Bonterra Resources Inc. — Management Reports 2020

Jun 12, 2020

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

FORWARD-LOOKING INFORMATION AND MATERIAL ASSUMPTIONS

This report on results for three and seven month periods ended December 31, 2019 contains forward-looking information, including forward-looking information about Bonterra Resources Inc.’s (the "Company" or "Bonterra") operations, estimates, and exploration and acquisition spending.

Forward-looking information is generally signified by words such as “forecast”, “projected”, “expect”, “anticipate”, believe”, “will”, “should” and similar expressions. This forward-looking information is based on assumptions that the Company believes were reasonable at the time such information was prepared, but assurance cannot be given that these assumptions will prove to be correct, and the forward-looking information in this report should not be unduly relied upon. The forward-looking information and the Company’s assumptions are subject to uncertainties and risks and are based on a number of assumptions made by the Company, any of which may prove to be incorrect.

GENERAL

This Management Discussion and Analysis (“MD&A”) of the financial condition, results of operations and cash flows of the Company for three and seven month periods ended December 31, 2019 should be read in conjunction with the audited consolidated financial statements as at and for the seven month period ended December 31, 2019 and year ended May 31, 2019. This MD&A is effective June 11, 2020. Additional information relating to the Company is available on SEDAR at www.sedar.com.

The Company has prepared its audited consolidated financial statements for the seven month period ended December 31, 2019 and year ended May 31, 2019 in Canadian dollars and in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board.

UPDATE ON COVID-19

As the global pandemic related to the Coronavirus disease 2019 (“ COVID-19 ”) continues, Bonterra has implemented a plan to protect the health and safety of its employees and all stakeholders. The Company has implemented alternative working arrangements for all employees to work from home and temporary closed all of its offices and placed its exploration camps on care and maintenance.

The Company’s operational activities were particularly affected due to the inability of staff to travel because of the non-essential travel restrictions, especially into and out of it’s exploration camps in Quebec. Furthermore, suppliers of services to the Company are also similarly affected and this may lead to delays in the provision of data and services to the Company’s operational efforts. In an effort to preserve cash and due to reductions in operational activities, the Company has in some instances temporary laid off various members of staff. The Company has been engaged in discussions with the Government of Quebec and other stakeholders on alternative approaches to its work and flow through commitments, so as to preserve the integrity of its mineral properties and flow through obligations.

The Company will continue to monitor the COVID-19 related situation and will only fully resume regular activities when there are clear indications that its employees are able to return to work in a safe environment and in accordance with the advice and requirements provided by all the regulatory authorities from a local to national level.

DESCRIPTION OF BUSINESS

The Company is incorporated under the laws of the province of British Columbia on May 1, 2007. The Company’s common shares are traded on the TSX Venture Exchange (“TSX-V”) under the symbol “BTR”. The Company’s shares also trade on the OTC Exchange in the United States under the symbol “BONXF” and on the Frankfurt Stock Exchange under the symbol “9BR2”.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

The Company is a junior mineral exploration company engaged in the business of acquiring, exploring and evaluating natural resource properties in the province of Quebec. On September 24, 2018, the Company completed the acquisition of Metanor Resources Inc. (“Metanor”), a Québec based corporation engaged in the exploration and development of mining properties. The Company remains focused on exploration.

Prior to the acquisition, the Company completed a plan of arrangement whereby the Company spun out its Larder Lake Project assets and liabilities and $7,000,000 in cash in order to create a new exploration company, by way of plan of arrangement under the Business Corporations Act (British Columbia). Each holder of common shares of the Company received one common share of the new Company for every seven common shares of the Company held.

On November 6, 2018, the Company consolidated its common shares on a one new share for ten old shares basis. All share and per share amounts have been revised to reflect the consolidation.

On January 1, 2020, the Company amalgamated the parent Company with its wholly owned subsidiary Metanor Resources Inc. This amalgamation was done for administrative purposes and will have no material impact on the Company’s consolidated financial statements.

ABOUT THE MINERAL PROPERTIES

The Abitibi Greenstone Belt hosts significant gold mineralization in several parallel NE to SW trending zones. Gold in the Urban-Barry Township is primarily associated with quartz-carbonate veins mineralized with sulphides. The Company’s projects include the Gladiator Deposit, the Moroy Deposit and Bonterra Mill, and the Barry Deposit.

Bonterra’s recent acquisition of Metanor and consolidation of the Company’s databases and management have resulted in broader exploration and resource development plans. Bonterra conducted a NI 43-101 mineral resource estimate for all its advanced Urban-Barry exploration assets, being the Gladiator, Barry and Moroy deposits.

The results of the Mineral Resource Estimates for the Gladiator, Barry, and Moroy deposits are summarized in table 1. The Mineral Resource Estimates for the Gladiator and Barry deposits are reported at a 3.5 gram per tonne Au cut-off grade. The Mineral Resource Estimate for the Moroy deposit is reported at a 3.0 gram per tonne cut-off grade. The resource models are tabulated at various cut-off grades in tables 2 – 4 below. The Mineral Resource Estimates have been prepared by SGS Geological Services, Blainville, QC, and has been reviewed internally by the Corporation. The full technical reports, which were being prepared in accordance with National Instrument 43-101 (“NI-43-101”), are available on SEDAR (www.sedar.com) under the Corporation’s issuer profile. The effective date of the current mineral resource estimate is May 24, 2019.

Table 1 . Mineral Resource Estimate (effective May 24, 2019)

Deposit	Measured	Measured	Measured	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred
	Tonnes	Au(g/t)	Ounces Au	Tonnes	Au(g/t)	Ounces Au	Tonnes	Au(g/t)	Ounces Au
Gladiator				743,000	8.46	202,000	3,065,000	9.10	897,000
Barry				2,052,000	5.84	385,000	2,740,000	5.14	453,000
Moroy	302,000	5.66	55,000	365,000	4.77	56,000	396,000	4.32	55,000
Total	302,005	5.66	55,000	3,160,000	6.33	643,000	6,201,000	7.04	1,405,000

1. The classification of the current Mineral Resource Estimates into Measured, Indicated and Inferred are consistent with current 2014 CIM Definition Standards - For Mineral Resources and Mineral Reserves.

