COLLECTIVE MINING LTD.

NOTICE OF ANNUAL AND SPECIAL MEETING

AND

MANAGEMENT INFORMATION CIRCULAR

WITH RESPECT TO THE ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 29, 2022

Dated May 27, 2022

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COLLECTIVE MINING LTD. NOTICE OF ANNUAL AND SPECIAL MEETING

NOTICE IS HEREBY GIVEN that the Annual and Special Meeting (the “Meeting”) of shareholders of Collective Mining Ltd. (the "Company") will be held by way of teleconference on June 29, 2022 at the hour of 9:30 a.m. (Toronto time), and the Company invites shareholders to participate in that manner. The teleconference dial-in details are as follows: 647-723-3984 or 1-866-365-4406 from Canada or the US, 7 Digit Access Code – 8487744#. The Meeting will not be held in person. The Meeting will be held for the following purposes:

(a) To receive and consider the audited financial statements of the Company for the period ended December 31, 2021, and the report of the auditors thereon;

(b) To elect the directors of the Company for the ensuing year;

(c) To appoint PricewaterhouseCoopers LLP, as auditors for the ensuing year and to authorize the board of directors to fix the remuneration to be paid to the auditors;

(d) To consider and, if deemed appropriate, to pass with or without variation a resolution to confirm and approve the “rolling” stock option plan of the Corporation; and

(e) To transact such other business as may be properly transacted at the Meeting or at any adjournment thereof.

This notice is accompanied by a form of proxy and the Circular.

Shareholders who are unable to attend the Meeting in person are requested to complete, date, sign and return the accompanying form of proxy so that as large a representation as possible may be had at the Meeting.

THE CORPORATION DOES NOT INTEND TO HOLD THE MEETING IN PERSON AND YOU WILL NOT BE ABLE TO VOTE YOUR SHARES AT THE MEETING. SHAREHOLDERS THAT WISH TO PARTICIPATE MUST VOTE THEIR SHARES BY COMPLETING AND RETURNING THE ENCLOSED FORM OF PROXY BY 9:30 A.M. (TORONTO TIME) ON JUNE 27, 2022 OR 48 HOURS (EXCLUDING SUNDAYS, SATURDAYS AND HOLIDAYS) PRIOR TO ANY ADJOURNED OR POSTPONED MEETING, AS DESCRIBED IN THE CIRCULAR.

DATED at Toronto, in the Province of Ontario, as of the 27[th] day of May, 2022.

BY ORDER OF THE BOARD OF DIRECTORS

“Omar Ossma”

Omar Ossma President and CEO

INFORMATION CIRCULAR

as at and dated May 27, 2022

SOLICITATION OF PROXIES

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This Information Circular is furnished in connection with the solicitation of proxies by management of Collective Mining Ltd. (the “ Company ”) for use at the 2022 annual and special meeting (the “ Meeting ”) of shareholders of the Company (the “ Shareholders ”) to be held on June 29, 2022 at the time and place and for the purposes set forth in the Notice of Meeting.

The solicitation of proxies will be primarily by mail, but proxies may also be solicited personally or by telephone by directors, officers and regular employees of the Company. The cost of this solicitation will be borne by the Company.

The Corporation does not intend to hold the Meeting in person in view of the evolving COVID-19 situation. The Meeting will be held by teleconference on June 29, 2022 at the hour of 9:30 a.m. (Toronto time), and the Company invites shareholders to participate in that manner. The teleconference dial-in details are as follows: 647-723-3984 or 1-866-3654406 from Canada or the US, 7 Digit Access Code – 8487744#.

YOU WILL NOT BE ABLE TO VOTE YOUR SHARES AT THE MEETING. SHAREHOLDERS THAT WISH TO PARTICIPATE MUST VOTE THEIR SHARES BY COMPLETING AND RETURNING THE ENCLOSED FORM OF PROXY BY 9:30 A.M. (TORONTO TIME) ON JUNE 27, 2022, OR 48 HOURS (EXCLUDING SUNDAYS, SATURDAYS AND HOLIDAYS) PRIOR TO ANY ADJOURNED OR POSTPONED MEETING.

General Information

The Corporation was incorporated under the Business Corporations Act (Ontario) on February 21, 2018 under the name "POCML 5 Inc." (" POCML5 "). On December 10, 2018, POCML5 completed an initial public offering by way of a capital pool company prospectus. POCML5, Collective Mining Inc (“ CMI ”), a privately held business, and a wholly-owned subsidiary of POCML5 entered into a definitive business combination agreement dated February 26, 2021 (the " Business Combination Agreement "), providing for the acquisition of all of the issued and outstanding common shares of CMI (the " Business Combination "). On May 20, 2021, the Corporation completed its "Qualifying Transaction" in accordance with the applicable policies of the TSX Venture Exchange (the " TSXV ") and pursuant to the terms of the Business Combination Agreement. In connection with the completion of the Business Combination, which constituted a reverse takeover of POCML5 by CMI, POCML5 filed Articles of Amendment to effect the name change to Collective Mining Ltd. and a consolidation of the common shares of the Corporation (the " Common Shares ") on a four (old) for one (new) basis. The Common Shares commenced trading on the TSXV on May 28, 2021 under the symbol "CNL".

Additional information relating to the Business Combination can be found in the filing statement of the Corporation dated May 12, 2021 available under the Company’s issuer profile on SEDAR at www.sedar.com.

Appointment and Revocation of Proxies

The persons named in the accompanying form of proxy are directors or officers of the Company. A shareholder desiring to appoint some other person (who need not be a shareholder) to represent him or her at the Meeting may do so, either by striking out the printed names and inserting the desired person's name in the blank space provided in the form of proxy or by completing another proper form of proxy and in either case delivering the completed proxy to the office of TSX Trust Company, 301-100 Adelaide Street West, Toronto, Ontario, M5H 4H1 or by facsimile at (416) 595-9593, not less than forty-eight (48) hours (excluding Saturdays, Sundays and holidays) before the time fixed for the Meeting.

The Chair of the Meeting will have the discretion to accept or reject proxies otherwise deposited.

A shareholder who has given a proxy may revoke it by an instrument in writing delivered to the said office of TSX Trust Company or the Company’s office at any time up to and including the last business day preceding the day of the Meeting, or any adjournment thereof, or in any manner provided by law.

Proxy Instructions

Only registered shareholders or duly appointed proxyholders are permitted to vote at the Meeting. The securities represented by the proxy will be voted or withheld from voting in accordance with the instructions of the shareholder on any ballot that may be called for. If the shareholder specifies a choice with respect to any matter to be acted upon, the securities will be voted accordingly.

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The form of proxy confers authority upon the named proxyholder with respect to matters identified in the accompanying Notice of Meeting. If a choice with respect to such matters is not specified, it is intended that the person designated by management in the form of proxy will vote the securities represented by the proxy in favour of each matter identified in the proxy and for the nominees of management for directors and auditors.

The proxy confers discretionary authority upon the named proxyholder with respect to amendments to or variations in matters identified in the accompanying notice of Meeting and other matters which may properly come before the Meeting. As at the date of this Information Circular, management is not aware of any amendments, variations, or other matters which will be brought before the Meeting. If such should occur, the persons designated by management will vote thereon in accordance with their best judgment, exercising discretionary authority.

Non-Registered Holders

Only shareholder whose name appears on the records of the Company as the registered holder of shares or duly appointed proxyholders are permitted to vote at the Meeting. Most shareholders of the company are “non-registered” shareholders because the shares they own are not registered in their names but instead are registered in the name of a nominee such as a brokerage firm through which they purchased the shares; a bank, trust company, trustee or administrator of selfadministered RRSP’s, RRIF’s, RESP’s, TFSA’s and similar plans; or a clearing agency such as The Canadian Depository for Securities Limited (a “ Nominee ”). If you purchased your shares through a broker, you are likely an unregistered holder.

In accordance with securities regulatory policies, the Company has distributed copies of the Meeting materials, being the Notice of Meeting, this Information Circular and the form of proxy, to the Nominees for distribution to non-registered holders. Nominees are required to forward the Meeting materials to non-registered holders to seek their voting instructions in advance of the Meeting. Shares held by Nominees can only be voted in accordance with the instructions of the non-registered holder. The Nominees often have their own form of proxy, mailing procedures and provide their own return instructions. If you wish to vote by proxy, you should carefully follow the instructions from the Nominee in order to ensure that your shares are voted at the Meeting.

In addition, Canadian securities legislation now permits the Company to forward meeting materials directly to “non-objecting beneficial owners”. These materials are being sent to both registered and non-registered owners of the securities. If you are a non-registered owner, and the Company or its agent has sent these materials directly to you, your name, address and information about your holdings of securities have been obtained in accordance with applicable securities regulatory requirements from the Nominee holding securities on your behalf. By choosing to send these materials to you directly, the Company (and not the Nominee holding shares on your behalf) has assumed responsibility for: (i) delivering these materials to you; and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

The voting securities of the Company consist of an unlimited number of Common Shares without par value. As at the date of this Information Circular, 47,386,715 Common Shares were issued and outstanding, each such share carrying the right to one (1) vote at the Meeting. May 27, 2022 has been fixed in advance by the directors of the Company as the record date for the purpose of determining those shareholders entitled to receive notice of, and to vote at the Meeting.

To the knowledge of the directors and senior officers of the Company, as at the date hereof, no person beneficially owns, directly or indirectly, or exercises control or direction over, voting securities carrying more than 10% of the voting rights attached to the voting securities of the Company except for the following shareholders:

Name	Holdings(1)(2)	Percentage(1)(2)
AriSussman(3)	10,490,000	22.1%
Pasquale Dicapo(4)	8,686,666	18.3%

Notes

(1) The information as to Common Shares beneficially owned, controlled or directed, not being within the knowledge of the Company, has been obtained by the Company from publicly disclosed information and/or furnished by the Shareholder listed above (2) On a non-diluted basis.

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(3) The 10,490,000 are held directly by Mr. Sussman, an entity over which Mr. Sussman exercises direction or control, and by Mr. Sussman’s spouse.
(4) The 8,686,666 Common Shares are held directly by Mr. Dicapo and by entities over which Mr. DiCapo exercises direction or control.

EXECUTIVE COMPENSATION

Set forth below is the Company’s executive compensation summary for the year ended December 31, 2021 prepared in accordance with Form 51-102F6V – Statement of Executive Compensation – Venture Issuers .

Named Executive Officers

For the purposes of this Information Circular, a Named Executive Officer (“ Named Executive Officer ” or “ NEO ”) of the Company means each of the following individuals:

(a) a Chief Executive Officer (“ CEO ”) of the Company;
(b) a Chief Financial Officer (“ CFO ”) of the Company;
(c) the most highly compensated executive officer, including any of its subsidiaries, or the most highly compensated individuals acting in a similar capacity, other than the CEO and CFO, at the end of the most recently completed financial year whose total compensation was, individually, more than $150,000 for the December 31, 2021 financial year; and
(d) each individual who would be a NEO under paragraph (c) but for the fact that the individual was neither an executive officer, nor acting in a similar capacity at December 31, 2021.

Following the completion of the Business Combination, Ari Sussman, the Executive Chairman of the Company, Omar Ossma, the Chief Executive Officer and President of the Company and Paul Begin, the Chief Financial Officer and Corporate Secretary of the Company, were the only NEOs of the Company during the year-end December 31, 2021. David D’Onofrio, the former Chief Executive Officer, Chief Financial Officer, Secretary and Director of POCML 5 Inc., was the only NEO of the Company prior to the completion of the Business Combination. In connection with the completion of the Business Combination, the Board was reconstituted. Messrs. D’Onofrio, Parsons, and DiCapo resigned as Directors of POCML 5 Inc. and Messrs. Sussman, Murphy, Thomas, and Ms. Constanza joined the Board. Mr. Mehra joined the Board on September 6, 2021.

Director and Named Executive Officer Compensation, Excluding Compensation Securities

The following table sets forth information concerning all compensation paid, payable, awarded, granted, given or otherwise provided, directly or indirectly, by the Company, or a subsidiary of the Company, to each Named Executive Officer and director, other than stock options and other compensation securities, for each of the two most recently completed financial years.

Name and Position(1)(2)(3)	Fiscal Year Ended Dec 31,	Salary, Consulting Fee, Retainer or Commission	Bonus	Committee or Meeting Fees	Value of Perquisites	Value of All Other Compensation(4)	Total Compensation
Ari Sussman, Executive Chairman andDirector	2021	US$85,832	US$224,425	Nil	Nil	Nil	US$310,258
Omar Ossma, Chief Executive Officer and President	2021	US$95,660	US$72,919	Nil	Nil	US$3,986	US$172,565
Paul Begin, Chief Financial Officer and Corporate Secretary	2021	US$122,167	US$139,687	Nil	Nil	US$317	US$262,171
Kenneth Thomas, LeadDirector	2021	Nil	Nil	Nil	Nil	Nil	Nil
Maria Constanza, Director	2021	Nil	Nil	Nil	Nil	Nil	Nil
Paul Murphy,Director	2021	Nil	Nil	Nil	Nil	Nil	Nil
Ashwath Mehra, Director	2021	Nil	Nil	Nil	Nil	Nil	Nil
Former Officers and Directors of POCML 5 Inc.

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David D’Onofrio, Chief Executive Officer, Chief Financial Officer, Secretary andDirector	David D’Onofrio, Chief Executive Officer, Chief Financial Officer, Secretary andDirector	2021	Nil	Nil	Nil	Nil	Nil	Nil
		2020	Nil	Nil	Nil	Nil	Nil	Nil
Adam Parsons, Director		2021	Nil	Nil	Nil	Nil	Nil	Nil
		2020	Nil	Nil	Nil	Nil	Nil	Nil
Pasquale DiCapo, Director		2021	Nil	Nil	Nil	Nil	Nil	Nil
		2020	Nil	Nil	Nil	Nil	Nil	Nil
	Notes:

(1) The Company completed the Business Combination on May 20, 2021. The amounts included in the table above reflect the compensation paid to the directors and officers of POCML 5 Inc., and to the Company subsequent to the completion of the Business Combination. Amounts paid as compensation to the directors and officers of CMI., a private company, prior to the completion of the Business Combination are not included in the foregoing table.

(2) Messrs. D’Onofrio, Parsons and Dicapo were directors and/or officers of POCML 5 Inc. until completion of the Business Combination on May 20, 2021.

(3) Messrs. Sussman, Ossma and Begin became NEOs of the Company on the completion of the Business Combination on May 20, 2021, and Messrs. Sussman, Thomas, Murphy and Ms. Constanza became Directors of the Company on the completion of the Business Combination on May 20, 2021. Mr. Mehra was appointed to the Board on September 6, 2021.

(4) Other compensation includes health benefits.

Stock Options and Other Compensation Securities

Set forth in the table below is a summary of all compensation securities granted or issued to each Named Executive Officer and director of the Company during the fiscal year ended December 31, 2021.


		Compensation Securities
Name and Position	Type of Compensation Security	Number of Compensation Securities, Number of Underlying Securities, and Percentage of Class	Date of Issue or Grant	Issue, Conversion or Exercise Price	Closing Price of Security or Underlying Security on Date of Grant(1)	Closing Price of Security or Underlying Security at Year End	Expiry Date
Ari Sussman, Executive Chairman and Director	Stock Options	150,000	December 9, 2021	$2.90	$2.90	$2.95	December 9, 2026
Omar Ossma, Chief Executive Officer and President	Stock Options	150,000	December 9, 2021	$2.90	$2.90	$2.95	December 9, 2026
Paul Begin, Chief Financial Officer and Corporate Secretary	Stock Options	150,000	December 9, 2021	$2.90	$2.90	$2.95	December 9, 2026
Kenneth Thomas, Lead Director	Stock Options	150,000 100,000	May 20, 2021 December 9, 2021	$1.00 $2.90	N/A $2.90	$2.95 $2.95	May 20, 2024 December 6, 2026
Maria Constanza, Director	Stock Options	150,000 100,000	May 20, 2021 December 9, 2021	$1.00 $2.90	N/A $2.90	$2.95 $2.95	May 20, 2024 December 6, 2026
Paul Murphy, Director	Stock Options	150,000 100,000	May 20, 2021 December 9, 2021	$1.00 $2.90	N/A $2.90	$2.95 $2.95	May 20, 2024 December 6, 2026
Ashwath Mehra, Director	Stock Options	200,000 100,000	September 6, 2021 December 9, 2021	$2.90 $2.90	$2.90 $2.90	$2.95 $2.95	September 6, 2026 December 9, 2026

Exercise of Compensation Securities by Directors and Named Executive Officers

The following table sets forth certain information in respect of all compensation securities granted or issued to each Named Executive Officer and director by the Corporation or one of its subsidiaries in the financial year of the Company ended December 31, 2021 for services provided or to be provided, directly or indirectly, to the Company or any of its subsidiaries.

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Name and Position	Type of Compensation Security	Number of Underlying Securities Exercised	Exercise Price per Security	Date of Exercise	Closing Price per Security on Date of Exercise	Difference between Exercise Price and Closing Price on Date of Exercise	Total Value on Exercise Date
Ari Sussman, Executive Chairman andDirector	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Omar Ossma, Chief Executive Officer and President	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Paul Begin, Chief Financial Officer and Corporate Secretary	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Kenneth Thomas, LeadDirector	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Maria Constanza, Director	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Paul Murphy,Director	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Ashwath Mehra, Director	n/a	n/a	n/a	n/a	n/a	n/a	n/a

Stock option plans and other incentive plans

The Company’s only incentive plan is a stock option plan. A description of the material terms of the Company’s incentive stock option plan can be found under the heading “ Equity Compensation Plan Information – Summary of Stock Option Plan ”.

Employment, consulting and management agreements

Mr. Sussman’s remuneration is billed monthly through a service agreement with a service company (wholly owned by Mr. Sussman) Lion Mining Services, Inc. (“ Lion ”), signed May 1, 2021 to provide technical, administration and office support to Collective Mining Ltd. Lion is entitled to an annual compensation of US$250,000, billed monthly, plus a bonus of up to 100 percent of the annual compensation. The agreement can be terminated by either party without notice in the event of a material breach. If the agreement is terminated by the Company for any reason other than a material breach, Lion is entitled to a termination fee of US$250,000, last year’s bonus and one year of benefits. In the event of a Change of Control, and within twelve months of such Change of Control, either the Company or Lion elects to terminate the agreement, Lion is entitled to a payment of US$1,500,000.

Messrs. Ossma is remunerated pursuant to an employment contract dated August 15, 2020 and is compensated at a rate of COP50,000,000 per month and is entitled to a bonus of up to 50 percent of his annual compensation. The employment agreement can be terminated at any time by either party. In the event that the Company elects to terminate the agreement for any reason other than cause, Messrs. Ossma is entitled to one year’s salary, the prior year’s bonus and benefits as permitted by the Company’s insurer. In the event of a change of control, and if the Company elects to terminate the agreement, Messrs. Ossma is entitled to a payment of a sum of one year and a half (A) salary, (B) bonus based on the target bonus and (C) benefits.

Mr. Begin is remunerated pursuant to an employment contract dated January 1, 2021 and is compensated at a rate of US $200,000 per annum and is entitled to a bonus of up to 75 percent of his annual compensation. The employment agreement can be terminated at any time by either party. In the event that the Company elects to terminate the agreement for any reason other than cause, Mr. Begin is entitled to one year’s salary, the prior year’s bonus and benefits as permitted by the Company’s insurer. In the event of a change of control, and within twelve months of such Change of Control, either the Company or Mr. Begin elects to terminate the agreement, Mr. Begin is entitled to a payment of a sum of two year’s (A) salary, (B) bonus based on the target bonus and (C) benefits.

Oversight and description of director and named executive officer compensation

The Board has a Corporate Governance and Compensation committee which is tasked with the assessment of the compensation paid to both the NEOs and directors. Compensation is reviewed on an annual basis. The Company’s compensation program is designed to provide competitive levels of compensation, a significant portion of which is dependent upon individual and corporate performance and contribution to increasing shareholder value. The Board recognizes the need to provide a total

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compensation package that will attract and retain qualified and experienced executives as well as align the compensation level of each executive to that executive’s level of responsibility.

The objectives and reasons for this system of compensation are generally to allow the Company to remain competitive compared to its peers in attracting and retaining experienced personnel. In general, a NEO’s compensation is comprised of salary, wages or contractor payments and stock option grants.

Salary, wages or contractor payments for each NEO are based on the position held, the related responsibilities and functions performed by the NEO and salary ranges paid to executives at similar companies. Stock option grants are designed to reward the NEOs for success on a similar basis as the shareholders of the Company, but these rewards are highly dependent upon the volatile stock market, much of which is beyond the control of the NEOs. When new options are granted, the Board takes into account the previous grants of options, the number of stock options currently held, position, overall individual performance, anticipated contribution to the Company’s future success and the individual’s ability to influence corporate and business performance. The purpose of granting such stock options is to assist the Company in compensating, attracting, retaining and motivating the officers, directors and employees of the Company and to closely align the personal interest of such persons to the interest of the shareholders.

The exercise price of the stock options granted is determined by the market price at the time of grant. At this time the Board has not established any performance criteria or goals. There were no significant changes to the Company’s compensation policies during or after the most recently completed financial year that could or would have affected the Named Executive Officers’ compensation.

Pension

The Company does not have a pension plan under which benefits are determined primarily by final compensation (or average final compensation) and years of service.

EQUITY COMPENSATION PLAN INFORMATION

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information in respect of the Company’s equity compensation plans under which equity securities of the Corporation are authorized for issuance, aggregated in accordance with all equity plans previously approved by the Shareholders and all equity plans not approved by Shareholders as at December 31, 2021:

Plan Category	Number of securities to be issued upon exercise of outstanding options(a)	Weighted-average exercise price of outstanding options (b)	Number of Securities remaining available for future issuance under equity compensation plans(1)(2) (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by securityholders	3,798,750	$1.78	939,921
Equity compensation plans not approved by securityholders	N/A	N/A	N/A
Total	3,798,750	$1.78	939,921

Notes:

(1) The Company’s incentive stock option plan is a “rolling” stock option plan, last approved by the Shareholders at a meeting on April 9, 2021. The number of Common Shares that may be reserved for issuance pursuant to the incentive stock option is limited to 10% of the issued and outstanding Common Shares on the date of any grant of options thereunder. As at December 31, 2021, there were 3,798,750 options were outstanding.

(2) Based on a total of 4,748,671 stock options issuable pursuant to the Company’s incentive stock option plan as at December 31, 2021.

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Summary of Stock Option Plan

The Company has established a “rolling” stock option plan (the “ Plan ”) providing for the grant of stock options to directors, officers and other service providers of the Company in accordance with the terms thereof. A maximum of 10% of the issued shares of the Company, from time to time, may be reserved for issuance pursuant to the exercise of options granted pursuant to the Plan.

The purpose of the Plan established by the Company, pursuant to which it may grant incentive stock options, is to promote the profitability and growth of the Company by facilitating the efforts of the Company to obtain and retain key individuals. The Plan provides an incentive for and encourages ownership of the Common Shares by its key individuals so that they may increase their stake in the Company and benefit from increases in the value of the Common Shares.

The Plan is administered by the Board. The Plan provides for the grant of options to purchase Common Shares to eligible directors, officers, employees and consultants of the Company or any of its affiliates (“ Participants ”). The number of Common Shares reserved for issuance pursuant to options granted to any one Participant, other than a consultant, shall not, within any 12-month period, exceed 5% of the total number of Common Shares then issued and outstanding unless disinterested shareholder approval is obtained. The number of Common Shares issuable to any insider and such insiders’ associates pursuant to options granted under the Plan and all other security-based compensation arrangements of the Corporation shall not, at any time, exceed 10% of the total number of Common Shares then issued and outstanding, unless disinterested shareholder approval is obtained. The number of Common Shares issued to insiders and such insiders’ associates pursuant to the Plan and all other security-based compensation arrangements shall not, within any 12-month period, exceed 10% of the total number of Common Shares then issued and outstanding, unless disinterested shareholder approval is obtained. The number of Common Shares issued to any one consultant shall not, within any 12-month period, exceed 2% of the total number of Common Shares then issued and outstanding. The number of Common Shares issued to all persons engaged to conduct investor relations activities shall not, within any 12-month period, exceed 2% of the total number of Common Shares then issued and outstanding.

The exercise price of an option is set by the Board at the time of grant but may not be less than the Discounted Market Price (as defined in the policies of the TSXV). The maximum term of an option issued pursuant to the Plan is 10 years, and, subject to a specific determination by the Board, any granted options shall vest on the date of the grant save and except that options granted to consultants or persons employed in Investor Relations Activities (as such term is defined in the policies of the TSXV) shall vest in stages over 12 months with no more than one-quarter (¼) of such options vesting in any three month period. Notwithstanding any other provision of the Plan, without prior TSXV acceptance, the Company may not accelerate the vesting date of an option granted to consultants conducting Investor Relations Activities for the Company.

The expiration of any option will be accelerated if the Participant’s employment or other relationship with the Company terminates. An optionee that ceases to be a Participant (for reasons other than termination for cause) has 90 days from the date of termination to exercise all existing vested options; provided that in no event shall such right extend beyond the option period. In the event of the death of a Participant, the options granted to the Participant shall be exercisable for a period of 12 months from the date of death of the Participant by the person or persons to whom the Participant’s rights under the option shall pass by the Participant’s will or the laws of descent and distribution; provided that in no event shall such right extend beyond the option period. If the date on which an option expires occurs within or immediately following the last day of a trading black-out period imposed pursuant to the Company’s insider trading policy (as may be amended from time to time), then the expiry date of such option shall be the date that is 10 business days following the date of expiry of the trading black-out period. Any exercise, cancellation or expiry of options will make new grants available under the Plan effectively resulting in re-loading of the number of options available to grant under the Plan.

The Plan further provides for the termination of options in connection with certain fundamental changes such as the dissolution, liquidation or merger of the Company, or in the event of a change of control of the Company and provides for accelerated vesting in such circumstances, at the discretion of the Board. Subject to the approval of any stock exchange on which the Company’s securities are listed, the Board may suspend, amend or terminate the Plan.

The following types of amendments to the Plan or an option granted under the Plan require shareholder approval: (a) amendments to the number of Common Shares (or other securities) issuable under the Plan; (b) any amendment which reduces the exercise price of an option that is held by an insider; (c) any amendment to the number of Common Shares (or other securities) issuable to an insider; (d) any amendment which extends the term of an Option held by or benefiting an insider; (e) amendments to the definition of “Participants”; (f) any amendment which adds any form of financial assistance; (g) any amendment to a financial assistance provision which is more favorable to Participants; (h) any amendment which adds a

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cashless exercise feature which does not provide for a full deduction of the number of underlying securities from the Plan reserve; and (i) amendments adding a deferred or restricted share unit which results in Participants receiving securities while no cash consideration is received by the Company. The Board may approve all other amendments to the Plan or options granted under the Plan.

