ArcWest Exploration Inc. - Management Reports 2023

ARCWEST EXPLORATION INC. Management Discussion and Analysis For the year ended December 31, 2022

This management discussion and analysis of financial position and results of operations (“MD&A”) is prepared as at April 28, 2023 and should be read in conjunction with the audited financial statements and related notes thereto of ArcWest Exploration Inc. (the “Company” or “ArcWest”) for the year ended December 31, 2022 which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board and Interpretations of the International Financial Reporting Interpretations Committee. All dollar amounts included therein and in the following MD&A are expressed in Canadian dollars except where noted.

In this discussion, unless the context requires otherwise, references to “we” or “our” are references to ArcWest Exploration Inc.

Forward Looking Statements

This Management’s Discussion and Analysis (“MD&A”) contains certain statements, other than statements of historical fact that are forward-looking statements which reflect the current view of the Company with respect to future events including corporate developments, financial performance and general economic conditions which may affect the Company. The forward-looking statements in this MD&A include, but are not limited to: the exploration status of our Oweegee Dome, Todd Creek, Oxide Peak, Eagle, Rip, Teeta Creek, NVI and Sparrowhawk properties; related commitments and timelines for development of these properties; and future funding requirements for the Company. Forward-looking statements are included, but are not limited to, those statements set out in this MD&A under Description of Business and Overall Performance, Future Plans and Outlook, Future Changes in Accounting Policies and Risks and Uncertainties.

We have based these forward-looking statements largely on our current expectations, projections and assumptions made based on our experience, perception of historical trends, the current business and financial environment. Key assumptions upon which the forward-looking statements are based include the following:

a) If required, the Company will be able to secure additional financial resources; b) Key personnel will continue their positions with the Company; c) We will be able to enter into partnerships and/or complete exploration programs on our properties.

Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Risks that could cause actual results to differ from current expectations include: our ability to source new projects and properties; our ability to attract partners to conduct advanced exploration on our property portfolio; general economic and financial market conditions; inability to raise capital; and retaining key directors and management.

Except as may be required by applicable law or stock exchange regulation, we undertake no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this document or to reflect the occurrence of unanticipated events. Accordingly, readers should not place undue reliance on forward-looking statements. If we do update one or more forward-looking statements, no inference should be drawn that additional updates will be made with respect to those or other forward-looking statements. Additional information relating to our Company is available by accessing the SEDAR website at www.sedar.com.

Description of Business

ArcWest was incorporated under the Business Corporations Act (British Columbia) on December 23, 2010, and trades on the TSX Venture Exchange under the stock symbol “AWX”.

The registered and records office of the Company is located at Suite 1700, Park Place, 666 Burrard Street, Vancouver, British Columbia, V6C 2X8. The head office of the Company is located at 1000-355 Burrard Street, Vancouver, BC V6C 2G8.

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ArcWest is engaged in mineral exploration utilizing a “prospect generator” business model initially focused on securing exploration properties of exceptional merit in the highly prospective Golden Triangle region of British Columbia and other proven mining districts throughout BC. ArcWest plans to provide geological expertise and funding to efficiently build value in these properties and use joint ventures to build resources through the more expensive drilling stages.

Activities for the year ended December 31, 2022

On April 21, 2022, the Company announced an amending agreement to the Oweegee Dome earn-in agreement, providing partner Sanatana Resources Inc. (“Sanatana”) with an extension to the Dec. 31st, 2021 deadline for an aggregate payment to ArcWest of $50,000 (of which $12,500 has been paid and a balance of $37,500 was owing) and the issuance of 300,000 common shares of Sanatana, which payments were to be made promptly after approval by the TSX Venture Exchange. On April 26, 2022, the Company announced that its partner Sanatana had completed the year one obligations by the payment of the balance of $37,500 and the issuance of the 300,000 common shares of Sanatana.
On April 22, 2022, the Company provided an update for the partner funded exploration of its wholly owned Oxide Peak copper-gold (“Cu-Au”) project, situated in British Columbia’s Toodoggone District, northern B.C. The project is being advanced by partner TDG Gold Corp. (“TDG Gold”).
On May 2, 2022, the Company announced it had entered into a Portable Assessment Credit purchase agreement (the “PAC Agreement”) with Geofine Exploration Consultants Ltd. Pursuant to the PAC Agreement, Geofine agreed to sell $2,732,415 of British Columbia Portable Assessment Credits to ArcWest in exchange for a cash payment of $37,500 and the issuance of $37,500 of common shares of ArcWest.
On May 5, 2022, the Company reported positive copper (Cu) – gold (Au) assays from the Molloy Zone as well as progress on other targets at its Oweegee Porphyry Copper-Gold (Cu-Au) Project located within British Columbia’s renowned Golden Triangle. ArcWest and partner Sanatana completed a substantial program of mapping, rock sampling, geochronology, petrography, spectrographic, induced polarization (IP) and airborne magnetic surveys at Oweegee in 2021. The discovery of intrusive hosted, porphyry Cu-Au-style veins at the Molloy Zone in 2021 was reported in ArcWest’s press release dated September 21, 2021. ArcWest partner Sanatana announced plans for a 2022 exploration at Oweegee including an initial 5,000 metre drill program, which commenced in June 2022. In order to support Sanatana’s 2022 exploration efforts on the Oweegee Dome project, well known Golden Triangle project generator Teuton Resources participated in a private placement in Sanatana.
On August 9, 2022, the Company announced that summer and fall partner-funded exploration programs are anticipated to include: An ongoing geological mapping, geochemical sampling, geophysical (induced polarization) and diamond drilling program at its Oweegee Porphyry Copper-Gold (Cu-Au) Project, operated by partner Sanatana; a diamond drilling program at its Oxide Peak project, funded by partner TDG Gold; and partner Wedgemount Resources Corp. (“Wedgemount”) is required to complete a minimum of 1,000 metres of drilling at ArcWest’s Eagle project by Dec 31, 2022.
On August 25, 2022, Sanatana announced it had completed 12 drill holes, totalling 3,679 metres at ArcWest’s 100% owned Oweegee Dome property. Assay results for the diamond drill core are pending. Field work is ongoing on the property with field crews concentrating on mapping and sampling the Skowill prospect, and an area of QSP altered intrusions east of Bear Creek, which is 1 km east of the current drilling on the Delta prospect. A geophysical crew is conducting an IP survey over the Delta prospect area and extending and infilling to the west.
On November 2, 2022, TDG Gold announced the completion of its 2022 drilling program at ArcWest’s 100% owned Oxide Peak property. Two drill holes totaling 1,021 metres of oriented HQ diamond drilling were completed. Assays results for the diamond drill core are pending.

