Aton Resources Inc. — Management Reports 2022

Apr 29, 2022

Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

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ATON RESOURCES INC.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2021

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”) of financial condition and results of operations of Aton Resources Inc. and its subsidiaries (the “Company”) provides an analysis of the Company’s results of operations and financial condition for year ended December 31, 2021. This MD&A supplements but does not form part of the annual audited consolidated financial statements for the year ended December 31, 2021, which were prepared in accordance with International Financial Reporting Standards (“IFRS”).

All amounts presented in this MD&A are in Canadian dollars unless otherwise indicated. Additional information related to the Company is available on SEDAR at www.sedar.com and on the Company’s website www.atonresources.com. This MD&A contains information up to and including April 28, 2022.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this MD&A constitute “forward-looking statements”. All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forwardlooking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to, those discussed herein under the heading “Risks and Uncertainties” and “Risk Factors”. Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forwardlooking statements are made as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

The forward-looking statements in this MD&A are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding gold prices, business and operating strategies, and the Company’s ability to operate on a profitable basis.

NOTE TO U.S. INVESTORS CONCERNING ESTIMATES INFERRED RESOURCES

The term "Inferred" Resources is used herein. United States investors are advised that while such a term is recognized and required by Canadian regulations, the United States Securities and Exchange Commission do not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral.

Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Indicated Mineral Resources will ever be converted into

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Mineral Reserves. United States investors are also cautioned not to assume that all or any part of a Mineral Resource is economically or legally mineable.

Qualified Person

The technical information contained in this Management Discussion and Analysis was prepared by Javier Orduña MSc MCSM DIC SEG(M) MAIG, Exploration Manager for Aton Resources Inc. Mr. Orduña is a qualified person (QP) under National Instrument 43-101 Standards of Disclosure for Mineral Projects.

HIGHLIGHTS FOR YEAR ENDED DECEMBER 31, 2021 AND SUBSEQUENT EVENTS

• The Company commenced its Phase 2 diamond drilling programme at the Rodruin advanced exploration project on November 22, 2021, following the signing of a drilling contract with Energold Drilling to carry out a minimum of 4,250 metres of diamond drilling at its Abu Marawat Concession, with a primary focus on the Rodruin and Hamama projects.

• Field exploration activities consisted primarily of diamond drilling at Rodruin. As of April 1, 2022 a total of 28 drill holes for 3,115.5m of drilling had been completed.

• Significant drilling results reported as of April 1, 2022 include 48.0m @ 1.97g/t Au and 5.3 g/t Ag, and 38.85m @ 1.08g/t Au and 7.4 g/t Ag (hole ROD-052); 88.25m @ 1.74 g/t Au and 9.7 g/t Ag (hole ROD-055; and 129.5m @ 1.00 g/t Au and 8.8 g/t Ag (hole ROD-056). The results confirm the presence of wide zones of near surface open-pittable oxide gold mineralisation at Rodruin.

• At the end of the reporting period drilling was testing deeper sulphide mineralisation at Rodruin. Assay results are not yet available and reported, but strong visible copper-zinc mineralisation has been intersected in several drill holes.

• Matt Bampton of Cube Consulting undertook a site visit of Rodruin and Hamama West during March 2022, in advance of submitting a proposal to undertake a maiden Mineral Resource Estimate at Rodruin, and a revision of the Hamama West Mineral Resource Estimate.

• The Company execute a drilling contract on February 25, 2022 with Capital Drilling (Egypt) Ltd. to undertake a c. 5,000m RC percussion drilling contract at Hamama, consisting primarily of infill drilling at Hamama West designed to upgrade the confidence levels of the Hamama West Mineral Resource Estimate.

• The Company continued discussions with potential strategic investors to evaluate financing alternatives available to the Company.

• Entered into a bridge loan facility (the “Sixth Facility”) with Moonrider, a significant shareholder of the Company for $500,000. Pursuant to the Sixth Facility, the Company borrowed $500,000 from Moonrider at an interest rate of 12% per annum with a maturity date of April 26, 2022, then 20% per annum after maturity. In connection with the Sixth Facility, Moonrider was issued bonus warrants in October 2021 entitling it to acquire 3,125,000 common shares of the Company at a price of $0.16 per share. These bonus warrants had a fair value of $150,046 using risk-free interest rate of 0.98%, expected life of 1 year, dividend of 0% and volatility of 76.16%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the Company accrued interest expense of $10,849.

• Entered into a bridge loan facility (the “Seventh Facility”) with Moonrider, a significant shareholder of the Company for $500,000. Pursuant to the Seventh Facility, the Company borrowed $500,000 from

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Moonrider at an interest rate of 12% per annum with a maturity date of July 4, 2022, then 20% per annum after maturity. In connection with the Seventh Facility, Moonrider was issued bonus warrants in January 2022 entitling it to acquire 2,941,176 common shares of the Company at a price of $0.19 per share. The bonus warrants are exercisable for a period of 12 months from issuance.

• Entered into a bridge loan facility (the “Eighth Facility”) with Moonrider, a significant shareholder of the Company for $500,000. Pursuant to the Eighth Facility, the Company borrowed $500,000 from Moonrider at an interest rate of 12% per annum with a maturity date of July 26, 2022, then 20% per annum after maturity. In connection with the Eighth Facility, Moonrider was issued bonus warrants in January 2022 entitling it to acquire 2,173,913 common shares of the Company at a price of $0.23 per share. The bonus warrants are exercisable for a period of 12 months from issuance.

• Ordered a direction to pay with Ou Moonrider, a significant shareholder of the Company. The Company issued 8,510,638 common shares pursuant to the exercise of warrants for aggregate consideration of $2,000,000. The Warrant Exercise payment has been applied towards bridge loans and interest payable from Ou Moonrider.

• Closed a non-brokered private placement by issuing 13,333,333 common shares priced at $0.15 per share for gross proceeds of $2,000,000, less share issuance costs of $10,750.