PARTICULARS OF MATTERS TO BE ACTED UPON

To the knowledge of the Board, the only matters to be brought before the Meeting are those matters set forth in the accompanying Notice of Meeting.

Receipt of Financial Statements

The financial statements of the Corporation for the fiscal year ended December 31, 2021 and the report of the auditors thereon, will be submitted to the Meeting. Receipt at the Meeting of the auditor’s report and the Corporation’s audited financial statements for the fiscal year ended December 31, 2021 will not constitute approval or disapproval of any matters referred to therein.

Appointment of Auditors

It is proposed that PricewaterhouseCoopers LLP, the current auditors of the Company, be appointed as the auditors of the Company, to hold office until the close of the next annual meeting of Shareholders, or until a successor is appointed, and that the Directors be authorized to fix PricewaterhouseCoopers LLP’s remuneration. The Audit Committee has recommended to the Board, and the Board has approved, the nomination of PricewaterhouseCoopers LLP for such appointment. PricewaterhouseCoopers LLP have been the auditors of the Company since the completion of the Business Combination in May, 2021.

At the Meeting, Shareholders will be asked to consider and, if thought advisable, to pass an ordinary resolution to reappoint PricewaterhouseCoopers LLP to serve as auditors of the Company until the next annual meeting of Shareholders and to authorize the directors of the Company to fix their remuneration as such. To be adopted, this resolution is required to be passed by the affirmative vote of a majority of the votes cast at the Meeting.

Unless the Shareholder has specifically instructed that his or her Common Shares are to be withheld from voting in connection with the re-appointment of PricewaterhouseCoopers LLP, the persons named in the accompanying proxy intend to vote FOR the re-appointment of PricewaterhouseCoopers LLP as the auditors of the Corporation to hold office until the next annual meeting of Shareholders or until a successor is appointed, and to authorize the Board to fix their remuneration.

Election of Directors

Under the constating documents of the Company, the Board is to consist of a minimum of one (1) and a maximum of ten (10) directors, to be elected annually. Shareholders will be invited to elect five directors at the Meeting by voting for or withholding their votes in respect of each of the nominees named below. Each director holds office until the next annual meeting or until his successor is duly elected or appointed unless his office is earlier vacated in accordance with the Company’s by-laws. On any ballot that may be called for in the election of directors, the persons named in the enclosed form of proxy intend to cast the votes to which the Common Shares represented by such proxy are entitled for each of the proposed nominees whose names are set forth below, unless the shareholder who has given such proxy has directed that the Common Shares be withheld from voting in respect of any such Nominee(s) set forth below. Management does not contemplate that any of the nominees will be unable to serve as a director, but if that should occur for any reason prior to the Meeting, the persons named in the enclosed form of proxy reserve the right to vote for other Nominees at their discretion.

Shareholders have the option to: (i) vote for all of the directors of the Company listed in the table below; (ii) vote for some of the directors and withhold for others; or (iii) withhold for all of the directors. Unless otherwise instructed, proxies and voting instructions given pursuant to this solicitation by the management of the Company will be voted FOR the election of each of the proposed Nominees set forth in the table below.

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The following table sets out the name of each of the nominees, all positions and offices in the Company held by each of them, the principal occupation or employment of each of them for the past five years, the year in which each was first elected a director of the Company and the approximate number of Common Shares that each has advised are beneficially owned (directly or indirectly) or subject to his control or direction:

Name and Province of Residence and Present Position with Company	Principal Occupation for the last five years(1)	Director Since	Number of Common Shares Owned or Controlled(1)
Ari Sussman(1) Executive Chairman, and Director Miami, Florida	Executive Chairman of the Company (2021 to Present); Chief Executive Officer of Continental Gold Inc. (2010 to 2020)	May, 2021	10,490,000
Paul Murphy(1)(2)(3) Director Toronto, Ontario	Chairman of Alamos Gold Inc. (2010 to Present), Chief Financial Officer of G2 Goldfields Inc. (2020 to 2021); Executive Vice President of Finance and Chief Financial Officer of Guyana Goldfields Inc. (2010 to 2019)	May, 2021	316,667
Ken Thomas(1)(3) Director Oakville, Ontario	President of Ken Thomas & Associates Inc. (2012 to Present)	May, 2021	317,000
María Constanza García Botero(1)(2)(3) Director Medellín, Colombia	General Coordinator of Metrolinea1 (2021 to Present); Director of Education at Semana (2020); Under-Secretary of Access and Permanence with the Colombian Education Secretary (2019 to 2020); Senior Manager at Deloitte (Bogota, Colombia) (2018 to 2019)	May, 2021	Nil
Ashwath Mehra(1)(2) Director Zug, Switzerland	Chief Executive Officer of ASTOR Management AG (2011 to Present)	September, 2021	1,150,000

Notes:

(1) Information about principal occupation, business or employment and number of Common Shares beneficially owned, directly or indirectly, or over which control or direction is exercised, not being within the knowledge of the Company, has been furnished by respective persons set forth above.

(2) Member of the Audit Committee. Mr. Murphy is the Chair.

(3) Member of the Compensation, Nominating and Corporate Governance Committee. Mr. Thomas is the Chair.

Corporate Cease Trade Orders

To the Company’s knowledge, no director or executive officer of the Company is, as of the date hereof, or was within ten years before the date hereof, a director, chief executive officer or chief financial officer of any company (including the Company), that:

(a) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer; or
(b) was subject to a cease trade order, an order similar to a cease trade order, or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Bankruptcies and Other Proceedings

To the knowledge of the Company, no director or executive officer of the Company, or a shareholder holding a sufficient number of securities of the Company to affect materially the control of Company:

LEGAL*55854268.2

(a) is, as of the date hereof, or has been within the ten years before the date hereof, a director or executive officer of any company (including the Company) that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager or trustee appointed to hold its assets; or
(b) has, within the ten years before the date hereof, become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

Penalties or Sanctions

(a) any penalties or sanctions imposed by a court relating to securities legislation or by a securities regulatory authority or has entered into a settlement agreement with a securities regulatory authority; or
(b) any other penalties or sanctions imposed by a court or regulatory body that would likely be considered important to a reasonable investor in making an investment decision.

Approval of Stock Option Plan

The Company maintains the Plan, which was last approved by Shareholders at a meeting held on April 9, 2021. The Plan is a “rolling” stock option plan that sets the number of Common Shares issuable thereunder at a maximum of 10% of the Common Shares issued and outstanding at the time of any grant.

Pursuant to the policies of the TSXV, a TSXV-listed issuer is required to obtain the approval of its shareholders for a “rolling” stock option plan at each annual meeting of shareholders. Accordingly, at the Meeting, Shareholders will be asked to approve an ordinary resolution to approve the Plan for the ensuing year.

The Plan provides that the Board may from time to time, in its discretion, grant to directors, officers, employees and consultants of the Company, or any subsidiary of the Company, the option to purchase Common Shares. The Plan provides for a floating maximum limit of 10% of the outstanding Common Shares as permitted by the policies of the Exchange. As at the date hereof, options to purchase a total of 3,833,750 Common Shares have been issued to eligible participants under the Plan and remain outstanding. As at the date hereof, the number of Common Shares remaining available for issuance under the Stock Option Plan is 904,921.

For a summary of the Plan, please see “ Securities Authorized for Issuance Under Equity Compensation Plans – Summary of Stock Option Plan ” above. The full text of the Plan will be supplied free of charge to any Shareholder upon written request made directly to the Company at its registered head office located at 82 Richmond Street East, Toronto, Ontario M5C 1P1, telephone: (647) 930 1880.

Shareholder Approval of the Stock Option Plan

At the Meeting, Shareholders will be asked to consider and, if deemed advisable, to pass an ordinary resolution reapproving the Plan. To be adopted, this resolution is required to be passed by the affirmative vote of a majority of the votes cast at the Meeting.

Unless otherwise instructed, the persons named in the enclosed proxy or voting instruction form intend to vote such proxy or instructions FOR the resolution approving the Plan. The directors of the Corporation recommend that Shareholders vote in favour of the resolution approving the Plan.

LEGAL*55854268.2

INDEBTEDNESS TO COMPANY OF DIRECTORS AND SENIOR OFFICERS

None of the directors or senior officers of the Company have been indebted to the Company during the financial year ended December 31, 2021, or are indebted to the Company as of the date hereof.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

The directors and officers of the Company have an interest in the resolutions concerning the ratification of the Plan as each are entitled to receive stock option grants thereunder. Otherwise no director or senior officer of the Company or any associate of the foregoing has any substantial interest, direct or indirect, by way of beneficial ownership of shares or otherwise in the matters to be acted upon at the Meeting, except for any interest arising from the ownership of shares of the Company where the shareholder will receive no extra or special benefit or advantage not shared on a pro rata basis by all holders of shares in the capital of the Company.

CORPORATE GOVERNANCE

Corporate governance relates to the activities of the Board, the members of which are elected by and are accountable to the shareholders and takes into account the role of the individual member of management who are appointed by the Board and who are charged with the day to day management of the Company. The Board is committed to sound corporate governance practices which are both in the interest of its shareholders and contribute to effective and efficient decision making.

National Policy 58-201 – Corporate Governance Guidelines establishes corporate governance guidelines which apply to all public companies. The Company has reviewed its own corporate governance practices in light of these guidelines. In certain cases, the Company’s practices comply with the guidelines, however the Board considers that some of the guidelines are not suitable for the Company at its current stage of development and therefore these guidelines have not been adopted. National Instrument 58-101 – Disclosure of Corporate Governance Practices (“ NI 58-101 ”) mandates disclosure of corporate governance practices, which disclosure is set out below.

A summary of responsibilities and activities and the membership of the audit committee (the “ Audit Committee ”) is also set out below.

Board of Directors

Independence of Members of Board

NI 58-101 defines an “independent director” as a director who has no direct or indirect material relationship with the Company. A “material relationship” is in turn defined as a relationship which could, in the view of the Board, be reasonably expected to interfere with such member’s independent judgment.

The Board is currently comprised of five members, four of whom the Board has determined to be “independent directors” within the meaning of NI 58-101. Paul Murphy, Maria Constanza Garcia, Ashwath Mehra, and Kenneth Thomas are considered independent directors within the meaning of NI 58-101 since they are each independent of management and free from any material relationship with the Company. The basis for this determination is that, since the date of incorporation of the Company, none of the independent directors have worked for the Company, received remuneration from the Company or had material contracts with or material interests in the Company which could interfere with their ability to act with a view to the best interests of the Company. Ari Sussman is not considered an independent director because he is also an officer of the Company. To enhance its ability to act independent of management, the Board may in the future meet in the absence of members of management or may excuse such persons from all or a portion of any meeting where an actual or potential conflict of interest arises or where the Board otherwise determines is appropriate.

Management Supervision by Board

The operations of the Company and its current finances do not support a large board of directors and the board has determined that the current constitution of the Board is appropriate for the Company’s current stage of development. Independent

LEGAL*55854268.2

supervision of management is accomplished by choosing management that demonstrates a high level of integrity and ability, and a slate of strong independent board members.

Participation of Directors in other Reporting Issuers

The following directors of the Company presently hold directorships in other reporting issuers as set out below:

	Name of Director		Name of Reporting Issuer		Exchange or Market
	Paul Murphy	Alamos Gold Inc. Generation Mining Limited		TSX TSX
	Ashwath Mehra	Fancamp Exploration Ltd. EDM Resources Inc.		TSXV TSXV

Orientation and Continuing Education

While the Company does not have formal orientation and training programs, new Board members are provided with:

a) information respecting the functioning of the board, committees and copies of the Company’s corporate governance policies;
b) access to recent, publicly filed documents of the Company; and
c) access to management.

Board members are encouraged to communicate with management, auditors and technical consultants, to keep themselves current with industry trends and developments and changes in legislation with management’s assistance and to attend related industry seminars. Board members have full access to the Company’s records.

Code of Business Conduct & Ethics

The Board views good corporate governance as an integral component to the success of the Company and to meet responsibilities to Shareholders. To date, the Board has adopted a formal written Code of Business Conduct and Ethics. Furthermore, the current limited size of the Company’s operations, and the small number of officers and consultants, allow the Board to monitor, on an ongoing basis, the activities of management and to ensure that the highest standard of ethical conduct is maintained.

Anti-Bribery and Anti-Corruption Policy

The Company adopted an Anti-Bribery and Anti-Corruption Policy (“ ACP ”) for directors, officers and employees, to comply with applicable provisions of the Corruption of Foreign Public Officials Act of Canada (“ CFPOA ”) and The Superintendence of Companies External Letter No. 100-000005 of Colombia (“ External Letter 100 ”) and to promote activities and initiatives that help to ensure the Company is not used as a means of corruption, bribery, money laundering and the financing of terrorism and other crimes. The ACP supplements the Code and applicable laws and provides guidelines for compliance with the CFPOA and External Letter 100 and Company policies applicable to the Company’s international operations.

Anti-Hedging Policy

The Company adopted an anti-hedging policy to explicitly prohibit directors, officers and employees (including any individual who is in receipt of or currently holds equity received as part of such individual’s compensation) from directly or indirectly hedging against future declines in the market value of any equity-based securities of the Company (including through the purchase of financial instruments designed to offset such risk). Such transactions, while allowing the holder to own the Company’s securities without the full risks and rewards of ownership, potentially separate the holder’s interests from those of other stakeholders and may undermine the purpose for which such securities are granted. Prohibited transactions include the purchase by any Company personnel of financial instruments, including, without limitation, prepaid variable forward contracts, equity swaps, collars, puts, calls or other derivative securities that are designed to hedge or offset a decrease in market value of equity securities of the Company.

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Nomination of Directors

The Corporate Governance and Compensation Committee has assumed responsibility for identifying potential board candidates. The Corporate Governance and Compensation Committee assesses potential Board candidates to fill the need of the Company based on the sector the Company is currently engaged in and seeks to locate nominees with the skills, expertise, independence and other factors complementary to the Company’s present Colombian mining activity.

Compensation of Directors and the CEO and CFO

The Corporate Governance and Compensation Committee has the responsibility of determining the appropriate compensation payable to the directors and Executive Officers of the Company during each fiscal year.

To determine compensation payable, the independent directors will review compensation paid for directors, CEO’s and CFO’s of companies of similar size and stage of development and determine an appropriate compensation reflecting the need to provide incentive and compensation for the time and effort expended by the directors and senior management while taking into account the financial and other resources of the Company. In settling the compensation, the Corporate Governance and Compensation Committee annually review the performance of CEO and CFO in light of the Company’s objectives and consider other factors that may have impacted the success of the Company in achieving its objectives.

Other Board Committees

As at the date of this Information Circular, there were no other standing Board committees other than the Audit Committee and the Compensation, Nominating and Corporate Governance Committee.

Assessments

The Board monitors the adequacy of information given to directors, communication between the Board and management and the strategic direction and processes of the Board, Audit Committee and the Corporate Governance and Compensation Committee. No formal policy has been established to monitor the effectiveness of each director, the Board and the committees.

The Corporate Governance and Compensation Committee has assessed the Company’s compensation plans and programs for its executive officers to ensure alignment with the Company’s business plan and to evaluate the potential risks associated with those plans and programs. The Corporate Governance and Compensation Committee has concluded that the compensation policies and practices do not create any risks that are reasonably likely to have a material adverse effect on the Company. Company’s long-term incentives, which include stock options, comprise a significant portion of the executives’ compensation package, and are intended to align the executive compensation with the interest of the Company`s shareholders.

The Corporate Governance and Compensation Committee intends to continue such risk assessments on an annual basis and also considers the risks associated with executive compensation and corporate incentive plans when designing and reviewing such plans and programs.

The Company has adopted an Anti-Hedging policy restricting its Named Executive Officers or directors from purchasing financial instruments that are designated to hedge or offset a decrease in market value of equity securities granted as compensation or held, directly or indirectly, by its Named Executive Officers or directors.

AUDIT COMMITTEE INFORMATION

Additional information regarding the Audit Committee is contained in the Company’s annual information form dated April 7, 2022 (the “ AIF ”) under the heading “Audit Committee Disclosure” and a copy of the charter of the Audit Committee is attached to the AIF as Appendix “A”. The AIF is available under the Company’s SEDAR profile at www.sedar.com.

Additional Information

Additional information relating to the Company is on SEDAR at www.sedar.com. Shareholders may contact the Company to request copies of the Company’s financial statements and MD&A.

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Financial information is provided in the Company’s comparative audited annual financial statements and MD&A for its most recently completed financial year which are filed on SEDAR.

Dated this 27[th] day of May, 2022.

APPROVED BY THE BOARD OF DIRECTORS OF COLLECTIVE MINING LTD.

“Omar Ossma”

Omar Ossma, President and CEO

LEGAL*55854268.2

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CONSOLIDATED FINANCIAL STATEMENTS

For the year ended December 31, 2021

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

The accompanying annual consolidated financial statements of Collective Mining Ltd. (the “Company”) were prepared by management in accordance with International Financial Reporting Standards. Management acknowledges responsibility for the preparation and presentation of the annual consolidated financial statements, including responsibility for significant accounting judgements and estimates and the choice of accounting principles and methods that are appropriate to the Company’s circumstances.

Management has established systems of internal control over the financial reporting process, which are designed to provide reasonable assurance that relevant and reliable financial information is produced.

The Board of Directors of the Company is responsible for ensuring that management fulfills its financial reporting responsibilities and for reviewing and approving the annual consolidated financial statements together with other financial information. An Audit Committee, composed entirely of independent directors of the Company, assists the Board of Directors in fulfilling this responsibility. The Audit Committee, on behalf of the Board of Directors, meets with management to review the internal controls over the financial reporting process, the annual consolidated financial statements together with other financial information of the Company, and the auditor’s report. The Audit Committee reports its findings to the Board of Directors for its consideration in approving the annual consolidated financial statements for issuance to the shareholders.

Management recognizes its responsibility for conducting the Company’s affairs in compliance with established financial standards and applicable laws and regulations, and for maintaining proper standards of conduct for its activities.

(signed) Omar Ossma

(signed) Paul Begin

Omar Ossma Chief Executive Officer

Paul Begin Chief Financial Officer

April 7, 2022

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Independent auditor’s report

To the Shareholders of Collective Mining Ltd.

Our opinion

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the financial position of Collective Mining Ltd. and its subsidiaries (together, the Company) as at December 31, 2021 and 2020, and its financial performance and its cash flows for the year ended December 31, 2021 and for the period from February 11, 2020 to December 31, 2020 in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

What we have audited

The Company’s consolidated financial statements comprise:

the consolidated statement of financial position as at December 31, 2021 and 2020;
the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021 and for the period from February 11, 2020 to December 31, 2020;
the consolidated statement of cash flows for the year ended December 31, 2021 and for the period from February 11, 2020 to December 31, 2020;
the consolidated statement of changes in equity for the year ended December 31, 2021 and for the period from February 11, 2020 to December 31, 2020; and
the notes to the consolidated financial statements, which include significant accounting policies and other explanatory information.

Basis for opinion

We conducted our audit in accordance with Canadian generally accepted auditing standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities in accordance with these requirements.

PricewaterhouseCoopers LLP PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2 T: +1 416 863 1133, F: +1 416 365 8215

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

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Other information

Management is responsible for the other information. The other information comprises the Management’s Discussion and Analysis.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Company’s financial reporting process.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

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As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

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We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

The engagement partner on the audit resulting in this independent auditor’s report is Marelize Barber.

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Chartered Professional Accountants, Licensed Public Accountants

Toronto, Ontario April 7, 2022

COLLECTIVE MINING LTD. Consolidated Statement of Financial Position

(All amounts expressed in U.S. Dollars, unless otherwise indicated)

		December 31,	December 31,
As at	Note	2021	2020
		$	$
ASSETS
Current assets:
Cash and cash equivalents	18(a)	16,308,805	1,717,385
Receivables and prepaid expenses	8	391,337	446,806
		16,700,142	2,164,191
Non-current assets:
Equipment and other fixed assets	9	343,749	165,849
Intangible assets		ꟷ	7,536
Long-term VAT receivable	11	222,096	ꟷ
		565,845	173,385
Total assets		17,265,987	2,337,576
LIABILITIES AND EQUITY
Current liabilities:
Account payables and accrued liabilities		1,566,035	218,244
Other current liabilities	13	55,727	127,970
		1,621,762	346,214
Non-current liabilities:
Lease liability	14	65,927	98,321
		65,927	98,321
		1,687,689	444,535
Equity:
Share capital	19	25,192,092	3,050,813
Contributed surplus		9,393,189	542,698
Deficit		(19,006,983)	(1,700,470)
		15,578,298	1,893,041
Total liabilities and equity		17,265,987	2,337,576
Commitments and contingencies	25

The accompanying notes are an integral part of these consolidated financial statements.

Approved on behalf of the Board of Directors:

(signed) Ari Sussman Director

(signed) Paul Murphy

Director

COLLECTIVE MINING LTD. Consolidated Statement of Operations and Comprehensive Loss

(All amounts expressed in U.S. Dollars, unless otherwise indicated)

		December 31,	December 31,
For the year and period ended	Note	2021	20201
		$	$
Expenses
Exploration and evaluation	23(a)	(7,014,792)	(1,129,234)
General and administration	23(b)	(3,191,386)	(344,186)
RTO Transaction andpublic listingcosts	6	(1,512,215)	ꟷ
		(11,718,393)	(1,473,420)
Other income (expenses)
Revaluation of warrants liability	12(a),(c)	(5,087,559)	(192,353)
Foreign exchange loss		(327,953)	(15,733)
Other(expense)income		(23,520)	ꟷ
Net loss before finance items and income tax		(17,157,425)	(1,681,506)
Finance income (expense)
Finance costs	23 (c)	(149,088)	(18,964)
Net loss before income tax		(17,306,513)	(1,700,470)
Income tax		ꟷ	ꟷ
Net loss and comprehensive loss		(17,306,513)	(1,700,470)
Basic and diluted loss per common share	20	(0.47)	(0.13)
Weighted average common shares outstanding,
basic and diluted	20	36,476,417	12,925,095

1 - For the period from February 11, 2020 (date of incorporation)

The accompanying notes are an integral part of these consolidated financial statements.

COLLECTIVE MINING LTD. Consolidated Statement of Cash Flows

(All amounts expressed in U.S. Dollars, unless otherwise indicated)

			December 31,	December 31,
For the year and period ended	Note		2021	20201
			$	$
Cash flows used in operating activities
Net loss			(17,306,513)	(1,700,470)
Items not involving cash and cash equivalents:
Public listing cost		6	1,309,047	ꟷ
Revaluation of warrants liability	12(a),(c)		5,087,559	192,353
Finance costs	23(c)		149,088	18,964
Foreign exchange loss			327,953	15,733
Share-based compensation	23(b)		780,042	88,546
Depreciation and amortization	23(a),(b)		115,058	14,514
Net changes in working capital items	24(a)		1,670,358	(236,977)
			(7,867,408)	(1,607,337)
Cash flows from financing activities
Cash proceeds from issuance of shares, net of issue
costs or subscription units	19(b)		12,427,506	2,673,385
Financing costs paid	24(b)		(100,930)	(14,013)
Cash proceeds from warrant exercises	12,	19	10,789,874	413,521
Cash received from capital contributions	19(b)(v)		ꟷ	225,706
Cash received from option exercises	19,	21	109,089	ꟷ
Loan and related party payables	13, 16(a)		(83,449)	77,494
Principalportion of leasepayments		14	(72,299)	(13,838)
			23,069,791	3,362,255
Cash flows used in investing activities
Acquisition of fixed assets		9	(232,094)	(43,880)
Acquisition of intangible assets			(1,936)	(9,043)
			(234,030)	(52,923)
Net change in cash and cash equivalents during the
year			14,968,353	1,701,995
Cash and cash equivalents, opening balance			1,717,385	ꟷ
Foreignexchange effectoncashbalances			(376,933)	15,390
Cash and cash equivalents, ending balance			16,308,805	1,717,385

1 - For the period from February 11, 2020 (date of incorporation)

The accompanying notes are an integral part of these consolidated financial statements

COLLECTIVE MINING LTD. Consolidated Statement of Changes in Equity

(All amounts expressed in U.S. Dollars, unless otherwise indicated)

Note Number of shares issued and outstanding	Share capital Contributed surplus Deficit Total
Balance January 1, 2021 21,617,465 Issuance of shares – RTO 6, 19 2,785,000 Issuance of shares – Offering 12(a), 19 15,000,000 Fair value of warrants issued 12(a) ꟷ Finders’ Units 19, 22 534,500 Exercise of warrants 12(a), 19, 22 6,762,250 Exercise of options 19, 21 687,500 Share-based compensation 21 ꟷ Share issue costs 12(b), 19 ꟷ Net loss for the period ꟷ	$ $ $ $
	3,050,813 542,698 (1,700,470) 1,893,041
	1,772,606 ꟷ ꟷ 1,772,606
	12,427,506 ꟷ ꟷ 12,427,506
	(2,880,258) ꟷ ꟷ (2,880,258)
	340,200 102,633 ꟷ 442,833
	10,789,874 7,967,816 ꟷ 18,757,690
	109,089 ꟷ ꟷ 109,089
	ꟷ 780,042 ꟷ 780,042
	(417,738) ꟷ ꟷ (417,738)
	ꟷ ꟷ (17,306,513) (17,306,513)
Balance December 31, 2021 47,386,715	25,192,092 9,393,189 (19,006,983) 15,578,298
Balance February 11, 2020 ꟷ Subscription of shares 19 18,817,465 Fair value of warrants issued 12(c) ꟷ Exercise of warrants 12(c), 19 2,800,000 Capital contributions 19 ꟷ Share-based compensation 17 ꟷ Share issue costs 12(c), 19 ꟷ Net loss for the period ꟷ	ꟷ ꟷ ꟷ ꟷ 2,687,107 ꟷ ꟷ 2,687,107 (36,093) ꟷ ꟷ (36,093) 413,521 228,446 ꟷ 641,967 ꟷ 225,706 ꟷ 225,706 ꟷ 88,546 ꟷ 88,546 (13,722) ꟷ ꟷ (13,722) ꟷ ꟷ (1,700,470) (1,700,470)
Balance December 31, 2020 21,617,465	3,050,813 542,698 (1,700,470) 1,893,041

The accompanying notes are an integral part of these consolidated financial statements.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

Tabular dollar amounts represent United States (“U.S.”) dollars, unless otherwise shown. References to C$/CAD and COP are to Canadian dollars and Colombian pesos, respectively.

