - 2 -
$ 441 $ - $ 441 $ -

~~GOLDEN QUEEN MINING CO. LTD.~~

~~Notes to Condensed Consolidated Interim Financial Statements~~

~~For the Three and Six Months Ended June 30, 2018 and 2017~~

~~(amounts expressed in thousands of US dollars - Unaudited)~~

~~14.~~

~~Financial Instruments (continued)~~

~~Fair Value Measurements (continued)~~

	March 31, 2019
	Total		Level 1		Level 2		Level 3
Liabilities:
Share purchase warrants – Related Party (see Note 8)	$	63	$	-	$	63	$	-
GQM LLC Warrants – Related Party (see Note 8)		3,477		-		3,477		-
	$	3,540	$	-	$	3,540	$	-

	December 31, 2018
	Total		Level 1		Level 2		Level 3
Liabilities:
Share purchase warrants – Related Party (see Note 8)	$	76	$	-	$	76	$	-
GQM LLC Warrants – Related Party (see Note 8)		3,314		-		3,314		-
	$	3,390	$	-	$	3,390	$	-

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value measurement of the financial instruments above use observable inputs in option price models such as the binomial and the Black-Scholes valuation models.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

15.

Financial Instruments (continued)

Credit Risk

Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. To mitigate exposure to credit risk on financial assets the Company has established policies to ensure liquidity of funds and ensure counterparties demonstrate minimum acceptable credit worthiness.

The Company maintains its US Dollar and Canadian Dollar cash in bank accounts with major financial institutions with high credit standings. Cash deposits held in the United States are insured by the Federal Deposit Insurance Corporation (“FDIC”) for up to $250 and Canadian Dollar cash deposits held in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) for up to C$100.

Certain United States and Canadian bank accounts held by the Company exceed these federally insured limits or are uninsured as they relate to US Dollar deposits held in Canadian financial institutions. As at ~~June 30, 2018,~~March 31, 2019, the Company’s cash balances held in United States and Canadian financial institutions include ~~$10,537,~~$4,713, which are not fully insured by the FDIC or CDIC. The Company has not experienced any losses on such accounts and management believes that using major financial institutions with high credit ratings mitigates the credit risk in cash.

Interest Rate Risk

The Company holds approximately ~~55% of~~ its cash in bank deposit accounts with ~~a single~~ major financial ~~institution.~~institutions. The interest rates received on these balances may fluctuate with changes in economic conditions. Based on the average cash balances during the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, a 1% decrease in interest rates would have reduced the interest income for the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, by an immaterial amount.

Foreign Currency Exchange Risk

Certain purchases of corporate overhead items are denominated in Canadian Dollar. As a result, currency exchange fluctuations may impact the costs of operations. Specifically, the appreciation of the Canadian Dollar against the US Dollar may result in an increase in the Canadian operating expenses in US dollar terms. As at ~~June 30, 2018,~~March 31, 2019, the Company maintained the majority of its cash balance in US Dollars. The Company currently does not engage in any currency hedging activities.

16. Proposed Transaction

On February 9, 2019, the Company announced that it had entered into a binding share purchase agreement with a group of purchasers including Thomas M. Clay and certain members of the Clay family and associated entities (the “Purchaser”), whereby the Purchaser will acquire 100% of the Company’s 50% ownership interest in the Soledad Mountain Project (the “Transaction”).

The consideration from the Purchasers is comprised of (1) $4.25 million in cash; (2) the extinguishment of all amounts owing to the Purchasers by the Company under Clay Group Loan (Note 13(ii)); and (3) the cancellation of all of the Purchasers’ ownership interest in the Company (consisting of 177,701,229 Shares, 457,500 options and 18,000,000 share purchase warrants). In addition, the Purchasers may pay a contingent payment to the Company if the Soledad Mountain Project is subsequently sold or transferred to a third party in certain circumstances. The Company incurred $466 of costs relating to the Transaction during the three months ended March 31, 2019.

The transaction is subject to the approval of the shareholders of the Company. The shareholders will vote on the transaction at the Annual General and Special meeting to be held on May 13, 2019.

All payments of interest and principal on the Clay Group Loan (Note 13(ii)) are not due until completion of the proposed Transaction. If the shareholders vote against the Transaction, then the Clay Group Loan principal and accrued interest will be due immediately. Under this scenario, should the Company be unable to negotiate an extension to the Clay Group Loan, the independent directors and management will have no alternative but to pursue a reorganization or, at worst, bankruptcy, where the likely outcome for shareholders is the total loss of equity value.

GOLDEN QUEEN MINING CO. LTD.

Notes to the Condensed Consolidated Interim Financial Statements

For the Three Months Ended March 31, 2019 and 2018

(amounts expressed in thousands of US dollars, except share amounts - Unaudited)

17.

Subsequent Events

Subsequent to March 31, 2019, GQM LLC drew an additional $5,000 from the 2018 Credit Facility (Note 13(v)).

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

The following discussion of the operating results and financial condition of Golden Queen Mining Co. Ltd. (“Golden Queen”, “GQM Ltd.”, “Company”, “we”, “our” or “us”) is as at ~~August 9, 2018~~May 6, 2019 and should be read in conjunction with the unaudited condensed consolidated interim financial statements of the Company for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 and the notes thereto.

The financial information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations is derived from the audited consolidated financial statements and the unaudited condensed consolidated interim financial statements of the Company which have been prepared in accordance with US generally accepted accounting principles (“US GAAP”), where appropriate as applicable to interim financial reporting. All amounts herein are presented in thousands of US dollars, except per share amounts, or unless otherwise noted.

Cautionary Note Regarding Forward-looking Statements

This Form 10-Q contains certain forward-looking statements, which relate to the intent, belief and current expectations of the Company’s management, as well as assumptions and parameters used in the feasibility study referenced in this report. These forward-looking statements are based upon numerous assumptions that involve risks and uncertainties and other factors that may cause actual results to differ materially from those indicated by such forward-looking statements. Such factors include among other things the Company’s future prospects if the Transaction is not approved, the receipt and compliance with the terms of required approvals and permits, results of operations and commodity prices. In addition, projected mining results, including quantity of ore, grade, production rates, operating costs and recovery rates, are subject to numerous risks normally associated with mining activity of the nature described in this report and in the feasibility study, and as a result actual results may differ substantially from projected results. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date the statements were made.

Cautionary Note to US Investors

We advise US investors that the mineral reserve estimates disclosed in this report have been prepared in accordance with Canadian regulations and may not qualify as “reserves” under the SEC Industry Guide 7. Information concerning mineral resources and reserves set forth herein may not be comparable with information presented by companies using only US standards in their public disclosure.

Mr. Tim Mazanek, SME is a qualified person for the purposes of NI 43-101 and has reviewed and approved the technical information in this Form 10-Q.

Recent Developments

The Transaction

Pursuant to a share purchase agreement dated February 7, 2019, the Company agreed to sell 100% of the shares of its subsidiary Golden Queen Mining Holdings Inc. (the “Transaction”), which currently owns 50% of the outstanding units of Golden Queen Mining, LLC, to a group of purchasers including Thomas M. Clay and certain members of the Clay family and associated entities (collectively, the “Purchasers”). Golden Queen Mining, LLC owns and operates the Soledad Mountain Project located in Kern County, California.

The consideration from the Purchasers is comprised of (i) US$4.25 million in cash; (ii) the extinguishment of all amounts owing to the Purchasers by the Company under a loan agreement (US$27.0 million as of March 31, 2019); and (iii) the cancellation of all of the Purchasers’ ownership interest in the Company (consisting of 177,701,229 Shares, 457,500 options and 18,000,000 share purchase warrants). In addition, the Purchasers may pay a contingent payment to the Company if the Soledad Mountain Project is subsequently sold or transferred to a third party in certain circumstances.

The consideration offered by the Purchasers totals approximately US$37.2 million (excluding the contingent payment), based on the volume-weighted average price of the Company’s Shares on the OTCQX Best Market for the 20 trading days ended February 7, 2019, and including the principal and accrued interest payable to the Purchasers pursuant to the loans to be extinguished.

