---

UNITED STATESSECURITIES
AND EXCHANGE COMMISSIONWashington, D.C. 20549
________________

FORM 20-F

[   ]     REGISTRATION
STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF
1934

OR

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

For fiscal year ended December 31, 2017

OR

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

For the transition period from ______ to ______

OR

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

Date of event requiring this shell company report:

Commission file number: 001-35124

LONCOR RESOURCES INC.(Exact Name of Registrant as Specified in Its Charter)

Ontario(State or Other Jurisdiction of
Incorporation of Organization)

1 First Canadian Place, 100 King Street West, Suite 7070,
Toronto, Ontario, M5X 1E3, Canada(Address of Principal Executive
Offices, including Zip Code)

Contact: Geoffrey G. Farr; E-mail: gfarr@loncor.com; Address:
1 First Canadian Place,100 King StreetWest, Suite 7070, Toronto,
Ontario, M5X 1E3, Canada(Name, Telephone, E-mail and/or Facsimile
Number and Address of Company Contact Person)

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

Securities registered pursuant to Section 12(g) of the
Act:Common Shares

Securities for which there is a reporting obligation pursuant to
Section 15(d) of the Act.None

Indicate the number of outstanding shares of each of the issuer's
classes of capital or common stock as of December 31, 2017: 158,689,732
common shares

---

Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities Act. Yes
[   ]      No [X]

Indicate by check mark if the registrant is not required to
file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes [   ]      No[X]

Indicate by check mark whether the registrant: (1) has filed
all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days. Yes
[X]    
No [   ]

Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).Yes [  
]     No [   ]

Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging
growth company. See definition of large accelerated filer, accelerated
filer, and emerging growth company in Rule 12b-2 of the Exchange Act.

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

If an emerging growth company that
prepares its financial statements in accordance with U.S. GAAP, indicate by
check mark if the registrant has elected not to use the extended transition
period for complying with any new or revised financial accounting standards
provided pursuant to Section 13(a) of the Exchange Act.

†
The term new or revised financial
accounting standard refers to any update issued by the Financial Accounting
Standards Board to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark which basis of accounting the registrant
has used to prepare the financial statements included in this filing:

|U.S. GAAP [   ] | International Financial Reporting        | Other
      [   ]
|--------------- | ---------------------------------------- | -----------------
|                | Standards as issued by the International |                  
|                | Accounting Standards
      Board [X]     |                  

If "Other" has been checked in response to the previous
question, indicate by check mark which financial statement item the registrant
has elected to follow: [   ] Item 17    
[   ] Item 18

If this is an annual report, indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes
[   ]     No [X]

-ii-

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LONCOR RESOURCES INC. - FORM 20-F TABLE OF CONTENTS

|                                                                     |                                                             |                                                               | Page
|-------------------------------------------------------------------- | ----------------------------------------------------------- | ------------------------------------------------------------- | ----
|CAUTIONARY
      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS      | 1                                                          
|                                                                     |                                                            
|CAUTIONARY NOTE
      TO U.S. INVESTORS REGARDING RESOURCE ESTIMATES | 2                                                          
|                                                                     |                                                            
|CURRENCY                                                             | 2                                                          
|PART 1                                                              
|                                                                    
|ITEM 1.                                                              | IDENTITY OF
      DIRECTORS, SENIOR MANAGEMENT AND ADVISORS | 3                                                            
|                                                                     |                                                             |                                                              
|ITEM 2.                                                              | OFFER STATISTICS
      AND EXPECTED TIMETABLE               | 3                                                            
|                                                                     |                                                             |                                                              
|ITEM 3.                                                              | KEY
      INFORMATION                                       | 3                                                            
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | Selected Financial Data                                       | 3   
|                                                                     |                                                             |                                                               |     
|                                                                     | B.                                                          | Capitalization and
      Indebtedness                         | 4   
|                                                                     |                                                             |                                                               |     
|                                                                     | C.                                                          | Reason for the Offer and Use
      of Proceeds                | 4   
|                                                                     |                                                             |                                                               |     
|                                                                     | D.                                                          | Risk Factors                                                  | 4   
|                                                                     |                                                             |                                                              
|ITEM 4.                                                              | INFORMATION
      ON THE COMPANY                            | 15                                                           
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | History and Development of
      the Company                  | 15  
|                                                                     |                                                             |                                                               |     
|                                                                     | B.                                                          | Business Overview                                             | 19  
|                                                                     |                                                             |                                                              
|                                                                     | C.                                                          | Organizational Structure                                      | 20  
|                                                                     |                                                             |                                                              
|                                                                     | D.                                                          | Property, Plants and
      Equipment                          | 20  
|                                                                     |                                                             |                                                               |     
|ITEM 4.A.                                                            | UNRESOLVED STAFF
      COMMENTS                             | 48                                                           
|                                                                     |                                                            
|ITEM 5.                                                              | OPERATING AND
      FINANCIAL REVIEW AND PROSPECTS          | 48                                                           
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | Operating Results                                             | 48  
|                                                                     |                                                             |                                                              
|                                                                     | B.                                                          | Liquidity and Capital
      Resources                         | 48  
|                                                                     |                                                             |                                                               |     
|                                                                     | C.                                                          | Research and Development,
      Patents and Licenses, etc.    | 48  
|                                                                     |                                                             |                                                               |     
|                                                                     | D.                                                          | Trend Information                                             | 48  
|                                                                     |                                                             |                                                              
|                                                                     | E.                                                          | Off-Balance Sheet
      Arrangements                          | 48  
|                                                                     |                                                             |                                                              
|                                                                     | F.                                                          | Tabular Disclosure of
      Contractual Obligations           | 49  
|                                                                     |                                                             |                                                              
|                                                                     | G.                                                          | Safe Harbor                                                   | 49  
|                                                                     |                                                             |                                                              
|ITEM 6.                                                              | DIRECTORS, SENIOR
      MANAGEMENT AND EMPLOYEES            | 49                                                           
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | Directors and Senior
      Management                         | 49  
|                                                                     |                                                             |                                                               |     
|                                                                     | B.                                                          | Compensation                                                  | 51  
|                                                                     |                                                             |                                                               |     
|                                                                     | C.                                                          | Board Practices                                               | 55  
|                                                                     |                                                             |                                                               |     
|                                                                     | D.                                                          | Employees                                                     | 56  
|                                                                     |                                                             |                                                               |     
|                                                                     | E.                                                          | Share Ownership                                               | 57  
|                                                                     |                                                             |                                                               |     
|ITEM 7.                                                              | MAJOR SHAREHOLDERS
      AND RELATED PARTY TRANSACTIONS     | 59                                                           
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | Major Shareholders                                            | 59  
|                                                                     |                                                             |                                                               |     
|                                                                     | B.                                                          | Related Party Transactions                                    | 60  
|                                                                     |                                                             |                                                               |     
|                                                                     | C.                                                          | Interests of Experts and
      Counsel                        | 60  
|                                                                     |                                                             |                                                               |     
|ITEM 8.                                                              | FINANCIAL
      INFORMATION                                 | 60                                                           
|                                                                     |                                                             |                                                              
|                                                                     | A.                                                          | Consolidated Statements and
      Other Financial Information | 60  
|                                                                     |                                                             |                                                               |     
|                                                                     | B.                                                          | Significant Changes                                           | 61  
|                                                                     |                                                             |                                                               |     
|ITEM 9.                                                              | THE OFFER AND
      LISTING                                 | 61                                                           

-iii-

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TABLE OF CONTENTS (continued)

|                 |                                                                                     |                                                               | Page
|---------------- | ----------------------------------------------------------------------------------- | ------------------------------------------------------------- | ----
|                 | A.                                                                                  | Offer
      and Listing Details                               | 61  
|                 |                                                                                     |                                                               |     
|                 | B.                                                                                  | Plan
      of Distribution                                    | 64  
|                 |                                                                                     |                                                               |     
|                 | C.                                                                                  | Markets                                                       | 64  
|                 |                                                                                     |                                                               |     
|                 | D.                                                                                  | Selling
      Shareholder                                     | 64  
|                 |                                                                                     |                                                               |     
|                 | E.                                                                                  | Dilution                                                      | 64  
|                 |                                                                                     |                                                               |     
|                 | F.                                                                                  | Expenses
      of the Issue                                   | 64  
|                 |                                                                                     |                                                               |     
|ITEM
      10.   | ADDITIONAL
      INFORMATION                                                        | 64                                                           
|                 |                                                                                     |                                                              
|                 | A.                                                                                  | Share
      Capital                                           | 64  
|                 |                                                                                     |                                                               |     
|                 | B.                                                                                  | Memorandum
      and Articles of Association                  | 64  
|                 |                                                                                     |                                                               |     
|                 | C.                                                                                  | Material
      Contracts                                      | 66  
|                 |                                                                                     |                                                               |     
|                 | D.                                                                                  | Exchange
      Controls                                       | 67  
|                 |                                                                                     |                                                               |     
|                 | E.                                                                                  | Certain
      United States Federal Income Tax Considerations | 68  
|                 |                                                                                     |                                                               |     
|                 | F.                                                                                  | Dividends
      and Paying Agents                             | 77  
|                 |                                                                                     |                                                               |     
|                 | G.                                                                                  | Statement
      By Experts                                    | 77  
|                 |                                                                                     |                                                               |     
|                 | H.                                                                                  | Documents
      on Display                                    | 77  
|                 |                                                                                     |                                                               |     
|                 | I.                                                                                  | Subsidiary
      Information                                  | 78  
|                 |                                                                                     |                                                               |     
|ITEM
      11.   | QUANTITATIVE
      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.                   | 78                                                           
|                 |                                                                                     |                                                              
|ITEM
      12.   | DESCRIPTIONS
      OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 78                                                           
|                 |                                                                                     |                                                              
|PART II         
|                
|ITEM
      13.   | DEFAULTS,
      DIVIDEND ARREARAGES AND DELINQUENCIES.                              | 78                                                           
|                 |                                                                                     |                                                              
|ITEM
      14.   | MATERIAL
      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS. | 78                                                           
|                 |                                                                                     |                                                              
|                 | 14.A.-D.                                                                            | Modifications
      to the Rights of Security Holders         | 78  
|                 |                                                                                     |                                                               |     
|                 | 14.E.                                                                               | Use
      of Proceeds                                         | 78  
|                 |                                                                                     |                                                               |     
|ITEM
      15.   | CONTROLS
      AND PROCEDURES.                                                      | 79                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.A. | AUDIT
      COMMITTEE FINANCIAL EXPERT                                              | 80                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.B. | CODE
      OF ETHICS.                                                               | 80                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.C. | PRINCIPAL
      ACCOUNTANT FEES AND SERVICES                                        | 81                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.D. | EXEMPTIONS
      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                    | 81                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.E. | PURCHASE
      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS         | 81                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.F. | CHANGE
      IN REGISTRANT'S CERTIFYING ACCOUNTANT                                  | 82                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.G. | CORPORATE
      GOVERNANCE                                                          | 82                                                           
|                 |                                                                                     |                                                              
|ITEM
      16.H. | MINE
      SAFETY                                                                   | 82                                                           
|                 |                                                                                     |                                                              
|PART III        
|                
|ITEM
      17.   | FINANCIAL
      STATEMENTS                                                          | 82                                                           
|                 |                                                                                     |                                                              
|ITEM
      18.   | FINANCIAL
      STATEMENTS                                                          | 82                                                           
|                 |                                                                                     |                                                              
|ITEM
      19.   | EXHIBITS                                                                            | 82                                                           

-iv-

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Form 20-F and the documents incorporated by reference
herein contains "forward-looking statements" within the meaning of the United
StatesPrivate Securities Litigation Reform Actof 1995 and
"forward-looking information" within the meaning of Canadian provincial
securities laws (such forward-looking statements and forward-looking information
are referred to herein as "forward-looking statements"). Forward-looking
statements are necessarily based on a number of estimates and assumptions that
are inherently subject to significant business, economic and competitive
uncertainties and contingencies. All statements, other than statements which are
reporting results as well as statements of historical fact, that address
activities, events or developments that Loncor Resources Inc. (the
"Company" or "Loncor") believes, expects or anticipates will or
may occur in the future (including, without limitation, statements regarding
mineral resource estimates, drilling and other exploration results, potential
mineralization, potential mineral resources, and the Company's exploration and
development plans and objectives with respect to its projects) are
forward-looking statements. These forward-looking statements reflect the current
expectations or beliefs of the Company based on information currently available
to the Company. Forward-looking statements are subject to a number of risks and
uncertainties that may cause the actual events or results of the Company to
differ materially from those discussed in the forward-looking statements, and
even if such actual events or results are realized or substantially realized,
there can be no assurance that they will have the expected consequences to, or
effects on, the Company. Factors that could cause actual results or events to
differ materially from current expectations include, among other things:
uncertainties relating to the availability and costs of financing in the future;
risks related to the exploration stage of the Company's properties; the
possibility that future exploration results will not be consistent with the
Company's expectations; failure to establish estimated mineral resources or
mineral reserves; fluctuations in gold prices and currency exchange rates;
inflation; rules adopted by the U.S. Securities and Exchange Commission that may
affect mining operations in the Democratic Republic of the Congo; gold
recoveries being less than those indicated by the metallurgical testwork carried
out to date (there can be no assurance that gold recoveries in small scale
laboratory tests will be duplicated in large tests under on-site conditions or
during production); changes in equity markets; political developments in
the Democratic Republic of the Congo; lack of infrastructure; failure to procure
or maintain, or delays in procuring or maintaining, permits and approvals; lack
of availability at a reasonable cost or at all, of plants, equipment or labour;
inability to attract and retain key management and personnel; changes to
regulations or policies affecting the Company's activities; the uncertainties
involved in interpreting drilling results and other geological data; the
Company's history of losses and expectation of future losses; the Company's
ability to acquire additional commercially mineable mineral rights; risks
related to the integration of any new acquisitions into the Company's existing
operations; increased competition in the mining industry; and the other risks
disclosed under the heading "Risk Factors" in this Form 20-F.

Any forward-looking statement speaks only as of the date on
which it is made and, except as may be required by applicable securities laws,
the Company disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or results or
otherwise. Although the Company believes that the assumptions inherent in the
forward-looking statements are reasonable, forward-looking statements are not
guarantees of future performance and accordingly undue reliance should not be
put on such statements due to the inherent uncertainty therein.

The mineral resource figures referred to in this Form 20-F are
estimates and no assurances can be given that the indicated levels of gold will
be produced. Such estimates are expressions of judgment based on knowledge,
mining experience, analysis of drilling results and industry practices. Valid
estimates made at a given time may significantly change when new information
becomes available. While the Company believes that the resource estimates
included in this Form 20-F are well established, by their nature, resource
estimates are imprecise and depend, to a certain extent, upon statistical
inferences which may ultimately prove unreliable. If such estimates are
inaccurate or are reduced in the future, this could have a material adverse
impact on the Company.

1

---

Due to the uncertainty that may be attached to inferred mineral
resources, it cannot be assumed that all or any part of an inferred mineral
resource will be upgraded to an indicated or measured mineral resource as a
result of continued exploration. Confidence in the estimate is insufficient to
allow meaningful application of the technical and economic parameters to enable
an evaluation of economic viability sufficient for public disclosure, except in
certain limited circumstances. Inferred mineral resources are excluded from
estimates forming the basis of a feasibility study.

Statements concerning actual mineral resource estimates are
also deemed to constitute forward-looking statements to the extent that they
involve estimates of the mineralization that will be encountered if the relevant
project or property is developed. Mineral resources that are not mineral
reserves do not have demonstrated economic viability. There is no certainty that
mineral resources can be upgraded to mineral reserves through continued
exploration.

CAUTIONARY NOTE TO U.S. INVESTORS REGARDING RESOURCE
ESTIMATES

Resource estimates in this Form 20-F, including the documents
incorporated by reference herein, have been prepared in accordance with the
requirements of securities laws in effect in Canada, which differ from the
requirements of U.S. securities laws. Without limiting the foregoing, this Form
20-F, including the documents incorporated by reference herein, uses the terms
"indicated" and "inferred" resources. U.S. investors are advised that, while
such terms are recognized and required by Canadian securities laws, the U.S.
Securities and Exchange Commission (the "SEC") does not recognize them.
Under U.S. standards, mineralization may not be classified as a "reserve" unless
the determination has been made that the mineralization could be economically
and legally produced or extracted at the time the reserve determination is made.
U.S. investors are cautioned not to assume that all or any part of indicated
resources will ever be converted into reserves. Further, "inferred resources"
have a great amount of uncertainty as to their existence and as to whether they
can be mined legally or economically. It cannot be assumed that all or any part
of the "inferred resources" will ever be upgraded to a higher category.
Therefore, U.S. investors are also cautioned not to assume that all or any part
of the inferred resources exist, or that they can be mined legally or
economically. Disclosure of "contained ounces" is permitted disclosure under
Canadian regulations, however, the SEC normally only permits issuers to report
mineral deposits that do not constitute "reserves" as in place tonnage and grade
without reference to unit measures. Accordingly, information concerning
descriptions of mineralization and resources contained in this Form 20-F or in
the documents incorporated by reference, may not be comparable to information
made public by U.S. companies subject to the reporting and disclosure
requirements of the SEC.

National Instrument 43-101 - Standards of Disclosure for
Mineral Projects("NI 43-101") is a rule of the Canadian Securities
Administrators which establishes standards for all public disclosure an issuer
makes of scientific and technical information concerning mineral projects.
Unless otherwise indicated, all resource estimates contained in or incorporated
by reference in this Form 20-F have been prepared in accordance with NI 43-101
and the Canadian Institute of Mining, Metallurgy and Petroleum Classification
System. These standards differ significantly from the requirements of the SEC,
and resource information contained herein and incorporated by reference herein
may not be comparable to similar information disclosed by U.S. companies.

CURRENCY

Unless stated otherwise or the context otherwise requires, all
references in this Form 20-F to "US$" are to United States dollars and all
references in this Form 20-F to "Cdn$" are to Canadian dollars.

2

---

PART 1

|**Item 1.** | Identity of Directors, Senior Management and
      Advisors
|----------- | -----------------------------------------------------------

This Form 20-F is being filed as an annual report under the
United States Securities Exchange Act of 1934, as amended, (the "U.S.
Exchange Act") and, as such, there is no requirement to provide any
information under this item.

|**Item 2.** | Offer Statistics and Expected Timetable
|----------- | ---------------------------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|**Item 3.** | Key Information
|----------- | ---------------

|A. | Selected Financial Data
|-- | -----------------------

The selected consolidated financial information set forth below
for each of the five years ended December 31, 2017, 2016, 2015, 2014 and 2013,
which is expressed in United States dollars (the Company prepares its financial
statements in United States dollars), has been derived from the Company's
audited consolidated financial statements as at and for the financial years
ended December 31, 2017, 2016, 2015, 2014 and 2013. These consolidated financial
statements have been prepared in accordance with International Financial
Reporting Standards ("IFRS") issued by the International Accounting
Standards Board, which differ in certain respects from the principles the
Company would have followed had its consolidated financial statements been
prepared in accordance with generally accepted accounting principles in the
United States. The selected consolidated financial information should be read in
conjunction with the discussion in Item 5 of this Form 20-F and the consolidated
financial statements and related notes thereto filed as part of this Form 20-F
under Item 18. Historical results from any prior period are not necessarily
indicative of results to be expected for any future period.

|                                              |  | **(in
      $000 except share data)** |  
|--------------------------------------------- |  | ------------------------------------- | -
|                                              |  | 2017                                  |  
|Revenue                                       |  | $-                                    |  
|Net income (loss) from operations             |  | (61                                   | )
|Net income (loss) for the
      year          |  | (61                                   | )
|Basic and diluted net income (loss) per share |  | (0.00                                 | )
|Current assets                                |  | 268                                   |  
|Exploration and evaluation assets             |  | 27,634                                |  
|Total assets                                  |  | 27,918                                |  
|Total liabilities                             |  | 1,062                                 |  
|Net assets                                    |  | 26,856                                |  
|Share capital                                 |  | 77,287                                |  
|Shareholders' equity                          |  | 26,856                                |  
|Weighted average common shares outstanding    |  | 158,075                               |  

3

---

Exchange Rates

On March 23, 2018, the buying rate in New York City for cable
transfers in Canadian dollars, as certified for customs purposes by the Federal
Reserve Bank of New York, was US$1.00 = Cdn$1.2870. The following table sets
forth, for each of the years or, as applicable, months indicated, additional
information with respect to the noon buying rate for US$1.00 in Canadian dollars
and are based upon the rates quoted by the Federal Reserve Bank of New York.

|Rate        |  | 2017   |  |  | 2016   |  |  | 2015   |  |  | 2014   |  |  | 2013   | 
|----------- |  | ------ |  |  | ------ |  |  | ------ |  |  | ------ |  |  | ------ | 
|Average (1) |  | 1.2971 |  |  | 1.3229 |  |  | 1.2906 |  |  | 1.1083 |  |  | 1.0347 | 

___________________

(1)          The
average rate means the average of the exchange rates on the last day of each
month during the year.

|     |  | October |  |  | November |  |  | December |  |  | January |  |  | February |  |  | March       | 
|---- |  | ------- |  |  | -------- |  |  | -------- |  |  | ------- |  |  | -------- |  |  | ----------- | 
|Rate |  | 2017    |  |  | 2017     |  |  | 2017     |  |  | 2018    |  |  | 2018     |  |  | **2018(1)** | 
|High |  | 1.2894  |  |  | 1.2890   |  |  | 1.2900   |  |  | 1.2534  |  |  | 1.2806   |  |  | 1.3096      | 
|Low  |  | 1.2470  |  |  | 1.2693   |  |  | 1.2517   |  |  | 1.2293  |  |  | 1.2280   |  |  | 1.2822      | 

___________________

(1)         
Provided for the period from March 1, 2018 to March 23, 2018.

|B. | Capitalization and
Indebtedness
|-- | -------------------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|C. | Reason for the Offer and Use of
  Proceeds
|-- | ------------------------------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|D. | Risk Factors
|-- | ------------

There are a number of risks that may have a material and
adverse impact on the future operating and financial performance of Loncor and
could cause the Company's operating and financial performance to differ
materially from the estimates described in forward-looking statements relating
to the Company. These include widespread risks associated with any form of
business and specific risks associated with Loncor's business and its
involvement in the gold exploration industry.

An investment in the Company's common shares is considered
speculative and involves a high degree of risk due to, among other things, the
nature of Loncor's business (which is the exploration of mineral properties),
the present stage of its development and the location of Loncor's projects in
the Democratic Republic of the Congo (the "DRC"). In addition to the
other information presented in this Form 20-F, a prospective investor should
carefully consider the risk factors set out below and the other information that
Loncor files with the SEC and with Canadian securities regulators before
investing in the Company's common shares. The Company has identified the
following non-exhaustive list of inherent risks and uncertainties that it
considers to be relevant to its operations and business plans. Such risk factors
could materially affect the Company's future operating results and could cause
actual events to differ materially from those described in forward-looking
statements relating to the Company. As well, additional risks that the Company is unaware of or that are currently believed
to be immaterial may become important factors that affect the Company's
business.

4

---

The Company has not generated revenues from
operations, does not have a history of miningoperations, and there is no assurance that it will produce
revenue, operate profitably or provide areturn on investment in the future.

The Company has not generated revenues from operations and
there is no assurance that it will produce revenue, operate profitably or
provide a return on investment in the future. The Company has only incurred
operating losses, and the development of its projects is at an early stage. The
Company produced a loss of US$61,287 for the year ended December 31, 2017, and,
as of that date, the Companys deficit was US$58,650,391 and the Company had a
working capital deficit of US$726,550 which casts substantial doubt on the
Companys ability to continue as a going concern. The Company is subject to the
risks and challenges experienced by other companies at a comparable stage. These
risks include, but are not limited to, continuing losses and the ability to
secure adequate financing or to complete corporate transactions to meet the
minimum capital required to successfully complete its projects and fund other
operating expenses.

The Company's ability to continue as a going concern is
dependent upon its ability to obtain the necessary financing to meet its
obligations and repay liabilities arising from normal business operations when
they come due. Development of the Companys current projects to the production
stage will require significant financing. Given the current economic climate,
the ability to raise funds may prove difficult. The Company has no revenues and
is wholly reliant upon external financing to fund such plans. There can be no
assurance that such financing will be available to the Company or, if it is,
that it will be offered on acceptable terms. If additional financing is raised
through the issuance of equity or convertible debt securities of the Company,
the interests of the Company's shareholders in the net assets of the Company may
be diluted. Any failure of the Company to obtain required financing on
acceptable terms could have a material adverse effect on the Company's financial
condition, results of operations, liquidity, and its ability to continue as a
going concern, and may require the Company to cancel or postpone planned capital
investments.

The auditors report issued in respect of the Companys 2017
annual consolidated financial statements contains the following paragraph:

"Without modifying our opinion, we draw attention to
      Note 2 in the consolidated financial statements that indicates the
      Company produced a net loss of $61,287 for the year ended December
      31, 2017 and as of that date the Company had a working capital deficit
      of $726,550. These conditions, along with other matters as set
      forth in Note 2, indicate the existence of a material uncertainty
      that casts substantial doubt on the Companys ability to continue
      as a going concern. The consolidated financial statements do not include
      any adjustments that might result from the outcome of this
      uncertainty."


The assets and operations of Loncor are subject to
political, economic and other uncertainties as aresult of being located in the DRC.

Loncor's projects are located in the DRC. The assets and
operations of the Company are therefore subject to various political, economic
and other uncertainties, including, among other things, the risks of war and
civil unrest, expropriation, nationalization, renegotiation or nullification of
existing licenses, permits, approvals and contracts, taxation policies, foreign
exchange and repatriation restrictions, changing political conditions,
international monetary fluctuations, currency controls and foreign governmental
regulations that favour or require the awarding of contracts to local
contractors or require foreign contractors to employ citizens of, or purchase supplies from, a
particular jurisdiction. Changes, if any, in mining or investment policies or
shifts in political climate in the DRC may adversely affect Loncor's operations
or profitability. Operations may be affected in varying degrees by government
regulations with respect to, but not limited to, restrictions on production,
price controls, export controls, currency remittance, income taxes, foreign
investment, maintenance of claims, environmental legislation, land use, land
claims of local people, water use and mine safety. Failure to comply strictly
with applicable laws, regulations and local practices relating to mineral
rights, could result in loss, reduction or expropriation of entitlements. In
addition, in the event of a dispute arising from operations in the DRC, the
Company may be subject to the exclusive jurisdiction of foreign courts or may
not be successful in subjecting foreign persons to the jurisdiction of courts in
Canada. The Company also may be hindered or prevented from enforcing its rights
with respect to a governmental instrumentality because of the doctrine of
sovereign immunity. It is not possible for the Company to accurately predict
such developments or changes in laws or policy or to what extent any such
developments or changes may have a material adverse effect on the Company's
operations. Should the Company's rights or its titles not be honoured or become
unenforceable for any reason, or if any material term of these agreements is
arbitrarily changed by the government of the DRC, the Company's business,
financial condition and prospects will be materially adversely affected.

5

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Some or all of the Company's properties are located in regions
where political instability and violence is ongoing. Some or all of the
Company's properties are inhabited by artisanal miners. These conditions may
interfere with work on the Company's properties and present a potential security
threat to the Company's employees. There is a risk that activities at the
Companys properties may be delayed or interfered with, due to the conditions of
political instability, violence, hostage taking or the inhabitation of the
properties by artisanal miners. The Company uses its best efforts to maintain
good relations with the local communities in order to minimize such risks.

The DRC is a developing nation emerging from a period of civil
  war and conflict. Physical and institutional infrastructure throughout the DRC
  is in a debilitated condition. The DRC is in transition from a largely state
  controlled economy to one based on free market principles, and from a
  non-democratic political system with a centralized ethnic power base, to one
  based on more democratic principles. There can be no assurance that these
  changes will be effected or that the achievement of these objectives will not
  have material adverse consequences for Loncor and its operations. The DRC
  continues to experience instability in parts of the country due to certain
  militia and criminal elements. While the government and United Nations forces
  are working to support the extension of central government authority throughout
the country, there can be no assurance that such efforts will be successful.

No assurance can be given that the Company will be able to
maintain effective security in connection with its assets or personnel in the
DRC where civil war and conflict have disrupted exploration and mining
activities in the past and may affect the Company's operations or plans in the
future.

HIV/AIDS, malaria and other diseases represent a serious threat
to maintaining a skilled workforce in the mining industry in the DRC. HIV/AIDS
is a major healthcare challenge faced by the Company's operations in the
country. There can be no assurance that the Company will not lose members of its
workforce or workforce man-hours or incur increased medical costs, which may
have a material adverse effect on the Company's operations.

The DRC has historically experienced relatively high rates of
inflation.

6

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The Companys properties are in the exploration stage,
and there can be no assurance that theCompanys exploration activities will result in discoveries
that are commercially viable.

The Company's properties are in the exploration stage. The
future development of properties found to be economically feasible will require
board approval, the construction and operation of mines, processing plants and
related infrastructure. As a result, Loncor is subject to all of the risks
associated with establishing new mining operations and business enterprises
including: the timing and cost, which can be considerable, of the construction
of mining and processing facilities; the availability and costs of skilled
labour and mining equipment; the availability and costs of appropriate smelting
and/or refining arrangements; the need to obtain necessary environmental and
other governmental approvals and permits, and the timing of those approvals and
permits; and, the availability of funds to finance construction and development
activities. The costs, timing and complexities of mine construction and
development are increased by the remote location of the Company's properties. It
is common in new mining operations to experience unexpected problems and delays
during construction, development, and mine start-up. In addition, delays in the
commencement of mineral production often occur. Accordingly, there are no
assurances that the Company's activities will result in profitable mining
operations or that the Company will successfully establish mining operations or
profitably produce gold at any of its properties.

The Company may be adversely affected by fluctuations
in gold prices.

The future price of gold will significantly affect the
development of Loncor's projects. Gold prices are subject to significant
fluctuation and are affected by a number of factors which are beyond Loncor's
control. Such factors include, but are not limited to, interest rates, inflation
or deflation, fluctuation in the value of the United States dollar and foreign
currencies, global and regional supply and demand, and the political and
economic conditions of major gold-producing countries throughout the world. The
price of gold has fluctuated widely in recent years, and future price declines
could cause development of and commercial production from Loncor's mineral
interests to be impracticable. If the price of gold decreases, projected cash
flow from planned mining operations may not be sufficient to justify ongoing
operations and Loncor could be forced to discontinue development and sell its
projects. Future production from Loncor's projects is dependent on gold prices
that are adequate to make these projects economic.

The Companys activities are subject to various laws
and government approvals and no assurancecan
be given that the Company will be successful in obtaining or maintaining such
approvals orthat it will successfully comply
with all applicable laws.

Loncor's mineral exploration activities are subject to various
laws governing prospecting, mining, development, production, taxes, labour
standards and occupational health, mine safety, toxic substances, land use,
water use, land claims of local people and other matters. Although Loncor's
exploration activities are carried out in accordance with all applicable rules
and regulations, no assurance can be given that new rules and regulations will
not be enacted or that existing rules and regulations will not be applied in a
manner which could limit or curtail development.

Many of Loncor's mineral rights and interests are subject to
government approvals, licenses and permits. Such approvals, licenses and permits
are, as a practical matter, subject to the discretion of the DRC government. No
assurance can be given that Loncor will be successful in maintaining any or all
of the various approvals, licenses and permits in full force and effect without
modification or revocation. To the extent such approvals are not maintained,
Loncor may be delayed, curtailed or prohibited from continuing or proceeding
with planned exploration of mineral properties.

7

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Failure to comply with applicable laws, regulations and
permitting requirements may result in enforcement actions thereunder, including
orders issued by regulatory or judicial authorities causing operations to cease
or be delayed or curtailed, and may include corrective measures requiring
capital expenditures, installation of additional equipment, or remedial actions.
Parties engaged in the exploration or development of mineral properties may be
required to compensate those suffering loss or damage by reason of the
activities and may have civil or criminal fines or penalties imposed for
violations of applicable laws or regulations.

Amendments to current laws and regulations governing operations
or more stringent implementation thereof could have a substantial adverse impact
on Loncor and cause increases in exploration expenses, capital expenditures or
require abandonment or delays in development of mineral interests.

Exploration, development and mining involve a high
degree of risk.

All of the Company's properties are in the exploration stage
only. The exploration for and development of mineral deposits involves
significant risks that even a combination of careful evaluation, experience and
knowledge may not eliminate. While the discovery of an ore body may result in
substantial rewards, few properties that are explored are ultimately developed
into producing mines. Major expenditures may be required to locate and establish
mineral reserves, to develop metallurgical processes and to construct mining and
processing facilities at a particular site. Whether a mineral deposit, once
discovered, will be commercially viable depends on a number of factors, some of
which are: the particular attributes of the deposit, such as size, grade and
proximity to infrastructure; metal prices which are highly cyclical; and
government regulations, including regulations relating to prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and
environmental protection. The exact effect of these factors cannot be accurately
predicted, but the combination of these factors may result in Loncor not
receiving an adequate return on invested capital.

There is no certainty that expenditures made towards the search
for and evaluation of mineral deposits will result in discoveries that are
commercially viable. In addition, assuming discovery of a commercial ore-body,
depending on the type of mining operation involved, several years can elapse
from the initial phase of drilling until commercial operations are commenced.

Mining operations generally involve a high degree of risk. Such
operations are subject to all the hazards and risks normally encountered in the
exploration for, and development and production of gold and other precious or
base metals, including unusual and unexpected geologic formations, seismic
activity, rock bursts, fires, cave-ins, flooding and other conditions involved
in the drilling and removal of material as well as industrial accidents, labour
force disruptions, fall of ground accidents in underground operations,
unanticipated increases in gold lock-up and inventory levels at heap-leach
operations and force majeure factors, any of which could result in damage to, or
destruction of, mines and other producing facilities, damage to person or
property, environmental damage, delays, increased production costs, monetary
losses and possible legal liability. Milling operations are subject to hazards
such as equipment failure or failure of mining pit slopes and retaining dams
around tailings disposal areas, which may result in environmental pollution and
consequent liability. The Company may not be able to obtain insurance to cover
these risks at economically feasible premiums. Insurance against certain
environmental risks, including potential liability for pollution or other
hazards as a result of the disposal of waste products occurring from production,
is not generally available to the Company or to other companies within the
mining industry. The Company may suffer a material adverse effect on its
business if it incurs losses related to any significant events that are not
covered by insurance policies.

8

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There can be no assurance that an active market for
the Companys securities will be sustained.

The market price of the Company's securities may fluctuate
significantly based on a number of factors, some of which are unrelated to the
financial performance or prospects of the Company. These factors include
macroeconomic developments in North America and globally, market perceptions of
the attractiveness of particular industries, short-term changes in commodity
prices, other precious metal prices, the attractiveness of alternative
investments, currency exchange fluctuation, the political environment in the DRC
and the Company's financial condition or results of operations as reflected in
its consolidated financial statements. Other factors unrelated to the
performance of the Company that may have an effect on the price of the
securities of the Company include the following: the extent of analytical
coverage available to investors concerning the business of the Company may be
limited if investment banks with research capabilities do not follow the
Company's securities; lessening in trading volume and general market interest in
the Company's securities may affect an investor's ability to trade significant
numbers of securities of the Company; the size of the Company's public float may
limit the ability of some institutions to invest in the Company's securities;
the Company's operating performance and the performance of competitors and other
similar companies; the public's reaction to the Company's press releases, other
public announcements and the Company's filings with the various securities
regulatory authorities; changes in estimates or recommendations by research
analysts who track the Company's securities or the shares of other companies in
the resource sector; the arrival or departure of key personnel; acquisitions,
strategic alliances or joint ventures involving the Company or its competitors;
the factors listed in this Form 20-F under the heading "Cautionary Statement
Regarding Forward-Looking Statements"; and a substantial decline in the price of
the securities of the Company that persists for a significant period of time
could cause the Company's securities to be delisted from any exchange on which
they are listed at that time, further reducing market liquidity. If there is no
active market for the securities of the Company, the liquidity of an investor's
investment may be limited and the price of the securities of the Company may
decline. If such a market does not develop, investors may lose their entire
investment in the Company's securities.

The Company expects that it will be considered a
passive foreign investment company or "PFIC".

Holders of common sharesof the Company that are U.S.
taxpayers should be aware that, due to the nature of the Company's assets and
the income that it expects to generate, the Company expects to be a "passive
foreign investment company" ("PFIC") for the current year, and may be a
PFIC in subsequent taxable years. Whether the Company will be a PFIC for the
current tax year or future tax years will depend on the Company's assets and
income over the course of each such taxable year and, as a result, cannot be
predicted with certainty as of the date of this Form 20-F. Accordingly, there
can be no assurance that the IRS will not challenge the determination made by
the Company concerning its PFIC status for any tax year. U.S. federal income tax
laws contain rules which result in materially adverse tax consequences to U.S.
taxpayers that own shares of a corporation which has been classified as a PFIC
during any taxable year of such holder's holding period. A U.S. taxpayer who
holds stock in a foreign corporation during any year in which such corporation
qualifies as a PFIC may mitigate such negative tax consequences by making
certain U.S. federal income tax elections, which are subject to numerous
restrictions and limitations. Holders of the Company's common sharesare
urged to consult their own tax advisors regarding the acquisition, ownership,
and disposition of the Company's common shares. This paragraph is only a brief
summary of the PFIC rules, and is qualified in its entirety by the section below
entitled "Certain United States Federal Income Tax Considerations".

The Company has a history of losses and may never
achieve revenues or profitability.

The Company has incurred losses from operations since it became
a mineral exploration company in November 2008 and the Company expects to incur
losses from operations for the foreseeable future. The Company had an accumulated deficit of US$58,650,391 as of
December 31, 2017. The losses do not include capitalized mineral property
exploration costs. The Company expects to continue to incur losses unless and
until such time as one or more of its properties enter into commercial
production and generate sufficient revenues to fund continuing operations. The
development of the Company's properties will require the commitment of
substantial financial resources. The amount and timing of expenditures will
depend on a number of factors, including the progress of ongoing exploration and
development, the results of consultants' analysis and recommendations, the rate
at which operating losses are incurred, and the Company's acquisition of
additional properties, some of which are beyond the Company's control. There can
be no assurance that the Company will ever achieve profitability.

