Argo Gold Inc. — Interim / Quarterly Report 2021

Aug 30, 2021

ARGO GOLD INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2021

General

The following management’s discussion and analysis (“ MD&A ”) of the financial condition and results of the operations of Argo Gold Inc. (“ Argo Gold ”, or the “ Company ”) constitutes management’s review of the factors that affected the Company’s financial and operating performance for the three and six months ended June 30, 2021 (“ second quarter of 2021 ” or “ Q2 2021 ”). The comparative periods are for the three and six months ended June 30, 2020 (“ second quarter of 2020 ” or “ Q2 2020 ”). This MD&A was written to comply with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual financial statements of the Company for the years ended December 31, 2020 and 2019, and the unaudited condensed interim financial statements for the three and six months ended June 30, 2021 and 2020, together with the notes thereto (“the financial statements ”). Results are reported in Canadian dollars, unless otherwise noted.

The financial statements and the financial information contained in this MD&A were prepared in accordance with International Financial Reporting Standards (“ IFRS ”) as issued by the International Accounting Standards Board (“ IASB ”) and interpretations of the International Financial Reporting Interpretations Committee (“ IFRIC ”). Please refer to Note 3 of the annual audited financial statements as at and for the years ended December 31, 2020 and 2019 for disclosure of the Company’s significant accounting policies.

The audit committee of the Company has reviewed this MD&A and the unaudited condensed interim financial statements for the three and six months ended June 30, 2021 and 2020 and the Company’s Board of Directors approved these documents prior to their release.

This MD&A is dated August 30, 2021 and is current to that date.

Additional information relating to the Company is available free of charge on the System for Electronic Document Analysis and Retrieval (“ SEDAR ”) website at www.sedar.com, on the Canadian Securities Exchange (“ CSE ”) website at www.thecse.com or on Argo Gold’s website at www.argogold.ca.

Caution Regarding Forward Looking Information

This MD&A includes certain statements that may be deemed "forward-looking statements". All statements in this discussion, other than statements of historical fact, that address future exploration activities and events or developments that the Company expects, are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements.

Qualified Person

Technical information contained in this MD&A has been prepared by or under the supervision of Bill Kerr, P. Geo., Lead Exploration Geologist for Argo Gold, who is a “Qualified Person” for the purpose of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“ NI 43-101 ”). He has verified the data comprising such technical information, including sampling, analytical and test data underlying the information or opinions contained herein.

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Overview

Argo Gold is a development stage company incorporated under the laws of Ontario on December 9, 1995. The Company is listed on the Canadian Securities Exchange (“CSE”) under the symbol ARQ , the OTCQB under ARBTF , and on the XFRA, XSTU and XBER FSE under A2ASDS . The address of the Company's corporate office and principal place of business is 350 Bay Street, Suite 700 Toronto, Ontario, M5H 2S6.

Description of the Business

Argo Gold is a Canadian mineral exploration and development company, focused on gold exploration at the Uchi Gold Project in the Red Lake District and the Talbot Lake Gold Project also in the Uchi Geological Subprovince. Argo Gold’s Uchi Gold Project covers 22 km[2] of widespread mineralization and multiple mineralized trends in the Birch-Uchi Greenstone Belt. High grade gold intercepts from the winter 2019 drill program include 132 grams per tonne gold (“g/t Au”) over 1.8 metres at the Woco Vein.

On December 1, 2020, Argo Gold announced the results of its 2020 exploration program at the Uchi Gold Project (see news release at https://www.newsfilecorp.com/release/69265/Argo-Gold-ConfirmsMultiple-HighGrade-Mineralized-Structures-and-Visible-Gold-at-all-Target-Areas-at-the-Uchi-GoldProject).

In summary, significantly more high-grade gold mineralization was uncovered at Woco, Northgate and Raingold and multiple mineralized trends were confirmed.

• The mineralized strike length of the Woco Zone was extended to 280 metres from 70 metres previously. Diamond-saw channel sampling composites include; 1.1 metres of 10.4 g/t Au and 0.55 metres of 58.2 g/t Au.

• At the Northgate Zone, two new 15 metre sections of high-grade gold were identified within the known mineralized strike length of 225 metres. Diamond-saw channel sample composites included; 4.9 m metres of 7.1 g/t Au, 5.35 metres of 4.1 g/t Au, 1.65 metres of 43.5 g/t Au, 1.65 metres of 40.1 g/t Au, 1.6 metres of 37.7 g/t Au and 0.65 metres of 77.5 g/t Au.