CORPORATE OVERVIEW

The Company is a Canadian mineral exploration company committed to identifying and advancing gold and base metal projects in the Eastern Desert of Egypt. Since October 5, 2010, the common shares have been listed for trading on the TSX Venture Exchange (the “TSX-V”) under the symbol “AAN”. Through the Company’s wholly owned subsidiary, Aton Mining Inc, the Company holds the Abu Marawat exploration concession, which covers an area of 448 km[2] in Egypt.

The Company is actively exploring the Abu Marawat Concession, which contains the Company's two main deposits that are the Company’s material projects: the Hamama West gold-silver deposit, which has been the main focus of exploration and drilling since 2012, and the Abu Marawat gold-silver-copper-zinc vein deposit.

Both the Hamama West and Abu Marawat deposits have mineral resource estimates prepared in accordance with National Instrument 43-101 – Standards for Disclosure for Mineral Projects (“NI 43-101”). The historical gold and copper mining district in which the Company operates contains numerous small workings, including ancient small-scale mining at Abu Marawat, Hamama, and numerous other sites in the Concession, and two past-producing modern era gold mines (Semna and Sir Bakis), which were in operation during the early 20[th] Century. The two main projects are located near excellent regional infrastructure. They are 40 kilometers apart, are within 35 kilometers of a four-lane highway, water pipeline, and high-capacity electricity grid, and are near the major cities of Qena, on the Nile River, and Safaga, on the Red Sea.

The Company commenced drilling at its top priority gold exploration project at Rodruin in 2018, with positive results, and has now started the Phase 2 follow-up diamond drilling programme in November 2021. Rodruin is located 18 kilometers east of the Hamama West deposit. The Company has not yet determined whether these properties and geological targets contain ore reserves.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

MINERAL PROPERTIES

Abu Marawat Concession

Through the Company’s wholly owned subsidiary, Aton Mining Inc., the Company holds the Abu Marawat exploration concession in Egypt.

The Abu Marawat Concession Agreement is defined by multiple phases of exploration with a required minimum exploration obligation for each phase of exploration. Phase I has a duration of one year, Phase IIA, is for a duration of two years and Phase II-B has a duration of two years. An additional six months may be applied with the approval of EMRA at the end of the last phase of exploration.

The Abu Marawat Concession has met the minimum financial obligation for all three phases and the Company is required to provide a 2% training fee on the total exploration expenditure for the fiscal year.

For the Abu Marawat Concession, on April 23, 2020 EMRA granted the Company a further extension to the Phase II-B exploration period, which will now expire on March 4, 2023.

During the year ended December 31, 2021, the Company had advance deposit of $253,560 (US$200,000) on the Abu Marawat project.

Hamama Gold-Silver Project

• a) Hamama is interpreted as a structurally modified gold-silver-zinc bearing, hybrid epithermal-VMS deposit.

• b) Mineralization is found primarily at and stratigraphically below the overturned contact between the stratigraphic footwall consisting of andesitic and felsic volcanic rocks, and the stratigraphic hanging wall consisting of volcanic rocks and volcanogenic sediments (predominantly bedded tuffs and argillites).

• c) Mineralization is primarily hosted in a silica-carbonate-barite rock (SCBR) unit which constitutes the Main Horizon at Hamama, and outcrops over a strike length of approximately 3,000 meters. The Main Horizon is sub-divided into the Western Carbonate, Hamama West, Hamama Central and Hamama East zones.

• d) The Main Zone at Hamama West is capped by a 650-meter-long Gold-Oxide Cap, which extends to an average of 35-40 meters depth. The Gold-Oxide Cap has a surface area of between 30,000sq meters and 40,000sq meters and has been thoroughly trenched at ~50 meter spacing.

• e) Hamama Central is 640 meters long and contains gold-silver, zinc and copper mineralization, as indicated in part by rock chip sampling of the Main Horizon. This returned 6 metres at 0.80 g/t gold, 49 g/t silver, 0.95% copper and 1.6% zinc. Drilling and surface trenching indicates a continuous mineralized sulphide zone, which, where tested so far, is 8-14 m thick. The deepest hole (AHA020) intersected 8.5 meters of 1.28 g/t gold, 83 g/t silver, 0.24% copper and 6.87% zinc. Surface grab samples from Hamama Central returned assays of up to 15.2 g/t Au, 123 g/t Ag, 0.16 % Cu, and 10.1 % Zn.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

• f) Hamama East has a 500-metre-long oxide horizon with extensive ancient workings for copper-zincrich oxide material, which may reflect significant mineralization at depth. Surface grab samples from ancient workings from Hamama East returned assays of up to 1.17 g/t Au, 5.0 g/t Ag, 1.00% Cu, and 31.4% Zn. Recent trenching has indicated the potential development of a zone of surface high grade zinc oxide-gold-silver mineralization at Hamama East.

• g) To date AAN drilled a total of 109 diamond drill holes at Hamama, for a total of 11,827m. Mineralization has been intersected to true depths of up to 200 meters below surface at Hamama West and is open along strike and at depth.

• h) Cube Consulting have completed a maiden mineral resource estimate of the Hamama West deposit. The accompanying NI 43-101 independent technical report was filed during the year ended September 30, 2017. The mineral resource estimate is presented below in Tables 1 and 2.