9

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In order to develop any of its projects the Company
will need to establish the facilities and material necessary to support operations in the remote locations in
which they are situated, which lack basic infrastructure.

The Company's projects are located in remote areas of the DRC,
which lack basic infrastructure, including sources of power, water, housing,
food and transport. In order to develop any of its projects Loncor will need to
establish the facilities and material necessary to support operations in the
remote locations in which they are situated. The remoteness of each project will
affect the potential viability of mining operations, as Loncor will also need to
establish substantially greater sources of power, water, physical plant and
transport infrastructure than are currently present in the area. The
transportation of equipment and supplies into the DRC and the transportation of
resources out of the DRC may also be subject to delays that adversely affect the
ability of the Company to proceed with its mineral projects in the country in a
timely manner. Shortages of the supply of diesel, mechanical parts and other
items required for the Company's operations could have an adverse effect on the
Company's business, operating results and financial condition. The lack of
availability of such sources may adversely affect mining feasibility and will,
in any event, require Loncor to arrange significant financing, locate adequate
supplies and obtain necessary approvals from national, provincial and regional
governments, none of which can be assured. The Company's interests in the DRC
are accessed over lands that may also be subject to the interests of third
parties which may result in further delays and disputes in the carrying out of
the Company's operational activities.

There is uncertainty in the estimation of mineral
resources.

The mineral resource figures referred to in this Form 20-F and
in the Company's filings with the SEC and applicable Canadian securities
regulatory authorities, press releases and other public statements that may be
made from time to time are estimates. These estimates are imprecise and depend
upon geological interpretation and statistical inferences drawn from drilling
and sampling analysis, which may prove to be unreliable. There can be no
assurance that these estimates will be accurate or that this mineralization
could be mined or processed profitably.

The Company has not commenced commercial production on any of
its properties, and has not defined or delineated any proven or probable
reserves on any of its properties. Mineralization estimates for the Company's
properties may require adjustments or downward revisions based upon further
exploration or development work or actual production experience. In addition,
the grade of ore ultimately mined, if any, may differ from that indicated by
drilling results. There can be no assurance that minerals recovered in small
scale tests will be duplicated in large scale tests under on-site conditions or
in production scale.

The resource estimates referred to in this Form 20-F have been
determined and valued based on assumed future prices, cut-off grades and
operating costs that may prove to be inaccurate. Extended declines in the market
price for gold may render portions of the Company's mineralization uneconomic
and result in reduced reported mineralization. Any material reductions in
estimates of mineralization, or of the Company's ability to extract this mineralization, could have a
material adverse effect on the Company's results of operations or financial
condition.

10

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The Company has not established the presence of any proven or
probable reserves at any of its properties. There can be no assurance that
subsequent testing or future studies will establish proven and probable reserves
on such properties. The failure to establish proven and probable reserves on
such properties could severely restrict the Company's ability to successfully
implement its strategies for long-term growth.

There is uncertainty relating to inferred mineral
resources.

There is a risk that the inferred mineral resources referred to
in this Form 20-F cannot be converted into mineral reserves as the ability to
assess geological continuity is not sufficient to demonstrate economic
viability. Due to the uncertainty that may attach to inferred mineral resources,
there is no assurance that inferred mineral resources will be upgraded to
resources with sufficient geological continuity to constitute proven and
probable mineral reserves as a result of continued exploration.

The Company is exposed to a heightened degree of risk
due to the lack of property diversification.

The Ngayu and North Kivu projects account for all of the
Company's mineral properties. Any adverse development affecting the progress of
either of these projects may have a material adverse effect on the Company's
financial performance and results of operations.

Negative market perception of junior mineral
exploration companies could adversely affect theCompany.

Market perception of junior mineral exploration companies such
as the Company may shift such that these companies are viewed less favourably.
This factor could impact the value of investors' holdings and the ability of the
Company to raise further funds, which could have a material adverse effect on
the Company's business, financial condition and prospects.

The SEC has adopted rules that may affect mining
operations in the DRC.

The Companys business is subject to evolving corporate
governance and public disclosure regulations that have increased both the
Companys compliance costs and the risk of noncompliance, which could have an
adverse effect on the Companys stock price.

The Company is subject to changing rules and regulations
promulgated by a number of United States and Canadian governmental and
self-regulated organizations, including the SEC, the Canadian Securities
Administrators, the Toronto Stock Exchange, and the International Accounting
Standards Board. These rules and regulations continue to evolve in scope and
complexity and many new requirements have been created in response to laws
enacted by the United States Congress, making compliance more difficult and
uncertain. For example, on July 21, 2010, the United States Congress passed the
Dodd-Frank Wall Street Reform and Consumer Protection Act, pursuant to which the
SEC adopted rules which require a company filing reports with the SEC to
disclose on an annual basis whether certain conflict minerals necessary to the
functionality or production of a product manufactured by such company originated
in the DRC or any adjoining country. The Company currently holds properties
located in the DRC. It is possible that the new SEC rules regarding conflict
minerals could adversely affect the value of the minerals mined in the DRC,
which may impact the value of the Companys interests in those properties. The
Companys efforts to comply with the Dodd-Frank Act, the rules and regulations
promulgated thereunder, and other new rules and regulations have resulted in,
and are likely to continue to result in, increased general and administration expenses and a diversion of management time and
attention from revenue-generating activities to compliance activities.

11

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The Company is not insured to cover potential
risks.

The Company currently does not have insurance to cover
potential risks associated with its operations, including industrial accidents,
damages to equipment and facilities, labour disputes, pollution, unusual or
unexpected geological conditions, rock bursts, ground or slope failures,
cave-ins, fires, changes in the regulatory environment and natural phenomena
such as inclement weather conditions, floods, earthquakes and other
environmental occurrences. Losses from these events may cause Loncor to incur
significant costs that could have a material adverse effect upon its financial
performance and results of operations.

The Companys operations may be adversely affected by
environmental hazards on the properties and
related environmental regulations.

All phases of Loncor's operations are subject to environmental
regulation. These regulations mandate, among other things, the maintenance of
air and water quality standards and land reclamation. They also set forth
limitations on the generation, transportation, storage and disposal of solid and
hazardous waste. Environmental legislation is evolving in a manner which will
require stricter standards and enforcement, increased fines and penalties for
non-compliance, more stringent environmental assessments of proposed projects
and a heightened degree of responsibility for companies and their officers,
directors and employees. Compliance with environmental laws and regulations may
require significant capital outlays on behalf of the Company and may cause
material changes or delays in the Company's intended activities. There is no
assurance that future changes in environmental regulation, if any, will not
adversely affect Loncor's operations. Environmental hazards may exist on the
properties on which Loncor holds interests which are unknown to Loncor at
present and which have been caused by previous owners or operators of the
properties. Reclamation costs are uncertain and planned expenditures may differ
from the actual expenditures required.

The Company is a foreign corporation and all of the Companys directors and officers
except one director are outside the United
States, which makes enforcement of civil liabilities
difficult.

The Company is organized under the laws of the Province of
Ontario in Canada, and its principal executive office is located in Toronto,
Canada. All of the Company's directors and officers except one director reside
outside of the United States, and all or a substantial portion of their assets,
and all or a substantial portion of the Company's assets, are located outside of
the United States. As a result, it may be difficult for investors in the United
States or otherwise outside of Canada to bring an action against directors,
officers or experts who are not resident in the United States or in other
jurisdictions outside Canada. It may also be difficult for an investor to
enforce a judgment obtained in a United States court or a court of another
jurisdiction of residence predicated upon the civil liability provisions of
federal securities laws or other laws of the United States or any state thereof
or the equivalent laws of other jurisdictions outside Canada against those
persons or the Company.

The Companys business depends on its ability to
identify and acquire commercially mineable mineral rights, and there can be no assurances that it will be
successful in such efforts.

Most exploration projects do not result in the discovery of
commercially mineable ore deposits and no assurance can be given that any
anticipated level of recovery of ore reserves will be realized or that any
identified mineral deposit will ever qualify as a commercially mineable (or
viable) ore body which can be legally and economically exploited. Estimates of
reserves, resources, mineral deposits and production costs can also be affected
by such factors as environmental permitting regulations and requirements, weather, environmental factors, unforeseen technical
difficulties, unusual or unexpected geological formations and work
interruptions. Material changes in ore reserves, grades, stripping ratios or
recovery rates may affect the economic viability of any project.

12

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Loncor's future growth and productivity will depend, in part,
on its ability to identify and acquire additional commercially mineable mineral
rights, and on the costs and results of continued exploration and development
programs. Mineral exploration is highly speculative in nature and is frequently
non-productive. Substantial expenditures are required to: establish ore reserves
through drilling and metallurgical and other testing techniques; determine metal
content and metallurgical recovery processes to extract metal from the ore; and
construct, renovate or expand mining and processing facilities.

In addition, if the Company discovers ore, it would take
  several years from the initial phases of exploration until production is
  possible. During this time, the economic feasibility of production may change.
  As a result of these uncertainties, there can be no assurance that the Company
  will successfully acquire additional commercially mineable (or viable) mineral
rights.

Litigation may adversely affect the Companys
financial position, results of operations or theCompanys project development operations.

The Company may from time to time be involved in various legal
proceedings. While the Company believes it is unlikely that the final outcome of
any such proceedings will have a material adverse effect on the Company's
financial position or results of operation, defence and settlement costs can be
substantial, even with respect to claims that have no merit. Due to the inherent
uncertainty of the litigation process, there can be no assurance that the
resolution of any particular legal matter will not have a material adverse
effect on the Company's future cash flow, results of operations or financial
condition.

Future hedging activities may result in selling
products at a price lower than could have otherwisebeen received.

The Company has not entered into forward contracts or other
derivative instruments to sell gold that it might produce in the future.
Although the Company has no near term plans to enter such transactions, it may
do so in the future if required for project financing. Forward contracts
obligate the holder to sell hedged production at a price set when the holder
enters into the contract, regardless of what the price is when the product is
actually mined. Accordingly, there is a risk that the price of the product is
higher at the time it is mined than when the Company entered into the contracts,
so that the product must be sold at a price lower than could have been received
if the contract was not entered. There is also the risk that the Company may
have insufficient gold production to deliver into forward sales positions. The
Company may enter into option contracts for gold to mitigate the effects of such
hedging.

Increased sales of the Companys common shares by
shareholders could lower the trading price ofthe shares.

Sales of a large number of the Company's common shares in the
public markets, or the potential for such sales, could decrease the trading
price of such shares and could impair Loncor's ability to raise capital through
future sales of common shares.

13

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Fluctuations in currency could have a material impact
on the Companys financial statements.

The Company uses the United States dollar as its functional
currency. Fluctuations in the value of the United States dollar relative to
other currencies (including the Canadian dollar) could have a material impact on
the Company's consolidated financial statements by creating gains or losses. No
currency hedge policies are in place or are presently contemplated.

The loss of key management personnel or the inability
to recruit additional qualified personnel mayadversely affect the Companys business.

The success of the Company depends on the good faith,
experience and judgment of the Company's management and advisors in supervising
and providing for the effective management of the business and the operations of
the Company. The Company is dependent on a small number of key personnel, the
loss of any one of whom could have an adverse effect on the Company. The Company
currently does not have key person insurance on these individuals. The Company
may need to recruit additional qualified personnel to supplement existing
management and there is no assurance that the Company will be able to attract
such personnel.

The Company may not be able to compete with current
and potential exploration companies, someof
whom have greater resources and technical facilities.

The natural resource industry is intensely competitive in all
of its phases. Significant competition exists for the acquisition of properties
producing, or capable of producing, gold or other metals. The Company competes
with many companies possessing greater financial resources and technical
facilities than itself. The Company may also encounter increasing competition
from other mining companies in its efforts to hire experienced mining
professionals. As well, there is competition for exploration resources at all
levels, particularly affecting the availability of manpower, drill rigs and
helicopters. Increased competition could also adversely affect the Company's
ability to attract necessary capital funding or acquire suitable producing
properties or prospects for mineral exploration in the future.

Certain directors and officers may be in a position of
conflict of interest with respect to theCompany due to their relationship with other resource
companies.

The directors and officers of the Company also serve as
directors and/or officers of other companies involved in the exploration and
development of natural resource properties. As a result, conflicts may arise
between the obligations of these individuals to the Company and to such other
companies.

The Company has never paid and has no plans to pay
dividends.

The Company has not paid out any cash dividends to date and has
no plans to do so in the immediate future. As a result, an investors return on
investment in the Companys common shares will be solely determined by his or
her ability to sell such shares in the secondary market.

Trading of the Companys common shares in the United
States may be effected by its voluntarydelisting from the NYSE American.

The Companys common shares are traded exclusively in the
United States on the OTC Pink tier of the OTC Link. The Companys common shares
previously traded on the NYSE American, and the OTC Pink does not require the
same level of disclosure and compliance requirements compared to the NYSE
American. The Company is still, however, required to meet its SEC filing
requirements and to meet its Toronto Stock Exchange and Canadian filing,
compliance and disclosure requirements. As the Companys common shares are no longer listed on the NYSE
American, shareholders will not be able to trade its common shares on the NYSE
American and certain federal and state securities law exemptions for its common
shares would no longer be available. Consequently, the trading market for the
Companys securities in the United States will be limited.

14

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|**Item 4.** | Information on the Company
|----------- | --------------------------

|A. | History and Development of the
  Company
|-- | ----------------------------------------

The Company is a corporation which was formed under the
OntarioBusiness Corporations Act on August 24, 1993. The head office and
registered office of the Company is located at 1 First Canadian Place, Suite
7070, 100 King Street West, Toronto, Ontario, M5X 1E3, Canada. The telephone
number of such office is (416) 366-2221.

On November 28, 2008, the Company completed the acquisition
(the "Acquisition") of all of the outstanding shares of the private
company, Loncor Resources Inc. ("Old Loncor"). Also on November 28, 2008,
immediately following this acquisition, the Company amalgamated with Old Loncor
and, pursuant to the amalgamation, changed its name from Nevada Bob's
International Inc. to Loncor Resources Inc. As a result of this acquisition, the
business of the Company is the exploration of mineral properties in the DRC.
Prior to this acquisition, the Company was in the business of licensing the
right to use (a) the Nevada Bob's trademarks in connection with operating retail
golf stores internationally, excluding the United Kingdom, Europe, Canada and
the United States, and (b) certain other golf-related, non-Nevada Bob's
trademarks internationally, including the United Kingdom, Europe, Canada and the
United States.

In September 2009, the Company completed a non-brokered private
placement of 3,000,000 common shares at a price of Cdn$0.75 per share for
proceeds to the Company of Cdn$2,250,000.

In October 2009, the Company announced the appointment of Peter
Cowley as President and Chief Executive Officer of the Company. Mr. Cowley was
also appointed to the board of directors of the Company. Kevin Baker stepped
down as President and Chief Executive Officer, but remained a non-executive
director of the Company until March 2014. Arnold Kondrat was appointed Executive
Vice President of the Company and relinquished the title of Chairman of the
Board of the Company. In connection with Mr. Cowley's appointment as a director
of the Company, Geoffrey Farr stepped down as a director of the Company but
remains Corporate Secretary of the Company.

In February 2010, the Company completed a brokered private
placement financing involving the issuance of 8,166,500 units of the Company at
a price of Cdn$1.25 per unit for aggregate gross proceeds of Cdn$10,208,125.
Each such unit was comprised of one common share of the Company and one-half of
one common share purchase warrant of the Company, with each full warrant
entitling the holder to purchase one common share of the Company at a price of
Cdn$1.45 for a period of 24 months. GMP Securities L.P. as lead agent, together
with CI Capital Markets Inc. and Salman Partners Inc., acted as the Company's
agents in connection with this financing.

Also in February 2010, the Company completed a non-brokered
private placement financing involving the issuance to an affiliate
("Newmont") of Newmont Mining Corporation of 4,000,000 units of the
Company at a price of Cdn$1.25 per unit for aggregate gross proceeds of
Cdn$5,000,000. The units issued under this financing had the same terms as the
units issued under the February 2010 brokered private placement. In December
2010, Newmont exercised the 2,000,000 warrants that it had acquired under the
said February 2010 non-brokered private placement, resulting in the issuance by
the Company to Newmont of 2,000,000 common shares of the Company at a price
of Cdn$1.45 per share for gross proceeds to the Company of Cdn$2,900,000.

15

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The Company established the main Ngayu exploration camp in
early 2010 at the Yindi prospect, located in the southwest corner of the Ngayu
gold project area.

In June 2010, the Company announced initial assay results from
  the Makapela prospect at the Company's Ngayu gold project. A core drilling
  program at Makapela commenced in November 2010 with the objective of testing
  along strike and at depth the sub vertical, vein mineralized system being
  exploited by the artisanal miners at the Main, North and Sele Sele pits which
  returned significant results from channel sampling. Drill results at Makapela
  were announced by the Company via a number of press releases in 2011 and
2012.

Exploration at the Itali prospect at the Company's Ngayu gold
project commenced during the third quarter of 2010. The Itali prospect is
located about 10 kilometres south of Makapela. In January 2012, the Company
announced the results of its first drill hole at the Itali prospect. Additional
drill results at the Itali prospect were announced by the Company in October
2012.

In December 2010, the Company completed a non-brokered private
placement with Newmont involving the issuance by the Company to Newmont of
2,000,000 units of the Company at a price of Cdn$1.95 per unit for aggregate
gross proceeds of Cdn$3,900,000. Each such unit was comprised of one common
share of the Company and one-half of one common share purchase warrant of the
Company. Each full warrant was exercisable into one additional common share of
the Company at a price of Cdn$2.30 until December 2012 (these warrants expired
in December 2012 without being exercised).

In February 2011, the Company and Newmont entered into a
technology consultation services agreement pursuant to which Newmont agreed to
make available to Loncor, at Loncors reasonable request, exploration
consultation services to assist Loncor in the exploration of Loncor's Ngayu gold
project.

Also in February 2011, the Company completed concurrent
brokered and non-brokered private placement equity financings. Pursuant to a
bought deal private placement financing conducted by a syndicate of investment
dealers, the Company issued 8,500,000 common shares of the Company at a price of
Cdn$2.35 per share, resulting in aggregate gross proceeds of Cdn$19,975,000. The
Company also issued, by way of non-brokered private placement, to Newmont,
1,700,000 common shares of the Company at a price of Cdn$2.35 per share for
aggregate proceeds of Cdn$3,995,000.

In April 2011, the Companys common shares commenced trading on
the NYSE American LLC (formerly called NYSE Amex LLC). The Company retained its
primary listing on the TSX Venture Exchange.

In December 2011, the Company announced the results of the
regional assessment of its Ngayu gold project. The targets were outlined by
assessing the results of two regional BLEG (Bulk Leach Extractable Gold)
geochemical surveys conducted during 2011 as part of the technology consultation
services agreement between Loncor and Newmont. In accordance with this
agreement, Loncor was able to utilize advanced exploration assessment techniques
developed by Newmont. As part of this evaluation program, the BLEG results were
assessed in conjunction with a detailed geophysical magnetic interpretation of
the Ngayu Greenstone belt also undertaken by senior Newmont geophysicists to
define the target areas. The initial BLEG survey commenced in March 2011 and
comprised the collection of 418 stream sediment samples, at an average sample
density of one sample per 10 square kilometres. A second round of infill BLEG
sampling was undertaken in September 2011 consisting of 185 samples at an
average sample density of one sample per four square kilometres. Samples were
sent to Newmont's proprietary geochemical laboratory in Perth, Australia for preparation and
analysis. From these results, six high priority targets were delineated together
with seven medium priority targets for follow up.

16

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In January 2012, the Company announced initial bottle roll
metallurgical testwork results for the Makapela prospect at the Company's Ngayu
gold project. Bottle roll is a preliminary metallurgical test to determine how
much and how easily gold may be liberated from an ore using cyanide.

In May 2012, the Companyannounced a maiden
  mineral resource estimate for the Company's Makapela prospect, of 4.10 million
  tonnes grading 7.59 g/t Au (using a 2.75 g/t Au cut-off) for an inferred mineral
  resource of 1.0 million ounces of gold. The Company also announced that this
  mineral resource was outlined down to a maximum vertical depth 500 metres below
surface with gold mineralization open at depth.

In June 2012, the Company announced an exploration update on
its regional target follow-up at its Ngayu gold project, reporting that initial
groundwork on the priority regional targets has delineated significant
mineralized gold trends at Nagasa (4.5 kilometres), Matete (2.0 kilometres) and
Mondarabe (1.5 kilometres) in the Imva Fold area. The Company also reported that
it has commenced a preliminary economic assessment of the Makapela prospect.

In October 2012, the Company completed two financings
concurrently, raising total gross proceeds of Cdn$14,799,750. The first
financing involved the issuance of 9,245,000 common shares of the Company at a
price of Cdn$1.05 per share for aggregate gross proceeds of Cdn$9,707,250. This
offering was conducted by a syndicate of investment dealers and was made by way
of a short form prospectus filed with securities regulatory authorities in all
of the provinces of Canada (other than Québec). The said shares were also
offered on a private placement basis in certain jurisdictions outside of Canada.
The second financing involved a non-brokered private placement to Newmont of
4,850,000 common shares of the Company at a price of Cdn$1.05 per share for
aggregate gross proceeds of Cdn$5,092,500. As of the date of this Form 20-F,
Newmont holds 14,550,000 (representing 9.17%) of the outstanding common shares
of the Company.

In April 2013, the Company announced updated mineral resource
estimates for the Company's Makapela prospect, of an indicated mineral resource
of 0.61 million ounces of gold (2.20 million tonnes grading at 8.66 g/t Au) and
an inferred mineral resource of 0.55 million ounces of gold (3.22 million tonnes
grading at 5.30 g/t Au).

In April 2013, the Company announced results of IP surveys at
the Company's Nagasa prospect at the Ngayu project, which surveys identified
three well-defined, open-ended anomalous zones. The Company had acquired IP
equipment in January 2013 with the objectives of: (a) locating potentially
mineralized zones in areas covered by transported overburden where soil
geochemistry is problematic, such as at Nagasa, and (b) testing for blind ore
bodies where mineralization does not reach surface.

The Companys common shares began trading on the Toronto Stock
Exchange effective April 26, 2013 and were delisted from the TSX Venture
Exchange at the same time.

In July 2013, the Company updated exploration activities at its
Ngayu project including announcing drilling results. The Company also reported
that, as a result of the sharp decrease in the gold price, the Company would be
reducing its exploration effort and overhead costs until market conditions
improve. The Company further reported that, in terms of the Makapela preliminary
economic assessment, due to the sharply lower gold price, it was decided to not
incur any further expenditure on the study until the gold market improves.

17

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As a result of the sharp decline in gold prices in 2013 and the
difficult financing prospects for gold exploration companies in general and the
Company in particular, the Company substantially reduced exploration efforts at
its projects in order to conserve cash. Since the end of September 2013, the
Company undertook mainly assessment of exploration work undertaken earlier in
2013 at Ngayu and selecting prospects at Ngayu requiring further investigation.
In addition, new historical data was obtained for the North Kivu project in
order to select target areas for follow up.

In April 2014, Loncor voluntarily delisted from the NYSE
American LLC.

In February 2015, Peter Cowley stepped down from his roles as
President and Chief Executive Officer of the Company for personal reasons. Mr.
Cowley agreed to provide advisory services to Loncor. Arnold T. Kondrat,
Executive Vice President and a founding director of the Company, was appointed
President and Chief Executive Officer of the Company.

In February 2015, the Company closed a non-brokered private
placement of 8,000,000 common shares of the Company at a price of Cdn$0.06 per
share for gross proceeds of Cdn$480,000. In March 2015, the Company closed a
non-brokered private placement of 3,000,000 common shares of the Company at a
price of Cdn$0.06 per share for gross proceeds of Cdn$180,000.

In January 2016, Loncors subsidiary, Loncor Resources Congo
SARL ("Loncor Subco"), entered into a joint venture agreement (the
"Agreement") with Randgold Resources (DRC) Limited ("Randgold").
The Agreement provides for a joint venture (the "Joint Venture") between
Loncor Subco and Randgold covering all of the exploration permit areas
comprising Loncors Ngayu project, other than certain parcels of land
surrounding and including the Makapela and Yindi prospects which are retained by
Loncor Subco and do not form part of the Joint Venture. Randgold will have
certain preemptive rights over these two areas. Randgold will manage and fund
all exploration of the permit areas until the completion of a prefeasibility
study on any gold discovery meeting the investment criteria of Randgold. Once
the Joint Venture has determined to move ahead with a full feasibility study, a
special purpose vehicle ("SPV") would be created to hold the specific
discovery areas. Subject to the DRCs free carried interest requirements,
Randgold would retain 65% of the SPV with Loncor Subco holding the balance of
35%. Loncor Subco will be required, from that point forward, to fund its
pro-rata share of the SPV in order to maintain its 35% interest or be
diluted.

In February 2016, the Company closed a non-brokered private
placement of 67,000,000 common shares of the Company at a price of Cdn$0.015 per
share for gross proceeds of Cdn$1,005,000. Arnold T. Kondrat, Chief Executive
Officer, President and a director of the Company, acquired 60,000,000 of the
common shares issued under this private placement. Taking into account the
acquisition of these shares, Mr. Kondrat currently owns an aggregate of
74,300,818 common shares, representing approximately 46.82% of the issued and
outstanding common shares of the Company.

In April 2016, the Company announced that its joint venture
partner, Randgold, will commence a regional helicopter-borne VTEM B-Field,
Horizontal Magnetic Gradiometer geophysical survey (the "JV
Survey") over Loncors Ngayu project. The JV Survey flight path design
was north-south orientated lines at 400 meter spacing for a total of
approximately 10,000 line kilometres, of which 4,200 line kilometers would be
flown over the Ngayu project.

In June 2016, the Company closed a non-brokered private
placement of 1,750,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$210,000. Each such unit was comprised of one common share
of the Company and one-half of one warrant of the Company, with each full
warrant entitling the holder to purchase one common share of the Company at a
price of Cdn$0.18 for a period of two years.

18

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In January 2017, the Company announced preliminary results of
the JV Survey undertaken by Randgold under the Joint Venture. The JV Survey was
performed by Geotech Airborne Limited.

In February 2017, the Company closed a non-brokered private
placement of 4,000,000 units of the Company at a price of Cdn$0.12 per unit for
gross proceeds of Cdn$480,000. Each such unit was comprised of one common share
of the Company and one-half of one warrant of the Company, with each full
warrant entitling the holder to purchase one common share of the Company at a
price of Cdn$0.18 for a period of two years. Also in February 2017, the Company
closed a second non-brokered private placement of 1,500,000 units of the Company
at a price of Cdn$0.13 per unit for gross proceeds of Cdn$195,000. Each such
unit was comprised of one common share of the Company and one-half of one
warrant of the Company, with each full warrant entitling the holder to purchase
one common share of the Company at a price of Cdn$0.18 for a period of two
years.

In May 2017, the Company announced that exploration ground work
had commenced on priority targets resulting from the JV Survey undertaken by
Randgold under the Joint Venture.

|B. | Business Overview
|-- | -----------------

General

Loncor is a Canadian gold exploration company focused on two
projects in the DRC, the Ngayu and North Kivu projects. The Ngayu project
comprises 12 exploration permits (which permits are held by the Companys
wholly-owned DRC subsidiary) that cover large parts of the Ngayu Archaean
greenstone belt in Tshopo province in the northeast portion of the DRC. The
North Kivu project comprises 47 exploration permits owned or controlled by
Loncor, covering an area of approximately 13,000 square kilometres in North Kivu
province located west of the city of Butembo. Both projects have historic gold
production. Additional information with respect to the Company's projects can be
found below under "Loncor Mineral Properties".

The Loncor Foundation

In early 2010, the Company established the Loncor Foundation, a
registered charity in the DRC, funded by the Company with the goal of improving
the quality of life and opportunities for communities near the Company's
exploration projects. In meetings and discussions with community
representatives, it was determined that the Loncor Foundation would focus
primarily on health and education projects. Based on this advice, the Loncor
Foundation initiated a number of community projects near the Yindi and Makapela
prospects at the Ngayu project and the Manguredjipa prospect at the North Kivu
project. These included the construction of a new primary school for 400
students at Yindi. The Loncor Foundation also donated text and exercise books
for teachers and students in 2011 and 2012 and made a donation of 40 hospital
beds to two medical clinics in the Yindi area. Loncor Foundation projects at
Manguredjipa have included financial support for a community electrification
project and the construction of six showers and latrines at the Manguredjipa
General Hospital, as well as the donation of a motorbike for use by medical
staff at the hospital.

The primary focus of the Loncor Foundation in 2011 and 2012 was
the construction of the Bole Bole medical clinic at Makapela. Also in 2012, the
Foundation initiated a program to fund the salaries of 12 teachers at the Yindi
primary school, eliminating the need for parents to pay tuition costs and
increasing enrollment at the school. During 2013, the Loncor Foundation repaired
bridges on the road between Yindi and Makapela and continued to fund teachers
salaries at the Yindi primary school and partially fund operations at the Bole Bole medical clinic. The
Foundations work was suspended in 2014 having regard to the Companys financial
situation and the need to conserve funds.

19

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Exploration Permits and Exploitation Permits under DRC
Mining Law

As described below under "Loncors Mineral Properties", Loncor
holds or controls a number of exploration permits covering ground in the DRC
with respect to its exploration projects. Under DRC mining law, an exploration
permit entitles the holder thereof to the exclusive right, within the perimeter
over which it is granted and for the term of its validity, to carry out mineral
exploration work for mineral substances, substances for which the licence is
granted and associated substances if an extension of the permit is obtained.
However, the holder of an exploration permit cannot commence work on the
property without obtaining approval in advance of its mitigation and
rehabilitation plan. An exploration permit also entitles its holder to the right
to obtain an exploitation permit for all or part of the mineral substances and
associated substances, if applicable, to which the exploration permit or any
extension thereto applies if the holder discovers a deposit which can be
economically exploited.

Under DRC mining law, an exploitation permit entitles the
holder thereof to the exclusive right to carry out, within the perimeter over
which it is granted and during its term of validity, exploration, development,
construction and exploitation works in connection with the mineral substances
for which the permit has been granted and associated substances if the holder
has obtained an extension of the permit. In addition, an exploitation permit
entitles the holder to: (a) enter the exploitation perimeter to conduct mining
operations; (b) build the installations and infrastructures required for mining
exploitation; (c) use the water and wood within the mining perimeter for the
requirements of the mining exploitation, provided that the requirements set
forth in the environmental impact study and the environmental management plan of
the project are complied with; (d) use, transport and freely sell the holder's
products originating from within the exploitation perimeter; (e) proceed with
concentration, metallurgical or technical treatment operations, as well as the
transformation of the mineral substances extracted from the exploitation
perimeter; and (f) proceed to carry out works to extend the mine. Without an
exploitation permit, the holder of an exploration permit may not conduct
exploitation work on the perimeter covered by the exploration permit. So long as
a perimeter is covered by an exploitation permit, no other application for a
mining or quarry right for all or part of the same perimeter can be processed.

|C. | Organizational Structure
|-- | ------------------------

Loncor does not have any material subsidiaries, other than
Loncor Resources Congo SARL, which is wholly owned by Loncor and was
incorporated in the DRC.

|D. | Property, Plants and
Equipment
|-- | ------------------------------

The Company does not have any material tangible fixed
assets.

Loncors Mineral Properties

Loncors exploration activities have been focused on two
projects in the DRC, the Ngayu and North Kivu projects. The following
information relating to Loncors projects is as of December 31, 2017 unless
otherwise specified.

20

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Ngayu Project

Certain of the following disclosure relating to the Companys
Ngayu gold project is derived from the independent technical report (the
"Ngayu Technical Report") dated May 29, 2012 and entitled "Updated
National Instrument 43-101 Independent Technical Report on the Ngayu Gold
Project, Orientale Province, Democratic Republic of the Congo" prepared for
Loncor by Venmyn Rand (Pty) Ltd ("Venmyn"). A copy of the Ngayu Technical
Report can be obtained from SEDAR at www.sedar.com and EDGAR at
www.sec.gov.

Property Description and Location

The Ngayu gold project is situated approximately 300 kilometres
northeast of Kisangani and 70 kilometres to the west of the Okapi Game Reserve
in the Tshopo Province (formerly, Orientale Province) of the DRC (see Figure 1
below). The project is located 470 kilometres and 400 kilometres north-northwest
of Bukavu and Goma, respectively and is situated 130 kilometres northwest of
Loncors North Kivu project. It is made up of a total of 12 exploration permits
(or "PRs") held by the Company through its wholly-owned DRC subsidiary,
which cover an area of approximately 960 square kilometres.

Legal Aspects and Tenure

The Ngayu project consists of 12 PRs numbered 1793 to 1806,
excluding 1795 and 1799, held by the Companys wholly-owned DRC subsidiary. The
Ngayu project PRs were renewed on February 9, 2017 and will expire on February
9, 2022. The PR details are shown in Table 1 below.

Table 1: License Details for the PRs of the Ngayu
Project

PR NO.
    LICENCE NO.
    HOLDER
    DATE OFISSUE
    DATE OFEXPIRY
    MINERALS
    AREA**(km2****)**1793
    NO° CAMI/CR/3169/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au, Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    94.300051794
    NO° CAMI/CR/3170/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au, Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    98.54781796
    NO° CAMI/CR/3172/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    75.609951797
    NO° CAMI/CR/3173/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    78.15861798
    NO° CAMI/CR/3174/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    89.202751800
    NO° CAMI/CR/3176/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    82.406351801
    NO° CAMI/CR/3177/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    82.406351802
    NO° CAMI/CR/3178/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    79.85771803
    NO° CAMI/CR/3179/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au,Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    90.901851804
    NO° CAMI/CR/3180/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au, Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    61.16761805
    NO° CAMI/CR/3181/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au, Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    86.65411806
    NO° CAMI/CR/3182/2007
    Loncor Resources Congo SARL
    10-Feb-2007
    09-Feb-2022
    Fe,Au, Sn, Cu, Pt, Ag, W, Co,
      Nb and Ta
    40.7784


Surface Rights Owners

According to the DRC laws, the surface rights and the mineral
rights pertaining to one property are not separated. Loncor therefore has access
to both the surface and mineral rights to the Ngayu project.

21

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Figure 1



22

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Surface Fees and Provincial Taxes

In order to maintain a PR in good standing under DRC law the
title holder is required to make annual surface fee and surface tax payments to
the State Treasury and the Provincial Tax authorities, respectively. To qualify
for permit renewal the applicant must demonstrate that it has paid all surface
fees and provincial taxes and has complied with environmental obligations. All
surface fees and provincial taxes for the Ngayu project PRs have been paid and
the PRs are currently in good standing. In 2017, amounts of US$140,181 and
US$10,386 were paid for surface fees and provincial taxes respectively.

Should exploration lead to the discovery of an economic deposit
the PR holder has the right to apply for a Permit dExpoitation
("PE") or exploitation permit. The PE gives the title holder the right to
carry out exploration, development, construction and exploitation works for a
specific mineral. This includes the right to conduct mining operations, process
and sell the mineral extracted. PEs are valid for 30 years, renewable for
15-year periods until the end of the mines life.

The DRC Mining Code levies a 2.5% royalty on production of
precious metals. Furthermore, the DRC Mining Code stipulates that a 5%
free-carried interest be awarded to a Congolese State owned company at no
charge. Surface fees for PEs are US$6 per hectare (approximately US$511 per
carre), irrespective of commodity.

According to DRC law there is no export duty on marketable
products, but a 30% corporate tax rate is applied on corporate profits. Loncor
has not entered into any other agreements which could have a material impact on
the Ngayu project, other than the joint venture agreement entered into with
Randgold Resources (DRC) Limited in January 2016 (see Item 4A. of this Form 20-F
("History and Development of the Company") for information in respect of this
agreement).

Environmental Liabilities

Loncor currently has no environmental liabilities or penalties
pending for the Ngayu project. At this phase of exploration, very little damage
has been done to the environment. Trenches dug for sampling purposes are
rehabilitated fully once the sampling process has been completed. Similarly,
drill pads have been rehabilitated after drilling activities. The exploration
camp was built utilising an abandoned historic mining site with as little
clearance as possible. Should the project be abandoned for any reason, the
locals will be able to use the camp for residential purposes. Loncor does not
foresee any significant environmental expenditure at this stage of the project.
Each year environmental reports are submitted to the government.

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

Altitude within the Ngayu project area ranges from 550 metres
above mean sea level to 950 metres above mean sea level. The topography is made
up of gently rolling hills and slightly incised valleys. The vegetation is
typical dense forest. The region is drained by the Ituri River. The major
tributaries within the Ituri River basin in this region include the Neopoko,
Ngayu and Imbo rivers.

Access to the Ngayu project is by poorly maintained dirt
tracks. These tracks converge towards a 760 kilometre well-maintained network of
gravel roads that connect the towns of Kisangani, Nia-Nia and Butembo. The track
between Bomili and Isiro is in extremely poor condition and only accessible by
motor bike. The track between Nia-Nia, Wamba and Isiro is also in poor
condition, but has been upgraded by the government recently. Kisangani has a
tarred air strip and receives flights from Kinshasa. There is a grass airstrip
at Nia Nia and Isiro also has a gravel air strip and receives flights from
Kisangani and Bunia. There is a railway running through the town of Isiro, but
this is no longer in service.

23

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Towns located around the Ngayu project include Bomili and Yindi
within the project area, Nia-Nia, Wamba, Isiro and Kisangani outside the project
boundaries. The mode of transport on the poor quality dirt roads in and around
the project area is either motorbike or foot but on the better quality gravel
roads, trucks, buses and utility vehicles operate. The area can be accessed by
means of a helicopter.