1. NATURE OF OPERATIONS

Collective Mining Inc. (“CMI” or “Old Collective”) was incorporated under the Business Corporations Act (Ontario) on February 11, 2020 and is the holding company of the wholly-owned subsidiary Collective Mining Limited (formerly known as Collective Mining (Bermuda) Ltd.), a Bermuda company incorporated under the Bermuda Companies Act 1981. In addition, wholly owned subsidiaries, incorporated in Colombia, hold certain exploration properties. Prior to May 20, 2021, CMI was controlled by a founding shareholder, who is also the Executive Chairman of the Board of Directors.

On May 20, 2021, CMI and POCML 5 Inc. (“POCML”), a company listed on the Toronto Stock Venture Exchange (the “TSXV”), completed a three-cornered amalgamation resulting in a reverse take-over of POCML by CMI (the “RTO” or the “RTO Transaction”) with the resulting issuer now operating as Collective Mining Ltd. (“CML”) (See Note 6).

On May 20, 2021, pursuant to the closing of the RTO, CML’s common shares were accepted for listing and began trading on the TSXV under the symbol "CNL".

The registered office for CML is located at 82 Richmond St E 4[th] Floor Toronto, Ontario, Canada.

CML and its subsidiaries (collectively referred to as the “Company”) are principally engaged in the acquisition, exploration and development of mineral properties located in South America. The Company principally carries on business through an Ontario corporation and a foreign company branch office in Colombia.

To date, the Company has not generated any revenue from mining or other operations as it is considered to be in the exploration stage.

2. BASIS OF PREPARATION

Statement of Compliance

The consolidated financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB), effective for the year ended December 31, 2021, applicable to companies reporting under IFRS, and have been consistently applied unless otherwise indicated.

These consolidated financial statements were approved and authorized by the Board of Directors of the Company on April 7th, 2022.

Basis of Measurement

These consolidated financial statements have been prepared under the historical cost convention except for certain financial assets and financial liabilities, which are measured at fair value.

Basis of Consolidation

Subsidiaries

Subsidiaries are entities over which the Company has control. The Company controls an entity when the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date the control ceases. Any remaining interest in the entity is re-measured to fair value on the date when control is lost, with the change in carrying amount recognized in profit or loss.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

The principal subsidiaries of the Company, their activities, and their geographic locations as at December 31, 2021 were as follows:

	Country of
Name	incorporation	Nature of business
Collective Mining Limited	Bermuda	Exploration
Minerales Provenza SAS	Colombia	Intermediate holding company
Minera Campana SAS	Colombia	Exploration

Intercompany transactions, balances and unrealized gains and losses on transactions between group entities are eliminated. Accounting policies of subsidiaries are consistent with the policies adopted by the Company.

Functional and Reporting Currency

The functional currency of the Company and its subsidiaries is the U.S. dollar. Functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates (“IAS 21”). All financial information in these consolidated financial statements has been presented in U.S. dollars, except when otherwise indicated.

3. CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

The preparation of the consolidated financial statements in accordance with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenditures on the financial statements. These estimates and assumptions are based on management’s best knowledge of the relevant facts and circumstances, taking into account previous experience. Actual results could differ from those estimates and such differences could be material. Estimates are reviewed on an ongoing basis and are based on historical experience and other facts and circumstances. Revisions to estimates and the resulting effects on the carrying amounts of the Company’s assets and liabilities are accounted for prospectively. Information about estimates, assumptions and other sources of estimation uncertainty as at December 31, 2021 that have a risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next year are as follows:

(a) Functional currency:

Management is required to assess the functional currency of each entity of the Company. In concluding the functional currencies of the parent and its subsidiary companies, management considered the currency that both mainly influences the cost of providing goods and services in each jurisdiction in which the Company operates and in which a significant portion of costs are denominated or contracted. While the local currency generally influences the goods and services received in each jurisdiction in which the Company operates, a significant portion of the Company’s costs are denominated, negotiated and/or contracted in U.S. dollars, the majority of which relate to exploration activities. As a result, the Company also considered secondary indicators including the currency in which funds from financing activities are retained by the parent to fund subsidiary operations.

(b) Warrants and share-based compensation:

The Company issues common share purchase warrants as part of unit placements in equity financing raises and also provides compensation benefits to employees, directors and officers through a stock option plan. The fair value of each warrant or option award is estimated using the Black-Scholes option pricing model. Expected volatility is based on historical volatility of comparable companies and the company’s own volatility. The risk-free rate for the expected term of the warrant or option is based on the Government of Canada yield curve in effect at the time of issue or grant. Management judgement is utilized to estimate option exercises and forfeiture behavior with the valuation model in respect of options.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Foreign currency translation

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions or valuation where items are re-measured. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the period-end exchange rate. Non-monetary items which are measured at historical cost in a foreign currency are translated at the exchange rate at the date of the initial recognition of the transaction. Revenue, expense items and capitalized exploration expenditures are translated using the rate at the date of the transaction, except for depreciation and amortization, which are translated at historic rates.

(b) Financial instruments

Measurement – Initial Recognition

Financial assets and liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument. On initial recognition, all financial assets and liabilities are recorded at fair value, net of attributable transaction costs, except for financial assets and liabilities classified as fair value through profit or loss (“FVTPL”). Transaction costs of financial assets and liabilities classified as at FVTPL are expensed in the period in which they are incurred.

Subsequent measurement of financial assets and liabilities depends on the classifications of such assets and liabilities. Management determines the classification on initial recognition.

Financial Assets

Financial assets are classified and measured at FVTPL, fair value through other comprehensive income (“FVOCI”), or amortized cost, as appropriate. The classification depends on the purpose for which the financial assets were acquired.

Financial assets are classified as FVTPL when the financial asset is either held for trading or is designated as FVTPL. Realized and unrealized gains and losses arising from changes in fair value are recognized in recognized in profit or loss.

Financial assets classified as FVOCI are non-derivative financial assets that are not held for trading and the Company has made an irrevocable election on initial recognition to measure the assets at FVOCI. The Company currently has no financial assets classified as FVOCI.

Financial assets at amortized cost are non-derivative financial assets that are held for collection of contractual cash flows, where those cash flows represent repayments of principal and interest. The Company’s cash and cash equivalents and receivables are classified as financial assets at amortized cost.

Financial liabilities and equity

Debt and equity instruments are classified as either financial liabilities or equity in accordance with the substance of the contractual arrangements.

Financial liabilities are measured at amortized cost unless they are required to be measured at FVTPL or the Company has elected to measure the financial liability at FVTPL. The Company’s accounts payable and accrued liabilities, loan payable and related party payable are classified as financial liabilities at amortized cost.

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized as proceeds received, net of direct issue costs.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

Derivatives

Derivative assets and liabilities include derivative financial instruments that do not qualify as hedges or are not designated as hedges and are classified as FVTPL.

Warrants Liability

From time to time, the Company has common share purchase warrants denominated in Canadian dollars, which are classified as derivative financial liabilities, presented as warrants liability and measured at fair value until the instruments are exercised or extinguished ("Warrants”). Fair value of exercised warrants is transferred to contributed surplus at the exercise date. Warrants that expire unexercised are considered extinguished. Gains or losses on extinguishment are recognized in profit or loss. Proceeds from unit placements are allocated between shares and Warrants issued on the residual fair value method within the unit. Fair value for the Warrants is determined using the Black-Scholes option pricing model. Incremental costs directly attributable to unit placements, including the value of any additional units issued to eligible finders of the unit placements (“Finders’ Units”), are allocated on a prorata basis between shares and Warrants, with the portion allocated to Warrants recognized as an expense in the statement of operations and comprehensive loss. Any gain or loss arising from the revaluation of a Warrant is recognized in profit or loss.

Derecognition

A financial asset is derecognized when the contractual rights to the cash flows from the asset expire or are transferred or when the Company no longer retains substantially all the risks and rewards of ownership. On derecognition, the difference between the carrying amount measured at the date of derecognition and consideration received is recognized in profit or loss, except for financial assets at FVOCI, for which the cumulative gain or loss remains in accumulated other comprehensive income or loss and is not reclassified to profit or loss.

A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires with any associated gain or loss recognized in profit or loss.

(c) Cash and cash equivalents

Cash and cash equivalents include cash on hand or on deposit with banks, short-term investments which are readily convertible into cash or which have maturities of 90 days or less.

(d) Properties, plant and equipment

Properties, plant and equipment are stated at cost less accumulated depreciation and impairment losses. The cost of an asset consists of its purchase price, any directly attributable costs of bringing the asset to its present working condition and location for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably.

Depreciation of an asset begins when it is available for use, i.e. when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. Depreciation of each asset is calculated using the straight-line method or units of production, as appropriate, to allocate its cost less its residual value over its estimated useful life, as follows:

Computer equipment 3 years Exploration equipment and structures 5 years

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

The assets’ residual values and useful lives are reviewed, and adjusted, if appropriate, at each balance sheet date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in the statement of operations and comprehensive loss.

(e) Exploration and evaluation expenditures, mineral interests and mineral development costs

Exploration and evaluation expenditures relate to those activities involving the search for mineral deposits with economic potential, the process of obtaining more information about existing mineral deposits, the determination of technical feasibility and the assessment of commercial viability of a mineral interest.

The Company expenses all exploration and evaluation expenditures, including all expenditures incurred under option agreements, within an area of interest until management determines the mineral interest to be technically feasible and commercially viable.

Technical feasibility and commercial viability of a mineral interest generally coincide with the establishment of proven and probable reserves; however, this determination may be impacted by management’s assessment of certain modifying factors, including, but not limited to the status of environmental permit applications and the status of mining leases or permits. Upon demonstrating technical feasibility and commercial viability, all subsequent costs directly relating to the development and advancement of the related mineral interest are capitalized as mineral development costs within properties, plant and equipment.

(f) Leases

At inception of a contract, the Company assesses whether a contract is, or contains, a lease based on whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company recognizes a right-of-use asset and a lease liability at the lease commencement date.

Right-of-use assets

The right-of-use asset is initially measured based on the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. Right-of-use assets are classified as other fixed assets in the consolidated statement of financial position.

The assets are depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term using the straight-line method as this most closely reflects the expected pattern of consumption of the future economic benefits. The lease term includes periods covered by an option to extend if the Company is reasonably certain to exercise that option.

Lease liabilities

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

The lease liability is measured at amortized cost using the effective interest method. Interest recognized on the consolidated statement of operations and comprehensive loss is classified as a financing cost.

The lease liability is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Company’s estimate of the amount

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

expected to be payable under a residual value guarantee, or if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. A corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero upon remeasurement of the liability.

(g) Intangible assets

Intangible assets are comprised of computer software acquired and are measured on initial recognition at cost, being its purchase price plus any directly attributable costs of preparing the asset for its intended use. Following initial recognition, intangible assets are carried at cost less any accumulated amortization, calculated on a straight-line basis over their useful lives, and any accumulated impairment losses.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the consolidated statement of operations and comprehensive loss when the asset is de-recognized.

(h) Provisions

Provisions are recognized when a present legal or constructive obligation exists as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is material, the provision is discounted using an appropriate credit-adjusted risk- free rate.

(i) Share capital and contributed surplus

Share capital

Amounts received for the issuance of shares are recognized as an increase in share capital, including amounts received upon exercise of options or warrants. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from share capital.

Proceeds from unit placements are allocated between shares and warrants issued on the residual fair value method within the unit, using the Black-Scholes option pricing model to determine fair value for the warrants. Incremental costs directly attributable to unit placements, including the value of any Finders’ Units issued, are allocated on a pro-rata basis between shares and warrants, with the portion allocated to shares recognized as a deduction from share capital.

Contributed surplus

Additional capital contributions received with no corresponding issuance of shares are recognized as contributed surplus. Upon exercise of Warrants, the fair value of the Warrants on the date of exercise are recognized in contributed surplus.

Contributed surplus – warrants reserve

Any warrants issued as part of Finders’ Units (“Finders’ Warrants”) are valued on the date on which service was received, included in incremental costs attributable to unit placements, allocated between shares and warrants accordingly and classified as warrants reserve, a component of contributed surplus. Subsequent to issue Finders’ Warrants are not revalued.

Contributed surplus – share-based payments

The Company has a stock option plan for its employees, directors and other eligible participants (“Participants”).

Stock options are granted to Participants to purchase common shares at a price determined

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

at the time of grant. Fair value for stock options granted is determined on grant date using the Black-Scholes option-pricing model. Share-based compensation expense is recorded over the period the options vest, with a corresponding increase to contributed surplus. The Company issues new common shares to satisfy stock option exercises, with the proceeds received, net of any directly attributable transaction costs, credited to share capital.

(j) Share-based payments

The Company has a stock option plan for its employees, directors and other eligible participants (“Participants”).

Stock options are granted to Participants to purchase common shares at a price determined at the time of grant. Fair value for stock options granted is determined on grant date using the Black-Scholes option-pricing model. Share-based compensation expense is recorded over the period the options vest, with a corresponding increase to contributed surplus. The Company issues new common shares to satisfy stock option exercises, with the proceeds received, net of any directly attributable transaction costs, credited to share capital.

(k) Loss per share

Basic loss per share is computed by dividing loss attributable to common shareholders by the weighted average number of common shares outstanding during the period. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on earnings per share. The dilutive effect of outstanding options and their equivalents are reflected in diluted earnings per share by application of the treasury stock method. The treasury stock method calculates the dilutive effect of share options assuming that the proceeds to be received on the exercise of share options are applied to repurchase common shares at the average market price of the period.

(l) Income taxes

Current income taxes are recognized for the estimated income taxes payable or recoverable for the current year. Deferred income tax assets and liabilities are recognized for temporary differences between the tax and accounting bases of assets and liabilities. Deferred income tax assets and liabilities are measured using substantially enacted tax rates that apply for the years in which the temporary differences are expected to be recovered or settled. Deferred income tax assets are recognized to the extent that it is probable that the asset will be realized.

5. NEW ACCOUNTING STANDARDS

The following revised standards and amendments, unless otherwise stated, are effective on or after January 1, 2022, with early adoption permitted, and have not been applied in preparing these consolidated financial statements. The Company does not plan to adopt any of these standards before they become effective.

(a) IAS 1, Presentation of Financial Statements (“IAS 1”) was amended to clarify the classification of liabilities between current and noncurrent to be based on the rights that exist at the end of the reporting period and that such classification is unaffected by the expectations of the entity or events after the reporting date. The changes must be applied retrospectively in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”) and are effective on or after January 1, 2023 with early adoption permitted.

The Company does not expect an impact to its consolidated financial statements on adoption and is considering whether to adopt the change early.

(b) IAS 1 was also amended to help preparers in deciding which accounting policies to disclose in their financial statements. The amendments are effective on or after January 1, 2023.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

The Company does not expect an impact to its consolidated financial statements on adoption and is considering whether to adopt the change early.

(c) IAS 16, Property, Plant and Equipment (“IAS 16”) was amended to prohibit the deduction of proceeds from the sale of items produced from an item of property, plant and equipment while the entity is preparing the asset for its intended use. IAS 16 further clarifies that the financial performance of the asset is not relevant in the assessment of the technical and physical performance of the asset. The changes are effective on or after January 1, 2022. The Company does not plan to adopt this change before it becomes effective.

The Company does not expect an impact to its consolidated financial statements on adoption.

6. REVERSE TAKE-OVER

On May 20, 2021, Old Collective and POCML completed a business combination agreement whereby POCML acquired all the issued and outstanding shares of Old Collective and which resulted in a reverse take-over of POCML by Old Collective (the “RTO” or the “RTO Transaction”) and constituted POCML’s qualifying transaction pursuant to TSXV Policy 2.4.

Upon closing of the RTO Transaction, the issued and outstanding common shares of Old Collective prior to the RTO were exchanged on a one for one basis of the resulting issuer company (the “Resulting Issuer”) while every four issued and outstanding shares of POCML, prior to the RTO Transaction, were exchanged for one common share of the Resulting Issuer. Management and directors of the Resulting Issuer were appointed by Old Collective. Immediately after closing of the RTO Transaction, the Resulting Issuer was renamed to Collective Mining Ltd. (“CML” or the “Company”).

The substance of the transaction is a reverse acquisition of a non-operating company with Old Collective being identified as the acquirer. The transaction does not constitute a business combination as POCML did not meet the definition of a business under IFRS 3 – Business Combinations (“IFRS 3”). As a result, the RTO Transaction is accounted for as a share-based payment in accordance with IFRS 2 – Share-Based Payments (“IFRS 2”) where the consideration for the RTO Transaction is determined as the fair value of CML shares issued to original POCML shareholders.

On closing of the RTO, the Company issued 2,785,000 common shares to original POCML shareholders. The fair value of CML per share on closing of the RTO Transaction has been determined as C$0.77 per share (See Note 12), resulting in a total fair value of $1,772,606 determined as the purchase consideration for the RTO Transaction. In accordance with IFRS 2, any excess of the fair value of the shares issued by the Company over the fair value of the net monetary assets of POCML acquired is recognized as an expense of listing Old Collective on the TSXV.

	$
Fair value of POCML net assets acquired, May 20, 2021	463,559
Public listing costs expensed	1,309,047
Fair value of 2,785,000 CML shares issued to original POCML shareholders, May 20,
2021	1,772,606

The resulting consolidated financial statements of the combined entity represents the continuation of Old Collective Mining and its subsidiaries (“OldCo”) with comparative figures presented in the consolidated financial statements after the RTO are those of OldCo.

Upon the closing of the RTO, assets and liabilities of OldCo were recognized by the Resulting Issuer at carrying values whereas POCML assets and liabilities were accounted for at their fair value. POCML’s share capital, contributed surplus and deficit at the time of the RTO Transaction were eliminated and costs totaling $203,168 incurred in respect of the RTO Transaction were expensed. As a result, total RTO Transaction costs including the public listing costs was $1,512,215.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

7. OPERATING SEGMENTS

An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the same entity), whose operating results are regularly reviewed by the entity’s chief operating decision-maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

The Company's operations comprise a single reporting operating segment engaged in mineral development and exploration in Colombia.

8. RECEIVABLES AND PREPAID EXPENSES

Receivables and prepaid expenses are made up of the following:

	December 31,	December 31,
As at	2021	2020
	$	$
Exploration deposit (a)	ꟷ	396,961
Prepaid expenses	198,098	41,061
Other receivables (b)	20,881	8,784
Advanceto suppliers	172,358	ꟷ
	391,337	446,806

(a) Exploration deposit

On January 4, 2021, upon completion of the Second Guayabales Option (see Note 10(a)(ii)), the deposit balance as at December 31, 2020 was applied to the option payments required within the agreement and recognized within exploration and evaluation expense in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

(b) Other receivables

Included in other receivables is $20,881 (December 31, 2020 – $8,769) of Harmonized Sales Tax (“HST”) refund receivable in Canada.

9. EQUIPMENT AND OTHER FIXED ASSETS

Equipment and other fixed assets consist of the following:

	Exploration
	Equipment			Right of
	and	Computer	Leasehold	use assets
	structures	Equipment	Improvement	(a)	Total
	$	$	$	$	$
Opening net book value,
January 1, 2021	20,315	20,971	ꟷ	124,563	165,849
Additions	68,558	70,311	93,226	51,391	283,486
Disposals and write-downs	ꟷ	ꟷ	ꟷ	ꟷ	ꟷ
Depreciation (b)	(15,475)	(20,547)	(11,956)	(57,608)	(105,586)
Net book value, December
31, 2021	73,398	70,735	81,270	118,346	343,749
Balance, December 31, 2021
Cost	90,624	92,125	93,226	187,278	463,253
Accumulated depreciation	(17,226)	(21,390)	(11,956)	(68,932)	(119,504)
Net book value	73,398	70,735	81,270	118,346	343,749

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

	Exploration
	Equipment			Right of
	and	Computer	Leasehold	use assets
	structures	Equipment	Improvement	(a)	Total
	$	$	$	$	$
Opening net book value,
February 11, 2020	ꟷ	ꟷ	ꟷ	ꟷ	ꟷ
Additions	22,067	21,813	ꟷ	135,887	179,767
Disposals and write-downs	ꟷ	ꟷ	ꟷ	ꟷ	ꟷ
Depreciation(b)	(1,752)	(842)	ꟷ	(11,324)	(13,918)
Net book value, December 31,
2020	20,315	20,971	ꟷ	124,563	165,849
Balance, December 31, 2020
Cost	22,067	21,813	ꟷ	135,887	179,767
Accumulated depreciation	(1,752)	(842)	ꟷ	(11,324)	(13,918)
Net book value	20,315	20,971	ꟷ	124,563	165,849

(a) Right of use assets

Right of use assets are comprised of vehicle leases with terms of 3 years and a warehouse lease with an initial term of 2 years plus an extension for an additional term of 2 years. The value of additions is determined as the present value of lease payments at the inception of the lease (see Note 14).

(b) Depreciation

Depreciation expense for the year ended December 31, 2021 of $100,916 and $4,670, respectively (period from February 11, 2020 to December 31, 2020 – $13,833 and $85, respectively), was recognized within exploration and evaluation expenses and general and administration expenses in the consolidated statement of operations and comprehensive loss.

10. MINERAL INTERESTS

(a) Guayabales Project

The Guayabales project is comprised of exploration applications, exploration titles and three option agreements. The Company entered into two option agreements (the “First Guayabales Option” and the “Second Guayabales Option”) with third parties to explore, develop and acquire property within the Guayabales Project and during the fourth quarter of 2021, the Company secured option agreements to purchase surface rights from a third party for a twoyear period (see Note 25). The Guayabales Project is located in the Middle Cauca belt in the Department of Caldas, Colombia.

For the year ended December 31, 2021, the Company has recognized $5,032,256 (period from February 11, 2020 to December 31, 2020 – $831,778), including option payments of $1,400,000 (period from February 11, 2020 to December 31, 2020 – $350,000 respectively), as exploration and evaluation expense in the consolidated statement of operations in respect of the Guayabales Project.

Details of the two first option agreements are as follows:

i. First Guayabales Option

On June 24, 2020, the Company entered into the First Guayabales Option. The terms of the agreement are as follows:

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

Phase 1:

The Company must incur a minimum of $3,000,000 of exploration and evaluation expenditures in respect of such property within the First Guayabales Option and make total option payments of $2,000,000 over a maximum four-year term ending on or before June 24, 2024, to proceed to Phase 2 of the agreement.

As at December 31, 2021, and from the inception of the agreement, the Company has recognized a total of $2,578,376 (period from February 11, 2020 to December 31, 2020 – $481,778) as exploration and evaluation expenditures in respect of the minimum expenses required under the Phase I of the agreement, and has made total option payments of $750,000 (period from February 11, 2020 to December 31, 2020 – $350,000) required within the agreement.

Phase 2:

To acquire a 90% interest in the property within the First Guayabales Option, the Company must incur a minimum of $10,000,000 of incremental exploration and evaluation expenditures in respect of such property and make total option payments of $2,000,000, payable in equal instalments of $166,666 semi-annually over a maximum six-year term, commencing at the end of Phase 1.

Phase 3:

To acquire the remaining 10% interest in the property within the First Guayabales Option, the Company has the following options:

provide notice that the Company has elected to pay a 1% NSR commencing on the first calendar day of each month after 85% of the processing plant capacity has been achieved in exchange for the remaining 10% interest;
acquire 0.625% each year to a total of 10% by paying $250,000 semi-annually, commencing at the end of Phase 2, to a total of $8,000,000 in lieu of the NSR; or
pay a one-time payment of $8,000,000 in lieu of the NSR.

In addition, the Company is required to fund and complete all development and construction activities to bring the project to commercial production.

Summary:

The following is a summary of the option payments and exploration expenditures required to acquire 100% of the property under the First Guayabales Option:

			Option	Exploration
			Payments	Expenditures	Total
			$	$	$
Phase	1	June 24, 2020 – June 24, 2024	2,000,000	3,000,000	5,000,000
Phase	2	June 24, 2024 – June 24, 2030	2,000,000	10,000,000	12,000,000
Phase	3	To commercialproduction	8,000,0001	ꟷ	8,000,000
			12,000,000	13,000,000	25,000,000

1 Based on the assumption that the Company does not elect to pay the NSR.

The Company has the option to terminate the agreement at any time, upon notification to the optionor. As a result, the Company has not recognized any option payments payable in the future under the agreement in the consolidated statement of financial position.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

ii. Second Guayabales Option

On January 4, 2021, the Company entered into the Second Guayabales Option. The terms of the agreement are as follows:

Phase 1:

The option agreement provides the Company the right to explore the property within the Second Guayabales Option over a four-year term, expiring on January 2, 2025, for total payments over the term of the agreement of $1,750,000, with minimum payments of $1,000,000 if the agreement is terminated on or before January 2, 2022.

For the year ended December 31, 2021, the Company recognized option payments of $1,000,000. On December 28, 2021, $523,566 was paid in advance of the required minimum option payment of $600,000 due January 2, 2022. As at December 31, 2021, $76,434 was included in accounts payable and accrued liabilities, representing the unpaid portion of required minimum option payments.

Phase 2:

The option agreement provides the Company the right to explore the property within the Second Guayabales Option over a second four-year term between January 2, 2025 to January 2, 2029 for total payments over the term of $1,000,000.

Phase 3:

Upon completion of Phase 2, the Company is required to pay a total of $4,300,000 over a two-year period ending on January 2, 2030 to acquire 100 percent of the property within the Second Guayabales Option.

Summary:

The following is a summary of the option payments to acquire the property under the Second Guayabales Option:

		$
Total Phase	1	1,750,000
Total Phase	2	1,000,000
Total Phase	3	4,300,000
		7,050,000

The Company has the option to terminate the agreement at any time, upon notification to the optionor. Other than the required minimum option payments under the agreement, the Company has not recognized any option payments payable in the future in the consolidated statement of financial position.

(b) San Antonio Project

On July 9, 2020, the Company entered into an option agreement with a third party to acquire the San Antonio Project. The San Antonio project is located approximately 80km south of Medellín. It is situated in the Middle Cauca belt in the Department of Caldas, Colombia.

The option agreement provides the Company the right to explore, develop and acquire the property over a seven-year term, expiring on July 9, 2027, for total payments over the term of the agreement of $2,500,000. The Company has the option to pay an additional $2,500,000 to the optionor upon reaching commercial production in exchange for the 1.5% NSR.

The exploration and development program, including the amount of expenditures, is at the sole discretion of the Company during the term of the agreement.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

For the year ended December 31, 2021, the Company has recognized $1,982,536 (period from February 11, 2020 to December 31, 2020 – $276,718), including option payments of $50,000 (period from February 11, 2020 to December 31, 2020 – $30,000), as exploration and evaluation expense in the consolidated statement of operations and comprehensive loss.

As the Company has the option to terminate the agreement at any time, upon notification to the optionor, the Company has not recognized any option payments payable in the future under the agreement in its consolidated statement of financial position.

