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MANAGEMENT’S DISCUSSION AND ANALYSIS

For the three and six months ended January 31, 2021 and 2020 (Expressed in Canadian dollars)

SULLIDEN MINING CAPITAL INC. (an exploration stage mining company)

65 Queen Street West, Suite 900 Toronto, ON M5H 2M5

Date: March 15, 2021

INTRODUCTION

The following Management Discussion and Analysis (“MD&A”) of Sulliden Mining Capital Inc. (“we”, “our”, “us”, the “Company” or “SMC”) provides a discussion and analysis of the operations, results, and financial condition of the Company for the three and six months ended January 31, 2021 and 2020, and should be read in conjunction with the Company’s condensed interim consolidated financial statements for the three and six months ended January 31, 2021 and the Company’s annual consolidated financial statements for the year ended July 31, 2020. This discussion covers the period for the three and six months ended January 31, 2021 and the subsequent period up to the date of this MD&A. Other pertinent information about the Company is available on SEDAR at www.sedar.com as well as on the Company’s website at www.sulliden.com.

For the purpose of preparing our MD&A, the Company considers the materiality of information. Information is considered material if in the opinion of management: (i) such information results in, or would reasonably be expected to result in, a significant effect in the market price or value of our shares; (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. We evaluate materiality with reference to all relevant circumstances. All dollar amounts are stated in Canadian dollars unless otherwise indicated.

This MD&A contains forward-looking information that also involves numerous risks and uncertainties. Actual results of the Company’s business and operations could differ materially from those discussed in such forward-looking information as a result of the risks and uncertainties faced by the Company, including those set forth in this MD&A under “Forward-looking Information and Cautionary Statements”, “Risk and Uncertainties”, and as discussed in the Company’s annual information form (AIF) which is available under the Company’s profile at www.sedar.com.

References to the second quarter of 2021 and 2020 or Q2-2021 and Q2-2020 mean the quarters ending January 31, 2021 and January 31, 2020, respectively.

Stéphane Amireault, P.Eng (B.Eng; MScA), is the Company’s Qualified Person for geology for the purposes of National Instrument 43-101 (“NI 43-101”). Mr. Amireault has reviewed and approved the respective scientific and technical disclosure in this MD&A.

Novel Coronavirus (“COVID-19”)

The Company’s operations could be significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company cannot accurately predict the impact COVID-19 will have on its operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

UPDATE AND OUTLOOK

The Company was incorporated on June 10, 2014 as a wholly owned subsidiary of the former Sulliden Gold Corporation Ltd. (“Sulliden”). Pursuant to a statutory plan of arrangement (the “Arrangement”) under section 182 of the Business Corporations Act (Ontario) among the Company, Sulliden and Rio Alto Mining Limited (“Rio Alto”), all of the issued and outstanding common shares of Sulliden were, effective August 5, 2014, exchanged for 0.525 of a common share of Rio Alto and 0.10 of a common share of the Company. Effective August 11, 2014, the common shares of the Company commenced trading on the Toronto Stock Exchange under the symbol SMC.

Upon completion of the Arrangement, the Company assumed Sulliden’s interests in the East Sullivan Property, valued in the amount of $133,538 and the Company was capitalized with $24,760,514 in cash.

In May 2016, Sulliden Moҫambique Ltd. was incorporated in Mozambique and is a 100% owned subsidiary of the Company. The Company owned a 98% interest in the issued and outstanding shares of Daos International Ltd. (“Daos”), a Mauritius company. During the year ended July 31, 2020, the Company sold its interest in Daos for $1.

EAST SULLIVAN PROPERTY

The Company’s exploration property is located in the Abitibi region of Québec, about five kilometers southeast from the city of Val-d’Or. The property forms a single claim block that consists of 13 contiguous staked claims registered in 1981 for a total area of 334 ha.

The Company holds a 100% interest in these claims, which are all in good standing and not subjected to any royalty agreement. In Québec, staked mining claims require a $1,000 payment or work equivalent to be renewed on a two-year anniversary cycle. Suitable banked assessment credits originally generated by completing and filing eligible exploration work may be distributed on contiguous claims. Effective August 19, 2013, Sulliden Gold Corporation Ltd. had accumulated credits for a total of $1,083,514. Effective December 10, 2013, accumulated assessment credits have a period of validity of the longer of twelve years or twelve years after filing for eligible assessment work.

