CANEX Metals Inc. - Interim / Quarterly Report 2021

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

The following management discussion and analysis (MD&A) is management's assessment of the results and financial condition of CANEX Metals Inc. ("CANEX Metals" or "the Company") for the three and six month periods ended March 31, 2021 and should be read in conjunction with the Unaudited Condensed Interim Consolidated Financial Statements as at and for the three and six month periods ended March 31, 2021 ("Q2 2021") and related notes thereto as well as the Audited Consolidated Financial Statements for the year ended September 30, 2020 and related notes thereto. The date of this MD&A is May 20, 2021. CANEX Metals' common shares trade on the TSX Venture Exchange under the symbol "CANX". The Company's most recent filings are available on the System for Electronic Document Analysis and Retrieval ('SEDAR') and can be accessed at www.sedar.com.

The Company's Unaudited Condensed Interim Consolidated Financial Statements for the six months ended March 31, 2021 have been prepared in accordance with IAS 34 "Interim Financial Reporting" and the IFRS accounting policies the Company adopted in its initial IFRS Annual Consolidated Financial Statements as at and for the year ended September 30, 2020. The Company's accounting policies are provided in Note 3 "Summary of significant accounting policies" to the annual Consolidated Financial Statements as at September 30, 2020. All dollar amounts are in Canadian dollars, unless otherwise noted.

The "Qualified Person” under the guidelines of National Instrument 43-101 of the Canadian Securities Administrators ("NI 43-101") for CANEX Metals' exploration projects in the following discussion and analysis is Dr. Shane Ebert, P. Geo., a Professional Geologist, registered in the Province of British Columbia and the President and Director of CANEX Metals. The scientific and technical information concerning such properties contained herein has been reviewed by Dr. Ebert.

Statements and/or financial forecasts that are unaudited and not historical, including without limitation, exploration budgets, data regarding potential mineralization, exploration results and future plans and objectives, are to be regarded as forward-looking statements that are subject to risks and uncertainties that can cause actual results to differ materially from those anticipated. Such risks and uncertainties include risks related to the Company’s business including, but not limited to: general market and economic conditions, continued industry and public acceptance, regulatory compliance, potential liability claims, additional capital requirements and uncertainty of obtaining additional financing and dependence on key personnel. Actual exploration and administrative expenditures can differ from budget due to unforeseen circumstances, changes in the market place that will cause suppliers’ prices to change, and additional findings that will dictate that the exploration plan be altered to result in more or less work than was originally planned.

All forward-looking information is stated as of the effective date of this document and is subject to change after this date. There can be no assurance that forward-looking information will prove to be accurate and future events and actual results could differ materially from those anticipated.

1) Principal Business of the Company

CANEX Metals, including its wholly owned subsidiary, Canexco Inc. (“Canexco”), is engaged exclusively in the business of mineral exploration and development and, as the Company have no mining operations and no earnings there from, is considered to be in the exploration stage. The recoverability of the amounts comprising exploration and evaluation assets is dependent upon the existence of economically recoverable mineral reserves; the acquisition and maintenance of appropriate permits, licenses and rights; the ability of the Company to obtain financing to complete the development of the mineral properties where necessary and upon future profitable production; or, alternatively, upon the Company’s ability to recover its costs through a disposition of its interests. The Company’s philosophy is to acquire projects at the grass roots level and advance them to a point where partners can be brought in to further the properties to the stage where a mine is commercially feasible or the property can be sold outright.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

The Company has no operating income and no earnings; exploration and operating activities are financed by the sale of common shares and warrants. None of the Company’s mineral properties are in production. Consequently, the Company’s net income is a limiting indicator of its performance and potential.

2) Highlights – Three and six months ended March 31, 2021

Mineral properties

Gold Range Property, Arizona, USA

The Gold Range Property is located in Northern Arizona within an area that has seen historic lode and placer gold production but limited modern gold exploration. Since fiscal 2019, systematic fieldwork by the Company, including geological mapping, structural analyses, airborne geophysics, and surface rock and soil sampling has identified multiple gold exploration targets that are interpreted to be part of the same large mineralizing event.

The summer 2020 field program was completed by September 30, 2020. Field personnel conducted surface exploration and mapping activities focussing on expanding existing zones and discovering new zones of gold mineralization. Multiple new gold exploration targets were identified and were advanced to define new drill targets for future testing. Over 100 rock and 214 soil samples were collected from these targets and submitted for assay. A single geophysical test line of induced polarization – resistivity was completed. Due to high fire risk a second test line was cancelled. Results of these programs were released in News Release 20-19 dated September 10, 2020.

The first drill program, which was conducted during August and September 2020, terminated early due to equipment limitations. However, 14 holes for a total of 1481 meters of drilling were completed. Drilling was conducted at 5 different targets across the Gold Range property and a total of 1,044 drill samples were sent for analysis. Results from this program were disclosed in News Release 20-20, 20-21 and 2022 dated October 27, 2020, November 2, 2020 and November 16, 2020 respectively. On the back of drilling success, the Company staked an additional 47 claims extending the south and southeast part of the property.

The second drill program was conducted between January 28, 2021 and March 1, 2021, consisting of 34 drill holes across 2.5 kilometres of strike length along the southern portion of the Gold Range Property. In total, 2357.6 metres were drilled in holes ranging from 38 to 137 meters deep. 1642 drill samples were collected and submitted for assay. Fifteen holes were drilled at the Eldorado Zone to test and expand the Company’s previously announced bulk tonnage oxide discovery, 5 holes tested various targets across the southern part of the property and 14 holes tested the Excelsior Mine area. Results have been released for 13 holes, with results from the remaining 21 holes to be released as they are received, compiled and interpreted. Refer to News Releases 21-5 dated January 28, 2021, 21-6 dated March 1, 2021, 21-7 dated April 15, 2021 and 21-8 dated April 26, 2021 for more information regarding the drill program and results released to date.

During Q2 2021, the Company made a US$15,000 (CDN$19,063) option payment in respect of the Never Get Left Claim in accordance with the terms of the option agreement. For more information refer to Section 3) “Mineral properties – Gold Range, Arizona, USA” outlined below.

On January 12, 2021, the Company, through its 100% owned Arizona subsidiary Canexco Inc., signed a binding Letter of Intent to option the Excelsior Mine Property composed of 11 lode mining claims and 2 patented mining claims covering 3 past producing historic gold mines. The Excelsior Mine Property sits within the boundaries of the Gold Range Project. The LOI allows CANEX to earn a 90% interest in the Excelsior Mine Property by issuing 2,750,000 common shares and spending US$4.5 million on

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

exploration and development in 3 stages over 4.5 years. CANEX and the property Vendors have committed to complete a definitive option agreement by May 16, 2021. Both the LOI and the definitive option agreement will be subject to TSX-Venture approval. Refer to Section 21) “Subsequent events” for more details regarding this transaction.

Key exploration events at Gold Range include:
Option agreement signed on 3 key claims over a new gold discovery – June 2019
CANEX stakes 11 claims surrounding the new gold discovery – June 2019
CANEX stakes 23 additional claims – October 2019
Trenching and Drilling permits received – October 2019
Trenching and mapping program conducted – October 2019
CANEX stakes 32 additional claims – November 2019
Drone airborne magnetic survey results received – January 2020
CANEX stakes 73 additional claims – January 2020
Amended exploration permit received – February 2020
CANEX options Never Get Left Claim – February 2020
Field mapping, prospecting, and soil sampling conducted – Feb to May 2020
Field mapping and soil sampling conducted – July to August 2020
Drill program conducted – August to September 2020
CANEX stakes 47 additional claims – November 2020
Second drill program conducted – January 28 to March 1, 2021
For more information related to the fiscal 2020 and the six month period ended March 31, 2021 exploration program updates and results refer to the following News Releases: 19-16 dated December 3, 2019, 19-17 dated December 16, 2019, 20-1 dated January 16, 2020, 20-2 dated January 20, 2020, 20-3 dated January 27, 2020, 20-6 dated February 20, 2020, 20-7 dated February 25, 2020, 20-8 dated February 26, 2020, 20-10 dated March 27, 2020, 20-13 dated April 27, 2020, 20-14 dated May 11, 2020, 20-15 dated May 27, 2020, 20-16 dated June 24, 2020, 20-17 dated June 29, 2020, 20-18 dated August 25, 2020, 20-19 dated September 10, 2020, 20-20 dated September 29, 2020, 20-20 dated October 27, 2020, 20-21 dated November 2, 2020, 20-22 dated November 16, 2020, 21-5 dated January 28, 2021, 216 dated March 1, 2021, 21-7 dated April 15, 2021 and 21-8 dated April 26, 2021.