The Company is currently unable to repay the interest and principal payments due on the Clay Group Loan, which will be extinguished upon completion of the proposed Transaction. If the shareholders do not approve the Transaction, then the Clay Group Loan principal and accrued interest will be due immediately. Under this scenario, should the Company be unable to negotiate an extension to the Clay Group Loan, the Company will have no alternative but to pursue a reorganization or, at worst, bankruptcy, where the likely outcome for shareholders is the total loss of equity value.

Golden Queen Mining Co. Ltd. has been looking for alternatives to refinance and/or reschedule its debt without success and now faces a significant insolvency risk. The proposed transaction has many benefits, including the elimination of this risk. Proxy Advisors, Glass Lewis and Institutional Shareholder Services have both recommended shareholders vote for the transaction.

On May 13, 2019, the Company will hold an Annual General and Special Meeting of Shareholders to vote on the Transaction. Refer to the proxy statement and management information circular dated April 10, 2019 for additional information.

The Soledad Mountain Mine

Overview

The Company is engaged in the operation of the Soledad Mountain Mine (“the Mine”), located in the Mojave Mining District, Kern County, California. The Company owns 50% of Golden Queen Mining Company, LLC (“GQM LLC”), the operator of the Mine. The remaining 50% is owned by Gauss LLC (“Gauss”). The Mine is located just outside the town of Mojave in southern California and utilizes conventional open pit mining methods and cyanide heap leach and Merrill-Crowe processes to recover gold and silver from crushed, agglomerated ore. The Mine also produces ~~small quantities of~~ aggregate.

~~Highlights: Second~~First Quarter Highlights

·●

Total of ~~3,900 kt~~5.4 million tons of ore and waste were mined including ~~1,473 kt~~989 kilotons of ore;

·●

Plant processed a total of ~~943 kt~~853 kilotons of ore at an average grade of ~~0.020 oz/t;~~0.022 ounces per ton; and

·●

~~9,976~~12,032 ounces of gold and ~~99,846~~95,615 ounces of silver were produced.

Project Update

In the first quarter of 2019, the Company continued stripping the East Pit phase 2. Total material mined was up slightly from the previous quarter, while processed ore and gold production were at similar levels. Since the first quarter of 2018, almost all of the Mine’s production was sourced from the East Pit. Mining results from the East Pit have shown positive reconciliation for both tons and grade with the mine plan. Operations during the first ~~half~~quarter of ~~2018 have shown continued improvement~~2019 showed stabilization in gold ounces loaded on the ~~pad. Mining of~~pad after the ~~East Pit has progressed on schedule. For the quarter, ore mining was 49% higher~~decline in the ~~East Pit than contemplated~~fourth quarter of 2018 (Figure #1). The peak production shown for the third quarter 2018 was the result of higher productivity in the ~~mine~~crushing/stacking process and monthly average grade as high as 0.028 oz/ton.

Mechanical availability remained below plan as a result of a lower stripping ratio. In addition, the ore grade was higher by 26%. A significant amount of ore has been stockpiled during the second quarter and the ore quantity contained within the stockpile was over 750K tons at the end of June 2018.

During the second half of 2017, the mine produced and sold more gold than the recoverable ounces placed on the pad during the same period, effectively depleting the leach pad inventory of its gold loaded solution. Consequently, in the first quarter ~~2018, gold production was significantly reduced.~~of 2019, although downtime included time required for the installation of a larger secondary crusher and two major conveyer belts. The monthly ~~recoverable gold ounces loaded~~tonnage on ~~the leach~~ pad ~~have steadily increased since September 2017, but the positive impact on production has only begun during the second quarter of 2018.~~

~~In the process area, pad-loading tonnage and average grade are increasing compared to the past two quarters. Modifications have been made to the secondary plant~~progressed during the quarter, ~~that have increased both~~but lower grade mitigated the ~~throughput and the run-time. Gold precipitation has increased, although not steadily, from the low period of January 2018. In June, there was a dip in~~total recoverable ounces ~~precipitated due to the move to stack the second lift~~ on ~~Pad-2. Leach solutions had to penetrate twice the amount of~~ leach material, delaying gold flow to the Merrill-Crowe Plant. As a result of higher grades in the East Pit and the improved plant throughput, gold production is anticipated to continue increasing throughout the remainder of this year. pad.

Figure #1:

Leaching performance ~~is currently matching the feasibility study, with the~~resulted in total apparent gold recovery to ~~June 30, 2018~~March 31, 2019 of ~~69.1%, which management believes~~67.4%. The quarterly reduction in apparent gold recovery during the first quarter of 2019 was caused in part by limits on the amount of leach solution that can be placed on the leach pad, as a result of pad geometry. Management has designed a potential solution that will be implemented when all permits are obtained. In addition, East Pit ore has exhibited slower leach dynamics than previously processed ore. The final recovery is ~~on track~~expected to ~~achieve~~remain unchanged, although a longer leach time will be required.

During the quarter, Management prepared a new draft of the life of mine ~~80% gold recovery.~~

Inplan. While it has the ~~second quarter of 2018,~~potential to extend mine life, the cost structure has been reset at a higher level. The Company ~~continued to develop the East Pit. It~~ is ~~anticipated that the transition~~considering applying for an addendum to the ~~East Pit will provide the majority of ore production~~major permit to allow more flexibility for ~~at least the next two years where higher ore tonnage~~gold and ~~grade and lower waste tons are expected. The plan is to increase the delivery of ounces to the heap leach pad by selectively~~silver mining ~~higher grade tons~~ as ~~much~~well as ~~practical.~~

A total of 19,520 feet of reverse circulation drilling was completed during first quarter. This drill program was designed to increase confidence in the currently modelled ore grades and tonnage associated with the Golden Queen vein structure, to improve the Company’s understanding of the Patience vein structure potentially adding ounces to the Company’s reserves and to investigate the Silver Queen vein structure (where historical underground development is illustratedaggregate operations on ~~historic maps but not evidenced in historic extraction reports). The drill results were analyzed during the second quarter. A new life of mine plan is anticipated during the third quarter.~~Soledad.

As well, the Company is in the process of permitting additional infrastructure for ongoing operations and planned activities that are expected to extend the mine life of Soledad Mountain beyond the initial 11 years contemplated in the 2015 Feasibility Study. The process is anticipated to take approximately one to two years.

For the three months ended ~~June 30, 2018,~~March 31, 2019, the Company recorded aggregate sales of ~~$4 thousand dollars. In 2017, the Company was added to the California AB 3098 list, which allows the Company to sell its aggregate to state and municipal agencies.~~$9K. The Company will not include the sale of aggregate in cash flow projections until such time as a long-term contract for the sale of products has been secured.

There ~~is a total~~were 242 employees on site at the end of ~~213 employees currently on site.~~the first quarter 2019.

Results of Operations

The following are the results of operations for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 and ~~2017:~~2018:

Three months ended Six months ended
30-June-18 30-June-17 30-June-18 30-June-17
Mining - Key Metrics
Ore mined k ton 1,473 1,010 2,608 1,862
Waste mined: ore mined ratio ore mined ratio 1.7:1 3.7:1 1.9:1 3.7:1
Gold grade placed oz/ton 0.020 0.016 0.019 0.017
Silver grade placed oz/ton 0.347 0.201 0.331 0.215
Gold sold oz 9,892 12,653 16,421 23,813
Silver sold oz 96,127 53,514 149,739 115,609
Apparent cumulative recovery - gold⁽¹⁾ % 69.1 % 68.0 % 69.1 % 68.0 %
Apparent cumulative recovery - silver⁽¹⁾ % 27.7 % 25.3 % 27.7 % 25.3 %