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Activities for the subsequent year ended December 31, 2022

On March 10, 2023, the Company announced that it had entered into an earn-in agreement with FreeportMcMoRan Mineral Properties Canada Inc. (“Freeport”) to advance ArcWest’s Todd Creek copper-gold (CuAu) project located in BC’s Golden Triangle (the “Todd Creek project”). Under the terms of the earn-in agreement, Freeport has a two-stage option to earn up to an 80% ownership interest in the Todd Creek project over up to a 10-year period. To earn an initial 51% interest, Freeport is required to fund $20,000,000 of work expenditures over a 5-year period and make staged cash payments to ArcWest totaling $900,000. ArcWest will be the operator during the initial earn-in period. Upon Freeport earning such 51% interest, it can elect, at its sole discretion, to earn an additional 29% ownership interest in the Todd Creek project (for a total 80% interest) by sole funding a further $30,000,000 within the following five years and make staged cash payments to ArcWest totaling $750,000. Once Freeport has finalized its earned ownership interest at either the 51% or 80% level, each party will be responsible for funding its pro rata share of project costs on a 51:49 or 80:20 basis.
On April 26, 2023, the Company announced initial drill results from 2022 drilling on its Oweegee Dome Porphyry Copper-Gold (Cu-Au) Project located within British Columbia’s renowned Golden Triangle. Partner Sanatana Resources (TSX-V: STA) completed a large program of mapping, rock and soil geochemical sampling, spectrographic, induced polarization (IP) and diamond drilling at Oweegee in 2022, including 3679 meters of drilling in twelve drill holes. For further details on the drilling and sampling program, readers are referred to the Company’s press release entitled: “ArcWest Provides an Exploration Update for its Oweegee Dome Porphyry Copper-Gold Project in B.C.’s Golden Triangle.”

Future Plans and Outlook

ArcWest's plan is to become a pre-eminent North American project generator with an initial focus on British Columbia and its highly prospective Golden Triangle and other highly prospective porphyry copper - gold belts in BC. ArcWest believes its properties represent some of the most prospective targets available in BC and is in a position to deliver increased shareholder value by providing geological expertise and funding to advance current properties and acquire new projects.

Operations Review

ArcWest owns eight mineral exploration projects in British Columbia as follows.

Todd Creek

ArcWest’s 100% owned, 32,133-hectare Todd Creek project is located 30 km northeast of Stewart and 45 km southeast of the giant KSM-Iron Cap porphyry Cu-Au (Seabridge Gold) and Treaty Creek Au-Ag+/-Cu (Tudor) deposits in B.C.’s Golden Triangle. The project is also located 35 km southeast of Pretium Resource Inc.’s (“Pretium”) Brucejack gold-silver mine (ArcWest’s and Pretium’s claims are contiguous) and is proximal to the Brucejack mine road. On November 9, 2021, Newcrest Mining Limited (“Newcrest”) announced the acquisition of Pretium and its Brucejack mine in a transaction valued at CAD $3.5 billion. Collectively, the KSM-Iron Cap (Seabridge Gold), Treaty Creek (Tudor Gold-Teuton Resources-American Creek Resources) and Brucejack (Pretium /Newcrest) projects contain an estimated 199 million oz gold, 790 million oz silver and 51 billion lbs copper (Roulston, 2021).

The Todd Creek project hosts a 12 km N-S, variably Cu-Au mineralized gossan on the west side of Todd Creek valley that is prospective for KSM-Iron Cap-like porphyry Cu-Au systems. Multiple underexplored VMS occurrences on the east side of Todd Creek valley are prospective for Eskay Creek-like precious and base metal enriched VMS systems. An epithermal Au-Ag-Cu system, the South Zone, is present at low elevations on the west side of the Todd Creek valley. South Zone is host to a non-43-101 compliant historic resource calculated by Noranda Inc. (“Noranda”) totaling 207,000 tonnes grading 5.48 g/t Au (Hemlo Gold Mines, 1988 Annual Report). The South Zone is open in multiple directions. It should be noted that the historical estimates by Noranda were made by a source believed to be reliable. However, the estimates have not yet been independently verified according to The Canadian Institute of Mining, Metallurgy and Petroleum standards. The resource estimate is presented for historical purposes only. Therefore, the Company is not treating the estimate as a National Instrument 43-101 defined resource, and the historical estimate should not be relied upon.

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P2 Gold Inc. (“P2 Gold”) and ArcWest announced an earn-in and joint venture agreement for ArcWest’s Todd Creek project on July 9, 2020. P2 Gold completed in 2020 a first phase drill program at Yellow Bowl zone (two drill holes totaling 802 metres) and the VMS zone (one drill hole totaling 225 metres). An airborne magnetic-radiometric survey was also completed on the northwest portion of the project in addition to a satellite hyperspectral survey. In 2021, P2 Gold completed a 21 line km geophysical survey (magnetotellurics) and a phase one geological mapping and sampling program. In a December 24, 2021 press release, P2 Gold announced the relinquishment of its option to earn an interest in the project.

