AuQ Gold Mining Inc. — Management Reports 2021

Jan 29, 2021

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AUQ GOLD MINING INC. (formerly Royal Gold Mining Inc.)

Management’s Discussion and Analysis

Nine Month Period Ended November 30, 2020

(Expressed in Canadian Dollars)

Report Date – January 28, 2021

AUQ GOLD MINING INC. For the nine month period ended November 30, 2020 Management’s Discussion and Analysis

This Management’s Discussion & Analysis (“MD&A”) is intended to assist in the understanding of the trends and significant changes in the financial condition and results of operations of Royal Gold Mining Inc. (“Royal” or the “Company”) for the nine month period ended November 30, 2020. It should be read in conjunction with condensed interim financial statements for the nine month period ended November 30, 2020 and the audited annual financial statements and related notes for the year ended February 29, 2020 which was prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). All figures in this MD&A are expressed in Canadian Dollars unless otherwise noted. Additional information relevant to the Company’s activities can be found on SEDAR at www.sedar.com.

Overview

AUQ Gold Mining Inc. (“AUQ” or the “Company”) was incorporated on April 23, 2005 under the Company Act of British Columbia. The Company changed its name from Royal Gold Mining Inc. on October 26, 2020. The Company’s offices are located at Suite 701, 595 Howe Street, Vancouver, BC, Canada, V6C 2T5. The Company is engaged in the exploration of mineral properties in Canada. The Company’s shares are traded on the TSX Venture Exchange (“TSXV”) under the symbol “AUQ”.

Its principal activities are the exploration of resource properties located in Quebec. At this time the Company has no production from its mineral interests.

Selected Annual Information

The following table sets forth selected audited financial information of the Company from the last three completed financial years.

	2020	2019	2018
	$	$	$
Total revenue	–	–	–
Net loss for the year	(348,031)	(166,536)	(141,569)
Basic and diluted loss per share	(0.05)	(0.01)	(0.01)
Total assets	704,275	168,045	90,201
Non-current financial liabilities	-	-	139,260

Results of Operations

The Company incurred a net loss of $186,870 for the nine month period ended November 30, 2020 compared to a net loss of $248,790 for the nine month period ended November 30, 2019. The decrease was due primarily to a reduction in professional and consulting fees in the current period.

AUQ GOLD MINING INC. For the nine month period ended November 30, 2020 Management’s Discussion and Analysis

Summary of Quarterly Results

The following table sets out financial information for the Company for each of the last eight quarters summarized in accordance with IFRS.

Quarter Ended	Nov 30, 2020($)	Aug 31, 2020($)	May 31, 2020($)	Feb 29, 2020($)
RevenueLoss for periodLoss pershare	Nil(53,455)(0.00)	Nil(105,233)(0.01)	Nil(28,182)(0.00)	Nil(109,455)(0.01)
Quarter Ended	Nov 30, 2019($)	Aug 31, 2019($)	May 31, 2019($)	Feb 28, 2019($)
RevenueLoss for periodLoss pershare	Nil(238,576)(0.02)	Nil(75,384)(0.01)	Nil(126,332)(0.01)	Nil(42,299)(0.00)

Liquidity

Historically, the Company’s sole source of funding has been from loans payable and the issuance of equity securities for cash, primarily through private placements. There can be no assurance of continued access to equity or debt funding.

The Company had cash on hand of $380,302 and working capital of $133,435 as at November 30, 2020 compared to $109,423 and $525,601 (deficiency) as at February 28, 2020. The significant improvement is due to the exercise of 3,445,000 share purchase warrants for aggregate proceeds of $616,750.

Resource Properties

Kirkland Creek Property

The Kirkland Creek property is located 120 kilometers northwest of Whitehorse, Yukon in the Ashihik Lake region. The Kirkland Creek property originally was comprised of 144 claims totaling approximately 7,300 acres. The Company paid the vendor 2,000,000 common shares for a 100% interest in the property. The vendor retained a 3% net smelter royalty (“NSR”) on any mineral production from the property. The Company has the right to purchase up to 2% of the 3% NSR for $1,000,000 per percentage point. The Kirkland Creek property now consists of 40 contiguous claims. The Company is obligated to make pre-production royalty payments of an aggregate of $25,000 annually to the Vendor – Deborah Moreau, who is the common-law spouse of the CEO of the Company.

AUQ GOLD MINING INC. For the nine month period ended November 30, 2020 Management’s Discussion and Analysis

Resource Properties (continued)

Saint Sabine Property, Quebec

In September 2019, the Company acquired an option to purchase a 100% ownership interest in 163 mining claims in the Beauce region of Quebec, known as the Sainte Sabine property.

In consideration, the company will make cash payments totalling $295,000, issue a total of 1,500,000 shares and undertake a total of $2,200,000 in exploration work all in stages over a four-year period as follows:

• Upon exchange approval, $55,000 cash (paid) and 200,000 shares;

• Year 1, $45,000, 250,000 shares and $100,000 in work expenditures;

• Year 2, $55,000, 300,000 shares and $400,000 in work expenditures;

• Year 3, $65,000, 350,000 shares and $700,000 in work expenditures;

• Year 4, $75,000, 400,000 shares and $1,000,000 in work expenditures.