Loncor has erected exploration camps in the Ngayu project in
the vicinity of the Yindi and Makapela prospects. The Yindi camp is a
self-sustaining camp, with its own power, water and road infrastructure. Potable
water is sourced from a tributary of the Ngayu river and filtered on site.
Supplies are driven in from various developed towns. The camp consists of an
office, tents sheltered by corrugated iron, a dining hall, core shed, a clinic
and a helicopter pad and yard. The Makapela camp consisted of tented
accommodation, offices and kitchen facilities, but has been abandoned due to its
remoteness. Power is supplied by a diesel generator at the Yindi camp.

The climate in the eastern DRC is tropical. It is hot and humid
in the equatorial river basin and cooler and wetter in the eastern highlands.
The wet season takes place from April to October and the dry season from
December to February north of the equator. South of the equator the wet season
is from November to March and the dry season from April to October. The climate
facilitates exploration and mining activities all year round. Exploration is
more challenging during the wet season, as roads become muddy and slippery, pits
are rapidly filled by water and field mapping is more difficult.

The land around the Ngayu project is mainly equatorial rain
forest, with very tall trees and grass. A few small villages exist around the
project area. Some wild animals exist in and around the area but most have been
hunted out by the local population. Natural water sources are abundant.
Groundwater potential has not been investigated. No electricity is available in
the area except in the Yindi camp. The closest hydro-electric power station is
situated near Kisangani. The towns of Yindi, Bomili, Wamba and Nia-Nia are
potential sources of a workforce.

History

The details of historical exploration for the Ngayu project are
poorly recorded and not very clear. Gold was first prospected for in the Ngayu
region by Belgian prospectors in 1909. The Societe Internationale Forestiere et
Miniere du Congo (FORMINIERE) obtained exploration rights in the area and had
evaluated the most important prospects by 1925. FORMINIERE then obtained
exploitation rights for its subsidiary company, La Societe Miniere de la Tele.
No further information about the two companies is available. The Ngayu project
was owned by Société Minière de lAruwimi  Ituri and was exploited between 1929
and 1955. No further information on historical ownership of the project is
available.

The database of the Central African Museum of Tervueren notes
13 occurrences of gold in the Ngayu greenstone belt, six of which are hosted
within the Ngayu project area. The Tervuren database recorded historical gold
production for some of the deposits occurring within the Ngayu greenstone belt.
The largest hardrock gold mining operation in the Ngayu greenstone belt was at
Adumbi which is not on Loncors PRs. It is evident that mostly alluvial deposits
were exploited, perhaps due to the ease of mining and due to the fact that it
was mostly mined on a small scale.

Geological Setting and Mineralization

Regional Geology

Most of the Tshopo Province is underlain by an Archaean
Basement, called the Upper-Congo Granitoid Complex or Bomu Craton, formerly
known as the Upper-Zaïre Granitoid Massif. This basement is covered by Lower and
Upper Kibalian rocks, NeoArchaean in age that consist of volcano-sedimentary
formations with intercalations of quartzites and itabirites. The Kibalian rocks
have been metamorphosed to greenschist facies and in the project area constitute
the greenstone belt. The Neoproterozoic Lindian Supergroup occurs to the south
of the area and consists of a sedimentary sequence with a thickness of more than 2,500 metres. The rock
types in the sequence are mainly arkoses, sandstones, quartzites, shales and
conglomerates.

24

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The Upper Congo Granitoid Complex constitutes, together with
associated metasediments and volcanics, the western part of the Nyanza-Kibali
granite-greenstone terrain, which extends from northern Tanzania into Central
African Republic. The greenstone terrain is hosted within the Kibalian series,
which outcrops in numerous zones surrounded by granitoids, the most important
(i.e. Moto, Kilo, Mambasa, Ngayu and Isiro) are more than 100 kilometres in
strike length. They can be distinguished both by their shape and their
lithological composition. Some of these zones constitute narrow belts (less than
10 kilometres wide, 30-60 kilometres in length) made up of units which are
isoclinally folded along subvertical axial planes and sub-horizontal fold axes.
Others are more or less isometric and show a synclinorial tectonic style. The
former possesses a metavolcanic/metasediment volumetric ratio (v/s) of about 1
that of the latter exceeds three (up to 10).

An Upper Kibalian (v/s about 1) overlies a Lower Kibalian (v/s
  high) in the zones of Moto and Ngayu. Extrapolating this relationship to other
  zones it can be concluded that two generations of greenstones exist, the one
  forming narrow bands, rich in sedimentary rocks, belonging to the younger of the
  two generations. This distinction is also supported by geochronology. The Lower
  Kibalian of Ngayu and Moto is intruded by 2.8Ga old tonalities and the Upper
  Kibalian by 2.45Ga old granites. Most volcanics of the Lower Kibalian are akin
  to oceanic tholeiites while those from the upper division contain distinct
  andesitic members together with less typical tholeiites. Nowhere has the Lower
  Kibalian series been observed to be associated with high-grade gneissic rocks
  likely to represent their basement. The Upper Kibalian series, on the other
  hand, is typically associated both with the tonalite-Lower Kibalian association
  and with gneissic series (i.e. the West-Nile gneissic Complex) suggesting a
different geodynamic setting for the two series.

The Ruwenzori tectonic episode (ca. 2Ga old) strongly affected
the southern flank of the Upper Congo Granitoid Complex, which resulted in the
formation of shear belts cutting through the Kibalian zones, and in the
cataclasis of the associated granitoids.

In the region bodering the Western Rift, NNE-SSW trending shear
belts, ca. 950Ma old, strongly reactivated parts of the West-Nile gneissic
Complex. Parallel trending belts cutting through the Kibalian zone of Kilo are
probably linked to the same event. The tectonic episodes of ca. 790Ma and 700Ma
affected the northern flank of the Upper Congo Granitoid Complex and
consequently the Kibalian zone of Moto. By reactivating the late-Archaean suture
between the West-Nile Complex and the Congo Granitoid Complex, these episodes
contributed to the present shape of the Moto zone.

Local Geology

The Ngayu project is located in a Precambrian greenstone belt
enclosing folded and fractured volcano-sedimentary series. In the project area,
both the Upper and Lower Kibalian Groups are present. The Lower Kibalian is
represented by the orthogneiss complex, which is a sequence of metamorphosed
granites and gneiss intruded by diorites. The Upper Kibalian represents the
greenstone belt made up of metasediments and metavolcanics of greenschist facies
including prominent banded ironstone units (BIF) which form prominent ridges
throughout the Ngayu greenstone belt.

The Kibalian Supergroup is overlain by the early Proterozoic
Lindian Supergroup, which is composed of the Penge Formation (arkoses,
conglomerates and quartzites), Lenda Formation (carbonaceous sediments), Asoso
Formation (intercalated schists and quartzite), Avakubi Formation (sandstones,
arkoses and conglomerates), Mamungi-Kole Formation (schists, with lenses of
sandstone and dolomite) and Galamboge Formation (quartzite, sandstone and
arkose). World class examples of gold deposits in similar geological settings to
the Ngayu project include Kilo-Moto and Geita in Tanzania. Fractured zones
marked by quartz veins cross-cutting the Kibalian (including the BIF) throughout
the prospect are first targets. Also of interest are fractured contact zones
including cataclastic breccias between the Kibalian series and the Lindian cover
deposits.

25

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Property Geology

The Ngayu project covers large parts of the Ngayu greenstone
belt and consists of three main Pre-cambrian lithological units. The
granite-gneiss sequence forms the basement in the project area. The Upper-Congo
granitoid complex, composed of undifferentiated Kibalian and pre-Kibalian rocks,
occupies a zone in the eastern-central and in the northwestern part of the
concession. Different rock types can be distinguished in the area, namely,
granitoids with porphorytic texture, diorites, orthogneisses, and magmatic and
anatectic rocks.

The metamorphic Kibalian rocks overlying the basement are
composed of paragneissic Lower Kibalian, not identified in the project area, and
of Upper Kibalian occupying the northeastern border of the concession with
scattered outcrops. The greenschist facies consists of a pelitic-psammitic
series with intercalations of quartzites, itabirites, para-amphibolites,
metavolcanics and accessory carbonate rocks. Towards the base, quartzophyllades,
micaschists and gneisses can be found. The granitic and metamorphic rocks may
also be intruded by pegmatites, aplites, undifferentiated amphibolites, mafic
rocks, diorites and quartz diorites as well as quartz veins and quartz veins
with tourmaline.

The overlying sedimentary Lindian Supergroup is found to the
southwestern part of the concession. It is composed of the Ituri Group (Penge,
Lenda, Asoso Formations) and the lower part of the Lokoma Group (Avakubi
Formation). The sedimentary units in the project area comprise mainly clastic
sediments. Different faults cross-cut the three lithological units. Several
folds have been observed in the field but no detailed structural study of this
region is available.

Mineralised Zones

The majority of gold occurrences within the Ngayu project are
located close to the contact of BIF (Banded Ironstone Formation). Historically,
only two deposits were exploited on a large-scale by previous owners, namely
Yindi and Adumbi. Adumbi falls out of the project area in the east. Remnant
mining infrastructure from previous operations at Yindi includes the old
laboratory, plant and camp but are derelict. Makapela is a relatively new
artisanal site which was developed by artisanal miners within the last 15 years
and has been one of the foci of the Companys exploration activities.

Mineralization

Gold is the only commodity to have been extracted commercially
in the Ngayu belt. A few years ago Rio Tinto assessed the BIF as a potential
source of iron ore, but although haematite-rich zones of good grade were
reportedly drilled, tonnage was below the economic requirement. Diamonds are
recovered by artisanal miners from the Ngayu River; the source of the stones is
unknown, but is probably outside the area under discussion. No other mineral
occurrences of potential significance are known.

Gold was discovered in the Ngayu belt by Belgian prospectors in
the 1920s, and commercial production took place from both primary and secondary
sources until the mid-1950s. A summary of the historical production is given in
Table 2 below, although production records are incomplete and sketchy and the
figures quoted represent only an approximation.

Table 2: Historical Gold Production for the Ngayu Belt (1925
 1955)

Deposit
    Primary Au (oz)
    Secondary Au (oz)
    Total Au (oz)Adumbi Area
    208,000
    83,000
    291,000Imva Fold Area
    N/A
    200,700
    200,700Yindi
    45,200
    21,000
    66,200Northern Ngayu Belt
    N/A
    60,800
    60,800Anguluku
    5,700
    N/A
    5,700Totals
    258,900
    365,500
    624,400


26

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The most prolific area for alluvial mining was the Imva Fold
area, where extensive artisanal mining continues today, and where several areas
of primary gold mineralization (Matete, Nagasa, Anguluku and Itali) have been
under investigation by Loncor.

Several styles of gold mineralization have been identified in
the Ngayu belt and are summarised below:

Shear-zone hosted gold:

| | ➢ | Mineralization of shears within BIF, or on the
      BIF contacts, leading to quartz veining and sulphidation of the BIF and
      immediate wall-rock, e.g. Adumbi, Makapela Reef 2.                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ➢ | Mineralization of shears within basalts and schists (and
      to a much lesser extent intermediate intrusives) resulting in discrete
      auriferous quartz veins with limited wall- rock mineralization, e.g.
      Makapela Reef 1, and the Yindi vein field.

Disseminated mineralization in BIF:

| | ➢ | Sulphidation of BIF by fluids utilizing nearby
      cross-cutting and parallel structures, such as thrusts and shears e.g.
      Yindi BIF-hosted mineralization and Nagasa Anomaly
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

1.     This style
of mineralization has the potential to form deposits of very large size, e.g.
Geita in Tanzania.

Sheeted veins:

| | ➢ | Shear zones resulting in auriferous sheeted quartz veins
      and veinlets developing mainly parallel to the foliation and forming
      packages over widths of up to 40 metres, often with disseminated
      mineralization between the veins, e.g. Itali, Mondarabe.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Elluvial/Colluvial deposits:

| | ➢ | Artisanal mining of weathered gold mineralization
      preserved as elluvial or colluvial material, is widespread throughout the
      belt, particularly in the Imva Fold area and Anguluku.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Alluvial deposits:

| | ➢ | Palaeoalluvial deposits are locally exploited
      by artisanals by digging pits to the basal gravel layer of old river
      channels, e.g. Nagasa, Mondarabe, Matete.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | ➢ | Exploitation of modern alluvium is widespread
      throughout the Ngayu belt, and is particularly common in the Imva Fold
      area.                                  

Prospect-Scale Mineralization Controls

BIF (Banded Ironstone Formation)

Within the Ngayu belt there is a strong association between
gold mineralization and the presence of BIF, the BIF either constituting the
host rock (e.g. Adumbi, Yindi, Makapela, Nagasa) or forming a significant part
of the local stratigraphy (e.g. Mondarabe, Itali, Anguluku). BIF forms both
physical and chemical traps for mineralizing hydrothermal fluids as follows:

| |  | Competency contrasts between the BIF and the
      interlayered rocks.                                                                                                                                                                                                                                                                                                                                                                                                                
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | When interlayered with incompetent lithologies such as
      the metasedimentary schists and volcaniclastics, the BIF constitutes
      relatively hard rock, more likely to develop brittle fracturing than the
      more ductile surrounding rocks. Also, shearing may preferentially take
      place in the schists, on the contact with the BIF. These fractures and
      shears can act as channel-ways, focussing hydrothermal fluids into the
      chemically reactive BIF.
| |  | When interlayered with competent rocks such as massive
      basalts, the BIF units (especially if relatively thin like those at
      Makapela) may act as zones of weakness, along which shears and faults may
      propagate. Again, the tectonic fabric within the BIF can facilitate the
      flow of hydrothermal fluids.                                                                                                                                                     
| |  | Sulphidation of magnetite. The iron-rich BIF is a
      chemically reactive rock, the main interaction with hydrothermal fluids
      involving the reduction of magnetite to pyrite, resulting in the
      precipitation of gold.                                                                                                                                                                                                                                                   

27

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Loncor Exploration

Exploration by Loncor commenced in late 2009 and initially
included desktop research, primarily utilising data from the Royal Museum for
Central Africa in Terveuren, Belgium and preliminary interpretation of airborne
geophysical data, acquired by Rio Tinto in 2007. A base camp was established on
the property at Yindi in March 2010. At the beginning of Loncors Ngayu project,
it was decided to divide the exploration into two concurrent programs:

| |  | Assessment of areas of known gold mineralization (Yindi
      and Makapela) with the potential to rapidly reach the drilling stage and
      provide a mineral resource base for the Company. Soil sampling, augering,
      rock chip and channel sampling were carried out prior to diamond drilling.                                                                                                                                                                                                                                                                                                                                       
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Regional programs aimed at assessing the remainder of the
      then 4,500 km2land package as quickly and cost effectively as
      possible, in order to identify and prioritise mineralized target areas for
      follow-up, and enable less-prospective ground to be relinquished with
      confidence. This program mainly entailed a regional BLEG (Bulk Leach
      Extractable Gold) survey and detailed interpretation of regional
      aeromagnetic data. Both these programs were carried out under a technology
      consultation services agreement between Loncor and Newmont, which was
      entered into in February 2011.

Regional Programs

Aeromagnetic Surveys

Rio Tinto commissioned heliborne magnetic and radiometric
surveys over the Ngayu belt in July and August 2008, as part of its iron ore
exploration programme. Loncor was provided with this data in 2009, under the
then terms of the agreement between the two companies. The survey was flown by
New Resolution Geophysics, on 200 metre-spaced lines orientated north-south. The
average sensor terrain clearance was 32 metres, and tie lines were flown every
2,000 metres. All the greenstone terrain covered by Loncors properties was
included, with only the areas to the northeast and southwest, which are
underlain by granitoids and Lindian cover respectively, excluded from the
survey. The aeromagnetic data were interpreted by Newmont in 2011, under the
companies technology consultation services agreement. Four areas were
prioritised as being lithologically and structurally favourable for gold
mineralization, as follows:

| |  | The Imva Fold Area, where the BIF has been
      deformed into a tight regional fold, with strike- parallel faults
      (probably thrusts) and quartz-diorite intrusives in the fold hinge and on
      the flanks.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | An early-formed, north-south trending
      structural corridor, in the Makapela-Itali area, with dioritic intrusives.                                                                                              
| |  | The Anguluku area where BIF is interpreted to
      have been thrust against a basement high, at the intersection with the
      NW-SE trending Yindi structure.                                                    
| |  | The northeast of the project area, along strike
      from the old Adumbi mine, in an area where folded BIF with strike-parallel
      faulting, is cut by a major north-south structure.                           

During 2012, Loncor undertook more detailed aeromagnetic and
radiometric surveys over priority target areas (ie Imva Fold area).

BLEG Sampling

BLEG (Bulk Leach Extractable Gold) sampling is a stream
sediment sampling technique employed by Newmont worldwide in its regional gold
exploration programmes. It provides a relatively fast and reliable way of
assessing large tracts of land, and has been particularly effective in defining
targets within the Ngayu area. The sampling methodology and analytical
techniques are proprietary to Newmont, and as such, cannot be detailed herein. Following
successful orientation surveys in the Yindi and Makapela areas in 2010, in which
32 samples were collected, three phases of BLEG sampling were carried out as
follows:

28

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| |  | phase 1, carried out in March
      2011, in which 418 samples were taken over the whole concession area, at
      an average sampling density of one sample per 10 km2;                                                                             
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | phase 2 was completed in September 2011, with the
      objective of more closely defining the anomalies outlined in Phase 1. A
      total of 192 samples were collected representing an average sampling
      density of one sample per 4 km2; and
| |  | phase 3 was implemented in
      November 2011 in order to further delineate the sources of gold anomalism
      in selected target areas. A total of 129 samples were collected.                                                                    

Six high priority (H1-H6), seven medium priority (M1-M7) and
four lower priority targets (L1-L4) have been defined based on the BLEG data and
the geophysical interpretation. The rationale for selecting these targets is as
follows:

| |  | targets H1, H2, H3 and M1 in Imva Fold area: BIF occurs
      on the limbs of an WSW- ENE trending fold over a strike length of 25
      kilometres. More complex zones of folding locally occur on the limbs of
      this regional structure, which together with the presence of
      strike-parallel faulting, form structurally favourable sites for gold
      mineralization. Clusters of strong BLEG anomalies of up to 1,136 ppb Au
      are present (compared with background values of <3ppb Au for the
      general area);                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | targets H4 and M2 (Makapela area): the BLEG data indicate
      the presence of gold mineralization to the east and west of the Makapela
      prospect, in catchment areas independent of the Makapela mineralization.
      Both targets are interpreted to be underlain by the basalt-dominated
      package with thin BIF units, which host the Makapela mineralization. The
      Makapela area (and the eastern part of the Imva Fold) are transgressed by
      a north-south structural corridor which appears to be an early feature
      that has been the focus of granodioritic intrusives, and which probably
      also introduced mineralizing fluids;
| |  | targets H5, M3 and M4 (Bole Bole Area): these areas of
      anomalous BLEG lie within a sequence of metasediments, tuffs and
      interbedded BIF, in a structurally favourable zone where the regional
      strike of the greenstone belt changes from NW-SE to NE-SW;                                                                                                                                                                                                                                                                                                                                                                                             
| |  | target H6 (Anguluku Area): the area of anomalous BLEG
      data is underlain by BIF, and lies at the intersection of the NW-SE
      trending Yindi structure and E-W, strike- parallel faults. The latter are
      possibly thrusts which formed due to compression of the Anguluku
      lithological sequence against a basement dome immediately to the north.
      The BLEG data suggest that mineralization may have a greater strike extent
      than the 3 kilometres indicated by artisanal mining in the area;                                                                                                                                           
| |  | targets M5, M6 and L1 (Adumbi Trend): the BLEG data in
      anomaly M6 suggest that the BIF-associated mineralization at Adumbi may
      extend onto Loncors property. Targets M5 and L1 are located 15 kilometres
      and 30 kilometres respectively along strike and may represent a NW
      extension of the Adumbi trend;                                                                                                                                                                                                                                                                                                                                    
| |  | target L3 includes the Yindi mineralization. However, the
      southeastern anomalous catchment has not yet been investigated, and will
      be followed up probably by extending the soil grid; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |  | targets L2 and L4 are relatively small and isolated BLEG
      anomalies. They will be confirmed by additional BLEG sampling before
      decisions on follow-up work are made.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

Field duplicates were taken at a frequency of one in twenty
samples and the results rigorously assessed by Newmonts senior geochemists in
Perth, Australia. It was concluded that the quality of the sampling was
excellent, and that the results of the survey are reliable. Analytical
duplicates and blanks were also included as part of Newmonts internal quality
control procedures. Groundwork aimed at defining drilling sites within the above target areas
commenced in January 2012. This entailed soil sampling (initially on lines 320
metres apart, with in-fill to 160 metres and 80 metres where warranted),
geological mapping and rock chip sampling, regolith mapping (utilizing remote
sensing techniques and Newmonts in-house expertise), and trenching and/or
mechanical augering of soil anomalies. In addition, the program provides for
geophysical surveys to more closely define the location of potentially
mineralized zones. There is good correlation between the target areas derived
from the aeromagnetic interpretation and the BLEG surveys.

29

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Prospect Exploration

Grids were established at the Yindi, Makapela, Itali, Matete,
Nagasa, Mondarabe, Anguluku and Adumbi West prospects with airborne magnetic and
radiometric surveys, geological mapping, stream sediment sampling, soil and rock
sampling, trenching, augering, ground geophysical surveys (Induced Polarisation)
and core drilling being undertaken.

Table 3 below summarises the exploration statistics for the
Ngayu work program for the period 2010  2013.

Prospects within the Ngayu Project

Yindi Prospect

Yindi is the site of an old Belgian mining operation which
ceased production before independence, and which produced approximately 45,000
ounces and 21,000 ounces of gold from primary and secondary sources
respectively. The Belgians primarily exploited discrete high grade quartz veins
by means of adits and narrow open-pits, and limited open-pitting was also
carried out on mineralized BIF. Since operations ceased in the mid-1950s, the
veins have been targeted by artisanal miners.

Exploration at Yindi commenced in March 2010 with the
establishment of a 2 x 6 kilometre soil sampling grid, coincident with a
well-defined magnetic anomaly, and covering the area of old mining activity.
Soil sampling lines were originally at a spacing of 160 metres, with infill to
80 metres in anomalous areas. All soil sampling lines were geologically
mapped.

Table 3: Exploration Statistics for the Ngayu
      Work Program (2010-2013)Activity
    SamplesProspects
    Gridding (km)
    IP
      (km)
    Trenching (m)
    Adit
    Mapping (m)
    Other Channel
    (m)
    Auger Drilling
    Diamond **Drilling**
    BLEG
    Stream
      Sediment
    Soils
    Rock
    Adit
      Channel
    Trench Channel
    Other
      **Channe**l
    Auger
    DD
    Thin
      SectionHoles
    (m)
    Holes
    (m)Yindi
    94.16
    23
    486.49
    208.30
    388.70
    133
    566.90
    18
    3302.24
    16
    0
    2362
    189
    227
    525
    424
    558
    3526
    11Makapela
    189.68
    0
    0
    0
    242.46
    797
    4537.12
    84
    24058
    12
    659
    4826
    197
    0
    0
    287
    3381
    6201
    58Itali
    48.20
    0
    691.10
    29.00
    170.45
    170
    938.55
    5
    1195.43
    0
    0
    1234
    169
    31
    751
    196
    649
    1450
    8Anguluku
    101.28
    47.5
    439.85
    173.00
    165.93
    126
    381.35
    0
    0
    0
    560
    2549
    274
    175
    454
    227
    481
    0
    1Adumbi
    68.80
    0
    13.00
    0
    141.90
    0
    0
    0
    0
    0
    0
    1787
    138
    0
    20
    197
    0
    0
    0Nagassa
    147.68
    125.9
    432.85
    26.70
    253.55
    750
    3489.39
    9
    2620.65
    0
    
    3815
    373
    34
    481
    309
    3277
    1880
    11Mondarabe
    157.36
    0
    375.21
    0
    489.60
    135
    542.70
    7
    1220.50
    0
    0
    4047
    362
    0
    385
    580
    561
    1533
    7Matete
    148.84
    89
    989.20
    0
    239.39
    256
    1079.25
    0
    0
    0
    0
    3856
    401
    0
    1062
    330
    1110
    0
    8Andagbowa
    3.04
    0
    0
    0
    21.90
    0
    0
    0
    0
    0
    91
    89
    34
    0
    0
    30
    0
    0
    0Bleg
    0
    0
    0
    0
    0
    0
    0
    0
    0
    711
    0
    0
    71
    0
    0
    0
    0
    0
    0PROJECT TOTAL
    959
    285.4
    3428
    437
    2114
    2367
    11535
    123
    32397*
    739
    1310
    24565
    2208
    467
    3678
    2580
    10017
    14590
    104


30

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Channel sampling of accessible old adits and open-pits was
undertaken, and several old trenches were re-excavated and channel sampled.
Mechanical auger drilling was carried out to test for saprolite mineralization
below soil anomalies.

Diamond drilling commenced in September 2010 and 18 holes
(3,274 metres) were completed before drilling was stopped in March 2011. The
drilling focussed on an area of BIF-hosted gold mineralization which was
identified from soil and channel sampling, and which had been mined to a limited
extent during colonial times. Holes ranged from 134 metres to 290 metres in
depth (i.e. a maximum of 262 metres vertically below surface).

IP surveys were carried out in March 2013, and comprised a 1 x
1 kilometre gradient array survey, followed by two lines of pole-dipole. The
objectives of this work were: (a) to assess the IP response of mineralized BIF
as an orientation for surveys elsewhere in the concession, (b) to assist in
determining the geometry and plunge of the BIF-hosted mineralization at Yindi,
and (c) to detect possible additional mineralized zones.

The drilled rocks mainly comprise fine grained schists, which
petrographic studies show were originally pellitic sediments and tuffs, now
metamorphosed to lower greenschist facies. Several units of BIF up to about 15
metres in thickness are interlayered with the schists. The sequence has a
consistent NW-SE strike and southwesterly dip of about 75°. Gold mineralization
occurs both within the BIF and within the schist near the BIF contacts, and is
associated with:

| |  | pyritisation of magnetite bands in the BIF;
| | - | -------------------------------------------
| |  | massive pyritisation of the BIF;           
| |  | disseminated pyrite in the schist; and     
| |  | quartz veining within both lithologies.    

All significant mineralized intersections are shown in Figure 2
below. The better grades and widths occur in the central part, in drill holes
NYDD001, NYDD003, NYDD004, NYDD005, NYDD007, NYDD008, NYDD012 and NYDD014. In
these holes the mineralization associated with the main BIF horizon has an
average width of 12.90 metres (10.96 metres true width) at an average grade of
2.20 g/t Au.

Additional drilling is warranted at Yindi in order to determine
a mineral resource.

Makapela Prospect

Belgian workers carried out alluvial mining in streams draining
from the Makapela area during the colonial era, but no production figures are
available. Primary mineralization was discovered by artisanal miners in 2006,
and within four years mining was taking place in three pits to a maximum depth
of about 20 metres. The pits are between 170 metres and 190 metres in length and
are located along a strike of 2.2 kilometres. Exploration by Loncor at Makapela
commenced in May 2010, with a 7 x 2 kilometre soil sampling grid covering the
area of artisanal activity, and extending southwestwards over stream sediment
anomalies depicted on old maps from the colonial era. Lines were at 160 metre
intervals, with infill to 80 metres where warranted. The results indicated the
possible continuation of mineralization between the Main, North and Sele Sele
pits, over a strike of 3 kilometres. A separate soil anomaly was identified over
a strike of 2 kilometres in the Bamako area, to the southeast of the Main pit.
Channel sampling was carried out in the artisanal workings, and based on the
encouraging grades and widths returned, a preliminary drilling program of five
holes was planned to test the mineralization at depth below the Main, North and
Makapela pits. This program was expanded to outline the strike extent of the
mineralized zones, following which a decision was made to drill sufficient
intersections to provide an inferred resource. The resource drilling aimed to
intersect the mineralization on sections 80 metres apart along strike, at depths
of 80 metres, 160 metres and 240 metres; intersections at 320 metres and 400
metres depths were drilled on sections 160 metres apart. A total of 56 holes
(18,091 metres) were completed in the vicinity of the Main and North pits, and 15 holes (3,594 metres) were drilled at Sele Sele. In
addition to the above resource drilling program, a total of 12 holes (1,560
metres) were drilled to locate potential extensions to the known reefs and new
mineralized structures indicated by soil, rock chip and auger sampling.

31

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The Makapela area is underlain by a series of basalts which
strike NNE-WSW and dip to the WNW at an average of 85°. A mineralogically
similar rock with a coarser texture is also common, and has been given the field
name dolerite. However, it has gradational contacts with the fine-grained
basalt, and is interpreted to represent the central parts of thick flows, rather
than intrusive sills. Several units of BIF are interlayered with the basalts,
and range up to 13 metres in thickness, although the width is generally less
than 6 meters. Quartz porphyry and quartz-feldspar porphyry dykes and sills are
also present, and petrographic examination shows that they are quartz-dioritic
to tonalitic in composition. In the vicinity of the mineralized zones, these
intrusives are generally no more than a few metres in width, and are probably
apophyses off a larger porphyry body located about 200 metres to the NW.

Three styles of mineralization are present at Makapela:

(a) Quartz veins emplaced into shear zones within the basalt
sequence, which are either parallel to strike or cross-cut the lithological
strike at acute angles. The best developed and economically significant vein
(Reef 1) is exploited in the Main pit, and consists of white quartz with
irregularly distributed pyrite as disseminations and blebs averaging about 3%.
Visible gold is quite common, occurring in 28% of the intersections as isolated
specks and small aggregates up to 2 mm across. Reef 1 has been intersected over
a strike length of 480 metres and to a vertical depth of 480 metres, and dips to
the WNW at 80 - 90°. It has an average true width and grade of 2.15 metres @
11.15 g/t Au.

A characteristic of Reef 1 is the good geological continuity
between drill sections; although the width and grade is variable, the vein was
present in almost all holes, in approximately the expected position. The basalt
hosting Reef 1 shows intense hydrothermal alteration for several metres into the
hangingwall and footwall. The alteration consists mainly of pervasive chlorite
with abundant finely disseminated pyrite.

(b) Strike-parallel mineralization up to 6 metres in width,
closely associated with shearing within and on the margins of BIF units. The
most important zone (Reef 2) is exploited in the North pit. The alteration
assemblage frequently obliterates all traces of the original rock fabric, and
consists of smoky grey, brecciated quartz and chlorite with common
disseminations and stringers of pyrite (Plate 8). The sulphide content is
variable and averages about 8%. In some intersections, remnant magnetite is
present as isolated grains and fragmented bands within the quartz, whilst
relatively unaltered BIF locally occurs in the immediate footwall of the
alteration. Visible gold is much less common than in Reef 1 occurring in 5% of
intersections.

Reef 2 has been intersected on the North pit trend over a
strike length of 800 metres, the most significant grades occurring in the
northern section over a potential strike length of 480 metres. In this northern
area, which has been drilled to a maximum vertical depth of 418 metres, the
mineralization has an average true width of 3.52 metres with an average grade of
8.44 g/t Au. Several metres of pervasive chlorite and finely disseminated pyrite
occur as an alteration halo to Reef 2, similar to Reef 1. As with Reef 1, Reef 2
shows excellent geological continuity, the altered BIF horizon being intersected
in all holes in the expected position. The better developed part of Reef 2
occurs at relatively shallow depths with a plunge of about 10 ° to the NNE,
before assuming a very steep plunge to the SSW. It is possible that the Reef 2
mineralization represents the lower part of a sigmoidal structure, the upper
tail of which has been lost by erosion.

A minor zone of mineralized BIF (Reef 3) occurs 70  170 metres
in the footwall of Reef 2. It is thinner, more irregularly mineralized and has a
much shorter strike than Reef 2, and has little economic significance.

32

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Figure 2 Significant Gold Drill Intersections at Yindi
Prospect



33

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Mineralization in the Sele Sele pit, 2 kilometres NNE of the
North pit, has similar characteristics to Reef 2, and is interpreted to be on
the same BIF unit, based on continuity of the soil anomaly, augering and limited
diamond drilling between the two pits. However, the Sele Sele zone is generally
wider and lower grade than in the North pit area, the best intersection drilled
being 15.68 metres @ 5.35 g/t Au. Pyrrhotite is commonly associated with the
pyrite in the Sele Sele area, and is locally the dominant sulphide phase. The
mineralization plunges to the SSE at about 40°.

A third area of Reef 2 style mineralization occurs in the
Bamako area where channel sampling returned an intersection of 4.60 metres @
11.42 g/t Au. The mineralization is associated with a 2 kilometre long soil
anomaly, and although the best intersection from preliminary drilling was of
relatively low grade (3.60 metres @ 4.43 g/t Au) further work is warranted.

Figures 3 and 4 below highlight the drill intersections on
Makapela Main to North area and Sele Sele area respectively.

Itali Prospect

The Itali prospect is located at the eastern end of the Imva
Fold structure, 40 kilometres to the northwest of Yindi and 10 kilometres south
of Makapela. Lithologies comprise an interbedded sequence of BIF, basaltic
volcanics and metasedimentary schist. Post-deformation, dioritic intrusives
occur within and on the flanks of the fold. Extensive strike-parallel faults
have been interpreted from aeromagnetic data, and are possibly thrusts that
formed during the NNW-SSE compression and folding event. Five drill holes have
been completed at Itali. The first hole was drilled to test a trench
intersection of 42.50 metres at 2.11g/t. The drill hole was 161.85 metres in
length and inclined at -50 degrees to the south, and was drilled parallel to and
immediately below the trench.

The main mineralized zone consists of quartz veins and veinlets
within basalt, overlain by graphitic schist. Two lower-grade zones occur in the
vicinity of the basalt/schist contact. The main mineralized zone of 38.82 metres
at 2.66 g/t Au, dips at 52° to the north, strikes east-west, and correlates
closely with the trench intersection. The rock is completely oxidised to a
vertical depth of 110 metres below surface.

Intersections in the subsequent holes, drilled to test the
mineralized zone down dip and along strike, include: 21.20 metres @ 0.68 g/t Au
(Hole 2), 10.15 metres @ 1.07 g/t Au (Hole 3), 14.70 metres @ 1.68 g/t Au and
3.95 metres @ 19.5 g/t Au (Hole 4). Ground geophysics and further ground
geophysics and drilling will be required to determine the strike potential, and
to identify the higher-grade parts of the mineralized package.

Mondarabe Prospect

Soil sampling and rock chip sampling at Mondarabe delineated
two anomalous areas: one to the north in the vicinity of the Mondarabe artisanal
workings, where +100 ppb values (maximum of 2,350 ppb Au) occur over a strike
length of 960 metres; and one in the southern part of the grid, on a hill
associated with folded BIF. Five diamond drill holes have been completed on the
northern anomaly where gold mineralization is associated mainly with
foliation-parallel quartz veins and veinlets within a series of metapelites,
intruded by sills of dolerite and minor quartz porphyry. Shearing has
preferentially affected the dolerite, and hydrothermal fluids have mineralized
the shear zones to varying degrees. The most significant mineralized
intersections included 10.46 metres grading 2.01 g/t Au, 2.14 metres grading
31.1 g/t Au and 0.66 metres grading 148 g/t Au.

34

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Figure 3 Makapela Main to North Drill Intersections



35

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Figure 4 Makapela Sele Sele Drill Intersections



36

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Two drill holes were completed on the southern soil anomaly
area which is associated with folded BIF. Both holes intersected significant
widths of BIF with individual units of up to 96 metres, interbedded with
sericite schist. The BIF is locally quartz-veined and pyritized, the sulphide
occurring as disseminated crystals, massive bands and patches. Despite the
fairly widespread hydrothermal alteration, the mineralized zones intersected
were relatively narrow, the best intersections in holes 6 and 7 being 3.23
metres grading 3.78 g/t Au and 1.23 metres grading 9.46 g/t Au respectively.
Additional ground geophysics (I.P. surveys) and drilling is required to fully
assess this prospect.

Nagasa Prospect

The Nagasa prospect is located on the southern limb of the Imva
Fold, and is underlain by schists containing several BIF horizons which strike
east-west and dip steeply to the north. Strike-parallel faults, probably
thrusts, are interpreted from the aeromagnetic data. A prominent BLEG anomaly is
found at Nagasa.

The area is characterized by a relatively complex regolith
cover, comprising a colluvial layer up to 3 metres thick containing abundant
quartz clasts, overlain by a fine grained silty clay layer, interpreted to be
palaeo-alluvium. The matrix of the colluvium is auriferous and is extensively
pitted by artisanal miners, soil anomalies occurring where the colluvial
material has been brought to surface. A +100 ppb soil anomaly with a strike of
3.5 kilometres is present in the eastern half of the grid, with values of up to
4,070 ppb Au. A second soil anomaly with a strike of about 1 kilometre occurs in
the west.

Due to the overburden (regolith) covering much of Nagasa, it
was decided to undertake geophysical IP ground surveys with the objective of
detecting mineralized units below the regolith cover. IP surveys were conducted
over an initial 2 kilometre x 2 kilometre block at Nagasa, and three
well-defined anomalies were delineated. Additional IP surveys were subsequently
carried out to the east and west to determine the strike potential of the
anomalies. The southernmost Anomaly (Anomaly 1) has a strike length of at least
6 kilometres, and is associated with zones of colluvial workings and with
localized remnants of colonial mining activity. Pole-Dipole IP arrays were also
undertaken to produce pseudo cross sections which indicated that the higher
chargeability anomalies were located at depth.

Two diamond drill holes, with a strike separation of 2,800
metres, were drilled to test Anomaly 1. IP Anomaly 2 was defined over a 2.9
kilometre strike and is located 500 metres north of, and parallel to Anomaly 1.
Two wide spaced holes, 500 metres apart, were drilled into Anomaly 2. Again the
higher chargeability anomalies from the Pole-Dipole sections appeared to be more
prominent at depth and did not come to surface. One core hole was also drilled
into the 5 delineated 1.6 kilometre IP Anomaly 3 which is located about 1
kilometre north of Anomaly 2, and occurs on a topographic high associated with
the main BIF unit. Four other shallower diamond drill holes have also been
completed by the Company at Nagasa. No significant mineralized zones were
drilled at IP Anomaly 2 and Anomaly 3 although broad zones of hydrothermal
alteration were intersected while at Anomaly 1, the most significant
intersections were 3.72 metres grading 3.17 g/t Au, 2.00 metres grading 2.22 g/t
Au and 0.41 metres grading 27.4 g/t Au. Further closer spaced drilling is
required to delineate discrete mineralization within the broad hydrothermally
altered zones at Nagasa.