• At the Raingold Zone, high-grade gold was identified over 15 metres of the 20 metre strike length tested. Diamond saw channel samples include; 2.3 metres of 31.2 g/t Au, 1.9 metres of 29.8 g/t Au, 1.9 metres of 10.3 g/t Au, 2.65 metres of 5.4 g/t Au, 2.6 metres of 5.5g/t and 1.0 metre of 21.2 g/t Au.

On December 23, 2020, Argo Gold closed a non-brokered private placement for gross proceeds of $1.8 million (see news release at https://www.newsfilecorp.com/release/71003/Argo-Gold-ClosesOversubscribed-Private-Placement-Financing).

Argo Gold recently started an overburden stripping and bedrock testing program at the Uchi Gold Project to test identified geochemical anomalies covered by overburden as well as locate the exact location of the extensions of the mineralized trends under the overburden cover. Locating the extensions of the structures that are hosting the gold mineralization at site which is key to successfully finding additional high-grade mineralization. Target areas include the southern extension of Woco South vein, the ENE and WSW extensions of Northgate, anomalous mineralization south of the Uchi Mine on the Uchi Break, biogeochemistry anomalies southwest of Northgate and the southern extension of Raingold.

In June 2020, Argo Gold acquired the Talbot Lake Gold Project located 70 kilometres east of Pickle Lake in the prolific Uchi Geologic Subprovince (see Argo Gold news release June 11 2020). Thel property hosts a historical non-NI 43-101 compliant mineral resource estimate of approximately 50,000 ounces at 14.0 g/t Au, in a quartz vein system starting right at surface and there is known gold mineralization in the associated banded iron formation. At the Talbot Lake Gold project, Argo has over 23 line kilometres of banded iron formations that are targets for a Musselwhite Mine type mineralization (over 20 years of

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200,000 ounces of annual production). Gold mineralization in banded iron formations can be quite pervasive and the Argo Gold team believes the current historical non-NI 43-101 compliant estimated mineral resource can be expanded. Prior to the acquisition of Talbot Lake from Denison Mines Inc., the property had been sitting unexplored within a uranium company. Argo Gold is currently in the permitting phase for Talbot Lake.

Developments during the three months ended June 30, 2021 and up to August 30, 2021

Exploration and Evaluation Activities – Uchi Gold Project

In June 2021, Argo Gold completed a 2,670 metre drill program at the Uchi Lake Gold Project. The drill program tested the downdip and strike extension at Northgate, biogeochemical anomalies proximal to the main mineralized Woco-Northgate trend, and drill tested Raingold on a parallel mineralized structure (the HST Zone) located to the west of the main mineralized Woco-Northgate structure. Drill core from the drill program has been sent to Activation Laboratories Ltd. for assay. Assays are currently pending.

In April 2021, Argo Gold initiated bedrock stripping, trenching, washing, geological mapping and channel sampling at the Uchi Lake Gold Project and will continue in phases throughout the 2021 field season. Objectives of the bedrock stripping and trenching are to expand and define known gold mineralization, identify additional gold mineralization along the mineralized trends, and to follow-up on the numerous biogeochemical anomalies identified by the Summer 2019 biogeochemical survey that covered 5 kilometres of strike length on the main mineralized trend (see Argo Gold news release October 28, 2019).

In the Spring of 2021, Argo Gold also completed a LiDAR survey and aerial photography at the Uchi Lake Project. Data collection by Eagle Mapping Ltd. covered 23.2 km[2] consisting of 10 strips with > 50% overlap totaling 65-line kilometers. The data provided by the survey is being used to enhance the base map and assist with planning, access and execution of bedrock stripping, trenching, washing, channel sampling, geological mapping, and drilling. The data is also useful in identifying geophysical structures under canopy allowing for visualization of resistant or recessive lithologies, faults, and veins.

The exploration targets for the Uchi Gold Project area continues to be the narrow vein, high-grade gold mineralization; a common economic model in the Canadian Shield where a series of high-grade gold veins are mined using narrow vein mining methods.

Argogold.com

On July 15, 2021, the Company announced that it had acquired the ArgoGold.com domain in addition to the previous ArgoGold.ca domain. The move reinforces the global strength of the Argo Gold corporate brand in the online world and is in recognition of the worldwide investor following and the Company’s recent listings on United States of America and German stock exchanges.