11. LONG-TERM VAT RECEIVABLE

Long-term receivable represents value added taxes in respect of exploration activities that will be recovered when the related project commences production.

12. WARRANTS LIABILITY

The following represents warrants denominated in Canadian dollars and classified as derivative financial liabilities:

financial liabilities:
	2021 2020
	Number of warrants Black- Scholes Value Number of warrants Black- Scholes Value
Opening balance Subscription Warrants issued (a) 2020 warrants issued (c) Warrants exercised (a), (c) Warrants expired (a) Fair value revaluation of warrants liability (a), (c)	$ $ ꟷ ꟷ ꟷ ꟷ 7,500,000 2,880,258 ꟷ ꟷ ꟷ ꟷ 5,200,000 36,093 (6,495,000) (7,967,813) (5,200,000) (228,446) (1,005,000) (975,807) ꟷ ꟷ ꟷ 6,063,362 ꟷ 192,353
Balance,end ofperiod	ꟷ ꟷ ꟷ ꟷ

(a) Subscription Warrants

In conjunction with the Transaction (See Note 6), the Company closed a total of C$15,000,000 non-brokered private placement in the form of subscription receipts (“Subscription Receipts”) at a price of C$1.00 per Subscription Receipt (the “Offering”). Proceeds from the Offering were held in escrow until May 20, 2021, upon closing of the Transaction.

Upon closing of the Transaction, the holder of each Subscription Receipt (on a postconsolidation basis) received one unit in the capital of the Company at a price of C$1.00 per unit (a “Subscription Unit). Each Subscription Unit consisted of one common share of CML (a “Subscription Share”) and one-half share purchase warrant of CML (each whole warrant, a “Subscription Warrant”). Each Subscription Warrant had an exercise price of C$2.00 per share with an expiry date of May 20, 2024, subject to the Company’s right to accelerate the expiry of the Subscription Warrants in the event that the Company’s closing price on the TSXV remains equal to or higher than $2.60 for 20 consecutive trading days. On June 25, 2021, the Company issued a notice exercising its right to accelerate the expiry date to August 9, 2021.

Upon issuance, the Subscription Warrants were classified as derivative financial liabilities as a result of their being denominated in Canadian dollars and the Company’s functional currency being the US dollar. Proceeds from the Offering are allocated between Subscription Shares and Subscription Warrants on the residual fair value method within the unit.

The issue date fair value of the Subscription Warrants was determined to be C$0.46 per warrant with the resulting allocation of the total proceeds for the Offering being:

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

	C$	$
Warrants liability – Subscription Warrants	3,476,472	2,880,258
Share capital–Subscription Shares	11,523,528	9,547,248
Totalgrossproceeds	15,000,000	12,427,506

As at August 9, 2021, there were no outstanding Subscription Warrants and the balance of the warrants liability was $nil as a result of the exercise of 6,495,000 Subscription Warrants for total proceeds of $10,363,272 (C$12,990,000) and the expiry of the remaining 1,005,000 unexercised warrants. The fair value of the Subscription Warrants exercised was revalued to $7,967,813 and transferred to contributed surplus. The remaining value of the warrants liability was reduced to $nil and recognized in the statement of operations. For the year ended December 31, 2021, the Company recognized a derivative loss of $5,087,559 in the consolidated statement of operations and comprehensive loss for the revaluation of the Subscription Warrants.

Fair value for the Subscription Warrants was determined using the Black-Scholes option pricing model using the following weighted average assumptions for the period from May 20, 2021 (date of issue) to August 9, 2021 (date of expiry):

2021 (date of issue) to August 9, 2021 (date of expiry):
Weighted average share price	C$2.10
Weighted average risk-free interest rate	0.47%
Weighted average dividend yield	Nil
Weighted average stock price volatility, based on historical volatility for comparable
companies	130%
Weighted averageperiod to expiry (years)	1.5

(b) Financing Costs

Costs directly attributable to the Offering are made of:

	$
Finders’ Units (see Note 22)	442,833
Additional financing costs	100,931
Total financingcosts	543,764

Financing costs are allocated on a pro-rata basis between Subscription Shares and Subscription Warrants, with the portion allocated to Subscription Warrants recognized as an expense and the portion allocated to Subscription Shares recognized as a reduction in share capital as follows:

capital as follows:
	$
Subscription Warrants – financing expense	126,026
Subscription Shares–share issue costs	417,738
	543,764

(c) 2020 Warrants

i. On May 25, 2020, the Company issued 4,800,000 Warrants (see Note 19(b)vi and vii). Each Warrant had an exercise price of C$0.10 per share and an expiry date of June 5, 2021. The issue date fair value of the Warrants was $35,909. In June 2020, all such Warrants were exercised. The Company recognized a derivative loss of $132,119 in the consolidated statement of operations and comprehensive loss upon revaluation of the Warrants immediately prior to their exercise.
ii. On August 12, 2020, the Company issued 400,000 Warrants (see Note 19(b)viii). Each Warrant had an exercise price of C$0.20 per share and an expiry date of June 5, 2021. The issue date fair value of the Warrants was $184. In September 2020, all such Warrants were exercised, resulting in the recognition of a derivative loss of $60,234 in the consolidated statement of operations and comprehensive loss.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

13. OTHER CURRENT LIABILITIES

Other current liabilities are made up of the following:

		December 31,	December 31,
As at	Note	2021	2020
		$	$
Loan payable (a)		ꟷ	76,477
Related party loan payable	16(a)	ꟷ	6,973
Current portion of lease liabilities	14	55,727	44,520
		55,727	127,970

(a) In 2020, the Company received a loan of $154,504. The loan was subject to interest payable to September 2020 at an annualized rate of 10.03%. Effective September 2020, the loan became payable on demand with no interest recognized subsequent to that date. For the year ended December 31, 2021, the Company incurred interest of $nil (period from February 11, 2020 to December 31, 2020 – $2,606) in respect of the loan, which was recognized within finance costs on the consolidated statement of operations and comprehensive loss. As at December 31, 2021, the loan was settled in full.

14. LEASE LIABILITIES

LEASE LIABILITIES
As at	December 31,	December 31,
(in thousands of U.S. dollars)	2021	2020
	$	$
Opening balance	142,841	ꟷ
New leases during the period	51,391	135,887
Lease payments	(72,299)	(13,838)
Interest accretion expense	23,063	4,951
Foreign exchange	(23,342)	15,841
Balance, end of period	121,654	142,841
Current portion	(55,727)	(44,520)
Long-termportion	65,927	98,321

The lease liabilities were measured on inception of the lease at the present value of the lease payments over the lease term, discounted using a weighted average discount rate of 15.70%, based on the Company’s incremental borrowing rate.

Interest accretion expense or amortization of the discount on the lease liability is charged to the consolidated statement of operations and comprehensive loss using the effective interest method.

For the year ended December 31, 2021, the Company made lease payments of $120,683 (period from February 11, 2020 to December 31, 2020 – $10,179) for contracts with terms of 12 months or less and which were recognized as lease expense within exploration and evaluation expenses.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

15. INCOME TAXES

The Company is incorporated in Ontario, Canada and is subject to income taxes at a combined federal and provincial statutory rate as at December 31, 2021 and 2020 of 26.5%. The tax on the Company’s net income (loss) before tax differs from the amount that would arise using the tax rate applicable to the Company as follows:

	December 31,	December 31,
As at	2021	2020
	$	$
Net loss before income taxes	(17,306,913)	(1,700,470)
Expected income tax recovery	(4,586,226)	(450,625)
Foreign tax rates differences	(249,885)	(33,086)
Non-deductible items	2,133,586	83,054
Temporary differences	358,599	10,491
Adjustments in respect of prior years	57,117	ꟷ
Others	ꟷ	(20,119)
	(2,286,809)	(410,285)
Change in unrecognised deferred tax assets	2,286,809	410,285
Income tax expense(recovery)	ꟷ	ꟷ

The Company and its subsidiaries have not generated any taxable profit in 2021 and 2020. As the Company is in the exploration stage, it is not probable that any tax benefit from available tax losses and tax assets will be realized in the future and therefore, has not recognized their effect in the consolidated statements as at December 31, 2021.

Tax losses and tax assets available in Canada and Colombia to reduce income taxes payable in the future, for which the effect has not been recognized in the consolidated financial statements as at December 31, 2021 are as follows:

December 31, 2021 are as follows:
	December 31,		December 31,
As at	2021	Expiry Date	2020
	$		$
Tax loss – Colombia	7,690,546	2033	1,084,000
Fixed and intangible assets – Colombia	244,000	2031	53,000
Tax loss – Canada	1,374,000	2041	321,000
Transaction costs - Canada	210,000	2041	ꟷ

Underlying tax losses and tax assets in Colombia and Canada are denominated in Colombian pesos and Canadian dollars, respectively.

16. RELATED PARTY TRANSACTIONS

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

The following related party transactions were conducted in the normal course of operations:

(a) During the period from February 11, 2020 to December 31, 2020, an officer and employee of the Company incurred expenditures totalling $165,816, included within exploration and evaluation expenses (see Note 23(a)), on behalf of the Company at an interest rate of 27%, which was reimbursed. The amounts advanced were considered as a loan to the Company with interest payable at an annualized rate of 13.48% and is payable on demand. For the year ended December 31, 2021, the Company incurred interest of $nil (period from February 11, 2020 to December 31, 2020 – $6,884) in respect of the loan from the employee. As at December 31, 2020, $6,973 was payable to the employee in respect of the loan. During 2021, the loan was settled in full and the balance payable as at December 31, 2021 is $nil.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

(b) Compensation of key management personnel

Key management includes independent directors, the executive chairman of the board of directors (the “Chairman”), the president and chief executive officer (“CEO”) and the chief financial officer (“CFO”). The remuneration of members of key management personnel were as follows:

as follows:
	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
	$	$
Management salaries and benefits	1,058,142	63,458
Share-based payments	152,576	39,429
	1,210,718	102,887

1 – For the period from February 11, 2020

17. FINANCIAL INSTRUMENTS

Financial Instrument Disclosures

Details of the significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement and the bases for recognition of income and expenses) for each class of financial asset and financial liability are disclosed in Note 4. The carrying values for financial assets and liabilities of cash and cash equivalents, receivables, accounts payable and accrued liabilities, loan payable and related party payable approximate their fair values as at December 31, 2021.

There were no transfers between the fair value hierarchy during the year ended December 31, 2021.

18. FINANCIAL AND CAPITAL RISK MANAGEMENT

(a) Financial Risk Management

The Company’s activities expose it to a variety of financial risks, which include currency risk, credit risk, liquidity risk and interest rate risk.

Risk management is carried out by the Company’s management with guidance from and policies approved by the Board of Directors.

Financial risk factors

Foreign currency risk

Foreign currency risk arises from future commercial transactions and recognized assets and liabilities denominated in currency that is not the entity’s functional currency. The Company’s functional currency is the U.S. dollar. The Company conducts some of its operating, financing and investing activities in currencies other than the U.S. dollar. The Company is therefore subject to gains and losses due to fluctuations in these currencies relative to the U.S. dollar. The Company does not use derivative instruments to hedge exposure to foreign exchange risk.

At year end the exchange rate was COP:US$ 3,981.16 based on Banco de la Republica - Colombia (COP:US$ 3,432.50 in 2020), and COP:US$ 3,743.09 was the average in 2021 (COP:US$ 3,738.84 for the period from February 11, 2020 to December 31, 2020).

At year end the exchange rate was CAD:US$ 0.7887 based on Bank of Canada (CAD:US$ 0.7854 in 2020), and CAD:US$ 0.7979 was the average in 2021 (CAD:US$ 0.7442 for the period from February 11, 2020 to December 31, 2020).

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

The Company had the following foreign currency balances:

	Foreign	Foreign
As at December 31, 2021	Currency	Balance	$
Cash and cash equivalents	COP (000’s)	25,077,015	6,298,922
Cash and cash equivalents	CAD	1,042,895	822,602
Receivables	COP (000’s)	2,083,482	526,783
Receivables	CAD	26,473	20,881
Accounts payable and accrued liabilities	COP (000’s)	(3,835,494)	(963,411)
Accounts payable and accrued liabilities	CAD	(92,515)	(72,973)
Lease liability	COP(000’s)	(484,324)	(121,654)
	Foreign	Foreign
As at December 31, 2020	Currency	Balance	$
Cash and cash equivalents	COP (000’s)	852,871	248,469
Cash and cash equivalents	CAD	1,801,983	1,415,540
Receivables	COP (000’s)	50,000	15
Receivables	CAD	9,302	7,307
Accounts payable and accrued liabilities	COP (000’s)	(300,032)	(87,409)
Accounts payable and accrued liabilities	CAD	(17,543)	(13,766)
Loan payable	COP (000’s)	(262,507)	(76,477)
Related party payable	COP (000’s)	(23,934)	(6,973)
Lease liability	COP(000’s)	(490,302)	(142,841)

Credit risk

Credit risk is the risk of loss associated with a counter party’s inability to fulfil its payment obligations. The Company's credit risk is primarily attributable to cash and cash equivalents and receivables. The Company has no significant concentration of credit risk arising from its properties. The majority of the Company’s cash and cash equivalents are held with banks in Canada and Colombia. Funds held in banks in Colombia are limited to yearly forecasted Colombian denominated expenses. The Company limits material counterparty credit risk on these assets by dealing with financial institutions with credit ratings of at least “A” or equivalent, or those which have been otherwise approved. Receivables mainly consist of receivables for refundable commodity taxes in Canada. Management believes that the credit risk concentration with respect to remaining amounts receivable is minimal.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company regularly evaluates its cash position to ensure preservation and security of capital as well as maintenance of liquidity. The Company manages its liquidity risk by proactively mitigating exposure through cash management, including forecasting its liquidity requirements with available funds and anticipated investing and financing activities.

As at December 31, 2021, the cash balance of $16,308,805 is expected to be sufficient to meet its obligations in respect of its current liabilities of $1,621,762, and anticipated exploration, evaluation and administrative expenditures over the next twelve months. However, the cash balance is not sufficient to meet all of its future obligations in respect of the option contracts in note 10 if the Company elects to exercise all its options in respect of all the contracts. Thus, continued operations of the Company are dependent on its ability to develop a sufficient financing plan, receive continued financial support from existing shareholders and/or new shareholders or through other arrangements, complete sufficient public equity financing, or generate profitable operations in the future.

Interest rate risk

Interest rate risk is the impact that changes in interest rates could have on the Company’s earnings and liabilities. The Company’s cash balances are not subject to significant interest

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

rate risk as balances are current.

(b) Capital Management

The Company manages its capital to maintain its ability to continue as a going concern in order to pursue the exploration and evaluation of its mineral interests. The Company mainly relies on equity issuances to raise new capital. The capital structure of the Company includes the components of equity as well as cash and cash equivalents.

On November 10, 2021, the Company filed a short form base shelf prospectus which will allow the Company to issue common shares, warrants, subscriptions receipts, units of debt securities among others for up to an aggregate total of C$100,000,000. The base shelf prospectus is effective until December 2023.

The Company prepares annual estimates of exploration and administrative expenditures and monitors actual expenditures compared to estimates to ensure that there is sufficient capital on hand to meet ongoing obligations. The Company maintains its cash in highly liquid shortterm deposits which can be liquidated immediately without interest or penalty.

The Company’s overall strategy with respect to capital risk management has remained consistent for the year ended December 31, 2021.

19. SHARE CAPITAL

(a) Authorized

Authorized share capital consists of an unlimited number of common shares without par value. All issued shares are fully paid. No dividends have been paid or declared by the Company since inception.

(b) Issued

During the years ended December 31, 2020 and December 31, 2021, the Company issued shares resulting from the following transactions:

2021 Transactions

i. On January 5, 2021, the Company issued 500,000 common shares resulting from the exercise of stock options (See Note 21(a)).
ii. On May 20, 2021, the Company issued 2,785,000 common shares to original POCML shareholders on closing of the RTO. The fair value of shares was determined to be $1,772,606 (See Note 6).
iii. On May 20, 2021, the Company issued 15,000,000 common shares upon closing of the Offering. Proceeds from the Offering of C$15,000,000 ($12,427,506) were allocated between Subscription Shares and Subscription Warrants on the residual fair value method within the unit of which $9,547,248 was allocated to Subscription Shares (See Note 12(a)). Share issue costs of $417,738 (See Note 12(b)) were recognized as a reduction in share capital.

From July 1, 2021 to August 9, 2021, the Company issued 6,495,000 common shares and received total proceeds of C$12,990,000 ($10,363,272) as a result of the exercise of the Subscription Warrants (See Note 12(a)).

iv. On May 20, 2021, the Company issued 534,500 common shares as part of the Subscription Units issued to eligible finders (the “Finders’ Shares”) (See Note 22). The value allocated to the Finders’ Shares was $340,200.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

From July 1, 2021 to August 9, 2021, the Company issued 267,250 common shares and received total proceeds of C$534,500 ($426,602) as a result of the exercise of the Finders’ Warrants (See Note 22).

2020 Transactions

v. On March 16, 2020, the Company issued 20,000,000 common shares at a price of C$0.005 per share for total proceeds of C$100,000 ($71,565). On August 4, 2020, the Company received capital contributions totalling $300,000 ($225,706) from the shareholders, effectively increasing the price per share to C$0.02 on a pre-consolidation basis. The additional capital contribution was recognized in contributed surplus in the consolidated statement of financial position at the time of receipt.
vi. On May 25, 2020, the Company issued 4,800,000 units at a price of C$0.05 per unit for total proceeds of C$240,000 ($171,625). Each unit is comprised of one common share and one Warrant with an exercise price of C$0.10. The increase in share capital was $135,716, being the total proceeds less the fair value of the Warrants on the date of issue (See Note 12(c)i).

In June 2020, the Company issued 4,800,000 common shares and received total proceeds of C$480,000 ($353,105) as a result of the exercise of the related Warrants (See Note 12(c)i).

vii. On August 5, 2020, the Company completed a share consolidation of the common shares on the basis of 2 pre-consolidation shares for 1 post-consolidated common share. All share amounts for 19(b)(v) and (vi) are presented on the consolidated statement of changes in equity as post-consolidated shares.
viii. On August 12, 2020, the Company issued 400,000 units at a price of C$0.10 per unit for total proceeds of C$40,000 ($30,180). Each unit is comprised of one common share and one Warrant with an exercise price of C$0.20. The increase in share capital was $29,996, being the total proceeds less the fair value of the warrants on the date of issue (See Note 12(c)ii).

In September 2020, the Company issued 400,000 common shares and received total proceeds of C$80,000 ($60,416) as a result of the exercise of the related Warrants (See Note 11(c)ii).

20. EARNINGS PER SHARE

(a) Basic

Basic earnings (loss) per share are calculated by dividing net income (loss) attributable to equity holders of the Company by the weighted average number of common shares outstanding as follows:

outstanding as follows:
	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
Net loss	$ (17,306,513)	$ (1,700,470)
Weighted average number of common shares outstanding	36,476,417	12,925,095
Basic net lossper common share	$(0.47)	$ (0.13)

1 – For the period from February 11, 2020

(b) Diluted

The Company incurred a net loss for the year ended December 31, 2021 and the period from February 11, 2020 to December 31, 2020. Therefore, all outstanding stock options and share

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

warrants have been excluded from the calculation of diluted loss per share since the effect would be anti-dilutive.

21. SHARE BASED PAYMENTS

The Company adopted a stock option plan (the “Plan”) pursuant to the Securities Act of Ontario (the “Act”). The aggregate maximum number of shares reserved for issuance under the Plan and all other security-based compensation arrangements (together “Share Compensation Arrangements”) at any given time is 10% of the Company’s issued and outstanding shares as at the date of the grant of the Share Compensation Arrangement. Any shares subject to a stock option under the Plan which have been exercised, cancelled, repurchased, expired or terminated in accordance with the Plan will again be available under the Plan.

Under the Plan, the Company may grant to directors, officers, employees, and consultants stock options to purchase common shares of the Company. Stock options granted under the Plan will be for a term not to exceed 10 years.

The continuity of stock options during the period were as follows:

	2021 2020
	Number of stock options Weighted average exercise price Number of stock options Weighted average exercise price
Outstanding, beginning of period Granted Exercised (a) Expired/cancelled	C$ C$ 2,120,000 0.37 ꟷ ꟷ 2,488,750 2.48 2,220,000 0.37 (687,500) (0.20) ꟷ ꟷ (122,500) (0.48) (100,000) (0.20)
Outstanding,December 31	3,798,750 1.78 2,120,000 0.37

(a) On January 5, 2021, 500,000 options were modified whereby vesting of such options were accelerated and immediately exercised, resulting in the recognition of $19,237 in the consolidated statement of operations and comprehensive loss on the date of modification.

The following table summarizes information about stock options outstanding and exercisable as at December 31, 2021:

	Options Outstanding	Options Outstanding		Options	Exercisable
		Weighted	Weighted		Weighted	Weighted
		average	average		average	average
	Number of	remaining	exercise	Number of	remaining	exercise
Range of	Options	contractual	price	options	contractual	price
Price (C$)	Outstanding	life (years)	(C$)	exercisable	life (years)	(C$)
$0.20 – $1.00	1,900,000	1.76	0.62	753,335	1.12	0.35
$2.40–$4.00	1,898,750	4.87	2.93	ꟷ	ꟷ	ꟷ
	3,798,750	3.31	1.78	753,335	1.12	0.35

Options outstanding as at December 31, 2021 have vesting terms of every six or eight months over a two-year period and have terms of two to five years.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

The following is a summary of the stock options granted, the fair values and the assumptions used in the Black-Scholes option pricing formula:

in the Black-Scholes option pricing formula:
For the year or period ended December 31	2021	20201
Number of options granted	2,488,750	1,300,000
Weighted average share price on grant date	C$2.48	C$0.15
Weighted average risk-free interest rate	0.95%	0.3%
Weighted average dividend yield	Nil	Nil
Weighted average stock price volatility, based on historical volatility for
comparable companies	114%	130%
Weighted average period to expiry (years)	2.9	1.4
Weighted averagegrant date fair valueper share	$1.30	$0.23

1 – For the period from February 11, 2020

22. WARRANTS RESERVE

The following represents warrants issued and recognized within warrants reserve, a component of contributed surplus:

contributed surplus:
	Number of
	warrants	$
Balance January 1, 2021	ꟷ	ꟷ
Finders’ Warrants issued, May 20, 2021	267,250	102,633
Exercised	(267,250)	(102,633)
Balance December 31,2021	ꟷ	ꟷ

In connection with the Offering, eligible finders were issued a total of 534,500 Finders’ Units, upon closing of the Transaction and representing 5% of the number of Subscription Receipts placed by such eligible finders. Each Finders’ Unit consisted of one Finders’ Share and one-half of a Finders’ Warrant, with the same terms and conditions as the Subscription Warrants (See Note 12(a)).

The Finders’ Warrants are accounted for under IFRS 2, as they were issued in exchange for services and therefore, the value allocated to the Finders’ Warrants are classified in warrants reserve, a component of contributed surplus, and are not subsequently revalued. The value of services received is determined to be the issue price of the Finders’ Units on the date of issue, May 20, 2021, and are allocated between Finders’ Shares and Finders’ Warrants on the residual fair value method within the unit. Fair value for the Finders’ Warrants was determined using the Black-Scholes option pricing model.

The allocation of values between Finders’ Shares and Finders’ Warrants is as follows:

	C$	$
Contributed surplus – Finders’ Warrants	123,878	102,633
Share capital–Finders’Shares	410,622	340,200
Total value of Finders’ Units issued	534,500	442,833

On June 25, 2021, the Company issued a notice exercising its right to accelerate the expiry date to August 9, 2021.

As at August 9, 2021, all Finders’ Warrants were exercised and total proceeds of $426,602 (C$534,500) in respect of the Finders’ Warrants were received.

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

23. EXPENSES BY NATURE

(a) Exploration and evaluation

Exploration and evaluation expense is made up of the following:

	For the year	For the
	ended	period ended
	December 31,	December 31,
	2021	20201
	$	$
Option payments and fees (i)	1,641,578	440,035
Drilling services	1,670,642	ꟷ
Salaries and benefits	878,478	118,717
Field costs, surveys and other	831,741	266,073
Consulting and professional fees	587,410	161,969
Assaying	404,594	89,857
Transportation and meals	382,080	28,680
Geophysics	245,398	ꟷ
Communities	193,728	ꟷ
Depreciation and amortization	108,452	14,429
Security	70,691	9,474
	7,014,792	1,129,234

1 – For the period from February 11, 2020

i. Includes total option payments in respect of option agreements for the year ended December 31, 2021 of $1,450,000 (period from February 11, 2020 to December 31, 2020 $380,000).

(b) General and administration

General and administration expense is made up of the following:

	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
	$	$
Salaries and benefits	1,345,522	96,375
Share-based compensation	780,042	88,546
Consulting and professional fees	814,720	114,371
Travel and entertainment	139,727	11,339
Office administration	79,256	29,053
Regulatory and compliance fees	17,117	ꟷ
Directors’ fees and expenses	8,000	3,000
Depreciation and amortization	6,606	85
Investor relations	396	1,417
	3,191,386	344,186

1 – For the period from February 11, 2020

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

(c) Finance costs

Finance costs is made up of the following:

Finance costs is made up of the following:
	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
	$	$
Finance issue expense (i)	126,025	ꟷ
Interest accretion expense (ii)	23,063	4,951
Interest on loan and related party payables (Note 13(a), 16(a))	ꟷ	9,490
Other interest expense	ꟷ	4,523
	149,088	18,964

1 – For the period from February 11, 2020

i. Represents the portion of the Offering financing costs allocated to the Subscription Warrants (See Note 12(b)).
ii. Interest accretion expense or amortization of the discount is in respect of the lease liability, also representing the interest portion of lease payments (See Note 14).

24. CASH FLOW INFORMATION

(a) Operating Activities

Net changes in working capital items:

Net changes in working capital items:
	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
	$	$
Receivables and prepaid expenses	(194,708)	(444,810)
Net assets acquired from RTO Transaction (Note 6)	463,559	ꟷ
Accounts payables and accrued liabilities	1,401,507	207,833
	1,670,358	(236,977)

1 – For the period from February 11, 2020

(b) Financing Activities

Financing costs paid:

Financing costs paid:
	For the year	For the period
	ended	ended
	December 31,	December 31,
	2021	20201
	$	$
Offering finance costs (i)	100,931	ꟷ
Interest portion of loan and related party payable payments
(Note 13(a), 16(a), 23(c))	ꟷ	9,490
Other interest expense(Note 23(c))	ꟷ	4,523
	100,931	14,013

1 – For the period from February 11, 2020

i. Represents financing costs incurred in respect of the Offering (See Note 12(b)).