Gibson Prospect, British Columbia

On February 26, 2021, under the terms of an underlying option agreement with Steven Scott, the Company fulfilled its obligations with respect to cash or cash equivalent payments and minimum exploration expenditures, by issuing 185,185 common shares to Steven Scott valued at $25,000. For more information refer to Section 3) “Mineral properties – Gibson Prospect, British Columbia” below.

Corporate

On October 15, 2020, 2,300,000 warrants exercisable at $0.10 per share, expiring October 20, 2020, were exercised for total proceeds of $230,000.
During the three-month period ended December 31, 2020, the Company disposed of 100,000 Commander Resources Ltd. shares, 31,500 Maple Gold Mines Ltd shares and 54,867 Canada Nickel Co. Inc. shares for net cash proceeds of $2,540, $10,560 and $108,526, respectively further bolstering its treasury. (Refer to Note 7 “Short-term investments” to the unaudited condensed interim consolidated financial statements for the three- and six-month periods ended March 31, 2021).

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

On December 23, 2020, the Company held its Annual General Meeting (“AGM”) approving its Financial Statements for the year ended September 30, 2019.
On December 10 and 11, 2020, the Company announced a non-brokered equity financing for 17,000,000 common shares at a price of $0.10 per share for gross proceeds of $1,700,000. The first tranche closed on January 7, 2021 for 16,292,500 common shares and gross proceeds of $1,629,250. The final tranche closed on December 11, 2021 for 707,750 common shares and gross proceeds of $70,750. Proceeds of the financing will be used to drill test and further explore the Gold Range Property and for general working capital.

The Company continues to actively search for new early stage exploration opportunities and avenues for growth in stable jurisdictions within North America. The Company has not entered into any business combination, acquisition or similar agreements except as noted above.

3) Mineral Properties

Gold Range Property, Arizona, USA

As at March 31, 2021, the Company holds 192 lode mining claims (1,415 hectares) in respect of the Gold Range Property, including acquisitions via the option agreements noted below as well as staking. The area has seen historic lode and placer gold production but limited modern lode gold exploration. The gross costs and impairments recorded to the Gold Range Property at March 31, 2021 are $1,389,384 and $nil, respectively (September 30, 2020 - $963,577 and $nil).

On June 11, 2019, the Company’s wholly owned subsidiary, Canexco Inc., entered into an Option Agreement to acquire a 100% interest in the Gold Range Property, Arizona, USA from a Prospector, the “Optionor”. The Gold Range Property, under option, is comprised of three staked lode mineral claims with a total area of 61.98 acres and is in Mohave County, Arizona, USA. Since the acquisition through the option agreement, the Company has continued to stake additional lode mining claims increasing its holdings to 192 mining lode claims (1,415 hectares) covering prospective ground surrounding the area of interest optioned. The area has seen historic lode and placer gold production but limited modern lode gold exploration.

Under the terms of the agreement, the Company is committed to make options payments and minimum exploration expenditures totaling US$90,000 and US$80,000 over four years, respectively. On June 11, 2019, the Company paid US$10,000 (CDN$13,405) and on June 6, 2020, the Company paid US$15,000 (CDN$20,306) in accordance with the agreement. In addition, the Optionor will retain a 2% NSR, half of which can be bought back by the Company for US$500,000; the remaining half can be bought back for US$1,000,000. Refer to Section 7) c) “Contractual obligations” for the remaining commitments under the terms of the agreement at March 31, 2021.

On February 24, 2020, the Company’s wholly-owned subsidiary, Canexco Inc., entered into an arm’s length Option Agreement to acquire a 100% interest in the Never Get Left Claim, Mohave County, Arizona, USA from Onyx Exploration Inc., the “Optionor”, which is adjacent to the Company’s Pit Zone target on the Gold Range Property. The Never Get Left Claim, under option, is comprised of one staked lode mineral claims with a total area of 20.99 acres and is located in Mohave County, Arizona, USA.

Under the terms of the agreement, the Company is committed to make option payments totaling US$90,000 over four years. The Company paid US$10,000 (CDN$13,397) and US$15,000 (CDN$ 19,063) on February 24, 2020 and February 18, 2021, respectively, in accordance with the agreement. In addition, the Optionor will retain a 2% NSR, half of which can be bought back by the Company for US$500,000; the remaining half can be bought back for US$500,000. Additionally, the Company must pay 10% of any

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

profits realized from the processing and recovery of metals from the existing leach pad materials located within the Optionor’s claim. Refer to Section 7) d) “Contractual obligations” for the remaining commitments under the terms of the agreement at March 31, 2021.

Earlier in 2019 a prospector using a hand-held metal detector discovered a quartz vein containing abundant visible gold concealed under shallow soil cover at the Gold Range property. This area is termed the Discovery Zone, and subsequent work by CANEX has demonstrated that soil sampling should be an effective tool for identifying these covered gold zones, with a test soil line over the Discovery Zone returning up to 838 parts per billion gold in proximity to the discovery. CANEX has conducted 3 detailed soil lines around the discovery area to help trace the zone prior to a trenching program that will be designed to fully expose the mineralized quartz vein. Recent fieldwork at the Adit Zone has defined a 1000-metrelong linear trend of historic workings and exposed quartz veins along the zone. Surface and underground exposures at the core of the Adit Zone were mapped and chip sampled, with gold observed in several samples. During Q4 2019, the Company submitted a reclamation bond of US$20,450, for its proposed exploration program. Permitting for trenching and drilling activities was received in October 2019. The Company commenced its planned program during Q1 2020, which included excavator trenching, surface rock and soil sampling and geologic mapping with the goal to better define and sample known mineralized zones across their entire width and explore them along strike. A follow up program was conducted to evaluate the newly identified target areas, and consisted of a property wide airborne magnetic survey, additional trenching and drilling and a 10-day detailed mapping and soil sampling program of multiple new targets. Positive magnetic survey results prompted the Company to file an appended exploration permit application with the Bureau of Land Management, to allow for an expanded trenching and drilling program and to commission an additional drone magnetic survey over two priority targets to obtain increased resolution and positioning.

Permitting was received in February 2020, allowing the Company to conduct its planned mapping and sampling programs at Gold Range in preparation for a final trenching program, prior to selecting drill targets. The March 2020 program was ended prior to completion to comply with health and travel advisories related to the Corona virus pandemic (see Section 20) “Novel corona virus pandemic”). However, during Q3 2020, the Company engaged a local contractor to complete a seven day field program of soil sampling. Results for 303 soil samples and one rock sample from the Central zone are reported in News Release 20-13 dated April 27, 2020. Results related to the February and March field programs are reported in News Release 20-14 dated May 11, 2020. Additional results related to the May field program are reported in News Release 20-17 dated June 29, 2020.

On July 2, 2020, the Company resumed its planned exploration program at Gold Range as travel restrictions were lifted and work was allowed resume in the area. Field personnel began conducting surface exploration and mapping activities focusing on expanding existing zones and discovering new zones of gold mineralization. Multiple new gold exploration targets were identified and have been advanced to define new drill targets for future testing. Over 100 rock samples and 214 soil samples were collected from these targets and submitted for assay, the results of which were disclosed in News Release 20-19 dated September 10, 2020 and News-Release 20-20 dated September 29, 2020.

The drill program began on August 25, 2020, with the goal to drill 1675 meters of reverse circulation drilling designed to test up to 7 different targets over multiple holes per targets. Equipment limitations forced early termination of the drill program with 88 percent of the planned drilling being completed. Results from this program were released in News Releases 20-20, 20-21 and 20-22 dated October 7, 2020, November 2, 2020 and November 16, 2020. Based on these results, the Company planned and completed a second drill program.

The second drill program was conducted between January 28, 2021 and March 1, 2021, and consisted of 34 drill holes across 2.5 kilometres of strike length along the southern portion of the Gold Range Property. In

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

total, 2357.6 metres were drilled in holes ranging from 38 to 137 meters deep. 1642 drill samples were collected and submitted for assay. Fifteen holes were drilled at the Eldorado Zone to test and expand the Company’s previously announced bulk tonnage oxide discovery, 5 holes tested various targets across the southern part of the property and 14 holes tested the Excelsior Mine area. Results have been released for 13 holes, with results from the remaining 21 holes to be released as they are received, compiled and interpreted. Refer to News Releases 21-5 dated January 28, 2021, 21-6 dated March 1, 2021, 21-7 dated April 15, 2021 and 21-8 dated April 26, 2021 for more information regarding the drill program and results released to date.