The Company’s exploration property is on public land, and permits would be obtained from the Ministère des Ressources Naturelles du Québec (“MRN”) for machinery access, for drilling, or mechanical trenching activities.

There are no surface rights associated to the land holding, but exploration work would be coordinated with other land users including the MRN, the Québec Environment and Sustainable Development Ministry (“MDDP”), the City of Val-d’Or and Agnico-Eagle’s Goldex-Manitou project managers in the area occupied by a tailings pile. The tailings pile left by the former East Sullivan Mines has been rehabilitated by the MRN and a certificate of authorization issued by the MDDP is required before initiating a drill program from the tailings surface or the containment dam.

The exploration property includes the past producing site of the East Sullivan Mine. This historical exploitation of copper-zinc (gold-silver) massive and disseminated sulphide lenses left mining infrastructure and a large tailings pile covering the central part of the property. After closure of the mine in 1966, the site was abandoned and declared an orphan site by the government of Québec and is still listed as such. The site was among the first to be reclaimed by the Québec Government in the early 1980’s, because of acid drainage problems caused by the pyrite-rich tailings. Wood waste covering of the tailings pile to reduce oxidation by rain-water was initiated in 1984. In addition, the pile was surrounded by a containment dam between 1992 and 1996. In 1998, a recirculation circuit was introduced by pumping the outflow water from the impoundment to the tailings pile, throughout the organic cover.

There is no direct liability for past production on the property for the Company, but future exploration and exploitation activities will have to be carried out in coordination with governmental representatives in order to keep the integrity of the tailings confinement system. Ultimately, the tailings pile could be further secured and used for tailings disposal in the case of any future production by constructing appropriate containment facilities for tailings and waste material.

Mineral Resource Estimate and characterization of the Former East-Sullivan Mine

There are no current mineral reserves or mineral resources for the exploration property. Further details

relating to the exploration property can be found in the technical report (NI-43-101) titled Technical Report on the East Sullivan Property, Abitibi, Quebec, which is filed on SEDAR at www.sedar.com.

The past operating mine has declared a total production of 15 Million Metric Tonnes of Copper, Zinc, Gold and Silver ore from 1949 to 1966.

The type of ore deposit is interpreted from preliminary geological interpretation, mineral alteration and petrography study as skarn-like.

The characterization of in situ metal distribution for the exploited sulfide lenses was completed to help appreciate the exploration potential on the property.

Overall, 15 Million tonnes were milled from 24 lenses with a mine life average grade of 1.04% Cu, 0.79% Zn, 0.36 g/t Au and 10.3 g/t Ag.

Out of these 24 lenses, 3 mineralized lenses represented approximately 57% of the ore sent to the mill.

These 3 lenses are aligned in an East-West Corridor, at short distance and west from the boundary of the multiphase East-Sullivan Pluton. The lenses are found between surface and 300m depth and seem fault bounded to the North.

They show the following metal association: Cu - Zn ± Au ± Ag. They made up most (± 80%) of the metal produced from the mine. The 3 lenses accounted for 8.6 Million tonnes with grades of: 1.39% Cu, 1.12% Zn, 0.50 g/t Au, 11.4 g/t Ag, which are higher than the average for the whole deposit.

The main sulfide association for these lenses is composed of Chalcopyrite – Pyrrhotite ± Pyrite, sitting in a pervasively altered sequence of chloritized and silicified rocks.

Five smaller lenses showing distinct geological features were also noted. These 5 lenses are tabular in shape and are aligned in an East-West Shear Zone located immediately north of the lenses described above.

They are rich in zinc and accounted for 14 % of the zinc produced at the mine.

The main sulfide association found in these massive sulfide lenses consists of Sphalerite – Pyrite ± Galena, sitting in a pervasively altered sequence of sericitized rocks.