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Overview of Financial Results

Three and Six Months Ended June 30, 2021 vs. June 30, 2020

	Three Months Ended	Three Months Ended	Three Months Ended	Six Months Ended	Six Months Ended	Six Months Ended
	June	30,		June	30,
(Expressed in Canadian Dollars)	2021		2020	2021		2020
Expenses
Exploration and evaluation	$ 929,892	$	94,992	$ 1,007,332	$	173,482
Management fees	42,000		34,000	84,000		67,000
Consulting fees	11,500		29,875	24,500		54,750
Professional fees	11,300		17,213	23,028		33,716
Business development	34,673		6,382	74,703		29,157
Investor relations	40,740		36,630	79,591		58,130
General and administrative	24,108		16,900	53,036		28,591
Listing, filing and regulatory fees	11,562		8,091	19,282		14,069
Depreciation	406		229	1,329		738
Share-based compensation	-		130,560	-		269,580
Total expenses	1,106,181		374,872	1,366,801		729,213
Loss before the undernoted	(1,106,181)		(374,872)	(1,366,801)	(729,213)
Bank charges	(326)		(176)	(1,147)		(329)
Part X11.6 taxes	(395)		-	(395)		(4,106)
Interest income	2		4	2		14
Flow-through share premium recovery	194,388		559	224,650		1,186
Change in unrealized gain (loss) on value
of investments	36,000		(16,525)	(335,000)		(16,700)
Net loss and comprehensive loss for theperiod	$ (876,512)	$	(391,010)	$(1,478,691)	$ (749,148)
Net loss per share
Basic and diluted lossper share	$(0.01)	$	(0.01)	$(0.02)	$	(0.02)
Weighted average number of shares
Outstanding– basic and diluted	63,068,881		51,808,887	63,068,881	49,209,162

Three months ended June 30, 2021 vs. three months ended June 30, 2020

• Overall, the Company recorded a net loss and comprehensive loss of $876,512 or $0.01 per share for the quarter ended June 30, 2021 compared to a net loss and comprehensive loss of $391,010 or $0.01 per share for the quarter ended June 30, 2020.

• Exploration and evaluation expenses were $929,892 in the second quarter of 2021 compared to $94,992 during the second quarter of 2020. During the second quarter of 2021, an exploration program was conducted at the Uchi Gold Project that included overburden and bedrock stripping and washing, a LiDAR survey and ariel photography and a 2,670 metre helicopter supported drill program.

• Management fees were $42,000 in the second quarter of 2021 compared to $34,000 in the second quarter of 2020. These include fees paid to the Company’s CFO and 50% of the fees paid to the Company’s CEO. The other 50% are included in exploration and evaluation expenditures.

• Consulting fees were $11,500 during the second quarter of 2021 compared to $29,875 during the second quarter of 2020.

• Professional fees were $11,300 during the second quarter of 2021 compared to $17,213 during the second quarter of 2020.

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• Business development was $34,673 during the second quarter of 2021 compared to $6,382 during the second quarter of 2020.

• Investor relations was $40,740 during the second quarter of 2021 compared to $36,630 during the second quarter of 2020.

• General and administrative expenses were $24,108 in the second quarter of 2021 compared to $16,900 in the second quarter of 2020.

• Listing, filing and regulatory fees were $11,562 in the second quarter of 2021 compared to $8,091 during the second quarter of 2020. Q2 2021 was higher due to the Company now being listed on the OTCQB as of November 2020.

• Share-based compensation was $nil for the second quarter of 2021, as no stock options were granted, compared to $130,560 for the second quarter of 2020. The 2020 expense represented the grant date fair value of 1,200,000 stock options granted in April, May and June, 2020.

• The Company raised $431,266 of flow-through funds in December 2020 compared to $142,812 in December 2019. As a result, the Company recorded a flow-through share premium liability of $224,650 as at December 31, 2020 compared to $5,951 as at December 31, 2019. During the second quarter of 2021, the Company recognized $194,388 of flow-through share premium recovery compared to $559 during the second quarter of 2020, associated with the expenditure of flowthrough funds in the respective quarters.