COLLECTIVE MINING LTD. Notes to the Consolidated Financial Statements December 31, 2021 and 2020 (All amounts expressed in U.S. Dollars, unless otherwise indicated)

25. COMMITMENTS, OPTION AGREEMENTS AND CONTINGENCIES

Commitments

As at December 31, 2021, the Company had the following contractual commitments and obligations:

		Less than		After 5
	Total	1 Year	Years 2– 5	Years
	$	$	$	$
Other lease commitments (a)	29,239	29,239	ꟷ	ꟷ
Service contracts(b)	389,239	389,239	ꟷ	ꟷ
	418,478	418,478	ꟷ	ꟷ

(a) Lease liability commitments represent contractual lease payments payable over future periods in respect of lease liabilities recognized.

(b) Service contracts represent commitments in respect of drilling and induced polarization (IP) project.

Option Agreements

The Company has the option to terminate its option agreements at any time. Future expenditures are therefore dependent on the success of exploration and development programs and a decision by management to continue or exercise its option(s) for the relevant project and agreement.

As at December, 2021, the expected timing of payments, in respect of the Company’s option agreements under the assumption that the Company continues to exercise its option(s) for the relevant project and agreement are as follows:

		Less than		After 5
	Total	1 Year	Years 2– 5	Years
	$	$	$	$
First Guayabales Option (c)	3,250,000	500,000	1,583,330	1,166,670
Second Guayabales Option (d)	6,126,434	76,434	1,000,000	5,050,000
San Antonio Option (e)	2,420,000	100,000	1,570,000	750,000
Other Option agreements(f)	1,772,735	ꟷ	1,772,735	ꟷ
	13,569,169	676,434	5,926,065	6,966,670

(c) Amounts disclosed relate only to option payments of the agreement. In addition, the Company must incur a minimum of $3,000,000 of exploration and evaluation expenditures under Phase 1 and $10,000,000 under Phase 2. As at December 31, 2021, the remaining required minimum exploration and evaluation expenditures under Phase 1 of the First Guayabales Option is $422,000.
(d) On December 28, 2021, $523,566 was paid in advance of the required option payment of $600,000 due January 2, 2022 (see Note 8).
(e) Excludes payments additional option payment or NSR upon reaching commercial production.
(f) Amounts disclosed related to the option agreements to purchase surface rights from a third party for a two-year period.

Environmental Contingencies

The Company’s exploration activities are subject to Colombian laws and regulations governing the protection of the environment. These laws are subject to change and may generally become more restrictive. The Company may be required to make future expenditures to comply with such laws and regulations, the amounts for which are not determinable and have not been recognized in the consolidated financial statements.

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MANAGEMENT DISCUSSION AND ANALYSIS Of Results of Operation and Financial Condition For year ended December 31, 2021

The following management discussion and analysis (“MD&A”) of the consolidated operations and financial position of Collective Mining Ltd. (the company that resulted from a three-cornered amalgamation whereby a reverse take-over of POCML 5 Inc. (“POCML”) by Collective Mining Inc. resulted) and its subsidiaries (“CML” or the “Company”) for the year ended December 31, 2021 should be read in conjunction with the Company’s audited consolidated financial statements and related notes for the year ended December 31, 2021, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Management is responsible for the preparation of the consolidated financial statements and other financial information relating to the Company included in this report. The information included in this MD&A is as of April 7th, 2022, the date when the Board of Directors approved the Company's audited consolidated financial statements for the year ended December 31, 2021. All monetary amounts included in this report are expressed in United States (“U.S.”) dollars (“$”), the Company’s reporting and functional currency, unless otherwise noted. References to C$ and COP are to Canadian dollars and Colombian pesos, respectively. This MD&A contains forward-looking information and should be read in conjunction with the risk factors described in the “Caution Regarding Forward-Looking Information” section.

Table Of Contents
Description Of Business	2
2021 Summary And Highlights	2
2021 Operating And Financial Results	3
Business Transaction	3
Exploration Summary	4
Selected Annual Consolidated Financial Information	8
Overview Of Consolidated Financial Results	9
Summary Of Consolidated Quarterly Results	10
Liquidity And Management Of Capital Resources	10
Equity And Warrants	11
Trends And Risks That Affect The Company’s Financial Condition	12
Contractual Obligations, Commitments And Option Agreements	12
Related Party Transactions	13
Financial Instruments And Related Risks	13
Off-Balance Sheet Arrangements	13
Market Trends	13
Critical Accounting Estimates And Judgements	14
Changes In Accounting Policies	14
Internal Control Over Financial Reporting And Disclosure Controls And Procedures	15
Emerging Market Disclosure	15
Risks And Uncertainties	18
Caution Regarding Forward-Looking Information	33
Corporate Information	36

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DESCRIPTION OF BUSINESS

Collective Mining Inc. (“CMI” or “Old Collective”) was incorporated under the Business Corporations Act (Ontario) on February 11, 2020. On May 20, 2021, CMI and POCML 5 Inc. (“POCML”), a company listed on the Toronto Stock Venture Exchange (the “TSXV”), completed a three-cornered amalgamation resulting in a reverse take-over of POCML by CMI (the “RTO” or the “RTO Transaction”) with the resulting issuer now operating as Collective Mining Ltd. (“CML”).

On May 20, 2021, pursuant to the closing of the RTO, CML’s issued and outstanding common shares (the “Common Shares”) were accepted for listing and began trading on the TSXV under the symbol "CNL".

The registered office for CML is located at 82 Richmond St E 4th Floor Toronto, Ontario, Canada.

CML and its subsidiaries (collectively referred to as the “Company”) is an early-stage exploration company and is principally engaged in the acquisition, exploration and development of mineral properties located in South America.

The Company currently holds mining titles, mining applications and option agreements to explore and acquire two exploration projects in Colombia, South America, the Guayabales Project and the San Antonio Project.

2021 SUMMARY AND HIGHLIGHTS

2021 Business Highlights

On May 20, 2021, the Company completed an RTO Transaction with POCML and began trading on the TSXV.
In connection with the RTO Transaction, the Company completed a non-brokered private placement of $12.4 million (C$15 million) in the form of subscription receipts at a price of C$1.00 per subscription receipt on May 20, 2021.
The Company received total proceeds of $10.8 million (C$13.5 million) from the exercise of subscription warrants and finders’ warrants as a result of the acceleration of the expiry date for such warrants.
On November 10, 2021, the Company filed a final short form base shelf prospectus, which will allow the Company to issue common shares, warrants, subscriptions receipts, units of debt securities among others for up to an aggregate total of C$100 million. The base shelf prospectus is effective until December 2023.
During 2021, the Company announced the following management appointment: Ana Milena Vásquez as Executive Vice-President, Rodolfo Higuera as Vice-President of Sustainability, Carlos David Rios as Vice-President of Exploration and Steven Gold as Vice President of Corporate Development and Investor Relations.
During 2021, the Company announced that Ashwath Mehra joined the company as a NonExecutive Director.

2021 Exploration Highlights

Guayabales Project

During 2021, the Guayabales Project was advanced with intense geological mapping, soil, channel and rock sampling programs and the completion and interpretation of an airborne geophysical survey and an Induced Polarization (“IP”) survey on a portion of the land package resulting in the generation of multiple outcropping and grassroot targets to date.
During the third quarter of 2021, the Company announced that drilling had commenced at the Guayabales Project.
Early in the fourth quarter of 2021, the Company announced that it has made a significant discovery at the Donut target, drilling 163 metres at 1.3 g/t gold equivalent from surface.
Drilling was also initiated at the Box and Olympus targets within the Guayabales Project, with assays due in 2022.
The Company announced the discovery of a large gold porphyry stockwork system at surface within the Victory target area which will be drill tested in 2022.

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On September 24, 2021, the Company filed a National Instrument 43-101 (“NI 43-101”) Technical Report for its Guayabales Project, with an effective date of August 30, 2021.

San Antonio Project

During 2021, the Company announced a maiden 5,000 metre drill program at San Antonio and announced that it has made a significant grassroot discovery at the Pound target (“Pound”). Pound is one of three targets the Company has generated thus far at the San Antonio project.
On October 27, 2021, the Company announced that drilling at the Pound target returned 710 metres at 0.53 g/t gold equivalent from surface.

Subsequent to 2021:

The Company announced that it made a significant new discovery at Olympus, drilling 302 Metres at 1.11 g/t gold equivalent from near surface.

2021 Operating and Financial Results

Results for the three months and year ended December 31, 2021 was net loss of $3.6 million and net loss of $17.3 million, respectively ($0.08 per share and $0.47 per share, respectively).
Exploration expense for the three months and year ended December 31, 2021 was $2.3 million and $7 million, respectively, including $0.1 million and $2 million, respectively, relating to the San Antonio project and $2.2 million and $5 million, respectively, relating to the Guayabales project.
Total RTO Transaction costs were $1.5 million.
Revaluation of warrants liability for the three months and year ended December 31, 2021 was $nil and a loss of $5.1 million, respectively.
Operating cash outflow for the three months and year ended December 31, 2021 was $3.3 million and $7.9 million, respectively.
Net financing cash inflow for the three months and year ended December 31, 2021 was $nil and $23.1 million, respectively.
A total of $23.3 million (C$28.6 million) was raised through equity financing and warrants and option exercises for the year ended December 31, 2021.
Cash and cash equivalents at December 31, 2021 was $16.3 million.

BUSINESS TRANSACTION

On May 20, 2021, Old Collective and POCML completed a business combination agreement whereby POCML acquired all the issued and outstanding shares of Old Collective through a three-cornered amalgamation and resulting in a reverse take-over of POCML by Old Collective (the “RTO” or the “RTO Transaction”) and constituted POCML’s qualifying transaction pursuant to TSXV Policy 2.4. The resulting issuer company was renamed to Collective Mining Ltd. (“CML” or the “Company”).

Upon closing of the RTO Transaction, the issued and outstanding shares of Old Collective prior to the RTO was exchanged on a one for one basis for the Company’s Common Shares while every four issued and outstanding shares of POCML prior to the RTO was exchanged for one Common Share of the Company. Management and directors of the Company were appointed by Old Collective.

As a result of the RTO Transaction, the Company recognized a total of $nil and $1.5 million, respectively, in the consolidated statement of operations and comprehensive loss for the three and twelve months ended December 31, 2021, as public listing costs, representing the difference between the fair value of the shares issued to the original POCML shareholders and the fair value of POCML net assets acquired plus additional transaction costs incurred.

In connection with the RTO Transaction, the Company closed a non-brokered private placement for aggregate gross proceeds of C$15 million in the form of subscription receipts at a price of C$1.00 per subscription receipt (“Subscription Units”) (the “Offering”). Each Subscription Unit consisted of one common share of the Company (a “Subscription Share”) and a one-half share purchase warrant of the Company (each whole warrant, a “Subscription Warrant”). Each Subscription Warrant has an exercise price of C$2.00 per share with an expiry date of May 20, 2024, subject to an accelerated expiry option.

In connection with the Offering, eligible finders were issued 534,500 Subscription Units representing 5%

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of the number of Subscription Units placed by such eligible finders (the “Finders’ Units”). The Finders’ Units are considered a cost of the Offering.

Following the completion of the RTO Transaction and the Offering, 37,651,965 Common Shares are held by shareholders of Old Collective and purchasers in the Offering, representing approximately 55% and 38%, respectively, of the total Common Shares on May 20, 2021. Shareholders of POCML prior to the RTO Transaction held approximately 7% of the total Common Shares on May 20, 2021.

On June 25, 2021, the Company issued a notice exercising its right to accelerate the expiry date of Subscription Warrants and warrants issued in connection with the Finders’ Units (the “Finders’ Warrants”) to August 9, 2021. Total proceeds of C$13.5 million was received in respect of 6,495,000 exercised Subscription Warrants and 267,250 exercised Finders’ Warrants with all remaining unexercised warrants expiring.

EXPLORATION SUMMARY

The following is a summary of exploration expenditures incurred for the three months ended December 31, 2021 and 2020:

31, 2021 and 2020:
For the three months ended December 31	2021 2020
	San Antonio Guayabales Corporate1 Total Total
Option payments and fees Drilling services Salaries and benefits Field costs, surveys and other Consulting, professional fees and technical assistance Assaying Transportation and meals Geophysics Depreciation and amortization Community expenses Security	$ $ $ $ $ (13,823) 359,899 ꟷ 346,076 (26,825) (12,449) 552,711 ꟷ 540,262 ꟷ 53,951 261,849 ꟷ 315,800 118,717 10,428 309,783 ꟷ 320,211 91,997 38,675 175,251 ꟷ 213,926 149,369 18,613 136,394 ꟷ 155,007 89,857 23,184 138,671 ꟷ 161,855 19,953 ꟷ 73,181 ꟷ 73,181 ꟷ (4,544) 35,220 ꟷ 30,676 14,429 (20,709) 148,139 ꟷ 127,430 ꟷ 6,341 16,764 ꟷ 23,105 9,474
	99,667 2,207,862 ꟷ 2,307,529 466,971

1 Corporate exploration relates to the evaluation of properties prior to the acquisition of the property or entering into an option agreement in respect of the property and general costs not directly attributable to a project.

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The following is a summary of exploration expenditures incurred for the year ended December 31, 2021 and period from February 11, 2020 to December 31, 2020:

and period from February 11, 2020	to December 31, 2020:	to December 31, 2020:
For the year and period ended December 31	2021 20202
	San Antonio Guayabales	Corporate1 Total Total
Option payments and fees Drilling services Salaries and benefits Field costs, surveys and other Consulting, professional fees and technical assistance Assaying Transportation and meals Geophysics Depreciation and amortization Community expenses Security	$ $	$ $ $ ꟷ 1,641,578 440,035 ꟷ 1,670,642 ꟷ ꟷ 878,477 118,717 ꟷ 831,741 266,073 ꟷ 587,410 161,969 ꟷ 404,594 89,857 5,400 382,080 28,680 ꟷ 245,398 ꟷ ꟷ 108,452 14,429 ꟷ 193,728 ꟷ ꟷ 70,692 9,474
	81,257 1,560,321
	745,127 925,515
	324,156 554,321
	225,898 605,843
	266,595 320,815
	132,045 272,549
	112,650 264,030
	ꟷ 245,398
	46,161 62,291
	16,029 177,699
	32,620 38,072
	1,982,538 5,026,854	5,400 7,014,792 1,129,234

2 For the period from February 11, 2020

Guayabales Project

The Guayabales project consists of exploration applications, exploration titles and three option agreements. The Company entered into two option agreements (the “First Guayabales Option” and the “Second Guayabales Option”) with third parties to explore, develop and acquire property within the Guayabales Project. During the fourth quarter of 2021, the Company secured option agreements to purchase surface rights from a third party for a two-year period, for a total of $1.8 million. The Guayabales Project is located in the Middle Cauca belt in the Department of Caldas, Colombia, and is comprised of four exploration titles totalling 2,411 hectares and seventeen exploration applications totalling 1,885 hectares.

Exploration activities:

During the first half of 2021, the Company rapidly advanced the project with intense geological mapping, soil and rock sampling programs and the completion and interpretation of an airborne geophysical survey and IP survey. Work highlighted a major NW-trending and mineralized structural corridor that incorporates both porphyry style copper-gold-molybdenum mineralization and associated high-grade gold-silver (base metal) vein systems. During the second half of 2021, exploration activities focused on six outcropping and grassroot targets generated by the Company.

For the three months and year ended December 31, 2021, the Company recognized a total of $2.2 million and $5 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.3 million and $0.8 million, respectively) as exploration and evaluation expense in the consolidated statement of operations in respect of the Guayabales Project, including option payments of $0.3 million and $1.4 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020, 2020 – $nil and $0.35 million, respectively). As at December 31, 2021, $0.1 million was included in accounts payable and accrued liabilities, representing the unpaid portion of required minimum option payment due in early 2022.

Drilling commenced at the Guayabales project in late 2021 and is expected to continue throughout 2022. In addition, the Company plans to continue with geological mapping, soil and rock sampling programs and a high-resolution IP survey on some of the remaining areas of the Guayabales Project not covered in 2021.

Option agreements:

Details of the two first option agreements are as follows:

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First Guayabales Option

On June 24, 2020, the Company entered into the First Guayabales Option to acquire 100 percent of the property covered within the agreement. The terms of the agreement are as follows:

Phase 1:

The Company must incur a minimum of $3 million of exploration and evaluation expenditures in respect of property within the First Guayabales Option and make total option payments of $2 million over a maximum four-year term ending on or before June 24, 2024 in order to proceed to Phase 2 of the agreement.

Phase 2:

To acquire a 90% interest in the property within the First Guayabales Option, the Company must incur a minimum of $10 million of incremental exploration and evaluation expenditures in respect of such property and make total option payments of $2 million payable in equal instalments of $0.2 million semiannually over a maximum six-year term, commencing after the end of Phase 1.

Phase 3:

To acquire the remaining 10% interest in the property within the First Guayabales Option, the Company has the following options:

provide notice that the Company has elected to pay a 1% NSR commencing on the first calendar day of each month after 85% of the processing plant capacity has been achieved in exchange for the remaining 10% interest;
acquire 0.625% each year to a total of 10% by paying $0.25 million semi-annually, commencing at the end of Phase 2, to a total of $8 million in lieu of the NSR; or
pay a one-time payment of $8 million in lieu of the NSR.

In addition, the Company is required to fund and complete all development and construction activities to bring the project to commercial production.

Summary:

The following is a summary of the option payments and exploration expenditures required to acquire 100% of the property under the First Guayabales Option:

			Option	Exploration
			Payments	Expenditures	Total
			$	$	$
Total Phase	1	June 24, 2020 – June 24, 2024	2,000,000	3,000,000	5,000,000
Total Phase	2	June 24, 2024 – June 24, 2030	2,000,000	10,000,000	12,000,000
Total Phase	3	To commercialproduction	8,000,0001	ꟷ	8,000,000
			12,000,000	13,000,000	25,000,000

1 Based on the assumption that the Company does not elect to pay the NSR.

The Company may terminate the agreement at any time, upon notification to the optionor.

For the three months and year ended December 31, 2021, the Company recognized a total of $0.8 million and $2.5 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.3 million and $0.8 million, respectively) as exploration and evaluation expense in the consolidated statement of operations in respect of Phase I of the First Guayabales Option, including option payments of $nil and $0.4 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $nil and $0.35 million, respectively).

As at December 31, 2021, and from inception of the agreement, the Company has recognized a total of $2.6 million as exploration and evaluation expenditures in respect of the minimum expenditures required

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under the Phase I of the agreement, and has made total option payments of $0.75 million required within the agreement.

Second Guayabales Option

On January 4, 2021, the Company entered into the Second Guayabales Option. The terms of the agreement are as follows:

Phase 1:

Phase 2:

Phase 3:

Upon completion of Phase 2, the Company is required to pay a total of $4.3 million over a two-year period ending on January 2, 2030 to acquire 100 percent of the property within the Second Guayabales Option.

The exploration and development program for the Second Guayabales Option, including the amount of expenditures, is at the sole discretion of the Company during the term of the agreement.

Summary:

The following is a summary of the option payments to acquire the property under the Second Guayabales Option:

Guayabales	Option:
		$
Total Phase	1	1,750,000
Total Phase	2	1,000,000
Total Phase	3	4,300,000
		7,050,000

The Company may terminate the agreement at any time, upon notification to the optionor.

For the three months and year ended December 31, 2021, the Company recognized a total of $0.7 million and $1.8 million, respectively (period from February 11, 2020 to December 31, 2020 – $nil) as exploration and evaluation expense in the consolidated statement of operations in respect of Phase I of the Second Guayabales Option, including option payments of $0.3 million and $1 million, respectively (period from February 11, 2020 to December 31, 2020 – $nil).

San Antonio Project

On July 9, 2020, the Company entered into an option agreement with a third party to acquire the San Antonio Project. The San Antonio Project is located approximately 80km south of Medellín and is situated in the Middle Cauca belt in the Department of Caldas, Colombia. The San Antonio Project is comprised of one exploration title totalling 1,664 hectares and fifteen exploration applications totalling 3,065 hectares.

The option agreement provides the Company the right to explore, develop and acquire 100 percent of the property over a seven-year term, expiring on July 9, 2027, for total payments over the term of the agreement of $2.5 million. The Company has the option to pay an additional $2.5 million to the optionor upon reaching commercial production in exchange for the 1.5% NSR.

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Option payments under the agreement are as follows:

Option payments under the agreement are as follows:
	$
August 8, 2020	30,000
July 9, 2021	50,000
July 9, 2022	100,000
July 9, 2023	150,000
July 9, 2024	250,000
July 9, 2025	420,000
July 9, 2026	750,000
July 9, 2027	750,000
	2,500,000
Upon reaching commercial production	2,500,000
	5,000,000

The Company may terminate the agreement at any time, upon notification to the optionor. In addition, the Company may acquire 100 percent of the property at any time prior to the expiration of the agreement by paying all remaining amounts under the agreement.

The exploration and development program, including the amount of expenditures, is at the sole discretion of the Company during the term of the agreement.

Exploration activities:

During 2021, the Company initiated a maiden 5,000-meter drill program on the San Antonio Project. The aim of the program was to initially determine the near surface geometry of three targets and once defined, begin testing the potential for multiple, concealed, mineralized porphyry and breccia bodies within an area measuring approximately 2 x 1 kilometers (“km”). Surface work in this area had outlined anomalous gold and molybdenum soil values in association with altered porphyry intrusive bodies, porphyry-related stockwork quartz veining, hydrothermal breccias and polymetallic veins. To date, the Company has made a significant grassroot discovery at the Pound target, one of the three targets generated at the San Antonio project.

For the three months and year ended December 31, 2021, the Company recognized a total of $0.1 million and $2 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.2 million and $0.3 million, respectively) as exploration and evaluation expense in the consolidated statement of operations and comprehensive loss in respect of the San Antonio Project.

In 2022, the Company plans to conduct an IP survey to further delineate the drill targets. Once completed and analyzed, the Company plans to conduct follow up drilling.

SELECTED ANNUAL CONSOLIDATED FINANCIAL INFORMATION

The Company’s presentation and functional currency are U.S. dollars.

	December 31,	December 31,
As at	2021	2020
	$	$
Consolidated Financial Position
Cash and cash equivalents	16,308,805	1,717,385
Total assets	17,265,987	2,337,576
Working capital1	15,078,380	1,817,977
Equity	15,578,298	1,893,041

1 Working capital is current assets less current liabilities.

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	Three months ended December 31 Year and period ended December 31
	2021 2020 2021 20201
Consolidated Operating Results Exploration and evaluation expense Loss on revaluation of warrants liability Net loss and comprehensive loss Basic and diluted loss per common share	$ $ $ $ (2,307,528) (466,971) (7,014,792) (1,129,234) ꟷ ꟷ (5,087,559) (192,353) (3,628,004 (786,745) (17,306,513) (1,700,470) (0.08) (0.05) (0.47) (0.13)
Consolidated Cash Flow Operating cash outflow Financing cash inflow Net cash inflow, including foreign exchange effect on cash balances	(3,291,525) (1,178,597) (7,867,408) (1,607,337) 6,692 2,315,660 23,069,791 3,362,255 (3,406,587) 1,091,720 14,591,420 1,717,385

1 For the period from February 11, 2020

OVERVIEW OF CONSOLIDATED FINANCIAL RESULTS

The Company’s results for three months and year ended December 31, 2021 was net loss of $3.6 million ($0.08 per share) and $17.3 million ($0.47 per share), respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.8 million ($0.05 per share) and $1.7 million ($0.13 per share), respectively) is mainly a result of the following:

Exploration expenditures for the three months and year ended December 31, 2021 were $2.3 million and $7 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.4 million and $1.1 million, respectively), including option payments totalling $0.3 million and $1.45 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $nil and $0.4 million, respectively).
General and administrative expense for the three months and year ended December 31, 2021 was $1.3 million and $3.2 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.2 million and $0.3 million, respectively), including:
Compensation costs related to share-based payments for the three months and year ended December 31, 2021 of $0.5 million and $1.1 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.07 million and $0.09 million, respectively).
Share-based payments include 1,548,750 options and 2,488,750 options granted, respectively, during the three months and year ended December 31, 2021 (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – 920,000 options and 2,220,000 options, respectively) with average grant date fair values of $2.84 and $2.48 per share, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $0.31 per share and $0.18 per share, respectively).
RTO Transaction and public listing expense of $1.5 million.
Revaluation of warrants liability for the three months and year ended December 31, 2021 was $nil and a $5.1 million loss, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – $nil and $0.2 million, respectively).

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SUMMARY OF CONSOLIDATED QUARTERLY RESULTS

The following table sets forth selected consolidated financial information, prepared in accordance with IFRS, for each of the Company’s eight most recently completed quarters.

	Q4 2021	Q3 2021	Q2 2021	Q1 2021	Q4 2020	Q3 2020	Q2 2020	Q1 2020*
	$	$	$	$	$	$	$	$
Netincome (loss)	(3,628,004)	133,788	(11,719,806)	(2,092,492)	(786,745)	(366,288)	(547,437)	ꟷ
Basic and diluted income (loss) per share	(0.08)	0.003	(0.38)	(0.09)	(0.06)	(0.02)	(0.05)	ꟷ

From February 11, 2020, date of incorporation of Old CMI.

As the Company is currently in the exploration stage, variations in the quarterly results are mainly due to the exploration activities, the impact of fluctuation of exchange rates on cash balances and the revaluation of derivative instruments.

LIQUIDITY AND MANAGEMENT OF CAPITAL RESOURCES

The Company has no operating cash flow from a producing mine and therefore must utilise its current cash reserves and funds obtained from equity financing transactions, including the Offering (see “Business Transaction” in this MD&A) to fund its operating and exploration activities, including payments subject to exploration option agreements (see “Exploration Summary” in this MD&A).

The Company’s objectives in managing capital are to ensure the entity continues as a going concern and to achieve optimal returns for its stakeholders. In addition, the Company will continue to assess new properties and seek to acquire an interest in additional properties if it believes there is sufficient potential, if they fit within the Company’s overall strategic plan and if the Company has sufficient financial resources to do so. Management considers future capital requirements to sustain the future operation of the business, including current and new exploration program requirements, and assesses market conditions to determine when adjustments to the capital structure is appropriate.

For the year ended December 31, 2021, the Company raised $23.3 million (C$28.6 million) from the closing of the Offering (See the “Business Transaction” section in this MD&A) and the exercise of warrants and options (period from February 11, 2020 to December 31, 2020 – $3.1 million through private equity financing, including the exercise of warrants).

