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I've received a Golden Bottle cap, never encounter this item before in any of my previous game play. I'm wondering what does this item do? I'm confused to what it is or what it can do for Ev training Pokemon. Thanks :)

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That's a pretty valuable item you've got there! According to Serebii:

This item can be exchanged with Mr. Hyper in the Hau'oli City Mall to allow for him to boost all Individual Values up to maximum.

A Pokemon's IVs can be maximised if you give the Gold Bottle Cap to Mr. Hyper!

Hope I helped. :)
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So in other words if I had a Pokemon with bad Ivs, it would automatically boost all of its Ivs to a Outstanding Potential Pokemon? Am I correct?
Yes, but consider that the pokemon must be level 100 to work