• The change in market value of investments resulted in a non-cash gain of $36,000 during the second quarter of 2021, compared to a non-cash loss of $16,525 during the second quarter of 2020. The 2021 quarterly non-cash gain was primarily the result of an increase in the share price of Angus Gold Inc. from $0.78 at March 31, 2021 to $0.95 at June 30, 2021 partially offset by a decrease in the share price of Cross River Ventures Inc. from $0.195 per share at March 31, 2021 to $0.155 per share at June 30, 2021. See Note 5 to the financial statements for the three and six months ended June 30, 2021 for the market values of the Company’s investments.

Six months ended June 30, 2021 vs. six months ended June 30, 2020

• Overall, the Company recorded a net loss and comprehensive loss of $1,478,691 or $0.02 per share for the six months ended June 30, 2021 compared to a net loss and comprehensive loss of $749,148 or $0.02 per share for the six months ended June 30, 2020.

• Exploration and evaluation expenses were $1,007,332 in the first half of 2021 compared to $173,482 during the first half of 2020. The 2021 period featured an exploration program at the Uchi Gold Project that included overburden and bedrock stripping and washing, a LiDAR survey and ariel photography and a 2,670 metre helicopter supported drill program.

• Management fees were $84,000 in the first half of 2021 compared to $67,000 in the first half of 2020. These include fees paid to the Company’s CFO and 50% of the fees paid to the Company’s CEO. The other 50% are included in exploration and evaluation expenditures.

• Consulting fees were $24,500 during the first half of 2021 compared to $54,750 during the first half of 2020.

• Professional fees were $23,028 during the first half of 2021 compared to $33,716 during the first half of 2020.

• Business development was $74,703 during the first half of 2021 compared to $29,157 during the first half of 2020.

• Investor relations was $79,591 during the first half of 2021 compared to $58,130 during the first half of 2020.

• General and administrative expenses were $53,036 in the first half of 2021 compared to $28,591 in the first half of 2020.

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• Listing, filing and regulatory fees were $19,282 in the first half of 2021 compared to $14,069 during the first half of 2020. The 2021 period was higher due to the Company now being listed on the OTCQB as of November 2020.

• Share-based compensation was $nil for the first half of 2021, as no stock options were granted, compared to $269,580 for the first half of 2020. The 2020 expense represented the grant date fair value of 2,600,000 stock options granted in February, April, May and June, 2020.

• The Company raised $431,266 of flow-through funds in December 2020 compared to $142,812 in December 2019. As a result, the Company recorded a flow-through share premium liability of $224,650 as at December 31, 2020 compared to $5,951 as at December 31, 2019. During the first half of 2021, the Company recognized $224,650 of flow-through share premium recovery compared to $1,186 during the first half of 2020, associated with the expenditure of flow-through funds in the respective periods.

• The change in market value of investments resulted in a non-cash loss of $335,000 during the first half of 2021, compared to a non-cash loss of $16,700 during the first half of 2020. The 2021 non-cash loss was primarily the result of a decrease in the share price of Cross River Ventures Inc. from $0.34 per share at December 31, 2020 to $0.155 per share at June 30, 2021. See Note 5 to the financial statements for the three and six months ended June 30, 2021 for the market values of the Company’s investments.

Selected Quarterly Financial Information

The following table is a summary of selected financial information for the Company for the eight most recently completed financial quarters. It has been derived from the unaudited condensed interim financial statements of the Company. The information has been prepared by management in accordance with IFRS and is expressed in Canadian dollars.

	**Q2 **	**Q1 **	Annual	**Q4 **	**Q3 **
	June 2021 (unaudited)	March 2021 (unaudited)	Dec. 2020 (audited)	Dec. 2020 (unaudited)	Sept. 2020 (unaudited)
Revenue	$ -	$ -	$ -	$ -	$ -
(Loss) income and comprehensive loss	($876,512)	($602,179)	($206,547)	$1,124,586	($581,985)
(Loss) income per share – basic and diluted	($0.01)	($0.01)	($0.00)	$0.02	($0.01)
Assets	$3,101,495	$3,620,438	$4,303,968	$4,303,968	$1,464,083
	**Q2 **	**Q1 **	Annual	**Q4 **	**Q3 **
	June 2020 (unaudited)	March 2020 (unaudited)	Dec. 2019 (audited)	Dec. 2019 (unaudited)	Sept. 2019 (unaudited)
Revenue	$ -	$ -	$ -	$ -	$ -
Loss and comprehensive loss	($391,010)	($358,138)	($1,225,438)	($241,499)	($486,746)
Loss per share – basic and diluted	($0.01)	($0.01)	($0.03)	($0.01)	($0.01)
Assets	$1,790,522	$1,853,439	$1,127,662	$1,127,662	$1,042,049