Financial⁽¹⁾
Revenue $ 14,485 16,882 24,070 31,686
Cost of sales, excluding depreciation and depletion (or Direct mining costs) $ 8,130 13,367 21,146 24,929
Depreciation and depletion $ 3,364 2,742 6,340 5,498
Income (loss) from mine operations $ 2,991 773 (3,416 ) 1,259
General and administrative expenses $ (879 ) (712 ) (2,133 ) (2,128 )
Total other income (expenses) $ (1,508 ) 1,131 (2,910 ) (755 )
Net and comprehensive income (loss) $ 604 1,192 (8,459 ) (1,624 )
Net and comprehensive income (loss) attributable to Golden Queen Mining Co Ltd. $ (632 ) 962 (6,049 ) (1,465 )
Average realized gold price⁽¹⁾ $/oz sold 1,302 1,262 1,313 1,246
Average realized silver price⁽¹⁾ $/oz sold 16.62 17.10 16.65 17.37
Total cash costs - net of by-product credits⁽¹⁾⁽²⁾ $/Au oz produced 730 1,038 1,214 1,016
All-in sustaining costs - net of by-product credits⁽¹⁾ $/Au oz produced 1,045 1,427 1,586 1,552
Total cash costs⁽³⁾ $/t placed 16.56 13.48 17.25 14.61
Off-site costs⁽¹⁾ $/t placed 0.63 0.71 0.62 0.77

		Three months ended:
		March 31,			March 31,
		2019			2018
Mining - Key Metrics
Ore mined	k ton		989			1,135
Waste mined: ore mined ratio	ore mined ratio		4.4:1			2.3:1
Gold grade placed	oz/ton		0.022			0.019
Silver grade placed	oz/ton		0.365			0.313
Gold sold	oz		11,919			6,529
Silver sold	oz		92,668			53,612
Apparent cumulative recovery - gold⁽¹⁾	%		67.4	%		71.5	%
Apparent cumulative recovery - silver⁽¹⁾	%		29.3	%		27.1	%

Financial⁽¹⁾
Revenue	$		16,979			9,585
Income (loss) from mine operations	$		2,077			(6,449	)
General and administrative expenses	$		(1,832	)		(1,254	)
Total other expenses	$		(2,497	)		(1,360	)
Net and comprehensive loss	$		(2,252	)		(9,063	)
Net and comprehensive loss attributable to GQM Ltd.	$		(2,300	)		(5,417	)
Average realized gold price⁽¹⁾	$/oz sold		1,302			1,330
Average realized silver price⁽¹⁾	$/oz sold		15.61			16.70
Total cash costs - net of by-product credits⁽¹⁾	$/Au oz produced		985			1,954
All-in sustaining costs - net of by-product credits⁽¹⁾	$/Au oz produced		1,226			2,406
Total cash costs⁽¹⁾	$/t placed		21.55			18.06
Off-site costs⁽¹⁾	$/t placed		0.63			0.61

⁽¹⁾

~~Total~~total cash costs, all-in sustaining costs, apparent cumulative recovery, off-site costs, average realized gold price and average realized silver price are financial performance measures with no standard meaning under US GAAP. Refer to “Non-US GAAP Financial Performance Measures” for further information.

⁽²⁾

~~Total cash costs – net of by-product credits figure incorporates inventory changes and others adjustment, refer to total cash costs reconciliation in “~~~~Non-US GAAP Financial Performance Measures~~~~” for details.~~

⁽³⁾

~~Total cash costs figure does not incorporate inventory changes and others adjustment.~~

Financial Results

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company generated revenues from operations of ~~$14,485~~$16,979 from the sale of ~~9,892~~11,919 ounces of gold and ~~96,127~~92,668 ounces of silver ~~and $24,070~~compared to revenues of $9,585 from the sale of ~~16,421~~6,529 ounces of gold and ~~149,739~~53,612 ounces of silver ~~respectively. In comparison, for~~during the ~~same periods~~comparable period in 2018, an increase in revenue of ~~2017 the Company generated revenues from operations of $16,882 from the sale of 12,653 ounces of gold and 53,514 ounces and $32,686 from the sale of 23,813 ounces of gold and 115,609 ounces of silver.~~$7,394.

The ~~decrease~~increase in revenue ~~resulted from~~in the ~~time required for~~first quarter of 2019 compared to the ~~gold to be processed through~~same quarter in 2018 is explained by the ~~leach pad. There~~poor performance in the first quarter of 2018; as the mine was ~~18,807 ounces~~slowly pulling out of ~~gold was~~a period of very low ore grade placed on the leach pad in the second quarter of 2018 compared to 16,590 ounces in the second quarter of 2017 and revenues from ounces of gold placed on the leach pad will not be realized until later this year. As a result of this situation, the Mine recorded a higher cost per ton (less tons mined).pad.

The costs, excluding depreciation and depletion, applicable to sales incurred during the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 were ~~$8,130 and $21,146~~$12.2 million (three ~~and six~~ months ended ~~June 30, 2017~~March 31, 2018 - ~~$13,367 and $24,929), respectively.~~$13.0 million). The cost of sales, excluding depreciation and depletion, in the current quarter ~~substantially decreased in comparison~~were relatively consistent with the comparable prior quarter. The unit costs per ton placed has increased by 19.3% over the comparable quarter due mainly to ~~a lower cost per ounce in~~ the second quarter of 2018. Costs of sales include mining, processing, maintenance and site support costs. Also, included in the costs of sales are refining, transportation costs, royalties and property taxes. higher stripping ratio.

Depreciation and depletion expenses during the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 were ~~$3,364 and $6,340 (three and six months ended June 30, 2017 – $2,742 and $5,498), respectively. The increase~~$2,566 compared to $2,976 for the same period in 2018, a decrease of $410. The decrease in 2019 compared to ~~2017~~2018 was ~~mainly~~ due to ~~the addition of depreciable fixed assets of $19,409 in the third~~depreciation and ~~fourth quarters of 2017 and the addition of depreciable fixed assets of $4,990 in the first two quarters of 2018.~~depletion being allocated to stockpile inventory.

General and administrative expenses for the three ~~and six~~ months ended ~~June 30, 2018~~March 31, 2019 were ~~$879 and $2,133 (three and six~~$1,832 compared to $1,254 for the three months ended ~~June 30, 2017 - $712 and $2,128), respectively.~~March 31, 2018, an increase of $578. The increase in ~~2018~~2019 compared to ~~2017~~2018 was mainly a result of ~~higher legal and professional fees,~~transaction costs of $466 relating to a proposed transaction as well as an increase in salaries and benefits ~~insurance~~ and ~~regulatory fees.~~directors’ fees from $503 in 2018 to $799 in 2019 as a result of increased compensation to key management.

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company incurred finance expenses of ~~$1,441 and $2,974~~$2,420 compared to ~~$1,250 and $2,297~~$1,533 for the three ~~and six~~ months ended ~~June 30, 2017.~~March 31, 2018, an increase of $887. The increase in finance expenses was mainly due to ~~an increase~~the amortization of ~~2% in the~~deferred financing fees relating to LLC warrants and interest ~~rate~~expense on the ~~Clay Loan resulting in additional interest payable and increased accretion on the Clay Loan.~~LLC line of credit.

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company recorded a ~~loss of $70 and~~ gain ~~of $68~~ on derivative instruments of $150 compared to ~~gains of $2,375 and $1,894~~a loss on derivative instruments of $138 for the three ~~and six~~ months ended ~~June 30, 2017, respectively.~~March 31, 2018. The gain ~~for six months ended June 30, 2018~~in 2019 was ~~smaller~~ due to ~~insignificant downward movement of~~a decrease in the Company’s share price ~~compared~~and remaining life of derivatives whereas the loss in 2018 was due to ~~the same period of 2017. Significant downward movement of~~an increase in the Company’s share ~~price in the three months ended June 30, 2017 resulted in a significant gain while the Company’s share price remained relatively consistent during the same period of 2018 fiscal year.~~price.