Matete and Anguluku Prospects

Ground geophysical IP surveys were undertaken during 2013 at
the Matete and Anguluku prospects where the surface expression of mineralization
may be masked by the presence of transported overburden. Both prospects were
initially identified as high priority BLEG targets and the airborne magnetic
data indicated structurally favourable (folded and faulted) BIF. At both Matete
and Anguluku, gradient array and pole-dipole IP surveys delineated a number of
IP anomalies that require follow up core drilling.

37

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Sample Preparation, Analyses and Security

Section 10 of the Ngayu Technical Report (which section is
entitled Sample Preparation, Analyses and Security) is incorporated by
reference into, and forms part of, this Form 20-F. A copy of the Ngayu Technical
Report can be obtained from SEDAR at www.sedar.com and EDGAR at
www.sec.gov.

Data Verification

Section 11 of the Ngayu Technical Report (which section is
entitled Data Verification) is incorporated by reference into, and forms part
of, this Form 20-F. A copy of the Ngayu Technical Report can be obtained from
SEDAR at www.sedar.com and EDGAR at www.sec.gov.

Metallurgical Testing

Initial bottle roll metallurgical testwork for the Makapela
prospect were undertaken in 2012 in order to obtain preliminary indications of
gold recovery from the mineralized zones. Bottle roll is a preliminary
metallurgical test to determine how much and how easily gold may be liberated
from an ore using cyanide. Samples from Reef 1, Reef 2 and Sele Sele were
selected for bottle roll tests at SGS in Mwanza. For Reef 1, ten core samples
from two boreholes with grades from 2.50 g/t to 59.03 g/t Au (average grade 19.6
g/t Au) were used for the testwork and for Vein 2, 15 core samples from two
boreholes with grades from 1.29 g/t to 76.33 g/t Au (average grade 15.24 g/t)
were utilised. From the Sele Sele area, 14 core samples from one borehole
grading 2.54 g/t to 18.17 g/t Au (average grade 7.30 g/t Au) were used.

For the bottle roll testwork, each core sample was crushed down
to minus 2mm and pulverized down to 90% passing 75microns. Triplicate samples
were analysed by fire assay to determine the average head grade of each sample.
A 1.5 kg pulverised sample was then bottle rolled for 24 hours in a diluted
cyanide solution to extract the gold. Gold analyses were then undertaken on the
total gold in cyanide solution and the grade in the sample tails to arrive at
the amount of gold extracted by the cyanide solution and the gold remaining in
the leached tails. The results are summarised in Table 4 below.

Table 4: Bottle Roll Metallurgical Testwork Results

VEIN
    NO. OF SAMPLES
    MIN. MET RECOVERY(%)
    MAX. METRECOVERY(%)
    AVG MET RECOVERY (%)1
    10
    70.8
    97.6
    842
    15
    50.6
    100
    80.6Sele Sele
    14
    16.1
    93.5
55


The results indicate that Veins 1 and 2 are not refractory and
have good metallurgical recoveries. Sele Sele requires further mineralogical and
leaching testwork to investigate the wide variability on results to define leach
characteristics and so the recoveries can be optimised.

Additional metallurgical testwork was initiated in 2013 but was
not completed.

Mineral Resource Estimates

In April 2013, the Company announced increases and upgrades of
mineral resources at the Makapela prospect compared to the maiden mineral
resources announced by the Company in May 2012. The updated mineral resources
incorporated an additional 13 core holes from the initial, inferred-only maiden
resource.

38

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Tables 5 and 6 below summarise the current indicated and
inferred mineral resources at Makapela using various cut-off grades including a
base case economic cut-off grade of 2.75 g/t Au that used a US$1,500/ounce gold
price and appropriate cost parameter assumptions and metallurgical recoveries.
Core drilling began at Makapela in October 2010 and focused on a quartz vein
system within a sequence of basalts, thin units of banded iron formation and
dolerite sills of Archaean age. A total of 71 core holes totalling 21,635 metres
(including deflections) have been used to estimate these indicated and inferred
mineral resources at Makapela. Drilling has been focused on three main veins:
Reef 1, Reef 2, and Sele Sele that occur over a total strike length of 2.2
kilometres. Core drilling was undertaken on an approximate grid pattern of 80 by
80 metres down to a vertical depth of 240 metres and then on a 160 by 80 metre
grid pattern down to a maximum depth of 480 metres.

Table 5: Makapela Indicated Mineral Resources (with an
effective date of April 9, 2013)

Cut-off Grade
      (g/t Au)
    Average Grade (g/t Au)
    Tonnes (Mt)
    Gold
      Content (Ounces)1.00
    7.45
    2.683
    643,0002.00
    8.14
    2.407
    629,7002.75*
    8.66
    2.205
    614,2003.00
    8.87
    2.130
    607,2004.00
    9.97
    1.764
    565,500


Minimum mining true thickness of 1.5 metres. *Cut-off grade
estimated using a US$1,500/ounce gold price with appropriate cost parameter
assumptions for mining and other economic factors.

Table 6: Makapela Inferred Mineral Resources (with an
effective date of April 9, 2013)

Cut-off Grade
      (g/t Au)
    Average Grade (g/t Au)
    Tonnes (Mt)
    Gold
      Content (Ounces)1.00
    3.49
    6.944
    779,8002.00
    4.29
    4.900
    675,9002.75*
    5.30
    3.223
    549,6003.00
    5.69
    2.781
    508,7004.00
    7.26
    1.640
    382,600


Minimum mining true thickness of 1.5 metres. *Cut-off grade
estimated using a US$1,500/ounce gold price with appropriate cost parameter
assumptions for mining and other economic factors.

In terms of material type, approximately 9% of the total
mineral resources are in oxides, 6% in transitional and 85% in fresh rock.

These mineral resource estimates were prepared by independent
consultants Venmyn Deloitte ("Venmyn"). The geology and drilling
information was analysed, interpreted and estimated by Andrew Clay of Venmyn,
who is a "qualified person" as such term is defined in National Instrument
43-101. Mr. Clay visited the site to review data collection procedures,
geological interpretations and modelling, and estimation using geostatistical
techniques. Venmyn also reviewed the geological and grade continuity to
supplement the review of data quality in order to confer mineral resource
classification categories to reflect the variable sample coverage. Venmyn was
satisfied that all drilling, sampling, database and geological modelling
protocols comply with the standards prescribed by National Instrument
43-101.

39

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The following key assumptions, parameters and methodologies
were used to estimate the mineral resources:

| |  | Datamine Studio 3 software was the modelling
      package used for the determination of the mineral resources.                                                                                                                                                                                                                                                                             
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Gold grades were determined using ordinary kriging
      interpolation into a 3-dimensional block model constrained by
      mineralization wireframes developed from a 2g/t Au sample cut-off grade
      and a minimum horizontal width of 1.5 metres.                                                                                                                                     
| |  | The mineralization models were constrained within the
      wireframe with primary block dimensions of 10 metres N-S (along strike), 5
      metres E-W (cross strike direction) and 10 metres in the vertical
      direction.                                                                                                                                                              
| |  | Grade interpolation was effected separately for the
      individual mineralized zones and Datamine's dynamic anisotropy process was
      employed to control the orientation and axes of the search volumes.                                                                                                                                                                               
| |  | The down dip extrapolations were restricted to three
      times the variogram range from the last drillhole used in the
      interpolation and the model was trimmed off at a maximum depth of 500
      metres from the surface for reporting purposes.                                                                                                                                   
| |  | Portions of the resource have been re-classified from
      Inferred to Indicated based on increased geological confidence and grade
      continuity due to data quality and data density following infill drilling.
      Criteria for Indicated are sufficient samples within one variogram range
      to achieve valid local estimates, in respect of positive kriging
      efficiency.

Drill cores for assaying were taken at a maximum of one metre
intervals and were cut with a diamond saw with one-half of the core placed in
sealed bags by Company geologists and sent to the SGS Laboratory (which is
independent of the Company) in Mwanza, Tanzania. The core samples were then
crushed down to minus 2 mm, and split with one half of the sample pulverized
down to 90% passing 75 microns. Gold analyses were carried out on 50g aliquots
by fire assay. In addition, checks assays were also carried out by the screen
fire assay method to verify high grade sample assays obtained by fire assay.
Internationally recognized standards and blanks were inserted as part of the
Company's internal QA/QC analytical procedures.

A total of 2,614 core samples were taken to determine relative
density measurements for the various reefs and oxide, transitional and fresh
rock components.

Exploration Plans at Ngayu

Since 2013, no drilling has been undertaken and the Yindi camp
was put on care and maintenance due to funding constraints.

The status of exploration, exploration potential and
recommended future exploration programs are summarised for the various prospects
at Ngayu as follows, subject to sufficient funding being available for the
Company and subject to the results obtained by Randgold under the Joint
Venture:

Prospect
    Exploration
      Status
    Exploration
      Potential
    Next StepsMakapela
    Indicated and inferred mineral resources summarized in
      the tables above.
    Main Zones:Considered unlikely that all the
      mineralized bodies are outcropping, and good potential for locating blind
      mineralized shoots along well-defined structures with an aggregate strike
      of >5 kilometres.
      *Other:*Possible mineralization associated with a
      quartz-porphyry intrusion overlain by transported overburden.
    Main Zones:1. IP (pole dipole) testwork over
      known mineralization, followed by systematic pole-dipole lines along
      strike.2. Drill testing of anomalies.3. Completion of preliminary
      economic assessment.
      Other:IP to locate possible mineralized parts of
      the quartz- porphyry, followed by auger drilling and diamond drilling


40

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Prospect
    Exploration
      Status
    Exploration
      Potential
    Next StepsYindi
    Outline drilling on main soil
      anomaly (18 holes) demonstrates potential for delineation of a mineral
      resource.
    Drilled zone is open-ended to SE.
      Two adjacent IP anomalies not drill tested. Kputuka adit (10.30 metres
      @ 4.12 g/t Au) not drill tested. Possibility of disseminated &
      stockwork mineralization in La Grace area.
    Additional drilling on main zone for
      inferred resources and to close off in SE.
    Drill test IP targets and Kputuka adit.
    IP surveys in La Grace area.Nagasa
    Preliminary drilling of IP anomalies (9 holes). Intersections
      include:
      3.72 metres @ 3.17 g/t Au
      0.76 metres @ 9.03 g/t Au
      0.41 metres @ 27.40 g/t Au
    The Anomaly 1 structure has an
      open-ended strike of >6 kilometres, with gold mineralization indicated
      by rock chip sampling, widespread auriferous colluvium, and drilling. Only
      three widely-spaced lines drilled; all have strong hydrothermal
      alteration, and two have Au mineralization.
    Systematic pole-dipole IP to define
      the more highly altered sections of the 6 kilometre zone (possible use of
      3D IP). Wider- spaced IP to test strike extensions.
    Outline drilling
      of IP anomalies.Mondarabe
    Preliminary drilling of 2 soil anomalies (7 holes). Intersections
      include:
      10.46 metres @ 2.01 g/t Au
      3.52 metres @ 3.54 g/t Au
      2.14 metres @ 31.15 g/t Au
    1. Northern anomaly: two zones of workings with a combined strike of
      1.6 kilometres, only one of which has been drilled on two lines. Possible
      strike extensions under transported cover.
      2. Southern anomaly: underlain by S-fold in BIF. Two southerly limbs of
      the fold covered by colluvium and not yet drill tested.
    Additional drilling on the northern anomaly. IP to test for strike
      extensions under cover.
      Drilling on the southern part of the S-folded BIF.Itali
    Preliminary drilling over a strike of 480 metres (5 holes on 3 lines).
      Intersections include:
      38.82 metres @ 2.66 g/t Au
      21.20 metres @ 0.68 g/t Au
      14.70 metres @ 1.68 g/t Au
      3.95 metres @ 19.50 g/t Au
    Mineralization open-ended to E, with
      340 metres of potential strike before Kilogold boundary. Also possibly
      open-ended to W, under transported cover
    IP to cover potential strike
    extensions.
    Additional drilling to test strike extensions and establish orientation
    and extension of plunging shoots


41

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Prospect
    Exploration
      Status
    Exploration
      Potential
    Next StepsMatete
    Soil geochemistry, rock chip
      sampling, augering, trenching in N and E. IP over lithostructurally
      favourable areas with transported overburden in SW.
    7 drill targets proposed by Newmont
      based on IP anomalies. Extensive alluvial mining in E with source not yet
      located.
    Prioritise and drill test IP
      anomalies in SW Additional IP in E.Anguluku
    Detailed stream sediment sampling.
      Soil geochemistry, rock chip sampling, augering, trenching (but problems
      with transported overburden). IP in geochemically anomalous areas.
    Strong stream sediment anomalies
      associated with NW structure. Disseminated mineralization sampled within
      schists (e.g. trench with 5 metres @ 5.5 g/t Au). Well-defined IP
      chargeability anomalies associated with E-W structures and anomalous rock-
      chips.
    Drill test IP anomalies.


Joint Venture with Randgold

In January 2017, Loncor announced preliminary results of the
geophysical airborne survey undertaken by Randgold as part of its Joint Venture
with Loncor. A 10,013 line-kilometre helicopter borne electromagnetic VTEM
survey (the JV Survey) was completed over the Ngayu belt. The JV Survey
was performed by Geotech Airborne Limited over the span of approximately five
months. The JV Survey has provided a valuable additional layer of geological
information through mapping the conductivity nature of the belt. The new data
has assisted with resolving the lithological nature of the belt as well as
assisting in identifying major structures and areas of structural
complexity.

As per the joint venture agreement signed in January 2016,
Randgold will manage and fund exploration of the exploration permit areas
comprising the Ngayu project until the completion of a pre-feasibility study on
any gold discovery meeting the investment criteria of Randgold. Subject to the
DRCs free carried interest requirements, Randgold would earn 65% of any
discovery with Loncor holding the balance of 35%. Loncor will be required, from
that point forward, to fund its pro-rata share in respect of the discovery in
order to maintain its 35% interest or be diluted. Certain parcels of land within
the Ngayu project surrounding and including the Makapela and Yindi prospects
have been retained by Loncor and do not form part of the Joint Venture with
Randgold. Randgold shall have certain preemptive rights over these two
areas.

In May 2017, Loncor announced that exploration ground work had
commenced on priority targets resulting from the JV Survey. Processed data and
final products from the JV Survey have been combined with all other geological
layers to complete an updated integrated geological map of the belt and to
refine and prioritize areas of interest (AOIs). Figure 5 below
highlights the preliminary four significant AOIs generated using pre-existing
data sets and the VTEM data. The four preliminary AOIs have several
kilometer-long mineralised strike potential focused on extension of known
mineralized trends as well as areas of geochemical anomalies and structural
complexity. The four priority AOIs identified are summarized below:


    Priority 30 kilometre long Imva Fold
      structureExtensive geochemical anomalies and several
      gold occurrences along major structures and complex deformation around
      intrusions.


42

---

| |  | Yindi/Aguluku trend                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | 20 kilometre long northwest extension of the
      Yindi/Aguluku mineralised trend with high soil and BLEG geochemical
      anomalies in the Yindi and Anguluku prospect areas. Younger Lindian cover
      may be obscuring any geochemical signature further along strike to the
      northwest. Structural complexity favourable for gold mineralised
      emplacement where the Banded Ironstone Formations (BIFs) wrap
      around the western side of a regional intrusive complex.
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Adumbi trend                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |   | 20 kilometre mineralised northwest extension of the
      Adumbi trend with moderate BLEG anomalism along the entire AOI, in places
      associated with similar lithological setting as the Adumbi deposit.                                                                                                                                                                                                                                                                                  
| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  | Northern Ngayu                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| |   | 8 kilometre structural trend located in an area of
      complex folding of BIFs and carbonaceous shale, a localized area of high
      BLEG anomalism associated with a northwest trending fold axis, the setting
      and geochemical anomalism indicate the potential for fold plunging style
      mineralization.                                                                                                                                                                        

The initial work program will have a two-pronged approach: a
geological review of all existing targets; and ground follow-up of remotely and
conceptually generated AOIs to generate additional new targets.

The belt scale exploration strategy of Randgold is to focus on
the discovery of large high quality gold deposits by rapidly identifying and
progressing targets that show the potential to meet these filters. Gold mineral
resources have already been identified within the Ngayu greenstone belt in the
Makapela and Adumbi deposits, and the objective is to further unlock the
potential of the Ngayu greenstone belt for a world class discovery using cutting
edge geophysics, geochemistry, structural interpretation and driven by an
experienced and proven exploration team on the ground.

Figure 5



43

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North Kivu Project

Loncor owns or controls a contiguous block of 47 exploration
permits (or "PRs") covering an area of approximately 13,000 square
kilometers to the northwest of Lake Edward in the North Kivu province in the
DRC. The areas covered by these PRs are located between the two major gold belt
terrains of the DRC: the Twangiza-Namoya gold belt, owned by Banro Corporation,
and the Kilo-Moto gold belt, previously controlled by Moto Gold and now owned by
Randgold and Anglogold Ashanti. In addition to gold, there are a number of
alluvial platinum occurrences in the project area, including the type locality
for the platinum selenide mineral luberoite near Lubero. To date, no primary
source has been found for the alluvial platinum occurrences. Due to the security
situation, all of the North Kivu PRs are currently under force majeure.

Historical data was compiled from the colonial period of
alluvial gold mining and exploration which outlined ten gold prospects for
follow-up, the most prospective being the Manguredjipa prospect where 300,000
ounces of alluvial gold was reportedly mined during the colonial period up to
1960. Other gold prospects warranting follow up included Lutunguru, Lubero,
Makwasu, Lutela, Bilolo, Manzia, Mohanga and Ludjulu.

The Companys most explored gold prospect area within the North
Kivu project area has been Manguredjipa.

Manguredjipa

Certain of the following disclosure relating to the
Manguredjipa prospect is derived from the independent technical report (herein
referred to as, the "Manguredjipa Technical Report") dated February 29,
2012 and entitled "National Instrument 43-101 Independent Technical Report on
the Manguredjipa Gold Project, North Kivu Province, Democratic Republic of the
Congo" prepared for Loncor by Venmyn. A copy of the Manguredjipa Technical
Report can be obtained from SEDAR at www.sedar.com and EDGAR at
www.sec.gov.

Property Description and Location

The Manguredjipa area is located in the North Kivu Province of
the DRC, approximately 80 kilometres northwest of Lake Edward, as shown in
Figure 1. Manguredjipa forms part of Loncors extensive North Kivu project area.
The project was delineated from Loncors program of historical records
commissioned in 2008 as one of the primary targets to pursue and conduct further
studies on. The project consists of four PRs 1380, 1381, 1718 and 1719, two of
which (1380 and 1381) are owned by Loncor through its wholly-owned DRC
subsidiary, while the other two are under option. The project was delineated
into three prospective targets, namely Durba, Manguredjipa West and Muhanga.

Manguredjipa is situated approximately 60 kilometres (95
kilometres by road) northwest of Butembo and approximately 80 kilometres west of
Beni and 395 kilometres west of Kisangani. Manguredjipa is situated
approximately 220 kilometres northwest of Goma and 275 kilometres northwest of
Kigali in Rwanda. The Manguredjipa area is regionally served by primitive
infrastructure and serviced by a gravel road from Butembo.

According to DRC law, the surface rights and the mineral rights
pertaining to one property are not separated. Loncor therefore owns or has
option rights to the licences to both the surface and mineral rights to the
Manguredjipa project.

44

---

In order to maintain a PR in good standing the title holder is
required to make annual surface fee and surface tax payments to the State
Treasury and the Provincial Tax authorities, respectively. However, all 47 PRs
comprising the North Kivu Project are under force majeure where no fees or taxes
are payable during the force majeure period.

Accessibility, Climate, Local Resources, Infrastructure
and Physiography

The Manguredjipa project area occurs to the south of the
Mobissio and Mutumbi highland ridge which trends northwest-southeast across the
region. This elevated ridge forms the main watershed of the region.
Topographically the area is hilly with deeply incised valleys with an average
elevation of 1,000 mamsl, ranging from 700 mamsl to 1,500 mamsl. The hilltops
rise more than 50 metres above the surrounding drainage basins and in the
western Lenda-Biaboy basins the hills are steeply sided with slope angles of up
to 35°. The hills in the southern Eohe basin are less steeply sided, with slopes
of 15°.

The area is covered by equatorial rain forests and thick grassy
hilltops. Scattered rubber and palm tree plantations date from the colonial
era.

Access to the project area is primarily by gravel road from
Butembo. In the past, the area can be reached by light aircraft due to the
existence of an airstrip near the old Manguredjipa camp. Other usable airstrips
are situated in Butembo, Lubero and Beni. An 800 metre unused airstrip is
located at Etaetu approximately 58 kilometres west of Manguredjipa but this
airstrip is now covered by vegetation. The main road north from Goma to Beni
also provides access to the towns of Lubero and Butembo. Existing infrastructure
is best developed and therefore concentrated along the main road between Goma in
the south and Beni in the north.

The nearest village to the site is Mangazi village, situated a
few kilometres south of the main artisanal workings. The Manguredjipa property
lies within the Lubero Territory under the collectivitéof Bapere. The
indigenous people are Bapiri and their main source of income is through
subsistence farming and artisanal mining. Goma, Butembo and Beni are the
principal commercial centres in the northeastern DRC.

In relation to the existing infrastructure of the North Kivu
Province, the Manguredjipa project is well placed. The mode of transport for the
general population is mainly trucks and buses on the road to Butembo, which has
deteriorated since exploration began in 2008. The projects exploration team has
utilised mainly utility vehicles and, where there are no roads, travel is by
foot. In some cases a helicopter has to be utilised to gain access to remote
areas.

The climate in the eastern DRC is tropical. It is hot and humid
in the equatorial river basin and cooler and wetter in the eastern highlands.
The wet season takes place in April to October and the dry season from December
to February north of the equator. South of the equator the wet season is from
November to March and the dry season from April to October. The climate
facilitates exploration and mining activities all year round. Exploration is
more challenging during the wet season, as roads become muddy and slippery, pits
are rapidly filled by water and work in the field becomes difficult.

Historical Exploration

During the colonial period up until 1960, the Belgians sampled
rivers and tributaries using sluices for gold and diamonds, recording their
findings onto detailed plans held at the Tervuren Museum in Brussels. The North
Kivu area was historically a significant producer of alluvial gold and platinum.
Exploration and mining took place from 1923 to 1960 when low gold prices and
civil unrest caused the cessation of activities.

45

---

Alluvial gold was first reported in the North Kivu region in
1913 and reports of gold discoveries continued into the 1920s. Regional
infrastructure to support the mining industry was established from the 1930s
with the town of Butembo becoming the main mining centre in the region. Intense
exploration for alluvial and primary precious metals was conducted over a period
of about fifty years. Exploration included both surface and underground
investigations using systematic sampling, pitting and trenching.

Historic exploration and production on the Manguredjipa project
area was from the Lenda drainage which was explored and exploited for alluvial
gold from 1925 to 1960. The term Division Lenda in various reports, has been
noted as referring to the entire goldfield including Manguredjipa, Motokolea,
Mabea, Makwasu, Eohe and Biaboy.

Geology and Mineralisation

The regional geological history of the DRC is directly relevant
to the prospectivity of the North Kivu region. Several broad geological terrains
occur in the North Kivu and South Kivu districts with specific, genetically
related metallogenic provinces. The northern area consists of an Archaean
greenstone belt and granite-gneiss basement (3.5 -3.2Ga), while the central and
southern parts are comprised of Mesoproterozoic (1.6Ga -950Ma) mobile belts
formed during the Kibaran orogeny dated at 1,400-950Ma.

The deposit occurs within the Kibaran orogenic belt which
contains renowned metallogenic provinces genetically related to the protracted
history of tectonism, volcanism and metamorphism of the belt. The local geology
of the Manguredjipa project area consists of E-W trending sequences of arkoses,
conglomeratic arkose, schists and basic intrusive, as determined from literature
studies.

The primary mineralisation appears to be typical of that
associated with greenstone and mobile belts, where syngenetic gold has been
mobilised during tectonism and complex structural and chemical controls.
Concentration and re-deposition of ore minerals has occurred in veins and
disseminated mineralisation along structural or chemical features.

These processes are consistent with the complex and protracted
geological and tectonic history of the Kibaran Belt and the genetic model is
further complicated by magmatic intrusive events that introduced epithermal
fluids, heat sources and additional metallic elements. The areas are considered
highly prospective as only limited exploration has taken place using modern
exploration techniques.

Loncor Exploration (2008 to 2012)

Exploration by Loncor commenced in 2008 with the interpretation
of airborne magnetic and radiometric surveys which were flown over a portion of
the Loncor owned PRs by New Resolution Geophysics (NRG) in July and August 2007.
The area covered by the survey is located 390 kilometres east of Kisangani and
230 kilometres north of Goma. The Manguredjipa licence area covers almost the
entire southern half of the geophysical survey area. The combined geophysical
survey identified 14 potential exploration targets.

In addition, historical data during colonial times was
evaluated from the Tervuren Museum in Brussels from which a number of priority
gold targets were outlined including Lutunguru, Lubero, Makwasu, Lutela, Bilolo,
Manzia, Muhanga and Ludjulu.

During 2008, Venmyn carried out an analysis on historical
stream sediment sampling data from the Manguredjipa project. This analysis was
graphically presented utilising Surfer® software to create a grade model of the
Manguredjipa and surrounding environs. The Surfer® model of gold grade distribution for Manguredjipa showed a clear zone of
anomalously high gold grades developed across the area trending in a
southwest-northeast direction. The background gold grades range between 0.2 to
1.0g/m 3 and the anomalous areas reach a maximum of 4.2g/m 3.

46

---

In August 2009, Loncor embarked on geochemical stream sediment,
soil and rock sampling programs based on the combined results from the
geophysical interpretation and the stream sediment grade distribution models. A
one kilometre by two kilometre grid was designed initially for a target area,
near the Durba adit, north of the base camp at Manguredjipa.

From 2010 until October 2011, the focus was on the Durba,
  Manguredjipa West and Muhanga prospects. Another prominent artisanal adit, named
  the Mont Blue Adit, was discovered within the Muhanga prospect. The following
was carried out during this period:

| |  | 9,490 metres of soil gridding;                
| | - | ----------------------------------------------
| |  | 1,308 metres of trenching;                    
| |  | 130 metres of adit mapping; and               
| |  | 260 metres of other channel mapping.          
| |  | 35 stream samples;                            
| |  | 58 Bulk Leach Extractable Gold (BLEG) samples;
| |  | 2,385 soil samples;                           
| |  | 1,669 rock grab samples;                      
| |  | 130 adit channel samples;                     
| |  | 818 trench channel samples; and               
| |  | 202 other channel samples.                    

2012 Exploration Activitiesat
Manguredjipa

Exploration continued in the Manguredjipa area until early June
2012, when activities were suspended to conserve funds for the priority Ngayu
project. Field work focused mainly on the Muhanga prospect. In order to better
assess continuity of the mineralization, a channel sampling program at the
Muhanga was completed in the first quarter of 2012. A total of 780 metres were
sampled by means of a mechanical rock cutter, in two phases: (a) channels
orientated N-S, i.e. normal to the lithological strike and long-axis of the rock
chip anomaly, and (b) channels orientated E-W, normal to the dominant quartz
vein direction. The rock sample results indicated that the mineralization is
patchy and the potential to generate a significant mineral resource was low and
did not warrant follow up drilling.

2013-2017 Exploration Activitiesat
Manguredjipa

No exploration was undertaken on the North Kivu project due to
the force majeure situation in respect of the PRs and in order to focus
exploration and funds on the priority Ngayu project.

Exploration Plans for the North Kivu Project

Exploration on the North Kivu project will be dependent on the
lifting of force majeure on the priority PRs so that groundwork can commence and
on sufficient funding being available for exploration. The priority area would
be Lutunguru prospect where extensive gold artisanal activity including hardrock
mining is currently being undertaken.

47

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Qualified Person

William R. Wilson, a director of the Company and a "qualified
person" as such term is defined in National Instrument 43-101, has reviewed and
approved the technical information in this Form 20-F relating to the Companys
mineral projects.

|**Item 4A.** | Unresolved Staff Comments
|------------ | -------------------------

Not applicable.

|**Item 5.** | Operating and Financial Review and
      Prospects
|----------- | --------------------------------------------------

See the management's discussion and analysis of the Company for
the year ended December 31, 2017 incorporated by reference into this Form 20-F
as Exhibit 15.1.

|A. | Operating Results
|-- | -----------------

See the management's discussion and analysis of the Company for
the year ended December 31, 2017 incorporated by reference into this Form 20-F
as Exhibit 15.1.

|B. | Liquidity and Capital
Resources.
|-- | --------------------------------

See the management's discussion and analysis of the Company for
the year ended December 31, 2017 incorporated by reference into this Form 20-F
as Exhibit 15.1.

|C. | Research and Development, Patents and Licenses,
      etc.
|-- | ----------------------------------------------------------

The Company is a mineral exploration company and does not carry
on any research and development activities.

|D. | Trend Information
|-- | -----------------

None of the Company's assets are currently in production or
generate revenue. However, the cyclical nature of the prices of metals,
particularly the price of gold, is reasonably likely to have an effect on the
Company's liquidity and capital resources. If the price of gold or the worldwide
demand for gold decreases, there would likely be an adverse effect on the
Companys ability to raise additional funding and attract exploration partners
for its projects. In recent years, junior mineral exploration companies have
experienced difficulties raising new money, and capital raising activities
completed by such companies have often resulted in substantial dilution to
existing shareholders.

|E. | Off-Balance Sheet
Arrangements.
|-- | -------------------------------

The Company does not have any off-balance sheet
arrangements.

48

---

|F. | Tabular Disclosure of Contractual
    Obligations
|-- | -------------------------------------------------

The following information is as of December 31, 2017:

Contractual
      Obligations
    Payments due
      by periodTotal
    Less than
      1 year
    1-3 years
    3-5 years
    More than
      5 yearsLong-term debt
    -
    -
    -
    -
    -Capital (finance) lease obligations
    -
    -
    -
    -
    -Operating lease obligations
    US$294,007
    US$176,404
    US$117,603
    -
    -Purchase obligations
    -
    -
    -
    -
    -Other long-term liabilities
    -
    -
    -
    -
    -Loan
    US$122,753
    US$122,753
    -
    -
    -Total
    US$416,760
    US$299,157
    US$117,603
    -
    -


|G. | Safe Harbor
|-- | -----------

Not applicable.

|**Item 6.** | Directors, Senior Management and Employees
|----------- | ------------------------------------------

|A. | Directors and Senior
Management
|-- | -------------------------------

The directors and senior management of the Company and term of
continuous service are as follows:

|                           |                                                         | Served as a    
|-------------------------- | ------------------------------------------------------- | ---------------
|Name                       | Position(s) with the Company                            | Director Since 
|                           |                                                         |                
|Arnold T. Kondrat          | President, Chief Executive Officer and a
      director | August 24, 1993
|Donat K. Madilo            | Chief Financial Officer                                 | Not applicable 
|Fabrice Matheys            | General Manager, DRC                                    | Not applicable 
|Geoffrey G. Farr           | General Counsel and Corporate Secretary                 | Not applicable 
|Maurice J. Colson (1) (2)  | Director                                                | March 31, 2011 
|Richard J. Lachcik (1) (2) | Director                                                | June 29, 1998  
|William R. Wilson (1) (2)  | Director                                                | July 15, 1997  

|_______________________________
|-------------------------------
|                               
|                               
|                               
|(1)                            
|                               
|(2)                            

Arnold T. Kondrat- Mr. Kondrat is the Company's
principal founder and has over 30 years of management experience in the resource
exploration industry. During this time he has been a senior officer and director
of a number of publicly-traded resource exploration companies, in both Canada
and the United States, including principal founder of several of
these companies. In addition to his positions with Loncor, Mr. Kondrat is also
Chief Executive Officer, President and a director of Gentor Resources Inc. (a
mineral exploration company listed on the TSX Venture Exchange), a director of
Kuuhubb Inc. (a company listed on the TSX Venture Exchange focused on lifestyle
and mobile video game applications), and President of Sterling Portfolio
Securities Inc. (a private venture capital firm based in Toronto).

49

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Donat K. Madilo  Mr. Madilo has over 28 years of
  experience in accounting, administration and finance in the DRC and North
  America. He is Senior Vice President, Commercial & DRC Affairs of Banro
  Corporation (a gold mining company in the DRC) (and was previously Chief
  Financial Officer of Banro Corporation), and Chief Financial Officer of Gentor
  Resources Inc. and Kuuhubb Inc. Mr. Madilos previous experience includes
  director of finance of Coocec-ceaz (a credit union chain in the DRC) and senior
  advisor at Conseil Permanent de la Comptabilité au Congo, the accounting
  regulation board in the DRC. He holds a Bachelor of Commerce (Honours) degree
  from Institut Supérieur de Commerce de Kinshasa, a B.Sc. (Licence) in Applied
  Economics from University of Kinshasa and a Masters of Science in Accounting
(Honours) from Roosevelt University in Chicago.

Fabrice Matheys  Mr. Matheys is a professional
geologist with more than 25 years of experience in Africa. Prior to his role
with Loncor, Mr. Matheys served as Exploration Geologist for De Beers in
Botswana, West Africa and South Africa and spent eight years as Exploration
Manager in the DRC with exploration programs focused on gold, diamonds, niobium
and tungsten.

Geoffrey G. Farr  From February 2011 to present, Mr.
Farr has been Vice President, General Counsel and Corporate Secretary of Banro
Corporation, and General Counsel to and Corporate Secretary of each of Loncor
and Gentor Resources Inc. He is also General Counsel to and Corporate Secretary
of Kuuhubb Inc. Prior to February 2011, Mr. Farr practised corporate and
securities law in Toronto for 17 years, which included extensive experience in
representing public companies. He holds a LL.B. from the University of Ottawa
and a B.Comm. from Queens University.

Maurice J. Colson  Mr. Colson has worked in the
investment industry for more than 38 years and was for many years managing
director for a major Canadian investment dealer in the United Kingdom. He is
actively involved in providing strategic counsel and assistance with financing
to emerging private and public companies in Canada and to Canadian companies
operating in China, Africa and South America. He is a director, and a member of
the audit committee, of several Toronto Stock Exchange and TSX Venture Exchange
listed companies, and is the former President and Chief Executive Officer of the
TSX Venture-listed company, Lithium One Resources. Mr. Colson holds a Masters of
Business Administration degree from McGill University in Montreal.

Richard J. Lachcik  Prior to his retirement in 2017,
Mr. Lachcik practiced corporate and securities law in Toronto, Canada for over
30 years. His practice included extensive experience in representing public
companies, as well as acting for a number of investment dealers. He has been an
officer and director of a number of Canadian public resource companies.

William R. Wilson  Mr. Wilson is Director, Executive
Vice President and Chief Financial Officer of TUVERA Exploration Inc. TUVERA is
a private B.S. holding company for the ARVENUT exploration properties in Nevada,
Utah and New Mexico. He has created and managed 11 mining companies over 25
years with properties in the U.S., Canada, Russia, the DRC and Ukraine. Mr.
Wilson is a Qualified Professional in Mining, Metallurgy/Processing and
Environmental Compliance (Member no. 01063QP) of the Mining and Metallurgical
Society of America. He has a degree in Metallurgical Engineering from the
Colorado School of Mines and a Masters of Business Administration degree from
the University of Southern California. Mr. Wilson has been involved in the
mining industry for more than 35 years. He has been a director and senior officer of a number of public
companies in both Canada and the United States, and has been a member of the
audit committee of several of these companies.

50

---

There are no family relationships among any of the Company's
directors or senior management.

There is no arrangement or understanding with major
shareholders, customers, suppliers or others, pursuant to which any person
referred to above was selected as a director or officer of the Company.

The following directors of the Company are presently directors
of other issuers that are public companies:

| | Name of Director   | Names of Other Issuers     
| | ------------------ | ---------------------------
| |                    |                            
| | Maurice J. Colson  | Aberdeen International Inc.
| |                    | Stetson Oil & Gas Ltd.     
| |                    | Kuuhubb Inc.               
| |                    | China Goldcorp Ltd.        
| |                    |                            
| | Arnold T. Kondrat  | Kuuhubb Inc.               
| |                    | Gentor Resources Inc.      
| |                    |                            
| | Richard J. Lachcik | Gentor Resources Inc.      
| |                    |                            
| | William R. Wilson  | Gentor Resources Inc.      

Other than the board of directors, the Company does not have an
administrative, supervisory or management body.

|B. | Compensation
|-- | ------------

Named Officers

Summary Compensation Table

The following table sets forth certain information with respect
to compensation paid to the officers of the Company set out in the following
table (the "NEOs") for the financial year ended December 31, 2017.

Name and PrincipalPosition
    Year
    Salary(US$)
    Share-basedawards(US$)
    Option-basedawards(2)(US$)
    Non-equityincentive
      plancompensation -Annual IncentivePlan(US$)
    All otherCompensation(US$)
    TotalCompensation(US$)Arnold T. Kondrat Chief Executive Officer
      and President
    2017
    $92,496(1)
    N/A
    Nil
    Nil
    $52,291 (3)
    $144,787Donat K. Madilo Chief Financial Officer
    2017
    Nil
    N/A
    Nil
    Nil
    Nil
    Nil


51

---

Name and PrincipalPosition
    Year
    Salary(US$)
    Share-basedawards(US$)
    Option-basedawards(2)(US$)
    Non-equityincentive
      plancompensation -Annual IncentivePlan(US$)
    All otherCompensation(US$)
    TotalCompensation(US$)Fabrice Matheys General Manager, DRC
    2017
    N/A
    N/A
    Nil
    Nil
    $12,000 (4)
    $12,000Geoffrey G. Farr General Counsel and
      Corporate Secretary
    2017
    $33,600
    N/A
    Nil
    Nil
    $2,843 (5)
    $36,443


|______________________________
|------------------------------
|                              
|(1)                           
|                              
|(2)                           
|                              
|(3)                           
|                              
|(4)                           
|                              
|(5)                           

Loncor employees are currently entitled to receive a retention
allowance (the "Retention Allowance") on termination of their employment
with the Company, provided the employee has been with the Company for a minimum
of two years and provided that termination is not due to misconduct (in the case
of misconduct, the Retention Allowance is forfeited). The amount of the
Retention Allowance is equal to the employee's monthly base salary multiplied by
the number of years the employee was with the Company (up to a maximum of 10
years), with any partial year being recognized on a pro rata basis.