Classification	Domain	Density	Tonnes	Grade	Grade	Grade	Contained Metal	Contained Metal	Contained Metal
		**(g/cm3) **	(t)	Au (g/t)	Ag (g/t)	AuEq (g/t)	Au (koz.)	Ag (koz.)	AuEq (koz.)
Indicated	FRESH	3.0	3,805,000	0.72	27.6	1.12	88	3,376	137
	TOTAL	3.0	3,805,000	0.72	27.6	1.12	88	3,376	137

Table 1: Indicated Mineral Resource by Domain: Above 0.5g/t gold equivalent (AuEq) cut-off

Classification	Domain	Density	Tonnes	Grade	Grade	Grade	Contained Metal	Contained Metal	Contained Metal
		**(g/cm3) **	(t)	Au (g/t)	Ag (g/t)	AuEq (g/t)	Au (koz.)	Ag (koz.)	AuEq (koz.)
Inferred	OXIDE (surface)	2.4	220,000	1.63	19.9	1.92	12	141	14
	OXIDE	2.57	2,630,000	0.80	28.9	1.22	61	2,193	93
	FRESH	3.0	5,360,000	0.87	30.4	1.30	157	5,503	235
	TOTAL	2.85	8,210,000	0.87	29.7	1.29	230	7,836	341

Table 2: Inferred Mineral Resource by Domain: Above 0.5g/t gold equivalent (AuEq) cut-off

Rodruin Advanced Exploration Project

Rodruin was discovered by the Company’s field teams in 2017, and is located 18 kilometers east of the Hamama West deposit. Rodruin was immediately recognised as being a highly prospective gold target and became the main focus of the Company’s exploration efforts, leading up to a first phase reverse circulation percussion (“RC”) drilling program which was completed in December 2018, with positive results. The planned Phase 2 follow-up diamond drilling programme commenced at Rodruin on November 22, 2021 and is ongoing.

Gold mineralization at Rodruin is mainly associated with and located within a carbonate unit, which is extensively gossanized and weathered to depths of up to 70-80m below ground surface. Mineralization in fresh rock is associated with a variably, and sometimes highly sulphidic carbonate rock. The mineralization consists primarily of gold, with subsidiary amounts of silver, zinc, and copper. The Rodruin deposit is also heavily structurally deformed, with the identification of faulting, thrusting, and folding. Gold is also remobilized into higher grade structurally controlled zones of mineralization, which have returned surface grab sample grades of up 321 g/t Au.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

An RC drilling programme was completed at Rodruin during the final quarter of 2018, with 50 holes drilled for a total of 4,125m. Most holes were quite shallow, with the maximum hole depth being only 200m. Gold mineralization was intersected in almost every hole, frequently starting from surface (oxide), and also to a downhole depth of up to 172m (sulphide). Selected intersections are tabulated below:

Hole ID	From	Intersection (m) To	Interval	Au (g/t)	Ag (g/t)	Zn (%)	Zone
ROP-003	0	56	56	8.20	7.5	0.17	Aladdin’s Hill
ROP-017	0	163	163	0.90	7.4	2.54	Aladdin’s Hill NE
ROP-029	0	30	30	3.21	13.8	0.47	Spiral Pit Zone
ROP-032	0	40	40	1.30	13.5	0.19	Central Buttress Zone
and	55	70	15	3.95	18.8	0.22
ROP-034	0	36	36	2.15	11.7	0.09	Central Buttress Zone
ROP-050	111	172	61	1.55	8.9	0.86	Aladdin’s Hill NE

Table 3: Selected Rodruin RC drilling intersections

For additional disclosure regarding the Hamama West deposit, see the Company’s press releases as listed for download on the Aton Resources website, www.atonresources.com or filed under the Company’s profile on SEDAR at www.sedar.com.

RESULTS OF OPERATIONS

Selected annual Information

Selected annual Information
	December 31, 2021	December 31, 2020	December 31, 2019
Net sales Net loss Loss per share – basic and diluted Total assets Total long-term liabilities Cashdividends declared pershare	$ Nil $ 4,625,231 $ 0.14 $ 760,602 $ Nil $ Nil	$ Nil $ 1,351,882 $ 0.04 $ 79,791 $ Nil $ Nil	$ Nil $ 1,826,859 $ 0.06 $ 159,464 $ Nil $ Nil

Results of operations for the year ended December 31, 2021 as compared with 2020

The net loss for the year increased by $3,273,349 to $4,625,231 (2020 – $1,351,882). Significant items explaining this change in net loss are as follows:

• Exploration and evaluation expenditures increased by $1,197,304 to $1,978,791 (2020 - $781,487) due to an increase in expenditures at the Abu Marawat Concession.

• Management and consulting fees increased by $136,294 to $267,544 (2020 - $131,250) due to an increase in consulting costs at the corporate level as compared to prior year.

• Finance expense increased by $444,610 to $470,575 (2020 - $25,965) as the Company entered into several bridge loans with an interest rate of 12% per annum.

• Accretion expense increased by $1,629,107 to $1,695,133 (2020 - $66,026) as the Company entered into several bridge loans with an interest rate of 12% per annum.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Cash Flows for the year ended December 31, 2021 as compared to 2020

Cash outflows from operating activities increased by $3,010,472 to $3,424,276 (2020 – outflow of $413,804). The Company paid $689,313 to settle accounts payable and accrued liabilities.

Cash outflow from investing activities increased by $412,228 to $412,228 (2020 – $Nil). The Company paid $412,228 to purchase equipment.

Cash inflow from financing activities increased by $3,491,561 to $3,886,345 (2020 –$394,784). The Company received $3,950,000 from bridge loans, paid $20,586 on share issuance costs.

RESULTS OF OPERATIONS

The following table summarizes the last 8 quarters of the Company.

