Au Gold Corp. — Management Reports 2020

Apr 24, 2020

SCHOONER CAPITAL CORP. MD&A FOR THE YEARS ENDED DECEMBER 31, 2019 AND DECEMBER 31, 2018

Background and Corporate Update

This Management Discussion and Analysis for Schooner Capital Corp. (“ Schooner ” or the “ Company ”) is prepared as at April 23, 2020 and should be read in conjunction with the Company’s audited financial statements for the years ended December 31, 2019 and December 31, 2018.

The audited financial statements for the year ended December 31, 2019 have been prepared in accordance with International Financial Reporting Standard (“ IFRS ”), as issued by the International Accounting Standards Board (“ IASB ”).

All dollar figures included therein and in the following Highlights are quoted in Canadian dollars. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com.

The Company is a capital pool company (a “ CPC ”), as defined by Policy 2.4 – Capital Pool Companies (“ Policy 2.4 ”) of the TSX Venture Exchange (the “ TSXV ”). As a CPC, the Company’s objective is to identify and acquire either operating assets or a business, subject to regulatory approval, that meet the criteria of a “Qualifying Transaction”, as defined by the TSXV pursuant to Policy 2.4 (“ Qualifying Transaction ”). Until such time that a “Qualifying Transaction” is completed, the Company will have no significant revenue and will incur expenses primarily for “Qualifying Transaction” investigation, TSXV listing and filing requirements, professional services, and office facilities and administration, subject to certain restrictions under Policy 2.4.

The Company was incorporated on December 7, 2017 with 2,400,000 shares being issued at a price of $0.05 per share for total proceeds of $120,000 (the “ Seed Shares ”). The Seed Shares are held in escrow and will be released ratably over an 18-36 month period following the completion of a Qualifying Transaction. Should a Qualifying Transaction not be completed within two years, then one-half of the Seed Shares may be subject to cancellation in accordance with policies of the TSXV.

On June 27, 2018, the Company completed its initial public offering (the “ IPO ”) which resulted in the issuance of 2,350,000 common shares at a price of $0.10 per share for total gross proceeds of $235,000. In connection with the IPO, the Company incurred $38,140 in share issuance costs for legal, TSXV, agency, and other services, of which $12,500 is for the fair value of 235,000 options issued to the placement agent. These options have an exercise price of $0.10 per common share and are exercisable until June 27, 2020 without further vesting conditions.

Concurrent with the IPO, on June 27, 2018 the Company granted 475,000 stock options to directors of the Company. These options have an exercise price of $0.10 per common share and are exercisable until June 27, 2023 without further vesting conditions.

Forward-Looking Statements

Certain statements contained in the following Quarterly Highlights constitute forward-looking statements. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-

looking statements. These risks include, but are not limited to, the Company completing the Transaction, and its ability to maintain operations following a “Qualifying Transaction”. Readers are cautioned not to place undue reliance on these forward-looking statements.

Analysis of the Company’s Financial Performance and Condition

The Company had $219,997 in cash on December 31, 2019. The Company does not have any significant business activity and, as a result, did not incur any significant operating expenses or liabilities in the years ended December 31, 2019 to December 31, 2018.

For the year ended December 31, 2019, the Company, incurred a net loss of $44,228 compared to $124,255 for the year ended December 31, 2018. This loss was primarily the result of a professional fees of $28,896 compared to $71,278 in the prior year. Other expenses incurred in the year were for filing fees of $15,235 compared to $16,319 in the prior year. The Company also incurred $35,600 for stock based compensation in the prior year and Nil for the current year.

Liquidity and Expense Structure

As a CPC, the Company’s routine expenses are limited to general administrative costs such as TSXV listing and filing fees, audit fees, and accounting fees. Additional legal or other costs may be incurred to pursue a potential “Qualifying Transaction”, regardless of whether the transaction is ultimately completed. The Company’s current cash balance is sufficient to pay its existing accounts payable and accrued liabilities, to maintain its existing level of operations for the next 12 months should the “Qualifying Transaction” not be completed.

Share Capital as of April 23, 2020

Authorized:

Unlimited common shares

Issued:

4,750,000 common shares, net of issuance costs $ 316,860

Transactions with Related Parties

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

Key management personnel received $nil (2018 - $35,600) of share-based compensation during the year ended December 31, 2019.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.