Gibson Prospect, British Columbia

The Gibson prospect ("Gibson") is 887 hectares in size and located in central British Columbia, approximately 95 kilometres northwest of Fort St. James. The area is accessible via a network of all-weather logging roads. Gibson contains mesothermal gold-silver mineralization hosted in highly altered volcanic and sedimentary rocks adjacent to the Hogem Batholith. The zone was discovered and explored by Noranda Exploration Company from 1989 to 1991. Following soil sampling and induced polarization geophysical surveys, Noranda exposed precious metal mineralization in hand trenches with surface samples returning 12.86 g/t gold and 144.7 g/t silver over 1.5 meters and 5.35 g/t gold and 2136 g/t silver over 1.7 meters. Noranda subsequently drilled 9 holes with 8 and 9 holes intersecting significant gold and silver mineralization. The best drill intercept returned 4.26 meters grading 6.77 g/t gold and 1828 g/t silver. The mineralized zone appears to be about 4.5 metres wide and at least 400 metres long and remains open in all directions. Prior to recent work by CANEX no follow up trenching or drilling has been conducted at Gibson since the highly successful Noranda program.

The Noranda hand trenching and drill results are reported in BC Assessment report 21762 for Noranda Exploration Company by Stewart and Walker 1991. This drilling was done prior to NI 43-101 and should be considered historic in nature. The results have not been verified by CANEX Metals and should not be relied upon.

On April 4, 2017, the Company announced it had signed a Letter of Intent to acquire a 100% interest in the Gibson property from Altius Resources Inc. ("Altius"), a wholly held subsidiary of Altius Minerals (TSX:ALS). The Option agreement (“the Agreement”) was executed on May 12, 2017; and received Exchange approval on May 17, 2017. The Company also assumed the obligation of an underlying option agreement with Steven Scott, an arm’s length party (the “Underlying Agreement”).

Under the terms of the Agreement, the Company is committed to issue a maximum 3,545,000 common shares to Altius, in three stages plus incur minimum exploration expenditures up to $500,000 within 18 months, and make $90,000 in cash or share equivalent payments to Steven Scott, to earn a 100% interest in Gibson. The Company issued 1,125,000 common shares to Altius on signing of the Option Agreement and Exchange approval valued at $78,750 and paid $5,000 to Steven Scott pursuant to the Underlying Agreement. On February 14, 2018, the Company paid Steven Scott $15,000 pursuant to the Underlying Agreement. On October 5, 2018, the Company issued 1,180,000 common shares to Altius valued at $82,600 pursuant to the Agreement. The Company issued 400,000 common shares valued at $20,000, 121,951 common shares valued at $25,000 and 185,185 common shares valued at $25,000 on February 21, 2019, February 27, 2020 and February 26, 2021, respectively to Steven Scott pursuant to the Underlying Agreement. Effective February 26, 2021, under the terms of the Underlying Agreement with Steven Scott, the Company has fulfilled its obligations with respect to cash or cash equivalent payments and minimum exploration expenditures. On November 12, 2018, the Company was granted an extension to meet its minimum exploration expenditures of $500,000 by November 12, 2018 to July 15, 2019, as lack of access during 2018, in part, prevented the Company from completing the required expenditures with in the allotted time. On June 20, 2019, the Company was granted a further extension to meet its minimum exploration expenditures of $500,000 by July 15, 2019 to July 15, 2020 as lack of access to capital has prevented the Company from completing the

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

required expenditures by the allotted time. On July 16, 2020, the Company was granted a further extension to meet its minimum exploration expenditures of $500,000 by July 15, 2020 to November 30, 2020 which was subsequently extended to July 31, 2021. All other terms of the Agreement remain unchanged. For more information relating to this transaction see News Release 17-1 issued April 4, 2017 and Section 7) Contractual obligations in this report.

Prior to 2019, Shane Ebert through his company, Vector Resources (see Note 17 - "Related parties and transactions and key management remuneration" to the Unaudited Condensed Interim Consolidated Financial Statements for the three- and six-month periods ended March 31, 2021, which accompany this MD&A) was involved in British Columbia project generation activities for Altius. Vector Resources is entitled to 5% of the compensation, 177,250 shares, due to Altius under the Gibson agreement.

In addition, Altius will retain a right to purchase an underlying 1.5% Net Smelter Royalty ("NSR") and preferential rights on any future royalties or streams granted on the Property. If the Company achieves measured and indicated mineral resources in excess of 1 million gold equivalent ounces, a Milestone Payment of 1,275,000 shares will be issued to Altius. Altius will have a pro rata right to participate in future equity financings of the Company for two years.

Pursuant to the Underlying Agreement, Steven Scott is also entitled to the additional milestone bonuses of 1) $25,000 in cash or securities upon a Bankable Feasibility Study; and 2) $50,000 in cash or securities upon Commercial Production.

Exploration permits for Gibson were received allowing the Company to establish an access road into the zone and conduct trenching and drilling. During August 2017, the Company completed an access trail into Gibson and excavated 8 trenches, uncovering considerable zones of alteration and silver-gold mineralization. Detailed trench mapping and sampling was conducted with 161 surface rock samples and 464 soils collected. Highlights of the trenching results include 4.0 g/t gold equivalent (Au Eq) over 12 metres, 24.1 g/t Au Eq over 1 metre, 5.9 g/t Au Eq over 3 metres, 10.7 g/t Au Eq over 1 metre, 1.3 g/t Au Eq over 16 metres, 2.8 g/t Au Eq over 9 metres, and 5.5 g/t Au Eq over 3 metres. As a condition of permitting, the Company has issued a $10,000 reclamation security deposit to British Columbia Ministry of Energy and Mines.

The Company completed its summer 2018 drilling program on the Gibson Prospect in October 2018. Ten shallow drill holes were completed, testing a small portion of a soil anomaly measuring 850 metre long by up to 500 metres wide. The results for all holes have been received and are summarized in the News Release 19-2, dated January 16, 2019. The main Gibson Vein Zone (“GVZ”) shows high grade and bulk minable potential. Five of six holes drilled into the GVZ have returned high grade and indicate continuity over the 200 metres of strike drilled to date. Two to three subparallel veins ranging from 0.5 to 3.7 metres wide occur within the GVZ and the veins remain open in all directions. CANEX Metals has submitted a new exploration permit application to allow for additional drilling, trenching and geophysical surveys, and looks forward to an active exploration season in 2021; however future exploration expenditures on the Gibson Prospect will be dependent upon the Company successfully completing financing to fund planned programs. The gross costs and impairment recorded to the Gibson Prospect as at March 31, 2021 are $473,527 and $nil, respectively (September 30, 2020 - $448,027 and $nil).

Echo, Fulton, Red and Beal properties, British Columbia

On June 21, 2018, the Company signed a Definitive Agreement granting the Company an option to acquire a 100% interest in five mineral exploration properties in British Columbia from Altius, named Ace, Echo, Fulton, Red and Beal. The Ace property was subsequently dropped from the definitive agreement as exploration was conditional upon satisfactory resolution of a property access issue by August 15, 2018, which was not resolved. To earn a 100% interest in the remaining properties, the Company was required to spend a

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

minimum of $30,000 on exploration on or before September 21, 2019 and issue to Altius 500,000 common shares for each project. In addition, Altius would retain a 1.75% Gross Smelter Royalty ("GSR") on all properties within a 5 km area of interest. For each property that achieved a measured and indicated mineral resource in excess of 0.5 million gold equivalent ounces, a Milestone Payment of 1.5 million shares would be issued to Altius.

The results from field programs conducted during fiscal 2019 did not support further exploration on the Fulton, Red and Beal properties. As a result, the Company returned the respective properties to the vendor and impaired the full amount of expenditures on each respective property as of September 30, 2019. However, the Company was granted an extension on the expenditure deadline to December 31, 2019 to allow the Company time to conduct further work and evaluations on the Echo property. During the three-month period ended December 31, 2019, the Company conducted a ground magnetic survey at Echo. After thorough analysis of the results of this program, the Company, unable to identify clear targets for advancement, terminated the option, returning the Echo property to the vendor, fully impairing the remaining expenditures as of September 30, 2020. The gross costs and impairments recorded to the Echo, Fulton, Red and Beal properties combined as at September 30, 2020 are $23,001 and $23,001.