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Liquidity and Capital Resources

The Company’s cash decreased by $594,437 during the three months ended June 30, 2021, compared to a decrease of $383,590 during the three months ended June 30, 2020. The Company’s cash decreased by $1,001,554 during the six months ended June 30, 2021, compared to an increase of $302,730 during the six months ended June 30, 2020. As at June 30, 2021, the ending cash balance was $805,464 compared to $1,807,018 as at December 31, 2020.

Working Capital

As at June 30, 2021, the Company had a working capital surplus of $1,545,724 compared to a surplus of $3,249,285 as at December 31, 2020. The non-cash flow-through share premium liability amount has been excluded from current liabilities in the calculation of working capital as at December 31, 2020.

A summary of the Company’s cash position and changes in cash for the three and six months ended June 30, 2021 and 2020 are provided below:

Three Months Ended June 30,	Six Months Ended June 30,	Six Months Ended June 30,
2021 2020	2021	2020
Cash used in operating activities – gross $(1,106,494) $ (244,255) Changes in non-cash operatingworkingcapital 512,057 (4,335)	$(1,367,012) 367,007	$ (375,816) (205,254)
Cash used in operating activities – net (594,437) (248,590) Cash used in investing activities - (135,000) Cashprovided byfinancingactivities - -	(1,000,005) (1,549) -	(581,070) (135,000) 1,018,800
(Decrease) increase in cash (594,437) (383,590) Cash,beginningofperiod 1,399,901 809,905	(1,001,554) 1,807,018	302,730 123,585
Cash,end ofperiod $ 805,464 $426,315	$ 805,464	$426,315

Three months ended June 30, 2021 vs. three months ended June 30, 2020

Operating Activities

Cash used in operating activities before changes in non-cash working capital during the three months ended June 30, 2021 was $1,106,494 compared to $244,255 for the three months ended June 30, 2020.

Investing Activities

During the three months ended June 30, 2021, cash used in investing activities was $nil compared to $135,000 for the three months ended June 30, 2020. The 2020 amount relates to the purchase of the Talbot Lake Gold Project from Denison Mines Inc. in June 2020.

Financing Activities

There were no financing activities during the three months ended June 30, 2021 and 2020.

Six months ended June 30, 2021 vs. six months ended June 30, 2020

Operating Activities

Cash used in operating activities before changes in non-cash working capital during the six months ended June 30, 2021 was $1,367,012 compared to $375,816 for the six months ended June 30, 2020. The first half of 2021 was higher due to the exploration program at the Uchi Gold Project that included overburden and bedrock stripping and washing, a LiDAR survey and ariel photography, and a 2,670 metre helicopter supported drill program.

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Investing Activities

During the six months ended June 30, 2021, cash used in investing activities was $1,549 compared to $135,000 for the six months ended June 30, 2020. The 2021 amount relates to the purchase of a computer, while the 2020 amount relates to the purchase of the Talbot Lake Gold Project from Denison Mines Inc. in June 2020.

Financing Activities

During the six months ended June 30, 2021, cash provided by financing activities was $nil compared to $1,018,800 for the six months ended June 30, 2020. On February 5, 2020, the Company closed a nonbrokered private placement with an entity beneficially owned by Mr. Eric Sprott, through the issuance of 11,200,000 units at $0.09 per unit, for gross proceeds of $1,008,000. In addition, a subscription receivable of $10,800, part of a flow-through financing closed on December 31, 2019, was collected in January 2020. No financings were completed or planned during the six months ended June 30, 2021.

Liquidity Outlook

The Company had a cash balance of $805,464 at June 30, 2021, a decrease of $1,001,554 from the balance at December 31, 2020.

In general, completion of all of the Company’s ongoing and future exploration and development initiatives and its ability to continue as a going concern are subject to successfully raising additional funding (see “Risks and Uncertainties”).

On December 23, 2020, the Company raised $1,835,675 through the issuance of 8,261,232 units at $0.17 per unit and the issuance of 1,960,300 flow-through shares at $0.22 per flow-through share. These proceeds are sufficient to fund the Company’s operations in 2021, including a 2,670 metre drill program at the Uchi Gold Project that was completed in July 2021.