Summary of Quarterly Results

Results for the eight most recent quarters are set out in the table below:

	Results for the quarter ended:												Results for the quarter ended:
	30-Jun-18			31-Mar-18			31-Dec-17			30-Sep-17			31-Mar-19			31-Dec-18			30-Sep-18			30-Jun-18
Revenue	$	14,485		$	9,585		$	13,939		$	16,496		$	16,979		$	17,478		$	16,855		$	14,485
Net and comprehensive income (loss)	$	602		$	(9,063	)	$	(1,327	)	$	(3,224	)	$	(2,252	)	$	4,937		$	(3,357	)	$	604
Net and comprehensive income (loss) attributable to GQM Ltd.	$	(632	)	$	(5,417	)	$	2,188			(1,889	)	$	(2,300	)	$	1,393		$	(2,403	)		(632	)
Basic net income (loss) per share	$	0.00		$	(0.03	)	$	0.02		$	0.01		$	(0.01	)	$	0.01		$	(0.01	)	$	(0.00	)
Diluted net income (loss) per share	$	0.00		$	(0.03	)	$	0.02		$	0.01		$	(0.01	)	$	0.01		$	(0.01	)	$	(0.00	)

	Results for the quarter ended:												Results for the quarter ended:
	30-Jun-17			31-Mar-17			31-Dec-16			30-Sep-16			31-Mar-18			31-Dec-17			30-Sep-17			30-Jun-17
Revenue	$	16,882		$	14,804		$	10,278		$	13,451		$	9,585		$	13,939		$	16,496		$	16,882
Net and comprehensive income (loss)	$	1,192		$	(2,816	)	$	(434	)	$	3,591		$	(9,063	)	$	(1,327	)	$	(3,224	)	$	1,192
Net and comprehensive income (loss) attributable to GQM Ltd.	$	962		$	(2,426	)		868			2,738		$	(5,417	)	$	(2,188	)		(1,889	)		962
Basic net income (loss) per share	$	0.01		$	(0.02	)	$	0.01		$	0.03		$	(0.03	)	$	(0.02	)	$	(0.01	)	$	0.01
Diluted net income (loss) per share	$	0.01		$	(0.02	)	$	0.01		$	0.03		$	(0.03	)	$	(0.02	)	$	(0.01	)	$	0.01

During the three months ended March 31, 2019, net and comprehensive loss was $2,252 mainly as a result of G&A and finance expense of $4,252 which was offset by income from mine operations of $2,077.

During the three months ended December 31, 2018, net and comprehensive income of $4,937 was mainly due to a reclassifying depreciation and depletion from the cost of sales to inventory as the inventory stock piles were increasing throughout the year.

During the three months ended September 30, 2018, net and comprehensive loss of $3,357 was mainly due to the loss generated from mine operations of $1,229. Mine operations improvements and higher grade were offset by additional cost for East Pit phase 2 stripping, equipment overhauls and the lower gold price.

During the three months ended June 30, 2018, net and comprehensive income was ~~$602~~$604 mainly as a result of income generated from mine operations of ~~$2,112.~~$2,991 and inventory reallocation into stockpile inventory.

During the three months ended March 31, 2018, net and comprehensive loss was $9,063 mainly as a result of loss from mine operations of $6,449 due to higher direct mining costs as a result of developing the East Pit and lower revenues due to lower gold production as a result of ~~less~~fewer available gold ounces on the leach pad.

Although the primary driver of quarterly results above is the performance of the mine, significant fluctuations in net (loss) income between periods are the fluctuations in the Company’s derivative liabilities from warrants and interest expense also impacted results. The Company’s derivative liabilities are a function of the Company’s stock price as compared to the instruments’ strike price and the exchange rate between the Canadian dollar and the US dollar. As the stock price rises, the derivative liabilities increase resulting in the Company recognizing losses. When the stock price decreases, the Company recognizes gains.

In addition to the fluctuations in derivative liabilities described above, results for the second half of 2017 were impacted by the lower gold produced due to significant reduction in ore grade in Nord-West Pit and Main Pit Ph-1. Although the operations moved to East Pit in the middle of November 2017, higher cost of production was experienced during this period. Finally, The Tax Cuts and Jobs Act (“TCJA”) was enacted on December 22, 2017, which significantly changed U.S. income tax law, including a reduction of the Federal corporate income tax rate from 35% to 21%. The $4,725 income tax recovery was recognized in fourth quarter of 2017.

In general, the results of operations can vary from quarter to quarter depending upon the nature, timing and cost of activities undertaken, whether or not the Company incurs gains or losses on foreign exchange or grants stock options, and the movements in its derivative liability.

Reclamation Financial Assurance and Asset Retirement Obligation

Reclamation Financial Assurance

The Company is required to provide the Bureau of Land Management, the State Office of Mine Reclamation and Kern County with a revised reclamation cost estimate annually. The financial assurance is adjusted once the cost estimate is approved.

The Company is also required to provide financial assurance with the Lahontan Regional Water Quality Control Board (the “Regional Board”) for closure and reclamation costs related to the lined impoundments, which are defined as the Stage 1 and Stage 2 heap leach pads, the overflow pond, and the solution collection channel. The reclamation financial assurance estimate as at ~~June 30, 2018~~March 31, 2019 is $2,450 (December 31, ~~2017~~2018– ~~$1,869)~~$2,450).

In addition to the above, the Company is required to obtain and maintain financial assurance for initiating and completing corrective action and remediation of a reasonably foreseeable release from the Project’s waste management units as required by the Regional Board. The reclamation financial assurance estimate as at ~~June 30, 2018~~March 31, 2019 is ~~$278~~$320 (December 31, ~~2017~~2018– $278).

~~The Company~~As at March 31, 2019 GQM LLC had entered into ~~$4,921 (2017~~$5,507 (December 31, 2018 –~~$3,612)~~ $4,921) in surety bond agreements in order to release its reclamation ~~deposits. The Company~~deposits and a bond for power of $443 (December 31, 2018 - $443). GQM LLC pays a yearly premium of ~~$101 (2017~~$100 (2018 – ~~$90)~~ $100). Golden Queen Ltd. has provided a corporate guarantee on the surety bonds. In addition, a certificate of deposit for $1,000 was posted as collateral to reclamation bonding in 2018.

Asset Retirement Obligation

The total asset retirement obligation as at ~~June 30, 2018,~~March 31, 2019, was ~~$2,413~~$2,966 (December 31, ~~2017~~2018– ~~$1,838)~~$2,497).

The following is a summary of asset retirement obligations:

	June 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Balance, beginning of the period	$	1,838	$	1,366	$	2,497	$	1,838
Accretion		83		126		52		167
Changes in cash flow estimates		492		346		417		492
Balance, end of the period	$	2,413	$	1,838	$	2,966	$	2,497

Off-balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Transactions with Related Parties

Except as noted elsewhere in this Form 10-Q, related party transactions are disclosed as follows:

(i)

Compensation of Key Management Personnel, Transactions with Related Parties and Related Party Balances

For the three ~~and six~~ months ended ~~June 30, 2018,~~March 31, 2019, the Company recognized ~~$104 and $299 (for the three and six months ended June 30, 2017~~$361 (2018– $~~78 and $278)~~195) salaries and fees for ~~Officers and Directors.~~

~~As at June 30, 2018, $nil (December 31, 2017~~– ~~$38) was included in prepaid expenses and other current assets for closing fees paid to related parties.~~

~~As at June 30, 2018, $28 (December 31, 2017~~–$463) for amended fees and accrued interest payable to related parties was included in accounts payable and accrued liabilities for accrued interest payable to related parties and salaries and fees payable to Officers and Directors.

(ii)

Note Payable

~~On November 18, 2016, the~~

As at December 31, 2018, The Company ~~entered into~~had a loan with the Clay Group ~~for $31,000~~with a principal balance of $25,625 (the ~~“November 2016~~“Clay Group Loan”),. The Clay Group Loan had principal and accrued interest due as follows: $1.7 million of principal and accrued interest on January 1, 2019; $3.9 million of principal and accrued interest on April 1, 2019; and the balance due on May 21, 2019 and an annual interest rate of 8%, payable quarterly. In connection with the November 2016 Loan the Company issued 8,000,000 common share purchase warrants exercisable for a period of five years expiring November 21, 2021. The common share purchase warrants have an exercise price of $0.85. As per an anti-dilution provision included in the November 2016 Loan agreement, the exercise price of the November 2016 Warrants was revised to $0.6650 on the rights offering completion date. The expiry date of November 18, 2021 of the November 2016 Warrants remains unchanged.