2. Mineral resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to a Measured and Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

3. All figures are rounded to reflect the relative accuracy of the estimate. Composites have been capped where appropriate.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

4. Resources are presented undiluted and in situ and are considered to have reasonable prospects for economic extraction. In order to meet this requirement, the Gladiator, Barry and Moroy Deposit mineralization are considered amenable for underground extraction.

5. Underground mineral resources are reported at a cut-off grade of 3.5 g/t Au for Gladiator and Barry, and 3.0 for Moroy. Cut-off grades are based on a gold price of US$1,300 per ounce, a foreign exchange rate of US$0.75, gold recoveries of 93% - 95%, and reasonable mining, processing and transportation costs.

6. High grade capping was done on composite data. Capping values of 30 to 55 g/t Au were applied to all 3D grade controlled wireframe models. A fixed specific gravity value of 2.82 was used to estimate the tonnage from block model volumes for Moroy and Barry, and 2.78 for Gladiator.

7. Mineral Resources for Barry and Moroy are exclusive of material that has been mined.

Table 2. Gladiator Mineral Resource Estimate tabulated at various cut off grades

Cut-off (Aug/t)	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred
	Tonnes	Au(g/t)	Ounces Au	Tonnes	Au(g/t)	Ounces Au
2	1,244,000	6.13	245,000	5,079,000	6.53	1,067,000
2.5	1,019,000	6.99	229,000	4,162,000	7.48	1,001,000
3	859,000	7.78	215,000	3,511,000	8.35	943,000
3.5	743,000 8.46 202,000			3,065,000 9.10 897,000
4	653,000	9.10	191,000	2,696,000	9.83	852,000

Values in this table are reported to illustrate the sensitivity of the block model to cut-off grade relative to the base case resource estimate. The Gladiator Resource Estimate is based on a cut-off grade of 3.5 g/t Au (see table 1) and values presented here above and below the base case should not be interpreted as a mineral resource statement.

Table 3. Barry Mineral Resource Estimate tabulated at various cut off grades

Cut‐off (Au g/t)	Indicated	Indicated	Indicated	Inferred	Inferred	Inferred
	Tonnes	Au(g/t)	Ounces Au	Tonnes	Au(g/t)	Ounces Au
2	4,507,000	4.11	595,000	5,716,000	3.87	712,000
2.5	3,449,000	4.67	518,000	4,577,000	4.28	630,000
3	2,662,000	5.25	449,000	3,675,000	4.66	551,000
3.5	2,052,000 5.84 385,000			2,740,000 5.14 453,000
4	1,587,000	6.47	330,000	2,127,000	5.54	379,000

Values in this table are reported to illustrate the sensitivity of the block model to cut-off grade relative to the base case resource estimate. The Barry Resource Estimate is based on a cut-off grade of 3.5 g/t Au (see table 1) and values presented here above and below the base case should not be interpreted as a mineral resource statement. Mineral Resources are exclusive of material that has been mined.

Table 4. Moroy Mineral Resource Estimate tabulated at various cut off grades

2 2.5 3 3.5 4 Cut‐off (Au g/t)	Indicated	Indicated	Indicated	Tonnes Au(g/t) Ounces Au Inferred	Tonnes Au(g/t) Ounces Au Inferred	Tonnes Au(g/t) Ounces Au Inferred
	Tonnes	Au(g/t)	Ounces Au	Tonnes	Au(g/t)
	1,017,004	4.25	139,000	701,000	3.55	80,000 70,000
	840,004	4.70	127,000	563,000	3.87
	667,005 5.17 111,000			396,000 4.32 55,000
	531,005	5.68	97,000	271,000	4.93	43,000 34,000
	432,006	6.19	86,000	202,000	5.23

Values in this table are reported to illustrate the sensitivity of the block model to cut-off grade relative to the base case resource estimate. The Moroy Resource Estimate is based on a cut-off grade of 3.0 g/t Au (see table 1) and values presented here above and below the base case should not be interpreted as a mineral resource statement. Mineral Resources are exclusive of material that has been mined.

The combined mineral resource estimate is part of Bonterra’s strategy to fast track the development of the three deposits simultaneously, to optimize feed to the Bachelor Mill over the life of the three mines.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

BONTERRA EXPLORATION PROJECTS – URBAN-BARRY, QUÉBEC

The Company’s mineral p roperties ar e subjecy to n et smelter r e turns royal t y (“NSR”) ranging from 0 % to 3.9%. Thes e NSR’s may have variou s purchase o p tions in whi c h the Comp a ny may be a ble to redu c e the NSR % for a cash payment.

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COLISEUM PROPERTY

The Company holds a 10 0 % interest in 95 claim b l ocks in Qué b ec.

WEST ARENA PROPERTY

The Compa n y acquired a 100% inter e st in 23 ad d itional mineral claims a d jacent to th e Coliseum c laims in Québec.

EAST ARENA PROPERTY

On Decemb e r 30, 2010, the Compa n y acquired a 100% inte r est in 57 m ineral claim s east of th e UrbanBarry Township in Québec.

The East Ar e na Property is contiguo u s and along strike with the West Arena propert y . This property was drilled in th e past wher e gold-bearin g veins wer e intercepted. The Com p any conduc t ed the first phase of exploration o n the property, a groun d magnetic s urvey. An a nomaly of i n terest runs NE-SW and warrants further inve s tigation.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

ST-CYR AND WEST LACROIX LAKE PROPERTIES

On February 23, 2016, the Company acquired a 100% interest in the St-Cyr and West Lacroix Lake Properties, located in the Urban-Barry Gold Camp, Barry Township, Québec.