At June 30, 2021, the Company also holds investments valued at $1,166,250. Future sales of these investments to fund the Company’s operations remain a possibility.

The Company is currently sufficiently funded to carry out its 2021 exploration programs and fund its operations. The Company will require additional funding in the future.

Related Party Transactions and Key Management Compensation

Related Party Transactions

Related parties include the Board of Directors, senior management, close family members and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

There were no related party transactions during the three and six months ended June 30, 2021.

As at June 30, 2021, $1,024 (December 31, 2020 - $26,313) included in accounts payable and accrued liabilities was owing to related parties. These amounts are unsecured, non-interest bearing, with no fixed terms of repayment.

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Key Management Compensation

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. Key management of Argo Gold includes the Chief Executive Officer and the Chief Financial Officer.

	Three months ended	Three months ended	Three months ended	Six months ended	Six months ended	Six months ended
	June	30,		June 30,
	2021		2020	2021		2020
Management fees – paid to CEO	$ 15,000	$	15,000	$ 30,000	$	30,000
Exploration and evaluation fees – paid to CEO(1)	15,000		15,000	30,000		30,000
Management fees – paid for CFO services	27,000		19,000	54,000		37,000
Consultingfees –paid to an independent director	3,000		3,000	6,000		5,000
Total fees paid to management	60,000		52,000	120,000		102,000
Share-basedpayments	-		77,500	-		156,940
	$ 60,000	$	129,500	$ 120,000	$	258,940

(1) Amounts included in “Consulting fees” in exploration and evaluation expenditures.

Subsequent Events

There are no events subsequent to June 30, 2021.

Outstanding Capital and Share Data

Argo Gold’s authorized capital stock consists of an unlimited number of common shares without par value. As at August 30, 2021 there were 63,068,881 common shares issued and outstanding.

As at August 30, 2021, the Company also had the following items issued and outstanding:

• 11,200,000 common share purchase warrants at an exercise price of $0.12, expiring February 5, 2023.

• 8,794,565 common share purchase warrants at an exercise price of $0.24, expiring December 22, 2022.

• There are no stock options outstanding as at August 30, 2021.

Off-Balance Sheet Arrangements

As at June 30, 2021, the Company has not entered into any off-balance sheet arrangements.

Proposed Transactions

In the normal course of business, the Company evaluates property acquisition and sale transactions and, in some cases, makes proposals to acquire or sell such properties. These proposals, which are usually subject to Board and sometimes regulatory and shareholder approvals, may involve future payments, share issuances and property work commitments. These future obligations are usually contingent in nature and generally the Company is only required to incur the obligation if it wishes to continue with the transaction.

As of August 30, 2021, there are no material property acquisitions or possible transactions that the Company is examining.

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Financial Instruments

The Company manages its exposure to a number of different financial risks arising from its operations as well as its use of financial instruments including market risks (commodity prices, foreign currency exchange rate and interest rate), credit risk and liquidity risk through its risk management strategy. The objective of the strategy is to support the delivery of the Company's financial targets while protecting its future financial security and flexibility.

Financial risks are primarily managed and monitored through operating and financing activities and, if required, through the use of derivative financial instruments. The Company does not use derivative financial instruments for purposes other than risk management. The financial risks are evaluated regularly with due consideration to changes in the key economic indicators and up to date market information.

Market Risk

Market risk is the risk or uncertainty arising from possible market price movements and their impact on the future performance of the business. The Company may use derivative financial instruments such as foreign exchange contracts and interest rate swaps to manage certain exposures. These market risks are evaluated by monitoring changes in key economic indicators and market information on an ongoing basis.

Commodity Risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company monitors commodity prices as they relate to gold and the stock market to determine the appropriate course of action to be taken.

Liquidity Risk

Liquidity risk encompasses the risk that a company cannot meet its financial obligations in full. The Company's main source of liquidity is derived from its common stock issuances. These funds are primarily used to finance working capital, operating expenses, capital expenditures and acquisitions.

The Company manages its liquidity risk by regularly monitoring its cash flows from operating activities and holding adequate amounts of cash. The 2021 budget is planned to be funded from funds raised on December 23, 2020. There is no certainty of the Company’s ability to complete additional financings.