Ongoing work

A compilation of surface and underground drill data respecting the former East-Sullivan mine was completed in 2020, which lead management to a better understanding of mineralization trends and controls. The eastern extension of the mineralization straddles the East-Sullivan pluton contact oriented N50E, whereas the western extension is oriented east-west.

Concomitant to the advancement of the compilation a two phase drill program was executed:

1- In September 2019, Sulliden completed drillholes SU-19-001 and SU-19-002 to test the eastern extension of the East-Sullivan past producing mine, for a total of 942m of drilling. Highlights are 52.4 meters grading 0.45% Cu and 0.44 g/t Au for the first hole, and 20.2 meters grading 0.66% Cu and 0.4 g/t Au for the second hole.
2- In October 2020, drill holes SU-20-001 and SU-20-002 tested a magnetic anomaly at the western contact of the East-Sullivan pluton and the western extension of the East-Sullivan past producing mine, respectively. A total of 1091m were drilled for this phase.

Drillhole SU-20-002 intersected 9 meters averaging 0.95% Cu and 0.14 g/t Au

Results and Drill hole location are found in the table 1 and 2 below:

Table 1: Drill hole mineralized intersections

Drill Hole	From (m)	To (m)	Width (m)	Estimated True Width (m)	Cu (%)	Au (g/t)
SU-19-001	344.0	396.4	52.4	16.2	0.45	0.44
SU-19-001	411.1	420.0	8.9	2.8	0.38	0.22
SU-19-002	426.0	446.2	20.2	10.2	0.66	0.40
SU-19-002	464.0	474.8	10.8	5.5	0.55	0.17
SU-19-002	494.0	522.0	28.0	14.2	0.44	0.09
SU-20-001	-	-	-	-	-	-
SU-20-002	459.0	473.0	14.0	7.0	0.69	0.12
Incl.	464.0	473.0	9.0	4.5	0.95	0.14

Table 2 : Drill hole coordinates

Drill Hole	E_MTM83	N_MTM83	Elevation (m)	Length (m)	Azimuth	Dip
SU-19-001	214918	5326304	317	420	003	-65
SU-19-002	214892	5326689	320	522	168	-55
SU-20-001	214423	5326067	320	567	136	-75
SU-20-002	214251	5326630	322	524	185	-60

The recent exploration results confirm the potential extensions around the past producing East-Sullivan mine.

RESULTS OF OPERATIONS

For the three months ended January 31, 2021

For the three months ended January 31, 2021, the Company reported a net income of $2,380,372 (or $0.04 per share), compared to a net loss of $2,038,473 for the three months ended January 31, 2020 (or $0.04 per share). Net comprehensive income was $2,380,372 for the three months ended January 31, 2021 (three months ended January 31, 2020: comprehensive loss of $2,040,668).

Share-based compensation expense

Share-based compensation was an expense of $1,500 for the three months ended January 31, 2021 compared to $22,674 for the three months ended January 31, 2020. Share-based compensation expense relates to Restricted Share Units (“ RSUs ”) and Deferred Share Units (“ DSUs ”) granted to directors, officers, employees and consultants of the Company.

	Three months ended	Three months ended
Share-based payments	January 31,
	2021	2020
Restricted share units	-	24,439
Deferred share units	1,500	(1,765)
	1,500	22,674

During the three months ended January 31, 2021 and the three months ended January 31, 2020, the Company did not grant RSUs, DSUs or options to directors, officers, employees and consultants of the Company. The Company incurred share-based payment expenses related to accruals and/or vesting of the RSUs and DSUs granted during prior periods. The value of the DSUs is based on the Company’s share price which increased during the quarter and decreased in the same period in the prior year.

As a result of the Company adopting the RSU and DSU plans in 2014, as at January 31, 2021, the Company has allocated an aggregate of 7,345,000 RSUs to employees of the Company and an aggregate of 1,350,000 DSUs to the Company’s independent directors.