2019. On November 10, 2017, the Company and the Clay Group entered into a letter agreement (the “Letter Agreement”) pursuant to which they agreed to amend the November 2016 Loan by reducing the 2018 quarterly and 2019 Q1 principal payments from $2,500 to $1,000, adding the reduction of such payments pro-rata to the remaining 2019 payments, and increasing the annual interest rate from 8% to 10% effective January 1, 2018 (the “November 2017 Loan”). On February 22,December 27, 2018, the Company and the Clay Group ~~entered into definitive agreements~~agreed to amend the ~~terms~~Clay Group Loan, extending the due date of $1.7 million of principal as well as interest from the original due date of January 1, 2019 to February 1, 2019. An extension fee of $125 was added to the principal amount owing. On February 1, 2019, the due date was extended to February 8, 2019 for an extension fee of $75 that was added to the principal amount owing. On February 8, 2019, the due dates of principal and interest on the Clay Group Loan were extended until completion of the ~~November 2016 Loan~~proposed transaction between the Clay Group and the ~~registration rights agreement in accordance with the Letter Agreement. This amendment was~~Company. The amendments were accounted for as a debt ~~modification.~~modifications.

The following table summarizes activity on the notes payable:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Balance, beginning of the period	$	30,099		$	26,347		$	24,690		$	30,099
Interest payable transferred to principal balance		-			2,212
Accretion of discount on loans		994			1,940			526			2,040
Capitalized financing and legal fees		-			(400	)
Accretion of capitalized financing and legal fees		130			-
Capitalized financing, extension and legal fees								(75	)		(125	)
Extension fee added to principal								75			125
Accretion of capitalized financing, extension and legal fees								265			262
Repayment of loans and interest		(6,711	)		-			-			(7,711	)
Balance, end of the period	$	24,512		$	30,099
Balance, end of the year							$	25,481		$	24,690

Current portion	$	24,512		$	7,712		$	25,481		$	24,690
Non-current portion	$	-		$	22,387		$	-		$	-

(iii)

Amortization of Discounts and Interest Expense

The following table summarizes the amortization of discounts and interest on loan:

Three Months
Ended
June 30, Three Months
Ended
June 30, Six Months
Ended
June 30, Six Months
Ended
June 30,
2018 2017 2018 2017
Accretion of the Nov 2017 Loan discount $ 504 $ 454 $ 994 $ 740
Accretion of capitalized financing and legal fees 66 - 130 -
Interest expense related to the Nov 2017 Loan 695 646 1,409 1,272
Closing and commitment fees related to the Credit Facility 10 - 40 -
Interest expense related to Komatsu financial loans⁽¹⁾ 166 150 401 285
Accretion of discount and interest on loan $ 1,441 $ 1,250 $ 2,974 $ 2,297

	Three Months Ended March 31,		Three Months Ended March 31,
	2019		2018
Accretion of the Clay Group Loan discount	$	526	$	490
Accretion of capitalized financing and legal fees		265		65
Amortization of deferred financing fees		655		-
Interest expense related to the Clay Group Loan		658		713
Interest expense related to the 2018 Credit Facility		180		-
Closing and commitment fees related to credit facilities		27		30
Interest expense related to Komatsu financial loans⁽¹⁾		109		235
Accretion of discount and interest on loan	$	2,420	$	1,533

⁽¹⁾

Komatsu is not a related party and has only been included in the above table to reconcile the total interest expense incurred for the period to the amounts capitalized and expensed.

(iv)

Joint Venture ~~Transaction~~

~~If a member becomes less than a 20% interest holder, its remaining interest will (ultimately) be terminated through one of three events at the non-diluted member’s option:~~

~~Through conversion to a net smelter royalty (“NSR”);~~

~~Through a buy-out (at fair value) by the non-diluted member; or~~

~~Through a sale process by which the diluted member’s interest is sold.~~

The net assets of GQM LLC as at ~~June 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 are as follows:

	June 30, 2018			December 31, 2017			March 31, 2019			December 31, 2018
Assets, GQM LLC	$	160,379		$	149,095		$	176,635		$	171,334
Liabilities, GQM LLC		(24,130	)		(28,024	)		(24,782	)		(29,904	)
Net assets, GQM LLC	$	136,249		$	121,071		$	151,853		$	141,430

Included in the assets above, is ~~$5,930~~$4,713 (December 31, ~~2017~~2018– ~~$2,606)~~$4,149) in cash held by GQM LLC which is directed specifically to fund capital expenditures required to continue with production and to settle GQM LLC’s obligations. The liabilities of GQM LLC do not have recourse to the general credit of Golden Queen except for ~~$2,203~~$349 for ~~two~~a mining drill ~~loans~~loan and ~~$4,921~~$5,507 in surety bond agreements.

~~Non-Controlling Interest~~

Permanent Non-
Controlling
Interest Temporary Non-
Controlling
Interest
Carrying value of non-controlling interest, December 31, 2017 $ 36,321 $ 24,214
Capital contribution 10,000 -
Net and comprehensive loss for the period (1,446 ) (964 )
Carrying value of non-controlling interest, June 30, 2018 $ 44,875 $ 23,250

(v)

Credit Facility

In connection with the 2018 Credit Facility, the Lenders were issued 21,486 warrants (the “GQM LLC Warrants”), with each warrant entitling the holder to purchase a unit of GQM LLC for a period of five (5) years at an exercise price of $475.384 per unit. The warrants are classified as a derivative liability due to a clause in the warrant agreement that offers the warrant holders price protection. The fair value of GQM LLC Warrants at the issuance date of $3,314 is amortized to the statement of loss over the expected life of the warrants. During the three months ended March 31, 2019, the Company recorded amortization expense of $655.

The 2018 Credit Facility ~~expired on May 22, 2018. The balance~~is secured by a pledge of the ~~Credit Facility was $3,000 as at December 31, 2017, and the balance was repaid during the first quarter of 2018.~~Company’s equity interest in GQM LLC.

Fair Value of Financial Instruments

Fair Value Measurements

The three levels of the fair value hierarchy are as follows:

Level 1

Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

Level 2

Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability;

~~Level3~~

Level 3

Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity).

	March 31, 2019
	Total		Level 1		Level 2		Level 3
Liabilities:
Share purchase warrants – Related Party	$	63	$	-	$	63	$	-
GQM LLC Warrants – Related Party		3,477		-		3,477		-
	$	3,540	$	-	$	3,540	$	-

	December 31, 2018
	Total		Level 1		Level 2		Level 3
Liabilities:
Share purchase warrants – Related Party	$	76	$	-	$	76	$	-
GQM LLC Warrants – Related Party		3,314		-		3,314		-
	$	3,390	$	-	$	3,390	$	-

Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The fair value measurement of the financial instruments above uses observable inputs in option price models such as the binomial and the Black-Scholes valuation models.

Please refer also to the note on fair value of derivative liability underResults of operations above for more information.

Select Non-Consolidated Figures

The Company has a 50% interest in GQM LLC, which meets the definition of a Variable Interest Entity (“VIE”). The Company consolidates entities which meet the definition of a VIE for which it is the primary beneficiary. The Company has determined it is the member of the related party group that is most closely associated with GQM LLC and, as a result, is the primary beneficiary who consolidates GQM LLC.