The Properties adjoin Bonterra’s West and East Arena properties. Both are located approximately 90 kilometres east of Lebel-sur-Quevillon and less than 10 kilometres southwest of, and along the same geological trend as, Bonterra’s 100% owned Gladiator Gold Project. The St-Cyr Property consists of 13 mineral claims covering 733.70 hectares and the West Lacroix Lake Property consists of 18 mineral claims covering 1,016.34 hectares.

Gold mineralization found to date in the area occurs in basalts, rhyolite and the volcano-sedimentary sequence. There are at least two styles of gold mineralization: sulphide replacement (generally pyrite) either as disseminations and stockworks of sulphide-rich fractures and classical native gold in quartz veins.

The properties also cover a recently discovered alkaline carbonatite complex with interesting, but as yet undetermined, gold potential. Carbonatite-syenite alkaline complexes make excellent exploration environments, especially when embedded in gold-bearing Archean greenstone belts.

LAC BARRY

On March 10, 2016, and as amended March 30, 2017, the Company entered into an option agreement with Golden Valley Mines Ltd. (“Golden Valley”) and acquired an 85% interest in Golden Valley’s Lac Barry Property, comprised of 35 claims covering 1,431.65 hectares adjacent to the south boundary of the Coliseum Property.

The Lac Barry Property is located approximately 1.5 kilometres southwest of the West Arena Property.

MACHO SOUTH, BARRY AND BAILLY PROPERTIES

On March 11, 2016, the Company entered into option agreements to acquire 100% interests in the Macho South Property, the Barry Property and the Bailly Property.

The Macho South Property is located at the extreme southwestern end of Bonterra’s Gladiator Project. The three property acquisitions, together with the acquisition of the Lac Barry Property, extend Bonterra’s coverage of favourable gold host environments southward and closer to the edge of the Urban-Barry greenstone belt. These four properties, together with Bonterra’s West and East Arena properties, cover 25 kilometres of prospective greenstone belt lithology and known shear zones.

THUBIERE PROPERTY

On March 10, 2017, the Company entered into an agreement to acquire a 100% interest in the Thubiére Property. The Thubiére Property (6 claims covering 338 hectares) is a strategic acquisition to the northwest of the Gladiator and Barry deposits.

LAC MISTA PROPERTY

On March 14, 2017, the Company acquired a 100% interest in the Lac Mista Property. The vendors retain a 2% gross overriding royalty reserve on the claim, of which 1% may be repurchased by the Company for $1,000,000.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

DUKE PROPERTY

On July 6, 2018, the Company entered into an agreement with Beaufield Resources Inc. to acquire a 70% interest in the Duke Property, located in Québec. In consideration, the Company must make payments as follows:

• Cash payment of $250,000 (paid) and issue 400,000 common shares of the Company (issued on July 12, 2018 and valued at $1,600,000) upon acceptance by the TSX-V;

• An additional $250,000 (paid) on or before July 6, 2019; and

• An additional $250,000 on or before July 6, 2020.

The Company must also incur exploration expenditures as follows:

• $1,500,000 (Completed) on or before July 6, 2019;

• An additional $1,500,000 (Completed subsequent to December 31, 2019) on or before July 6, 2020; and

• An additional $1,500,000 on or before July 6, 2021.

The Property is an assemblage of contiguous mineral claims located immediately adjacent to the northern boundaries of the Company’s Urban-Barry properties containing the Gladiator Deposit and extensions. This includes a narrow inset of claims that interrupt the western continuity of claims in the Gladiator region known as “The Gap”. This land package also contains numerous gold showings with expansion potential, including Lac Rouleau and Zone 18. The general geology is considered to be similar to that of the Gladiator area, with numerous occurrences of structurally controlled shear hosted vein mineralization on or near mafic volcanic contacts in proximity to both felsic and mafic intrusive units.

Maximus Property

On July 23, 2018, the Company acquired a 100% interest in the Maximus Property, located in Québec.

Boudreault-Duval Property

In March 2019, the Company entered into an option agreement to acquire a right to a new property called Boudreault-Duval, consisting of one mining claim covering an area of 56 ha, located 20 km north of the Barry project. To acquire the right to the property option, the Company made a cash payment of $25,000 and issued 10,000 common shares (issued on March 28, 2019 and valued at $19,500), to the arm's length vendors and, to exercise the option, the Company will make an additional cash payment of $50,000 and issue 15,000 common shares before the one-year anniversary of the agreement.

Lapointe Property

On March 9, 2020, the Company completed a purchase agreement and acquired a new property called the Lapointe property consisting of nine new claims covering an area of 508 ha, contiguous with the Company’s Urban-Barry properties located approximately 10 km southwest of the Barry deposit. To acquire the property, the Company made a cash payment of $10,000.

Moroy Deposit

The Moroy Deposit is a recent discovery near the Bachelor Mill property with access via the Bachelor Mine. Current development consists of three sub-drifts and a series of raises, accessed from the 11th level and 14[th] level at Bachelor. Extensive drill information exists from surface, as well as from the 11th level to a depth of approximately 700 feet, effectively resulting in the existence of multiple unmined mineralized zones.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

Barry Deposit

The Barry Deposit is permitted for initial mine development access and bulk sampling, with decline and cross cut development currently underway. Recent drilling has resulted in the expansion of high-grade areas down plunge at each known strike extent. Bonterra expects to rapidly increase the size of the Barry Deposit especially at depth, given that very little drilling has previously taken place below 300 metres depth over a one kilometre strike length.

Bachelor Mine

The Bachelor Mine is located 4 kilometres south of Highway 113, or 90 kilometres northeast of the city of Lebel-sur-Quévillon, Québec, Canada. The mine is connected to the provincial electrical grid and has access to high-speed internet and mobile phone service on site. The mine has a sleep camp to lodge and cater to all of the workers. The mill and tailing facility are fully functional with all the social and environmental licenses in place. The Bachelor Mine infrastructure is currently being used to access the Moroy Deposit.