Incentive Plan Awards

The following table provides details regarding outstanding
option and share-based awards held by the NEOs as at December 31, 2017:

Outstanding share-based awards and
      option-based awardsOption-based Awards
    Share-based AwardsName
    Option grantdate
    Number ofsecuritiesunderlyingunexercisedoptions(1)(#)
    Option exerciseprice(2)($)
    Optionexpirationdate
    Aggregatevalue ofunexercisedin-the-moneyoptions(3)(US$)
    Number ofshares orunits thathave notvested(#)
    Market orpayout valueof share-based awardsthat have notvested(US$)Arnold T. Kondrat
    Mar. 11, 2016
    500,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $10,000
    N/A
    N/ADonat K. Madilo
    Mar. 11, 2016
    500,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $10,000
    N/A
    N/AFabrice Matheys (4)
    N/A
    -
    -
    -
    -
    N/A
    N/AGeoffrey G. Farr
    Mar. 11, 2016
    500,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $10,000
    N/A
    N/A


52

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|_____________________________
|-----------------------------
|                             
|(1)                          
|                             
|(2)                          
|                             
|(3)                          
|                             
|(4)                          

The following table provides details regarding outstanding
option-based awards, share-based awards and non-equity incentive plan
compensation held by the NEOs, which vested and/or were earned during the year
ended December 31, 2017:

Incentive plan awards - value vested or
      earned during the yearName
    Option-based awards -
      Value vested during the year(1)(US$)
    Share-based awards -
      Value vested during the year (US$)
    Non-equity incentive
      plan compensation - Value earned during the year
      (US$)Arnold T. Kondrat
    $12,500
    N/A
    N/ADonat K. Madilo
    $12,500
    N/A
    N/AFabrice Matheys
    Nil
    N/A
    N/AGeoffrey G. Farr
    $12,500
    N/A
    N/A


|_____________________________
|-----------------------------
|                             
|(1)                          

Non-Executive Directors

The directors of the Company were not paid any fees by the
Company during the financial year ended December 31, 2017 for their services in
their capacity as directors. The Company's directors are entitled to receive
stock option grants under the Company's Stock Option Plan, as recommended by the
compensation committee and determined by the board of directors of the Company
(the "Board"). The exercise price of such stock options is determined by
the Board, but shall in no event be less than the last closing price of the
Companys common shares on the Toronto Stock Exchange prior to the date the
stock options are granted. No stock options of the Company were granted during
the financial year ended December 31, 2017.

All directors receive reimbursement for reasonable
out-of-pocket expenses related to their attendance at meetings or other expenses
incurred for Company purposes.

53

---

Incentive Plan Awards

The following table provides details regarding the outstanding
option and share based awards held as at December 31, 2017 by the directors of
the Company other than Mr. Kondrat. See "Named Officers - Incentive Plan Awards"
above for details regarding the outstanding stock options held by Mr. Kondrat as
at December 31, 2017.

Outstanding share-based awards and
      option-based awardsOption-based Awards
    Share-based AwardsName
    Option grantdate
    Number ofsecuritiesunderlyingunexercisedoptions(1)(#)
    Option exerciseprice(2)($)
    Optionexpirationdate
    Aggregatevalue ofunexercisedin-the-moneyoptions(3)(US$)
    Number ofshares orunits ofshares thathave notvested(#)
    Market orpayout valueof share-**based awards**that have notvested(US$)Maurice J. Colson
    Mar. 11, 2016
    300,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $6,000
    N/A
    N/ARichard J. Lachcik
    Mar. 11, 2016
    300,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $6,000
    N/A
    N/AWilliam R. Wilson
    Mar. 11, 2016
    300,000
    Cdn$0.06 (US$0.05)
    Mar. 11, 2021
    $6,000
    N/A
    N/A


|_________________________________
|---------------------------------
|                                 
|(1)                              
|                                 
|(2)                              
|                                 
|(3)                              

The following table provides details regarding outstanding
option-based awards, share-based awards and non-equity incentive plan
compensation in respect of the directors of the Company other than Mr. Kondrat,
which vested and/or were earned during the year ended December 31, 2017.
See "Named Officers - Incentive Plan Awards" above for details regarding
the outstanding option-based awards, share-based awards and non-equity incentive
plan compensation in respect of Mr. Kondrat, which vested and/or were earned
during the year ended December 31, 2017.

54

---

Incentive plan awards - value vested
      or earned during the yearName
    Option-based awards -Value vested during theyear(1)(US$)
    Share-based awards -Value vested during theyear(US$)
    Non-equity incentive plancompensation - Valueearned during the year(US$)Maurice J. Colson
    $7,500
    N/A
    N/ARichard J. Lachcik
    $7,500
    N/A
    N/AWilliam R. Wilson
    $7,500
    N/A
    N/A


|_______________________________
|-------------------------------
|                               
|(1)                            

Other Information

Neither the Company nor its subsidiaries provides pension,
retirement or similar benefits.

|C. | Board Practices
|-- | ---------------

Each director of the Company holds office until the close of
the next annual meeting of shareholders of the Company following his election or
appointment, unless his office is earlier vacated in accordance with the by-laws
of the Company. See Item 6.A. of this Form 20-F for the dates the directors of
the Company were first elected or appointed to the Company's board of directors.

Employment Contracts with Executive Officers 
Termination Benefits

There is no contract, agreement, plan or arrangement that
provides for payments to an executive officer of the Company at, following or in
connection with any termination (whether voluntary, involuntary or
constructive), resignation, retirement, a change in control of the Company or a
change in an executive officer's responsibilities, other than the Retention
Allowance discussed above. However, the Board may, in its sole discretion,
accelerate the vesting of currently outstanding stock options granted under the
Companys Stock Option Plan in the event a take-over bid is made for the common
shares of the Company, any change of control of the Company occurs or any other
transaction involving the Company occurs (see "Named Officers - Incentive Plan
Awards" under Item 6.B. of this Form 20-F with respect to the stock options of
the Company held by the executive officers of the Company; see also "Incentive
Stock Option Plan" under Item 6.E. of this Form 20-F regarding the terms of the
Companys Stock Option Plan).

Audit Committee

The Board has an audit committee (the "Audit
Committee"), the members of which are Maurice J. Colson, Richard J. Lachcik
and William R. Wilson. Each member of the Audit Committee is independent within
the meaning of Canadian National Instrument 52-110 - Audit Committees ("NI
52-110") and Section 803A of the NYSE MKT Company Guide. Each member of the
Audit Committee is "financially literate" within the meaning of NI 52-110. At no
time since the commencement of the Company's financial year ended December 31,
2017 was a recommendation of the Audit Committee to nominate or compensate an
external auditor not adopted by the Board. The Audit Committee's charter is
incorporated by reference into this Form 20-F as Exhibit 1.3.

55

---

Compensation Committee

The Board has a compensation committee, the members of which
are Maurice J. Colson, Richard J. Lachcik and William R. Wilson. See the
discussion above under "Audit Committee" with respect to the independence of the
members of the compensation committee. The primary function of the compensation
committee is to assist the Board in fulfilling its oversight responsibilities
with respect to: (a) human resources policies; and (b) executive compensation.
To carry out its oversight responsibilities, the compensation committee's duties
include the following:

| | 1.  | review and recommend for approval to the Board, the
      Company's key human resources policies;                                                                                                                                                                                                                                                                                                                                                                                                   
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 2.  | review and recommend for approval to the Board the
      compensation and benefits policy and plans (including incentive
      compensation plans) for the Company;                                                                                                                                                                                                                                                                                                                                 
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 3.  | review and recommend to the Board the employment
      agreements of the Company's executive officers;                                                                                                                                                                                                                                                                                                                                                                                              
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 4.  | evaluate annually the performance of the Chief Executive
      Officer of the Company and recommend to the Board his annual compensation
      package and performance objectives;                                                                                                                                                                                                                                                                                                                  
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 5.  | review annually and recommend to the Board the annual
      compensation package and performance objectives of the other executive
      officers of the Company;                                                                                                                                                                                                                                                                                                                                   
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 6.  | review annually and recommend to the Board the annual
      salaries (or percentage change in salaries) for the Company's
      non-executive staff;                                                                                                                                                                                                                                                                                                                                                
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 7.  | review annually and recommend to the Board the adequacy
      and form of the compensation of the Company's directors and be satisfied
      the compensation realistically reflects the responsibilities and risk
      involved in being such a director;                                                                                                                                                                                                                                         
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 8.  | review annually and recommend for approval to the Board
      the executive compensation disclosure of the Company in its information
      circular, and be satisfied that the overall compensation philosophy and
      policy for senior officers is adequately disclosed and describes in
      sufficient detail the rationale for salary levels, incentive payments,
      share options and all other components of executive compensation as
      prescribed by applicable securities laws;
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 9.  | determine grants of options to purchase shares of the
      Company under the Company's Stock Option Plan and recommend same to the
      Board for approval;                                                                                                                                                                                                                                                                                                                                       
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 10. | engage, at the Company's expense, any external
      professional or other advisors which it determines necessary in order to
      carry out its duties hereunder; and                                                                                                                                                                                                                                                                                                                             
| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
| | 11. | perform any other activities consistent with this mandate
      as the compensation committee or the Board deems necessary or
      appropriate.                                                                                                                                                                                                                                                                                                                                                    

|D. | Employees
|-- | ---------

The following sets out the number of employees which the
Company and its subsidiaries had as at December 31, 2017, December 31, 2016 and
December 31, 2015, providing a breakdown of these employees by location:

56

---

|                                 | Dec. 31, | Dec. 31, | Dec. 31,
|-------------------------------- | -------- | -------- | --------
|Location                         | 2017     | 2016     | 2015    
|Loncor office in Toronto, Canada | 4        | 4        | 4       
|Loncor office in Beni, DRC       | 1        | 2        | 2       
|Loncor office in Kinshasa, DRC   | 1        | 1        | 2       
|Ngayu project                    | -        | -        | -       
|North Kivu project               | -        | -        | -       
|Totals:                          | 6        | 7        | 8       

Neither the Company nor any of its subsidiaries has any
unionized employees.

Neither the Company nor any of its subsidiaries employ a
significant number of temporary employees.

|E. | Share Ownership
|-- | ---------------

The following table sets out the number of common shares of the
Company held by the Company's directors and officers as of March 21, 2018
(including the percentage of the Company's outstanding common shares represented
by such shares). See Item 6.B. of this Form 20-F for information regarding the
stock options of the Company held by the Company's directors and officers as of
March 21, 2018.

Percentage ofNumber of Common
    
    
    OutstandingName
    
    Shares Owned
    
    
    Common SharesMaurice J. Colson
    
    Nil
    
    
    NilGeoffrey G. Farr
    
    105,000
    
    
    0.07%Arnold T. Kondrat
    
    74,300,818
    
    
    46.82%Richard J. Lachcik
    
    11,666
    
    
    0.01%Donat K. Madilo
    
    100,000
    
    
    0.06%Fabrice Matheys
    
    Nil
    
    
    NilWilliam R. Wilson
    
    3,333
    
    
    0.002%


Incentive Stock Option Plan

The Company has a Stock Option Plan (the "Plan"), the
principal purposes of which are: (A) to retain and attract qualified directors,
officers, employees and consultants which the Company and its subsidiaries
require; (B) to promote a proprietary interest in the Company and its
subsidiaries; (C) to provide an incentive element in compensation; and (D) to
promote the development of the Company and its subsidiaries. The following
summarizes the terms of the Plan:

57

---

|(a) | Stock options may be granted from time to time by the
      Board to such directors, officers, employees and consultants of the
      Company or a subsidiary of the Company, and in such numbers, as are
      determined by the Board at the time of the granting of the stock
      options.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(b) | The number of common shares of the Company reserved from
      time to time for issuance to optionees pursuant to stock options granted
      under the Plan shall not exceed 8,000,000 common shares (as at the date of
      this Form 20-F, there are outstanding under the Plan 2,400,000 stock
      options entitling the holders to purchase an aggregate of 2,400,000 common
      shares of the Company (which is equal to 1.51% of the number of common
      shares of the Company which are outstanding as at the date of this Form
      20-F), such that the number of new stock options currently available for
      future grants under the Plan is stock options to purchase an aggregate of
      5,600,000 common shares of the Company (which is equal to 3.53% of the
      number of common shares of the Company which are outstanding as at the
      date of this Form 20-F).
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(c) | The exercise price of each stock option shall be
      determined in the discretion of the Board at the time of the granting of
      the stock option, provided that the exercise price shall not be lower than
      the "Market Price". "Market Price" means the last closing price of the
      common shares of the Company on the Toronto Stock Exchange prior to the
      date the stock option is granted.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(d) | The total number of common shares of the Company issued
      to "insiders" (as such term is defined under the Ontario Securities
      Act) of the Company, within any one year period, under all "security
      based compensation arrangements" (within the meaning of the rules of the
      Toronto Stock Exchange) of the Company shall not exceed 10% of the total
      number of outstanding common shares of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(e) | The total number of common shares of the Company issuable
      to "insiders" (as such term is defined under the Ontario Securities
      Act) of the Company, at any time, under all "security based
      compensation arrangements" (within the meaning of the rules of the Toronto
      Stock Exchange) of the Company shall not exceed 10% of the total number of
      outstanding common shares of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(f) | All stock options shall be for a term determined in the
      discretion of the Board at the time of the granting of the stock options,
      provided that no stock option shall have a term exceeding five years and,
      unless the Board at any time makes a specific determination otherwise (but
      subject to the terms of the Plan), a stock option and all rights to
      purchase common shares of the Company pursuant thereto shall expire and
      terminate immediately upon the optionee who holds such stock option
      ceasing to be at least one of a director, officer or employee of or
      consultant to the Company or a subsidiary of the Company, as the case may
      be.                                                                                                                                                                                         
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(g) | Unless otherwise determined by the Board at the time of
      the granting of the stock options, one- quarter of the stock options
      granted to an optionee vest on each of the 6 month, 12 month, 18 month and
      24 month anniversaries of the grant date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(h) | Except in limited circumstances in the case of the death
      of an optionee, stock options shall not be assignable or
    transferable.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|(i) | Disinterested shareholder approval is required prior to
      any reduction in the exercise price of a stock option if the optionee
      holding such stock option is an insider of the
Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      

58

---

|(j) | The Company may amend from time to time the terms and
      conditions of the Plan by resolution of the Board. Any amendments shall be
      subject to the prior consent of any applicable regulatory bodies,
      including the Toronto Stock Exchange (to the extent such consent is
      required).      
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                
|(k) | The Board has full and final discretion to interpret the
      provisions of the Plan, and all decisions and interpretations made by the
      Board shall be binding and conclusive upon the Company and all optionees,
      subject to shareholder approval if required by the Toronto Stock
      Exchange.
|    |                                                                                                                                                                                                                                                                                                                
|(l) | The Plan does not provide for financial assistance by the
      Company to an optionee in connection with an option
  exercise.                                                                                                                                                                                

The Board may, in its sole discretion, accelerate the vesting
of currently outstanding stock options granted under the Plan in the event a
take-over bid is made for the common shares of the Company, any change of
control of the Company occurs or any other transaction involving the Company
occurs.

A copy of the Plan is incorporated by reference into this Form
20-F as Exhibit 4.1.

|**Item 7.** | Major Shareholders and Related Party
      Transactions
|----------- | -------------------------------------------------------

|A. | Major Shareholders
|-- | ------------------

To the knowledge of management of the Company, based on a
review of publicly available filings as at March 21, 2018, the following are the
only persons or companies who beneficially own 5% or more of the outstanding
common shares of the Company.

Number of Common
    
    
    Percentage of OutstandingName of Shareholder
    
    Shares Owned
    
    
    **Common Shares(1)**Arnold T. Kondrat (2)
    
    74,300,818
    
    
    46.82%Newmont Canada FN Holdings ULC (3)
    
    14,550,000
    
    
    9.17%


|_______________________________
|-------------------------------
|                               
|(1)                            
|                               
|(2)                            
|                               
|(3)                            

None of the shareholders disclosed above have any voting rights
with respect to their respective common shares of the Company that are different
from any other holder of common shares of the Company.

As of March 21, 2018, based on the Companys shareholders
register, there were 79 shareholders of record of the Companys common shares in
the United States, holding 8.57% of the outstanding common shares of the
Company.

59

---

Control by Foreign Government or Other
Persons

To the best of the knowledge of management of the Company, the
Company is not directly or indirectly owned or controlled by another
corporation, any foreign government, or any other natural or legal person,
severally or jointly.

Change of Control

As of the date of this Form 20-F, there are no arrangements
known to the Company which may at a subsequent date result in a change in
control of the Company.

|B. | Related Party Transactions
|-- | --------------------------

In February 2015, the Company closed a non-brokered private
placement of 8,000,000 common shares of the Company at a price of Cdn$0.06 per
share for gross proceeds to the Company of Cdn$480,000. Arnold T. Kondrat
purchased 3,500,000 of the shares issued under this placement. In March 2015,
the Company closed a non-brokered private placement of 3,000,000 common shares
of the Company at a price of Cdn$0.06 per share for gross proceeds to the
Company of Cdn$180,000. Mr. Kondrat purchased 500,000 of the shares issued under
this placement. In February 2016, the Company closed a non-brokered private
placement of 67,000,000 common shares of the Company at a price of Cdn$0.015 per
share for gross proceeds of Cdn$1,005,000. Mr. Kondrat purchased 60,000,000 of
the shares issued under this private placement. As well, a portion of the
proceeds from the said February 2016 private placement were used to repay short
term, non-interest bearing loans totaling Cdn$825,000 provided to the Company by
Mr. Kondrat. Mr. Kondrat is President, Chief Executive Officer and a director of
the Company and, as of the date of this Form 20-F, holds 74,300,818 (or 46.82%)
of the outstanding common shares of the Company.

|C. | Interests of Experts and
Counsel
|-- | --------------------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|**Item 8.** | Financial Information
|----------- | ---------------------

|A. | Consolidated Statements and Other Financial
      Information
|-- | -------------------------------------------------------------

Consolidated Financial Statements

The consolidated financial statements of the Company are filed
as part of this annual report under Item 18.

Legal or Arbitration Proceedings

The Company is not aware of any current or pending material
legal or arbitration proceeding to which it is or is likely to be a party or of
which any of its properties are or are likely to be the subject.

The Company is not aware of any material proceeding in which
any director, member of senior management or affiliate of the Company is either
a party adverse to the Company or any of its subsidiaries or has a material
interest adverse to the Company or any of its subsidiaries.

60

---

Dividend Policy

The Company has not paid any dividend or made any other
distribution in respect of its outstanding shares and management does not
anticipate that the Company will pay dividends or make any other distribution in
respect on its shares in the foreseeable future. The Company's Board, from time
to time, and on the basis of any earnings and the Company's financial
requirements or any other relevant factor, will determine the future dividend or
distribution policy of the Company with respect to its shares.

|B. | Significant Changes
|-- | -------------------

There have been no significant changes in the affairs of the
Company since the date of the audited annual consolidated financial statements
of the Company as at and for the year ended December 31, 2017, other than as
discussed in this Form 20-F.

|**Item 9.** | The Offer and Listing
|----------- | ---------------------

|A. | Offer and Listing Details
|-- | -------------------------

The Company's common shares (a) are listed for trading on the
Toronto Stock Exchange (the "TSX") under the symbol "LN", and (b) are
quoted on the OTC Pink tier of the OTC Link under the symbol "LONCF". The
Company's common shares commenced trading on the TSX on April 26, 2013. Prior to
April 26, 2013, such shares traded on the TSX Venture Exchange (the
"TSX-V"). From April 27, 2011 to April 24, 2014, the Companys common
shares were traded in the United States on the NYSE American, from April 25,
2014 to April 30, 2015, the Companys common shares traded in the United States
on the OTCQB tier of the OTC Link, and since May 1, 2015, the Companys common
shares have traded in the United States on the OTC Pink tier of the OTC
Link.

Toronto Stock Exchange/TSX Venture
Exchange

The following table discloses the annual high and low sales
prices in Canadian dollars for the common shares of the Company for the five
most recent financial years of the Company as traded on the TSX and TSX-V, as
applicable.

Year
    High (Cdn$)
    Low (Cdn$)2017
    $0.200
    $0.0752016
    $0.250
    $0.0152015
    $0.130
    $0.0202014
    $0.270
    $0.0402013
    $0.820
    $0.100


The following table discloses the high and low sales prices in
Canadian dollars for the common shares of the Company for each quarterly period
within the two most recent financial years of the Company as traded on the
TSX:

61

---

Quarter Ended
    High (Cdn$)
    Low (Cdn$)December 31, 2017
    $0.110
    $0.085September 30, 2017
    $0.165
    $0.085June 30, 2017
    $0.200
    $0.145March 31, 2017
    $0.200
    $0.110December 31, 2016
    $0.200
    $0.090September 30, 2016
    $0.250
    $0.160June 30, 2016
    $0.200
    $0.060March 31, 2016
    $0.080
    $0.015


The following table discloses the monthly high and low sales
prices in Canadian dollars for the common shares of the Company for the most
recent six months as traded on the TSX:

Month
    High (Cdn$)
    Low (Cdn$)March 2018
    $0.105
    $0.085February 2018
    $0.110
    $0.090January 2018
    $0.110
    $0.085December 2017
    $0.110
    $0.085November 2017
    $0.090
    $0.075October 2017
    $0.100
    $0.085September 2017
    $0.110
    $0.085


US Trading

The following table discloses the annual high and low sales
prices in United States dollars for the common shares of the Company for the
five most recent financial years of the Company as traded on the NYSE American,
the OTCQB tier of the OTC Link, and the OTC Pink tier of the OTC Link, as
applicable. The Company's common shares commenced trading on the NYSE American
on April 27, 2011 and ceased trading on the NYSE American on April 24, 2014, as
a result of the Company voluntarily delisting from the NYSE American. From April
25, 2014 to April 30, 2015, the Companys common shares traded in the United
States on the OTCQB tier of the OTC Link and since May 1, 2015, the Companys
common shares have traded in the United States on the OTC Pink tier of the OTC
Link.

62

---

Year
    High (US$)
    Low (US$)2017
    $0.14
    $0.052016
    $0.20
    $0.012015
    $0.14
    $0.022014
    $0.27
    $0.032013
    $0.87
    $0.08


The following table discloses the high and low sales prices in
United States dollars for the common shares of the Company for each quarterly
period within the two most recent financial years as traded on the OTC Pink tier
of the OTC Link.

Quarter Ended
    High (US$)
    Low (US$)December 31, 2017
    $0.08
    $0.05September 30, 2017
    $0.11
    $0.08June 30, 2017
    $0.12
    $0.09March 31, 2017
    $0.14
    $0.06December 31, 2016
    $0.14
    $0.06September 30, 2016
    $0.20
    $0.12June 30, 2016
    $0.14
    $0.04March 31, 2016
    $0.05
    $0.01


The following table discloses the monthly high and low sales
prices in United States dollars for the common shares of the Company for the
most recent six months as traded on the OTC Pink tier of the OTC Link.

Month
    High (US$)
    Low (US$)March 2018
    $0.09
    $0.06February 2018
    $0.08
    $0.06January 2018
    $0.09
    $0.06December 2017
    $0.08
    $0.06November 2017
    $0.06
    $0.05October 2017
    $0.08
    $0.06September 2017
    $0.08
    $0.08


63

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|B. | Plan of Distribution
|-- | --------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|C. | Markets
|-- | -------

The Company's outstanding common shares are listed on the TSX
and are quoted on the OTC Pink tier of the OTC Link.

|D. | Selling Shareholder
|-- | -------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|E. | Dilution
|-- | --------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|F. | Expenses of the Issue
|-- | ---------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|**Item 10.** | Additional Information
|------------ | ----------------------

|A. | Share Capital
|-- | -------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|B. | Memorandum and Articles of
  Association
|-- | ----------------------------------------

A copy of the Company's articles of amalgamation is
incorporated by reference into this Form 20-F as Exhibit 1.1. The Company's
general by-law is incorporated by reference into this Form 20-F as Exhibit
1.2.

The Company is a corporation governed by the Ontario
Business Corporations Act (the "OBCA"). Under the OBCA, the
articles of the Company may, by "special resolution" (see below for definition),
be amended to add, change or remove any rights, privileges, restrictions and
conditions, including rights to accrued dividends, in respect of all or any of
its shares, whether issued or unissued. Under the OBCA, "special resolution"
means a resolution passed by a majority of not less than two-thirds of the votes
cast by the shareholders who voted in respect of that resolution or signed by
all the shareholders entitled to vote on that resolution.

The Companys articles provide that there are no restrictions
on the business the Company may carry on and there are no restrictions on the
powers the Company may exercise.

The Company's authorized share capital consists of an unlimited
number of common shares and an unlimited number of preference shares, issuable
in series, of which 158,689,732 common shares and no preference shares were issued and outstanding as of March 21, 2018. The
following is a summary of the material provisions attaching to the common shares
and preference shares.

64

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Common Shares - The holders of the common shares are
  entitled to receive notice of and to attend all meetings of the shareholders of
  the Company and shall have one vote for each common share held at all meetings
  of the shareholders of the Company, except for meetings at which only holders of
  another specified class or series of shares are entitled to vote separately as a
  class or series. Subject to the prior rights of the holders of the preference
  shares or any other shares ranking senior to the common shares, the holders of
  the common shares are entitled to (a) receive any dividends as and when declared
  by the Board, out of the assets of the Company properly applicable to the
  payment of dividends, in such amount and in such form as the board of directors
  may from time to time determine, and (b) receive the remaining property of the
  Company in the event of any liquidation, dissolution or winding-up of the
Company.

Preference Shares - The Board may issue the preferences
shares at any time and from time to time in one or more series, each series of
which shall have the designations, rights, privileges, restrictions and
conditions fixed by the directors. The preference shares of each series shall
rank on a parity with the preference shares of every other series, and shall be
entitled to priority over the common shares and any other shares of the Company
ranking junior to the preference shares, with respect to priority in the payment
of dividends and the return of capital and the distribution of assets of the
Company in the event of the liquidation, dissolution or winding-up of the
Company.

Under the Company's general by-law, a director of the Company
who is a party to, or who is a director or officer of a party to, or has a
material interest in any person who is a party to, a material contract or
material transaction or proposed material contract or proposed material
transaction with the Company, must disclose the nature and extent of their
interest at the time and in the manner provided by the OBCA and such material
interest must be entered in the minutes of the meetings of directors or
otherwise noted in the records of the Company. Any such material contract or
material transaction or proposed material contract or proposed material
transaction must be referred to the Board or shareholders for approval even if
such contract is one that in the ordinary course of the Company's business would
not require approval by the Board or shareholders. Such a director must not vote
on any resolution to approve the same except as provided by the OBCA.

Also under the Company's general by-law, the Company's
directors may be paid such remuneration for their services as the Board may from
time to time determine. The directors are also entitled to be reimbursed for
travelling and other expenses properly incurred by them in attending meetings of
the Board or any committee thereof.

With respect to borrowing powers, the Company's general by-law
provides that, without limiting the borrowing powers of the Company as set forth
in the OBCA, the Board may from time to time on behalf of the Company, without
authorization of the shareholders:

| | (a) | borrow money upon the credit of the Company;                                                                                                                                                     
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     |                                                                                                                                                                                                  
| | (b) | issue, reissue, sell or pledge debt obligations of the
      Company;                                                                                                                            
| |     |                                                                                                                                                                                                  
| | (c) | subject to the OBCA, give a guarantee on behalf of the
      Company to secure performance of an obligation to any person;
and                                                                   
| |     |                                                                                                                                                                                                  
| | (d) | mortgage, hypothecate, pledge, or otherwise create a
      security interest in all or any property of the Company, owned or
      subsequently owned, to secure any obligation of the
  Company.

65

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A director of the Company need not be a shareholder of the
Company. There is no age limit requirement for a director of the Company.

The annual meeting of shareholders of the Company is held at
such time in each year (but not later than 15 months after holding the last
preceding annual meeting of shareholders) and at such place as the Board may
from time to time determine. The Board has the power to call a special meeting
of shareholders of the Company at any time.

The only persons entitled to be present at a meeting of
shareholders are those entitled to vote thereat, the directors and auditor of
the Company and others who, although not entitled to vote, are entitled or
required under any provision of the OBCA or the articles or by-laws to be
present at the meeting. Any other person may be admitted only on the invitation
of the chairperson of the meeting or with the consent of the meeting.

A quorum for the transaction of business at any meeting of
shareholders is two persons present in person, each being a shareholder entitled
to vote thereat or a duly appointed proxyholder or representative for a
shareholder so entitled.

Disclosure of Share Ownership

In general, under applicable securities regulation in Canada, a
person or company who beneficially owns, directly or indirectly, voting
securities of an issuer or who exercises control or direction over voting
securities of an issuer or a combination of both, carrying more than 10% of the
voting rights attached to all the issuer's outstanding voting securities is an
insider and must, within 10 days of becoming an insider, file a report in the
required form effective the date on which the person became an insider. The
report must disclose any direct or indirect beneficial ownership of, or control
or direction over, securities of the reporting issuer. Additionally, securities
regulation in Canada provides for the filing of a report by an insider of a
reporting issuer whose holdings change, which report must be filed within five
days from the day on which the change takes place.

The rules in the U.S. governing the ownership threshold above
which shareholder ownership must be disclosed are more stringent than those
discussed above. Section 13 of the U.S. Exchange Act imposes reporting
requirements on persons who acquire beneficial ownership (as such term is
defined in Rule 13d-3 under the U.S. Exchange Act) of more than 5% of a class of
an equity security registered under Section 12 of the U.S. Exchange Act. In
general, such persons must file, within 10 days after such acquisition, a report
of beneficial ownership with the SEC containing the information prescribed by
the regulations under Section 13 of the U.S. Exchange Act. This information is
also required to be sent to the issuer of the securities and to each exchange
where the securities are traded.

|C. | Material Contracts
|-- | ------------------

Except for contracts entered into in the ordinary course of
business and other than as disclosed elsewhere in this Form 20-F, there are no
material contracts to which the Company is currently a party that were entered
into by the Company or any of its subsidiaries during the two years immediately
preceding the date of this Form 20-F.

66

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|D. | Exchange Controls
|-- | -----------------

There are no governmental laws, decrees, regulations or other
legislation, including foreign exchange controls, in Canada which may affect the
export or import of capital or that may affect the remittance of dividends,
interest or other payments to non-resident holders of the Company's securities.
Any remittances of dividends to United States residents, however, are subject to
a withholding tax pursuant to the Income Tax Act (Canada) and the Canada-U.S.
Income Tax Convention (1980), each as amended. Remittances of interest to U.S.
residents entitled to the benefits of such Convention are generally not subject
to withholding taxes except in limited circumstances involving participating
interest payments. Certain other types of remittances, such as royalties paid to
U.S. residents, may be subject to a withholding tax depending on all of the
circumstances.

Restrictions on Share Ownership by
Non-Canadians

There are no limitations under the laws of Canada or in the
organizational documents of the Company on the right of foreigners to hold or
vote securities of the Company, except that the Investment Canada Act(the "ICA") may require review and approval by the Minister of
Innovation, Science and Economic Development (ISED) of certain
acquisitions of "control" of the Company by a "non-Canadian". The threshold for
acquisitions is generally defined as being one-third or more of the voting
shares of the Company. "Non-Canadian" generally means an individual who is not a
Canadian citizen, or a corporation, partnership, trust or joint venture that is
ultimately controlled by non-Canadians.

Under the ICA, transactions exceeding certain financial
thresholds, and which involve the acquisition of control of a Canadian business
by a non-Canadian, are subject to review and cannot be implemented unless the
ISED Minister and/or, in the case of a Canadian business engaged in cultural
activities, the Minister of Canadian Heritage, are satisfied that the
transaction is likely to be of "net benefit to Canada". If a transaction is
subject to review (a "Reviewable Transaction"), an application for review
must be filed with the Investment Review Division of ISED Canada and/or the
Department of Canadian Heritage prior to the implementation of the Reviewable
Transaction. The responsible Minister is then required to determine whether the
Reviewable Transaction is likely to be of net benefit to Canada, taking into
account, among other things, certain factors specified in the ICA and any
written undertakings that may have been given by the applicant. The ICA
contemplates an initial review period of up to 45 days after filing; however, if
the responsible Minister has not completed the review by that date, s/he may
unilaterally extend the review period by up to 30 days (or such longer period as
may be agreed to by the applicant and the Minister) to permit completion of the
review. If the responsible Minister is not satisfied that the investment is
likely to be of net benefit to Canada, s/he may prohibit the investment or order
a divestiture (if the investment has already been completed).

If the transaction is not reviewable because it does not meet
or exceed the applicable financial threshold, the non-Canadian investor must
still give notice to ISED Canada and, in the case of a Canadian business engaged
in cultural activities, Canadian Heritage, of its acquisition of control of a
Canadian business within 30 days of the implementation of the investment.

Furthermore, under the ICA, every investment in, or acquisition
of control of, a Canadian business by a non-Canadian is subject to a "national
security" review which examines whether the transaction could be injurious to
Canadas national security. There is no minimum threshold for the size of
transaction potentially subject to such review. If the ISED Minister, after
consultation with the Minister of Public Safety and Emergency Preparedness and
the investor, considers that the investment could be injurious to national
security, the Minister refers the matter to the Governor in Council. Following
its review, if the Governor in Council may take any measures in respect of the
investment that it considers advisable to protect national security, including denying the investment,
asking for undertakings, imposing terms or conditions for the investment or
ordering a divestiture (if the investment has already been completed).

67

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|E. | Certain United States Federal Income Tax
      Considerations
|-- | -------------------------------------------------------------

The following is a general summary of certain material U.S.
federal income tax considerations applicable to a U.S. Holder (as defined below)
arising from and relating to the acquisition, ownership and disposition of
common shares of the Company ("Common Shares").

This summary is for general information purposes only and does
not purport to be a complete analysis or listing of all potential U.S. federal
income tax considerations that may apply to a U.S. Holder arising from and
relating to the acquisition, ownership and disposition of Common Shares. In
addition, this summary does not take into account the individual facts and
circumstances of any particular U.S. Holder that may affect the U.S. federal
income tax consequences to such U.S. Holder, including specific tax consequences
to a U.S. Holder under an applicable tax treaty. Accordingly, this summary is
not intended to be, and should not be construed as, legal or U.S. federal income
tax advice with respect to any U.S. Holder. Except as specifically set forth
below, this summary does not discuss applicable tax reporting requirements. This
summary does not address the U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and foreign tax consequences to U.S.
Holders of the acquisition, ownership and disposition of Common Shares. Each
prospective U.S. Holder should consult its own tax advisor regarding the U.S.
federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S.
state and local, and foreign tax consequences relating to the acquisition,
ownership and disposition of Common Shares.

No legal opinion from U.S. legal counsel or ruling from the
Internal Revenue Service (the "IRS") has been requested, or will be
obtained, regarding the U.S. federal income tax consequences of the acquisition,
ownership and disposition of Common Shares. This summary is not binding on the
IRS, and the IRS is not precluded from taking a position that is different from,
and contrary to, the positions taken in this summary. In addition, because the
authorities on which this summary is based are subject to various
interpretations, the IRS and the U.S. courts could disagree with one or more of
the conclusions described in this summary.

Scope of this Summary

Authorities

This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury Regulations (whether final,
temporary, or proposed), published rulings of the IRS, published administrative
positions of the IRS, the Convention Between Canada and the United States of
America with Respect to Taxes on Income and on Capital, signed September 26,
1980, as amended (the "Canada-U.S. Tax Convention"), and U.S. court
decisions that are applicable and, in each case, as in effect and available, as
of the date of this document. Any of the authorities on which this summary is
based could be changed in a material and adverse manner at any time, and any
such change could be applied on a retroactive or prospective basis which could
affect the U.S. federal income tax considerations described in this summary.
This summary does not discuss the potential effects, whether adverse or
beneficial, of any proposed legislation that, if enacted, could be applied on a
retroactive or prospective basis.

68

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U.S. Holders

For purposes of this summary, the term "U.S. Holder"
means a beneficial owner of Common Shares that is for U.S. federal income tax
purposes:

| |  | an individual who is a citizen or resident of
      the U.S.;                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                          
| |  | a corporation (or other entity taxable as a
      corporation for U.S. federal income tax purposes) organized under the laws
      of the U.S., any state thereof or the District of Columbia;                                                                                           
| |   |                                                                                                                                                                                                                                                                                          
| |  | an estate whose income is subject to U.S.
      federal income taxation regardless of its source; or                                                                                                                                                                                     
| |   |                                                                                                                                                                                                                                                                                          
| |  | a trust that (1) is subject to the primary supervision of
      a court within the U.S. and the control of one or more U.S. persons for
      all substantial decisions or (2) has a valid election in effect under
      applicable Treasury Regulations to be treated as a U.S. person.

Non-U.S. Holders

For purposes of this summary, a "non-U.S. Holder" is a
beneficial owner of Common Shares that is not a U.S. Holder. This summary does
not address the U.S. federal income tax consequences to non-U.S. Holders arising
from and relating to the acquisition, ownership and disposition of Common
Shares. Accordingly, a non-U.S. Holder should consult its own tax advisors
regarding the U.S. federal, U.S. federal alternative minimum, U.S. federal
estate and gift, U.S. state and local, and foreign tax consequences (including
the potential application of and operation of any income tax treaties) relating
to the acquisition, ownership and disposition of Common Shares.