A 2% net smelter royalty applies to the acquisition, of which two tranches of 0.5% may be acquired for $500,000 each.

Eliza Gold Project, Quebec

On February 6, 2020, the Company entered into an option agreement whereby the Company has the right to earn a 100% interest in 8 mineral claims covering 408 hectares within and near Azimut Exploration Inc.’s Elmer property, James Bay territory, Quebec. in exchange for issuing 600,000 units to the vendor and paying $20,000 in cash. The vendor will retain 2%-per-cent net smelter return (“NSR”) royalty on the Eliza Gold Project. The Company may repurchase 50% of the NSR for a cash payment of $1,000,000.

In consideration, the Company will make cash payments totalling $20,000, issue a total of 600,000 units all in stages over a three-year period as follows:

• Within 3 days of Exchange approval, $20,000 cash (paid in March) and 150,000 shares and 150,000 warrants exercisable at $0.60 for two years (issued in March);

• 1st anniversary of Exchange approval, issue 150,000 shares and 150,000 warrants exercisable at $0.60 for two years;

• 2nd anniversary of Exchange approval, 150,000 shares and 150,000 warrants exercisable at $0.60 for two years; and

• 3rd anniversary of Exchange approval, 150,000 shares and 150,000 warrants exercisable at $0.60 for two years.

The optionor retains a 2% net smelter royalty, of which two tranches of 0.5% may be acquired by the Company for $500,000 each.

AUQ GOLD MINING INC. For the nine month period ended November 30, 2020 Management’s Discussion and Analysis

Resource Properties (continued)

Partridge Gold Property

In January 2020, the Company acquired a 100% interest in 95 mineral claims covering 52.68 km[2] in Abitibi, Quebec (the “Partridge Gold Project”) in exchange for issuing 360,000 common shares to the vendor. The vendor will retain 2%-per-cent net smelter return (“NSR”) royalty on the Partridge Gold Project. The Company may repurchase 50% of the NSR for a cash payment of $1,000,000.

In October 2020, the Company entered into an agreement to purchase a 100% interest in an additional 97 mineral claims that are contiguous to the existing Partridge Gold Property. The consideration for the claims is the payment of $20,000 in cash and the issuance of 100,000 units of the Company at a price of $0.30 per unit. Each unit is comprised of one common share and one share purchase warrant exercisable at $0.50 for a period of 12 months. The vendor will retain a 2% NSR. The Company may repurchase 50% of the NSR for a cash payment of $1,000,000.

Bellechase Property

On September 29, 2020, as amended on November 30, 2020, the Company entered into an option agreement to acquire up to a 70% interest in the advanced-stage Bellechasse Timmins gold property located in the Beauce region of southern Quebec.

The initial option to acquire a 35% interest in the property requires the Company to issue a $350,000 promissory note bearing interest at 10% and due on or before October 2, 2022, issue 1,000,000 common shares and incur $200,000 of property expenditures prior to October 2, 2021.

An additional 35% interest can be acquired if the Company issues a $350,000 promissory note bearing interest at 10% and maturing within two years from the date of issuance, issues 500,000 common shares and incurs $250,000 of property expenditures prior to October 2, 2023.

The agreement remains subject to receipt of TSXV approval.

Transactions with Related Parties

• (a) During the nine month period ended November 30, 2020, the amount of $26,250 (2019 – $22,500) was incurred to the Chief Executive Officer (“CEO”) of the Company for consulting fees.

• (b) During the nine month period ended November 30, 2020, the amount of $390 (2019 – $Nil) was incurred on a long term loan owing to the CEO.

• (c) During the nine month period ended November 30, 2020, the amount of $Nil (2019 – $31,128) was incurred to the Chief Executive Officer of the Company for exploration costs.

• (d) As at November 30, 2020, a total of $31,584 (February 28, 2019 - $31,194) was included in accounts payable and accrued liabilities owing to a corporation controlled by the CEO of the Company.

AUQ GOLD MINING INC. For the nine month period ended November 30, 2020 Management’s Discussion and Analysis

Off-Balance Sheet Arrangements

As of the Report Date, the Company has not entered into any Off-Balance Sheet Arrangements.

Adoption of New Accounting Standards

No new accounting standards were adopted during the period.

Disclosure of Outstanding Share Data

As at November 30, 2020 and the Report Date, the Company had the following securities outstanding:

Type of Security	November 30, 2020	Report Date
Common Shares	14,851,962	15,401,962
Options	-	-
Warrants	4,597,919	4,597,919

Subsequent Events

Subsequent to November 30, 2020, the Company completed a non-brokered private placement whereby it issued 550,000 flow-through shares at $0.70 per share for aggregate proceeds of $385,000.