As at June 30, 2021 the Company held cash of $805,464 (December 31, 2020 - $1,807,018) to settle current liabilities of $621,313 (December 31, 2020 - $120,445), exclusive of non-cash flow-through share premium liability.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate due to changes in market interest rates. Cash bears interest at market rates. In the event that the Company held interest bearing debt, the Company could be exposed to interest rate risk. The Company does not have any interest-bearing debt. Other current financial assets and liabilities are not exposed to interest rate risk because of their short-term nature.

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Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. Financial instruments that potentially subject the Company to credit risk consist of cash and subscription receivable. The Company has reduced its credit risk by investing its cash with a Canadian chartered bank.

The Company's financial assets and liabilities as at June 30, 2021 and December 31, 2020 were as follows:

	Amortized Cost	FVPL	Total
December 31, 2020
Financial assets
Cash	$ 1,807,018	$ -	$ 1,807,018
Investments	$ -	$ 1,501,250	$ 1,501,250
Financial liabilities
Accountspayable and accrued liabilities	$120,445	$-	$120,445
June 30, 2021
Financial assets
Cash	$ 805,464	$ -	$ 805,464
Investments	$ -	$ 1,166,250	$ 1,166,250
Financial liabilities
Accountspayable and accrued liabilities	$621,313	$-	$621,313

At June 30, 2021 and December 31, 2020, there were no significant concentrations of credit risk for receivables. The carrying amounts reflected above represent the Company's maximum exposure to credit risk for such receivables.

The fair values of these financial instruments approximate their carrying values because of their shortterm nature and/or the existence of market related interest rates on the instruments.

Going Concern

The unaudited condensed interim financial statements of the Company have been prepared on the basis that the Company will continue as a going concern, which presumes that it will be able to realize its assets and discharge its liabilities in the normal course of business. Due to continuing operating losses and current working capital levels, the application of the going concern basis is dependent upon the Company achieving profitable operations to generate sufficient cash flows to fund continuing operations or in the absence of adequate cash flows from operations, obtaining additional financing to support operations for the foreseeable future. It is not possible to predict whether financing efforts will be successful or if the Company will attain profitable levels of operations. These factors may cast significant doubt on the entity’s ability to continue as a going concern. The unaudited condensed interim financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern. If management is unsuccessful in securing capital, the Company’s assets may not be realized or its liabilities discharged at their carrying amounts and these differences could be material. Changes in future conditions could require material write-downs of the carrying amounts of mineral properties.

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Critical Accounting Policies and the Use of Estimates

The preparation of the condensed interim financial statements in conformity with IFRS requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from those estimates. A detailed summary of the Company’s significant accounting policies, including the use of estimates, is included in Notes 2 and 3 of the Company’s audited financial statements for the year ended December 31, 2020. The accounting policies and management estimates applied in the condensed interim financial statements for the three and six months ended June 30, 2021, are consistent with those used in the Company’s audited financial statements for the year ended December 31, 2020.

Commitments

As at June 30, 2021, the Company has a remaining commitment to spend $nil (December 31, 2020 - $431,266) from amounts raised from flow-through financing on eligible Canadian Exploration Expenditures (“CEE”), by December 31, 2022.

Flow-through common shares require the Company to incur an amount equivalent to the proceeds of the issued flow-through common shares on eligible CEE. The Company has indemnified current and previous flow-through subscribers for any tax and other costs payable by them in the event the Company does not incur the required exploration expenditures. No amounts have been recorded in these financial statements for potential liabilities relating to these indemnities as a triggering event has not taken place. Upon issuance of the flow-through shares in December 2020 in the amount of $431,266 (December 2019 - $142,812), the Company recorded a flow-through share premium liability of $224,650 (December 2019 - $5,951). As expenditures are incurred, the liability will be drawn down as income through the statement of loss. During the three and six months ended June 30, 2021, the Company incurred $373,171 and $431,266 on eligible CEE related to the 2020 flow-through issuance. During the three months ended June 30, 2021 and 2020, the Company recorded a flow-through share premium recovery of $194,388 and $559, respectively in the statement of loss. During the six months ended June 30, 2021 and 2020, the Company recorded a flow-through share premium recovery of $224,650 and $1,186, respectively in the statement of loss.

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.

The Company and its operations have been largely unaffected by the impact of the COVID-19 global pandemic. The Company continues to follow all related government measures and mandates and recommendations from health officials. The Company continues to believe that it will remain largely unaffected, however the future impact on the Company, if any, is uncertain at this time.