Each RSU entitles an employee of the Company to receive one common share of the Company to be purchased in the secondary market by an independent trustee upon the vesting of such RSU, subject to acceleration upon a change of control of the Company. Of the 7,345,000 RSUs, 416,666 RSUs were cancelled, 3,000,000 RSUs vested in three equal tranches, on each of January 1, 2015, January 1, 2016 and January 1, 2017; 500,000 RSUs vested in three equal tranches on each of January 5, 2017, January 5, 2018 and January 5, 2019; 875,000 RSUs vested in three equal tranches on each of February 1, 2016, February 1, 2017 and February 1, 2018 and 2,553,334 RSUs, of which 990,000 vested on June 1, 2018, 906,667 vested on February 1, 2019 and 656,667 vested on February 1, 2020. At January 31, 2021, no shares remained in treasury with the trustee and shares had not been issued for 958,335 of the 990,000 RSUs that vested on June 1, 2018, 166,667 of the RSUs that vested on January 5, 2019, 906,667 of the RSUs that vested on February 1, 2019 and 656,667 of the RSUs that vested on February 1, 2020.

Each DSU entitles the holder to receive a cash payment equal to the market price of one common share of the Company upon ceasing to hold office. As at January 31, 2021, 386,869 DSU’s that are issued for current directors are fully vested.

Professional, consulting and management fees

Professional, consulting and management fees of $275,416 were incurred for the three months ended January 31, 2021 compared to $1,353,535 for the three months ended January 31, 2020 as follows:

		Three months ended	Three months ended
		January	31,
		2021	2020
Salaries and benefits	$	2,492	57,837
Directors fees		65,000	18,750
Consulting fees		193,784	741,796
Legal, audit and professional fees		14,140	535,152
	$	275,416 $	1,353,535

Spend on salaries and benefits was lower in Q2-2021 compared to Q2-2020 as a result of the decrease in headcount of employees. Consulting fees are lower in Q2-2021 compared to Q2-2020 due to an additional one-time consulting fee. Legal, audit and professional fees were lower in the three months ended January 31, 2021 compared to the three months ended January 31, 2020 due to a one-time fee paid for professional services related to the Troilus transaction.

General and administrative expenses

General and administrative expenses for the three-month periods are reflected in the table below:

		Three months ended	Three months ended
		January 31,
		2021	2020
General and office	$	55,554	53,468
Shareholder communication		18,247	8,518
Traveland accommodation		-	58,573
	$	73,801 $	120,559

General and office costs and shareholder communications as a total were slightly higher during Q2-2021 compared to Q2-2020 due to a slightly higher level of activity. Travel costs during Q2-2020 were higher than Q2-2021 and were incurred for business development and promotional activities.

Other

The Company’s other expenses during Q2-2021 resulted primarily from realized losses of $1,978,572 that were offset by unrealized gains in investments of $4,689,896 on securities that are classified as fair value through profit or loss (“FVTPL”). During the comparative period ended January 31, 2020, the Company recorded an unrealized loss of $312,378 and realized losses of $272,682. See Related Party Disclosures section of this report.

For the six months ended January 31, 2021

For the six months ended January 31, 2021, the Company reported a net income of $1,838,130 (or $0.03 per share), compared to a net loss of $2,661,195 for the six months ended January 31, 2020 (or $0.05 per share). Net comprehensive loss was $1,838,130 for the six months ended January 31, 2021 (six months ended January 31, 2020: comprehensive loss of $2,663,644).

Share-based compensation expense

Share-based compensation expense was $750 for the six months ended January 31, 2021 compared to $37,994 for the six months ended January 31, 2020. Share-based compensation expense relates to RSUs and DSUs granted to directors, officers, employees and consultants of the Company.

	Six months	ended
Share-based payments	January	31,
	2021	2020
Restricted share units	-	49,325
Deferred share units	750	(11,331)
	750	37,994

During the six months ended January 31, 2021 and the six months ended January 31, 2020, the Company did not grant RSUs, DSUs or options to directors, officers, employees and consultants of the Company. The Company incurred share-based payment expenses related to accruals and/or vesting of the RSUs and DSUs granted during prior periods. The value of the DSUs is based on the Company’s share price which increased during the six months 2021 and decreased in the same period in the prior year.