Bachelor Mill

The Bachelor Mill is the only permitted mill in the region, with more than 15 high-grade gold deposits within a 110 kilometre radius of the mill site. The mill is accessible by a paved highway with a network of logging roads linking the other properties in the area to feed the mill. Bonterra began the Environmental Assessment process in 2017 to proceed with the mill expansion project in order to increase the daily production capacity of the Bachelor Mill from 800 tpd to 2,400 tpd, and to increase the total capacity of the tailing storage facility by an additional 8 millions tonnes. In October 2019, the company submitted the Environmental Assessment of the mill expansion project to the Quebec’s Ministry of Environment (MELCCC).

SELECTED ANNUAL INFORMATION

The following tables summarize selected annual financial data of the Company for the seven month period ended December 31, 2019 and two most recent years ended May 31, 2019 and 2018:

	Seven Month period ended December 31, 2019	Year ended May 31, 2019	Year ended May 31, 2018
Recurring revenue	$NIL	$NIL	$NIL
Net loss and Comprehensive loss1	17,576,707	100,843,563	22,002,860
Basic and diluted loss per share2	0.25	2.42	1.11
Total assets	65,470,444	57,944,178	28,125,586
Total current liabilities	11,915,594	16,571,520	6,808,404

1 Includes costs allocated as part of Metanor acquisition and discontinued operations 2 All periods are adjusted for 10:1 share consolidation completed on November 6, 2018 SELECTED QUARTERLY INFORMATION

Results for the eight most recently completed quarters are summarized below.

For the Quarters Ending	Three Months December 31, 2019 $	Four Months September 30, 2019 $	Three Months May 31, 2019 $	Three Months February 28, 2019 $
Exploration expenses and impairment of mining properties	5,357,851	6,508,526	9,722,814	6,877,347
Loss for the period	8,619,400	9,407,307	5,251,167	19,900,631
Basic and diluted loss per share	0.11	0.14	0.09	0.43
Total assets	65,470,444	71,797,358	57,944,178	45,540,225
Total current liabilities	11,915,594	13,983,502	16,571,520	28,890,594

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

For the Quarters Ending	Three Months November 30, 2018 $**	Three Months August 31, 2018 $	Three Months May 31, 2018 $	Three Months February 28, 2018 $
Exploration expenses	9,342,826	8,366,638	9,304,374	4,929,544
Loss for the period	68,108,881	7,582,884	8,123,956	6,004,926
Basic and diluted loss per share	2.26	0.33	0.36	0.32
Total assets	57,437,651	21,215,157	28,125,586	37,797,275
Total current liabilities	23,209,072	5,305,859	6,808,404	9,062,162

**includes costs allocated as part of Metanor acquisition

OPERATIONS

During the three months ended December 31, 2019, the Company reported a net loss of $8,169,400 compared to a net loss for the three months ended November 30, 2018 of $68,108,881. Variations in expenses from the three month period ended December 31, 2019 to the three month period ended November 30, 2018 are as follows:

• Exploration and evaluation of $5,357,851 (November 30, 2018 - $9,342,826). The Company expects to increase this level of exploration and evaluation expenditures in the coming quarter in order to meet its flow-through share obligations;

• Impairment of mineral properties of $Nil (November 30, 2018 - $50,243,671) was new in 2018 as a result of the acquisition of Metanor. This is the fair value assigned to the mineral properties on the date of acquisition under IFRS 3. Due to the subjectiveness of the value and trying to be consistent with the Company’s policy under IFRS 6 to expense all exploration and evaluation expenditures, the Company took this one time impairment;

• Professional fees decreased to $158,059 in 2019 from $344,091 in 2018 due to increased audit and legal fees relating to the acquisition of Metanor in 2018. The Company expects these professional fees to decrease in the coming quarters;

• The Company incurred costs of $231,977 in shareholder communications and investor relations as compared to $878,729 in 2018 and $75,798 in travel as compared to $266,898 in 2018. The decreases are due to less travel, marketing and promotional activity in 2019 as the Company focuses its resources on exploration. The Company expects these shareholder communications and investor relations and travel costs to be consistent in the coming quarter; and

• Recovery of flow-through premium liability of $1,252,000 (November 30, 2018 - $1,301,677) related to the reduction of the flow-through premium liability created by the issuance of flow-through shares at a premium. The decrease was the result of less qualified expenditures made by the Company during 2019 related to flow-through shares with a higher premium;

• Unrealized gain on marketable securities of $nil (November 30, 2018 - $314,640) related to a change in the share price of marketable securities at period end;

• Mill care and maintenance of $1,287,792 (November 30, 2018 - $Nil) is new for 2019 as a result of the acquisition of Metanor. The Company began to shut down its production operations in October 2018 and as a result put its fully operational mill on care and maintenance effective June 1, 2019;

• Loss on discontinued operations of $43,000 (November 30, 2018 - $Nil) is new for 2019 as a result of the acquisition of Metanor. The Company wound down its production operations in October 2018;

• Impairment of materials and supplies of $1,401,953 (November 30, 2018 - $Nil) is new for 2019. The materials and supplies were acquired as a result of the acquisition of Metanor. As a result of the uncertainty around the future development of the Company’s current resources the Company has written down it s material and supplies to its current net realizable value.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

Comparison of the seven month period ended December 31, 2019 to the year ended May 31, 2019 has not been provided as the significant difference in the time periods for each period would not allow for accurate comparisons. Instead users are encouraged to review the three month period ended December 31, 2019 to the three month period ended November 30, 2018 above as well as the four month period ended September 30, 2019 to the three month period ended August 31, 2018 provided in Bonterra’s MD&A for the four month period ended September 30, 2019 available on the Company’s website www.btrgold.com or through the Company’s public filings at www.sedar.com.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash at December 31, 2019 was $18,762,439 compared to $9,806,591 at May 31, 2019. The working capital was $8,122,625 at December 31, 2019, compared to a deficit in working capital of $2,980,830 at May 31, 2019.