4) Operating Results

A summarized statement of operations appears below to assist in the discussion that follows:

Three months ended March 31 2021 2020 (121,022) $ (113,572) (109) (4,895) (5,224) (4,888) (5,256) (2,142) (4) (8) - (22,297) (1,610) 237 84,503 (114,130) (48,722) $ (261,695)		Six months ended March 31	Six months ended March 31
2021 (121,022) $ (109) (5,224) (5,256) (4) - (1,610) 84,503 (48,722) $		2021 (231,295) $ (17,721) (10,287) (7,350) (9) - (3,315) 415,381 145,404 $	2021
	$ $		(266,402) (4,984) (7,240) (4,452) (16) (22,297) 315 (137,819)
			(442,895)

The most significant changes in other expenditures follow:

Variances in general and administrative expenditures and professional fees are examined in further detail in the chart below.
Reporting to shareholders expenditures during the six-month period ended March 31, 2021 include fees for filing the fiscal 2020 annual audited financial statements as well as expenditures for the Annual General Meeting (“AGM”) relating to the fiscal 2019 financial statements, both of which took place during Q1 2021. Due to the later completion of the fiscal 2019 audited financial statements, the related filing fees were incurred in Q2 2020. Further, the Company did not hold an AGM during either Q1 or Q2 2020.
Stock exchange and transfer agent fees relate directly to the number of security exchange transactions during the periods, which have increased by $3,000 between the current six-month and comparative sixmonth periods. The increase is primarily a result of the stock option plan fees of $2,700 which were incurred during Q2 2021. There was no similar expenditure during the comparative six-month period.
During Q2 2020, the Company impaired the full amount of expenditures relating to the Echo property in British Columbia as it was unable to identify clear targets for advancement; the option was

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

terminated, and the property was returned to the vendor. There were no similar charges in the current period. Refer to Section 3) – “Mineral properties – Echo, Fulton, Red and Beal properties, British Columbia” for more information.

Interest and other income include interest earned from a high interest savings account, management fees and foreign exchange gains and losses. Q1 2021 and Q2 2021 include foreign exchange losses of $1,825 and $1,782 respectively on the US dollar denominated bank account. There were no similar losses in the comparative period.
During the six-month period ended March 31, 2021, the Company recognized a net gain of $415,381 on its short-term investments, including a net realized gain of $51,711 on the sale of certain short-term investments and net cash proceeds of $121,826. Refer to Note 7 “Short-term investments” to the Unaudited Condensed Interim Consolidated Financial Statements for the six-month period ended March 31, 2021, which accompany this document, for further information regarding these transactions. During the six-month period ended March 31, 2020, the Company recognized a net loss of $137,819 on its short-term investments, including a realized loss of $2,649 on the sale of 200,000 Spruce Ridge Resources shares resulting in a cash inflow of $15,433. The remainder of the gains or losses in each respective period result from adjusting the Company’s holdings in common shares to fair value at the respective period ends. These market price changes result in significant valuation adjustments from period to period.

General and administrative expenses

Details of the components of General and Administrative expenses appear below to assist in the discussion that follows:

Three months ended March 31 2021 2020 84,031 $ 75,636 $ - - 4,697 4,697 16,981 15,041 11,925 15,520 1,777 1,766 1,000 300 611 612 121,022 $ 113,572 $	Six months ended March 31	Six months ended March 31
2021 84,031 $ - 4,697 16,981 11,925 1,777 1,000 611 121,022 $	2021 162,992 $ - 9,394 34,352 17,937 3,555 1,600 1,465 231,295 $	2020
		164,299 37,417 9,394 28,519 21,425 3,532 600 1,216
		266,402

Administrative consulting fees, which consist of fees for the CFO, the controller, geological consulting, and services provided by other consultants, have decreased by $1,300 from the comparative six-month period. They include geological consulting fees of $18,800 (March 31, 2020 - $30,300), fees to the CFO of $Nil, (March 31, 2020 - $700), fees to the controller of $16,300 (March 31, 2020 - $16,100) and fees to other consultants of $128,000 (March 31, 2020 - $117,200). Current and comparative period geological consulting and other consulting fees relate to managing investor relations and marketing to secure corporate financing.
During the six-month period ended March 31, 2020, the Company granted, pursuant to its stock option plan, a total of 710,000 options to consultants of the Company, exercisable at $0.055 per share to October 4, 2024. The options were valued at $37,417 using the Black-Scholes Options Pricing model assuming a 5-year term, volatility of 118.84%, a risk-free discount rate of 1.25% and a dividend rate of 0%. There were no options issued during the current three- and six-month periods.
There is no change in occupancy costs between the current and comparative periods. See Note 17 - "Related party balances and transactions and key management remuneration" to the Condensed Interim

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

Consolidated Financial Statements dated March 31, 2021, which accompany this document and Section 7) “Contractual obligations, a) Office lease”.

There is an increase of $1,900 and $5,800 in office, secretarial and supplies between the current threeand six-month periods respectively, and the comparative three- and six-month periods. The majority of the variance relates to contract fees for administrative services and office supply expenditures. The increase is consistent with the increase in activity levels during fiscal 2021.
Travel and promotional expenditures have decreased by $3,500 between the current and comparative six-month periods and are in accordance with the 2021 budget. Due to the COVID-19 pandemic (refer to Section 20) “Novel coronavirus pandemic”, marketing and promotional events that the Company has attended in the past were temporarily suspended to reduce the spread of the virus. As a result promotional travel by the Company was suspended by the end of Q2 2020; however, the Company has continued its promotional efforts with respect to investor relations through a number of other avenues, including presenting to potential investors at virtual conferences, and investments in various on-line investor relations management tools. The comparative periods’ expenditures include travel for promotional activities conducted by the Company’s President and an outside consultant during Q1 and Q2 2020, as noted above and include attending the Association of Mineral Exploration (“AME”) Roundup held in Vancouver, BC and Prospectors and Developers Association of Canada (“PDAC”) conference held in Toronto, Ontario.
There is no significant variation in insurance premiums between current and comparative three- and sixmonth periods.
Commencing January 1, 2021, the Company increased payments to directors who are not officers of the Company to $500 for meeting attendance in person or by telephone. Prior to January 1, 2021, the Company paid directors who were not officers $500 for meeting attendance in person and $300 for meeting attendance by telephone. There are two directors who are not officers and the amounts above reflect directors’ fee paid or payable for meetings attended during the above-noted periods.
There is no significant variance between current and comparative three- and six-month periods expenditures for computer network and website maintenance. These expenditures include website hosting fees, internet fees and other computer related expenditures.

Professional fees

Professional fees
Audit and accounting $ Legal and filing fees Total professional fees $	Three months ended March 31 2021 2020 - $ (378) $ 5,224 5,266 5,224 $ 4,888 $	Six months ended March 31
	2021 - $ 5,224 5,224 $	2021 2,145 $ 8,142 10,287 $	2020
			422 6,818
			7,240

Professional fees consist of annual auditing fees plus legal and other filing fees. The current and comparative six-month period audit and accounting fees relate to the audited financial statements, and filing US tax returns on account of Canexco, for the years ended September 30, 2020 and 2019 respectively.
Legal and filing fees incurred in fiscal 2021 include $4,500 for miscellaneous legal consultations and audit support; the remainder relate to news releases during the period. Legal and filing fees incurred in the comparative six-month period include $1,920 on account of Canexco with respect to miscellaneous business operations in the USA, as well as $1,980 with respect to audit support and other miscellaneous legal services. The remainder relate to filing fees and news releases.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

5) Liquidity and Capital Resources

The Company’s working capital position at March 31, 2021 was $2,573,359 (September 30, 2020 - $950,919) an increase of $1,622,440. Changes to working capital and cash flow in the current and comparative periods are discussed below:

The current three- and six-month periods operating expenditures resulted in a cash outflow of $223,350 and $365,057 respectively, compared to $92,214 and $260,261 during the respective comparative threeand six-month periods. The increases are consistent with the factors described in Section 4) “Operating results”.
During Q1 and Q2 2021, the Company incurred foreign exchange losses on its US dollar denominated bank account resulting in net cash outflows of $1,610 and $3,315 in each respective period. There were no similar losses incurred during the comparative periods.
An increase in the fair market value of the short-term investments from September 30, 2020 to March 31, 2021 resulted in a net gain of $363,670 and increase in working capital (2020 – net loss of $135,169).
During the six-month period ended March 31, 2021, the Company disposed of 100,000 Commander Resources Ltd. shares, 31,500 Maple Gold Mines Ltd. shares and 54,867 Canada Nickel Co. Inc. shares resulting in a net realized gain of $51,711 for net cash proceeds of $121,626. During the six-month period ended March 31, 2020, the Company disposed of 200,000 Spruce Ridge Resources Ltd. shares for cash proceeds of $15,433 net of commissions. See Note 7 – “Short-term investments” to the Unaudited Condensed Interim Consolidated Financial Statements dated March 31, 2021 for more information.
During the six-month period ended March 31, 2021, the Company invested $474,246 (March 31, 2020, - $365,164) in exploration and evaluation assets for exploration activities, which primarily relate to the Gold Range property in Arizona, USA. See Note 8 – “Exploration and evaluation assets” to the Unaudited Condensed Interim Consolidated Financial Statements dated March 31, 2021, which accompany this document and Section 3) “Mineral Properties” for more information. The Company also received $4,450 for a British Columbia Mining Exploration Tax credit on account of the Echo property, British Columbia for expenditures relating to the year ended September 30, 2020.
On October 15, 2020, 2,300,000 warrants exercisable at $0.10 per share, expiring October 20, 2020, were exercised for total proceeds of $230,000. During the three month period ended March 31, 2020, 3,000,000 warrants exercisable at $0.08 per share, expiring June 6, 2022 were exercised for total proceeds of $240,000 and 173,333 warrants exercisable at $0.05 per share, expiring June 6, 2022 were exercised for total proceeds of $8,667.
During Q2 2021, the Company closed a non-brokered private placement financing for aggregate gross proceeds of $1,700,000, of which partial proceeds of $670,010 were received during Q1 2021. On October 29, 2019, the Company completed a non-brokered private placement share issue for gross proceeds of $606,000 and on November 13, 2019, 100,000 options were exercised for total proceeds of $6,000. Refer to Section 6) “Financing” below for further information.
During the six-month period ended March 31, 2021, the Company incurred cash share issuance costs of $28,122 (Six-months ended March 31, 2020 - $9,898).
During the three month period ended March 31, 2020, the Company received $59,940 as partial proceeds on a non-brokered private placement share issuance which closed on April 7, 2020 (refer to Section 6) “Financing” )

The Company is continually investigating financing options. The continuing operations of the Company are dependent upon its ability to obtain adequate financing or to commence profitable operations in the future. The Company feels that it has sufficient working capital to finance general and administration and other operating expenses for 12 months assuming similar activity levels to the previous year. However, increases in activity levels, new property acquisitions and increased levels of exploration on it mineral properties will require additional financing. There can be no assurance that the Company will be successful in obtaining

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

financing. Refer to Note 1 "Nature and continuance of operations" to the Condensed Interim Consolidated Financial Statements dated March 31, 2021.

6) Financing

Six-month period ended March 31, 2021

On October 15, 2020, 2,300,000 warrants exercisable at $0.10 per share, expiring October 20, 2020, were exercised for total proceeds of $230,000 including 100,000 exercised by related parties.

On January 7, 2021, the Company closed the first tranche of its non-brokered private placement, issuing 16,292,500 common shares at $0.10 per share for aggregate gross proceeds of $1,629,250. On January 11, 2021, the Company closed the final tranche of its non-brokered private placement, issuing 707,750 common shares at $0.10 per share for aggregate gross proceeds of $70,750. A total of $16,500 was paid in finder’s fees in connection with this financing.

On February 26, 2021, the Company issued 185,185 common shares valued at $25,000 pursuant to an option agreement on the Gibson property. The share issuance was valued using the closing share price on the transaction date. See Section 3) “Mineral properties - Gibson Prospect, British Columbia” for more information.

Year ended September 30, 2020

On October 29, 2019, the Company closed its non-brokered private placement, issuing 12,120,000 common shares for aggregate gross proceeds of $606,000.

On November 13, 2019, 100,000 options exercisable at $0.06 per share were exercised for total proceeds of $6,000.

During February, 2020, 2,900,000 warrants exercisable at $0.08 per share, expiring June 6, 2022 were exercised for total proceeds of $232,000 and 69,334 warrants exercisable at $0.05 per share, expiring June 6, 2022 were exercised for total proceeds of $3,467.

On February 27, 2020, the Company issued 121,951 common shares valued at $25,000 pursuant to an option agreement on the Gibson property. The acquisition was valued using the closing share price on the transaction date. See Section 3) “Mineral Properties – Gibson Prospect, British Columbia” for more information.

On March 3, 2020, 103,999 warrants exercisable at $0.05 per share, expiring June 6, 2022, were exercised for total proceeds of $5,200

On April 7, 2020, the Company closed a non-brokered private placement share issuance of 6,667,100 common shares issued at $0.09 per share for gross aggregate proceeds of $600,039.

On July 9, 2020, 8,250 warrants exercisable at $0.05 per share were exercised for total proceeds of $412.

On August 27, 2020, 150,000 options exercisable at $0.06 per share, expiring June 26, 2020, were exercised for total proceeds of $9,000.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

7) Contractual Obligations

a) Office Lease

The Company is party to a lease for office space that terminates August 31, 2021. As at March 31, 2021, the contractual cash obligations for the following five fiscal years are as follows:

Nature of obligation Office lease	2021 $ 7,830	2022 $ -	2023 $ -	2024 $ -	2025
					$ -

b) Gibson Prospect, British Columbia – Altius option agreement

On April 4, 2017, the Company announced it had signed a Letter of intent to acquire a 100% interest in the Gibson property from Altius Resources Inc. ("Altius"). Gibson is 887 Ha in size and located in central British Columbia, approximately 95 kilometres northwest of Fort St. James. The purchase agreement was executed on May 12, 2017 and received Exchange approval on May 17, 2017. The Company also assumed the obligations of an underlying option agreement with Steven Scott.

As at March 31, 2021, under the terms of the Agreement, the Company is committed to the following remaining share issuances, cash payments and minimum exploration expenditures:

Remaining commitments under the terms of the Agreement are as follows: Expenditure Commitment on or before July 31, 2021 Following the completion of the Expenditure Commitment Total (1) as at March 31, 2021, the Company has incurred exploration expenditures of $293,500	Altius Share issues Minimum exploration expenditures(1)
	- 500,000 1,240,000 -
	1,240,000 500,000

Pursuant to the Underlying Agreement, Steven Scott is also entitled to the additional milestone bonuses of: 1) $25,000 in cash or securities upon a Bankable Feasibility Study; and 2) $50,000 in cash or securities upon Commercial Production.

On November 12, 2018, the Company was granted an extension to meet its minimum exploration expenditures of $500,000 by November 12, 2018 to July 15, 2019, as lack of access during 2018, in part, prevented the Company from completing the required expenditures within the allotted time. On June 20, 2019, the Company was granted a further extension to meet its minimum exploration expenditures of $500,000 by July 15, 2019 to July 15, 2020. On July 16, 2020, the Company was granted a further extension to meet its minimum exploration expenditures by July 15, 2020 to November 30, 2020 and was subsequently granted a further extension to July 31, 2021. All other terms of the agreement remain unchanged.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

c) Gold Range, Arizona, USA – Prospector option agreement

On June 11, 2019, the Company’s wholly owned subsidiary, Canexco Inc., entered into an Option Agreement to acquire a 100% interest in the Gold Range Property, Arizona, USA from a Prospector, the “Optionor”. Under the terms of the Agreement, the Company is committed to the following cash payments and minimum exploration expenditures:

Due date June 11, 2021 June 11, 2022 June 11, 2023 Total cash payments and exploration expenditure commitment Exploration expenditures to March 31, 2021 Total remaining commitment as of March 31, 2021	Option Payments Minimum Exploration Expenditures
	US$ US$
	15,000 20,000 20,000 20,000 30,000 30,000
	65,000 70,000 - 1,176,300
	65,000 -

The committed option payments and exploration expenditures of US$65,000 would equate to CDN$81,738 using the March 31, 2021 Bank of Canada exchange rate. An increase or decrease of 10% to the exchange rate would result in an increase or decrease in required option payments CDN$8,174.

d) Gold Range, Arizona, USA – Onyx Exploration Inc. option agreement

On February 24, 2020, the Company’s wholly owned subsidiary, Canexco Inc., entered into an arm’s length Option Agreement to acquire a 100% interest in the Never Get Left Claim, Mohave County, Arizona, USA from Onyx Exploration Inc.