U.S. Holders Subject to Special U.S. Federal Income Tax
Rules Not Addressed

This summary does not address the U.S. federal income tax
considerations applicable to U.S. Holders that are subject to special provisions
under the Code, including, but not limited to, U.S. Holders that: (a) are
tax-exempt organizations, qualified retirement plans, individual retirement
accounts, or other tax-deferred accounts; (b) are financial institutions,
underwriters, insurance companies, real estate investment trusts, or regulated
investment companies; (c) are broker-dealers, dealers, or traders in securities
or currencies that elect to apply a mark-to-market accounting method; (d) have a
functional currency other than the U.S. dollar; (e) own Common Shares as part
of a straddle, hedging transaction, conversion transaction, constructive sale,
or other arrangement involving more than one position; (f) acquired Common
Shares in connection with the exercise of employee stock options or otherwise as
compensation for services; (g) hold Common Shares other than as a capital asset
within the meaning of Section 1221 of the Code (generally, property held for
investment purposes); (h) own, have owned or will own (directly, indirectly, or
by attribution) 10% or more of the total combined voting power or value of the
outstanding shares of the Company; or (i) are required to accelerate the
recognition of any item of gross income with respect to Common Shares as a
result of such income being recognized on an applicable financial statement.
This summary also does not address the U.S. federal income tax considerations
applicable to U.S. Holders who are: (a) U.S. expatriates or former long-term
residents of the U.S.; (b) persons that have been, are, or will be a resident or
deemed to be a resident in Canada for purposes of the Income Tax Act (Canada)
(the "Tax Act"); (c) persons that use or hold, will use or hold, or that
are or will be deemed to use or hold Common Shares in connection with carrying
on a business in Canada; (d) persons whose Common Shares constitute taxable
Canadian property under the Tax Act; or (e) persons that have a permanent
establishment in Canada for purposes of the Canada-U.S. Tax Convention. U.S.
Holders that are subject to special provisions under the Code, including, but
not limited to, U.S. Holders described immediately above, should consult their own tax advisors regarding the U.S.
federal, U.S. federal alternative minimum, U.S. federal estate and gift, U.S.
state and local, and foreign tax consequences relating to the acquisition,
ownership and disposition of Common Shares.

69

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If an entity or arrangement that is classified as a partnership
  (or other pass-through entity) for U.S. federal income tax purposes holds
  Common Shares, the U.S. federal income tax consequences to such entity and the
  partners (or other owners) of such entity generally will depend on the
  activities of the entity and the status of such partners (or owners). This
  summary does not address the tax consequences to any such owner. Partners (or
  other owners) of entities or arrangements that are classified as partnerships or
  as pass-through entities for U.S. federal income tax purposes should consult
  their own tax advisors regarding the U.S. federal income tax consequences
  arising from and relating to the acquisition, ownership and disposition of
Common Shares.

Passive Foreign Investment Company
Rules

If the Company were to constitute a passive foreign investment
company under the meaning of Section 1297 of the Code (a PFIC, as
defined below) for any year during a U.S. Holders holding period, then certain
potentially adverse rules will affect the U.S. federal income tax consequences
to a U.S. Holder resulting from the acquisition, ownership and disposition of
Common Shares. The Company believes that it was classified as a PFIC during the
tax year ended December 31, 2017, and due to the nature of the Companys assets
and the income that the Company expects to generate, the Company expects to be a
PFIC for its current tax year and may be a PFIC in subsequent tax years. No
opinion of legal counsel or ruling from the IRS concerning the status of the
Company as a PFIC has been obtained or is currently planned to be requested. The
determination of whether any corporation was, or will be, a PFIC for a tax year
depends, in part, on the application of complex U.S. federal income tax rules,
which are subject to differing interpretations. In addition, whether any
corporation will be a PFIC for any tax year depends on the assets and income of
such corporation over the course of each such tax year and, as a result, cannot
be predicted with certainty as of the date of this document. Accordingly, there
can be no assurance that the IRS will not challenge any determination made by
the Company (or any subsidiary of the Company) concerning its PFIC status. Each
U.S. Holder should consult its own tax advisor regarding the PFIC status of the
Company and any subsidiary of the Company.

In addition, in any year in which the Company is classified as
a PFIC, such holder will be required to file an annual report with the IRS
containing such information as Treasury Regulations and/or other IRS guidance
may require. A failure to satisfy such reporting requirements may result in an
extension of the time period during which the IRS can assess a tax. U.S. Holders
should consult their own tax advisors regarding the requirements of filing such
information returns under these rules, including the requirement to file a IRS
Form 8621.

The Company generally will be a PFIC if, for a tax year, (a)
75% or more of the gross income of the Company is passive income (the "income
test") or (b) 50% or more of the value of the Companys assets either
produce passive income or are held for the production of passive income, based
on the quarterly average of the fair market value of such assets (the "asset
test"). Gross income generally includes all sales revenues less the cost
of goods sold, plus income from investments and from incidental or outside
operations or sources, and passive income generally includes, for example,
dividends, interest, certain rents and royalties, certain gains from the sale of
stock and securities, and certain gains from commodities transactions.

Active business gains arising from the sale of commodities
generally are excluded from passive income if substantially all (85% or more) of
a foreign corporations commodities are stock in trade or inventory, depreciable property used in a trade or business, or supplies
regularly used or consumed in a trade or business and certain other requirements
are satisfied.

70

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For purposes of the PFIC income test and asset test described
  above, if the Company owns, directly or indirectly, 25% or more of the total
  value of the outstanding shares of another corporation, the Company will be
  treated as if it (a) held a proportionate share of the assets of such other
  corporation and (b) received directly a proportionate share of the income of
  such other corporation. In addition, for purposes of the PFIC income test and
  asset test described above, and assuming certain other requirements are met,
  passive income does not include certain interest, dividends, rents, or
  royalties that are received or accrued by the Company from certain related
  persons (as defined in Section 954(d)(3) of the Code), to the extent such items
  are properly allocable to the income of such related person that is not passive
income.

Under certain attribution rules, if the Company is a PFIC, U.S.
Holders will generally be deemed to own their proportionate share of the
Companys direct or indirect equity interest in any company that is also a PFIC
(a "Subsidiary PFIC"), and will be subject to U.S. federal income tax on
their proportionate share of (a) any excess distributions, as described below,
on the stock of a Subsidiary PFIC and (b) a disposition or deemed disposition of
the stock of a Subsidiary PFIC by the Company or another Subsidiary PFIC, both
as if such U.S. Holders directly held the shares of such Subsidiary PFIC. In
addition, U.S. Holders may be subject to U.S. federal income tax on any indirect
gain realized on the stock of a Subsidiary PFIC on the sale or disposition of
Common Shares. Accordingly, U.S. Holders should be aware that they could be
subject to tax even if no distributions are received and no redemptions or other
dispositions of Common Shares are made.

Default PFIC Rules Under Section 1291 of the Code

If the Company is a PFIC for any tax year during which a U.S.
Holder owns Common Shares, the U.S. federal income tax consequences to such U.S.
Holder of the acquisition, ownership and disposition of Common Shares will
depend on whether and when such U.S. Holder makes an election to treat the
Company and each Subsidiary PFIC, if any, as a qualified electing fund or
QEF under Section 1295 of the Code (a "QEF Election") or makes a
mark-to-market election under Section 1296 of the Code (a "Mark-to-Market
Election"). A U.S. Holder that does not make either a QEF Election or a
Mark-to-Market Election will be referred to in this summary as a
"Non-Electing U.S. Holder".

A Non-Electing U.S. Holder will be subject to the rules of
Section 1291 of the Code (described below) with respect to (a) any gain
recognized on the sale or other taxable disposition of Common Shares and (b) any
excess distribution received on the Common Shares. A distribution generally will
be an excess distribution to the extent that such distribution (together with
all other distributions received in the current tax year) exceeds 125% of the
average distributions received during the three preceding tax years (or during a
U.S. Holders holding period for the Common Shares, if shorter).

Under Section 1291 of the Code, any gain recognized on the sale
or other taxable disposition of Common Shares (including an indirect disposition
of the stock of any Subsidiary PFIC), and any excess distribution received on
Common Shares or with respect to the stock of a Subsidiary PFIC, must be ratably
allocated to each day in a Non-Electing U.S. Holders holding period for the
respective Common Shares. The amount of any such gain or excess distribution
allocated to the tax year of disposition or distribution of the excess
distribution and to years before the entity became a PFIC, if any, would be
taxed as ordinary income. The amounts allocated to any other tax year would be
subject to U.S. federal income tax at the highest tax rate applicable to
ordinary income in each such year, and an interest charge would be imposed on
the tax liability for each such year, calculated as if such tax liability had
been due in each such year. A Non-Electing U.S. Holder that is not a corporation
must treat any such interest paid as personal interest, which is not
deductible.

71

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If the Company is a PFIC for any tax year during which a
  Non-Electing U.S. Holder holds Common Shares, the Company will continue to be
  treated as a PFIC with respect to such Non-Electing U.S. Holder, regardless of
  whether the Company ceases to be a PFIC in one or more subsequent tax years. A
  Non-Electing U.S. Holder may terminate this deemed PFIC status by electing to
  recognize gain (which will be taxed under the rules of Section 1291 of the Code
  discussed above), but not loss, as if such Common Shares were sold on the last
day of the last tax year for which the Company was a PFIC.

QEF Election

A U.S. Holder that makes a timely and effective QEF Election
for the first tax year in which its holding period of its Common Shares begins
generally will not be subject to the rules of Section 1291 of the Code discussed
above with respect to its Common Shares. A U.S. Holder that makes a timely and
effective QEF Election will be subject to U.S. federal income tax on such U.S.
Holders pro rata share of (a) the net capital gain of the Company, which will
be taxed as long-term capital gain to such U.S. Holder, and (b) the ordinary
earnings of the Company, which will be taxed as ordinary income to such U.S.
Holder. Generally, net capital gain is the excess of (a) net long-term capital
gain over (b) net short-term capital loss, and ordinary earnings are the
excess of (a) earnings and profits over (b) net capital gain. A U.S. Holder
that makes a QEF Election will be subject to U.S. federal income tax on such
amounts for each tax year in which the Company is a PFIC, regardless of whether
such amounts are actually distributed to such U.S. Holder by the Company.
However, for any tax year in which the Company is a PFIC and has no net income
or gain, U.S. Holders that have made a QEF Election would not have any income
inclusions as a result of the QEF Election. If a U.S. Holder that made a QEF
Election has an income inclusion, such a U.S. Holder may, subject to certain
limitations, elect to defer payment of current U.S. federal income tax on such
amounts, subject to an interest charge. If such U.S. Holder is not a
corporation, any such interest paid will be treated as personal interest,
which is not deductible.

A U.S. Holder that makes a timely and effective QEF Election
with respect to the Company generally (a) may receive a tax-free distribution
from the Company to the extent that such distribution represents earnings and
profits of the Company that were previously included in income by the U.S.
Holder because of such QEF Election and (b) will adjust such U.S. Holders tax
basis in the Common Shares to reflect the amount included in income or allowed
as a tax-free distribution because of such QEF Election. In addition, a U.S.
Holder that makes a QEF Election generally will recognize capital gain or loss
on the sale or other taxable disposition of Common Shares.

The procedure for making a QEF Election, and the U.S. federal
income tax consequences of making a QEF Election, will depend on whether such
QEF Election is timely. A QEF Election will be treated as timely if such QEF
Election is made for the first year in the U.S. Holders holding period for the
Common Shares in which the Company was a PFIC. A U.S. Holder may make a timely
QEF Election by filing the appropriate QEF Election documents at the time such
U.S. Holder files a U.S. federal income tax return for such year. If a U.S.
Holder does not make a timely and effective QEF Election for the first year in
the U.S. Holders holding period for the Common Shares, the U.S. Holder may
still be able to make a timely and effective QEF Election in a subsequent year
if such U.S. Holder meets certain requirements and makes a purging election to
recognize gain (which will be taxed under the rules of Section 1291 of the Code
discussed above) as if such Common Shares were sold for their fair market value
on the day the QEF Election is effective. If a U.S. Holder owns PFIC stock
indirectly through another PFIC, separate QEF Elections must be made for the
PFIC in which the U.S. Holder is a direct shareholder and the Subsidiary PFIC
for the QEF rules to apply to both PFICs.

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A QEF Election will apply to the tax year for which such QEF
Election is timely made and to all subsequent tax years, unless such QEF
Election is invalidated or terminated or the IRS consents to revocation of such
QEF Election. If a U.S. Holder makes a QEF Election and, in a subsequent tax
year, the Company ceases to be a PFIC, the QEF Election will remain in effect
(although it will not be applicable) during those tax years in which the Company
is not a PFIC. Accordingly, if the Company becomes a PFIC in another subsequent
tax year, the QEF Election will be effective and the U.S. Holder will be subject
to the QEF rules described above during any subsequent tax year in which the
Company qualifies as a PFIC.

U.S. Holders should be aware that there can be no assurances
that the Company will satisfy the record keeping requirements that apply to a
QEF, or that the Company will supply U.S. Holders with information that such
U.S. Holders are required to report under the QEF rules, in the event that the
Company is a PFIC. Thus, U.S. Holders may not be able to make a QEF Election
with respect to their Common Shares. Each U.S. Holder should consult its own tax
advisor regarding the availability of, and procedure for making, a QEF Election.

A U.S. Holder makes a QEF Election by attaching a completed IRS
Form 8621, including a PFIC Annual Information Statement, to a timely filed
United States federal income tax return. However, if the Company cannot provide
the required information with regard to the Company or any of its Subsidiary
PFICs, U.S. Holders will not be able to make a QEF Election for such entity and
will continue to be subject to the rules discussed above that apply to
Non-Electing U.S. Holders with respect to the taxation of gains and excess
distributions.

Mark-to-Market Election

A U.S. Holder may make a Mark-to-Market Election only if the
Common Shares are marketable stock. The Common Shares generally will be
marketable stock if the Common Shares are regularly traded on (a) a national
securities exchange that is registered with the U.S. Securities and Exchange
Commission, (b) the national market system established pursuant to section 11A
of the Securities and Exchange Act of 1934, or (c) a foreign securities
exchange that is regulated or supervised by a governmental authority of the
country in which the market is located, provided that (i) such foreign exchange
has trading volume, listing, financial disclosure, and surveillance
requirements, and meets other requirements and the laws of the country in which
such foreign exchange is located, together with the rules of such foreign
exchange, ensure that such requirements are actually enforced and (ii) the rules
of such foreign exchange effectively promote active trading of listed stocks. If
such stock is traded on such a qualified exchange or other market, such stock
generally will be regularly traded for any calendar year during which such
stock is traded, other than in de minimis quantities, on at least 15 days during
each calendar quarter.

A U.S. Holder that makes a Mark-to-Market Election with respect
to its Common Shares generally will not be subject to the rules of Section 1291
of the Code discussed above with respect to such Common Shares. However, if a
U.S. Holder does not make a Mark-to-Market Election beginning in the first tax
year of such U.S. Holders holding period for the Common Shares or such U.S.
Holder has not made a timely QEF Election, the rules of Section 1291 of the Code
discussed above will apply to certain dispositions of, and distributions on, the
Common Shares.

A U.S. Holder that makes a Mark-to-Market Election will include
in ordinary income, for each tax year in which the Company is a PFIC, an amount
equal to the excess, if any, of (a) the fair market value of the Common Shares,
as of the close of such tax year over (b) such U.S. Holders tax basis in such
Common Shares. A U.S. Holder that makes a Mark-to-Market Election will be
allowed a deduction in an amount equal to the excess, if any, of (a) such U.S.
Holders adjusted tax basis in the Common Shares, over (b) the fair market value of such Common Shares (but only to the
extent of the net amount of previously included income as a result of the
Mark-to-Market Election for prior tax years).

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A U.S. Holder that makes a Mark-to-Market Election generally
  also will adjust such U.S. Holders tax basis in the Common Shares to reflect
  the amount included in gross income or allowed as a deduction because of such
  Mark-to-Market Election. In addition, upon a sale or other taxable disposition
  of Common Shares, a U.S. Holder that makes a Mark-to-Market Election will
  recognize ordinary income or ordinary loss (not to exceed the excess, if any, of
  (a) the amount included in ordinary income because of such Mark-to-Market
  Election for prior tax years over (b) the amount allowed as a deduction because
  of such Mark-to-Market Election for prior tax years). Losses that exceed this
  limitation are subject to the rules generally applicable to losses provided in
the Code and Treasury Regulations.

A Mark-to-Market Election applies to the tax year in which such
Mark-to-Market Election is made and to each subsequent tax year, unless the
Common Shares cease to be marketable stock or the IRS consents to revocation
of such election. Each U.S. Holder should consult its own tax advisor regarding
the availability of, and procedure for making, a Mark-to-Market Election.

Although a U.S. Holder may be eligible to make a Mark-to-Market
Election with respect to the Common Shares, no such election may be made with
respect to the stock of any Subsidiary PFIC that a U.S. Holder is treated as
owning, because such stock is not marketable. Hence, the Mark-to-Market Election
will not be effective to eliminate the application of the default rules of
Section 1291 of the Code described above with respect to deemed dispositions of
Subsidiary PFIC stock or excess distributions from a Subsidiary PFIC.

Other PFIC Rules

Under Section 1291(f) of the Code, the IRS has issued proposed
Treasury Regulations that, subject to certain exceptions, would cause a U.S.
Holder that had not made a timely QEF Election to recognize gain (but not loss)
upon certain transfers of Common Shares that would otherwise be tax-deferred
(e.g., gifts and exchanges pursuant to corporate reorganizations). However, the
specific U.S. federal income tax consequences to a U.S. Holder may vary based on
the manner in which Common Shares are transferred.

Certain additional adverse rules may apply with respect to a
U.S. Holder if the Company is a PFIC, regardless of whether such U.S. Holder
makes a QEF Election. For example, under Section 1298(b)(6) of the Code, a U.S.
Holder that uses Common Shares as security for a loan will, except as may be
provided in Treasury Regulations, be treated as having made a taxable
disposition of such Common Shares.

Special rules also apply to the amount of foreign tax credit
that a U.S. Holder may claim on a distribution from a PFIC. Subject to such
special rules, foreign taxes paid with respect to any distribution in respect of
stock in a PFIC are generally eligible for the foreign tax credit. The rules
relating to distributions by a PFIC and their eligibility for the foreign tax
credit are complicated, and a U.S. Holder should consult with its own tax
advisor regarding the availability of the foreign tax credit with respect to
distributions by a PFIC.

The PFIC rules are complex, and each U.S. Holder should consult
its own tax advisors regarding the PFIC rules and how the PFIC rules may affect
the U.S. federal income tax consequences of the acquisition, ownership and
disposition of Common Shares.

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Ownership and Disposition of Common Shares to the
Extent that the PFIC Rules do not Apply

The following discussion is subject in its entirety to the
rules described above under the heading Passive Foreign Investment Company
Rules.

Distributions on Common Shares

A U.S. Holder that receives a distribution, including a
constructive distribution, with respect to a Common Share will be required to
include the amount of such distribution in gross income as a dividend (without
reduction for any Canadian income tax withheld from such distribution) to the
extent of the current or accumulated earnings and profits of the Company, as
computed for U.S. federal income tax purposes. A dividend generally will be
taxed to a U.S. Holder at ordinary income tax rates if the Company is a PFIC. To
the extent that a distribution exceeds the current and accumulated earnings and
profits of the Company, such distribution will be treated first as a tax-free
return of capital to the extent of a U.S. Holder's tax basis in the Common
Shares and thereafter as gain from the sale or exchange of such Common Shares.
(See Sale or Other Taxable Disposition of Common Shares below). However, the
Company may not maintain the calculations of earnings and profits in accordance
with U.S. federal income tax principles, and each U.S. Holder should therefore
assume that any distribution by the Company with respect to the Common Shares
will constitute ordinary dividend income. Dividends received on Common Shares
generally will not be eligible for the dividends received deduction. Subject
to applicable limitations and provided the Company is eligible for the benefits
of the Canada-U.S. Tax Convention or the Common Shares are readily tradable on a
United States securities market, dividends paid by the Company to non-corporate
U.S. Holders, including individuals, generally will be eligible for the
preferential tax rates applicable to long-term capital gains for dividends,
provided certain holding period and other conditions are satisfied, including
that the Company not be classified as a PFIC in the tax year of distribution or
in the preceding tax year. The dividend rules are complex, and each U.S. Holder
should consult its own tax advisor regarding the application of such rules.

Sale or Other Taxable Disposition of Common Shares

Upon the sale or other taxable disposition of Common Shares, a
U.S. Holder generally will recognize capital gain or loss in an amount equal to
the difference between the U.S. dollar value of cash received plus the fair
market value of any property received and such U.S. Holder's tax basis in such
Common Shares sold or otherwise disposed of. A U.S. Holders tax basis in Common
Shares generally will be such holders U.S. dollar cost for such Common Shares.
Gain or loss recognized on such sale or other disposition generally will be
long-term capital gain or loss if, at the time of the sale or other disposition,
the Common Shares have been held for more than one year.

Preferential tax rates currently apply to long-term capital
gain of a U.S. Holder that is an individual, estate, or trust. There are
currently no preferential tax rates for long-term capital gain of a U.S. Holder
that is a corporation. Deductions for capital losses are subject to significant
limitations under the Code.

Additional Considerations

Additional Tax on Passive Income

Certain U.S. Holders that are individuals, estates or trusts
(other than trusts that are exempt from tax) will be subject to a 3.8% tax on
all or a portion of their net investment income, which includes dividends on
the Common Shares and net gains from the disposition of the Common Shares.
Further, excess distributions treated as dividends, gains treated as excess
distributions under the PFIC rules discussed above, and mark-to-market inclusions and deductions are all
included in the calculation of net investment income.

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Treasury Regulations provide, subject to the election described
  in the following paragraph, that solely for purposes of this additional tax,
  that distributions of previously taxed income will be treated as dividends and
  included in net investment income subject to the additional 3.8% tax.
  Additionally, to determine the amount of any capital gain from the sale or other
  taxable disposition of Common Shares that will be subject to the additional tax
  on net investment income, a U.S. Holder who has made a QEF Election will be
  required to recalculate its basis in the Common Shares excluding QEF basis
adjustments.

Alternatively, a U.S. Holder may make an election which will be
effective with respect to all interests in a PFIC for which a QEF Election has
been made and which is held in that year or acquired in future years. Under this
election, a U.S. Holder pays the additional 3.8% tax on QEF income inclusions
and on gains calculated after giving effect to related tax basis adjustments.
U.S. Holders that are individuals, estates or trusts should consult their own
tax advisors regarding the applicability of this tax to any of their income or
gains in respect of the Common Shares.

Receipt of Foreign Currency

The amount of any distribution paid to a U.S. Holder in foreign
currency, or on the sale, exchange or other taxable disposition of Common
Shares, generally will be equal to the U.S. dollar value of such foreign
currency based on the exchange rate applicable on the date of receipt
(regardless of whether such foreign currency is converted into U.S. dollars at
that time). A U.S. Holder will have a basis in the foreign currency equal to its
U.S. dollar value on the date of receipt. Any U.S. Holder who converts or
otherwise disposes of the foreign currency after the date of receipt may have a
foreign currency exchange gain or loss that would be treated as ordinary income
or loss, and generally will be U.S. source income or loss for foreign tax credit
purposes. Different rules apply to U.S. Holders who use the accrual method of
tax accounting. Each U.S. Holder should consult its own U.S. tax advisor
regarding the U.S. federal income tax consequences of receiving, owning, and
disposing of foreign currency.

Foreign Tax Credit

Subject to the PFIC rules discussed above, a U.S. Holder that
pays (whether directly or through withholding) Canadian income tax with respect
to dividends paid on the Common Shares generally will be entitled, at the
election of such U.S. Holder, to receive either a deduction or a credit for such
Canadian income tax. Generally, a credit will reduce a U.S. Holders U.S.
federal income tax liability on a dollar-for-dollar basis, whereas a deduction
will reduce a U.S. Holders income subject to U.S. federal income tax. This
election is made on a year-by-year basis and applies to all foreign taxes paid
(whether directly or through withholding) by a U.S. Holder during a year.

Complex limitations apply to the foreign tax credit, including
the general limitation that the credit cannot exceed the proportionate share of
a U.S. Holders U.S. federal income tax liability that such U.S. Holders
foreign source taxable income bears to such U.S. Holders worldwide taxable
income. In applying this limitation, a U.S. Holders various items of income and
deduction must be classified, under complex rules, as either foreign source or
U.S. source. Generally, dividends paid by a foreign corporation should be
treated as foreign source for this purpose, and gains recognized on the sale of
stock of a foreign corporation by a U.S. Holder should be treated as U.S. source
for this purpose, except as otherwise provided in an applicable income tax
treaty, and if an election is properly made under the Code. However, the amount
of a distribution with respect to the Common Shares that is treated as a
dividend may be lower for U.S. federal income tax purposes than it is for
Canadian federal income tax purposes, resulting in a reduced foreign tax credit
allowance to a U.S. Holder. In addition, this limitation is calculated separately with respect to specific categories of
income. The foreign tax credit rules are complex, and each U.S. Holder should
consult its own U.S. tax advisor regarding the foreign tax credit rules.

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Backup Withholding and Information Reporting

Under U.S. federal income tax law and Treasury Regulations,
certain categories of U.S. Holders must file information returns with respect to
their investment in, or involvement in, a foreign corporation. For example, U.S.
return disclosure obligations (and related penalties) are imposed on individuals
who are U.S. Holders that hold certain specified foreign financial assets in
excess of certain threshold amounts. The definition of specified foreign
financial assets includes not only financial accounts maintained in foreign
financial institutions, but also, unless held in accounts maintained by a
financial institution, any stock or security issued by a non-U.S. person, any
financial instrument or contract held for investment that has an issuer or
counterparty other than a U.S. person and any interest in a foreign entity. U.S.
Holders may be subject to these reporting requirements unless their Common
Shares are held in an account at certain financial institutions. Penalties for
failure to file certain of these information returns are substantial. U.S.
Holders should consult with their own tax advisors regarding the requirements of
filing information returns, including the requirement to file an IRS Form 8938.

Payments made within the U.S. or by a U.S. payor or U.S.
middleman, of dividends on, and proceeds arising from the sale or other taxable
disposition of, Common Shares will generally be subject to information reporting
and backup withholding tax, at the rate of 24%, if a U.S. Holder (a) fails to
furnish such U.S. Holders correct U.S. taxpayer identification number
(generally on IRS Form W-9), (b) furnishes an incorrect U.S. taxpayer
identification number, (c) is notified by the IRS that such U.S. Holder has
previously failed to properly report items subject to backup withholding tax, or
(d) fails to certify, under penalty of perjury, that such U.S. Holder has
furnished its correct U.S. taxpayer identification number and that the IRS has
not notified such U.S. Holder that it is subject to backup withholding tax.
However, certain exempt persons generally are excluded from these information
reporting and backup withholding rules. Backup withholding is not an additional
tax. Any amounts withheld under the U.S. backup withholding tax rules will be
allowed as a credit against a U.S. Holders U.S. federal income tax liability,
if any, or will be refunded, if such U.S. Holder furnishes required information
to the IRS in a timely manner. Each U.S. Holder should consult its own tax
advisor regarding the information reporting and backup withholding rules.

|F. | Dividends and Paying
Agents
|-- | ---------------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|G. | Statement By Experts
|-- | --------------------

This Form 20-F is being filed as an annual report under the
U.S. Exchange Act and, as such, there is no requirement to provide any
information under this item.

|H. | Documents on Display
|-- | --------------------

The documents referred to and/or incorporated by reference in
this Form 20-F can be viewed at the office of the Company at 1 First Canadian
Place, 100 King Street West, Suite 7070, Toronto, Ontario, M5X 1E3, Canada. The
Company is required to file financial statements and other information with the
securities regulatory authorities in each of the Canadian provinces (other than
Quebec), electronically through the Canadian System for Electronic Document
Analysis and Retrieval (SEDAR), which can be viewed at www.sedar.com. The Company is subject to the
informational requirements of the U.S. Exchange Act and files reports and other
information with the SEC. You may read and copy any of the Companys reports and
other information at, and obtain copies upon payment of prescribed fees from,
the Public Reference Room maintained by the SEC at 100 F Street, N.E.,
Washington, D.C., U.S., 20549. In addition, the SEC maintains a website that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC at
http://www.sec.gov. The public may obtain information on the operation of the
Public Reference Room by calling the SEC at 1-800-SEC-0330.

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|I. | Subsidiary Information
|-- | ----------------------

Not applicable.

|**Item 11.** | Quantitative and Qualitative Disclosures
      About Market Risk.
|------------ | -----------------------------------------------------------------

See Note 16 to the Company's audited consolidated financial
statements filed as part of this Form 20-F under Item 18.

|**Item 12.** | Descriptions of Securities Other than Equity
      Securities
|------------ | -------------------------------------------------------------

Not applicable.

PART II

|**Item 13.** | Defaults, Dividend Arrearages and
      Delinquencies.
|------------ | ------------------------------------------------------

Not applicable.

|**Item 14.** | Material Modifications to the Rights of
      Security Holders and Use of Proceeds.
|------------ | -----------------------------------------------------------------------------------

|14. **A.-D.** | Modifications to the Rights of Security
    Holders
|------------- | ---------------------------------------------------

The Company was formed under the OBCA on August 24, 1993 by
articles of amalgamation. The name of the Company upon amalgamation was Taylor
Rand Incorporated. On June 25, 1996, pursuant to the filing of articles of
amendment, the Company changed its name from Taylor Rand Incorporated to
Sheridan Reserve Incorporated and consolidated its outstanding common shares.
Articles of amendment were filed by the Company on January 28, 1997 to
consolidate its outstanding series of preference shares. The Company changed its
name from Sheridan Reserve Incorporated to Nevadabobs.com Inc. on August 4, 2000
pursuant to the filing of articles of amendment. The Company changed its name
from Nevadabobs.com Inc. to Nevada Bobs International Inc. on August 24, 2001
pursuant to articles of amendment. Articles of amendment were filed by the
Company on May 6, 2002 to consolidate its outstanding common shares. Articles of
amendment were filed by the Company on April 30, 2003 to create a series of
preference shares. On November 28, 2008, immediately following the acquisition
by the Company of Old Loncor, the Company filed articles of amalgamation which
amalgamated the Company with Old Loncor and changed the Companys name from
Nevada Bob's International Inc. to Loncor Resources Inc.

|14. **E.** | Use of Proceeds
|---------- | ---------------

Not applicable.

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|**Item 15.** | Controls and Procedures.
|------------ | ------------------------

(a) Disclosure Controls and
Procedures

Under the supervision and with the participation of the
Company's management, including its Chief Executive Officer and Chief Financial
Officer, the Company evaluated the effectiveness of the design and operation of
its disclosure controls and procedures (as defined in Rule 13a-15(e) or
15d-15(e) under the U.S. Exchange Act) for the year ended December 31, 2017.
Based upon that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that, as of the end of the period covered by this report, the
Company's disclosure controls and procedures were adequately designed and are
effective to ensure that information required to be disclosed by the Company in
the reports it files or submits under the U.S. Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
applicable rules and forms.

In addition, the Company's Chief Executive Officer and Chief
Financial Officer have determined that the disclosure controls and procedures
are effective to ensure that information required to be disclosed in the reports
that are filed under the U.S. Exchange Act is accumulated and communicated to
management, including the Chief Executive Officer and Chief Financial Officer,
to allow timely decisions regarding required disclosure.

(b) Managements Annual Report on Internal Control
over Financial Reporting

The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting as defined in
Rules 13a-15(f) and 15d-15(f) under the U.S. Exchange Act. The Company's
management has employed a framework consistent with U.S. Exchange Act Rule
13a-15(c), to evaluate the Company's internal control over financial reporting
described below. The Company's internal control over financial reporting is a
process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation and fair presentation of financial
statements for external purposes in accordance with IFRS.

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

Management conducted an evaluation of the design and operation
of the Company's internal control over financial reporting as of December 31,
2017 based on the criteria set forth in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. This evaluation included review of the documentation of controls,
evaluation of the design effectiveness of controls, testing of the operating
effectiveness of controls and a conclusion on this evaluation. Based on this
evaluation, management has concluded that the Company's internal control over
financial reporting was effective as of December 31, 2017 and no material
weaknesses were discovered.

(c) Attestation Report of the Registered Public
Accounting Firm

This annual report on Form 20-F does not include an attestation
report of the Companys registered public accounting firm regarding internal
control over financial reporting. Under the Jumpstart Our Business &
Startups Act(JOBS Act), emerging growth companies are exempt from
Section 404(b) of the Sarbanes-Oxley Act, which generally requires public
companies to provide an independent auditor attestation of managements
assessment of the effectiveness of their internal control over financial reporting. The Company qualifies as an emerging growth company
under the JOBS Act and therefore has not included an independent auditor
attestation of managements assessment of the effectiveness of its internal
control over financial reporting.

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(d) Changes in Internal Control over Financial
Reporting

There were no changes in the Companys internal control over
financial reporting during the year ended December 31, 2017, that management
believes have materially affected, or are reasonably likely to materially
affect, the Companys internal control over financial reporting.

The Company's management, including the Chief Executive Officer
and Chief Financial Officer, does not expect that its disclosure controls and
procedures or internal controls and procedures will prevent all error and all
fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control
system are met. Further, the design of a control system must reflect the fact
that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the Company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. Additionally, controls can be circumvented by the individual
acts of some persons, by collusion of two or more people, or by management
override of the control. The design of any system of controls also is based in
part upon certain assumptions about the likelihood of future events, and there
can be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions; over time, control may become inadequate
because of changes in conditions, or the degree of compliance with the policies
or procedures may deteriorate. Because of the inherent limitations in a
cost-effective control system, misstatements due to error or fraud may occur and
not be detected.

|**Item 16.A.** | Audit Committee Financial Expert
|-------------- | --------------------------------

The Company's Board has determined that William R. Wilson
satisfies the requirements as an audit committee financial expert, in that he
has an understanding of IFRS and financial statements; is able to assess the
general application of such principles in connection with the accounting for
estimates, accruals and reserves; has experience preparing, auditing, analyzing
or evaluating financial statements that present a breadth and level of
complexity of accounting issues that can reasonably be expected to be raised by
the Company's financial statements (or experience actively supervising one or
more persons engaged in such activities); has an understanding of internal
controls over financial reporting; and has an understanding of audit committee
functions. Mr. Wilson is independent as defined in Section 803A of the NYSE MKT
Company Guide.

|**Item 16.B.** | Code of Ethics.
|-------------- | ---------------

The Company has adopted a code of business conduct and ethics
for directors, officers and employees (including the Companys principal
executive officer, principal financial officer and principal accounting officer)
(the "Code"). A copy of the Code is incorporated by reference into this
Form 20-F as Exhibit 1.4. A copy of the Code may also be obtained free of charge
from the Chief Financial Officer of the Company at dmadilo@loncor.com and is
also available on SEDAR at www.sedar.com, EDGAR at www.sec.gov and
the Company's website at www.loncor.com. Each director, officer and
employee of the Company is provided with a copy of the Code and is required to
confirm annually that he or she has complied with the Code. Any observed
breaches of the Code must be reported to the Company's Chief Executive
Officer.

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No amendment was made to the Code during the Company's most
recently completed financial year and no waiver from a provision of the Code was
granted by the Company during the Company's most recently completed financial
year.

In accordance with the OBCA(the Company's governing
corporate legislation), directors of the Company who are a party to, or are a
director or an officer of or have a material interest in a party to, a material
contract or material transaction or a proposed material contract or proposed
material transaction, are required to disclose the nature and extent of their
interest and not to vote on any resolution to approve the contract or
transaction. In addition, in certain cases, an independent committee of the
Company's Board may be formed to deliberate on such matters in the absence of
the interested party.

The Company has also adopted a "whistleblower" policy which
provides employees, consultants, officers and directors with the ability to
report, on a confidential and anonymous basis, violations within the Company's
organization including, (but not limited to), questionable accounting practices,
disclosure of fraudulent or misleading financial information, instances of
corporate fraud, or harassment. The Company believes that providing a forum for
such individuals to raise concerns about ethical conduct and treating all
complaints with the appropriate level of seriousness fosters a culture of
ethical business conduct. The Company has also adopted an insider trading policy
to encourage and promote a culture of ethical business conduct.

|**Item 16.C.** | Principal Accountant Fees and Services
|-------------- | --------------------------------------

The following summarizes the total fees billed by the external
auditors of the Company for each of the years ended December 31, 2017 and
December 31, 2016 (BDO Canada LLP were the external auditors of the Company in
respect of fiscal 2016 and UHY McGovern Hurley LLP were the external auditors of
the Company in respect of fiscal 2017). All dollar amounts are exclusive of
applicable taxes.

2017
    
    
    2016Audit Fees
    
    Cdn$40,000
    
    
    Cdn$45,000Audit-Related Fees
    
    Cdn$10,000
    
    
    Cdn$10,000Tax Fees
    
    Cdn$4,500
    
    
    Cdn$2,500All Other Fees
    
    Nil
    
    
    Nil


In accordance with existing Audit Committee policy and the
requirements of the Sarbanes-Oxley Act, all services to be provided by
the external auditors of the Company are subject to pre-approval by the Audit
Committee. This includes audit services, audit-related services, tax services
and other services. In some cases, pre-approval is provided by the full Audit
Committee for up to a year, and relates to a particular category or group of
services and is subject to a specific budget. All of the fees listed above have
been approved by the Audit Committee.

|**Item 16.D.** | Exemptions from the Listing Standards for
      Audit Committees
|-------------- | ----------------------------------------------------------------

Not applicable.

|**Item 16.E.** | Purchase of Equity Securities by the Issuer
      and Affiliated Purchasers
|-------------- | ---------------------------------------------------------------------------

The Company did not purchase any of its common shares during
the financial year ended December 31, 2017.