As at December 31, 2021, the Company’s cash and working capital position (current assets less current liabilities) was $16.3 million and $15.1 million, respectively (December 31, 2020 – $1.7 million and $1.8 million, respectively). The Company will utilize its working capital towards general operating activities and the advancement of its exploration programs, including its obligations under its exploration option agreements (see “Exploration Summary” in this MD&A).

Cash Flow Items

The following is a summary of the Company’s cash flows for the three months and year ended December 31, 2021 and 2020[1] :

	Three months ended December 31 Year and period ended December 31
	2021 2020 2021 20201
Operating activities Financing activities Investing activities	$ $ $ $ (3,291,525) (1,178,597) (7,867,408) (1,607,338) 6,692 2,315,660 23,069,791 3,362,256 (50,074) (49,992) (234,030) (52,923)
Foreign exchange on cash	(3,334,907) 1,087,071 14,968,353 1,701,995 (71,680) 4,949 (376,933) 15,390
Net change in cash balances	(3,406,587) 1,092,020 14,591,420 1,717,385

1 For the period from February 11, 2020

Operating Activities

Operating cash outflow for the three months and year ended December 31, 2021 was $3.3 million and

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$7.9 million, respectively, compared to the $1.2 million and $1.6 million, respectively, for the three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020. The change is mainly due to the increase of exploration activities in 2021.

Financing Activities

Net cash inflow from financing activities for the three months and year ended December 31, 2021 was $nil and $23.1 million, respectively, compared to $2.3 million and $3.4 million, respectively, for the three months ended December 31, 2020 and the period from February 11, 2020 to December 31, 2020. The increase is due to the closing of the Offering in 2021 and the exercise of subscription warrants and finders’ warrants (See the “Business Transaction” section in this MD&A).

Investing Activities

Cash outflow for investing activities for the three months and year ended December 31, 2021 were $0.05 million and $0.2 million, respectively, compared to the $0.05 million for the three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 and relate to the acquisition of fixed assets.

EQUITY AND WARRANTS

Fully Diluted Shares

EQUITY AND WARRANTS Fully Diluted Shares
	December 31,	December 31,
As at	2021	2020
Shares issued	47,386,715	21,617,465
Stock options outstanding	3,798,750	2,120,000
	51,185,465	23,737,465

Share Capital

As at December 31, 2021, the Company had a total of 47,386,715 Common Shares resulting from the issuance of shares for the RTO Transaction, the Offering, private equity financing in 2020, including unit placements whereby both common shares and common share purchase warrants were issued, and the exercise of warrants and options.

Total proceeds raised for the year ended December 31, 2021 from the Offering was $23.2 million (C$28.5 million), including the exercise of warrants issued as part of the Offering. Proceeds from the Offering and unit placements in 2020 were allocated between shares and warrants issued on the residual fair value method within the unit using the Black-Scholes option pricing model to determine fair value for the warrants. See also the “Warrants” section of this MD&A.

Similarly, total financing costs of $0.5 million for the Offering, including the value of the Finders’ Units of $0.4 million, was allocated between the Subscription Shares and the Subscription Warrants, with $0.4 million recognized as a reduction of share capital and $0.1 million recognized as financing cost in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2021.

Warrants

For the year ended December 31, 2021 and during 2020, the Company had warrants denominated in Canadian dollars. Proceeds from unit placements are allocated between shares and warrants issued on the residual fair value method within the unit. Fair value for the warrants was determined using the BlackScholes option pricing model. See also the “Business Transaction” section of this MD&A.

Subscription Warrants were classified as derivative financial liabilities, presented as warrants liability on the consolidated statement of financial position and measured at fair value until the instruments were exercised or extinguished in the consolidated financial statements. Gains or losses arising from the revaluation of a Subscription Warrant on the date of exercise or on the financial reporting date was recognized in the consolidated statement of operations and comprehensive loss. Warrants issued and exercised in 2020 were accounted for in the same manner as Subscription Warrants.

The Finders’ Units are accounted for under IFRS 2 – Share-Based Payments (“IFRS 2”), as they were

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issued in exchange for services and therefore, the value allocated to the Finders’ Warrants are classified in warrants reserve, a component of contributed surplus, and are not subsequently revalued. The value of services received is determined to be the issue price of the Finders’ Units on the date of issue, May 20, 2021, and were allocated between Finders’ Shares and Finders’ Warrants on the residual fair value method within the unit. Fair value for the Finders’ Warrants was determined using the Black-Scholes option pricing model.

The issue date fair value on May 20, 2021 of the warrants liability in respect of the Subscription Warrants and the warrants reserve in respect of the Finders’ Warrants was $2.9 million and $0.1 million, respectively.

For the year ended December 31, 2021, 6,495,000 Subscription Warrants and 267,250 Finders’ Warrants were exercised, as a result of the Company exercising its right to accelerate the expiry date to August 9, 2021 and resulting in a total of $10.8 million (C$13.5 million) received by the Company. All remaining unexercised warrants expired. The fair value of the Subscription Warrants exercised was revalued to $8.0 million and transferred to contributed surplus. As at December 31, 2021, the balance of the warrants liability was $nil.

For the three months and year ended December 31, 2021, the Company recognized a derivative loss of $nil and $5.1 million, respectively (three months ended December 31, 2020 and period from February 11, 2020 to December 31, 2020 – derivative loss of $nil and $0.2 million, respectively) in respect of the revaluation of warrants classified within warrants liability.

Options

As at December 31, 2021, 3,798,750 (December 31, 2020 – 2,120,000) stock options were outstanding at an average exercise price of C$1.78 (December 31, 2020 – C$0.37), of which 753,335 (December 31, 2020 – nil) were exercisable. The exercise in full of the outstanding stock options would raise a total of approximately C$6.8 million. Options expire between 2022 and 2026. Management does not know when and how much will be collected from the exercise of such securities as this is dependent on the determination of the option holders and the market price of the Common Shares.

Outstanding Equity Data

As of April 7, 2022, the Company had 47,386,715 Common Shares and a total of 3,833,750 share options outstanding to purchase Common Shares. All Subscription Warrants and Finders’ Warrants have been exercised in 2021.

TRENDS AND RISKS THAT AFFECT THE COMPANY’S FINANCIAL CONDITION

Please see the “Market Trends” and “Risks and Uncertainties” sections of this MD&A for information regarding known trends, demands, commitments, events or uncertainties that are reasonably likely to have an effect on the Company’s business and industry and economic factors affecting the Company’s performance.

CONTRACTUAL OBLIGATIONS, COMMITMENTS AND OPTION AGREEMENTS

Contractual Obligations and Commitments

As at December 31, 2021, the Company had the following contractual commitments and obligations:

		Less than	2 – 3	4 – 5 Years	Greater than 5
	Total	1 Year	Years		Years
	$	$	$	$	$
Other lease commitments	29,239	29,239	ꟷ	ꟷ	ꟷ
Service contracts1	389,239	389,239	ꟷ	ꟷ	ꟷ
	418,478	418,478	ꟷ	ꟷ	ꟷ

1 Represents drilling and induced polarization (IP) contracts.

Option Agreements

The Company has the option to terminate its option agreements at any time without any financial consequences. Future expenditures are therefore dependent on the success of exploration and

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development programs and a decision by management to continue or exercise its option(s) for the relevant project and agreement.

As at December 31, 2021, the timing of expenditures, including option payments, under the Company’s option agreements are as follows:

		Less than	2 – 3	4 – 5 Years	Greater than 5
	Total	1 Year	Years		Years
	$	$	$	$	$
First Guayabales Option1	21,671,624	668,650	2,002,974	3,999,997	15,000,003
Second Guayabales Option2	6,126,434	76,434	500,000	500,000	5,050,000
San Antonio Option	4,920,000	100,000	400,000	1,170,000	3,250,000
Other Option agreements	1,772,735	ꟷ	1,772,735	ꟷ	ꟷ
	34,490,793	845,084	4,675,709	5,669,997	23,300,003

1 Based on the assumption that the Company does not elect to pay the NSR. Timing of remaining required exploration expenditures are estimated by management.

2 Excludes required minimum option payments as at December 31, 2021.

RELATED PARTY TRANSACTIONS

As at December 31, 2021, $nil (December 31, 2020 – $0.01 million) is payable to an employee in respect of expenses incurred on behalf of the Company in 2020.

FINANCIAL INSTRUMENTS AND RELATED RISKS

All financial instruments are required to be measured at fair value on initial recognition. The fair value is based on quoted market prices, unless the financial instruments are not traded in an active market. In this case, the fair value is determined by using valuation techniques like discounted cash flows, the Black-Scholes option pricing model or other valuation techniques. Measurement in subsequent periods depends on the classification of the financial instrument. A description of financial instruments and their fair value is included in the audited consolidated financial statements for the year ended December 31, 2021.

OFF-BALANCE SHEET ARRANGEMENTS

As of the date of this MD&A, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of the Company, including, without limitation, such considerations as liquidity and capital resources.

MARKET TRENDS

Global Financial Market Conditions

Events and conditions in the global financial markets, particularly over the last two years, continue to impact gold prices, commodity prices, interest rates and currency rates. These conditions, as well as market volatility, may have a positive or negative impact on the Company’s operating costs, project exploration expenditures and planning of the Company’s projects.

Gold Market

The Company’s economic assessment of its gold projects is impacted by the market-driven gold price. The gold market is affected by negative real interest rates over the near-to-medium term, continued sovereign debt risks, elevated geo-political risks, mine production and substantial above-ground reserves that can affect the price should a portion of these reserves be brought to market.

While many factors impact the valuation of gold, traditionally the key factors are actual and expected U.S. dollar value, global inflation rates, oil prices and interest rates.

The gold price has displayed considerable volatility in the last few years. Continued uncertainties in major markets, specifically in the U.S. and European countries, and increased trade tensions between the U.S. and China and heightened geo-political risks in Europe were the main driving forces in the demand and volatility for gold. The daily closing spot gold price during in 2021 was between $1,684 and $1,943 per ounce, for an average price in 2021 of $1,799 per ounce.

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Currency

The Company’s functional and reporting currency is the U.S. dollar. The key currencies to which the Company is exposed are the Canadian dollar and the Colombian peso, which have experienced volatility relative to the U.S. dollar over the last several years. Fluctuation of the Canadian dollar against the U.S. dollar has a direct impact on the Company as proceeds from equity financing are in Canadian dollars. However, the Company has mitigated the majority of this impact by converting a significant portion of proceeds received from the Offering to U.S. dollars and Colombian pesos. Fluctuation of the Colombian peso has a direct impact on the Company’s exploration and operating activities.

The Company expects to have significant U.S. dollar and Colombian peso requirements, mainly in relation to exploration activities, salaries and exploration option payments. As at December 31, 2021, the Company held $16.3 million in cash, of which $9.2 million was in U.S. dollars, $0.8 million was in Canadian dollars, and $6.3 million was in Colombian pesos. Purchases of additional Canadian dollars and Colombian pesos will be required to meet the Company’s obligations in local jurisdictions.

As at April 7, 2022, the Company held $12.2 million in cash, of which $6.6 million was in U.S. dollars, $0.4 million in Canadian dollars, and $5.2 million in Colombian pesos, representing approximately 54%, 3%, and 43%, respectively of total cash balances.

CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The determination of estimates requires the exercise of judgement based on various assumptions and other factors such as historical experience and current and expected economic conditions. Actual results could differ from those estimates.

Critical accounting estimates and assumptions as well as critical judgements in applying the Company’s accounting policies are detailed in Note 3 of the audited consolidated financial statements for the year ended December 31, 2021.

CHANGES IN ACCOUNTING POLICIES

Future Accounting Changes

The following revised standards and amendments, unless otherwise stated, are effective on or after January 1, 2022, with early adoption permitted, and have not been applied in preparing the consolidated financial statements. The Company does not plan to adopt any of these standards before they become effective.

IAS 1 – Presentation of Financial Statements

IAS 1, Presentation of Financial Statements (“IAS 1”) was amended to clarify the classification of liabilities between current and noncurrent to be based on the rights that exist at the end of the reporting period and that such classification is unaffected by the expectations of the entity or events after the reporting date. The changes must be applied retrospectively in accordance with IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”).

IAS 1 was also amended to help preparers in deciding which accounting policies to disclose in their financial statements.

These amendments are effective on or after January 1, 2023. The Company does not expect an impact to its consolidated financial statements on adoption.

IAS 16 – Property, Plant and Equipment

IAS 16, Property, Plant and Equipment (“IAS 16”) was amended to prohibit the deduction of proceeds from the sale of items produced from an item of property, plant and equipment while the entity is preparing the asset for its intended use. IAS 16 further clarifies that the financial performance of the asset is not relevant in the assessment of the technical and physical performance of the asset. The changes are effective on or after January 1, 2022.

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The Company does not expect an impact to its consolidated financial statements on adoption as the Company does not expect to be in the construction phase at the time of adoption.

INTERNAL CONTROL OVER FINANCIAL REPORTING AND DISCLOSURE CONTROLS AND PROCEDURES

The Company’s Chief Executive Officer and Chief Financial Officer are responsible for establishing and maintaining disclosure controls and procedures (“DC&P”) and internal controls over financial reporting, as those terms are defined in National Instrument 52-109 – Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) for the Company. The Company’s controls are based on the Committee of Sponsoring Organizations of the Treadway Commission (2013) framework.

There were no significant changes in the Company’s disclosure controls and procedures and internal control over financial reporting, or in other factors that could significantly affect those controls subsequent to the date the Chief Executive Officer and Chief Financial Officer completed their evaluation as of December 31, 2021, nor were there any significant deficiencies or material weaknesses in the Company’s internal controls identified requiring corrective actions.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures. Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2021, the Company’s disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by the Company in reports it files is recorded, processed, summarized and reported, within the appropriate time periods.

The Company’s management, including the Chief Executive Officer and the Chief Financial Officer, does not expect that its disclosure controls and internal controls over financial reporting will prevent or detect all errors and fraud. A cost-effective system of internal controls, no matter how well conceived or operated, can provide only reasonable, not absolute, assurance that the objectives of the internal controls over financial reporting are achieved.

EMERGING MARKET DISCLOSURE

Operations in an Emerging Market Jurisdiction

The Company’s mineral properties and principal business operations are located in a foreign jurisdiction, namely the Caldas department of Colombia. Operating in Colombia exposes the Company to various degrees of political, economic and other risks and uncertainties.

Board and Management Experience and Oversight

Key members of the Company’s management team and board of directors (the “Board”) have extensive experience running business operations in Colombia. Mr. Ari Sussman, the Executive Chairman of the Company, was Chief Executive Officer and a director of Continental Gold Inc. (“Continental Gold”), and Paul Begin, the Chief Financial Officer and Corporate Secretary of the Company, was Chief Financial Officer of Continental Gold, which was the largest gold mining company in Colombia and the first to successfully permit and construct a modern large-scale underground gold mine in the country. Continental Gold was a former Toronto Stock Exchange-listed issuer, from March 2010 until it was acquired by Zijin Mining Group Co., Ltd. in March 2020 for over $1.4 billion.

Mr. Ossma, the President and Chief Executive Officer of the Company, was the former Vice President, Legal of Continental Gold, and has over 20 years of legal experience in Colombian corporate, environmental, mining and energy law. As Vice President, Legal of Continental Gold, he oversaw the Colombian legal team and was responsible for all legal support efforts in the country.

Ms. García Botero, an independent director of the Company, is a resident of Colombia, and has worked in public finance, urban development, infrastructure, mining, energy, and public-private partnerships (PPPs) as an advisor or in various management positions at the National Planning Department, the Ministry of Finance, and the National Hydrocarbons Agency. From 2010 to 2012 she served as the Deputy Minister of Infrastructure at the Ministry of Transport (Colombia), and from 2012 to 2014, served as President of the National Mining Agency, Ministry of Mining and Energy (Colombia).

Ms. Ana Milena Vásquez, the Executive Vice-President of the Company, has extensive Colombian

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experience in mining, community and government affairs. Most recently, she held the position of Senior Vice-President of External Affairs and Sustainability at Continental Gold, leading the environmental, sustainability, communications and international standards programs.

Each of Messrs., Ken Thomas and Paul Murphy, independent directors of the Company, were directors of Continental Gold until the sale of the company to Zijin Mining Group Co., Ltd. in 2020. Mr. Ashwath Mehra is a seasoned executive with over 35 years’ experience in the mineral industry with significant exposure in Latin America.

The Board, as well as management and consultants, are actively involved in technical activities, risk assessments and progress reports in connection with the Company’s exploration activities. The Colombian-resident Board and management members work directly with local contractors in an operational capacity, and are familiar with the laws, business culture and standard practices in Colombia, are fluent in Spanish, and are experienced in dealing with Colombian government authorities, including with respect to mineral exploration licensing, maintenance, and operations.

Communication

While the reporting language of the head office of the Company is English, the primary operating language in Colombia is Spanish. The senior management team in Colombia and Ms. García Botero, are bilingual in English and Spanish, and Mr. Sussman is fluent in English and conversationally fluent in Spanish. The Company maintains open communication with its Colombian operations through its partially bilingual Board, such that there are no language barriers between the Company’s management and local operations.

The Company’s management communicates with its in-country operations through phone and video calls and conferences, in-country work, meetings, e-mails, and regular reporting procedures. In addition, Collective retained Lloreda Camacho & Co., a law firm based in Bogota, Colombia, as its legal advisors for all Colombian related matters. Professionals at Lloreda Camacho & Co. acting on behalf of Collective are bilingual in both English and Spanish.

Controls Relating to Corporate Structure Risk

The Company has implemented a system of corporate governance, internal controls over financial and disclosure controls and procedures that apply to the Company, the Company’s branch office (“Branch”) and its two indirect Colombian subsidiaries, Minerales Provenza S.A.S. and Minera Campana S.A.S (collectively, the “Colombian Subsidiaries”), which are overseen by the Board and implemented by senior management.

The relevant features of these systems include direct oversight over the Branch and the Colombian Subsidiaries’ operations by Omar Ossma, as the sole director of each of the Colombian Subsidiaries and who is also the President and Chief Executive Officer of the Company. Since the Company indirectly holds all of the issued and outstanding equity interests of legal entity that comprises the Branch and the Colombian Subsidiaries, the Company exercises effective control over the Branch and the board of each of the Colombian Subsidiaries, as well as its composition.

Executive management and the Board prepare and review the Colombian Subsidiaries’ financial reporting as part of preparing its consolidated financial reporting, and the Company’s independent auditors review the consolidated financial statements under the oversight of the Company’s Audit Committee.

Local Records Management

The minute books and corporate records of each of the Colombian Subsidiaries are maintained and held by the Company at Avenida El Poblado, Carrera 42 No. 3 Sur 81, Torre 1 Piso 15, Edificio Milla de Oro, Medellin, Colombia. Senior management control these records and the Board and management team have full access.

Strategic Direction

While the exploration operations of each of the Branch and the Company’s subsidiaries are managed locally, the Board is responsible for the overall stewardship of the Company and, as such, supervises the management of the business and affairs of the Company. More specifically, the Board is responsible

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for reviewing the strategic business plans and corporate objectives, and approving acquisitions, dispositions, investments, capital expenditures and other transactions and matters that are material to the Company including those of its material subsidiaries

Disclosure Controls and Procedures

The Company has a disclosure policy that establishes the protocol for the preparation, review and dissemination of information about the Company. This policy provides for multiple points of contact in the review of important disclosure matters, which includes input from Board members in Colombia.

CEO and CFO Certifications

In order for the Company’s Chief Executive Officer and Chief Financial Officer to be in a position to attest to the matters addressed in the quarterly and annual certifications required by NI 52-109, the Company has developed internal procedures and responsibilities throughout the organization for its regular periodic and special situation reporting, in order to provide assurances that information that may constitute material information will reach the appropriate individuals who review public documents and statements relating to the Company and its subsidiaries containing material information, is prepared with input from the responsible officers and employees, and is available for review by the Chief Executive Officer and Chief Financial Officer of the Company in a timely manner.

Managing Cultural Differences

Differences in cultures and practices between Canada and Colombia are addressed by the engagement of Colombian-resident Board and management members, and local advisors, who have deep operational experience with the mineral exploration industry in Colombia and are familiar with the local laws, business culture and standard practices, have local language proficiency, are experienced in working in Colombia and in dealing with the relevant government authorities and have experience and knowledge of the local banking systems and treasury requirements. In addition, all of the Company’s Board and management team members that are non-resident Colombians have been involved in the Colombian mineral exploration and development industry for over 10 years through their involvement with Continental Gold (as further described above), developing an understanding of the relevant cultural differences and helping in mitigating potential risks from cultural differences.

Transactions with Related Parties

The Company is subject to applicable Canadian securities law and accounting rules with respect to approval and disclosure of potential related party transactions and has procurement and other policies in place which it follows to mitigate risks associated with potential related party transactions. The Company may in the future transact with related parties from time to time, in which case such related party transactions may require disclosure in the consolidated financial statements of the Company and in accordance with applicable Canadian securities laws.

Controls Relating to Verification of Property Interests

The Company engaged a local team with broad experience in mining exploration in Colombia, as well as in legal, social, and environmental matters. The lead team in Colombia was previously successful in licensing, building, and putting into operation other mining projects in Colombia. This contributed to obtaining an understanding of the framework surrounding the good standing of the Company’s properties and assets, from a legal, social, and environmental perspective.

The lead team was tasked with the negotiation and acquisition of properties that comprise the San Antonio and Guayabales projects. The current President and Chief Executive Officer of the Company, Mr. Omar Ossma, who lead the negotiations and acquisitions of the Company’s current projects, is a licensed lawyer in Colombia, with more than 20 years of professional experience in Colombian corporate, environmental, mining and energy law, 15 of which have been dedicated to the mining and energy sectors. His knowledge of the legal framework of mineral properties and assets assisted the Company in negotiating and entering into legally binding agreements under Colombian law, ensuring the good standing of the Company´s rights over the acquired assets and properties.

The Company also retained an established and leading law firm based in Bogota, Colombia, as its legal advisors for all Colombian related matters, that is widely known for their mining practice. In addition to providing a wide array of legal services beginning from the date of incorporation of the Company’s

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Colombian subsidiaries, the law firm also prepared and delivered title opinions with respect to the Company’s current Colombian properties.

In addition, the Company retained two independent consulting firms specializing in the mining sector, with significant experience in social, engineering, environmental and other sustainability matters that prepared and delivered a due diligence report on the socio-economic and environmental conditions of the properties comprising the San Antonio Option, as well as the first and second Guayables options, and a baseline study report on the performance of certain socio-economic, health and safety measures in the property area.

License, Permitting and other Regulatory Approvals

Based on consultations with its local advisers and government authorities, the Company satisfied itself that it has obtained all required permits, licenses and other regulatory approvals to carry out its business in Colombia. The table set out below details which material permits, business licenses and other regulatory approvals are required for the Company to carry out its business operations in Colombia.

regulatory approvals are required for the Company to	carry out its business operations in Colombia.
Material permit, license and/or other regulatory approval required to conduct operations	Material permit, license and/or regulatory approval obtained by the Company
Operating as a company requires a Public commercial registry before the Chamber of Commerce. This registry also activates a Tax Registry.	Obtained.
Prospecting activities (all exploration excluding drilling) are free activities in Colombia, and require no permit, other than authorization for land access from private owner.	The Company generally negotiates land access permits in advance to its operations. Currently, the Company has all required land access permits for its current prospecting campaign.
Drilling activities require a valid mining right and/or mining title granted by the National Mining Authority.	The Company is conducting exploration activities on mining titles LH0071-17, 781-17, HI8-15231 and IIS-10401 which are validly granted mining titles.
Drilling activities will require authorization for land access from private owner.	The Company generally negotiates land access permits in advance to its operations. Currently, the Company has all required land access permits for its current drilling campaign.
Exploration activities are not subject to environmental license. However, if the activities require the use of natural renewable resources (such as water catchments, dumpings and timbering, amongst others) the Company will require a filing, and further permission, before the regional environmental corporation in the territory.	The Company has been granted water rights for its drilling campaign, both in San Antonio and Guayabales projects, and may also recur to purchase water in bulk to perform its drilling campaign.
Construction of a mining project, and its operation requires an environmental license granted by an environmental authority.	The Company is not currently in a position to advance either of its properties to the development and construction phase of a mining project, therefore it does not require an environmental license at this time.
Construction of a mining project, and its operation requires a work plan approved by the applicable mining authority.	The Company is not currently in a position to advance either of its properties to the development and construction phase of a mining project, therefore it does not require a work plan at this time.

RISKS AND UNCERTAINTIES

The business of the Company is subject to a variety of risks and uncertainties. Investment in Common Shares should be considered highly speculative and involves a high degree of risk due to the nature of the Company’s business and the present stage of development, production and exploration and the location of its properties in Colombia. Readers should carefully consider the risks disclosed in this MD&A, and the audited consolidated financial statements for the year ended December 31, 2021. These risk factors are not a definitive list of all risk factors associated with an investment in the Company or relating to the Company’s operations and any of these risk elements could have a material adverse

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effect on the business of the Company.

Nature of Mineral Exploration

Resource exploration and development is a speculative business and involves a high degree of risk which even a combination of experience, knowledge and careful evaluation may not be able to overcome. The properties in which the Company holds an interest are without a known mineral resource or reserve. Each of the proposed programs on the properties is an exploratory search for resources or additional resources. There is no assurance that commercial quantities of resources will be discovered. There is also no assurance that even if commercial quantities of resources are discovered, a mineral property will be brought into commercial production. The discovery of mineral deposits is dependent upon a number of factors, not the least of which is the technical skill of the exploration personnel involved. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, some of which are the particular attributes of the deposit, such as size, grade, ground conditions and proximity to infrastructure, community relations, metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital. There is no certainty that the expenditures made by the Company towards the search and evaluation of mineral deposits will result in discoveries of economic commercial quantities of ore.

Foreign Country Risk

The Company’s principal mineral properties are located in rural Colombia. Over the past 10 to 15 years, the Government of Colombia has made strides in improving the social, political, economic, legal and fiscal regimes. However, operations in Colombia are still subject to risk due to the potential for social, political, economic, legal, and fiscal instability. The government in Colombia faces ongoing problems including, but not limited to, unemployment and inequitable income distribution and unstable neighboring countries. The instability in neighboring countries could result in, but not limited to, an influx of immigrants which could result in a humanitarian crisis and/or increased illegal activities. Colombia is also home to a number of insurgency groups and large swaths of the countryside are under guerrilla influence. In addition, Colombia experiences narcotics-related violence, a prevalence of kidnapping, extortion and thefts and civil unrest in certain areas of the country. Such instability may require the Company to suspend operations on its properties. There is a risk that agreements with the police and/or army are required and cannot be reached on time or on terms that are acceptable to the Company, which could result in an increase in security threats or loss of control at the project site that could have a material adverse effect on the Company.