On March 10, 2023, the Company announced that it had entered into an earn-in agreement with Freeport-McMoRan Mineral Properties Canada Inc. (“Freeport”) to advance ArcWest’s Todd Creek copper-gold (Cu-Au) project located in BC’s Golden Triangle (the “Todd Creek project”). Under the terms of the earn-in agreement, Freeport has a twostage option to earn up to an 80% ownership interest in the Todd Creek project over up to a 10-year period.

Oweegee Dome

ArcWest’s 100% owned, 31,077-hectare Oweegee Dome porphyry Cu-Mo-Au project is located 45 km east of Seabridge Gold’s supergiant KSM-Iron Cap porphyry Cu-Au project and 40 km east of Tudor Gold’s Treaty Creek Au-Ag-Cu project. Oweegee Dome is also situated 34 km northeast of Newcrest’s high grade Brucejack gold-silver mine. The Oweegee Dome project hosts multiple underexplored porphyry Cu-Au systems of significant size, including the large Delta and Skowill East gossans.

On July 21, 2021, the Company announced that Sanatana signed an earn-in agreement for the Oweegee Dome porphyry copper-gold project. In August 2021, geological mapping and sampling and an induced polarization geophysical survey was carried out on the property.

On September 21, 2021, the Company announced the discovery of a new copper-bearing zone (Tarn zone) at the northern portion of Oweegee Dome. A helicopter-borne magnetic and radiometric survey was subsequently completed over the Tarn zone and the surrounding Skowill East area. The 2021 geological and geophysical work programs were focused on the southern portion of Oweegee Dome at the Delta target area which includes at least three known porphyry Cu-Au occurrences at Delta Ridge, Molloy, and Snowpatch Creek. Geological mapping confirmed the presence of porphyry-style quartz stockwork veins hosted within microdiorite at the Molloy showing, while copper bearing potassic altered diorite dykes were observed at Snowpatch Creek. Over 200 rock samples were submitted for multi-element analysis. The ground geophysical program consisted of a 3D IP survey across the three showings within the Delta target area and comprised 9.7 line km over 6 roughly north-south lines.

On April 21, 2022, the Company announced an amending agreement to the Oweegee Dome earn-in agreement, providing Sanatana with an extension to the December 31, 2021 deadline for an aggregate payment to ArcWest of $50,000 (paid) and 300,000 Sanatana common shares (received).

On May 5, 2022, the Company announced positive copper (Cu) – gold (Au) assays from the Molloy Zone as well as progress on other targets at its Oweegee Porphyry Copper-Gold (Cu-Au) Project located within British Columbia’s renowned Golden Triangle. ArcWest and partner Sanatana completed a substantial program of mapping, rock sampling, geochronology, petrography, spectrographic, induced polarization (IP) and airborne magnetic surveys at Oweegee in 2021. The discovery of intrusive hosted, porphyry Cu-Au-style veins at the Molloy Zone in 2021 was reported in ArcWest’s press release dated September 21, 2021.

On August 9, 2022, the Company announced that a geological mapping, geochemical sampling, geophysical (induced polarization) and drilling program at Oweegee Dome, funded by partner Sanatana was ongoing.

On August 25, 2022, Sanatana announced it had completed 12 drill holes, totalling 3,679 metres at ArcWest’s 100% owned Oweegee Dome property. Assay results for the diamond drill core are pending. Field work is ongoing on the property with field crews concentrating on mapping and sampling the Skowill prospect, and an area of QSP altered intrusions east of Bear Creek, which is 1 km east of the current drilling on the Delta prospect. A geophysical crew is conducting an IP survey over the Delta prospect area and extending and infilling to the west.

During the year ended December 31, 2022 Sanatana fulfilled the first anniversary exploration expenditures and issued 400,000 common shares to ArcWest to keep the First Option in good standing.

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Willoughby

The Willoughby project was sold to Strikepoint Gold Inc. (“Strikepoint”) in a property purchase agreement announced April 17, 2019. ArcWest received $85,000 and 3,000,000 common shares of Strikepoint. ArcWest retains a 1.5% NSR on the project, which can be reduced to 1% for an additional cash payment of $1,000,000.

Oxide Peak

ArcWest’s 100% owned Oxide Peak project is situated in the northern part of the Toodoggone Au-Cu district. The region hosts extensive Early Jurassic porphyry Cu-Au and epithermal Au-silver (Au-Ag) mineralization including several past producing Au-Ag mines (Baker, Lawyers, Shasta) and the large Kemess South Au-Cu porphyry deposit. The southern half of the project is located 10 km east of Benchmark Metal’s Lawyer’s project. Historical production in the district exceeds 3.2 million ounces of Au and 360,000 tonnes of Cu.

ArcWest announced an earn-in and joint venture agreement with TDG Gold (formerly Locrian Resources Inc.) for Oxide Peak on December 23, 2019. In 2020, TDG Gold completed a geological mapping/sampling and geophysical (induced polarization) program focused on the Oxide Peak porphyry copper-gold target at the north end of the property. The program was successful in delineating a porphyry Cu-Au target of significant size situated on the east flank of Oxide Peak. Results of the 2020 exploration program are discussed in ArcWest press release dated January 27, 2021.

On April 22, 2022, the Company announced results of TDG Gold’s 2020 and 2021 exploration programs at Oxide Peak, including the results of the December 2021 1,000 metre drill program at the Drybrough target. Mapping, sampling (rock and soil) and geophysical surveys (magnetics and induced polarization) have delineated targets for porphyry Cu-Au mineralization at the undrilled Oxide Peak zone. TDG Gold plans to conduct a first phase drill test of porphyry Cu-Au targets at Oxide Peak in late August 2022.