On August 20, 2019, the Company completed a brokered private placement for gross proceeds of $31,962,910. The Company issued (a) 7,385,000 units of the Company (the “Units”) at a price of $2.50 per Unit for gross proceeds of $18,462,500, (b) 2,166,670 flow-through units of the Company (the “FT Units”) at a price of $3.00 per FT Unit for gross proceeds of $6,500,010, and (c) 1,628,000 super flow-through units of the Company (the “Super FT Units”) at a price of $4.30 per Super FT Unit for gross proceeds of $7,000,400. Each Unit consists of one common share of the Company and one-half of one common share purchase warrant (each whole common share purchase warrant, a “Warrant”). Each FT Unit consists of one common share of the Company issued on a flow-through basis (a “FT Unit Share”) and one-half of one Warrant. Each Super FT Unit consists of one common share of the Company issued on a flow-through basis that will also qualify for the two 10% enhancements under section 726.4.9 and section 726.4.17.1 of the Quebec Taxation Act and one-half of one Warrant. Each Warrant is transferrable and entitles the holder to acquire one common share of the Company until August 20, 2021 at price of $3.10 per common share.

On December 13, 2019, the Company completed a brokered private placement for gross proceeds of $5,292,898. The Company issued (a) 1,307,066 flow-through shares of the Company at a price of $2.25 per flow-through share for gross proceeds of $2,940,898, and (b) 980,000 super flow-through shares of the Company at a price of $2.40 per super flow-through share for gross proceeds of $2,352,000. Each super flow-through share consists of one common share of the Company issued on a flow-through basis that will also qualify for the two 10% enhancements under section 726.4.9 and section 726.4.17.1 of the Quebec Taxation Act.

During the seven month period ended December 31, 2019, the Company issued 100,000 common shares for proceeds of $200,000 on the exercise of 100,000 stock options.

Notwithstanding success to date in acquiring equity financing on acceptable terms, there is no guarantee of obtaining future equity financings or on what terms any such equity capital may be available to the Company and, as such, alternative funding programs are also being pursued by the Company.

The Company must utilize its current cash reserves, funds obtained from the exercise of options and warrants, if any, and other financing transactions to maintain the Company’s capacity to meet working capital requirements, and ongoing discretionary and committed exploration programs, and to fund any further development activities. The Company anticipates that it will raise additional capital when and if the opportunity arises.

OFF-BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

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TRANSACTIONS WITH RELATED PARTIES

The following expenses were incurred with directors and officers of the Company:

		Seven months ended	Seven months ended	Year	ended May 31,
	For the,		December 31, 2019		2019
	Short-term compensation
	Exploration and evaluation expenditures	$	60,000	$	288,000
	Salaries, management and director fees		497,000		1,352,000
	Professional fees		40,000		127,000
	Termination fees paid or accrued		210,000		1,146,000
			807,000		2,913,000
	Share-based compensation		-		3,159,000
		$	807,000	$	6,072,000

During the seven month period ended December 31, 2019, the Company received $Nil (Year ended May 31, 2019 - $69,000) for the recovery of rent expense from companies related by a former common officer.

Included in accounts payable at December 31, 2019 was $3,000 (May 31, 2019 - $22,958) due to officers for expense reimbursements and unpaid fees. The amounts payable are non-interest-bearing, uncollateralized and are repayable on demand.

During the seven month period ended December 31, 2019, the Company paid or accrued $Nil (Year ended May 31, 2019 - $18,760) to private companies with former common directors for exploration and evaluation expenditures.

RISKS AND UNCERTAINTIES

The Company is engaged primarily in mineral exploration and manages related industry risk issues directly. The Company may be at risk for environmental issues and fluctuations in commodity pricing. Management is not aware of and does not anticipate any significant environmental remediation costs or liabilities in respect of its current operations; however, it is not possible to be certain that all aspects of environmental issues affecting the Company, if any, have been fully determined or resolved.

CAPITAL DISCLOSURES

The Company’s objectives when managing capital are to identify, pursue and complete the exploration and development of mineral properties, to maintain financial strength, to protect its ability to meet its ongoing liabilities, to continue as a going concern, to maintain creditworthiness and to maximize returns for shareholders over the long term. With the exception of the TSXV’s minimum working capital requirements, the Company does not have any externally imposed capital requirements to which it is subject. Capital of the Company comprises shareholders’ equity.

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. To maintain or adjust the capital structure, the Company may attempt to issue new shares. The Company’s investment policy is to invest its cash in financial instruments at high credit quality financial institutions with terms to maturity selected with regard to the expected timing of expenditures from continuing operations. The Company's overall strategy remains unchanged from the prior year.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL INSTRUMENTS

As at December 31, 2019, the Company’s financial instruments consist of cash, marketable securities, receivables, security and contract deposits, trade and other payables, derivative liability and long-term debt.

Fair Value

The Company classifies its fair value measurements in accordance with an established hierarchy that prioritizes the inputs in valuation techniques used to measure fair value as follows:

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 following table sets forth the Company’s financial assets measured at fair value by level within the fair value hierarchy:

December 31, 2019	Level 1	Level 2	Level 3	Total
Cash	$18,762,439	$ -	$ -	$18,762,439
Marketable securities	$ 10,000	$ -	$ 10,000	$ 20,000
May 31, 2019	Level 1	Level 2	Level 3	Total
Cash	$ 9,806,591	$ -	$ -	$ 9,806,591
Marketable securities	$10,000	$-	$10,000	$20,000

CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS

Title to mineral property interests

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

Income taxes

Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The Company recognizes liabilities and contingencies for anticipated tax audit issues based on the Company’s current understanding of the tax law. For matters where it is probable that an adjustment will be made, the Company records its best estimate of the tax liability including the related interest and penalties in the current tax provision. Management believes they have adequately provided for the probable outcome of these matters; however, the final outcome may result in a materially different outcome than the amount included in the tax liabilities.