As at March 31, 2021, under the terms of the Agreement, the Company is committed to the following cash payments:

Due date February 24, 2022 February 24, 2023 February 24, 2024 Total committed cash payments and minimum exploration expenditures	Option Payments
	US$
	15,000 20,000 30,000
	65,000

The remaining committed option payments of US$65,000 would equate to CDN$81,738 using the March 31, 2021 Bank of Canada exchange rate. An increase or decrease of 10% to the exchange rate would result in an increase or decrease in required option payments of $8,174.

8) Exploration Expenditures

Refer to Note 8 “Exploration and evaluation assets,” to the Unaudited Condensed Interim Consolidated Financial Statements for exploration and evaluation asset expenditures for the three- and six-month periods ended March 31, 2021.

9) Off-Balance Sheet Transactions

There are no off-balance sheet transactions to report.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

10) Selected Quarterly Financial Information

The following selected financial data has been extracted from the Unaudited Condensed Interim Consolidate-+--d Financial Statements for the fiscal periods indicated and should be read in conjunction with those unaudited financial statements.

Three months ended	Mar 31 2021 (Q2 2021)	Dec 31 2020 (Q1 2021)	Sep 30 2020 (Q4 2020)	Jun 30 2020 (Q3 2020)	Mar 31 2020 (Q2 2020)	Dec 31 2019 (Q1 2020)	Sep 30 2019 (Q4 2019)	Jun 30 2019 (Q3 2019)
	$	$	$	$	$	$	$	$
Loss before recovery (impairment) of exploration and evaluation assets	(131,615)	(135,047)	(84,258)	(102,092)	(125,505)	(157,591)	(124,785)	(36,982)
Impairment of exploration and evaluation assets	-	-	4,450	-	(22,297)	-	(11,563)	-
Loss before other items	(131,615)	(135,047)	(79,808)	(102,092)	(147,802)	(157,591)	(136,348)	(36,982)
Dividend income	-	-	98,575	-	-	-	-	-
Interest and other income	(1,610)	(1,705)	(1,537)	370	237	78	39	147
Gain (loss) on short-term investments	84,503	330,878	128,998	200,351	(114,130)	(23,689)	115,882	(58,520)
Comprehensive(loss) profit	(48,722)	194,126	146,228	98,629	(261,695)	(181,202)	(20,427)	(95,355)
Basic and diluted earnings (loss) per share	0.00	0.00	0.00	0.00	(0.01)	0.00	0.00	0.00

Generally, the most significant influences on the variability of profit or loss are the amount of stock-based compensation, the amount of exploration and evaluation asset impairments or recoveries, the timing of the AGM in the respective periods in which it is held and gains or losses on short-term investments. Increases in activity in the junior mining sector in recent periods have also resulted in increased expenditures.

The Company’s improved working capital position in recent periods has allowed the Company to expand its operations into fiscal 2020 and 2021 which is reflected above including increased expenditures administrative consulting fees, office expenditures and travel and promotional activities included in travel and promotion as described in Section 4) “Operating results, General and administrative expenses”. Q1 2020 loss before impairment of exploration and evaluation also includes stock option compensation of $37,417 for the issuance of 710,000 options granted to consultants. Q4 2019 includes $59,216 for stock options granted for the issuance of 1,200,000 options granted to directors, officers and consultants during that quarter. Additionally, the most recent AGM was held in Q1 2021 and prior to that, Q4 2019.

The timing of the impairments and gains on sale of the Company’s Exploration and evaluation assets cannot be predicted in advance and will vary from one reporting period to the next. As a result, there may be dramatic changes in the financial results and balance sheet position reported by the Company on a period by period basis. Q4 2020 recovery is related to the British Columbia Mining Exploration Tax credit applied for at September 30, 2020 on account of the Echo property, British Columbia which was fully impaired during Q2 2020. Q4 2019 impairment relates to the Fulton, Red and Beal properties which were fully impaired in that period. Refer to Section 3) “Mineral properties – Echo, Fulton, Red and Beal properties, British Columbia.

Losses in interest and other income in Q4 2020, Q1 2021 and Q2 2021 reflect foreign exchange losses on a US dollar denominated bank account held by the Company to conduct its business in the United States.

The Company received common shares in four separate publicly traded Companies as partial consideration for the sale of mineral property interests in past years. Comprehensive Profit or Loss will fluctuate as the carrying value of these investments is adjusted to fair value at the respective period ends.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

11) Directors and Officers

Shane Ebert Director and President Gregory Hanks Director Jean Pierre Jutras Director and Vice-President Chantelle Collins Chief Financial Officer Barbara O’Neill Corporate Secretary Lesley Hayes Director

12) Related Party balances and transactions and key management remuneration

Transactions and balances are disclosed and explained in Note 17 to the Unaudited Condensed Interim Consolidated Financial Statements for the three- and six-month periods ended March 31, 2021 which accompanies this MD&A.

13) Share capital and equity reserves

Refer to Note 12 to the financial statements and the Condensed Interim Statement of Changes in Equity for common share capital, stock option and warrant transactions during the three- and six-month periods ended March 31, 2021, and balances as at that date.

During the subsequent period from April 1, 2021 and up to May 20, 2021, the date of this report, there were no shares issued or cancelled and returned to treasury, and no changes to warrants or options issued, exercised or expired.

14) Financial instruments

The carrying value of financial assets and liabilities measured at amortized cost approximates fair value due to the short-term nature of the instruments. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or credit risks arising from these financial instruments.

The Company undertakes transactions denominated in US currency through its exploration in the US; consequently, it is exposed to exchange rate fluctuations. The Company will acquire US funds from time to time to settle US dollar denominated liabilities. The Company had US$75,105, (CDN$94,445) in a US denominated bank account at March 31, 2021 (September 30, 2020 - US$76,844, (CDN$102,502)). The effect of a foreign currency increase or decrease of 10% on this cash holding would result in an increase or decrease of CDN$9,444 (September 30, 2020 - CDN$10,250). Additionally, at March 31, 2021, accounts payable and accrued liabilities include liabilities of US$9,580 (CDN$12,047) (September 30, 2020 - US$26,890 (CDN$35,869), that must be settled in US$. The effect of a foreign currency increase of decrease of 10% on this liability would result in an increase or decrease of CDN$1,205 (September 30, 2020 – CDN$3,587) to the amount payable.

15) Financial risk management

a) Credit risk

Credit risk is the risk of financial loss to the Company if counterparties to a financial instrument fail to meet their contractual obligations. The Company’s financial instruments that could be subject to credit risk consist of receivables and government grant receivables. The Company has had a history of prompt receipt of their receivables and considers credit risk to be low on these instruments as at March 31, 2021 and September 30, 2020.

b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company’s approach to managing liquidity risk is the utilization of budgets, to attempt to maintain

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

sufficient liquidity in order to meet operational and exploration requirements as well as property acquisition commitments. The Company raises capital through equity issues and its ability to do so is dependent on a number of factors including market acceptance, stock price and exploration results. The continuing operations of the Company are dependent upon its ability to obtain adequate financing or to commence profitable operations in the future. The Company feels that it has sufficient working capital to finance general and administration and other operating expenses for 12 months assuming similar activity levels to the previous year. However, increases in activity levels, new property acquisitions and increased levels of exploration on its mineral properties will require additional financing. There can be no assurance that the Company will be successful in obtaining financing. Refer to Note 1 "Nature and continuance of operations" to the unaudited Condensed Interim Consolidated Financial Statements dated March 31, 2021.

The Company’s significant remaining contractual maturities for financial liabilities at March 31, 2021 and September 30, 2020 are as follows:

Accounts payable and accrued liabilities are due within one year.

c) Market risk

The Company's equity investments are subject to market price risk. The investments in common shares are recorded at fair value at the respective period ends with the resultant gains or losses recorded in earnings. The price value of these investments can vary from period to period. During the six-month period ended March 31, 2021, the market price fluctuation on the investments held, resulted in a net gain of $363,370 (September 30, 2020 - net gain of $164,065) on short-term investments. In 2021, a 10% change in fair value of the Company's marketable investments would result in a charge to income of $84,502 (2020 - $55,127). The Company does not intend to hold these investments for more than one year.