On November 2, 2022 TDG Gold announced the completion of its 2022 drilling program at ArcWest’s 100% owned Oxide Peak property. Two drill holes totaling 1,021 metres of oriented HQ diamond drilling were completed. Assays results for the diamond drill core are pending.

By letter dated December 8, 2022, TDG alleged that it exceeded the minimum expenditures and is therefore taking steps to exercise the First Option. The Company is of the position that TDG Gold’s expenditures do not meet the requirements of the Oxide Pak Agreement and therefore the minimum expenditure threshold has not been met. TDG Gold and the Company are currently in negotiations to resolve the dispute.

Rip

The Rip Property is a copper molybdenum porphyry (“Cu-Mo-Au”) prospect located in the Skeena Arch approximately 60 km south of Houston, BC. The property is in a prospective part of the Skeena Arch, which includes the past producing Huckleberry, Silver Queen and Equity mines as well as projects with significant known mineral resources including Berg, Poplar and Seel/Ox.

Fieldwork at Rip was completed in September 2021 and included validation sampling of the Rox showing and historical trenches at the Tets showing. After reviewing results from sampling and mapping at the Rox and Tets showings, claims over the showings were allowed to lapse and the main Rip showing was kept in good standing. Discussions with multiple potential partners for the project are ongoing.

Huckleberry

In January 2019, ArcWest staked 2,525 hectares on the northern boundary of Imperial Metals Corporation’s (“Imperial Metals”) past producing Huckleberry Cu-Au-Mo mine located 85 km southwest of Houston BC. The staked mineral claim boundary is approximately 1.5 km from the Huckleberry East Zone open pit and contains two known porphyrystyle Cu-Mo-Au showings.

On July 29, 2021, the Company completed the sale of its Huckleberry property to Imperial Metals Corporation (“Imperial Metals”). Under the terms of transaction set out in the agreement, Imperial Metal’s wholly-owned subsidiary, Huckleberry Mines Ltd., acquired 100% of the Huckleberry property, and made a cash payment to ArcWest of $50,000. ArcWest will retain a 1.0% net smelter return royalty (“NSR”) on the property with no buydown provisions.

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Eagle

ArcWest’s road accessible Eagle porphyry Cu-Au project is located approximately 90 kilometres northwest of Fort St. James. The project is situated midway between several significant Cu-Au deposits. Centerra Gold’s Mt. Milligan mine is located approximately 50 kilometres to the east. The advanced stage Kwanika porphyry Cu-Au deposit and the neighbouring Stardust carbonate replacement Cu-Au deposit (NorthWest Copper Corp.) are located approximately 50 km to the northwest.

ArcWest announced an earn-in and joint venture agreement for Eagle with Wedgemount on October 5th, 2020. Wedgemount conducted a VTEM survey on the property in November 2020. The survey demonstrated that Cu-Au mineralized breccias on the property form readily identifiable geophysical anomalies. The survey identified similar geophysical anomalies throughout the property that might represent additional, previously unrecognized porphyry CuAu centres. The results of this exploration program are discussed in an ArcWest press release dated January 27th, 2021.

On August 5, 2021, the Company announced initial assay results from Wedgemount’s 2021 exploration program at the Eagle copper-gold project. Sampling was focussed at the three main zones (Nighthawk, Vector and Mid) to verify mineralization style and grade and to expand known mineralization footprints as well as other high priority targets that display coincident soil geochemical and ground and/or airborne geophysical anomalism. Of 51 rock samples collected, a total of 43 returned copper concentrations in excess of 1,000 ppm (0.1% copper) and 12 samples returned results ranging from 1.26% copper to the highest at 9.86% copper.

Anomalous copper grades are complimented with anomalous gold and silver values which averaged 0.292 g/t gold and 8.23 g/t silver for copper results in excess of 1,000 ppm and 0.725 g/t gold and 20.0 g/t silver for copper concentrations above 1%. The best copper-gold-silver result was sample D702202, which returned 9.86% copper, 2.5 g/t gold and 77.7 g/t silver. This sample was collected from a 20 by 20 metre gossanous outcrop at the Nighthawk showing. Multiple samples collected over an 800 m[2] area in the vicinity of the Nighthawk showing returned strong copper-gold values; these include sample D702202 (9.86% copper, 2.5 g/t gold and 77.7 g/t silver), sample D702210 (7.95 % copper and 1.59 g/t gold) and D702206 (4.42 % copper and 1.30 g/t gold).

On December 15, 2021, the Company announced that partner Wedgemount reported results from its 2021 induced polarization (“IP”) geophysical survey at Eagle. The IP survey included 20.5 line kilometres covering an area of approximately 8.75 km²; focused on the 3.5 kilometre long Nighthawk-Mid-Vector copper-gold mineralized trend. A new coincident high-chargeability and high-resistivity anomaly was discovered east of the historic Vector Zone, which is coincident with anomalous copper in soils (up to 3100 ppm copper from historical surveys) – this area represents a new exploration target located nearly 500 metres east of historical drilling. A second zone of high-chargeability was identified between the Mid and Nighthawk zones with a coincident magnetic low, and could represent an untested porphyry target. A southeastern IP line, which tested the core of the Nighthawk Zone, defined an intense chargeability anomaly that increases in size with depth. From the IP survey it’s now apparent that historic drilling at Nighthawk (DDH EA-91-06 which returned up to 27.3 metres of 0.87 % copper and 0.32 grams per tonne gold) tested only a narrow near-surface chargeability anomaly.