81

---

|**Item 16.F.** | Change in Registrant's Certifying Accountant
|-------------- | --------------------------------------------

At the Companys request, the Companys former independent
auditor, BDO Canada LLP, resigned effective March 13, 2018 and UHY McGovern
Hurley LLP was engaged as the Companys new independent auditor effective March
13, 2018. The disclosure required pursuant to this Item 16.F was included in the
Companys Current Report on Form 6-K filed with the SEC on March 29, 2018
including Exhibits 99.1, 99.2 and 99.3, which are hereby incorporated by
reference into this Annual Report on Form 20-F.

|**Item 16.G.** | Corporate Governance
|-------------- | --------------------

Not applicable.

|**Item 16.H.** | Mine Safety
|-------------- | -----------

Not applicable.

PART III

|**Item 17.** | Financial Statements
|------------ | --------------------

Not applicable.

|**Item 18.** | Financial Statements
|------------ | --------------------

The financial statements appear on pages F-1 through F-32.

|**Item 19.** | Exhibits
|------------ | --------

The following exhibits are filed as part of this Form 20-F:

|EXHIBIT |                                              
|------- | ---------------------------------------------
|NUMBER  | DESCRIPTION                                  
|        |                                              
|        | Constating
      Documents                   
|1.1     | Company's articles of amalgamation (1)       
|1.2     | Company's general by-law
      (1)           
|1.3     | Audit Committee's charter (1)                
|1.4     | Company's Business Conduct
      Policy (1)  
|        |                                              
|        | Material Contracts                           
|4.1     | Company's stock option plan (1)              
|        |                                              
|        | Subsidiaries                                 
|8.1     | List of subsidiaries of the
      Company (1)

82

---

|     | Certifications                                                                                                                                 
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------
|12.1 | Certification of the President and Chief
      Executive Officer of the Company pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002    
|12.2 | Certification of the Chief
      Financial Officer of the Company pursuant to Section 302 of Sarbanes-Oxley
      Act of 2002                  
|13.1 | Certification of the President and Chief
      Executive Officer of the Company pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002
|13.2 | Certification of the Chief
      Financial Officer of the Company pursuant to Section 906 of the
      Sarbanes-Oxley Act of 2002              
|     |                                                                                                                                                
|     | Other Exhibits                                                                                                                                 
|15.1 | Management's discussion and analysis of the
      Company for the year ended December 31, 2017                                                 
|15.2 | Sections 10 and 11 of the Ngayu
      Technical Report(2)                                                                                      
|15.3 | Notice of Change in Auditor(3)                                                                                                                 
|15.4 | Letter from Successor
      Auditor(3)                                                                                                         
|15.5 | Letter from Former Auditor(3)                                                                                                                  

Notes:

|(1) | Previously filed as an exhibit to the Companys annual
      report on Form 20-F filed with the SEC on March 30, 2012. SEC file number
      001-35124.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                        
|(2) | Previously filed as exhibit 99.1 to the Companys current
      report on Form 6-K filed with the SEC on July 13, 2012.                                
|    |                                                                                                                                                        
|(3) | Previously filed as an exhibit to the Companys current
      report on Form 6-K filed with the SEC on March 29,
2018.                                 

SIGNATURES

The registrant hereby certifies that it meets all of the
requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this annual report on its behalf.

|Date: April 2, 2018 |                           |                                      
|------------------- | ------------------------- | -------------------------------------
|                    |                           |                                      
|                    |                           |                                      
|                    | **LONCOR RESOURCES INC.**
|                    | (Registrant)             
|                    |                           |                                      
|                    |                           |                                      
|                    | By:                       | (signed)"Arnold T.
      Kondrat"    
|                    |                           | Arnold T. Kondrat                    
|                    |                           | President and Chief Executive Officer

83

---

CONSOLIDATEDFINANCIALSTATEMENTSDecember 31, 2017(Expressed in U.S. dollars)


F-1

---

CONTENTS CONSOLIDATED FINANCIAL STATEMENTS Managements
      Report
    3Independent
      Auditors Report
    6Consolidated
      Statements of Financial Position
    8Consolidated
      Statements of Loss and Comprehensive Loss
    9Consolidated
      Statements of Changes in Equity
    10Consolidated
      Statements of Cash Flows
    11 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1.
      Corporate Information
    122.
      Basis of Preparation
    123.
      Summary of Significant Accounting Policies
    134.
      Subsidiaries
    205.
      Advances receivable
    206.
      Related party transactions
    217.
      Property, Plant and Equipment
    228.
      Exploration and Evaluation Assets
    229.
      Intangible Assets
    2310.
      Segmented Reporting
    2411.
      Accounts Payable
    2412.
      Loan
    2413.
      Share Capital
    2414.
      Share-Based Payments
    2615.
      Commitments
    2716.
      Financial risk management objectives and policies
    2817.
      Supplemental cash flow information
    3018.
      Employee retention allowance
    3019.
      Income taxes
    31


F-2

---

Management's Report Managements Responsibility for Financial Statements The consolidated financial statements and the notes thereto
have been prepared in accordance with International Financial Reporting
Standards and are the responsibility of the management of Loncor Resources Inc.
(the Company). The financial information presented elsewhere in the
Managements Discussion and Analysis is consistent with the data that is
contained in the consolidated financial statements. The consolidated financial
statements, where necessary, include amounts which are based on the best
estimates and judgments of management. In order to discharge managements responsibility for the
integrity of the consolidated financial statements, the Company maintains a
system of internal controls. These controls are designed to provide reasonable
assurance that the Companys assets are safeguarded, transactions are executed
and recorded in accordance with managements authorization, proper records are
maintained and relevant and reliable information is produced. These controls
include maintaining quality standards in hiring and training of employees,
policies and procedures manuals, a corporate code of conduct and ensuring that
there is proper accountability for performance within appropriate and
well-defined areas of responsibility. The system of internal controls is further
supported by a compliance function, which is designed to ensure that we and our
employees comply with securities legislation and conflict of interest rules. The Board of Directors is responsible for overseeing
managements performance of its responsibilities for financial reporting and
internal control. The Audit Committee, which is composed of non-executive
directors, meets with management as well as the external auditors to ensure that
management is properly fulfilling its financial reporting responsibilities to
the Directors who approve the consolidated financial statements. The external
auditors have full and unrestricted access to the Audit Committee to discuss the
scope of their audits, the adequacy of the system of internal controls and
review reporting issues. The consolidated financial statements for the year ended
December 31, 2017 have been audited by UHY McGovern Hurley LLP, Chartered
Professional Accountants, in accordance with Canadian Generally Accepted
Auditing Standards and the standards of the Public Company Accounting Oversight
Board (United States). (Signed) Arnold T. Kondrat
    
    (Signed) Donat K. MadiloArnold T. Kondrat
    
    Donat K. MadiloPresident and Chief Executive Officer
    
    Chief Financial Officer


F-3

---

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and Directors of Loncor Resources Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated financial
statements of Loncor Resources Inc. (the Company), which comprise the
consolidated statements of financial position as at December 31, 2017, the
consolidated statements of loss and comprehensive loss, changes in equity and
cash flows for the year then ended, and the related notes, comprising a summary
of significant accounting policies and other explanatory information
(collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present
fairly, in all material respects, the consolidated financial position of the
Company as at December 31, 2017, and its consolidated financial performance and
its consolidated cash flows for the year then ended in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board. Material Uncertainty Related to Going Concern Without modifying our opinion, we draw attention to Note 2 in
the consolidated financial statements that indicates the Company produced a net
loss of $61,287 for the year ended December 31, 2017 and as of that date the
Company had a working capital deficit of $726,550. These conditions, along with
other matters as set forth in Note 2, indicate the existence of a material
uncertainty that casts substantial doubt on the Companys ability to continue as
a going concern. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. Basis for Opinion A  Managements Responsibility for the Consolidated
Financial Statements Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error. B  Auditors Responsibility Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States)
(PCAOB). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free from material misstatement, whether due to error or fraud. Those standards
also require that we comply with ethical requirements, including independence.
We are required to be independent with respect to the Company in accordance with
the ethical requirements that are relevant to our audit of the consolidated
financial statements in Canada, the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and
the PCAOB. We are a public accounting firm registered with the PCAOB. An audit includes performing procedures to assess the risks of
material misstatements of the consolidated financial statements, whether due to
error or fraud, and performing procedures to respond to those risks. Such
procedures included obtaining and examining, on a test basis, audit evidence
regarding the amounts and disclosures in the consolidated financial statements.
The procedures selected depend on our judgment, including the assessment of the
risks of material misstatement of the consolidated financial statements, whether
due to fraud or error. In making those risk assessments, we consider internal
control relevant to the Companys preparation and fair presentation of the consolidated financial
statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Companys internal control. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Accordingly, we express no such opinion.


F-4

---

An audit also includes evaluating the appropriateness of
accounting policies and principles used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements. We believe that the audit evidence we have obtained in our
  audits is sufficient and appropriate to provide a reasonable basis for our audit
opinion. Comparative Information The consolidated financial statements of the Company as at
December 31,2016 and for the years ended December 31, 2016 and 2015, were
audited by another auditor who expressed an unqualified (unmodified) opinion on
those financial statements on March 31, 2017. /s/ UHY McGovern Hurley LLPChartered Professional AccountantsLicensed Public AccountantsThis is our first year of service as the Companys auditor.Toronto, CanadaApril 2, 2018


F-5

---

Tel: 416 865 0200
    BDO Canada LLPFax: 416 865 0887
    TD Bank Towerwww.bdo.ca
    66 Wellington Street WestSuite 3600, PO Box 131Toronto ON M5K 1H1 Canada  INDEPENDENTAUDITORSREPORT To the Shareholders of Loncor Resources Inc. We have audited the accompanying consolidated financial
statements of Loncor Resources Inc., which comprise the consolidated statements
of financial position as at December 31, 2016 and the consolidated statements of
comprehensive loss, changes in equity, and cash flows for each of the years
ended December 31, 2016 and December 31, 2015, and a summary of significant
accounting policies and other explanatory information. Management's Responsibility for the Consolidated Financial
Statements Management is responsible for the preparation and fair
presentation of these consolidated financial statements in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or
error. Auditors Responsibility Our responsibility is to express an opinion on these
consolidated financial statements based on our audits. We conducted our audits
in accordance with Canadian generally accepted auditing standards and the
standards of the Public Company Accounting Oversight Board (United States).
Those standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free from material misstatement. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the consolidated financial
statements. The procedures selected depend on the auditor's judgment, including
the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's
preparation and fair presentation of the consolidated financial statements in
order to design audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the
Company's internal controls. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting
estimates made by management, as well as evaluating the overall presentation of
the consolidated financial statements.


F-6

---

We believe that the audit evidence we have obtained in our
audits is sufficient and appropriate to provide a basis for our audit
opinion.  Opinion In our opinion, the consolidated financial statements present
fairly, in all material respects, the financial position of Loncor Resources
Inc. as at December 31, 2016 and its financial performance and its cash flows
for the years ended December 31, 2016 and December 31, 2015 in accordance with
International Financial Reporting Standards as issued by the International
Accounting Standards Board. Emphasis of Matter Without qualifying our opinion, we draw attention to Note 2 in
the consolidated financial statements which indicates the Company produced a net
loss of $497,610 for the year ended December 31, 2016 and as of that date the
Company had a working capital deficit of $1,150,458. These conditions, along
with other matters as set forth in Note 2, indicate the existence of a material
uncertainty that casts substantial doubt on the Companys ability to continue as
a going concern. Managements plans in regard to these matters are also
described in Note 2. The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty. (signed) BDO Canada LLPChartered Professional Accountants, Licensed Public
      AccountantsToronto, CanadaMarch 31, 2017


F-7

---

LoncorResourcesInc.CONSOLIDATEDSTATEMENTS OFFINANACIALPOSITION(Expressed in
      U.S. dollars)  Notes
    
    
    December 31, 2017
    
    
    December 31, 2016$
    
    
    $AssetsCurrent AssetsCash and cash
      equivalents
    
    
    
    
    20,162
    
    
    21,520Advances receivable
    
    5
    
    
    175,501
    
    
    98,352Due from related
      parties
    
    6
    
    
    4,518
    
    
    -Prepaid expenses and deposits
    
    
    
    
    68,263
    
    
    67,971Total Current Assets
    
    
    
    
    268,444
    
    
    187,843Non-Current AssetsProperty, plant and equipment
    
    7
    
    
    16,275
    
    
    35,403Exploration and
      evaluation assets
    
    8
    
    
    27,633,564
    
    
    27,857,769Intangible assets
    
    9
    
    
    1
    
    
    1Total Non-Current Assets
    
    
    
    
    27,649,840
    
    
    27,893,173Total Assets
    
    
    
    
    27,918,284
    
    
    28,081,016Liabilities and
      Shareholders' EquityCurrent LiabilitiesAccounts payable
    
    11
    
    
    359,651
    
    
    403,613Accrued liabilities
    
    
    
    
    67,132
    
    
    209,930Due to related
      parties
    
    6
    
    
    237,305
    
    
    127,909Employee retention allowance
    
    18
    
    
    208,153
    
    
    596,849Loan
    
    12
    
    
    122,753
    
    
    -Current Liabilities
    
    
    
    
    994,994
    
    
    1,338,301Common share purchase warrants
    
    13c
    
    
    67,305
    
    
    85,633Total Liabilities
    
    
    
    
    1,062,299
    
    
    1,423,934Commitments and contingencies
    
    15Shareholders' EquityShare capital
    
    13
    
    
    77,286,874
    
    
    77,048,991Reserves
    
    
    
    
    8,219,502
    
    
    8,197,193Deficit
    
    
    
    
    (58,650,391
    )
    
    (58,589,102
    )Total Shareholders' Equity
    
    
    
    
    26,855,985
    
    
    26,657,082Total Liabilities and Shareholders' Equity
    
    
    
    
    27,918,284
    
    
    28,081,016 Approved and authorized for issue by the Board of Directors on
April 2, 2018. Signed on behalf of the Board of Directors by: /s/ William R. Wilson
    /s/ Arnold T. KondratWilliam R. Wilson
    Arnold T. KondratDirector
    Director The accompanying notes are an integral part of these
consolidated financial statements.


F-8

---

LoncorResourcesInc.CONSOLIDATEDSTATEMENTS OFLOSS ANDCOMPREHENSIVELOSS(Expressed in
      U.S. dollars)  For the years endedNotesDecember 31, 2017
    
    
    December 31, 2016
    
    
    December 31, 2015$
    
    
    $
    
    
    $ExpensesConsulting, management and
      professional fees
    
    
    
    
    105,092
    
    
    138,498
    
    
    92,329Employee
      benefits
    
    
    
    
    224,790
    
    
    188,877
    
    
    182,630Office and sundry
    
    
    
    
    47,932
    
    
    45,503
    
    
    70,549Compensation
      expense-share-based payment
    
    14
    
    
    22,309
    
    
    55,176
    
    
    -Travel and promotion
    
    
    
    
    163,584
    
    
    76,489
    
    
    63,138Depreciation
    
    
    
    
    3,327
    
    
    3,853
    
    
    22,082Interest and bank expenses
    
    
    
    
    3,501
    
    
    818
    
    
    1,158(Gain)/loss on
      derivative instruments
    
    13c
    
    
    (314,317
    )
    
    6,452
    
    
    -Impairment of exploration and
      evaluation assets
    
    8
    
    
    -
    
    
    -
    
    
    2,300,000Other
    
    
    
    
    (207,707
    )
    
    -
    
    
    -Foreign exchange loss/(gain)
    
    
    
    
    12,933
    
    
    (17,774
    )
    
    (177,310
    )Loss before other items
    
    
    
    
    (61,444
    )
    
    (497,892
    )
    
    (2,554,576
    )Interest income
    
    
    
    
    157
    
    
    282
    
    
    113Other Income
    
    
    
    
    -
    
    
    -
    
    
    137,216Loss
    
    
    
    
    (61,287
    )
    
    (497,610
    )
    
    (2,417,247
    )Comprehensive loss for the year
    
    
    
    
    (61,287
    )
    
    (497,610
    )
    
    (2,417,247
    )Loss per share, basic and diluted
    
    13d
    
    
    (0.00
    )
    
    (0.00
    )
    
    (0.03
    ) The accompanying notes are an integral part of these
consolidated financial statements.


F-9

---

LoncorResourcesInc.CONSOLIDATEDSTATEMENTS OFCHANGES INEQUITY(Expressed in
      U.S. dollars)  Common sharesNotes
    
    
    Number of
    
    
    
    
    
    Reserves
    
    
    Deficit
    
    
    Total shareholders'shares
    
    
    Amount
    
    
    
    
    
    
    
    
    equityBalance at January 1, 2015
    
    
    
    
    73,439,732
    
    $
    75,715,014
    
    $
    8,142,017
    
    $
    (55,674,247
    )
    $
    28,182,784Loss for the
      year
    
    
    
    
    -
    
    
    -
    
    
    -
    
    
    (2,417,247
    )
    
    (2,417,247
    )Common shares issued
    
    
    
    
    11,000,000
    
    
    525,980
    
    
    -
    
    
    -
    
    
    525,980Balance at December 31, 2015
    
    
    
    
    84,439,732
    
    $
    76,240,994
    
    $
    8,142,017
    
    $
    (58,091,494
    )
    $
    26,291,517Loss for the
      year
    
    
    
    
    -
    
    
    -
    
    
    -
    
    
    (497,610
    )
    
    (497,610
    )Share-based payments
    
    
    
    
    -
    
    
    -
    
    
    55,176
    
    
    -
    
    
    55,176Common shares and warrants issued
    
    
    
    
    68,750,000
    
    
    807,997
    
    
    -
    
    
    -
    
    
    807,997Balance at December 31, 2016
    
    
    
    
    153,189,732
    
    $
    77,048,991
    
    $
    8,197,193
    
    $
    (58,589,102
    )
    $
    26,657,082Loss for the year
    
    
    
    
    -
    
    
    -
    
    
    -
    
    
    (61,287
    )
    
    (61,287
    )Share-based
      payments
    
    
    
    
    -
    
    
    -
    
    
    22,309
    
    
    -
    
    
    22,309Common shares and warrants issued
    
    
    
    
    5,500,000
    
    
    237,883
    
    
    -
    
    
    -
    
    
    237,883Balance at December 31, 2017
    
    
    
    
    158,689,732
    
    $
    77,286,874
    
    $
    8,219,502
    
    $
    (58,650,391
    )
    $
    26,855,985 The accompanying notes are an integral part of these
consolidated financial statements.


F-10

---

LoncorResourcesInc.CONSOLIDATEDSTATEMENTS OFCASHFLOWS(Expressed in U.S. dollars)  For the years endedNotes
    
    
    December 31, 2017
    
    
    December 31, 2016
    
    
    December 31, 2015**$**
    
    
    $
    
    
    $Cash flows from operating
      activitiesLoss for the year
    
    
    
    
    (61,287
    )
    
    (497,610
    )
    
    (2,417,247
    )Adjustments to reconcile loss
      to net cash used in operating activitiesDepreciation
    
    
    
    
    3,327
    
    
    3,853
    
    
    23,175Share-based
      payments - employee compensation
    
    14
    
    
    22,309
    
    
    55,176
    
    
    -Loss/(gain) on derivative
      instruments
    
    
    
    
    (314,317
    )
    
    6,452
    
    
    -Employee
      retention allowance
    
    18
    
    
    23,853
    
    
    23,912
    
    
    (31,991
    )Impairment of exploration and
      evaluation assets
    
    
    
    
    -
    
    
    -
    
    
    2,300,000Changes in non-cash working
      capitalAdvances receivable
    
    
    
    
    (77,149
    )
    
    (56,352
    )
    
    (9,035
    )Prepaid expenses
      and deposits
    
    
    
    
    (292
    )
    
    (125
    )
    
    1,302Due from related parties
    
    
    
    
    (4,518
    )
    
    12,619
    
    
    (2,739
    )Accounts payable
    
    
    
    
    (42,663
    )
    
    26,636
    
    
    (43,766
    )Accrued liabilities
    
    
    
    
    (142,798
    )
    
    14,947
    
    
    (108,621
    )Net cash used in operating
      activities
    
    
    
    
    (593,535
    )
    
    (410,492
    )
    
    (288,922
    )Cash flows from investing
      activitiesDisposition of property, plant and equipment
    
    
    
    
    -
    
    
    2,400
    
    
    94,491Purchase of property, plant
      and equipment
    
    
    
    
    (1,510
    )
    
    -
    
    
    -Expenditures on exploration and evaluation assets
    
    
    
    
    (172,334
    )
    
    (254,454
    )
    
    (497,861
    )Net cash used in investing
      activities
    
    
    
    
    (173,844
    )
    
    (252,054
    )
    
    (403,370
    )Cash flows from financing
      activitiesProceeds from share and warrant issuance, net
      of issuance costs
    
    
    
    
    533,872
    
    
    887,178
    
    
    525,980Loan
    
    12
    
    
    122,753
    
    
    -
    
    
    -Due to related parties
    
    
    
    
    109,396
    
    
    (462,153
    )
    
    118,936Funds received from Randgold
    
    
    
    
    -
    
    
    250,786
    
    
    -Net cash provided from financing activities
    
    
    
    
    766,021
    
    
    675,811
    
    
    644,916Net increase/(decrease) in cash and cash
      equivalent during the year
    
    
    
    
    (1,358
    )
    
    13,265
    
    
    (47,376
    )Cash and cash equivalents, beginning of the year
    
    
    
    
    21,520
    
    
    8,255
    
    
    55,631Cash and cash equivalents, end of the year
    
    
    
    
    20,162
    
    
    21,520
    
    
    8,255 Supplemental cash flow information (Note 17) The accompanying notes are an integral part of these
consolidated financial statements.


F-11

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  1.
    CORPORATEINFORMATION Loncor Resources Inc. (the "Company") is a corporation governed
by the Ontario Business Corporations Act. The principal business of the
Company is the acquisition and exploration of mineral properties. These consolidated financial statements as at December 31, 2017
and 2016 and for the years ended December 31, 2017, 2016 and 2015 include the
accounts of the Company and of its wholly owned subsidiaries in the Democratic
Republic of the Congo (the Congo), Loncor Resources Congo SARL, and in the
U.S., Nevada Bobs Franchising, Inc., respectively. The Company is a publicly traded company whose outstanding
common shares are listed for trading on the Toronto Stock Exchange. The head
office of the Company is located at 1 First Canadian Place, 100 King St. West,
Suite 7070, Toronto, Ontario, M5X 1E3, Canada. 2.
    BASIS OFPREPARATION  a)
    Statement of complianceThese consolidated financial statements as at December
      31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015
      have been prepared in accordance with International Financial Reporting
      Standards (IFRS) as issued by the International Accounting Standards
      Board (IASB).The accompanying financial information as at December 31,
      2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 has
      been prepared in accordance with those IASB standards and IFRS
      Interpretations Committee (IFRIC) interpretations issued and effective,
      or issued and early-adopted, at December 31, 2017.The date the Companys Board of Directors approved these
      consolidated financial statements was April 2, 2018.b)
    Continuation of BusinessThe Company incurred a net loss of $61,287 for the year
      ended December 31, 2017 (year ended December 31, 2016  net loss of
      $497,610 and year ended December 31, 2015  net loss of $2,417,247) and as
      at December 31, 2017 had a working capital deficit of $726,550 (December
      31, 2016: $1,150,458).The Companys ability to continue operations in the
      normal course of business is dependent on several factors, including its
      ability to secure additional funding. Management is exploring all
      available options to secure additional funding, including equity financing
      and strategic partnerships. In addition, the recoverability of the amount
      shown for exploration and evaluation assets is dependent upon the
      existence of economically recoverable reserves, the ability of the Company
      to obtain financing to continue to perform exploration activity or
      complete the development of the properties where necessary, or
      alternatively, upon the Companys ability to recover its incurred costs
      through a disposition of its interests, all of which are
  uncertain.In the event the Company is unable to identify
      recoverable resources, receive the necessary permitting, or arrange
      appropriate financing, the carrying value of the Companys assets and
      liabilities could be subject to material adjustment. These matters create
      material uncertainties that cast significant and substantial doubt upon
      the validity of the going concern assumption.These consolidated financial statements do not include
      any additional adjustments to the recoverability and classification of
      certain recorded asset amounts, classification of certain liabilities and
      changes to the statements of comprehensive loss that might be necessary if
      the Company was unable to continue as a going
concern.


F-12

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  **c)**
    Basis of measurementThese consolidated financial statements have been
      prepared on the historical cost basis, except for certain financial assets
      and liabilities which are presented at fair value. These consolidated
      financial statements have also been prepared on an accrual basis, except
      for cash flow information.  3.
    SUMMARY OFSIGNIFICANTACCOUNTINGPOLICIES The accounting policies set out below have been applied
consistently by all group entities and to all periods presented in these
consolidated financial statements, unless otherwise indicated. a)
    Basis of Consolidation  i.
    SubsidiariesSubsidiaries consist of entities over which the Company
      is exposed to, or has rights to, variable returns as well as ability to
      offset these returns through the power to direct the relevant activities
      of the entity. This control is generally evidenced through owning more
      than 50% of the voting rights or currently exercisable potential voting
      rights of a companys share capital. The financial statements of
      subsidiaries are included in the consolidated financial statements of the
      Company from the date that control commences until the date that control
      ceases. Consolidation accounting is applied for all of the Companys
      wholly-owned subsidiaries (see note 4).ii.
    Transactions eliminated on consolidationInter-company balances, transactions, and any unrealized
      income and expenses, are eliminated in preparing the consolidated
      financial statements.Unrealized gains arising from transactions with
      associates are eliminated against the investment to the extent of the
      Companys interest in the investee. Unrealized losses are eliminated in
      the same way as unrealized gains, but only to the extent that there is no
      evidence of impairment.  b)
    Use of Estimates and
Judgments The preparation of these consolidated
financial statements in conformity with IFRS requires management to make
judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates. Estimates and underlying assumptions
are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimates are revised and in any future
periods affected. Information about critical judgments in applying accounting
policies and estimates that have the most significant effect on the amounts
recognized in these consolidated financial statements is included in the
following notes: Estimates: i. Impairment Assets, including property, plant and
equipment, and exploration and evaluation assets, are reviewed for impairment
whenever events or changes in circumstances indicate that their carrying amounts
exceed their recoverable amounts. If an impairment assessment is required, the
assessment of fair value often requires estimates and assumptions such as
discount rates, exchange rates, commodity prices, rehabilitation and restoration
costs, future capital requirements and future operating performance. Changes in
such estimates could impact recoverable values of these assets. Estimates are
reviewed regularly by management.


F-13

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) ii. Share-based payment transactions The Company measures the cost of
equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. Estimating fair value
for share-based payment transactions requires determining the most appropriate
valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determining the most appropriate inputs to the
valuation model including the expected life of the stock option, volatility and
dividend yield and making assumptions about them. The assumptions and models
used for estimating fair value for share-based payment transactions are
disclosed in Note 14. For warrant-based derivative financial
instruments, the Company uses the Black-Scholes option pricing model to estimate
fair value of the derivative instruments. The assumptions and models used for
estimating fair value of warrant-based derivative financial instruments are
disclosed in Note 13. Judgments: i. Provisions and
contingencies The amount recognized as provision,
including legal, contractual, constructive and other exposures or obligations,
is the best estimate of the consideration required to settle the related
liability, including any related interest charges, taking into account the risks
and uncertainties surrounding the obligation. In addition, contingencies will
only be resolved when one or more future events occur or fail to occur.
Therefore assessment of contingencies inherently involves the exercise of
significant judgment and estimates of the outcome of future events. The Company
assesses its liabilities and contingencies based upon the best information
available, relevant tax laws and other appropriate requirements. As at December
31, 2017 and 2016, the Company does not have any material asset retirement
obligations related to its exploration and evaluation assets. ii. Title to mineral property
interests Although the Company has taken steps to
verify title to mineral properties in which it has an interest, these procedures
do not guarantee the Companys title. Such properties may be subject to prior
agreements or transfers and title may be affected by undetected defects,
government renegotiation, other legal claims, and non-compliance with
regulatory, social and environmental requirements. iii. Exploration and evaluation
expenditure The application of the Companys
accounting policy for exploration and evaluation expenditure requires
significant judgment in determining whether it is likely that future economic
benefits will flow to the Company, which may be based on assumptions about
future events or circumstances. Estimates and assumptions made may change if new
information becomes available. There are key circumstances that would indicate a
test for impairment is required, which include: the expiry of the right to
explore, substantive expenditure on further exploration is not planned,
exploration for and evaluation of the mineral resources in the area have not led
to discovery of commercially viable quantities, and/or sufficient data exists to
show that the carrying amount of the asset is unlikely to be recovered in full
from successful development or by sale. If information becomes available
suggesting impairment, the amount capitalized is written off in the consolidated
statement of comprehensive loss during the year the new information becomes
available. Significant judgements have been made
with regards to the potential for indicators of impairment. This includes
judgements related to the ability to carry out the desired exploration
activities as a result of various permits currently being under force majeure
due to the poor security situation at the North Kivu property and the need to
allocate resources amongst different projects based on the availability of
capital and funding.


F-14

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LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) iv. Functional and presentation
currency Judgment is required to determine the
functional currency of the Company and its subsidiaries. These judgments are
continuously evaluated and are based on managements experience and knowledge of
the relevant facts and circumstances. c)
    Foreign Currency
Translation i. Functional and presentation
currency These consolidated financial statements
are presented in United States dollars ($), which is the Companys functional
and presentation currency. The United States dollar was determined to be the
functional currency of the Companys Congo subsidiary. References to Cdn$
represent Canadian dollars. ii. Foreign currency
transactions The functional currency for each of the
Companys subsidiaries and any associates is the currency of the primary
economic environment in which the entity operates. Transactions entered into by
the Companys subsidiaries and any associates in a currency other than the
currency of the primary economic environment in which they operate (their
"functional currency") are recorded at the rates ruling when the transactions
occur except depreciation and amortization which are translated at the rates of
exchange applicable to the related assets, with any gains or losses recognized
in the consolidated statements of comprehensive loss. Foreign currency monetary
assets and liabilities are translated at current rates of exchange with the
resulting gain or losses recognized in the statements of loss. Non-monetary
assets and liabilities are translated using the historical exchange rates.
Non-monetary assets and liabilities measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is
determined. d)
    Cash and Cash Equivalents Cash and cash equivalents includes cash
on hand, deposits held on call with financial institutions, and other
short-term, highly liquid investments with original maturities of three months
or less that are readily convertible to known amounts. e)
    Financial Assets A financial asset is classified as
either financial assets at fair value through profit or loss (FVTPL), loans
and receivables, held to maturity investments (HTM), or available for sale
financial assets (AFS), as appropriate at initial recognition and, except in
very limited circumstances, the classification is not changed subsequently. The
classification is determined at initial recognition and depends on the nature
and purpose of the financial asset. The Company does not have any financial
assets that are classified as HTM and AFS. A financial asset is derecognized
when contractual rights to the assets cash flows expire or if substantially all
the risks and rewards of the asset are transferred. Financial assets at FVTPL A financial asset is classified as
FVTPL when the financial asset is held for trading or it is designated upon
initial recognition as an FVTPL. A financial asset is classified as held for
trading if (1) it has been acquired principally for the purpose of selling or
repurchasing in the near term; (2) it is part of an identified portfolio of
financial instruments that the Company manages and has an actual pattern of
short term profit taking; or (3) it is a derivative that is not designated and
effective as a hedging instrument. Financial assets at FVTPL are carried in the
consolidated statements of financial position at fair value with changes in fair
value recognized in profit or loss. Transaction costs are expensed as incurred.
The Company has classified cash and cash equivalents as FVTPL.


F-15

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) Loans and receivables Loans and receivables are initially
recognized at fair value plus transaction costs that are directly attributable
to their acquisition or issue, and are subsequently carried at amortized cost
less losses for impairment. The impairment loss of receivables is based on a
review of all outstanding amounts at period end. Bad debts are written off
during the period in which they are identified. Amortized cost is calculated
taking into account any discount or premium on acquisition and includes fees
that are an integral part of the effective interest rate and transaction costs.
Gains and losses are recognized in the statements of comprehensive loss when the
loans and receivables are derecognized or impaired, as well as through the
amortization process. The Company has classified advances receivable and
balances due from related parties as loans and receivables. Impairment of financial
assets The Company assesses at each reporting
date whether a financial asset or a group of financial assets is impaired. A
financial asset or group of financial assets is deemed to be impaired, if, and
only if, there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset and that
event has an impact on the estimated future cash flows of the financial asset or
the group of financial assets that can be reliably estimated. f)
    Financial Liabilities Financial liabilities are classified as
FVTPL, or other financial liabilities, as appropriate upon initial recognition.
The common share purchase warrants are a liability classified as FVTPL. The
common share purchase warrants are revalued at each reporting period, with a
gain or loss reported on the consolidated statement of comprehensive loss. A
financial liability is derecognized when the obligation under the liability is
discharged, cancelled or expired. Financial liabilities classified as
other financial liabilities are initially recognized at fair value less directly
attributable transaction costs. Subsequent to the initial recognition, other
financial liabilities are measured at amortized cost using the effective
interest method. The Companys other financial liabilities include accounts
payable, accrued liabilities, due to related parties, and employee retention
allowance. g)
    Earnings (loss) Per Share Basic earnings (loss) per share is
computed by dividing the net income (loss) applicable by the weighted average
number of common shares outstanding during the reporting period. Diluted
earnings (loss) per share is computed by dividing the net income (loss) by the
sum of the weighted average number of common shares issued and outstanding
during the reporting period and all additional common shares for the assumed
exercise of options and warrants outstanding for the reporting period, if
dilutive. When the Company is incurring losses, basic and diluted loss per share
are the same since including the exercise of outstanding options and share
purchase warrants in the diluted loss per share calculation would be
anti-dilutive. h)
    Property, Plant and Equipment
  (PPE) i. Recognition and
measurement Items of PPE are measured at cost less
accumulated depreciation and accumulated impairment losses. Cost includes
expenditures that are directly attributable to the acquisition of the asset. The
cost of self-constructed assets includes the cost of materials, directed labor
and any other cost directly attributable to bring the asset to the location and
condition necessary to be capable of operating in the manner intended by the
Company.


F-16

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) ii. Subsequent costs The cost of replacing part of an item
of PPE is recognized in the carrying amount of the item if it is probable that
the future economic benefits embodied within the part will flow to the Company
and its cost can be measured reliably. The carrying amount of the replaced part
is derecognized and included in net loss. If the carrying amount of the replaced
component is not known, it is estimated based on the cost of the new component
less estimated depreciation. The costs of the day-to-day servicing of property,
plant and equipment are recognized in the statement of loss. iii. Depreciation Depreciation is based on the cost of an
asset less its residual value. Significant components of individual assets are
assessed to determine whether a component has an estimated useful life that is
different from that of the remainder of that asset, in which case that component
is depreciated separately. Depreciation is recognized in profit or loss over the
estimated useful lives of each item or component of an item of PPE as
follows: 
    Field camps and
      equipment
    straight line over 4 Years
    Furniture and
      fixtures
    straight line over 4 Years
    Office and
      communications equipment
    straight line over 4 Years
    Vehicles
    straight line over 4 Years
    Leasehold
      improvements
    straight line over the lease
      term
 Depreciation methods, useful lives and
residual values are reviewed annually and adjusted, if appropriate. Depreciation
commences when an asset is available for use. Changes in estimates are accounted
for prospectively. i)
    Exploration and Evaluation
Assets All direct costs related to exploration
and evaluation of mineral properties, net of incidental revenues and recoveries,
are capitalized under exploration and evaluation assets. Exploration and
evaluation expenditures include such costs as acquisition of rights to explore;
sampling, trenching and surveying costs; costs related to topography, geology,
geochemistry and geophysical studies; drilling costs and costs in relation to
technical feasibility and commercial viability of extracting a mineral
resource. Exploration and evaluation expenditures
incurred by Randgold Resources (DRC) Limited (Randgold) under the Farm-in
arrangement (See note 8b) are recorded on a cost-based approach and accounted in
the same way as they would for expenditures directly incurred by the Company as
described in the above paragraph. Exploration and evaluation expenditures
incurred by Randgold are offset by funding received from Randgold such that no
liability arises before an approved pre-feasibility study is completed. j)
    Impairment of Non-Financial
  Assets The Companys PPE, exploration and
evaluation assets, and intangible assets are assessed for indication of
impairment at each consolidated statement of financial position date.
Exploration and evaluation assets are assessed for impairment when facts and
circumstances suggest that the carrying amount of an exploration and evaluation
asset may exceed its recoverable amount. When facts and circumstances suggest
that the carrying amount exceeds the recoverable amount, an entity shall
measure, present and disclose any resulting impairment in accordance with IAS 36
Impairment of Assets. Internal factors, such as budgets and forecasts, as well
as external factors, such as expected future prices, costs and other market
factors are also monitored to determine if indications of impairment exist. If
any indication of impairment exists, an estimate of the assets recoverable
amount is calculated. The recoverable amount is determined as the higher of the
fair value less costs to sell for the asset and the assets value in use. This
is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or the Companys assets.
If this is the case, the individual assets are grouped together into cash
generating units (CGU) for impairment purposes. Such CGUs represent the lowest
level for which there are separately identifiable cash inflows that are largely
independent of the cash flows from other assets.