Professional, consulting and management fees

Professional, consulting and management fees of $554,269 were incurred for the six months ended January 31, 2021 compared to $1,666,600 for the six months ended January 31, 2020 as follows:

	Nine months ended	Nine months ended
	January	31,
	2021	2020
Salaries and benefits	$ 3,339 $	124,650
Directors fees	90,000	37,500
Consulting fees	394,274	919,084
Legal, audit and professional fees	66,656	585,366
	$ 554,269 $	1,666,600

Spend on salaries and benefits was lower in Q2-2021 compared to Q2-2020 as a result of the decrease in headcount of employees. Directors’ fees are higher than the same period in the prior year due to bonuses being issued to the directors. Consulting fees were higher in the six months ended January 31, 2020 compared to same period in 2021 due to an additional one-time consulting fee. Legal, audit and professional fees were higher in the six months ended January 31, 2020 due to a one-time fee paid for professional services related to the Troilus transaction.

General and administrative expenses

General and administrative expenses for the six-month periods are reflected in the table below:

	Year ended	Year ended
	January	31,
	2021	2020
General and office	$ 111,673 $	107,423
Shareholder communication	42,050	46,712
Traveland accommodation	-	59,926
	$ 153,723$	214,061

General and office costs were higher for the six months ended January 31, 2021 compared to same period in 2019 as a result of an increase in the Company’s contractual fee for its shared office space. Shareholder communications cost were lower in the six months ended January 31, 2021 compared to same period in 2020 due to higher mailing costs in the prior year. There were no travel costs in 2021 whereas travel costs in 2020 were related to general corporate travel and promotional activities.

Other

The Company’s other expenses for the six months ended January 31, 2021 resulted primarily from unrealized gains of $3,644,429 on securities that are classified as fair value through profit or loss that were offset by realized losses on the sale of investments of $1,167,825. During the comparative period ended January 31, 2020, the Company recorded an unrealized loss of $1,127,942 and realized gains of $300,652. See Related Party Disclosures section of this report.

SUMMARY OF QUARTERLY RESULTS

	January 31,	January 31,		October 31,		July 31,		April 30,
		2021		2020		2020		2020
		Q2-2021		Q1-2021		Q4-2020		Q3-2020
Interest income	$	80,673	$	28,577	$	29,079		$21,378
Net Income (loss)	$2,380,372			(563,103)		3,764,328		(346,857)
Net comprehensive income (loss)	$2,380,372			(563,103)		3,794,496		(367,029)
Basic and diluted net (loss) per share		0.04		(0.01)		0.07		(0.01)
Total assets		17,353,870		15,132,146	15,633,890			11,030,506
	January 31,			October 31,		July 31,		April 30,
		2020		2019		2019		2019
		Q2-2020		Q1-2020		Q4-2019		Q3-2019
Interest income	$	40,763	$	30,778	$	12,352	$	4,989
Net (loss)/income		(2,038,473)		(622,722)		(239,148)		(4,070,752)
Net comprehensive (loss)		(2,040,668)		(622,976)		(225,183)		(4,084,356)
Basic and diluted net (loss)/income per share		(0.04)		(0.02)		(0.01)		(0.10)
Total assets		11,620,289		12,566,915		13,396,539		13,402,784

The granting of stock options, RSUs and DSUs and bonuses in a particular quarter gives rise to stockbased compensation expense. This can generate fluctuations in expense and net income or loss quarter over quarter. As well, fluctuations in market prices of securities causes volatility in net income or loss through unrealized gains, as well as through the sale of securities. In Q2-2021, Q4-2020, Q3-2020, Q32019 and Q4-2019, mark-to-market fluctuations resulted in gains generating income during the quarter while in Q1-2021, Q2-2020, and Q1-2020, mark-to-market fluctuations resulted in losses. The Company realized gains and losses on the sale of investments in several of these quarters. Comprehensive loss accounts for foreign exchange translation changes related to the Company’s subsidiary.

Total assets also vary as a result of the fluctuations in market prices of securities as well as the sale of securities as these investments make up a large proportion of total assets.