The Company has not yet developed producing mineral interests; it is not exposed to commodity price risk associated with developed properties at this time.

d) Interest rate risk

The Company has no debt facilities and has minimal amounts of interest income; it is not exposed to significant interest rate risk at this time. All market risk is associated with the Company's investments in common shares, which are recorded at fair value at the respective period ends with the resultant gains or losses recorded in earnings.

e) Foreign exchange risk

The Company undertakes transactions denominated in US currency; consequently, it is exposed to exchange rate fluctuations. The effect of a foreign currency increase or decrease of 10% on the US denominated cash balance and liabilities has been disclosed in Section 14) “Financial instruments”. The Company has disclosed US dollar commitments pertaining to two option agreement in Section 7) “Contractual obligations c) and d)”.

16) Outlook

The Company’s primary objective is to discover mineral resources in economic quantities capable of supporting an operating mine. Should the Company discover such a promising property, it would likely attempt to ally with a more senior mining company that might option-in on the property or purchase the property outright, as the Company does not have expertise in operating a mine.

On October 15, 2020, warrants were exercised for gross proceeds of $230,000 adding to the Company’s working capital position during fiscal 2021. Further, on January 11, 2021 the Company closed its nonbrokered private placement issuing 17,000,000 common shares for aggregate gross proceeds of

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

$1,700,000. Refer to Section 6) “Financing”. The proceeds have provided working capital for the Company’s operations as well as fund continuing exploration of the Gold Range Property in Arizona.

During fiscal 2019, 2020 and 2021, the Company acquired by option and staking, the Gold Range Property in Arizona, USA, through its 100% owned subsidiary, Canexco Inc. Refer to Section 3) “Mineral properties, Gold Range Property, Arizona” for more information. To date exploration programs have included excavator trenching, surface rock and soil sampling, geologic mapping, a property wide airborne magnetic survey, further detailed mapping and soil sampling program and an initial drill program to identify priority targets for further evaluation. The results of these exploration programs have been positive. During Q1 2021, the Company continued to evaluate the results of its summer 2020 exploration program and has staked an additional 47 claims. As a result of successful financing efforts, the Company was well funded to continue its planned exploration program which included a second drill program that commenced January 28, 2021 and concluded March 1, 2021, the results of which continue to be received, compiled and evaluated. The next steps forward, following evaluation of assay results, will include select targets in the central and northern part of the property that remain untested, and additional work focused on the Eldorado to Excelsior area. In addition, the Company has entered into a LOI to acquire by Option the Excelsior Mine property which falls within the Gold Range area. Refer to Section 21) “Subsequent events, Letter of Intent to acquire by option the Excelsior Mine Property” for further information regarding this transaction.
With respect to the Gibson Prospect, CANEX Metals has submitted a new exploration permit application to allow for additional drilling, trenching and geophysical surveys; however, 2021 exploration expenditures will be dependent upon the Company successfully completing financing to fund planned programs. On June 20, 2019, the Company was granted an extension to meet its minimum exploration expenditures of $500,000 by July 15, 2019 to July 15, 2020 as lack of access to capital has prevented the Company from completing the required expenditures by the allotted time. On July 16, 2020 the Company was granted a further extension to November 30, 2020 and was subsequently granted a further extension to July 31, 2021 (refer to Section 3) “Mineral properties, Gibson Prospect, British Columbia” and Section 7) Contractual Obligations of this document). Throughout fiscal 2019, 2020 and 2021, the Company has continued to meet its contractual obligations except as noted above.
The Company is continuing its efforts to raise capital in this challenging market place, so that it can further pursue exploration activities with respect to its existing mineral properties, including meeting its expenditure commitments with respect to the Gibson Prospect, in British Columbia.

17) Risks

The business and operations of the Company are subject to numerous risks, many of which are beyond the Company's control. The Company considers the risks set out below to be some of the most significant to potential investors in the Company, but not all of the risks associated with an investment in securities of the Company. If any of these risks materialize into actual events or circumstances or other possible additional risks and uncertainties of which the Company is currently unaware or which it considers to be material in relation to the Company's business actually occur, the Company's assets, liabilities, financial condition, results of operation (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.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

The Company is a natural resource company engaged in the acquisition, exploration and development of mineral properties. Given the nature of the mining business, the limited extent of the Company's assets and the present stage of exploration, the following risk factors, among others, should be considered:

Exploration, development and operating risks
The Company is in the process of exploring its properties and has not yet determined whether its properties contain economically recoverable reserves and, therefore, does not generate any revenues from production. The recovery of expenditures on mineral properties and the related deferred exploration expenditures are dependent on the existence of economically recoverable mineralization, the ability of the Company to obtain financing necessary to complete the exploration and development of its properties, and upon future profitable production, or alternatively, on the sufficiency of proceeds from disposition. Mineral exploration is highly speculative in nature, involves many risks and frequently is non-productive. There is no assurance that exploration efforts will be successful.
Substantial capital requirements and liquidity Substantial additional funds for the establishment of the Company's current and planned mining operations will be required. No assurances can be given that the Company will be able to raise the additional funding that may be required for such activities, should such funding not be fully generated from operations. Mineral prices, environmental rehabilitation or restitution, revenues, taxes, transportation costs, capital expenditures and operating expenses and geological results are all factors which will have an impact on the amount of additional capital that may be required. To meet such funding requirements, the Company may be required to undertake additional equity financing, which would be dilutive to shareholders. Debt financing if available, may also involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Company or at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operation and pursue only those projects that can be funded through cash flows generated from its existing operations, if any.
Fluctuating mineral prices
The economics of mineral exploration are affected by many factors beyond the Company's control, including commodity prices, the cost of operations, variations in the grade of minerals explored and fluctuations in the market price of minerals. Depending on the price of minerals, the Company may determine that it is impractical to continue a mineral exploration operation. Mineral prices are prone to fluctuations and the marketability of minerals is affected by government regulation relating to price, royalties, allowable production and the importing and exporting of minerals, the effect of which cannot be accurately predicted. There is no assurance that a profitable market will exist for the sale of any minerals found on the Company's properties.
Regulatory, permit and license requirements
The current or future operations of the Company require permits from various governmental authorities, and such operations are and will be governed by laws and regulations concerning exploration, development, production, taxes, labour standards, occupational health, waste disposal, toxic substances, land use, environmental protection, site safety and other matters. Companies engaged in the exploration and development of mineral properties generally experience increased costs and delays in development and other schedules as a result of the need to comply with applicable laws, regulations and permits. There can be no assurance that all permits which the Company may require for facilities and the conduct of exploration and development operations on the Properties will be obtainable on a reasonable terms, or that such laws and regulation will not have an adverse effect on any exploration or development project which the Company might undertake.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed and may include corrective measures requiring capital expenditures, installation

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

of additional equipment or remedial actions. Parties engaged in exploration and development operations may be required to compensate those suffering loss or damage by reason of the exploration and development activities and may have civil or criminal fines or penalties imposed upon them for violation of applicable laws or regulations. Amendments to current laws, regulations and permits governing operations and activities of mineral companies, or more stringent implementation thereof, could have a material adverse impact on the Company and cause increases in capital expenditures or exploration and development costs, or require abandonment or delays in the development of new or existing properties.

Financing risks and dilution to shareholders
The Company has limited financial resources, no operations and no revenues. If the Company's exploration program on it properties is successful, additional funds will be required for the purposes of further exploration and development. There can be no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be available on favourable terms or at all. It is likely such additional capital will be raised through the issuance of additional equity which will result in dilution to the Company's shareholders.
Title to properties
Acquisition of title to mineral properties is a very detailed and time-consuming process. Title to, and the area of, mineral properties may be disputed. The Company cannot give an assurance that title to its properties will not be challenged or impugned. Mineral properties sometimes contain claims or transfer histories that examiners cannot verify. A successful claim that the Optionors or the Company, as the case may be does not have title to its properties could cause the Company to lose any rights to explore, develop and mine any minerals on its properties without compensation for its prior expenditures relating to its properties.
Competition
The mineral exploration and development industry is highly competitive. The Company will have to compete with other mining companies, many of which have greater financial, technical and other resources than the Company, for, among other things, the acquisition of mineral claims, leases and other mineral interest as well as for the recruitment and retention of qualified employees and other personnel. Failure to compete successfully against other mining companies could have a material adverse effect on the Company and its prospects.
Reliance on management and dependence on key personnel
The success of the Company will be largely dependent upon the performance of its directors and officers and the ability to attract and retain key personnel. The loss of the services of these persons may have a material adverse effect on the Company's business and prospects. The Company will compete with numerous other companies for the recruitment and retention of qualified employees and contractors. There is no assurance that the Company can maintain the service of its directors and officers, or other qualified personnel required to operate its business. Failure to do so could have a material adverse effect on the Company and its prospects. The Novel Corona Virus pandemic discussed below may result in one or more of the Company’s employees and/or officers and directors becoming ill and unable to provide services for a period of time. This is at least partially mitigated by the fact that certain individuals have overlapping competencies and they do not reside or work together.
Environmental risks
The Company's exploration and appraisal programs will, in general, be subject to approval by regulatory bodies. Additionally, all phases of the mining business present environmental risks and hazards and are subject to environmental regulation pursuant to a variety of international conventions and provincial and municipal laws and regulations. Environmental legislation provides for, among other things, restrictions and prohibitions on spills, releases or emissions of various substances

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

produced in association with mining operations. The legislation also requires that drill sites and facility sites be operated, maintained, abandoned and reclaimed to the satisfaction of applicable regulatory authorities. Compliance with such legislation can require significant expenditures and a breach may result in the imposition of fines and penalties, some of which may be material. Environmental legislation is evolving in a manner expected to result in stricter standards and enforcement, larger fines and liability and potentially increase capital expenditures and operating costs.