		December 31,		September 30,		June 30,		March 31,
		2021		2021		2021		2021
				(Unaudited)		(Unaudited)		(Unaudited)
Total assets	$	760,602	$	1,046,778	$	1,659,398	$	2,883,097
Working capital		(5,433,572)		(3,978,166)		(2,805,086)		(1,781,406)
Shareholders’ equity		(5,018,278)		(3,747,742)		(2,599,727)		(1,760,266)
Net loss		(2,210,181)		(1,148,015)		(955,810)		(311,225)
Net loss per share, basic & diluted		(0.07)		(0.03)		(0.03)		(0.01)
		December 31,		September 30,		June 30,		March 31,
		2020		2020		2020		2020
				(Unaudited)		(Unaudited)		(Unaudited)
Total assets	$	79,791	$	273,741	$	117,669	$	184,445
Working capital		(2,328,604)		(1,981,720)		(1,838,322)		(1,549,228)
Shareholders’ equity		(2,306,352)		(1,935,878)		(1,782,950)		(1,482,938)
Net loss		(351,974)		(336,677)		(339,957)		(323,274)
Net lossper share,basic & diluted		(0.01)		(0.01)		(0.00)		(0.00)

Results of operations for the three months ended December 31, 2021 as compared with 2020

The net loss for the three months period increased by $1,858,207 to $2,210,181 (2020 – $351,974). Significant items explaining this change in net loss are as follows:

• Exploration and evaluation expenditures increased by $722,042 to $977,239 (2020 - $255,197) due to an increase in expenditures at the Abu Marawat Concession.

• Management and consulting fees increased by $18,589 to $60,151 (2020 - $41,562) due to an increase in consulting costs at the corporate level as compared to prior period.

• Finance expense increased by $190,002 to $198,131 (2020 - $8,129) as the Company entered into several bridge loans with an interest rate of 12% per annum.

• Accretion expense increased by $817,502 to $837,821 (2020 - $20,319) as the Company entered into several bridge loans with an interest rate of 12% per annum.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

LIQUIDITY AND CAPITAL RESOURCES

The Company, an exploration-stage company, has sustained operating losses during recent fiscal years and currently has negative cash flow. The Company had working capital deficit of $5,433,572 as at December 31, 2021 (2020 - $2,328,604).

The Company’s operations to date have been financed by issuing common shares and convertible debentures. The continuing operations of the Company are dependent upon its ability to raise adequate financing and to commence profitable operations in the future. The current working capital deficiency position casts significant doubt as to its ability to continue as a going concern. The Company has limited financial resources, limited sources of operating cash flow and no assurance that additional financing will be available for further development of its projects. The Company has been successful in the past in obtaining financing through equity; however, there is no assurance that the Company will succeed in arranging all necessary financing in the future or on terms satisfactory to the Company.

Based on the cash position on hand as at the date of this MD&A and expected cash flow requirements of the Company for the next twelve months, management believes that the Company will require additional funds to meet its present operational commitments and working capital needs.

PROPOSED TRANSACTIONS

There are no unannounced proposed transactions at the date of this report.

OUTSTANDING SHARE DATA

At the date of this report the Company has 56,027,077 issued and outstanding common shares, 1,059,000 outstanding stock options, and 14,679,944 outstanding warrants.

During the year ended December 31, 2020, the Company consolidated its common shares at a ratio of ten pre-consolidation common shares to one post-consolidated common share. The number of shares, warrants and options and earnings per share data presented in these consolidated financial statements have all been adjusted retroactively to reflect the impact of this share consolidation.

TRANSACTIONS WITH RELATED PARTY AND BALANCES

The following entities are classified as related parties due to the following:

Related party

Relationship

Mark Campbell Bill Koutsouras David Laing Anthony Clements Assem Soliman Tonno Vahk Stella Chen Red Fern Consulting Ltd. Bennett Liu Ou Moonrider (“Moonrider”)

Former Director, President and CEO Former Director and Interim CEO Former Director Director Director Director and Interim CEO CFO CFO is an employee Former CFO Significant shareholder

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

a) Key management personnel compensation

The remuneration of directors and management including the CEO and CFO were as follows:

		For the year ended	For the year ended	December 31
		2021		2020
Short-term employee benefits – management compensation	$	187,423	$	185,000
Short-termemployee benefits–directors’ fees		56,653		70,000
	$	244,076	$	255,000

b) Related party balances and transactions

The balances due to the Company’s current and former directors and officer included in accounts payables and accrued liabilities were $30,851 (2020 – $197,953). These amounts are unsecured, non-interest bearing and payable on demand.

During the year ended December 31, 2021, the Company issued 427,082 common shares to settle a total of $102,500 in debt owed to directors and former director.

During the year ended December 31, 2021:

• a) The Company borrowed an unsecured short-term loan of $50,000 from Moonrider with a maturity date of August 24, 2021, a significant shareholder of the Company. The principal balance of loan payable bears an interest of 3% per annum. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $1,479.

• b) The Company entered into a bridge loan facility (the “Third Facility”) with Moonrider, a significant shareholder of the Company for $400,000. Pursuant to the Third Facility, the Company borrowed $400,000 from Moonrider at an interest rate of 12% per annum with a maturity date of August 04, 2021, then 20% per annum after maturity. In connection with the Third Facility, Moonrider was issued bonus warrants in February 2021 entitling it to acquire 1,600,000 common shares of the Company at a price of $0.25 per share. These bonus warrants had a fair value of $239,294 using risk-free interest rate of 0.24%, expected life of 1 year, dividend of 0% and volatility of 156.55%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $56,460.

• c) The Company entered into a bridge loan facility (the “Fourth Facility”) with Moonrider, a significant shareholder of the Company for $1,000,000. Pursuant to the Fourth Facility, the Company borrowed $1,000,000 from Moonrider at an interest rate of 12% per annum with a maturity date of September 15, 2021, then 20% per annum after maturity. In connection with the Fourth Facility, Moonrider was issued bonus warrants in March 2021 entitling it to acquire 4,255,319 common shares of the Company at a price of $0.235 per share. These bonus warrants had a fair value of $485,539 using risk-free interest rate of 0.24%, expected life of 1 year, dividend of 0% and volatility of 130.19%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $119,123.