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Risks and Uncertainties

Readers of the MD&A should give careful consideration to the information included or incorporated by reference in this document and the Company’s unaudited condensed interim financial statements and related notes. Argo Gold’s business of exploring and developing mineral resources involves a variety of operational, financial and regulatory risks that are typical in the natural resource industry, including the limited extent of the Company’s assets, the Company’s state of development and the degree of reliance upon the expertise of management. The Company attempts to mitigate these risks and minimize their effect on its financial performance, but there is no guarantee that the Company will be profitable in the future, and the Company’s common shares should be considered speculative. Only those persons who can bear the risk of the entire loss of their investment should participate.

An investor should carefully consider the risks described in the Company’s audited financial statements for the year ended December 31, 2020 and the “Risks and Uncertainties” discussion in the Company’s MD&A for the year ended December 31, 2020, dated April 28, 2021, before investing in the Company’s common shares. Readers are also encouraged to read and consider the risk factors more particularly described in Note 4 to the unaudited condensed interim financial statements for the three and six months ended June 30, 2021, which have been posted on the Company’s website at www.argogold.ca and are available on SEDAR at www.sedar.com. The risks described in these documents is not an exhaustive list. Additional risks that the Company currently believes are immaterial may become important factors that affect the Company’s business in the future. If any of the risks noted in the Company’s financial disclosure occur, or if others occur, the Company’s business, operating results and financial condition could be seriously harmed and could cause actual events to differ materially from those described in forwardlooking statements relating to the Company. In this event, investors may lose part or all of their investment.

Regulatory standards continue to change, making the review process longer, more complex and more costly. Even if an apparently mineable mineral deposit is developed, there is no assurance that it will ever reach production or be profitable, as its potential economics are influenced by many key factors such as commodity prices, foreign exchange rates, equity markets and political interference, which cannot be controlled by management. As a result, the Company’s future business, operations, and financial condition could differ materially from the forward-looking information contained in this MD&A and described in the “Forward-Looking Statements” section below.

Forward Looking Statements

This report may contain forward-looking statements that involve a number of risks and uncertainties, including statements regarding the outlook for the Company’s business and operational results. By nature, these risks and uncertainties could cause actual results to differ materially from what has been indicated. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to failure to establish estimated resources and reserves, the grade and recovery of ore which is mined from estimates, capital and operating costs varying significantly from estimates, delays or failure in obtaining governmental, environmental or other project approvals and other factors including those risks and uncertainties identified above. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking information as a result of new information, future results or other such factors, which affect this information, except as required by law.

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Management’s Evaluation of Disclosure Controls

Management is responsible for the design and effectiveness of disclosure controls and procedures to provide reasonable assurance that material information related to the Company is made known to the Company’s certifying officers. The Company’s Chief Executive Officer and Chief Financial Officer have each evaluated the effectiveness of the Company’s disclosure controls and procedures as at June 30, 2021 and have concluded that these controls and procedures are effective.

Internal Control over Financial Reporting:

Management is responsible for the design of internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements in accordance with accounting principles generally accepted in Canada. Based on a review of its control procedures at the end of the period covered by this MD&A, management believes its internal controls and procedures are appropriately designed as at June 30, 2021.

Other MD&A Requirements

Additional Disclosure for Companies Without Significant Revenue

Additional disclosure concerning Argo Gold’s exploration and evaluation expenditures, mineral property costs and general and administrative expenses is provided in the Company’s unaudited condensed interim financial statements and in Note 7 of the unaudited condensed interim financial statements for the three and six months ended June 30, 2021 and 2020 that are available on the Company’s website at www.argogold.ca and on SEDAR at www.sedar.com.

Approval

The Board of Directors of Argo Gold approved the disclosure contained in this MD&A on August 30, 2021. A copy of this MD&A will be provided to anyone who requests it from the Company.

Additional Information

Officers and Directors:

Judy Baker, Chief Executive Officer and Director Michael Farrant, Chief Financial Officer

Independent Directors Jonathan Armes, Director George Langdon, Director Reinhard Schu, Director Christopher Wardrop, Director

Legal Counsel and Auditors

Peterson McVicar LLP, James McVicar McGovern Hurley LLP, Auditors TSX Trust Company, Transfer Agent

Comparative Figures

Certain comparative figures may have been reclassified to conform to the current period’s presentation. These reclassifications did not affect the results of prior periods.

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