F-17

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) If the carrying amount of the asset
  exceeds its recoverable amount, the asset is impaired and an impairment loss is
  charged to the statements of comprehensive loss so as to reduce the carrying
  amount to its recoverable amount (i.e., the higher of fair value less cost to
  sell and value in use). Fair value less cost to sell is the amount obtainable
  from the sale of an asset or CGU in an arms length transaction between
  knowledgeable, willing parties, less the costs of disposal. Value in use is
  determined as the present value of the future cash flows expected to be derived
  from an asset or CGU. Estimated future cash flows are calculated using estimated
  future prices, any mineral reserves and resources, operating and capital costs.
  All assumptions used are those that an independent market participant would
  consider appropriate. The estimated future cash flows are discounted to their
  present value using a pre-tax discount rate that reflects current market
  assessments of the time value of money and the risks specific to the asset for
  which estimates of future cash flows have not been adjusted. During the year
  ended December 31, 2017, the Company recognized impairment of exploration and
  evaluation assets for $nil (December 31, 2016 - $nil, December 31, 2015 -
  $2,300,000) to adjust the carrying value of the assets to their fair value,
using a level 3 value in use methodology. k)
    Income Taxes Income tax expense consists of current
and deferred tax expense. Income tax expense is recognized in the statement of
loss, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also
recognized in other comprehensive income or directly in equity. Current income tax assets and
liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates
and tax laws used to compute current income tax assets and liabilities are
measured at future anticipated tax rates, which have been enacted or
substantively enacted at the reporting date. Current tax assets and current tax
liabilities are only offset if a legally enforceable right exists to set off the
amounts, and the Company intends to settle on a net basis, or to realize the
asset and settle the liability simultaneously. Deferred taxation is provided on all
qualifying temporary differences at the reporting date between the tax basis of
assets and liabilities and their carrying amounts for financial reporting
purposes. Deferred tax assets are only recognized to the extent that it is
probable that the deductible temporary differences will reverse in the
foreseeable future and future taxable profit will be available against which the
temporary difference can be utilized. Deferred tax liabilities and assets are
not recognized for temporary differences between the carrying amount and tax
bases of investments in controlled entities where the parent entity is able to
control the timing of the reversal of the temporary differences and it is
probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to offset current tax assets and liabilities and when the
deferred tax balances relate to the same taxation authority. l)
    Share-Based Payments Equity-settled share-based payments for
directors, officers and employees are measured at fair value at the date of
grant and recorded as compensation expense in the consolidated financial
statements. The fair value determined at the grant date of the equity-settled
share-based payments is expensed over the vesting period based on the Companys
estimate of options that will eventually vest. The number of forfeitures likely
to occur is estimated on grant date and is revised as deemed necessary.


F-18

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) Compensation expense on stock options
granted to consultants is measured at the earlier of the completion of
performance and the date the options are vested using the fair value method and
is recorded as an expense in the same period as if the Company had paid cash for
the goods or services received. When the value of goods or services
received in exchange for the share-based payment cannot be reliably estimated,
the fair value is measured by use of a Black-Scholes valuation model. The
expected life used in the model is adjusted, based on managements best
estimate, for the effects of non-transferability, exercise restrictions, and
behavioural considerations. Any consideration paid by directors,
officers, employees and consultants on exercise of equity-settled share-based
payments is credited to share capital. Shares are issued from treasury upon the
exercise of equity-settled share-based instruments. m)
    Provisions and
Contingencies Provisions are recognized when a legal
or constructive obligation exists, as a result of past events, and it is
probable that an outflow of resources that can be reliably estimated will be
required to settle the obligation. Where the effect is material, the provision
is discounted using an appropriate current market-based pre-tax discount rate.
The increase in the provision due to passage of time is recognized as interest
expense. When a contingency substantiated by
confirming events, can be reliably measured and is likely to result in an
economic outflow, a liability is recognized as the best estimate required to
settle the obligation. A contingent liability is disclosed where the existence
of an obligation will only be confirmed by future events, or where the amount of
a present obligation cannot be measured reliably or will likely not result in an
economic outflow. Contingent assets are only disclosed when the inflow of
economic benefits is probable. When the economic benefit becomes virtually
certain, the asset is no longer contingent and is recognized in the consolidated
financial statements. n)
    Related Party Transactions Parties are considered to be related if
one party has the ability, directly or indirectly, to control the other party or
exercise significant influence over the other party in making financial and
operating decisions. Parties are also considered to be related if they are
subject to common control or common significant influence. Related parties may
be individuals or corporate entities. A transaction is considered to be a
related party transaction when there is a transfer of resources or obligations
between related parties. Related party transactions are in the normal course of
business and have commercial substance. o)
    Decommisionning
obligations The Company recognizes an estimate of
the liabilities associated with decommissioning obligations when it has a
present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation,
and a reliable estimate of the obligation can be made. The estimated fair value
of the decommissioning obligations is recorded as a long-term liability, with a
corresponding increase in the carrying amount of the related asset. The
capitalized amount is amortized over the estimated life of the asset. The
liability amount is increased each reporting period due to the passage of time
and the amount of accretion is charged to any earnings in the period. The
decommissioning obligations are charged against the decommissioning obligations
to the extent of the liability recorded. The Company has no material
decommissioning obligations as at December 31, 2017 and 2016.


F-19

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  p)
    Newly Applied Accounting
  Standards The following amended standard was
adopted as of January 1, 2017: 
    IAS 7, Statement of Cash Flows (amendment). The adoption of this amended standard
did not have a significant impact on the Companys consolidated financial
statements. q)
    Accounting Standards Issued But Not Yet
      EffectiveThe Company has reviewed new and revised accounting
      pronouncements that have been issued but are not yet effective and
      determined that the following may have an impact on the Company:IFRS 9, Financial instruments (IFRS 9) was issued by
      the IASB on July 24, 2014 and will replace IAS 39 Financial Instruments:
      Recognition and Measurement. IFRS 9 is intended to reduce the complexity
      for the classification, measurement, and impairment of financial
      instruments. Most of the requirements in IAS 39 for classification and
      measurement of financial liabilities were carried forward unchanged to
      IFRS 9, except that an entity choosing to measure a financial liability at
      fair value will present the portion of any change in its fair value due to
      changes in the entitys own credit risk in other comprehensive income,
      rather than within profit or loss. The new standard also requires a single
      impairment method to be used, replacing the multiple impairment methods in
      IAS 39. The mandatory effective date is for annual periods beginning on or
      after January 1, 2018. The Company is evaluating the impact of this
      standard on its consolidated financial statements.IFRS 16, Leases (IFRS 16) was issued by the IASB in
      January 2016 and will replace IAS 17 Leases. IFRS 16 specifies the
      methodology to recognize, measure, present and disclose leases. The
      standard provides a single lessee accounting model, requiring lessees to
      recognize assets and liabilities for all leases unless the lease term is
      12 months or less or the underlying asset has a low value. The mandatory
      effective date is for annual periods beginning on or after January 1,
      2019. The Company is evaluating the impact of this standard on its
      consolidated financial statements.  4.
    SUBSIDIARIES The following table lists the Companys subsidiaries: Name of Subsidiary
    Place
      of Incorporation
    Proportion
      of Ownership Interest
    Principal ActivityLoncor Resources Congo SARL
    Democratic Republic of the
      Congo
    100%
    Mineral ExplorationNevada Bob's Franchising, Inc.
    Delaware, USA
    100%
    Dormant
  5.
    ADVANCES
RECEIVABLE  December 31,
    
    
    December 31,2017
    
    
    2016Advances receivable
    $
    175,501
    
    $
    98,352
 The balance of $175,501 pertains to advances to employees and
suppliers (December 31, 2016 - $98,352). The balances are non-interest bearing,
unsecured and due on demand.


F-20

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  6.
    RELATED PARTY
TRANSACTIONS Balances and transactions between the Company and its
subsidiaries, which are related parties of the Company, have been eliminated on
consolidation, and are not disclosed in this note. a)
    Key Management Remuneration Key management includes directors (executive and
non-executive), the Chief Executive Officer (CEO), the Chief Financial
Officer, and the senior executives reporting directly to the CEO. The
remuneration of the key management of the Company as defined above, during the
years ended December 31, 2017, December 31, 2016 and December 31, 2015 was as
follows: For the year's endedDecember 31, 2017
    
    
    December 31, 2016
    
    
    December 31, 2015Salaries
    $
    124,746
    
    $
    137,458
    
    $
    145,067Employee retention allowance
    $
    10,396
    
    $
    11,455
    
    $
    9,090Compensation
      expense-share-based payments
    $
    22,309
    
    $
    55,176
    
    $
    -$
    157,451
    
    $
    204,088
    
    $
    154,157  b)
    Other Related Party Transactions As at December 31, 2017, an amount of $4,518 was due from
Kuuhubb Inc. (formerly Delrand Resources Limited), a company with common
directors, incurred in connection with common expenses (December 31, 2016 -
$nil). As at December 31, 2017, an amount of $75,670 relating to
consulting fees and advances provided to the Company was due to Arnold Kondrat,
a director and officer of the Company (December 31, 2016 - $77,443). As at December 31, 2017, an amount of $161,635 was due to
Gentor Resources Inc. (a company with common directors) related to common
expenses (December 31, 2016 - $49,085). December 31, 2017
    
    
    December 31, 2016Due from related party
    $
    4,518
    
    $
    -Due to related parties
    $
    237,305
    
    $
    127,909
 The amounts included in due from/to related party are
unsecured, non-interest bearing and are payable on demand. Advance receivable at December 31, 2017, includes net amounts
paid to two companies controlled by an officer of the Companys Congo subsidiary
in the net amount of approximately $123,000.


F-21

---



Loncor Resources Inc.NOTES TO CONSOLIDATED FINANCIAL STATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and 2015(Expressed in
      U.S. dollars, except for per share amounts)  7.
    PROPERTY, PLANT AND EQUIPMENT The Companys property, plant and equipment are summarized as
follows: Office &
    
    
    
    
    
    Field campsFurniture &
    
    
    Communication
    
    
    Vehicles
    
    
    and
    
    
    Leasehold
    
    
    Totalfixtures
    
    
    equipment
    
    
    
    
    
    equipment
    
    
    improvements$
    
    
    $
    
    
    $
    
    
    $
    
    
    $
    
    
    $CostBalance at January 1, 2016
    
    151,786
    
    
    102,692
    
    
    11,707
    
    
    425,003
    
    
    84,906
    
    
    776,094Additions
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Disposals
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Balance at December 31,
      2016
    
    151,786
    
    
    102,692
    
    
    11,707
    
    
    425,003
    
    
    84,906
    
    
    776,094Additions
    
    -
    
    
    1,510
    
    
    -
    
    
    -
    
    
    -
    
    
    1,510Disposals
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Balance at December 31 2017
    
    151,786
    
    
    104,202
    
    
    11,707
    
    
    425,003
    
    
    84,906
    
    
    777,604Accumulated DepreciationBalance at January 1,
      2016
    
    129,249
    
    
    101,834
    
    
    11,707
    
    
    366,323
    
    
    84,906
    
    
    694,019Additions
    
    4,181
    
    
    857
    
    
    -
    
    
    41,634
    
    
    -
    
    
    46,672Disposals
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Balance at December 31, 2016
    
    133,429
    
    
    102,691
    
    
    11,707
    
    
    407,957
    
    
    84,906
    
    
    740,691Additions
    
    3,405
    
    
    189
    
    
    -
    
    
    17,046
    
    
    -
    
    
    20,640Disposals
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -
    
    
    -Balance at December 31
      2017
    
    136,834
    
    
    102,880
    
    
    11,707
    
    
    425,003
    
    
    84,906
    
    
    761,329Carrying amountsBalance at December 31, 2016
    
    18,357
    
    
    -
    
    
    -
    
    
    17,046
    
    
    -
    
    
    35,403Balance at December 31,
      2017
    
    14,952
    
    
    1,322
    
    
    -
    
    
    -
    
    
    -
    
    
    16,275 During the year ended December 31, 2017, depreciation in the
amount of $62 (year ended December 31, 2016 - $42,819) was capitalized to
exploration and evaluation assets. 8.
    EXPLORATION AND EVALUATION ASSETS  North Kivu
    
    
    Ngayu
    
    
    TotalCostBalance as at January 1, 2016
    
    9 ,946,482
    
    
    17,739,748
    
    
    27,686,230Additions
    
    8 ,933
    
    
    6 58,620
    
    
    667,553Earn-in Randgold payment
    
    -
    
    
    ( 646,014
    )
    
    ( 646,014
    )Balance as at December 31,
      2016
    $
    9,955,415
    
    $
    17,752,354
    
    $
    27,707,769Additions
    
    2 03,541
    
    
    1,236,098
    
    
    1,439,639Adjustments
    
    -
    
    
    ( 412,549
    )
    
    ( 412,549
    )Earn-in Randgold payment
    
    -
    
    
    ( 1,251,296
    )
    
    ( 1,251,296
    )Balance as at December 31,
      2017
    $
    10,158,956
    
    $
    17,324,607
    
    $
    27,483,564 There is $150,000 of intangible exploration and evaluation
expenditures as at December 31, 2017. The intangibles have not been included in
the table above. There have not been any additions or disposals of intangible
assets since January 1, 2014.


F-22

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) The Companys exploration and evaluation assets are subject to
renewal of the underlying permits and rights and other government royalties. a.
    North Kivu The North Kivu project is situated in the North Kivu Province
in eastern Congo to the northwest of Lake Edward and consists of various
exploration permits. All of these exploration permits are currently under force
majeure due to the poor security situation, affecting the Companys ability to
carry out the desired exploration activities. The duration of the event of force
majeure is added to the time limit for execution of obligations under the
permits. Exploration estimates to date have not advanced to the stage of being
able to identify the quantity of possible resources available for potential
mining. Under force majeure, the Company has no tax payment obligations and does
not lose tenure of mining titles until force majeure is lifted. b.
    Ngayu The Ngayu project consists of various exploration permits and
is found within the Tshopo Province in the northeast of the Congo, approximately
270 kilometers northeast of Kisangani. The Ngayu project covers part of the
Ngayu Archaean greenstone belt which is one of a number of greenstone belts in
the north-east Congo Archaeancraton that includes the Kilo and Moto greenstone
belts. These Archaean greenstone belts are the northwestern extensions of the
Lake Victoria greenstone belt terrain that hosts a number of world class gold
deposits including Geita and Bulyanhulu. In 2015, due to a decrease in gold prices coupled with the
reduction of the exploration budget, the Company conducted an impairment
analysis whereby the carrying value of the Ngayu exploration and evaluation
asset as at December 31, 2015 was assessed for possible impairment. The assets
recoverable amount was calculated applying a fair value of $15 per ounce of gold
in the ground, which was provided by a valuation analysis of an independent
report on similar African exploration companies, to the Ngayu projects Makapela
estimated mineral resource. Since the carrying value of the asset was determined
to be higher than its recoverable amount, an impairment loss of $2,300,000 was
recorded during the year ended December 31, 2015. As at December 31, 2016 and
2017, the Company conducted an analysis of various factors and determined that
therewas no further impairment recognized by IFRS 6, and no evidence to support
an impairment reversal. Randgold Agreement In January 2016, the Companys Congo subsidiary (Loncor
Congo) entered into an agreement with Randgold Resources (DRC) Limited
("Randgold") with respect to a portion of the Companys Ngayu project. This
agreement provides for the potential future establishment of a joint venture
special purpose company (Mining Company) between Loncor Congo and Randgold.
The Mining Company will be established only if exploration activities undertaken
by Randgold at the Ngayu project result in an approved completed pre-feasibility
study on any gold discovery meeting the investment criteria of Randgold. The
agreement does not include certain parcels of land surrounding and including the
Makapela and Yindi prospects which are retained by Loncor Congo and do not form
part of the agreement. Loncor Congo shall only be called upon to contribute to the
future costs of the Mining Company after the approval of the completed
pre-feasibility study. The parties will then (a) contribute to the funding
required pro rata to their participating interests (65% for Randgold and 35% for
Loncor Congo, less the free carried interest attributable to Congo authorities
under applicable law, determined at the time of establishment) once the Mining
Company has been established and any mining rights with respect to the area of
discovery are transferred to the Mining Company, or (b) be diluted. The
decision-making committee of the Mining Company will determine whether the
funding is contributed (for the purpose of funding the Mining Company) by way of
equity or shareholder loans. 9.
    INTANGIBLEASSETS The Companys intangible assets include licenses and rights.
Based on managements assessment, these intangible assets have been valued at $1
as their fair value is nominal.


F-23

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  10.
    SEGMENTEDREPORTING The Company has one operating segment: the acquisition,
exploration and development of precious metal projects located in the Congo. The
operations of the Company are located in two geographic locations, Canada and
the Congo. Geographic segmentation of non-current assets is as follows: December 31, 2017 Property, plant
      and
    
    
    
    
    
    Exploration andequipment
    
    
    Intangible assets
    
    
    evaluationCongo
    $
    1,174
    
    
    -
    
    $
    27,633,564Canada
    $
    15,101
    
    $
    1
    
    
    -$
    16,275
    
    $
    1
    
    $
    27,633,564 December 31, 2016 Property, plant
      and
    
    
    
    
    
    Exploration andequipment
    
    
    Intangible assets
    
    
    evaluationCongo
    $
    18,486
    
    
    -
    
    $
    27,857,769Canada
    $
    16,916
    
    $
    1
    
    
    -$
    35,403
    
    $
    1
    
    $
    27,857,769  11.
    ACCOUNTSPAYABLE The following table summarizes the Companys accounts payable: December 31, 2017
    
    
    December 31, 2016Exploration and evaluation
      expenditures
    $
    2
      27,537
    
    $
    228,839Non-exploration and evaluation expenditures
    $
    1 32,114
    
    $
    174,774Total Accounts Payable
    $
    3 59,651
    
    $
    403,613  12.
    LOAN On September 1, 2017,the Company received a loan from an arms
length party in the amount of $119,565 ($150,000 CDN) thatis unsecured
and bears interest at 8% per annum and is payable within one year. Total
interest accrued on the loan as at December 31, 2017 is $3,188. 13.
    SHARECAPITAL  a)
    AuthorizedThe authorized share capital of the Company consists of
      unlimited number of common shares and unlimited number of preference
      shares, issuable in series, with no par value. All shares issued are fully
      paid.The holders of common shares are entitled to receive
      notice of and to attend all meetings of the shareholders of the Company
      and shall have one vote for each common share held at all meetings of
      shareholders of the Company, except for meetings at which only holders of
      another specified class or series of shares are entitled to vote
      separately as a class or series. Subject to the prior rights of the
      holders of the preference shares or any other share ranking senior to the
      common shares, the holders of the common shares are entitled to (a)
      receive any dividend as and when declared by the board of directors, out
      of the assets of the Company properly applicable to payment of dividends,
      in such amount and in such form as the board of directors may from time to time
determine, and (b) receive the remaining property of the Company in the event of
any liquidation, dissolution or winding up of the Company.


F-24

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  The Company may issue preference shares at any time and
      from time to time in one or more series with designations, rights,
      privileges, restrictions and conditions fixed by the board of directors.
      The preference shares of each series are ranked on parity with the
      preference shares of every series and are entitled to priority over the
      common shares and any other shares of the Company ranking junior to the
      preference shares, with respect to priority in payment of dividends and
      the return of capital and the distribution of assets of the Company in the
      event of liquidation, dissolution or winding up of the Company.b)
    Issued share capitalIn February 2015, the Company closed a non-brokered
      private placement of 8,000,000 common shares of the Company at a price of
      Cdn$0.06 per share for proceeds to the Company of Cdn$480,000. In March
      2015, the Company closed a non- brokered private placement of 3,000,000
      common shares of the Company at a price of Cdn$0.06 per share for proceeds
      to the Company of Cdn$180,000. Arnold T. Kondrat, President, Chief
      Executive Officer and a director of the Company, purchased 3,500,000 of
      the shares issued under the February 2015 private placement and 500,000 of
      the shares under the March 2015 private placement.In February 2016, the Company closed a non-brokered
      private placement of 67,000,000 common shares of the Company at a price of
      Cdn$0.015 per share for gross proceeds of Cdn$1,005,000 (the "Offering").
      Arnold T. Kondrat, President, Chief Executive Officer and a director of
      the Company, acquired 60,000,000 of the shares issued under the Offering.
      Mr. Kondrat currently holds 74,300,818 (or 46.82%) of the outstanding
      common shares of the Company. A portion of the proceeds of the Offering
      were used to repay short term, non-interest bearing loans totalling
      Cdn$825,000 provided to the Company by Mr. Kondrat.In June 2016, the Company closed a non-brokered private
      placement of 1,750,000 units of the Company at a price of Cdn$0.12 per
      unit for gross proceeds of Cdn$210,000. Each such unit was comprised of
      one common share of the Company and one-half of one warrant of the
      Company, with each full warrant entitling the holder to purchase one
      common share of the Company at a price of Cdn$0.18 for a period of two
      years.In February 2017, the Company closed a non-brokered
      private placement of 4,000,000 units of the Company at a price of Cdn$0.12
      per unit for gross proceeds of Cdn$480,000. Each such unit was comprised
      of one common share of the Company and one-half of one warrant of the
      Company, with each full warrant entitling the holder to purchase one
      common share of the Company at a price of Cdn$0.18 for a period of two
      years. Also in February 2017, the Company closed a second non-brokered
      private placement of 1,500,000 units of the Company at a price of Cdn$0.13
      per unit for gross proceeds of Cdn$195,000. Each such unit was comprised
      of one common share of the Company and one-half of one warrant of the
      Company, with each full warrant entitling the holder to purchase one
      common share of the Company at a price of Cdn$0.18 for a period of two
      years.As of December 31, 2017, the Company had issued and
      outstanding 158,689,732 common shares (December 31, 2016  153,189,732)
      and no preference shares are issued and outstanding.c)
    Common share purchase warrantsAs at December 31, 2017, the Company had outstanding
      3,625,000 (December 31, 2016  875,000) common share purchase warrants. No
      warrants were forfeited or cancelled during the year ended December 31,
      2017 (year ended December 31, 2016  nil). The common share purchase
      warrants are classified as a liability because they are a derivative
      financial instrument due to their exercise price differing from the
      functional currency of the Company. The common share purchase warrants are
      re-valued at year and period end, with a gain or loss reported on the
      consolidated statement of comprehensive loss. During the year ended
      December 31, 2017, the Company recognized in the consolidated statement of
      comprehensive loss a gain of $314,317 (2016  loss of $6,452) representing
      the change in fair value on this derivative financial instrument. The
      following table summarizes the Companys common share purchase warrants
      outstanding as at December 31, 2017:


F-25

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  Granted
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    RemainingOpening
    
    
    during
    
    
    
    
    
    
    
    
    Closing
    
    
    Exercise
    
    
    Exerciseperiod
    
    
    
    
    
    contractuallifeDateofGrant
    
    **Balance**
    
    
    period
    
    
    Exercised
    
    
    **Expired**
    
    
    Balance
    
    
    Price
    
    
    (months)
    
    
    ExpiryDate
    
    
    (months)29/06/2016
    
    875,000
    
    
    -
    
    
    -
    
    
    -
    
    
    875,000
    
    $
    0.18
    
    
    24
    
    
    29/06/2018
    
    
    603/02/2017
    
    -
    
    
    2,000,000
    
    
    -
    
    
    -
    
    
    2,000,000
    
    $
    0.18
    
    
    24
    
    
    03/02/2019
    
    
    1328/02/2017
    
    -
    
    
    750,000
    
    
    -
    
    
    -
    
    
    750,000
    
    $
    0.18
    
    
    24
    
    
    28/02/2019
    
    
    14875,000
    
    
    2,750,000
    
    
    -
    
    
    -
    
    
    3,625,000
 The value of the warrants was
calculated using the Black-Scholes model and the assumptions at grant date and
period end date were as follows: (i)
    Risk-free interest rate: 0.48% - 1.66%, which is based on
      the Bank of Canada benchmark bonds yield 2 year rate in effect at the time
      of grant for bonds with maturity dates at the estimated term of the
      warrants(ii)
    Expected volatility: 112.46% - 179.41%, which is based on
      the Companys historical stock prices(iii)
    Expected life: 1 - 2 years(iv)
    Expected dividends: $Nil  d)
    Loss per shareLoss per share was calculated on the basis of the
      weighted average number of common shares outstanding for the year ended
      December 31, 2017 amounting to 158,074,664 (year ended December 31, 2016 
      142,123,979) common shares. The diluted weighted average number of common
      shares outstanding for the year ended December 31, 2017 amounted to
      158,074,664 (year ended December 31, 2016 - 142,123,979) common shares.
      During the year ended December 31, 2017, fully diluted earnings per share
      calculated by adding 2,400,000 (December 31, 2016  3,215,000) common
      shares related to stock options and 3,625,000 common share purchase
      warrants were the same as the basic earnings per share because they were
      anti-dilutive.  14.
    SHARE-BASEDPAYMENTS The Company has an incentive Stock Option Plan under which
non-transferable options to purchase common shares of the Company may be granted
to directors, officers, employees or consultants of the Company or any of its
subsidiaries. No amounts are paid or payable by the recipient on receipt of the
option, and the exercise of the options granted is not dependent on any
performance-based criteria. In accordance with these programs, options are
exercisable at a price not less than the last closing price of the shares at the
grant date. Under this Stock Option Plan, 25% of options granted vest on
each of the 6 month, 12 month, 18 month and 24 month anniversaries of the grant
date.


F-26

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) The following tables summarize information about stock options: For the year ended December 31, 2017: During the Period
    
    WeightedaverageExercise Price
    Opening Balance
    
    
    
    
    Closing Balance
    remaining
    Vested &
    UnvestedRange (Cdn$)
    
    Granted
    Exercised
    Forfeiture
    Expired
    
    contractual
    Exercisablelife (years)0-0.99
    2,400,000
    -
    -
    -
    -
    2,400,000
    3.19
    1,800,000
    600,0001.00 - 1.25
    815,000
    -
    -
    (25,000)
    (790,000)
    -
    0.00
    -
    -3,215,000
    -
    -
    (25,000)
    (790,000)
    2,400,000
    3.19
    1,800,000
    600,000Weighted Average Exercise Price (Cdn$)
    0.31
    -
    -
    -
    -
    0.06
    
    0.06
    0.06 For the year ended December 31, 2016: During the Period
    
    WeightedaverageExercise Price
    Opening Balance
    
    
    
    
    Closing Balance
    remaining
    Vested &
    UnvestedRange (Cdn$)
    
    Granted
    Exercised
    Forfeiture
    Expired
    
    contractual
    Exercisablelife (years)0-0.99
    -
    2,400,000
    -
    -
    -
    2,400,000
    3.13
    600,000
    1,800,0001.00 - 1.25
    815,000
    -
    -
    -
    -
    815,000
    0.24
    815,000
    -2.45 - 2.69
    580,000
    -
    -
    -
    (580,000)
    -
    0.00
    -
    -1,395,000
    2,400,000
    
    
    (580,000)
    3,215,000
    2.40
    1,415,000
    1,800,000Weighted Average Exercise Price (Cdn$)
    1.71
    0.06
    
    
    2.65
    0.31
    
    0.63
    0.06 There were no stock options granted during the year ended
December 31, 2017. The weighted average grant date fair value of stock options
as at December 31, 2017 was estimated at Cdn$0.04 per stock option (year ended
December 31, 2016  Cdn$0.11) . During the year ended December 31, 2017, the Company recognized
in the statement of comprehensive loss as an expense $22,309 (year ended
December 31, 2016  $55,176) representing the vesting of the fair value at the
date of grant of stock options previously granted to employees, directors and
officers under the Companys Stock Option Plan. 15.
    COMMITMENTS ANDCONTINGENCIES Environmental The Companys exploration and evaluation activities are subject
to laws and regulations governing the protection of the environment. These laws
and regulations are continually changing and generally becoming more
restrictive. The Company believes its activities are materially in compliance
with all applicable laws and regulations. The Company has made, and expects to
make in the future expenditures to comply with such laws and regulations. Lease Commitments The Company has in place a lease agreement for the head office
location in Toronto, Canada, (with monthly obligation of U.S. dollar equivalent
of Cdn $18,442) to August 2019.


F-27

---

LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  16.
    FINANCIAL RISK MANAGEMENT OBJECTIVES AND
      POLICIES  a)
    Fair value of financial assets and liabilitiesThe consolidated statements of financial position
      carrying amounts for cash and cash equivalents, advances receivable,
      balances due from and due to related parties, accounts payable, accrued
      liabilities and the employee retention allowance approximate fair value
      due to their short-term nature.Fair value hierarchyThe following table provides an analysis of financial
      instruments that are measured subsequent to initial recognition at fair
      value, grouped into Levels 1 to 3 based on the degree to which the fair
      value is observable:  
    Level 1 fair value measurements are those derived from
      quoted prices (unadjusted) in active markets for identical assets or
      liabilities;
    Level 2 fair value measurements are those derived from
      inputs other than quoted prices included within Level 1 that are
      observable for the asset or liability, either directly (i.e. as prices) or
      indirectly (i.e. derived from prices);
    Level 3 fair value measurements are those derived from
      valuation techniques that include inputs for the asset or liability that
      are not based on observable market data (unobservable inputs). There were no transfers between Level
1, 2 and 3 during the reporting period. Cash and cash equivalents are ranked
Level 1 as the market value is readily observable. The carrying value of cash
and cash equivalents approximates fair value, as maturities are less than three
months. The fair value of warrants (note 13c)
would be included in the hierarchy as follows: 31-Dec-17Liabilities:
    
    Level 1
    
    
    Level 2
    
    
    Level 3Canadian
      dollar common share purchase warrants
    
    -
    
    
    $67,305
    
    
    -  31-Dec-16Liabilities:
    
    Level 1
    
    
    Level 2
    
    
    Level 3Canadian
      dollar common share purchase warrants
    
    -
    
    
    $85,633
    
    
    -  b)
    Risk Management PoliciesThe Company is sensitive to changes in commodity prices
      and foreign-exchange. The Companys Board of Directors has overall
      responsibility for the establishment and oversight of the Companys risk
      management framework. Although the Company has the ability to address its
      price-related exposures through the use of options, futures and forward
      contracts, it does not generally enter into such arrangements.c)
    Foreign Currency RiskForeign currency risk is the risk that a variation in
      exchange rates between the United States dollar and Canadian dollar or
      other foreign currencies will affect the Companys operations and
      financial results. A portion of the Companys transactions are denominated
      in Canadian dollars. The Company is also exposed to the impact of currency
      fluctuations on its monetary assets and liabilities. Significant foreign
exchange gains or losses are reflected as a separate item in the consolidated
statement of comprehensive loss. The Company does not use derivative instruments
to reduce its exposure to foreign currency risk.


F-28

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LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) The following table indicates the
  impact of foreign currency exchange risk on net working capital as at December
  31, 2017. The table below also provides a sensitivity analysis of a 10 percent
  strengthening of the US dollar against the Canadian dollar which would have
  increased (decreased) the Companys net loss by the amounts shown in the table
  below. A 10 percent weakening of the US dollar against the Canadian dollar would
have had the equal but opposite effect as at December 31, 2017. December31,2017Canadian dollarCash and cash equivalents
    
    1 ,913Accounts payable and accrued liabilities
    
    ( 243,014
    )Employee retention allowance
    
    ( 261,138
    )Total foreign currency financial assets
      and liabilities
    
    ( 502,239
    )Foreign exchange rate
      at December 31, 2017
    
    0 .7971Total foreign currency financial assets
      and liabilities in US $
    
    ( 400,334
    )Impact of a 10%
      strengthening of the US $ on net loss
    
    ( 40,033
    )  d)
    Credit RiskFinancial instruments which are potentially subject to
      credit risk for the Company consist primarily of cash and cash
      equivalents, advances receivable, and due from related parties. Cash and
      cash equivalents are maintained with several financial institutions of
      reputable credit and may be redeemed upon demand. It is therefore the
      Companys opinion that such credit risk is subject to normal industry
      risks and is considered minimal. The credit risk of advances receivable
      is, in management opinion, normal given ongoing relationships with those
      debtors.The Company limits its exposure to credit risk on any
      investments by investing only in securities rated R1 (the highest rating)
      by credit rating agencies such as the DBRS (Dominion Bond Rating Service).
      Management continuously monitors the fair value of any investments to
      determine potential credit exposures. Short-term excess cash is invested
      in R1 rated investments including money market funds and other highly
      rated short-term investment instruments. Any credit risk exposure on cash
      balances is considered negligible as the Company places deposits only with
      major established banks in the countries in which it carries on
      operations.The carrying amount of financial assets represents the
      maximum credit exposure. The Companys gross credit exposure at December
      31, 2017 and December 31, 2016 was as follows:  December 31,
    
    
    December 31,2017
    
    
    2016Cash and cash equivalents
    $
    20,162
    
    $
    21,520Advances receivable
    $
    175,501
    
    $
    98,352Due from related parties
    $
    4,518
    
    $
    0$
    200,181
    
    $
    119,872  e)
    Liquidity RiskLiquidity risk is the risk that the Company will not be
      able to meet its financial obligations as they become due. The Company
      attempts to ensure that there is sufficient cash to meet its liabilities
      when they are due and manages this risk by regularly evaluating its liquid
      financial resources to fund current and long-term obligations and to meet
      its capital commitments in a cost-effective manner. Temporary surplus
      funds of the Company are invested in short-term investments. The Company
      arranges the portfolio so that securities mature approximately when funds
      are needed. The key to success in managing liquidity is the degree of
      certainty in the cash flow projections. If future cash flows are fairly
      uncertain, the liquidity risk increases. The Companys liquidity
      requirements are met through a variety of sources, including cash and cash equivalents and equity capital markets.
All financial obligations of the Company including accounts payable of $359,651,
accrued liabilities of $67,132, due to related parties of $237,305, employee
retention allowance of $208,153 and a loan of $122,753 are due within one year.


F-29

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LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts)  f)
    Mineral Property RiskThe Companys operations in the Congo are exposed to
      various levels of political risk and uncertainties, including political
      and economic instability, government regulations relating to exploration
      and mining, military repression and civil disorder, all or any of which
      may have a material adverse impact on the Companys activities or may
      result in impairment in or loss of part or all of the Company's
    assets.g)
    Capital ManagementThe Company manages its common shares, warrants and stock
      options as capital. The Companys policy is to maintain a sufficient
      capital base in order to meet its short term obligations and at the same
      time preserve investors confidence required to sustain future development
      of the business.  December 31,
    
    
    December 31,2017
    
    
    2016Share capital
    $
    77,286,874
    
    $
    77,048,991Reserves
    $
    8,219,502
    
    $
    8,197,193Deficit
    $
    (58,650,391
    )
    $
    (58,589,102
    )Common share purchase warrants
    $
    67,305
    
    $
    85,633$
    26,923,290
    
    $
    26,742,715 The Company is not subject to any
capital requirements imposed by a lending institution or regulatory body, other
than the TSX which requires adequate working capital or financial resources to
maintain operations and cover general and administrative expenses. 17.
    SUPPLEMENTAL CASH FLOW
  INFORMATION During the periods indicated the Company undertook the
following significant non-cash transactions: For the year endedNote
    
    
    December 31, 2017
    
    
    December 31, 2016
    
    
    December 31, 2015Depreciation included in
      exploration and evaluation assets
    
    8
    
    $
    62
    
    $
    4 2,819
    
    $
    8 2,272Employee retention allowance included in
      exploration and evaluation assets
    
    18
    
    $
    -
    
    $
    9 ,800
    
    $
    9 ,800Exploration and evaluation
      expenditures by Randgold
    
    
    
    $
    1,251,286
    
    $
    2 50,786
    
    $
    -  18.
    EMPLOYEE RETENTION
  ALLOWANCE The Company has an incentive employee retention plan under
which an amount equal to one month salary per year of service is accrued to each
qualified employee up to a maximum of 10 months (or 10 years of service with the
Company and/or a related company). To qualify for this retention allowance, an
employee must complete two years of service with the Company and/or a related
company. The full amount of retention allowance accumulated by a particular
employee is paid out when the employee is no longer employed with the Company,
unless other arrangements are made or unless there is a termination due to
misconduct, in which case the retention allowance is forfeited. There is
uncertainty about the timing and amount of these potential outflows. As at
December 31, 2017, the Company estimated a total provision of $208,153 (December
31, 2016 - $596,849).


F-30

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LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) The following table summarizes information about changes to the
Companys employee retention provision during the year ended December 31, 2017. $Balance at December 31, 2015
    
    570,487Additions
    
    21,255Foreign exchange gain
    
    5,107Balance at December 31, 2016
    
    596,849Additions
    
    10,396Change in estimate
    
    (412,549
    )Foreign exchange gain
    
    13,457Balance at December 31, 2017
    
    208,153  19.
    INCOME TAXES  a)
    Provision for Income TaxesMajor items causing the Companys effective tax rate to differ from the combined Canadian federal and
      provincial statutory rate of 26.5% (2012  28.25%) were as follows:  Years Ended
      December 31,2017
    
    
    2016
    
    
    2015$
    
    
    $
    
    
    $Net loss for the year
    
    (61,287
    )
    
    (497,610
    )
    
    (2,417,247
    )Combined federal and provincial income tax
      rates
    
    26.50%
    
    
    26.50%
    
    
    26.50%Income tax recovery at
      Canadian federal and provincial statutory rates
    
    (16,000
    )
    
    (131,867
    )
    
    (640,570
    )Permanent differences
    
    (77,000
    )
    
    13,679
    
    
    (49,263
    )Difference between Canadian rates and rates
      applicable to subsidiary in the Foreign Jurisdictions
    
    -
    
    
    -
    
    
    (80,501
    )Foreign exchange differences
    
    -
    
    
    (91,671
    )
    
    575,147Other
    
    2,000
    
    
    7,219
    
    
    1,887Change in unrecognized
      deferred tax asset
    
    91,000
    
    
    202,640
    
    
    193,300Income tax expense
    
    -
    
    
    -
    
    
    -  b)
    Deferred Income TaxesDeferred income taxes assets have not been recognized in respect to the following deductible temporary
      differences:  2017
    
    
    2016$
    
    
    $Non-capital losses carried
      forward
    
    15,953,000
    
    
    13,514,706Financing costs - Canada
    
    7,000
    
    
    -Fixed assets - Canada
    
    255,000
    
    
    185,547Exploration and evaluation properties - Congo
    
    31,242,000
    
    
    31,000,260Total
    
    47,457,000
    
    
    44,700,513


F-31

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LoncorResourcesInc.NOTES TOCONSOLIDATEDFINANCIALSTATEMENTSAs at December 31, 2017 and 2016 and for the years ended
      December 31, 2017, 2016 and2015(Expressed in
      U.S. dollars, except for per share amounts) Non-capital losses in Canada expire in the following years: 2026
    $
    46,0002027
    
    215,0002028
    
    772,0002029
    
    879,0002030
    
    1,982,0002031
    
    3,381,0002032
    
    2,852,0002033
    
    2,538,0002034
    
    1,135,0002035
    
    810,0002036
    
    798,0002037
    
    545,000$
    15,953,000


F-32

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