• d) The Company entered into a bridge loan facility (the “Fifth Facility”) with Moonrider, a significant shareholder of the Company for $2,000,000. Pursuant to the Fifth Facility, the Company borrowed $2,000,000 from Moonrider at an interest rate of 12% per annum with a maturity date of September

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

30, 2021, then 20% per annum after maturity. In connection with the Fifth Facility, Moonrider was issued bonus warrants in March 2021 entitling it to acquire 8,510,638 common shares of the Company at a price of $0.235 per share. These bonus warrants had a fair value of $922,083 using risk-free interest rate of 0.23%, expected life of 1 year, dividend of 0% and volatility of 122.69%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $221,151.

• e) The Company entered into a bridge loan facility (the “Sixth Facility”) with Moonrider, a significant shareholder of the Company for $500,000. Pursuant to the Sixth Facility, the Company borrowed $500,000 from Moonrider at an interest rate of 12% per annum with a maturity date of April 26, 2022, then 20% per annum after maturity. In connection with the Sixth Facility, Moonrider was issued bonus warrants in October 2021 entitling it to acquire 3,125,000 common shares of the Company at a price of $0.16 per share. These bonus warrants had a fair value of $150,046 using risk-free interest rate of 0.98%, expected life of 1 year, dividend of 0% and volatility of 76.16%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the Company accrued interest expense of $10,849.

During the year ended December 31, 2020:

• a) The Company borrowed an unsecured short-term loan of US$40,000 ($53,486) from Moonrider with a maturity date of August 24, 2021. The principal balance of loan payable bears an interest of 3% per annum. As at December 31, 2021, the Company accrued interest expense of US$1,613 ($1,979).

• b) The Company borrowed an additional $77,000 with a maturity date of December 31, 2020, from its Second Facility. The loan charges an interest rate of 12% per annum before maturity, then 20% per annum after maturity. In connection with the Second Facility, Moonrider was issued bonus warrants entitling it to acquire 154,000 common shares at a price of $0.50 per share. These bonus warrants had a fair value of $8,198 using risk-free interest rate of 0.26%, expected life of 1 year and volatility of 85.18%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $20,136.

• c) The Company entered into a bridge loan facility (the “Second Facility”) with Moonrider, a significant shareholder of the Company for $141,000. Pursuant to the Second Facility, the Company borrowed $141,000 from Moonrider at an interest rate of 12% per annum with a maturity date of December 31, 2020, then 20% per annum after maturity. In connection with the Second Facility, Moonrider was issued bonus warrants entitling it to acquire 282,000 common shares of the Company at a price of $0.50 per share. These bonus warrants had a fair value of $30,465 using risk-free interest rate of 1.30%, expected life of 1 year and volatility of 87.27%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $40,678.

• d) On December 17, 2019, the Company borrowed $82,000 from Moonrider at an interest rate of 10% per annum with a maturity date of December 31, 2020, then 20% per annum after maturity. Moonrider was issued bonus warrants entitling it to acquire 164,000 common shares of the Company at a price of $0.50 per share. These bonus warrants had a fair value of $28,008 using risk-free interest rate of 1.71%, expected life of 1 year and volatility of 155.56%, which is accreted over 12 months. The bonus warrants are exercisable for a period of 12 months from issuance. As at December 31, 2021, the loan was in default and the Company accrued interest expense of $24,937.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

COMMITMENTS AND CONTINGENCIES

As at the date of this MD&A, the Company has no undisclosed commitments or contingencies.

A former director and CEO of the Company commenced litigation against the Company alleging wrongful dismissal and claiming damages of US$500,000 for severance and unpaid wages of $236,798 plus interest and costs related. The Company is defending the cases and believes they are without merit. No liability other than unpaid fees for services amounting to $253,386 has been recorded in relation to these legal proceedings.

Former employees of the Company commenced litigation against the Company in Egypt alleging wrongful dismissal and claiming damages up to $71,901 and a former vender of the Company claiming fees and compensation of US$14,596. During the year ended December 31, 2019, the Company won its case but then had this overturned by the appellate court. Aton has filed an appeal in the Court of Cassation to overturn this appeal ruling. However, as the appellate court judgment is enforceable while it is adjudicated by the Court of Cassation, the Company has previously recorded a legal provision of $71,901 for contingent lawsuit expense.

In the ordinary course of business, the Company is from time to time involved in legal proceedings and litigation. Various legal claims were brought against the Company during the year. Unless recognized as a provision, management considers these claims to be unjustified and the probability that they will require settlement at the Company’s expense to be remote.

The Company did not accrue any loss contingencies in this respect as of December 31, 2021, as the Company did not consider an unfavorable outcome in any material respects in these legal proceedings and litigations to be probable.

FINANCIAL INSTRUMENTS

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3: Inputs that are not based on observable market data.

The fair value of the Company’s receivables and accounts payable and accrued liabilities, and loan payable approximate carrying value, which is the amount recorded on the consolidated statement of financial position. Cash under the fair value hierarchy is based on level one quoted prices in active markets for identical assets or liabilities including legal provision and loan payable.

The Company is exposed to varying degrees to a variety of financial instrument related risks:

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.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

The Company’s cash (excluding nominal petty cash) are all held at large Canadian or International financial institutions in interest bearing accounts. The Company has no investment in asset-backed commercial paper.

The Company’s receivables consist mainly of goods and services tax receivables due from the government of Canada. As at December 31, 2021, the Company’s exposure to credit risk is minimal. The advances receivable were received during the December 31, 2021 and therefore not subject to credit risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due.

Accounts payable and accrued liabilities, legal provision and loan payable are due within one year. The Company’s approach to managing liquidity risk is to try to have sufficient liquidity to meet liabilities when due. To maintain liquidity, the Company is currently investigating financing opportunities. While the Company has been successful in obtaining its required funding in the past, there is no assurance that future financings will be available.

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

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. A 1% change in interest rates on cash deposits would have a nominal effect on net loss.

b) Foreign currency risk

The Company is exposed to foreign currency risk on fluctuations related to cash, accounts receivable and accounts payable and accrued liabilities that are denominated in US Dollars (USD).

c) Price 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 of gold, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

Sensitivity Analysis

Based on management’s knowledge and experience of the financial markets, the Company believes the following movements are “reasonably possible”.