A mandatory minimum exploration expenditure of $250,000 was required at Eagle before December 31st, 2021, including a minimum 1,000 m of drilling. Wedgemount and ArcWest agreed to extend this deadline to December 31, 2022. In return, Wedgemount issued 400,000 common shares and paid $25,000 in cash; which payments will be credited towards future payments due to ArcWest as per the Eagle earn-in and joint venture agreement.

On August 12, 2022, Wedgemount relinquished their option to earn an interest in the Eagle project. ArcWest is currently seeking a new partner for the project. Discussions with multiple potential partners for the project are ongoing.

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Sparrowhawk

ArcWest’s road accessible, 9,913 hectare Sparrowhawk project surrounds Glencore Canada's past producing Bell and Granisle open pit mines and extends to the north where it is contiguous with Pacific Booker’s advanced stage Morrison project. Significant Cu-Au resources remain at Bell and Granisle open pits. At Bell alone, measured plus indicated resources total 257 million tonnes of 0.4% Cu and 0.2 g/t Au (Glencore Resources & Reserves as at December 31, 2021). The Sparrowhawk project is 11 kilometres southeast of the Morrison Cu deposit, which has a proven plus probable reserve of 224.25 Mt with an average grade of 0.33% Cu, 0.163 g/t Au and 0.004% Mo. In addition to containing multiple exploration targets for Bell-like porphyry Cu-Mo-Au systems, the Sparrowhawk property also underlies proposed sites for tailings and waste management facilities in the event of a Bell-Granisle restart. Source: Glencore Resources and Reserves, as at 31 December, 2021, pg 21.

- https://www.glencore.com/.rest/api/v1/documents/fb0cafaa3ec10b90571130be41ba4270/2021 GLEN_Resources and-Reserves-report.pdf

Fieldwork at Sparrowhawk was completed in September 2021 and included follow-up prospecting and the relogging, re-boxing and select re-sampling of historical core. Discussions with multiple potential partners for the project are ongoing.

Fieldwork completed at Sparrowhawk in October 2022 included geological mapping, geochemical sampling and a drone magnetometer survey. Results for the October 2022 program are pending.

Teeta Creek

ArcWest’s 100% owned Teeta Creek porphyry Cu-Au-Mo project on Vancouver Island, is located 23 kilometres south of BHP-Billiton’s past producing Island Copper porphyry Cu-Mo-Au mine, and approximately 40 km south of NorthIsle Copper and Gold Inc.’s advanced stage Hushamu porphyry Cu-Au project. Historical drilling on the project intersected significant Cu mineralization in multiple holes.

ArcWest announced an earn-in and joint venture agreement with Teck Resources for Teeta Creek on October 15, 2019. Teck completed a 1,116 m drill program at Teeta Creek in February 2021, the results of which were press released on September 20, 2021. Following the release of final reports on the program, Teck relinquished its options to earn an interest in the Teeta Creek project. ArcWest is now considering new funding partners in order to advance the projects. ArcWest’s recommended targets for porphyry Cu-Mo-Au and epithermal Au-Ag on the Teeta Creek project remain to be drill tested. Discussions with multiple potential partners for the project are ongoing.

North Vancouver Island (“NVI”)

ArcWest’s 100% owned, road accessible NVI porphyry Cu-Mo-Au project is located approximately 16 km southwest of BHP-Billiton’s past producing Island Copper porphyry Cu-Mo-Au mine, and approximately 40 km south of NorthIsle Copper and Gold Inc.’s advanced stage Hushamu porphyry Cu-Au. The 6,884-hectare NVI property was staked to cover a zone of porphyry Cu style veining discovered by ArcWest geologists on its west side (NVI showing; see ArcWest August 23 press release), multiple historic Cu occurrences on its east side, and a large belt of Miocene volcanic-intrusive centres that have recently been recognized as prospective for porphyry Cu-Au mineralization. Similarly aged centres in northern Vancouver Island are host to significant porphyry Cu-Mo-Au mineralization, including ArcWest’s nearby Teeta Creek project, which was optioned to Teck in an earn-in agreement announced on October 15, 2019.

ArcWest announced an earn-in and joint venture agreement with Teck Resources for NVI on December 20, 2019. Teck completed desktop studies, geological mapping and geochemical sampling in 2020. Following the release of final reports on the program, Teck has relinquished its options to earn an interest in the Teeta Creek and NVI projects. Discussions with multiple potential partners for the project are ongoing.

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References:

- Roulston, L. (2021): Golden Triangle Update; Resource World, URL https://resourceworld.com/golden triangle update/ (September 2021)

Investors are cautioned that ArcWest has not verified the historic data from the any of the Todd Creek, Willoughby, Oweegee Dome, Oxide Peak, Eagle, Huckleberry, NVI, Rip, Sparrowhawk or Teeta Creek properties. The true widths of any of the properties’ drill intersections are unknown at this time. Investors are cautioned that ArcWest has not verified the data from the Brucejack, KSM-Iron Cap, Treaty Creek, Mt. Milligan, Kwanika, Stardust, Baker, Shasta, Kemess, Bell, Granisle, Morrison, Island Copper and Hushamu deposits. Further, the presence and style of mineralization on these properties is not necessarily indicative of similar mineralization on the ArcWest property.

Historical assays have not been verified by ArcWest but have been cited from sources believed to be reliable. ArcWest's disclosure of a technical or scientific nature has been reviewed and approved by Nigel Luckman, PGeo, who serves as a Qualified Person under the definition of National Instrument 43-101.