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent that it is probable that taxable profit will be available against which a deductible temporary difference can be utilized. This is deemed to be the case when there are sufficient taxable temporary differences relating to the same taxation authority and the same taxable entity that are expected to reverse in the same year as the expected reversal of the deductible temporary difference, or in years into which a tax loss arising from the deferred tax asset can be carried back or forward. However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

Going concern risk assessment

The Company’s ability to continue its operations and to realize its assets at their carrying values is dependent upon its ability to fund its existing acquisition and exploration commitments on its exploration and evaluation projects when they come due, which would cease to exist if the Company decides to terminate its commitments, and to cover its operating costs. The Company may be able to generate working capital to fund its operations by the sale of its exploration and evaluation assets or raising additional capital through equity markets. However, there is no assurance it will be able to raise funds in the future. These financial statements do not give effect to any adjustments required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different from those reflected in the accompanying financial statements.

Provisions and contingent liabilities

Judgements are made as to whether a past event has led to a liability that should be recognized in the financial statements or disclosed as a contingent liability. Quantifying any such liability often involves judgments and estimations. These judgments are based on a number of factors including the nature of the claims or dispute, the legal process and potential amount payable, legal advice received from previous experience and the probability of a loss being realized. Several of these factors are a source of estimated uncertainty.

Establishing cash-generating units (“CGU”)

For the purpose of assessing impairment of its long-term assets, the Company determines the CGU, defined as being the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. The determination of the CGU and the classification of the Company’s assets to the determined CGU require significant judgement having a potentially significant incidence on the result of the subsequent impairment analysis.

The Company periodically reviews the determination of the CGU and the corresponding grouping of the Company’s assets, including its assets classified as common assets.

Impairment of long-term assets

The evaluation if an impairment test in accordance with IAS 36 needs to be performed on its long-term assets requires judgement in determining whether it is likely that future economic benefits will be achieved at certain mining properties, which may be based on assumptions about future events or circumstances. If, after expenditure is capitalized, information becomes available suggesting that the recovery of the expenditure is unlikely, the amount capitalized is written down in the statement of comprehensive loss in the period when the new information becomes available. During the year ended May 31, 2019, the Company took an impairment of mineral properties of $54,289,635 to bring the value on the statement of financial position to $nil, consistent with its accounting policy under IFRS 6.

Leases

The Company is required to make judgments in determining the lease term. Management considers all facts and circumstances, including economic incentives to exercise an extension option and its asset management strategy. Extension options are only included in the lease term if the lease is reasonably certain to be extended.

Asset retirement obligations

The Company assesses its asset retirement obligations annually. Determining these obligations requires significant estimates and assumptions due to the numerous factors that affect the amount ultimately payable. Such factors include estimates of the scope and cost of restoration activities, legislative

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

amendments, known environmental impacts, the effectiveness of maintenance and restoration measures and changes in the discount rate. This uncertainty may lead to differences between the actual expense and the allowance. At the date of the statement of financial position, asset retirement obligations represent management’s best estimate of the charge that will result when the actual obligations are terminated.

Fair value of Derivative Liability

As part of the Amending Agreement signed with Sandstorm Gold Ltd. (“Sandstorm”), Metanor agreed to a minimum stream deal to Sandstorm for its Bachelor and Barry properties. The minimum stream values were recorded at fair value. The fair value was based on current value due to the short-term duration of these remaining gold deliveries as at May 31, 2019. The important assumptions in the calculation were as follows:  Gold price of $1,732.

Valuation of flow-through premium

The determination of the valuation of flow-through premium and warrants in equity units is subject to significant judgment and estimates. The flow-through premium is valued as the estimated premium that investors pay for the flow-through feature, being the portion in excess of the market value of shares without the flow-through feature issued in concurrent private placement financing. In the case that the Company did not issue non-flow-through shares together with the flow-through shares, the market value of shares without the flow-through feature will be determined using their closing quoted bid price.

Mineral reserve estimate

Mineral reserves are estimates of the amount of product that can be economically and legally extracted from the Company’s properties. In order to calculate the reserves and resources that the Company considers highly likely to be able to convert into reserves, which form the life-of-mine of producing mining properties of the Company, estimates and assumptions are required about a range of geological, technical and economic factors, including but not limited to quantities, grades, production techniques and recovery rates.

Estimating the quantity and grade of the mineral reserves requires the size, shape and depth of ore bodies to be determined by analyzing geological data such as the logging and assaying of drill samples. This process may require complex and sophisticated geological models and calculations to interpret the data.

The Company is required to determine and report on the mineral reserves in accordance with the requirements of the Canadian Institute of Mining Standards. Estimates of mineral reserves may change from period to period due to the change in economic assumptions used to estimate ore reserves and due to additional geological data becoming available during the course of operations. Changes in reported proven and probable mineral reserves and a portion of measured, indicated and inferred resources that the Company expects to convert into reserves may significantly affect the Company’s financial results and position in a number of ways, including the following:

Asset carrying values may be affected due to changes in estimated cash flows;

Depreciation and amortization charges to the statement of comprehensive loss may change as these are calculated on the unit-of production method, or where the useful economic lives of assets change;

Asset retirement obligations and environmental provisions may change where changes in ore reserves affect expectations about the timing or cost of these activities.

Business combination

Determination of fair value of assets acquired, liabilities assumed and the fair value of purchase consideration requires the use of various estimates made by management.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

Classification of a transaction as a business combination depends on whether the assets acquired constitute a business in accordance with the criteria set forth in IFRS 3 Business Combination, which can be a complex judgement.

Application of accounting for plan of arrangement and spin-out of Larder Lake assets

Management has accounted for this transaction and distribution under IFRIC 17 – Distribution of Non-Cash Assets, in which the distribution of the assets is recorded as an equity transaction at fair value, with the gain on the distribution recorded in profit or loss. For presentation purposes, because the assets that were transferred did not represent the substantial activity within the Group, management did not follow discontinued operation presentation in the consolidated financial statements.