The Company has cash and accounts payable and accrued liabilities denominated in USD and the Egyptian Pound (EGP) and are exposed to risk from changes in the USD and EGP. A 10% depreciation or appreciation of the CAD against the USD and EGP would result in an increase/decrease of $65,342 and $12,152, respectively.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Capital management

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. In the management of capital, the Company considers components of shareholders’ deficiency. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets or adjust the amount of cash and investments.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company’s approach to capital management during the period.

OUTLOOK

On April 28, 2020, Aton was granted a three-year extension to the final period of the current Abu Marawat exploration lease, until March 4, 2023, while retaining its right to declare a commercial discovery and obtain an exploitation lease in accordance with the terms of its existing concession agreement.

The Company plans to continue its regional exploration program over the highly prospective Abu Marawat Concession, with a primary focus on the Rodruin prospect, while also taking the additional time provided in the extension as an opportunity to consider moving to the new terms and conditions to the mining law in Egypt which are designed to make investment in the mining sector much more attractive to investors.

RISKS AND UNCERTAINTIES

In addition to the fact that all current and proposed exploration and mining activities of the Company are situated in Egypt (refer to the Corporate Overview section in this MD&A for discussion of foreign and political risk) and the usual risks associated with an investment in a mineral exploration and development company, the directors of the Company believe that, in particular, the risk factors set out below should be considered. It should be noted that this list is not exhaustive and that other risk factors may apply. If any of these risks materialize into actual events or circumstances or other possible additional risks and uncertainties of which the directors of the Company are currently unaware or which they consider not to be material in relation to the Company’s business, actually occur, the Company’s assets, liabilities, financial condition, results of operations (including future results of operations), business and business prospects, are likely to be materially and adversely affected. In such circumstances, the price of the Company’s securities could decline and investors may lose all or part of their investment. An investment in the Company may not be suitable for all investors.

The market price of the Common Shares may be volatile

The market price of the Common Shares may experience significant volatility. Numerous factors, including many over which the Company has no control, may have a significant impact on the market price of the Common Shares, including, among other things:

• results of exploration programs;

• the Company’s financial condition and ability or perceived ability to raise funds in the future;

• • price fluctuations in gold and other commodities;

• political unrest in Egypt and more broadly, Africa;

• changes in investor sentiment towards the Company or towards the junior mining sector;

• changes in estimates, recommendations, or other material comments by securities analysts relating to the Company, its competitors or the industry in general;

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

• announcements by other companies in the industry relating to their operations, strategic initiatives, financial condition or financial performance or to the industry in general;

• announcements of acquisitions or consolidations involving industry competitors or industry suppliers;

• addition or departure of the Company’s executive officers;

• sales or perceived sales of additional Common Shares; and

• market response to the work stoppages and unrest at properties near to or adjacent to the Company’s mineral assets.

In addition, the stock market in recent years has experienced extreme price and trading volume fluctuations, many of which have been unrelated or disproportionate to the operating performance of individual companies. These broad market fluctuations may adversely affect the price of the Common Shares, regardless of the Company’s operating performance.

Need for additional financing

The Company will require additional financing, including through the sale of assets and/or the issue and sale of equity or debt securities if various events alone or in combination occur. No assurance is given that the Company will be able to obtain necessary financing in a timely manner or on acceptable terms, if at all.

The Company will require significant capital in order to develop its concessions and to fund its operating costs. The Company currently has no revenues from operations and is currently wholly reliant upon external financing to fund all of its capital requirements. The Company will require additional financing from external sources to meet such requirements. No assurance is given that such financing will be available to the Company or, if it is, that it will be offered on acceptable terms. If additional financing is raised through the issuance of equity or convertible debt securities of the Company, the interests of shareholders in the net assets of the Company may be diluted. Any failure of the Company to obtain required financing on acceptable terms could have a material adverse effect on the Company’s financial condition, results of operations, and liquidity, and could require the Company to cancel or postpone planned capital investments.

Limited operating history

The Company has a limited history of operations, is in the early stage of exploration and must be considered a start-up company. As such, the Company is subject to many risks common to such enterprises, including under-capitalization, cash shortages, limitations with respect to personnel, financial and other resources and lack of revenues. No assurance is given that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success must be considered in the light of its early stage of operations. The Company has no history of mining operations and gives no assurance that it will successfully produce gold, generate revenue, operate profitably or provide a return on investment in the future. Other factors maintained in this section may also prevent the Company from successfully operating a mine.

Future issuances of Common Shares or equity-related securities may depress the trading price of the Common Shares

Any issuance of equity securities could dilute the interests of existing shareholders and could substantially decrease the trading price of the Common Shares. The Company may issue equity securities in the future for a number of reasons, including to finance its exploration program and operations and business strategy (including in connection with acquisitions, strategic collaborations or other transactions) and to satisfy the Company’s obligations upon the exercise of outstanding warrants or options or for other reasons. Sales of a substantial number of Common Shares or other equity-related securities in the public market (or the perception that such sales may occur) could depress the market price of the Common Shares, and impair the Company’s ability to raise capital through the sale of additional equity securities. The Company cannot predict the effect that future sales of the Common Shares or other equity-related securities would have on the market price of the Common Shares.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Foreign investments and operations are subject to numerous risks associated with operating in foreign jurisdictions

The Company conducts its mining, development and exploration activities in Egypt. The Company’s foreign mining investments are subject to the risks normally associated with the conduct of business in foreign countries. The occurrence of one or more of these risks could have a material and adverse effect on the Company’s profitability or the viability of its affected foreign operations, which could have a material and adverse effect on the Company’s future cash flows, earnings, results of operations and financial condition.