Results of Operations

Selected Annual Financial Information

The following table represents selected financial information for the Company’s years ended December 31, 2022, 2021 and 2020:

Selected Statement of Operations Data

	2022	2021	2020
Comprehensive Loss for the Year	$797,530	$355,947	$245,756
Weighted average number of shares outstanding	82,815,802	82,526,150	69,408,533
Loss per share, basic and diluted	$(0.01)	$(0.00)	$(0.00)

The Company incurred a comprehensive loss of $797,530 ($0.01 per share) for the year ended December 31, 2022 compared to a comprehensive loss of $355,947 ($0.00 per share) for the year ended December 31, 2021. The expenses with the greatest variances were as follows:

Consulting fees - $43,250 (2021 - $2,640) - The increase in consulting fees was due to corporate secretarial services rendered during the period.

Director fees - $30,000 (2021 - $nil) - The increase in director fees was due to Board members receiving meeting and committee fees.

Wages & Administrative - $309,296 (2021 - $231,289) – The wages & administrative costs have increased due to a one time settlement payment of $41,666 as well as a lower allocation of employee’s time being capitalized to exploration and evaluation assets.

Professional fees –$107,281 (2021 - $69,722) – The increase in professional fees relates to increased legal costs for general business matters.

Share-based payments –$12,595 (2021 - $169,067) – The decrease in share-based payments is the result of less stock options vesting over the period, no new options granted in the period, and an employee resignation that resulted in forfeiture of 225,000 non-vested options.

(Loss) gain on marketable securities – loss of $248,997 (2021 - gain of $83,462) – The increase in unrealized losses on marketable securities was the result of weaker stock prices in equity markets.

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Selected Statement of Financial Position Data

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December 31, 2022 December 31, 2021
Cash and cash equivalents $1,777,274 $2,361,157
Net working capital $2,143,373 $2,819,568
Total assets $5,782,091 $6,547,250
Long term liabilities $nil $nil
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Quarterly Information

The following table presents the Company’s quarterly results for the periods ending March 31, 2021 to December 31, 2022 inclusive:

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(unaudited) 2022 Q4 2022 Q3 2022 Q2 2022 Q1
Total assets $5,782,091 $5,757,082 $5,954,886 $6,373,372
Working capital $2,143,373 $2,060,427 $2,273,992 $2,589,093
Comprehensive income
(loss) for the period $46,266 ($179,071) ($445,699) ($219,026)
Loss per share 0.00 ($0.00) ($0.01) ($0.00)
(unaudited) 2021 Q4 2021 Q3 2021 Q2 2021 Q1
Total assets $6,547,250 $6,649,082 $6,675,406 $6,638,741
Working capital $2,819,568 $2,981,113 $2,981,075 $2,938,112
Comprehensive income
(loss) for the period ($117,659) ($81,176) $15,971 ($173,083)
Earnings (loss) per share ($0.00) ($0.00) $0.00 ($0.00)
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Liquidity and Capital Resources

As at December 31, 2022, the Company had a cash and cash equivalents balance of $1,777,274 and a working capital position of $2,143,373 as compared to a cash balance of $2,361,157 and a working capital position of $2,819,568 as at December 31, 2021. The decrease in cash and cash equivalents at December 31, 2022 was primarily due to the following:

Operating activities – Cash used in operating activities for the year ended December 31, 2022 was $445,782 (2021 - $360,248). The cash used in operating activities was the result of operating costs less non cash items such as depreciation, share-based payments and unrealized loss on marketable securities.

– Investing activities Cash used in investing activities for the year ended December 31, 2022, was $138,101 (2021 – cash increase of $203,258). For the current year ended December 31, 2022, this is comprised of $68,681 in exploration and evaluation expenditures, $86,500 spent on a new reclamation deposit for the Rip and Eagle property, proceeds of $20,745 from the sale of marketable securities, and $3,665 for the purchase of equipment. For the prior year ended December 31, 2021, this was comprised of proceeds of $362,806 from the sale of marketable securities offset with $67,113 in exploration and evaluation expenditures, $36,800 in reclamation bonds, and $55,635 for the purchase of equipment.

Related Party Transactions

Key management includes directors and executive officers of the Company. Other than the amounts disclosed above, there was no other compensation paid or payable to key management for employee services for the reported periods. During the years ended December 31, 2022 and 2021, the Company entered into the following transactions with related parties:

For accounting purposes, executive compensation is allocated between exploration properties (which is capitalized to exploration and evaluation assets) and administrative activities which is recorded as wages and administrative expense. During the year ended December 31, 2022 the Company paid executive compensation of $389,420 (2021 - $445,000) to the Chief Financial Officer, Chief Executive Officer, the Chief Operating Officer and the Vice President of Exploration. During the year ended, a total of $153,810

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(2021 - $241,312) was capitalized to the mineral properties, $23,850 (2021 - $54,906) was charged to Sanatana and $211,760 (2021 - $148,782) was included in wages and administrative expenses.

Director fees of $30,000 (2021 - $nil) were charged by the directors of the Company.
Included in share-based payments is $9,643 (2021 - $105,651) relating to directors and officers of the Company.

As at December 31, 2022, $5,314 (December 31, 2021 - $14,046) was owed to related parties and included in accounts payable.

Financial Instruments and Capital Risk Management

Financial Instruments

As at December 31, 2022, the Company’s financial instruments are comprised of cash and cash equivalents, marketable securities, receivables, accounts payable, and loan payable. The fair value of these financial instruments approximates their carrying value, unless otherwise noted.

The Company’s risk exposures and the impact on the Company’s financial instruments are summarized below:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s credit risk is primarily attributable to its cash and cash equivalents and receivables. The Company limits exposure to credit risk by maintaining its cash and cash equivalents with large financial institutions. The Company’s receivables primarily consist of goods and services tax receivable due from the Government of Canada which are all current. Credit risk is assessed as low.