Although the Company is not presently aware of any circumstances or facts which may cause the following to occur, other risks may involve matters arising out of the evolving laws and policies in Colombia, any future imposition of special taxes or similar charges, as well as foreign exchange fluctuations and currency convertibility and controls, the unenforceability of contractual rights or the taking or nationalization of property without fair compensation, restrictions on the use of expatriates in the Company’s operations, renegotiation or nullification of existing concessions, licenses, permits and contracts, illegal mining, changes in taxation policies, or other matters.

The Government of Colombia reached a peace accord in 2016 with the country’s largest guerrilla group. The Government of Colombia also entered into and dissolved formal discussions with the country’s second largest guerrilla group due to their unwillingness to cease criminal and violent crimes. There is no certainty that the agreements will be adhered to by all of the members of the guerrilla groups or that a peace agreement will be ultimately reached with the country’s second largest guerrilla group. There is a risk that any peace agreement might contain new laws or change existing laws that could have a material adverse effect on the Company’s projects. Furthermore, the achievement of peace with the country’s guerrilla groups could create additional social or political instability in the immediate aftermath, which could have a material adverse effect on the Company.

Foreign Operations

The Company’s exploration operations are located in Colombia. Colombia’s legal and regulatory requirements in connection with companies conducting mineral exploration and mining activities, banking system and controls as well as local business culture and practices are different from those in Canada. The officers and directors of the Company must rely, to a great extent, on the Company’s Colombian management, legal counsel and local consultants retained by the Company in order to keep

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abreast of material legal, regulatory and governmental developments as they pertain to and affect the Company’s business operations, and to assist the Company with its governmental relations. The Company must rely, to some extent, on the members of management and the Board who have previous experience working and conducting business in Colombia to enhance its understanding of and appreciation for the local business culture and practices in Colombia. The Company also relies on the advice of local experts and professionals in connection with current and new regulations that develop in respect of banking, financing, and tax matters in Colombia. Any developments or changes in such legal, regulatory, or governmental requirements or in local business practices in Colombia are beyond the control of the Company and may adversely affect its business.

The Company also bears the risk that changes can occur to the Government of Colombia and a new government may void or change the laws and regulations that the Company is relying upon. Currently, there are no restrictions on the repatriation from Colombia of earnings to foreign entities and Colombia has never imposed such restrictions. However, there can be no assurance that restrictions on repatriation of earnings from Colombia will not be imposed in the future. Exchange control regulations require that any proceeds in foreign currency originated on exports of goods from Colombia (including minerals) be repatriated to Colombia. However, purchase of foreign currency is allowed through any Colombian authorized financial entities for purposes of payments to foreign suppliers, repayment of foreign debt, payment of dividends to foreign stockholders and other foreign expenses.

Due to its locations in Colombia, the Company depends in part upon the performance of the Colombian economy. As a result, the Company’s business, financial position and results of operations may be affected by the general conditions of the Colombian economy, price instabilities, currency fluctuations, inflation, interest rates, regulatory changes, taxation changes, social instabilities, political unrest and other developments in or affecting Colombia over which the Company does not have control. Because international investors’ reactions to the events occurring in one emerging market country sometimes appear to demonstrate a “contagion” effect in which an entire region or class of investment is disfavoured by international investors, Colombia could also be adversely affected by negative economic or financial developments in other emerging market countries.

Requirement for Future Financing

The Company has limited financial resources and has limited sources of operating cash flow. The Company will require additional funds to finance exploration and future acquisitions. The exploration and development of the various mineral properties in which the Company holds interests, and the acquisition of additional properties depend upon the Company’s ability to obtain financing through equity financings, joint ventures of projects, stream financing, debt financing or other means. The perception that security conditions in Colombia have not improved and the decline in the capital markets for the extractive industry could hinder the Company’s ability to access capital in a timely or cost-effective manner. Although the Company has been successful in raising funds as well as the filing of a base shelf prospectus for up to an aggregate total of C$100 million, there can be no assurance that the Company will be able to raise additional financing required or that such financing will be available on terms acceptable to the Company. Failure to obtain additional financing on a timely basis may result in delays or an indefinite postponement of exploration, development, or production on any or all of the Company’s properties, could cause the Company to reduce or terminate its operations or lose its interest in its properties and cease to continue as a going concern.

In addition, there can be no assurance that future financing can be obtained without substantial dilution to existing shareholders. The issuance of additional securities and the exercise of common share purchase warrants, stock options and other convertible securities will result in dilution of the equity interests of any persons who are or may become holders of Common Shares.

Property Interests

The ability of the Company to carry out successful mineral exploration, development and production activities will depend on a number of factors. The Company has a number of obligations with respect to acquiring and maintaining the Company’s interest in certain of its current properties. No guarantee can be given that the Company will be in a position to comply with all such conditions and obligations, or to require third parties to comply with their obligations with respect to such properties. Furthermore, while it is common practice that permits and licenses may be renewed, extended, or transferred into other forms of licenses appropriate for ongoing operations, no guarantee can be given that such renewal, extension or a transfer will be granted to the Company or, if they are granted, that the Company will be in a position to comply with all conditions that are imposed. Some of the Company’s interests are the

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subject of pending applications to register assignments, extend the term, and increase the area or to convert licenses to concession contracts and there is no assurance that such applications will be approved as submitted.

There is no assurance that the Company’s rights and foreign interests will not be revoked or significantly altered to the detriment of the Company.

No Assurance of Titles or Boundaries

The Company is not the registered holder of all of the licences or concessions that comprise its projects in Colombia. Some of the licences and concessions that comprise the Company’s projects in Colombia are registered in the names of certain third-party entities. The Company’s interest in the Colombia projects is partially derived from Option Agreements. Under the Option Agreements, third parties have agreed to transfer the licences and concessions that comprise such properties to the Company upon satisfaction of certain conditions including but not limited to the receipt of all of the option payments. There can be no assurance, however, that such transfers will be affected. Events may occur that would prevent the third-party entities from being able to transfer such licences and concessions to the Company. In addition, in the event of a dispute between the parties, the Company’s only recourse would be to commence legal action in Colombia. If the Company is required to commence legal proceedings, there is no assurance that the Company will succeed in such proceedings, and, therefore, may never obtain title to such properties.

Other parties may dispute title to any of the Company’s mineral properties or land titles, any of the Company’s properties may be subject to prior unregistered agreements, transfers or claims, and title may be affected by, among other things, undetected encumbrances or defects or governmental actions or errors. A successful challenge to the precise area and location of the Company’s projects could result in the Company being unable to operate on its properties as permitted or being unable to enforce its rights with respect to its properties.

Land Surface and Access Rights

The Company does not own any surface rights. There is a risk that the Company will not be able to purchase surface rights from third parties or on terms that are acceptable to the Company. Additionally, Colombia Law 1448/2011 compensates, with land restitution, communities that have been displaced as a result of political violence. In the event that the Company is impacted by application of Law 1448/2011, it has the right to begin an expropriation process available under Colombian law, although the process could take longer than expected. Although the Company does not expect the effects of Law 1448/2011 to impact the Company, there is a risk that land near or on the Company’s projects could be impacted, which could have a material adverse effect on the Company.

In order for the Company to conduct exploration including but not limited to surface reconnaissance work, mapping and drilling, it requires permission from third party owners of land. There is a risk that the Company will not be able to negotiate land access rights from third party landowners, which would have a material adverse effect on the Company’s exploration activities. Even though not a common practice, the Company may rely on judicial proceedings to obtain rights of way on third party land.

Artisanal Mining

The Company’s properties are located in Colombia in an area that has a long history of artisanal mining. A portion of the Company’s property include artisanal groups that are mining informally on a small-scale basis. The Company is committed to respecting their rights and to assist them in formalizing, however, there is no assurances that this process will be successful or that they will not oppose the Company’s exploration activities or potential future development. In addition, there is a risk that the number of informal miners could increase in the future resulting in a material adverse effect on the Company.

Community Relations

Maintaining a positive relationship with the communities in which the Company operates is critical to continuing successful exploration and development. There can be no assurances that the Company will be successful at managing these impacts. Community support for operations is a key component of a successful exploration or development project. Various international and national laws, codes, resolutions, conventions, guidelines, and other materials relating to corporate social responsibility (including rights with respect to health and safety and the environment) may also require government

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consultation with communities on a variety of issues affecting local stakeholders, including the approval of mining rights or permits. The Company may come under pressure in the jurisdictions in which it explores or develops to demonstrate that other stakeholders benefit and will continue to benefit from its commercial activities. Local stakeholders and other groups may oppose the Company’s current and future exploration, development, and operational activities through legal or administrative proceedings, protests, roadblocks or other forms of public expression against the Company’s activities. Opposition by such groups may have a negative impact on the Company’s reputation and its ability to receive necessary mining rights or permits. Opposition may also require the Company to modify its exploration and development plans or enter into agreements with local stakeholders or governments with respect to its projects. Any of these outcomes could have a material adverse effect on the Company’s business, financial condition, results of operations and Common Share price.

Minority Ethnic Groups

Various international and national laws, codes, resolutions, conventions, guidelines, and other materials relate to the rights of Minority Ethnic Groups. Many of these materials impose obligations on government to respect the rights of Minority Ethnic Groups. Some mandate that government consult with Minority Ethnic Groups regarding government actions which may affect Minority Ethnic Groups, including actions to approve or grant mining rights or permits. The obligations of government and private parties under the various international and national materials pertaining to Minority Ethnic Groups continue to evolve and be defined. The Company’s current or future operations are subject to a risk that one or more groups of Minority Ethnic Groups may oppose continued operation, further development, or new development on those projects or operations on which the Company holds an exploration right. Such opposition may be directed through legal or administrative proceedings or protests, roadblocks, public hearings or other forms of public expression against the Company or the owner/operator’s activities. Opposition by Minority Ethnic Groups to such activities may require modification of or preclude operation or development of projects or may require entering into agreements with Minority Ethnic Groups. Claims and protests of Minority Ethnic Groups may disrupt or delay activities of the owners/operators of the Company’s exploration assets.

Dependence on Key Management Employees

The Company’s exploration programs will depend on the business and technical expertise of key executives, including the directors of the Company and a small number of highly skilled and experienced executives and personnel. Due to the relatively small size of the Company, the loss of any of these individuals or the Company’s inability to attract and retain additional highly skilled employees may adversely affect its business and future operations. The Company does not have key man insurance in place with respect to any of these individuals.

Coronavirus (“COVID-19”)

On March 11, 2020, the World Health Organization declared the rapidly spreading COVID-19 outbreak a global pandemic. This pandemic has had a significant impact on the global economy including that of Colombia, where the Company operates, through restrictions put in place by the various levels of governments regarding travel, business operations and isolation orders to reduce the rate of spread of new infections. The Company has been closely monitoring developments in the COVID-19 outbreak since its incorporation and has implemented preventative measures to ensure the safety of our workforce and local communities. To date, there have been no significant outbreaks of COVID-19 at our properties and there have been no significant disruptions to current operations. The Company continues to manage and respond to COVID-19 within an internally constructed framework, along with recommendations of health authorities and local and national regulatory requirements.

Labour and Employment Matters

While the Company has good relations with its employees, these relations may be impacted by changes in labour laws which may be introduced by the relevant governmental authorities in jurisdictions in which the Company carries on business. Adverse changes in such legislation may have a material adverse effect on the Company’s business, results of operations and financial condition.

The Company’s workforce is not governed by a minority union or a cooperative agreement. Although labour relations with its employees have been good, there is no assurance that this will continue in the future or that employees will not attempt to organize in the future. Any significant disruption in labour arrangements could have a material adverse effect on the Company’s reputation and its ability to

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continue to operate.

Non-Governmental Organization Intervention

The Company’s relationship with the communities in which it operates is critical to ensure the future success of its existing operations. A number of non-governmental organizations are becoming increasingly active in Colombia as the security and safety in Colombia increases and the Government implements the peace accords. These organizations may create or inflame public unrest and anti-mining sentiment among the inhabitants in areas of mineral development. Such organizations have been involved, with financial assistance from various groups, in mobilizing sufficient local anti-mining sentiment to protest and even prevent the issuance of required permits for the development of mineral projects of other companies. While the Company is committed to operating in a socially responsible manner, there is no guarantee that the Company’s efforts in this respect will mitigate this potential risk.

Foreign Currency Fluctuations

The Company’s current and proposed exploration in Colombia render it subject to foreign currency fluctuations, which may materially affect its financial position and results. The Company’s reporting currency is the U.S. dollar, which is exposed to fluctuations against other currencies. In addition, the Company maintains cash accounts in Canadian dollars, U.S. dollars and Colombian pesos and has monetary assets and liabilities in U.S. and Canadian dollars and Colombian pesos. The important exchange rates for the Company are currently the rate between the U.S. dollar and the Colombian peso and the Canadian dollar and the U.S. dollar. While the Company is funding work in Colombia, the Company’s results of operations are subject to foreign currency fluctuation risks and such fluctuations may adversely affect the financial position and operating results of the Company. The Common Shares are traded on the TSXV, a Canadian stock exchange. Prior and future equity financings result in the generation of Canadian dollar proceeds to fund the Company’s activities, which are principally incurred in U.S. dollars or Colombian pesos. To the extent funds from such financings are maintained in Canadian dollars, the Company’s results can be significantly impacted by adverse changes in exchange rates between the Canadian dollar and the U.S. dollar and Colombian peso. From time to time, to partially mitigate transactional volatility in the U.S. dollar and Colombian peso, the Company may enter into foreign currency instruments in order to partially offset existing currency exposures.

Cybersecurity Risks

Cyber threats have evolved in severity, frequency and sophistication in recent years, and target entities are no longer primarily from the financial or retail sectors. The Company is reliant on the continuous and uninterrupted operations of its information technology (“IT”) systems. User access and security of all IT systems are critical elements to the operations of the Company. Protection against cyber security incidents and cloud security, and security of all of the Company’s IT systems, are critical to the operations of the Company. These IT systems could be subject to network disruptions caused by a variety of sources, including computer viruses, security breaches and cyber-attacks, as well as disruptions resulting from incidents such as cable cuts, damage to physical plants, natural disasters, terrorism, fire, power loss, vandalism and theft or other compromising of confidential or otherwise protected information. The Company's operations also depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as pre-emptive expenses to mitigate the risks of failures. Any of these and other events could result in IT system failures, delays and/or increase in capital expenses. The failure of IT systems or a component of information systems could, depending on the nature of any such failure, adversely impact the Company's reputation and results of operations. The Company stores all of its proprietary data on cloud servers including, but not limited to, financial records, drilling databases, technical information, legal information, licences and human resource records. There is no assurance that third parties will not illegally access these records which could have a material adverse effect on the Company.

Social Media

As a result of the increased usage and the speed and global reach of social media and other web-based tools used to generate, publish, and discuss user-generated content and to connect with other users, companies today are at much greater risk of losing control over how they are perceived in the marketplace. Damage to reputation can be the result of the actual or perceived occurrence of any number of events, and could include any negative publicity (for example, with respect to handling of environmental matters or the Company’s dealings with community groups), whether true or not. The Company places a great emphasis on protecting its image and reputation, but the Company does not

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ultimately have direct control over how it is perceived by others. Reputation loss may lead to increased challenges in developing and maintaining community relations, decreased investor confidence and an impediment to overall ability to advance its projects, thereby having a material adverse impact on financial performance, cash flows and growth prospects.

Health and Safety Risk

Mining and exploration, like many other extractive natural resource industries, is subject to potential risks and liabilities due to accidents that could result in serious injury or death. The impact of such accidents could affect the profitability of the operations, cause an interruption to operations and development, lead to a loss of licenses, affect the reputation of the Company and its ability to obtain further licenses, damage community relations and reduce the perceived appeal of the Company as an employer. The Company has limited procedures in place to manage health and safety protocols to reduce the risk of occurrence and the severity of any accident and plans to invest time and resources in the future to enhance health and safety at all operations.

The Company has limited insurance policies in place to cover some accidents and regularly monitors the adequacy of such policies; however, not all risks are covered by insurance policies due to either coverage not being available or not being available at commercially reasonable prices.

Limited Operating History

The Company has no history of generating profits. The Company expects to continue to incur losses unless and until such time as it develops its properties and commences operations on its properties. The development of the properties will require the commitment of substantial financial resources. The amount and timing of expenditures will depend on a number of factors, some of which are beyond the Company’s control, including the progress of ongoing exploration, studies and development, the results of consultant analysis and recommendations, the rate at which operating losses are incurred and the execution of any joint venture agreements with strategic parties, if any. There can be no assurance that the Company will generate operating revenues or profits in the future.

Special Skill and Knowledge

Various aspects of the Company’s business require specialized skills and knowledge. Such skills and knowledge include the areas of permitting, geology, drilling, metallurgy, logistical planning and implementation of exploration and development programs as well as finance and accounting. The Company has been able to recruit and retain employees and consultants with the necessary skills and knowledge. The Company believes it will continue to be able to do so; however, no assurance can be made in that regard.

Environmental and Other Regulatory Requirements

All phases of the Company’s operations are subject to environmental regulation (including environmental impact assessments and permitting). Environmental legislation and international standards are continually 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 have been a number of recent regulatory changes in Colombia and the Company expects additional regulatory changes, new interpretations and possibly enhanced enforcement to occur in the future. There is no assurance that the Company can or will be able to meet all standards on time, which could adversely affect the Company’s business, financial condition or operations.

Environmental hazards may exist on the properties in which the Company holds interests which are unknown to the Company at present, and which have been caused by artisanal miners or previous or existing owners or operators of the properties.

Failure to comply with applicable laws, regulations, permitting and zoning requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations or in the exploration, development or production of mineral properties may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Amendments to current laws,

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regulations and permits governing operations and activities of mining and exploration companies, or more stringent implementation of existing laws, could have a material adverse impact on the Company and cause an increase in exploration expenses or capital expenditures or require abandonment or delays in the development of new exploration properties.

It is not possible for the Company to accurately predict changes in laws or policy or the extent to which any such developments or changes may have a material adverse effect on the Company's operations. Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights applications and tenure could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners with carried or other interests. The occurrence of any of these various factors and uncertainties cannot be accurately predicted and could have an adverse effect on the properties, business, operations, or financial condition of the Company. In addition, in the event of a dispute arising from foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdiction of courts in Canada.

The Company cannot give any assurances that breaches of environmental laws (whether inadvertent or not) or environmental pollution will not materially or adversely affect its financial condition. There is no assurance that future changes to environmental regulation, if any, will not adversely affect the Company.

In the future, the Company may require, from time to time, various approvals including, but not limited to, the approval from the National Environmental Licensing Authority (ANLA in Spanish) or the regional environmental authority for environmental permits. There is no assurance that the Company will receive the various approvals or receive them within a reasonable time period.

Control of the Corporation

Mr. Ari Sussman, the Executive Chairman and a director of the Corporation, is also the principal shareholder of the Corporation. Mr. Sussman owns or controls, directly or indirectly, 10,490,000 Common Shares representing approximately 22.2% of the issued and outstanding Common Shares. By virtue of his status as principal shareholder of the Corporation, and by being an executive officer and a director of the Corporation, Mr. Sussman has the power to exercise significant influence over all matters requiring shareholder approval, including the election of directors, amendments to the Corporation’s articles and by-laws, mergers, business combinations and the sale of substantially all of the Corporation’s assets. As a result, the Corporation could be prevented from entering into transactions that could be beneficial to the Corporation or its other shareholders, and third parties could be discouraged from making a take-over bid. In addition, sales by Mr. Sussman of a substantial number of Common Shares could cause the market price of the Common Shares to decline.

Investors’ Ability to Exercise Statutory Rights and Remedies under Canadian Securities Laws

The Corporation is incorporated under the laws of the Province of Ontario. However, the subsidiaries of the Corporation are organized under the laws of jurisdictions outside of Canada, in particular Bermuda and Colombia, and certain of the officers and directors of the Corporation reside outside of Canada. This may limit an investor’s ability to exercise statutory rights and remedies under Canadian laws. In particular, a Canadian court may determine that it does not have jurisdiction over a claim by an investor against one of the Corporation’s subsidiaries and/or its officers and directors, or that another international jurisdiction is the more convenient forum to adjudicate the claim.

Difficulty in Enforcement of Judgments

The Corporation has subsidiaries incorporated in Bermuda and Colombia. Certain directors and officers of the Corporation reside outside of Canada and substantially all of the assets of these persons are located outside of Canada. It may not be possible for shareholders to effect service of process against the Corporation’s directors and officers who are not resident in Canada. In the event a judgment is obtained in Canada against one or more of the directors or officers of the Corporation for violations of Canadian securities laws or otherwise, it may not be possible to enforce such judgment against those directors and officers not resident in Canada. Additionally, it may be difficult for an investor, or any other person or entity, to assert Canadian securities law claims or otherwise in original actions instituted in Bermuda or Colombia. Courts in these jurisdictions may refuse to hear a claim based on a violation of Canadian securities laws or otherwise on the grounds that such jurisdiction is not the most appropriate forum to bring such a claim. Even if a court in an international jurisdiction agrees to hear a claim, it may

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determine that the local law, and not Canadian law, is applicable to the claim. If Canadian law is found to be applicable, the content of applicable Canadian law must be proven as a fact, which can be a timeconsuming and costly process. Certain matters of procedure will also be governed by the law in the relevant international jurisdiction.

Negative Operating Cash Flow

To date the Corporation has recorded no operating cash flow and the Corporation has not commenced development or commercial production on any property. There can be no assurance that significant losses will not occur in the near future or that the Corporation will be profitable in the future. The Corporation’s operating expenses and capital expenditures may increase in subsequent years as consultants, personnel and equipment associated with advancing exploration, development and commercial production of the Corporation’s properties. The Corporation expects to continue to incur losses unless and until such time as it enters into commercial production and generates sufficient revenues to fund its continuing operations. The development of the Corporation’s properties will require the commitment of substantial resources to conduct time-consuming exploration and development. There can be no assurance that the Corporation will ever generate positive operating cash flow or achieve profitability.

Compliance with Anti-Corruption Laws and ESTMA

The Company is subject to various anti-corruption laws and regulations including, but not limited to, the Canadian Corruption of Foreign Public Officials Act. In general, these laws prohibit a company and its employees and intermediaries from bribing or making other prohibited payments to foreign officials or other persons to obtain or retain business or gain some other business advantage. The Company’s primary operations are located in Colombia and, according to Transparency International, Colombia is perceived as having fairly high levels of corruption relative to Canada. The Company cannot predict the nature, scope or effect of future regulatory requirements to which its operations might be subject or the manner in which existing laws might be administered or interpreted.

Failure to comply with the applicable legislation and other similar foreign laws could expose the Company and its senior management to civil and/or criminal penalties, other sanctions and remedial measures, legal expenses and reputational damage, all of which could have a material adverse effect on the Company’s business, financial condition and results of operations. Likewise, any investigation of any potential violations of the applicable anti-corruption legislation by Canadian or foreign authorities could also have an adverse impact on the Company’s business, financial condition and results of operations, as well as on the market price of the Common Shares. As a consequence of these legal and regulatory requirements, the Company instituted policies with regard to its anti-corruption policies. There can be no assurance or guarantee that such efforts have been and will be completely effective in ensuring the Company’s compliance, and the compliance of its employees, consultants, contractors and other agents, with all applicable anti-corruption laws.

In addition, the Canadian Extractive Sector Transparency Measures Act (“ESTMA”), which became effective June 1, 2015, requires public disclosure of payments to governments by mining and oil and gas companies engaged in the commercial development of oil, gas and minerals who are either publicly listed in Canada or with business or assets in Canada. Commencing in 2017, mandatory annual reporting is required for extractive companies with respect to payments made to foreign and domestic governments at all levels, including entities established by two or more governments. ESTMA requires reporting on the payments of any taxes, royalties, fees, production entitlements, bonuses, dividends, infrastructure improvement payments, and any other prescribed payment over C$100,000. Failure to report, false reporting or structuring payments to avoid reporting may result in fines of up to C$250,000 (which may be concurrent). If the Company becomes subject to an enforcement action or is in violation of ESTMA, this may result in significant penalties, fines and/or sanctions, which may have a material adverse effect on the Company’s reputation. The Company will be required to comply with ESTMA reporting requirements.

Insurance and Uninsurable Risks

Exploration, development and production operations on mineral properties involve numerous risks including, but not limited to, unexpected or unusual geological operating conditions, rock bursts, caveins, fires, floods, landslides, earthquakes and other environmental occurrences, risks relating to the storage and shipment of precious metal concentrates or doré bars, and political and social instability. Such occurrences could result in damage to mineral properties, damage to underground development,

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damage to facilities, personal injury or death, environmental damage to the Company’s properties or the properties of others, delays in the ability to undertake exploration and development, monetary losses and possible legal liability. Should such liabilities arise, they could reduce or eliminate future profitability and result in increasing costs and a decline in the value of the securities of the Company.

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

Government Regulation

The mineral exploration, mining, processing, and development activities of the Company are subject to various laws and regulations governing prospecting, exploration, development, production, taxes, labour standards and occupational health, mine safety, toxic substances, land use, water use, waste disposal, land claims of local people, mine development, and other matters. Although the Company's exploration activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail exploration. Amendments to current laws and regulations governing operations and activities of exploration, or more stringent implementation thereof could have an adverse impact on the Company.

The Company’s mineral exploration activities in Colombia may be adversely affected in varying degrees by changing government regulations relating to the mining industry or shifts in political conditions that increase royalties or the costs related to the Company’s activities or maintaining its properties. Operations may also be affected in varying degrees by government regulations with respect to restrictions on production, price controls, government-imposed royalties, claim fees, export controls, income taxes, and expropriation of property, environmental legislation and project safety. The effect of these factors cannot be accurately predicted. Although the Company’s exploration are currently carried out in material compliance with all applicable rules and regulations, no assurance can be given that new rules and regulations will not be enacted or that existing rules and regulations will not be applied in a manner which could limit or curtail exploration.

Furthermore, any shift in political attitudes, or amendments to current laws and regulations governing operations and activities of exploration or more stringent implementation thereof are beyond the control of the Company and could have a substantial adverse impact on the Company.

Market Price of Common Shares

Securities of mineral exploration, development and production companies have experienced substantial volatility in the past, often based on factors unrelated to the financial performance or prospects of the companies involved. These factors include macroeconomic developments in North America and globally, and market perceptions of the attractiveness of particular industries. The price of the Common Shares is also likely to be significantly affected by short-term changes in precious and base metal mineral prices or the Company’s financial condition or results of operations as reflected in its quarterly and annual earnings reports. Other risks unrelated to the Company’s performance that may have an effect on the price of the Common Shares include the following: regulatory or economic changes affecting the Company’s operations; variations in the Company’s operating results; developments in the Company’s business or its competitors; the extent of analytical coverage available to investors concerning the Company’s business may be limited if investment banks with research capabilities do not follow the Company’s securities; lessening in trading volume and general market interest in the Company’s securities may affect an investor’s ability to trade significant numbers of Common Shares; changes in market sentiment towards the Common Shares; the size of the Company’s public float may limit the ability of some institutions to invest in the Company's securities; and a substantial decline in the price of the Common Shares that persists for a significant period of time could cause the Company’s securities to be delisted from the exchange on which they trade, further reducing market liquidity.