Risks may include, among others, labour disputes, invalidation of governmental orders and permits, corruption, uncertain political and economic environments, sovereign risk, war (including in neighbouring states), civil disturbances and terrorist actions, arbitrary changes in laws or policies of particular countries, the failure of foreign parties to honour contractual relations, corruption, foreign taxation, delays in obtaining or the inability to obtain necessary governmental permits, opposition to mining from environmental or other non-governmental organizations, limitations on foreign ownership, limitations on the repatriation of earnings, limitations on gold or ore concentrate exports, instability due to economic under-development, inadequate infrastructure and increased financing costs. In addition, the enforcement by the Company of its legal rights to exploit its properties may not be recognized by the government of Egypt or by its court system. These risks may limit or disrupt the Company’s operations, restrict the movement of funds or result in the deprivation of contractual rights, revocation of mineral rights, or the taking of property by nationalization or expropriation without fair compensation.

The economy and political system of Egypt is currently stable but should be considered by investors to be less predictable than those in countries in which the majority of investors are likely to be resident. The possibility that the current, or a future, government may adopt substantially different policies, take arbitrary action which might restrict or halt exploration activities, halt production (if commenced), extend to the renationalization of private assets or the cancellation of contracts, the cancellation of mining and exploration rights and/or changes in taxation treatment cannot be ruled out, the happening of any of which could result in a material and adverse effect on the Company’s results of operations and financial condition.

External perceptions of Egypt with respect to political and economic instability and civil unrest may have an adverse effect on the market value of the Company’s shares or the ability of the Company to attract suppliers, contractors and skilled workers to its operations in Egypt, which could have an adverse impact on capital projects and on-going operations, which in turn could have a material and adverse effect on the Company’s business, results of operations, financial performance and prospects.

The Company depends on two mineral projects without a known body of commercial ore or reserves

The Abu Marawat deposit and the Hamama deposit in the Abu Marawat Concession are currently the Company’s only material properties, both of which are in the exploration stage without a known body of commercial ore or reserves. There is no certainty that the expenditures made by the Company towards the search and evaluation of these mineral deposits will result in discovery of commercial quantities of ore. Any adverse development affecting the progress of the Abu Marawat Concession or rights of the Company to develop the mining concession may have a material adverse effect on the Company’s objectives, financial condition and results of operations.

The Company’s title to mineral rights could be challenged

The acquisition and retention of title to mineral rights is a detailed and time consuming process. Title to, and the area of, mineral interests may be disputed or challenged. The Company’s right to explore for, mine, produce and sell gold from the Abu Marawat Concession is based on the Abu Marawat Concession Agreement which was declared into law on June 28, 2007 (the “Abu Marawat Concession Agreement”). Should the Company’s rights under the Abu Marawat Concession Agreement not be honoured or be unenforceable for any reason, or if any material term of the Abu Marawat Concession Agreement is

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

unilaterally changed or not honoured, including the boundaries, the Company’s ability to explore and produce gold or associated minerals in the future would be materially and adversely affected, and this would have a material and adverse effect on the Company’s financial performance and results of operations.

The Company’s right to explore, develop, mine and sell gold and associated minerals under the Abu Marawat Concession Agreement may be terminated if the Egyptian government determines that the Company has submitted material false statements to the Egyptian government; that the Company has assigned any interest to any unrelated party without the written consent of the Egyptian government; that the Company has not complied with any final decisions reached as a result of provisions in the Abu Marawat Concession Agreement with respect to disputes and arbitration; that the Company has intentionally extracted any mineral other than gold and associated minerals authorized by the Abu Marawat Concession Agreement without the approval of the Egyptian government; or that the Company has committed any material breach of the Abu Marawat Concession Agreement. The Company cannot guarantee that the Egyptian government will not deem any of the above events to have happened, arbitrarily or not. Any claim of such events occurring could result in termination of the Abu Marawat Concession Agreement.

Under the Abu Marawat Concession Agreement, all land in the Abu Marawat Concession may become the property of the Egyptian Mineral Resources Authority (“EMRA”). Title to the fixed and movable assets are also required to be transferred by the Company to EMRA as soon as their costs are recovered by the Company. Should the relationship between EMRA and the Company break down, the Company will not have legal title to the land at the Abu Marawat Concession nor the fixed or movable assets, which could result in removal of Corporation personnel from the concession area and/or prevention from using the fixed and moveable assets, which could result in delays of operations.

Precious and base metal exploration projects may not be successful and are highly speculative in nature

The exploration for and development of precious and base metals involves significant risks which even a combination of careful evaluation, experience and knowledge cannot eliminate. While the discovery of a precious and base metal deposit may result in substantial rewards, few properties, which are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish mineral resources or reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. Whether a precious and base metal deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure; metal prices which are highly cyclical; and government regulations, including regulations relating to the reduction or the elimination of diesel, fuel and energy subsidies, water access, prices, taxes, royalties, land tenure, land use, importing and exporting of precious metals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital. There is no certainty that the expenditures made by the Company towards the search and evaluation of precious and base metal deposits will result in discoveries of commercial quantities of such metals.

Mining operations generally involve a high degree of risk

Mining exploration activities and operations are subject to all the hazards and risks normally encountered in the exploration for and development and production of precious metals, including unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding, variations in grade, deposit size, density and other geological problems, hydrological conditions, metallurgical and other processing problems, mechanical equipment performance problems, the unavailability of materials and equipment including fuel, labour force disruptions, unanticipated transportation costs, unanticipated regulatory changes, unanticipated or significant changes in the costs of supplies including, but not limited to, petroleum, and adverse weather conditions and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Should any of these risks and hazards affect any of the Company’s

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

proposed exploration activities it would have a material and adverse effect on the financial condition, results of operation, and cash flows of the Company.