Liquidity risk

The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2022, the Company had a cash and cash equivalents balance of $1,777,274 to settle current liabilities of $82,155. All of the Company’s current financial liabilities have contractual maturities of 30 days or due on demand and are subject to normal trade terms. Liquidity risk is assessed as low.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices.

(a) Interest rate risk

The Company has cash balances and no interest-bearing debt. As of December 31, 2022, the Company has an interest-bearing financial asset in the form of a GIC with a principal amount of $996,240 for a term of one year which bears interest at an average rate of 2.71% per annum. The GIC funds can be liquidated without an early redemption penalty. Interest rate risk is assessed as low.

(b) Foreign currency risk

The Company does not have assets or liabilities in a foreign currency and is not exposed to foreign currency risk.

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

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Capital management

Capital is comprised of the Company’s shareholders’ equity and any debt that it may issue. As at December 31, 2022, the Company’s shareholders’ equity was $5,699,936 and it had $82,155 in current liabilities. The Company’s objectives when managing capital are to maintain financial strength and to protect its ability to meet its on-going liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. Protecting the ability to pay current and future liabilities includes maintaining capital above minimum regulatory levels, current financial strength rating requirements and internally determined capital guidelines and calculated risk management levels. The Company is not subject to any externally imposed capital requirements.

Off Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Investor Relations

The Company has no investor relations agreements.

Outstanding Share Data

As of the date of this MD&A the Company had the following outstanding:

Shares Outstanding:

- Class Common Shares - Authorized Unlimited, without par value - Issued and outstanding: 82,977,957 ants Outstanding:	- Class Common Shares - Authorized Unlimited, without par value - Issued and outstanding: 82,977,957 ants Outstanding:	- Class Common Shares - Authorized Unlimited, without par value - Issued and outstanding: 82,977,957 ants Outstanding:
Number of Warrants	Exercise Price	Expiry Date
9,675,000	$0.15	August 28, 2023

Warrants Outstanding:

Options Outstanding:

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Number Exercise
of Options Price Expiry Date
4,400,000 $0.15 October 22, 2023
480,000 $0.10 April 2, 2024
1,640,000 $0.105 January 13, 2026
225,000 $0.105 October 13, 2026
750,000 $0.15 October 13, 2026
7,495,000
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Risks and Uncertainties

Exploration and Development Risk

The Company’s properties are in early exploration stages and are without a known body of commercial ore. Exploration for mineral resources involves a high degree of risk and few properties that are explored are ultimately developed into producing mines. Discovery of mineral deposits is dependent upon a number of factors, not the least of which are the technical skills of the exploration personnel involved and the capital required for the programs. The cost of conducting mineral exploration programs may be substantial and the likelihood of success is difficult to assess. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of new bodies of commercial ore. There is also no assurance that even if commercial quantities of ore are discovered that an ore body would be developed and brought into commercial production. The commercial viability of a mineral deposit once discovered is also dependent upon a number of factors, some of which are the particular attributes of the deposit such as size, grade and proximity to infrastructure, commodity prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. Most

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of the above factors cannot be predicted and are beyond the control of the Company. The Company attempts to mitigate its exploration risk by maintaining a diversified portfolio of projects that includes exposure to a variety of gold and copper targets in a number of geologic environments. Management also balances exploration risks through earn-in option agreements with other companies.

Financial Markets

Presently, the Company strives to obtain the majority of its working capital from other companies that are funding exploration on ArcWest projects in order to earn an interest in the mineral rights. However, the Company will also be dependent on the equity markets as a source of operating working capital and funding for any advanced exploration and development activities that may be needed on its projects. The Company’s capital resources are largely determined by the strength of the resource markets and by the status of the Company’s projects in relation to these markets, and its ability to compete for investor support of its projects. Consequently, there can be no assurance that equity financing will be available to the Company in the amount required at any time or for any period or if available, that it can be obtained on terms satisfactory to the Company.

Metal Prices

The prices of gold and copper are affected by numerous factors including central bank sales, producer hedging activities, the relative exchange rate of the U.S. dollar with other major currencies, supply and demand, political, economic conditions and production levels. In addition, the prices of gold and copper have been volatile over short periods of time due to speculative activities. The price of other metals and mineral products that the Company may be exploring for, all have the same or similar price risk factors. The prevailing price of metals and speculation on future price of metals by the investing public can have strong impacts on the share prices of exploration companies such as ArcWest.

Cash Flows

The Company currently has no revenue from its exploration operations. However, it does generate revenues from time to time on management fees charged to third parties where the Company is retained for project exploration or development work. Additionally, sources of capital currently available to the Company are the sale of its marketable securities, equity capital or the offering of an interest in its projects to another party.

Market Volatility for Marketable Securities

The Company’s marketable securities consist of shares of exploration companies that are historically very volatile. There is no assurance that the Company will be able to recover the current fair market value of those shares. The Company also may not be able to sell the shares it holds in other companies in an illiquid market.

Possible Dilution to Present and Prospective Shareholders

The Company’s plan of operation, in part, contemplates the financing of its business by the issuance of securities and possibly incurring debt. Any transaction involving the issuance of previously authorized but unissued shares of common stock, or securities convertible into common stock, would result in dilution, possibly substantial, to present and prospective holders of common stock. The Company usually seeks earn-in option agreement partners to fund in whole or in part exploration projects. This dilutes the Company’s interest in properties. This dilution is undertaken to spread or minimize the risk and to expose the Company to more exploration opportunities. However, it means that any increased market capitalization or profit that might result from a possible discovery would be shared with the option agreement partner. There is no guarantee that the Company can find a third party to enter an earn-in agreement for any property.

Share Trading Volume

The relatively low trading volume of the Company’s shares reduces the liquidity of an investment in its shares. Trading volumes fluctuate with market conditions and seasons. The Company attempts to reduce this risk by having multiple projects that are continually generating news and therefore investor interest and trading volume.