There can be no assurance that an active market for the Common Shares will be sustained. Investors

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should be aware that the value of the Common Shares may be volatile, and investors may, on disposing of the Common Shares, realize less than their original investment or may lose their entire investment.

The Company’s operating results and prospects from time to time may be below the expectations of market analysts and investors. In addition, stock markets from time to time suffer significant price and volume fluctuations that affect the market prices of the securities listed thereon and which may be unrelated to the Company’s operating performance. Any of these events could result in a decline in the market price of the Common Shares. The Common Shares may, therefore, not be suitable as a shortterm investment. In addition, the market price of the Common Shares may not reflect the underlying value of the Company’s net assets. The price at which the Common Shares will be traded and the price at which investors may realize their shares are influenced by a large number of factors, some specific to the Company and its proposed operations, and some which may affect the business and geographic sectors in which the Company operates. Such factors could also include the performance of the Company’s operations, large purchases or sales of the Common Shares, liquidity or the absence of liquidity in the Common Shares, legislative or regulatory changes relating to the business of the Company and general economic conditions.

As a result of any of these factors, the market price of the Common Shares at any given point in time may not accurately reflect the Company’s long-term value. Securities class action litigation often has been brought against companies following periods of volatility in the market price of their securities. The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and damages and divert management’s attention and resources.

Dividend Policy

No dividends on the shares of the Company have been paid by the Company to date. Payment of any future dividends will be at the discretion of the Board after taking into account many factors, including the Company's operating results, financial condition and current and anticipated cash needs. At this time, the Company has no source of cash flow and anticipates using all available cash resources towards its stated business objectives and retaining all earnings, if any, to finance its business operations.

Future Sales of Common Shares by Existing Shareholders

Sales of a large number of Common Shares in the public markets, or the potential for such sales, could decrease the trading price of the Common Shares and could impair the Company’s ability to raise capital through future sales of Common Shares. In addition, shareholders of the Company who have an investment profit in the Common Shares that they own may seek to liquidate their holdings, which could decrease the trading price of the Common Shares and could also impair the Company’s ability to raise capital through future sales of Common Shares.

Litigation Risk

All industries, including the mining industry, are subject to legal claims, with and without merit. Defense and settlement costs of legal claims can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation and dispute resolution process, the litigation process could take away from management time and efforts and the resolution of any particular legal proceeding to which the Company may become subject could have a material adverse effect on the Company’s financial position, results of operations or the Company’s property development.

Seizure or Expropriation of Assets

Pursuant to Article 58 of the Colombian constitution, the Government of Colombia can exercise its eminent domain powers in respect of the Company’s assets in the event such action is required to protect public interests. According to Law 388 of 1997, eminent domain powers may be exercised through: (i) an ordinary expropriation proceeding (expropiacion ordinaria), (ii) an administrative expropriation (expropiacion administrativa) or (iii) an expropriation for war reasons (expropiacion en caso de guerra). In all cases, the Company would be entitled to a fair indemnification for expropriated assets. However, indemnification may be paid in some cases years after the asset is effectively expropriated. Furthermore, the indemnification may be lower than the price for which the expropriated asset could be sold in a free market sale or the value of the asset as part of an ongoing business.

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Accounting Policies and Internal Controls

The Company prepares its financial reports in accordance with IFRS as issued by the IASB. In preparing financial reports, management may need to rely upon assumptions, make estimates or use their best judgment in determining the financial condition of the Company. Significant accounting policies are described in more detail in the Company’s annual consolidated financial statements. The Company has implemented and continues to assess its internal control systems for financial reporting in order to have a reasonable level of assurance that financial transactions are properly authorized, assets are safeguarded against unauthorized or improper use and transactions are properly recorded and reported. Although the Company believes its financial reporting and annual consolidated financial statements are prepared with reasonable safeguards and that all accounting policies are applied correctly to ensure reliability of the information, the Company continues to be in a start-up phase and internal control processes are still maturing.

Conflicts of Interest

Certain directors and officers of the Company are also directors, officers and/or shareholders of other companies that are similarly engaged in the business of natural resource exploration, development, and production. Such associations may give rise to conflicts of interest from time to time. The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company and to disclose any interest which they may have in any project or opportunity of the Company. If a conflict of interest arises at a meeting of the Board, any director in a conflict is required under the Business Corporations Act (Ontario) and the Company’s by-laws to disclose his/her interest.

Competition

The Company may compete with other exploration companies which may have greater financial resources and technical abilities for the acquisition of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees. The Company’s ability to increase the number of properties that it holds in the future will depend not only on its ability to explore and develop its present properties, but also on its ability to select, acquire and develop suitable properties or prospects.

Differing Interpretations in Tax Regimes in Foreign Jurisdictions

Tax regimes in foreign jurisdictions may be subject to sudden changes. The Company’s interpretation of taxation law where it operates and as applied to its transactions and activities may be different than that of applicable tax authorities. As a result, tax treatment of certain operations, actions or transactions may be challenged and reassessed by applicable tax authorities, which could result in adverse tax consequences for the Company, including additional taxes, penalties, or interest. See also “Risks of the Business – Bermuda Legal Matters - The Company May Become Subject to Taxes in Bermuda”.

Tax Matters

The Company is subject to income taxes and other taxes in a variety of jurisdictions and the Company’s tax structure is subject to review by both Canadian and foreign taxation authorities. The Company’s taxes are affected by a number of factors, some of which are outside of its control, including the application and interpretation of the relevant tax laws and treaties. If the Company’s filing position were to be challenged for whatever reason, this could have a material adverse effect on the Company’s business, results of operations and financial condition.

Foreign Subsidiaries

The Company conducts certain of its operations through foreign subsidiaries and some of its assets are held in such entities. Any limitation on the transfer of cash or other assets between the Company and such entities, or among such entities, could restrict the Company’s ability to fund its operations efficiently. Any such limitations, or the perception that such limitations may exist now or in the future, could have an adverse impact on the Company’s valuation and stock price.

Unknown Liabilities in Connection with Acquisitions

As part of the Company’s acquisitions, the Company has assumed certain liabilities and risks. While the Company conducted due diligence in connection with such acquisitions, there may be liabilities or risks

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that the Company failed, or was unable, to discover in the course of performing the due diligence investigations or for which the Company was not indemnified. Any such liabilities, individually or in the aggregate, could have a material adverse effect on the Company’s financial position and results of operations.

Acquisitions and Integration

From time to time, it can be expected that the Company will examine opportunities to acquire additional exploration and/or mining assets and businesses. Any acquisition that the Company may choose to complete may be of a significant size, may change the scale of the Company’s business and operations, and may expose the Company to new geographic, political, social, operating, financial and geological risks. The Company’s success in its acquisition activities depends upon its ability to identify suitable acquisition candidates, negotiate acceptable terms for any such acquisition, and integrate the acquired operations successfully with those of the Company. Any acquisition would typically be accompanied by risks. If the Company chooses to raise debt capital to finance any such acquisitions, the Company’s leverage will be increased, along with potential additional performance and covenant requirements which may increase the risk of default or reduced capital. If the Company chooses to use equity as consideration for such acquisitions, existing shareholders may suffer dilution. Alternatively, the Company may choose to finance any such acquisitions with its existing resources. There can be no assurance that the Company would be successful in overcoming these risks or any other problems encountered in connection with such acquisitions.

Enforcement of Legal Rights

The Company’s material subsidiaries are organized under the laws of foreign jurisdictions and certain of the Company’s directors, management personnel and experts are located in foreign jurisdictions. Given that the Company’s material assets and certain of its directors, management personnel and experts are located outside of Canada, investors may have difficulty in effecting service of process within Canada and collecting from or enforcing against the Company or its directors, officers and experts, any judgments obtained by the Canadian courts or Canadian securities regulatory authorities and predicated on the civil liability provisions of Canadian securities legislation or otherwise. Similarly, in the event a dispute arises from the Company’s foreign operations, the Company may be subject to the exclusive jurisdiction of foreign courts or may not be successful in subjecting foreign persons to the jurisdictions of courts in Canada.

Forward ‐ looking Information May Prove Inaccurate

Certain valuations and measurements required consideration of forecast estimates and the use of various assumptions reliant upon factors which are beyond the control of the Company. Readers of this MD&A should refer to the “Caution Regarding Forward-Looking Information” section.

Reliability of Mineral Resource and Reserve Estimates

The Company currently does not have any mineral resources or mineral reserves. Furthermore, there is no certainty that any of the mineral resources or mineral reserves on any project with mineral resources or mineral reserves will be realized. Until a deposit is actually mined and processed, the quantity of metal and grades must be considered as estimates only. Any material change in quantity of metal, grade or dilution may affect the economic viability of any project undertaken by the Company.

Environmentally Protected Areas/Forest Reserves

Colombia has a number of environmentally protected areas or forest reserves (“Protected Areas”) that can, in certain circumstances, restrict mining activities. There are varying levels of Protected Areas within the country with different levels of restrictions. The Company’s exploration properties may be subject to Protected Areas and while the Company does not expect any difficulties in obtaining the necessary permits to conduct mining activities in these areas, there can be no assurances that the laws or boundaries will not change or that permits will be granted which could have a material impact on the Company’s operations. In addition, there can be no assurances that the government of Colombia will not declare new environmentally protected areas or forest reserves that could potentially impact the Company’s Colombian Projects which could have a material negative impact on the Company.

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Cultural or Ethnic Restricted Areas

Colombia has a number of restricted areas that can, in certain circumstances, require companies to obtain special permits to advance into exploration and exploitation activities. Restricted areas include (i) urban areas, (ii) archeological interest areas, (iii) cultural and historical interest areas, and (iv) public utilities and infrastructure areas. A small portion of the Company’s exploration titles and/or exploration applications are subject to restricted areas and while the Company does not expect any difficulties in obtaining the necessary permits to conduct mining activities in these areas, there can be no assurances that the laws or boundaries will not change or that permits will be granted. In addition, there can be no assurances that the government of Colombia will not declare new restricted areas that could potentially impact the Company’s operations which could have a material negative impact on the Company.

Fluctuation in Mineral Prices

The mining industry in general is intensely competitive and there is no assurance that, even if commercial quantities of mineral resources are discovered, a profitable market will exist for the sale of same or mineral prices will be such that the Company’s properties can be mined at a profit. Factors beyond the control of the Company may affect the ability of the Company to attract investors and receive further funds for exploration and development. Metal prices have experienced volatile and significant price movements over short periods of time, and are affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations (specifically, the Canadian and U.S. dollars and the Colombian peso relative to other currencies), interest rates, global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. In particular, the supply of and demand for gold are affected by, among other factors, political events, economic conditions, and production costs in major gold-producing regions and governmental or central bank policies with respect to gold holdings. Declines in the price of gold may adversely affect the Company’s development and mining projects. Although the Company believes that the fundamentals of supply and demand will remain stable in the future and participants in various sectors will continue to support the gold price despite uncertainties in the global economy, there is no guarantee that the gold price will not materially decrease.

Credit Risk

Credit risk arises from cash and cash equivalents, held with banks and financial institutions, and amounts receivable. The maximum exposure to credit risk is equal to the carrying value of the financial assets.

Global Economic Conditions

There are significant uncertainties regarding the price of gold, other precious and base metals and other minerals and the availability of equity financing for the purposes of mineral exploration and development. Currently, prices of certain commodities such as gold have reflected volatility, which has had an impact on the Company and the mining industry in general. The Company’s future performance is largely tied to the exploration and development of the Colombia Projects and the commodity and financial markets. There can be no certainty that commodity prices will increase or maintain the same levels. Current financial markets are likely to continue to be volatile in Canada potentially through 2021 and beyond, reflecting ongoing concerns about the stability of the global economy, geo-political risks and weakening global growth prospects. Unprecedented uncertainty in the credit markets has also led to increased difficulties in financing activities. As a result, the Company may have difficulty raising financing for the purposes of mineral exploration and development and, if obtained, on terms favourable to the Company and/or without excessively diluting existing shareholders of the Company. These economic trends may limit the Company’s ability to develop and/or further explore its mineral property interests.

Additionally, global economic conditions may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. If such volatility and market turmoil continue, the Company’s business and financial conditions could be adversely impacted.

Unreliable Historical Data

The Company has compiled technical data in respect of the Colombia Projects, some of which was not prepared by the Company. While the data represents a useful resource for the Company, much of it must be verified by the Company before being relied upon in formulating exploration and development

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programs.

Infrastructure

Mining, processing, development and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants, which affect capital and operating costs. Unusual or infrequent weather phenomena, road blockades, sabotage, government or other interference in the maintenance or provision of such infrastructure could adversely affect the Company's operations, development, financial condition and results of operations.

Bermuda Legal Matters

The Company’s main subsidiary (the “Bermuda Subsidiary”) is subject to the laws of Bermuda. The following is a non-exhaustive summary of certain laws of Bermuda which are relevant to the operations of the Bermuda Subsidiary.

Enforcement of Judgments in Bermuda May be Difficult

The current position with regard to enforcement of judgments in Bermuda is set out below but this may be subject to change. A final and conclusive judgment of a foreign court against the Bermuda Subsidiary, under which a sum of money is payable (not being a sum of money payable in respect of multiple damages, or a fine, penalty tax or other charge of a like nature) may be the subject of enforcement proceedings in the Supreme Court of Bermuda under the common law doctrine of “obligation by action” on the debt evidenced by the foreign court’s judgment. On general principles, such proceedings would be expected to be successful provided that:

the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in Bermuda; and
the judgment is not contrary to public policy in Bermuda, has not been obtained by fraud or in proceedings contrary to natural justice, and is not based on an error in Bermuda law.

Enforcement of such a judgment against assets in Bermuda may involve the conversion of the judgment debt into Bermuda dollars, but the Bermuda Monetary Authority (the “BMA”) has indicated that its present policy is to give the consents necessary to enable recovery in the currency of the obligation.

No stamp duty or similar or other tax or duty is payable in Bermuda on the enforcement of a foreign judgment. Court fees will be payable in connection with proceedings for enforcement.

Exemption from Exchange Controls

The Bermuda Subsidiary is designated as “non-resident” for exchange control purposes by the BMA. Where a company is so designated, it is free to deal in currencies of any other country outside the Bermuda exchange control area which are freely convertible into currencies of any other country.

Limitations on Carrying on Business

Under Bermuda law, exempted companies are companies formed for the purpose of conducting business outside Bermuda from a principal place of business in Bermuda. As a result, they are exempt from Bermuda laws restricting the percentage of share capital that may be held by non-Bermudians, but they may not participate in certain business transactions, including:

(a) the acquisition or holding of land in Bermuda (except that required for their business and held by way of lease or tenancy for terms of not more than 50 years) without the express authorization of the Bermuda legislature;
(b) the taking of mortgages on land in Bermuda to secure an amount in excess of $50,000 Bermuda dollars without the consent of the Minister of Finance of Bermuda or such other Minister as may be appointed to administer the Bermuda Companies Act 1981 (the “Minister”);
(c) the acquisition of any bonds or debentures secured by any land in Bermuda, other than certain types of Bermuda government securities; or
(d) the carrying on of business of any kind in Bermuda, except in furtherance of their business carried on outside Bermuda or under license granted by the Minister.

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Economic Substance

Bermuda enacted legislation to introduce economic substance requirements in accordance with the requirements from the European Union ("EU") and in furtherance of its commitment to comply with international standards concerning the OECD's Base Erosion and Profit Shifting report. The legislation was enacted to demonstrate the jurisdictions commitment to comply with international standards with respect to cooperation for tax purposes and to ensure that Bermuda does not facilitate the use of structures which attract profits but which do not reflect real economic activity within the jurisdiction. The current legislation is set out in the Economic Substance Act 2018 (the "ES Act"), as amended, and the Economic Substance Regulations 2018, as amended, (the "ES Regulations") (together the ES Act and the ES Regulation, the “ES Law”).

The ES Law applies to any 'relevant entity' that conducts any 'relevant activity' in a 'relevant financial period.' A relevant entity that conducts a relevant activity must satisfy the economic substance requirements under the ES Law in relation to that activity. A relevant entity conducting a relevant activity must demonstrate it has satisfied the requirements under the ES Law by filing a declaration form with the Bermuda Registrar of Companies (the "Registrar") in respect of that financial year. Each relevant entity is require to file the Declaration Form no later than six months after the last day of each relevant financial period, with the first financial year commencing on or after 1 January 2019.

If the Registrar determines that a 'relevant entity' has not met the applicable economic substance requirements in accordance with the ES Laws, the Registrar is required by law to provide to the Bermuda Minster of Finance the information filed by the relevant entity pursuant to the ES Laws, and the Minister is required to provide that information to his counterpart in the relevant EU member state or other relevant jurisdiction. Additionally, the Registrar also has the power to impose financial penalties, restrictions or regulate the business activities of the relevant entity or be authorised by the court for such proceedings under the relevant legislation to be taken, including strike off.

On 24 February 2022, the European Council added ten countries, including Bermuda, to Annex II of the EU list of non-cooperative jurisdictions for tax purposes. Annex II is a list of jurisdictions that have made sufficient commitments to reform their tax policies but remain subject to close monitoring while they are executing on their commitments. It is expected that countries that have met their commitments will be removed from Annex II at the next opportunity later in 2022. No direct penalties or sanctions will be imposed by any EU member states on entities or institutions in listed jurisdictions as a result of their inclusion in Annex II. As such, there should be no impact for Bermuda companies such as the Bermuda Subsidiary with respect to doing business in Bermuda.

Evolving data privacy legislation

In Bermuda, the Personal Information Protection Act 2016 ("PIPA") was introduced to regulate the use of personal information in a manner that both protects its privacy and recognizes the need for organizations to use personal information for legitimate purposes. On 27 July 2016, PIPA received Royal Assent and thereafter, on 2 December 2016, limited administrative provisions of PIPA, relating to the appointment of a Privacy Commissioner and the creation of an independent office of the Privacy Commissioner came into force. PIPA sets out a number of requirements that must be complied with when organisations are handling personal information, including, the obligation to adopt suitable measures and policies, to appoint a privacy officer, to use personal information in a lawful and fair manner and maintain accurate records, the obligation to provide individuals with a clear and easily accessible privacy notice and to ensure adequate and proportionate security safeguards are in place and the obligation to report any breaches to the Privacy Commissioner. Bermuda's first Privacy Commissioner was appointed on January 20, 2020 and subsequently, it is anticipated that the obligations under PIPA will become operative in the near future.

CAUTION REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to the Company, certain information contained in this MD&A constitutes “forward-looking information” within the meaning of applicable Canadian securities legislation and “forward-looking statements within the meaning of applicable U.S. securities laws. Forward-looking information includes, but is not limited to: statements with respect to the potential of the Company’s properties or projects; exploration results; potential mineralization; exploration plans; obtaining necessary permits; the estimation of mineral resources and mineral reserves; the acquisition of additional projects; the future price of gold and other mineral commodities; the realization of mineral

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resource and mineral reserve estimates; success of exploration activities; cost and timing of future exploration and development; the development and advancement of a Corporate Social Responsibility (“CSR”) program; conclusion of economic evaluations; requirements for additional capital; statements regarding the Company’s steps to address its liquidity risk; other statements relating to the financial and business prospects of the Company; and other future events and information as to the Company’s strategy, plans or future financial or operating performance. In addition, statements (including data in tables) relating to mineral reserves and resources and gold equivalent ounces are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the estimates will be realized.

Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by use of forward-looking terminology such as "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", “targets”, "potential", "scheduled", “budgeted”, “forecasted” and similar expressions or variations (including negative variations), or that events or conditions "will", "would", "may", “might”, "could", "should", “will be taken”, “occur” or “be achieved”.

Forward-looking information is based on the reasonable assumptions, estimates, analysis, and opinions of management considered reasonable at the date the statements are made in light of management’s experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that it believes to be relevant and reasonable in the circumstances at the date that such statements are made. Forward-looking information is inherently subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including but not limited to risks related to: uncertainties associated with negotiations, misjudgments in the course of preparing forward-looking information; the actual results of exploration activities; the inherent risks involved in the exploration and development of mineral properties; liquidity risk; the presence of artisanal miners and the effect of mineral extraction by third parties without title; unreliable historical data for projects; cybersecurity risks; risks regarding community relations; security risks; ability to maintain obligations; uncertainties inherent in conducting operations in a foreign country; uncertainties related to the availability and costs of financing needed in the future; reliance on outside contractors in certain exploration operations; risks arising from labour and employment matters; health and safety risks; risks related to use of explosives; reliance on adequate infrastructure for exploration activities; unexpected adverse changes that may result in failure to comply with environmental and other regulatory requirements; environmentally-protected areas/forest reserves risks; dependence on key management employees; title risks related to the ownership of the Company’s projects; the Company’s limited operating history; risks relating to retaining employees and consultants with special skills and knowledge; fluctuations in mineral prices; uninsurable risks related to exploration; risks relating to shareholder(s) exercising significant control over the Company; delays in obtaining government approvals; uncertainties inherent in conducting operations in a foreign country; title risks related to the ownership of the Company’s projects and the related surface rights and to the boundaries of the Company’s projects; risks relating to the Company’s pending concession applications; uncertainties related to the availability and costs of financing needed in the future; differing interpretations of tax regimes in foreign jurisdictions; the loss of Canadian tax resident status; recovery of value added taxes; compliance with government regulation, anti-corruption laws and ESTMA; uncertainties inherent in competition with other exploration companies; non-governmental organization intervention and the creation of adverse sentiment among the inhabitants of areas of mineral development; uncertainties related to conflicts of interest of directors and officers of the Company; social media influence and reputation; the ability to fund operations through foreign subsidiaries; the residency of directors, officers and others; uncertainties related to holding minority interests in other companies; foreign currency fluctuations; global economic conditions; the market price of shares of the Company; the payment of future dividends; future sales of shares of the Company by existing shareholders; seizure or expropriation of assets; accounting policies and internal controls; passive foreign investment corporation; litigation risks; indigenous peoples; impairment of mineral properties; and Bermuda legal matters. See “Risks and Uncertainties” in this MD&A for further discussion regarding risk factors.

Material Forward-Looking Information

The annual consolidated financial statements of the Company for the year ended December 31, 2021 were prepared on a going concern basis. The going concern basis assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. The assumption is based on the anticipation of obtaining additional sources of financing to fund its exploration and operating activities

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for the foreseeable future. There is no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company.

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CORPORATE INFORMATION

Corporate Office

82 Richmond Street East Toronto, Ontario - M5C 1P1

Directors & Officers

Ari Sussman, Executive Chairman Maria Constanza Garcia, Director Kenneth Thomas, Director Paul Murphy, Director Ashwath Mehra, Director Omar Ossma, President and Chief Executive Officer Paul Begin, Chief Financial Officer Ana Milena Vásquez, Executive Vice-President

Auditors

PricewaterhouseCoopers LLP, Chartered Professional Accountants PWC Tower 18 York Street, Suite 2600 Toronto, Ontario - M5J 0B2

Stock Information

Collective Mining Ltd. common shares are traded on the TSX Venture Exchange under the symbol “CNL”

Investor Relations

Shareholder requests may be directed to Investor Relations via e-mail at [email protected] or via telephone at 416-648-4065

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AI assistant

Collective Mining Ltd. — Proxy Solicitation & Information Statement 2022

47675_rns_2022-06-07_771ad7e0-dc34-41f7-8549-95f571ad2228.pdf

COLLECTIVE MINING LTD.

COLLECTIVE MINING LTD. NOTICE OF ANNUAL AND SPECIAL MEETING

INFORMATION CIRCULAR

General Information

Appointment and Revocation of Proxies

Proxy Instructions

Non-Registered Holders

VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF

Notes

EXECUTIVE COMPENSATION

Named Executive Officers

Director and Named Executive Officer Compensation, Excluding Compensation Securities

Stock Options and Other Compensation Securities

Exercise of Compensation Securities by Directors and Named Executive Officers

Stock option plans and other incentive plans

Employment, consulting and management agreements

Oversight and description of director and named executive officer compensation

Pension

EQUITY COMPENSATION PLAN INFORMATION

Securities Authorized for Issuance under Equity Compensation Plans

Summary of Stock Option Plan

PARTICULARS OF MATTERS TO BE ACTED UPON

Receipt of Financial Statements

Appointment of Auditors

Election of Directors

Notes:

Corporate Cease Trade Orders

Bankruptcies and Other Proceedings

Penalties or Sanctions

Approval of Stock Option Plan

Shareholder Approval of the Stock Option Plan

INDEBTEDNESS TO COMPANY OF DIRECTORS AND SENIOR OFFICERS

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

CORPORATE GOVERNANCE

Board of Directors

Management Supervision by Board

Participation of Directors in other Reporting Issuers

Orientation and Continuing Education

Code of Business Conduct & Ethics

Anti-Bribery and Anti-Corruption Policy

Anti-Hedging Policy

Nomination of Directors

Compensation of Directors and the CEO and CFO

Other Board Committees

Assessments

AUDIT COMMITTEE INFORMATION

Additional Information

APPROVED BY THE BOARD OF DIRECTORS OF COLLECTIVE MINING LTD.

Omar Ossma, President and CEO

CONSOLIDATED FINANCIAL STATEMENTS

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING

Independent auditor’s report

Our opinion

What we have audited

Basis for opinion

Independence

Other information

Responsibilities of management and those charged with governance for the consolidated financial statements

Auditor’s responsibilities for the audit of the consolidated financial statements

COLLECTIVE MINING LTD. Consolidated Statement of Financial Position

COLLECTIVE MINING LTD. Consolidated Statement of Operations and Comprehensive Loss

COLLECTIVE MINING LTD. Consolidated Statement of Cash Flows

COLLECTIVE MINING LTD. Consolidated Statement of Changes in Equity

1. NATURE OF OPERATIONS

2. BASIS OF PREPARATION

Statement of Compliance

Basis of Measurement

Basis of Consolidation

Subsidiaries

Functional and Reporting Currency

3. CRITICAL ACCOUNTING ESTIMATES, JUDGEMENTS AND ASSUMPTIONS

(a) Functional currency:

(b) Warrants and share-based compensation:

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a) Foreign currency translation

(b) Financial instruments

Measurement – Initial Recognition

Collective Mining Ltd. Proxy Solicitation & Information Statement 2022