Conflicts of interest

Certain of the Directors and Officers of the Company are engaged in, and will continue to engage in, other business activities on their own behalf and on behalf of other companies and, as a result of these and other activities, such Directors and Officers of the Company may become subject to conflicts of interest. Canadian corporate laws provide that in the event that a Director has an interest in a contract or proposed contract or agreement, the director shall disclose his interest in such contact or agreement and shall refrain from voting on any matter in respect of such contract or agreement unless otherwise provided under those laws. To the extent that conflicts of interest arise, such conflicts will be resolved in accordance with the provisions of the applicable Canadian corporate laws.

Uninsurable risks

Exploration, development and production operations on mineral properties involve numerous risks, including unexpected or unusual geological operating conditions, rock bursts, cave-ins, fires, floods, earthquakes and other environmental occurrences, 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. Although precautions to minimize risk will be taken, operations are subject hazards that may result in environmental pollution and consequent liability that could have a material adverse impact on the business, operations and financial performance of the Company. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks as a result of high premiums or other reasons. Should such liabilities arise, they could have an adverse impact on the Company's results of operations and financial condition and could cause a decline in the value of the Company's shares.

Litigation
The Company and/or its directors may be subject to a variety of civil or other legal proceedings, with or without merit.

18) Critical Accounting Estimates

The most significant accounting estimate for the Company relates to the carrying value of its exploration and evaluation assets. Exploration and evaluation assets consist of the capitalized costs of exploration and mining concessions. Acquisition and leasehold costs and exploration costs are capitalized and deferred until such time as the property is put into production or the properties are disposed of either through sale or abandonments. The estimated values of exploration and evaluation assets are evaluated by management on a regular basis to determine whether facts and circumstances suggest that the carrying amount of the asset may exceed its recoverable amount. Reference is made to project economics, including the timing of the exploration and/or development work, the work programs and exploration results experienced by the Company and others, financing, the extent to which optionees have committed, or are expected to commit to, exploration on the property and the imminent expiry of the right to explore, among other factors. When it becomes apparent that the carrying value of a specific property will not be realized, an impairment provision is made for the estimated decline in value.

The Company’s estimate for decommissioning obligations is based on existing laws, contracts and other policies. The value of the obligation is based on estimated future costs for abandonments and reclamations which require that certain assumptions be made. By their nature, these estimates are subject to measurement uncertainty.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

Another significant accounting estimate relates to valuing stock-based compensation and warrants. The Company uses the Black-Scholes Option Pricing Model. Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options granted and vested, or warrants issued, during the year.

The Company estimates the fair value of its short-term equity investments at each period end as they are carried at fair value in the Statements of Financial Position. The Company uses the closing price of the common shares on the period-end date and uses the Black-Scholes Option Pricing Model discussed above to estimate the value of its investment in warrants. The price at which these instruments can ultimately be sold will vary from these estimates due to the timing of their sale, the volume of trading in the securities at any given time and changes in the market over time, among other factors.

19) New Accounting Policies

The Company did not adopt any new accounting policies during the six-month period ended March 31, 2021.

20) Novel coronavirus pandemic

In early January 2020, a human infection originating in China was traced to a novel strain of coronavirus. The virus has since spread to other parts of the world including North America and Europe, causing unprecedented disruptions in the global economy as efforts to contain the spread of the virus has intensified. On March 11, 2020, the World Health Organization declared this outbreak of coronavirus (“COVID-19”) as a pandemic as it continues to spread throughout North America. The March 2020 exploration program on the Gold Range Property, Arizona, was ended prior to completion to comply with health and travel advisories related to COVID-19. Commencing July 1, 2020, the Company continued its planned exploration programs for the remainder of 2020 and into 2021, (refer to Note 8 – “Exploration and evaluation assets” to the Unaudited Condensed Interim Consolidated Financial Statements for the three- and six-month periods ended March 31, 2021), as previously imposed travel restrictions as a result of COVID-19 were lifted and the Company determined that work could safely resume in the targeted areas. At this time, the full extent and duration of the impact of COVID-19 on the Company’s operations and financial performance is currently unknown, and depends on future developments that are uncertain and unpredictable, including the duration and spread of the pandemic, its impact on capital and financial markets on a macro-scale and any new information that may emerge concerning the severity of the virus, its spread to other regions and the actions to contain the virus or treat it impact, among others.

21) Subsequent events

Letter of Intent to acquire by option Excelsior Mine Property

On January 12, 2021, the Company signed a Letter of Intent (“LOI”) allowing the Company to earn into the Excelsior Mine Property (“the Property”) from a private vendor over 3 stages. During stage 1, CANEX can earn a 25% interest in the Property by issuing 750,000 common shares of CANEX and spending US$500,000 on exploration. During stage 2, CANEX can earn 51% interest in the Property by issuing 1 million shares of CANEX, spending US$2,000,000 and paying a bonus payment equivalent to 1% of the gold price on recoverable gold equivalent ounces defined in the measured and indicated resource categories. Stages 1 and 2 must be completed over 2.5 years.

During stage 3 CANEX can earn a 90% interest in the Property by issuing 1,000,000 CANEX shares and spending US$2,000,000 on exploration and development including an economic study. To complete the stage 3 earn in CANEX must make another bonus payment to the Vendors equivalent to 1.5% of the gold price on recoverable gold equivalent ounces defined in the proven and probable reserve categories.

CANEX METALS INC. MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021

CANEX has 2 years to complete the stage 3 earn in once Stage 2 is complete. Once CANEX has earned a 90% interest in the Property, the Vendors can elect to maintain their 10% ownership by contributing their 10% share to exploration and development or to give up 100% ownership to CANEX and revert to a 1.5% NSR. CANEX and Vendors have committed to completing a definitive options agreement by May 31, 2021. The transaction is subject to TSX-V approval.

22) Other

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

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CANEX Metals Inc. — Interim / Quarterly Report 2021

43278_rns_2021-05-20_2a3331d2-7467-4a7d-9549-59e775479b4d.pdf

1) Principal Business of the Company

2) Highlights – Three and six months ended March 31, 2021

Mineral properties

Gold Range Property, Arizona, USA

Gibson Prospect, British Columbia

Corporate

3) Mineral Properties

Gold Range Property, Arizona, USA

Gibson Prospect, British Columbia

Echo, Fulton, Red and Beal properties, British Columbia

4) Operating Results

General and administrative expenses

Professional fees

5) Liquidity and Capital Resources

6) Financing

Six-month period ended March 31, 2021

Year ended September 30, 2020

7) Contractual Obligations

a) Office Lease

b) Gibson Prospect, British Columbia – Altius option agreement

c) Gold Range, Arizona, USA – Prospector option agreement

d) Gold Range, Arizona, USA – Onyx Exploration Inc. option agreement

8) Exploration Expenditures

9) Off-Balance Sheet Transactions

10) Selected Quarterly Financial Information

11) Directors and Officers

12) Related Party balances and transactions and key management remuneration

13) Share capital and equity reserves

14) Financial instruments

15) Financial risk management

a) Credit risk

b) Liquidity risk

c) Market risk

d) Interest rate risk

e) Foreign exchange risk

16) Outlook

17) Risks

18) Critical Accounting Estimates

19) New Accounting Policies

20) Novel coronavirus pandemic

21) Subsequent events

Letter of Intent to acquire by option Excelsior Mine Property

22) Other

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CANEX Metals Inc. Interim / Quarterly Report 2021