The following table shows figures attributable to the Company only as at ~~June 30, 2018:~~March 31, 2019:

GQM LLC
100% GQM LLC
50%
Attributable
to GQM
Ltd. GQM Ltd.
on a Non-
Consolidated
Basis * GQM Ltd.
Attributable
(1) (2) (1) + (2)
Cash $ 5,930 $ 2,965 $ 4,608 $ 7,573
Short Term Debt $ 8,096 $ 4,048 $ 24,512 $ 28,560
Long Term Debt $ 8,306 $ 4,153 $ 0 $ 4,153
Working Capital/(Deficit) $ 18,376 $ 9,188 $ (20,074 ) $ (10,886 )

	GQM LLC		GQM LLC 50% Attributable to GQM Ltd.		GQM Ltd. on a Non- Consolidated Basis *			GQM Ltd. Attributable
	100%		(1)		(2)			(1) + (2)
Cash and restricted cash	$	4,713	$	2,357	$	1,971		$	4,328
Short Term Debt	$	5,708	$	2,854	$	26,791		$	29,645
Long Term Debt	$	4,810	$	2,405	$	-		$	2,405
Working Capital	$	19,785	$	9,893	$	(25,126	)	$	(15,233	)

* includes GQM Holdings

The following table shows figures attributable to the Company only for the ~~six~~three months ended ~~June 30, 2018:~~March 31, 2019:

GQM LLC
100% GQM LLC
50%
Attributable
to GQM
Ltd. GQM Ltd.
on a Non-
Consolidated
Basis * GQM Ltd.
Attributable
(1) (2) (1) + (2)
Revenue $ 24,070 $ 12,035 $ - $ 12,035
Cost of sales including depreciation and depletion $ (27,280 ) $ (13,640 ) $ (205 ) $ (13,845 )
Accretion expense $ (84 ) $ (42 ) $ - $ (42 )
G&A Expenses $ (1,132 ) $ (566 ) $ (922 ) $ (1,488 )
Share based payments $ - $ - $ (80 ) $ (80 )
Decrease in fair value of derivative liability $ - $ - $ 68 $ 68
Finance Expense $ (441 ) $ (221 ) $ (2,533 ) $ (2,754 )
Interest Income $ 40 $ 20 $ 32 $ 52
Other $ 8 $ 4 $ - $ 4
Net Loss $ (4,819 ) $ (2,410 ) $ (3,640 ) $ (6,049 )

	GQM LLC			GQM LLC 50% Attributable to GQM Ltd.			GQM Ltd. on a Non- Consolidated Basis *			GQM Ltd. Attributable
	100%			(1)			(2)			(1) + (2)
Revenue	$	16,979		$	8,490		$	-		$	8,490
Cost of sales including depreciation and depletion	$	(14,742	)	$	(7,371	)	$	(108	)	$	(7,479	)
Accretion expense	$	(52	)	$	(26	)	$	-		$	(26	)
G&A Expenses	$	(1,022	)	$	(511	)	$	(784	)	$	(1,295	)
Share based payments	$	-		$	-		$	(27	)	$	(27	)
Decrease in fair value of derivative liability	$	(163	)	$	(82	)	$	13		$	(69	)
Interest Expense	$	(970	)	$	(485	)	$	(1,450	)	$	(1,935	)
Interest Income	$	66		$	33		$	8		$	41
Net Loss	$	96		$	48		$	(2,348	)	$	(2,300	)

* includes GQM Holdings

Liquidity and Capital Resources

The Company’s access to the net assets of GQM LLC is determined by the Board of Managers of GQM LLC. The Board of Managers is not controlled by the Company ~~has generated $113,384~~and therefore there is no guarantee that any access to the net assets of GQM LLC would be provided to the Company in ~~revenues~~order to continue as a going concern. The Board of Managers of GQM LLC determine when and if distributions from ~~operations since inception~~GQM LLC are made to the holders of its membership units at their sole discretion.

The Company was required to pay the following amounts to the Clay Group on the following dates: $1.7 million of interest and asprincipal on January 1, 2019, $3.9 million of interest and principal on April 1, 2019 and $21.7 million of interest and principal on May 21, 2019. On December 27, 2018, the Company and the Clay Group agreed to postpone the January 1, 2019 $1.7 million of interest and principal payment until February 1, 2019 for a restructuring fee of $125. On January 31, 2019, the Company and the Clay Group agreed to an additional extension to February 8, 2019 for an extension fee of $75. On February 9, 2019, the parties agreed to defer payments of principal and interest until completion of the proposed Transaction involving the sale of our 50% ownership in Soledad Mountain.

As at ~~June 30, 2018,~~March 31, 2019, the Company had ~~an accumulated deficit of $94,549 and~~a working capital deficit of ~~$9,792.~~$15.3 million and during the three months ended March 31, 2019, the cash used in operating activities was $1.0 million. The Company is currently unable to repay the interest and principal payments due on the November 2017 Loan. The Company relies on cash distributions from GQM LLC to service its debt and such distributions are contingent on GQM LLC’s ability to generate positive cash flows. The Company reviewed the 2019 budget and the draft Life of Mine Plan and the results for the three months ended March 31, 2019 and has determined it is unlikely it will receive sufficient distributions from GQM LLC to service its debt in early 2019. This situation raises substantial doubt about the Company’s ability to continue as a going concern. Consequently, since the third quarter of 2018, the Company had pursued discussions with the Clay Group to restructure the reimbursement of the debt payments. The discussions terminated with the February 9, 2019 proposed Transaction.

See the “Recent Developments” section of this Form 10-Q for details of the proposed Transaction.

Cash from operating activities:

For the ~~six~~three months ended ~~June 30, 2018, $10,708~~March 31, 2019, $1,007 of cash was used in operating activities compared to ~~$5,450~~$7,394 of cash ~~generated from~~used in operating activities for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. The ~~increased~~decreased use of cash in ~~2018~~2019 was primarily due to increased ~~direct mining costs and reduced~~ revenue ~~arising from lower production~~ in ~~2018~~2019 compared to ~~2017.~~2018.

Cash used in investing activities:

For the ~~six~~three months ended ~~June 30, 2018, $2,394~~March 31, 2019, $2,031 of cash was used in investing activities compared to ~~$9,479~~$2,071 of cash used in investing activities for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. The ~~significant construction costs related to~~major use of cash in 2019 was the ~~heap leach pad incurred during the six months ended June 30, 2017 were $8,600. Since the heap leach pad was completed in 2017, no significant costs were incurred in the six months ended June 30, 2018.~~purchase and installation of a replacement secondary cone crusher.

Cash from financing activities:

For the ~~six~~three months ended ~~June 30, 2018, $20,703~~March 31, 2019, $2,991 of cash was generated from financing activities compared to ~~$2,988~~$24,758 of cash ~~used in~~generated from financing activities for the ~~six~~three months ended ~~June 30, 2017.~~March 31, 2018. In the 2019 period, the company received $5,000 from a credit facility. In the 2018 period, the Company completed a rights offering raising gross proceeds of $25,036.

Working capital:

The following table shows working capital as at ~~June 30, 2018:~~March 31, 2019:

GQM LLC
100%
GQM Ltd. on a
Non-
Consolidated
Basis * GQM Ltd. on a
Consolidated
Basis **
Current assets $ 23,691 $ 4,747 $ 28,438
Current liabilities (13,348 ) (24,821 ) (38,231 )
Working capital/(deficit) $ 10,343 $ (20,074 ) $ (9,793 )

	GQM LLC 100%			GQM Ltd. on a Non- Consolidated Basis *			GQM Ltd. on a Consolidated Basis **
Current assets	$	37,119		$	2,071		$	39,190
Current liabilities		(27,333	)		(27,197	)		(54,530	)
Working capital	$	9,786		$	(25,126	)	$	(15,340	)

includes GQM Holdings

includes GQM Holdings and GQM LLC

Golden Queen and GQM Holdings

As at ~~June 30, 2018,~~March 31, 2019, Golden Queen and GQM Holdings had current assets of ~~$4,747~~$2,071 (December 31, ~~2017~~2018 – ~~$502)~~$2,693) and current liabilities of ~~$24,821~~$27,197 (December 31, ~~2017~~2018 – ~~$9,194)~~$32,181) for a working capital deficit of ~~$20,074~~$25,126 (December 31, ~~2017~~2018 – working capital deficit of ~~$8,692)~~$29,488). The increase in current liabilities is primarily the result of interest expense on the Clay Group Loan during the three months ended March 31, 2019.

GQM LLC

As at ~~June 30, 2018,~~March 31, 2019, GQM LLC had current assets of ~~$23,691~~$37,119 (December 31, ~~2017~~2018 – ~~$12,162)~~$28,591) and current liabilities of ~~$13,348~~$27,333 (December 31, ~~2017~~2018 – ~~$16,572)~~$16,786) for working capital of ~~$10,343~~$9,786 (December 31, ~~2017~~2018 – working capital deficit of ~~$4,410)~~$11,805). The increase in current liabilities is due to the $10,000 credit line due March 31, 2020 becoming a current liability.