The Company may experience regulatory, consent or permitting delays

The business of mineral exploration, project development, mining and processing is subject to various national and local laws and plans relating to: permitting and maintenance of title; environmental consents; taxation; employee relations; heritage / historic matters; health and safety; royalties; land acquisition; and other matters. There is a risk that the necessary permits, consents, authorizations and agreements to implement planned exploration, project development, or mining may not be obtained under conditions or within time frames that make such plans economic, that applicable laws, regulations or the governing authorities will change or that such changes will result in additional material expenditures or time delays.

The Company is an exploration-stage company without any current mineral resources or mineral reserves. Should the Company be successful in its exploration programs in identifying mineral resources or mineral resources and reserves, feasibility studies may be used to determine the economic viability of a deposit. Many factors are involved in the determination of the economic viability of a deposit including the achievement of satisfactory mineral reserve estimates (of which the Company currently has none), the level of estimated metallurgical recoveries, capital and operating cost estimates and the estimate of future gold prices. Capital and operating cost estimates are based upon many factors, including anticipated tonnage and grades of ore to be mined and processed, the configuration of the ore body, ground and mining conditions, expected recovery rates of the metals from the ore and anticipated environmental and regulatory compliance costs. Each of these factors involves uncertainties and as a result the Company cannot give assurance that its development or exploration projects will become operating mines. If a mine is developed, actual operating results may differ from those anticipated, thereby impacting on the economic viability of the project.

The Company’s properties are subject to environmental risks

Mining operations have inherent risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. Laws and regulations involving the protection and remediation of the environment and the governmental policies for implementation of such laws and regulations are constantly changing and are generally becoming more restrictive. The Company cannot give any assurance that, notwithstanding its precautions, breaches of environmental laws (whether inadvertent or not) or environmental pollution will not materially and adversely affect the Company’s profitability, results of operations and financial condition.

There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations. Environmental hazards may exist on the properties on which the Company holds interests which are unknown to the Company at present and which have been caused by previous or existing owners or operators of the properties. Reclamation costs are uncertain and planned expenditures may differ from the actual expenditures required.

The Company relies on its management team and outside contractors, and the loss of one or more of these persons may adversely affect the Company

The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management and outside contractors. Investors must be willing to rely to a significant extent on management’s discretion and judgment, as well as the expertise and competence of outside contractors. The Company does not have in place formal programs for succession of management and training of management, nor does it hold key person insurance on these individuals. The loss of one or more of these key employees or contractors, if not replaced, could adversely affect the Company’s operations and financial condition.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

The Company’s insurance coverage does not cover all of its potential losses, liabilities and damages related to its business and certain risks are uninsured or uninsurable

The Company’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labour disputes or slowdowns, unusual or unexpected geological conditions, ground or slope failures, cave-ins, changes in the regulatory environment or laws, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company’s properties or the properties of others, delays in development or mining, monetary losses and possible legal liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to be reasonable, its insurance does not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover certain risks at economically feasible premiums. Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability. Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. The Company might also become subject to liability for pollution or other hazards which may not be insured against or which the Company may elect not to insure against because of premium costs or other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon its financial performance and results of operations.

Volatility in precious and base metal prices may affect the future production, profitability, financial position and financial condition of the Company

The development and success of the Abu Marawat Concession will be dependent on the future price of precious and base metals. These prices are subject to significant fluctuation and are affected by a number of factors which are beyond the control of the Company. Such factors include, but are not limited to, interest rates, exchange rates, inflation or deflation, fluctuation in the value of the United States dollar and foreign currencies, global and regional supply and demand, and the political and economic conditions of major goldproducing countries throughout the world. The prices of precious and base metals have fluctuated widely in recent years, and future serious price declines could cause continued development of, and commercial production from, the Company’s properties to be impracticable or uneconomic. Depending on the prices of precious and base metals, projected cash flow from planned mining operations may not be sufficient and the Company could be forced to discontinue development and may lose its interest in, or may be forced to sell, some of its properties. Future production from the Company’s mining properties is dependent on prices of precious and base metals that are adequate to make these properties economically viable.

Substantial expenditures are required to establish mineral reserves

Substantial expenditures are required to establish mineral reserves. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that the funds required for development can be obtained on a timely basis. The discovery of mineral deposits is dependent upon a number of factors. The commercial viability of a mineral deposit once discovered is also dependent upon a number of factors, some of which relate to particular attributes of the deposit, such as size, grade and proximity to infrastructure, and some of which are more general factors such as metal prices and government regulations, including environmental protection. Many of these factors are beyond the control of the Company. In addition, because of these risks, there is no certainty that the expenditures to be made by the Company on the exploration of the properties as described herein will result in the discovery of commercial quantities of ore.

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Aton Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2021

Currency fluctuations may affect the costs that the Company incurs in its operations

The revenue from financing activities will be received in Canadian dollars while a significant portion of its operating expenses will be incurred in United States dollars, Egyptian pounds and other foreign currencies. From time to time, the Company will incur capital expenditures that are denominated in foreign currency. The depreciation of the Canadian currency as against the currencies that the Company operates with could materially and adversely affect the Company’s profitability, results of operation and financial position.

Conflicts of interest may affect certain directors and officers of the Company.

Senior officers and directors of the Company own or control approximately 10% of the outstanding Common Shares. Certain conflicts may arise between such individuals’ interests as members of the management team and their interests as shareholders. Such conflicts could arise, for example, with respect to the payment of salaries and bonuses and similar matters. The Company’s directors and officers are subject to fiduciary obligations to act in the best interest of the Company.

Any of the risks and uncertainties described above and in the above-noted documents could have a material adverse effect on the Company’s business and financial condition and accordingly, should be carefully considered in evaluating the Company’s business.

OFF-BALANCE SHEET ARRANGEMENTS

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

APPROVAL

The Board of Directors of the Company has approved the disclosure contained in this MD&A.

ADDITIONAL INFORMATION

Additional information relating to the Company can be found on SEDAR at www.sedar.com.

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