The Company determined that the fair value of the shares received as consideration from Gatling for the Larder Lake Project and cash was $0.28, being the trading price.

NEW ACCOUNTING STANDARD ADOPTED DURING THE YEAR

IFRS 16 Leases

IFRS 16 Leases (“IFRS 16”), sets out the principles for the recognition, measurement and disclosure of leases. IFRS 16 provides revised guidance on identifying a lease and for separating lease and nonlease components of a contract. IFRS 16 introduces a single accounting model for all lessees and requires a lessee to recognize right-of-use assets and lease liabilities for leases with terms of more than 12-months, unless the underlying asset is of low value. Under IFRS 16, lessor accounting for operating and finance leases will remain substantially unchanged. The adoption of this standard had no material impact on the consolidated financial statements of the Company.

IFRIC 23, Uncertainty over Income Tax Treatments (“ IFRIC 23”) (effective June 1, 2019) provides guidance when there is uncertainty over income tax treatments including, but not limited to, whether uncertain tax treatments should be considered separately; assumptions made about the examination of tax treatments by tax authorities; the determination of taxable profit, tax bases, unused tax losses, unused tax credits, and tax rates; and, the impact of changes in facts and circumstances. This interpretation did not have an impact on the Company’s consolidated financial statements.

NEW ACCOUNTING STANDARDS NOT YET EFFECTIVE AND NOT YET ADOPTED

The following new standards, amendments and interpretations have been issued but are not effective for the fiscal year ended December 31, 2019 and, accordingly, have not been applied in preparing these consolidated financial statements.

Amendments to IFRS 3, Business Combinations (“IFRS 3”) (effective January 1, 2020) assist in determining whether a transaction should be accounted for as a business combination or an asset acquisition. It amends the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create goods and services provided to customers, generating investment and other income, and it excludes returns in the form of lower costs and other economic benefits. The Company has not elected to apply this amendment early.

Amendments to IFRS 9, Financial Instruments (“IFRS 9”) and IFRS 7, Financial Instruments: Disclosures (“IFRS 7”) (effective January 1, 2020) will affect entities that apply the hedge accounting requirements to hedging relationships directly affected by the interest rate benchmark reform. The amendments modify specific hedge accounting requirements, so that entities would apply those hedge accounting requirements assuming that the interest rate benchmark is not altered as a result of the interest rate benchmark reform. If a hedging relationship no longer meets the requirements for hedge accounting for reasons other than those specified by the amended Standards, then discontinuation of hedge accounting is still required. This amendment is not expected to have any impact on the Company’s consolidated financial statements.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

COMMITMENTS AND CONTINGENT LIABILITIES

The Company had entered into agreements with officers and consultants that include termination and change of control clauses. In the case of termination and change of control, the officers and consultants are entitled to certain amounts payable. As at December 31, 2019, the total annual base fee of the officers of the Company under these types of agreements was $745,000. In the case of termination, the officers are entitled to an amount equal to $805,000 and in the case of a change of control of the Company, the officers under certain circumstances are entitled to an amount equal to $1,130,000. Subsequent to year end, the Company terminated 2 of these agreements that called for a payment in the amount of $565,000 in the case of termination and $890,000 in the case of a change of control of the Company, for cash payments of $445,000.

As at December 31, 2019, the Company had a remaining commitment to incur exploration expenditures of approximately $15,900,000 in relation to its flow-through share financings. Subsequent to December 31, 2019, the Company has received $4,529,345 in mining tax credits received from Revenu Québec, of which, $3,347,530 increases the amount the Company’s flow-through expenditure requirements.

Asset retirement obligations

On September 9, 2013, the Ministry of Natural Resources of Quebec approved the update of the restoration plan of the Bachelor mine. The financial guarantee covering the restoration costs amount to $4,000,104 which has been paid as at December 31, 2019. Subsequent to December 31, 2019, the Company engaged a third party insurance provider to cover the Company’s bonds with the Government of Quebec. Under this arrangement, the Company was required to put 40% of the bonds value up as collateral to the third party insurance provider being $1,758,000. In return, the Company received the deposits with the Government of Quebec of $4,395,001.

Bachelor-Moroy

A closure plan for the mill, tailing storage, and underground facilities at both Bachelor and Moroy is in good standing. The Bond is in place for the site, and funded at 100%. The closure plan is approved for the current mill, and the existing tailing storage at 800 tpd. A revised closure plan will be submitted in the coming months to the Ministry of Natural Resources (MERN) after the 2,400 tonnes per day mill expansion, and the 8 millions tailing storage facility is being reviewed by the Ministry of Environment (MELCCC). Once the revised closure plan is approved by the MERN, the bond will be adjusted to reflect the revised closure costs.

Barry

A closure plan for the underground and surface facilities at Barry is in good standing. The Bond is in place for the site, and funded at 100%. The closure plan is currently being revised to include the sleep camp built in 2018. The revised closure plan will be presented in the Fall 2019 to the MERN. Once the revised closure plan is approved by the MERN, the bond will be adjusted to reflect the revised closure costs.

DISCLOSURE OF OUTSTANDING SHARE DATA

The Company had the following securities issued and outstanding:

	June 11, 2020	December 31, 2019	May 31, 2019
Common shares	77,508,522	77,493,522	63,926,786
Warrants	5,589,835	5,719,835	1,111,827
Stock options	2,546,917	3,075,548	4,098,293
Fully diluted shares	85,645,274	86,288,905	69,136,906

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

RISKS AND UNCERTAINTIES

Business Risk

There are numerous business risks involved in the mineral exploration industry, some of which are outlined below. The Company may not always own 100% of the mineral claims, concessions, rights or other interests. Similarly, any non-compliance with or non-satisfaction of the terms of an option agreement by the Company could affect its ability to exercise the option and earn its interest in the claims, concessions and assets relating to mineral properties.