Outstanding Share Data

The number of shares issued and outstanding and the fully diluted share position are set out in the table below:

Item		No. of Shares
Shares issued and outstanding as at December 31, ~~2017~~2018			~~111,148,683~~	300,101,444
Shares issued asduring the ~~result of a rights offering~~period up to May 6, 2019			~~188,952,761~~	-
Shares issued and outstanding as at ~~June 30, 2018~~	May 6, 2019		300,101,444		Exercise Price	Expiry Date
Shares to be issued on exercise of directors and employees stock options			~~2,475,001~~	2,325,001	$0.29 to ~~$1.59~~$0.66	From 09/~~03/18~~08/20 to 10/20/22
Shares to be issued on exercise of warrants			24,317,700		$~~0.665~~0.67 to ~~$0.95~~$0.78 and CAD $2.00	From 06/08/20 to 11/18/21
Fully diluted ~~August 9, 2018~~May 6, 2019			~~326,894,145~~	326,744,145

The Company has unlimited authorized share ~~capital.~~capital

Non-US GAAP Financial Performance Measures

Non-US GAAP financial measures are intended to provide additional information only and do not have any standard meaning prescribed by generally accepted accounting principles. These measures should not be considered in isolation or as a substitute for performance measures prepared in accordance with US GAAP.

Total Cash Costs

Total cash costs are derived from amounts included in the statement of operations and include direct mining costs and site general and administrative costs. The direct mining costs shown on the table below include mine site operating costs such as mining, processing, smelting, refining, third party transportation costs, advanced minimum royalties and production costs less silver metals revenues. Management has determined that silver revenues when compared with gold revenues, are immaterial and therefore are considered a by-product of the production of gold.

The table below shows a reconciliation of total cash costs per gold ounce and cash costs per gold ounce on a by-product basis:

Three Months Ended
June 30, 2018 March 31, 2018 December 31, 2017
Total cash costs
Mining $ 8,087 $ 7,376 $ 7,174
Processing 4,707 4,488 4,346
Indirect mining cost 2,029 1,972 2,308
Inventory changes and others (6,735 ) (820 ) 1,970
Cost of sales 8,088 13,016 15,798
Site general and administrative 792 732 897
Cash costs before by-product credits 8,880 13,748 16,695
Divided by gold produced (oz) 9,976 6,579 9,886
Cash costs per ounce of gold produced ($/oz) 890 2,090 1,689
Less: By-product silver credits per ounce ($/oz) (160 ) (136 ) (123 )
Total cash cost per ounce of gold produced on a by-product basis ($/oz) $ 730 $ 1,954 $ 1,566

Ore placed (tons) 943,148 806,450 837,779
Total Cash Costs ($/t placed) 16.56 18.06 17.52
Crusher mechanical availability (%) 73 % 65 % 69 %
Apparent cumulative recovery⁽¹⁾ - gold (%) 69.1 % 71.5 % 75.5 %
Apparent cumulative recovery⁽¹⁾ - silver (%) 27.7 % 27.1 % 27.4 %

	Three months ended
	March 31,			March 31,
	2019			2018
Total Cash Costs
Mining	$	11,051		$	7,376
Processing		4,821			4,488
Indirect mining cost		1,525			1,972
Inventory changes and others		(5,113	)		(820	)
Direct mining costs		12,284			13,016
Site general and administrative expenses		1,009			732
Cash costs before by-product credits		13,293			13,748
Divided by gold produced (oz)		12,032			6,579
Cash costs per ounce of gold produced ($/oz)		1,105			2,090
Less: By-product silver credits per ounce ($/oz)		(120	)		(136	)
Total cash cost per ounce of gold produced on a by-product basis ($/oz)	$	985		$	1,954

Ore placed (tons)		852,893			806,450
Total cash costs ($/t placed)		21.55			18.06
Crusher mechanical availability (%)		62	%		65	%
Apparent cumulative recovery⁽¹⁾ – gold		67.4	%		71.5	%
Apparent cumulative recovery⁽¹⁾ - silver		29.3	%		27.1	%

⁽¹⁾

Note: Apparent cumulative recovery is the ratio of metal produced since beginning of leaching over total estimated metal contained in ore loaded to pad since beginning of operation.

The increase in inventory during the second quarter was caused by the significant increase in the volume of mined ore stockpile and the increased number of gold ounces currently under leach. Historically, the inventory’s net realizable value was below its cost which resulted in inventory write-downs. In the three months ended June 30, 2018, the Company did not record any write-down as inventory’s net realizable value exceeded its cost.

All-in Sustaining Costs

Golden Queen defines all-in sustaining costs as the sum of direct mining costs (as defined under total cash costs), site and corporate general and administrative costs, share based payments, reclamation liability accretion and capital expenditures that are sustaining in nature. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Other companies may calculate these measures differently.

The table below shows a reconciliation of cash costs per gold ounce on a by-product basis and all-in sustaining costs per ounce:

										Three months ended
	Three Months Ended									March 31,			March 31,
	June 30, 2018			March 31, 2018			December 31, 2017			2019			2018
All-in sustaining costs
Cash costs before by-product credits	$	8,880		$	13,748		$	16,695
Cash costs before by-product credits*										$	13,293		$	13,748
Silver by-product		(1,598	)		(895	)		(1,221	)		(1,447	)		(895	)
Total cash cost after by-product		7,282			12,853			15,474			11,846			12,853
Corporate general and administrative expenses		87			522			549			796			477
Share based payments		35			45			68
Stock based compensation											27			45
Accretion expense		42			42			32			52			42
Sustaining capital		2,974			2,412			3,303			2,032			2,412
All-in sustaining costs		10,420			15,874			19,426			14,753			15,829
Divided by gold produced (oz)		9,976			6,579			9,886			12,032			6,579
All-in sustaining costs per gold ounce on a by-product basis	$	1,045		$	2,413		$	1,965		$	1,226		$	2,406

*The following table reconciles the above non-US GAAP measures to the most directly comparable US GAAP measures:

										Three months ended
	Three Months Ended									March 31,			March 31,
	June 30, 2018			March 31, 2018			December 31, 2017			2019			2018
Cost of goods sold	$	11,494		$	16,034		$	19,450			14,902			16,034
Less: depreciation and depletion		(3,364	)		(2,976	)		(3,526	)	$	(2,566	)	$	(2,976	)
Less: accretion expense		(42	)		(42	)		(126	)		(52	)		(42	)
Direct mining costs		8,088			13,016			15,798			12,284			13,016
Add: site general and administrative expenses		792			732			897			1,009			732
Cash costs before by-product credits	$	8,880		$	13,748		$	16,695		$	13,293		$	13,748

Summary of Significant Accounting Policies and Estimates

Full disclosure of the Company’s significant accounting policies and estimates in accordance with US GAAP can be found in the notes ofto its audited consolidated financial statements for the year ended December 31, ~~2017~~2018 and unaudited condensed consolidated interim financial statements for the three months ended March 31, ~~2018.~~2019.

Adopted

The ASU was effective for annual and interim periods beginning January 1, 2019 and is applicable on a modified retrospective basis. The Company adopted the guidance effective January 1, 2019 and has applied the guidance on a modified retrospectively basis. There was an immaterial impact on the financial statements from adoption of this guidance.

Additional Information

Further information on Golden Queen Mining Co. Ltd. is available on the SEDAR ~~website~~web site atwww.sedar.com and on the Company’s web site atwww.goldenqueen.com.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

Item 4. Controls and Procedures.

Disclosure controls and procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this report.

The Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the applicable Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to the Company’s management, including the Company’s Chief Executive Officer and the Company’s Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Management’s report on internal control over financial reporting

Changes in Internal Control

There were no changes in our internal control over financial reporting (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act) during the quarter ended ~~June 30, 2018~~March 31, 2019 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, other than the Company has implemented a remediation plan and has addressed the ~~deficiencies~~deficiency previously noted ~~in the areas of personnel and~~with regards to inventory controls, and has engaged an external consultant to assist in the documentation and review of its internal controls.