Volatility of Share Price

Market prices for shares of early stage companies are often volatile. Factors such as announcements of mineral discoveries or discouraging exploration results, changes in financial results, and other factors could have a significant effect on share price.

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Competition

There is aggressive competition within the mining industry for the discovery and acquisition of properties considered to have commercial potential. The Company competes with other exploration and mining companies, many of which have greater financial resources than the Company, for the acquisition of mineral claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees and other personnel.

Dependence on Management

The Company depends heavily on the business expertise of its management. There is risk to the Company’s ability to execute its business plans if some or all of the current management team were to suddenly leave the Company or become incapable of performing their individual and collective responsibilities. The Company has mitigated the risk of its managers leaving for other companies through competitive compensation, cash bonuses and by providing options to purchase ArcWest stock. Some of the senior managers hold substantial share positions in ArcWest and are motivated to remain with the Company. Despite the mitigation measures, the Company still depends heavily on its current management.

Title Risk

Although the Company has taken steps to verify title to mineral properties in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee a clear title. Property title may be subject to unregistered prior agreements and regulatory requirements. The Company is not aware of any disputed claims of title.

Environmental

The Company’s exploration and development activities are subject to extensive laws and regulations governing environment protection. The Company is also subject to various reclamation related conditions. Although the Company closely follows and believes it is operating in compliance with all applicable environmental regulations, there can be no assurance that all future requirements will be obtainable on reasonable terms. Failure to comply may result in enforcement actions causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures. Intense lobbying over environmental concerns by non-governmental organizations has caused some governments to cancel or restrict development of mining projects. Current publicized concern over climate change may lead to carbon taxes, requirements for carbon offset purchases or new regulation. The costs or likelihood of such potential issues to the Company cannot be estimated at this time.

Laws and Regulations

The Company’s exploration activities are subject to extensive federal, provincial and local laws and regulations governing prospecting, development, production, exports, taxes, labour standards, occupational health and safety, Covid-19 regulations and practices, mine safety and other matters in all the jurisdictions in which it operates. These laws and regulations are subject to change, can become more stringent and compliance can therefore become more costly. The Company applies the expertise of its management, advisors, employees and contractors to ensure compliance with current laws.

Local Resident & First Nations Concerns

The exploration, development and mining of the Company’s projects could be subject to claims and/or involvement from local residents and First Nations that could either prevent or delay exploration and development of the Property.

Litigation

In the course of conducting its business and operations, the Company or its directors may be subject to a variety of civil or other legal proceedings, with or without merit.

Management’s Responsibility for Financial Statements

The Company’s management is responsible for presentation and preparation of the financial statements and the MD&A. The MD&A have been prepared in accordance with the requirements of securities regulators, including National Instrument 51-102 of the Canadian Securities Administrators.

The financial statements and information in the MD&A necessarily include amounts based on informed judgments and estimates of the expected effects of current events and transactions with appropriate consideration to materiality. In addition, in preparing the financial information, we must interpret the requirements described above, make determinations as to the relevancy of information included, and make estimates and assumptions that affect reported information.

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The MD&A also includes information regarding the impact of current transactions and events, sources of liquidity and capital resources, operating trends, risks and uncertainties. Actual results in the future may differ materially from our present assessment of this information because future events and circumstances may not occur as anticipated.

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Additional Disclosure for Venture Issuers Without Significant Revenue – Exploration and Evaluation Asset Expenditures

As at December 31, 2022 and December 31, 2021, the Company has capitalized the following exploration and evaluation costs:

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Northern
Vancouver
Oweegee Todd Creek Oxide Peak Eagle Rip Teeta Creek Sparrowhawk Island Huckleberry Total
$ $ $ $ $ $ $ $ $
Balance, December 31, 2020 1,200,096 1,262,096 81,578 334,304 323,693 128,431 143,095 8,658 20,922 3,502,873
Field support - 158 - - 18 - 5,978 - - 6,154
Geochemistry and geology 20,801 10,195 6,220 7,048 5,355 3,010 27,758 - 1,190 81,577
Travel and accommodation fees 8,232 3,625 - 1,071 6,945 - 8,290 - - 28,163
Wages and salaries 67,280 26,532 25,968 25,718 41,095 16,938 26,313 4,781 6,687 241,312
1,296,409 1,302,606 113,766 368,141 377,106 148,379 211,434 13,439 28,799 3,860,079
- - -
Option payments received (11,500) (150,000) (109,980) (11,471) (28,736) (311,687)
BC Mining Exploration Tax Credit refund (22,134) (26,166) (5,443) (7,153) (2,899) (9,935) (15,145) (1,968) (63) (90,906)
Balance, December 31, 2021 1,262,775 1,126,440 108,323 251,008 374,207 138,444 196,289 - - 3,457,486
Field support 28,303 24,450 2,455 5,005 7,664 4,922 6,270 932 - 80,001
Geochemistry and geology 9,337 10,535 560 3,260 - 23,216 23,117 350 - 70,375
Travel and accommodation fees - - - 284 - 10,227 7,120 - - 17,631
Wages and salaries 19,092 43,500 7,812 9,657 7,937 33,282 27,436 5,094 - 153,810
1,319,507 1,204,925 119,150 269,214 389,808 210,091 260,232 6,376 - 3,779,303
- - - - - -
Option payments received (158,540) (25,000) (121,360) (304,900)
-
BC Mining Exploration Tax Credit refund (34,433) (25,407) (10,964) (13,573) (17,483) (19,111) (35,564) (2,421) (158,956)
Balance, December 31, 2022 1,126,534 1,179,518 83,186 134,281 372,325 190,980 224,668 3,955 - 3,315,447
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