Mining claims, concessions or other interests may not include surface rights and there can be no assurance that the Company will be successful in negotiating long-term surface rights access agreements in respect of the properties. Failure to obtain surface rights could have an adverse impact on the Company’s future operations.

The Company’s current or future operations, including exploration and evaluation activities, are subject to environmental regulations which may make operations not economically viable or prohibit them altogether.

The success of the operations and activities of the Company is dependent to a significant extent on the efforts and abilities of its management, outside contractors, experts and other advisors. Investors must be willing to rely to a significant degree on management’s discretion and judgment, as well as the expertise and competence of the outside contractors, experts and other advisors. The Company does not have a formal program in place for succession of management and training of management. The loss of one or more of the key employees or contractors, if not replaced on a timely basis, could adversely affect the Company’s operations and financial performance.

Additional Capital

The exploration activities of the Company may require substantial additional financing. Failure to obtain sufficient financing may result in delaying or indefinite postponement of exploration and evaluation of any of the Company’s properties. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financings will be favourable to the Company. In addition, low commodity prices may affect the Company’s ability to obtain financing.

Commodity Price Risk

The price of the common shares in the capital the Company, its financial results, exploration and evaluation activities have been, or may in the future be, adversely affected by declines in the price of gold and/or other metals. Gold, silver and other commodity prices fluctuate widely and are affected by numerous factors beyond the Company’s control, such as the sale or purchase of commodities by various central banks, financial institutions, expectations of inflation or deflation, currency exchange fluctuations, interest rates, global or regional consumptive patterns, international supply and demand, speculative activities and increased production due to new mine developments, improved mining and production methods and international economic and political trends. The Company’s revenues, if any, are expected to be in large part derived from mining and sale of precious and base metals or interests in properties related thereto. The effect of these factors on the price of precious and base metals, and therefore the economic viability of any of the Company’s exploration projects, cannot accurately be predicted.

Acquisition

The Company uses its best judgment to acquire mining properties for exploration and evaluation. In pursuit of such opportunities, the Company may fail to select appropriate acquisition candidates or negotiate acceptable agreements, including arrangements to finance the acquisitions and evaluation, or integrate such opportunity and their personnel with the Company. The Company cannot assure that it can complete any acquisition that it pursues or is currently pursuing, on favourable terms, or that any acquisition completed will ultimately benefit the Company.

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

Political Risk

All of the Company’s properties are located in Quebec, Canada. Accordingly, the Company is subject to risks normally associated with exploration for and evaluation of mineral properties in these countries. The Company’s mineral exploration activities could be affected in varying degrees by such political instability, aboriginal land claims and government regulation relating to foreign investment and the mining business. Operations may also be affected in varying degrees by terrorism, military conflict or repression, crime, extreme fluctuations in currency rates and high inflation.

Credit Risk

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The Company manages credit risk, in respect of cash and cash equivalents, by placing it at major Canadian financial institutions. Included in receivables as at December 31, 2019 is $1,109,691 (May 31, 2019 - $1,689,083) owing from the Canada Revenue Agency and Revenu Québec. Management of the the Company believes it has minimal credit risk.

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates and interest rates, will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return on capital.

• Currency risk – The Company has no funds held in a foreign currency, and as a result, is not exposed to significant currency risk on its financial instruments at period-end.

• Interest rate risk – Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. Interest earned on cash and cash equivalents is at nominal interest rates. Long-term debt bears interest at fixed rates, thus exposing the Company to the risk of changes in fair value arising from interest rate fluctuations.

• Other price risk – Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk. The Company is exposed to other price risk on its marketable securities and the gold price.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquid funds to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The current financial liabilities of the Company as of December 31, 2019 equal $11,915,594 (May 31, 2019 - $16,571,520). The cash available is sufficient to meet the Company’s financial obligations at December 31, 2019.

Environmental and Permitting

All aspects of the Company’s operations are subject to environmental regulation in the various jurisdictions in which it operates. These regulations, among other things, mandate the maintenance of air and water quality standards, land reclamation, transportation, storage and disposal of hazardous waste. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors, and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect the Company’s operations.

Global Pandemic

A global pandemic could cause temporary interruptions in operations if there is an outbreak in areas in which the Company operates. In addition, governments may take preventative measures such as imposing travel

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REPORT FOR THE THREE AND SEVEN MONTH PERIODS ENDED DECEMBER 31, 2019 MANAGEMENT DISCUSSION AND ANALYSIS

restrictions and closing points of entry which may impact the Company’s ability to operate. These preventive measures along with market uncertainty could cause economic uncertainty.

Competition

The mining industry is intensely competitive in all of its phases, and the Company competes with many companies possessing greater financial resources and technical facilities than the Company. Competition in the mining business could adversely affect the Company’s ability to acquire suitable producing properties or prospectus for mineral exploration in the future.

Internal Control over Financial Reporting

Internal controls over financial reporting are procedures designed to provide reasonable assurance that transactions are properly authorized, assets are safeguarded against unauthorized or improper use, and transactions are properly recorded and reported. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance with respect to the reliability of financial reporting and financial statement preparation.

OTHER INFORMATION

Additional information is accessible at the Company’s website www.btrgold.com or through the Company’s public filings at www.sedar.com.

MANAGEMENT’S RESPONSIBILITY

Management is responsible for all information contained in this MD&A. The audited consolidated financial statements have been prepared in accordance with IFRS and include amounts based on management’s informed judgments and estimates. The financial and operating information included in this MD&A is consistent with that contained in the audited consolidated financial statements in all material aspects.

Management maintains internal controls to provide reasonable assurance that financial information is reliable and accurate and assets are safeguarded.

The Audit Committee has reviewed the audited consolidated financial statements with management. The Board of Directors has approved these audited consolidated financial statements on the recommendation of the Audit Committee.

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