Fraud Analysis

The Company is committed to preventing fraud and corruption and is developing an anti-fraud culture. To achieve this goal, the Company has committed to the following:

Developing and maintaining effective controls to prevent fraud;

Ensuring that if fraud occurs a vigorous and prompt investigation takes place;

Taking appropriate disciplinary and legal actions;

Reviewing systems and procedures to prevent similar frauds;

Investigating whether there has been a failure in supervision and take appropriate disciplinary action if supervisory failures occurred; and

Recording and reporting all discovered cases of fraud.

The following policies have been developed to support the Company’s goals:

·●

Insider Trading Policy

·●

Managing Confidential Information Policy

·●

Whistleblower Policy

·●

Anti-corruption Policy

All policies can be viewed in full on the Company’s website atwww.goldenqueen.com

For the ~~six~~three months ended ~~June 30, 2018~~March 31, 2019 and the year ended December 31, ~~2017,~~2018, there were no reported instances of fraud.

~~Part~~PART II – ~~Other Information~~OTHER INFORMATION

Item 1. Legal Proceedings

Fromtime to time, we are a party to routine litigation and proceedings that are considered part of the ordinary course of our business. We are not aware of any material current, pending, or threatened ~~litigation with respect~~litigation.

Item 1A. Risk Factors

Golden Queen and its future business, operations and financial condition are subject to various risks and uncertainties due to the ~~Company.~~nature of its business and the present stage of development of the Mine. Certain of these risks and uncertainties are under the heading “Risk Factors” under Golden Queen’s Form 10-K dated March 15, 2017 which is available on SEDAR atwww.sedar.com, EDGAR atwww.sec.gov and on our website atwww.goldenqueen.com.

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

Not applicable.

Item 3. Defaults Upon Senior ~~Securities~~Securities.

Not applicable.

Item 4. Mine Safety Disclosures

GQM LLC is the operator of the Project, which is located in Mojave in Kern County, California. The mine safety disclosures required by section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K are included in Exhibit 95.1 of this Quarterly Report. There ~~were no reportable incidents~~was one lost-time accident at GQM LLC during the three months ended ~~June 30, 2018.~~March 31, 2019.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

Exhibit No.	Description of Exhibit	Manner of Filing

10.1	First Amendment to Second Amended and Restated Term Loan Agreement dated February 22, 2018 among the Company, the Landon T. Clay 2009 Irrevocable Trust Dated March 6, 2009, EHT, LLC, and the Clay Family 2009 Irrevocable Trust ~~Dated~~dated April 14, 2009	Incorporated by reference to Exhibit 10.1 to the Form 10-Q of the Company, filed with the SEC on May 10, 2018

10.2	First Amendment to Amended and Restated Registration Rights Agreement dated February 22, 2018 among the Company, the Landon T. Clay 2009 Irrevocable Trust Dated March 6, 2009, EHT, LLC, and the Clay Family 2009 Irrevocable Trust ~~Dated~~dated April 14, 2009	Incorporated by reference to Exhibit ~~10.1~~10.2 to the Form 10-Q of the Company, filed with the SEC on May 10, 2018

10.3	Revolving Credit Agreement dated October 12, 2018 among Golden Queen Mining Company, LLC, Golden Queen Mining Holdings, Inc., Gauss LLC, Gauss Holdings LLC and Auvergne LLC	Incorporated by reference to Exhibit 10.3 to the Form 10-Q of the Company, filed with the SEC on November 8, 2018

10.4	Share Purchase Agreement dated February 7, 2019 among the Company, and Estate of Landon Thomas Clay, Thomas M. Clay, Lavinia D. Clay, Cassius M.C. Clay, Landon H. Clay, Richard T. Clay, Jonathan Clay, James Clay, Clay Family 2009 Irrevocable Trust, LTC 2009 Irrevocable Trust, EHT, LLC, Monadnock Charitable Lead Annuity Trust dated May 31, 1996, Arctic Coast Petroleums, Ltd., and 933 Milledge, LLC	Incorporated by reference to Exhibit 10.1 to the Form 8-K of the Company, filed with the SEC on February 11, 2019

31.1	Certification of the Principal Executive Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the US Securities Exchange Act of 1934	Filed herewith

31.2	Certification of the Principal Financial Officer Pursuant to Rule 13a-14(a) or 15d-14(a) of the US Securities Exchange Act of 1934	Filed herewith

32.1	Section 1350 Certification of the Principal Executive Officer	Filed herewith

32.2	Section 1350 Certification of the Principal Financial Officer	Filed herewith

95.1	Mine Safety Disclosure	Filed herewith

101	Financial Statements from the Quarterly Report on Form 10-Q of the Company for the three months ended ~~June 30, 2018,~~March 31, 2019, formatted in XBRL	Filed herewith

SIGNATURES

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

Date: ~~August 9, 2018~~May 7, 2019

GOLDEN QUEEN MINING CO. LTD.
(Registrant)

By:	/s/ ~~Thomas M. Clay~~
	*~~Thomas M. Clay~~*
	~~Principal Executive Officer~~

~~By:~~	~~/s/~~ Guy Le Bel
		*Guy Le Bel*
		Principal Executive and Financial Officer

Warrants related to June 2015 Loan	June 30, 2018			December 31, 2017
Risk-free interest rate		1.91	%		1.73	%
Expected life of derivative liability		1.94 years			2.44 years
Expected volatility		69.67	%		78.59	%
Dividend rate		0.00	%		0.00	%

	Shares			Weighted Average Exercise Price per Share
Options outstanding, December 31, 2016		1,555,000		$	0.85
Options granted		1,605,001		$	0.38
Options forfeited		(166,667	)	$	0.64
Options expired		(393,333	)	$	1.13
Options outstanding, December 31, 2017		2,600,001		$	0.54
Options forfeited		(75,000	)	$	0.29
Options expired		(50,000	)	$	1.16
Options outstanding, June 30, 2018		2,475,001		$	0.53

		Three months ended						Six months ended
		30-June-18			30-June-17			30-June-18			30-June-17
Mining - Key Metrics
Ore mined	k ton		1,473			1,010			2,608			1,862
Waste mined: ore mined ratio	ore mined ratio		1.7:1			3.7:1			1.9:1			3.7:1
Gold grade placed	oz/ton		0.020			0.016			0.019			0.017
Silver grade placed	oz/ton		0.347			0.201			0.331			0.215
Gold sold	oz		9,892			12,653			16,421			23,813
Silver sold	oz		96,127			53,514			149,739			115,609
Apparent cumulative recovery - gold⁽¹⁾	%		69.1	%		68.0	%		69.1	%		68.0	%
Apparent cumulative recovery - silver⁽¹⁾	%		27.7	%		25.3	%		27.7	%		25.3	%

Financial⁽¹⁾
Revenue	$		14,485			16,882			24,070			31,686
Cost of sales, excluding depreciation and depletion (or Direct mining costs)	$		8,130			13,367			21,146			24,929
Depreciation and depletion	$		3,364			2,742			6,340			5,498
Income (loss) from mine operations	$		2,991			773			(3,416	)		1,259
General and administrative expenses	$		(879	)		(712	)		(2,133	)		(2,128	)
Total other income (expenses)	$		(1,508	)		1,131			(2,910	)		(755	)
Net and comprehensive income (loss)	$		604			1,192			(8,459	)		(1,624	)
Net and comprehensive income (loss) attributable to Golden Queen Mining Co Ltd.	$		(632	)		962			(6,049	)		(1,465	)
Average realized gold price⁽¹⁾	$/oz sold		1,302			1,262			1,313			1,246
Average realized silver price⁽¹⁾	$/oz sold		16.62			17.10			16.65			17.37
Total cash costs - net of by-product credits⁽¹⁾⁽²⁾	$/Au oz produced		730			1,038			1,214			1,016
All-in sustaining costs - net of by-product credits⁽¹⁾	$/Au oz produced		1,045			1,427			1,586			1,552
Total cash costs⁽³⁾	$/t placed		16.56			13.48			17.25			14.61
Off-site costs⁽¹⁾	$/t placed		0.63			0.71			0.62			0.77