FINANCIAL POSITION

As at January 31, 2021, the Company held cash and cash equivalents of $47,021 (July 31, 2020: $205,011), investments, at fair market value through profit and loss of $13,791,970 (July 31, 2020: $13,245,492) and loans receivable of $2,285,037 (July 31, 2020: $1,260,626). The loans receivable at January 31, 2021, were loans receivable from Greenway Investments International Ltd. (“Greenway”), Blue Sky Energy Inc. (“Blue Sky”), Brazil Potash Corp. (“Brazil Potash”), Medivolve Inc. (formerly QuestCap Inc.) (“Medivolve”) and Genesis International Ltd. (“Genesis”). The loans receivable as at July 31, 2020 were loans receivable from Aberdeen, Greenway, Blue Sky and Medivolve. The loans receivable at January 31, 2021 and July 31, 2020 consist of the following balances:

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Due from: January 31, 2021 July 31, 2020
Aberdeen International Inc. $ - $ 524,700
Greenway Investments International Ltd. 224,906 214,925
Blue Sky Energy Inc. 11,532 10,927
Medivolve Inc. * 1,799,002 510,074
-
Brazil Potash Corp. 92,254
Genesis International 157,343 -
Balance $ 2,285,037 $ 1,260,626
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Mineral and exploration assets consist of the Company’s interest in the East Sullivan property discussed above.

Accounts payable and accrued liabilities totaling $905,396 at January 31, 2021 (July 31, 2020 - $1,023,546) are comprised primarily of amounts payable of $156,345 and accrued liabilities of $709,051. Included in accrued liabilities is a DSU liability of $48,045 that is comprised of 386,870 vested DSUs at a weighted average share price of $0.12.

LIQUIDITY AND CAPITAL RESOURCES

As at January 31, 2021, the Company had net working capital (see Non-IFRS measures) of $15,347,885 (July 31, 2020: $13,832,139). The Company expects to rely on its existing net working capital to finance its ongoing activities.

As at January 31, 2021, the Company had 60,553,760 common shares issued and outstanding and 1,140,000 share purchase options outstanding which would generate $230,623 if exercised in full. The Company does not know when or how much will be collected from the exercise of these options as this is dependent on both the determination of the holder and the market trading price of the Company’s common shares. The Company does not have any long-term debt as of the date of this MD&A and its interest rate risk is minimal. Accounts payable and accrued liabilities are short-term and non-interest bearing.

CASH FLOWS

Operating

Cash used in operating activities was $659,762 for the six months ended January 31, 2021 compared to $1,664,892 for the six months ended January 31, 2020. Cash used related to operating expenses for the six months ended January 31, 2021 was $718,995 as generally discussed in the Results of Operations section of this report (2020: $1,727,298). Changes in working capital items was $59,233 during the six months ended January 31, 2021 (2020: $62,406).

Financing

There were no financing activities during the six months ended January 31, 2021. Cash provided by financing activities was $974,850 for the six months ended January 31, 2020. Cash provided in 2020 was from a non-brokered private placement issuing 9,090,909 flow-through shares of the Company at a price of $0.055 per share for gross proceeds of $500,000 and 10,000,000 non-flow-through common shares at a price of $0.05 per share for gross proceeds of $500,000.

Investing

Cash provided by investing activities during the six months ended January 31, 2021 was $501,772 compared to $1,470,771 provided by investing activities for the six months ended January 31, 2020. The purchase of investments at fair market value through profit and loss used $1,290,716 (six months ended

January 31, 2020 - $3,786,558) with the Company investing in securities during the period. The Company acquired shares of certain public resource and other sector companies (see Related Party Disclosures section of this report). The Company sold some of these investments generating cash of $3,794,598 during the six months ended January 31, 2021 (six months ended January 31, 2020 - $5,904,464). The Company entered into loan agreements during the six months ended January 31, 2021, lending $295,000 to Aberdeen, US$70,000($89,460) to Brazil Potash, US$108,200 ($138,280) and $1,500,000 to Medivolve and US$120,000 ($153,360) to Genesis International Ltd. The Company entered into loan agreements during the six months ended January 31, 2020, lending $470,000 to Aberdeen, $77,466 to Brazil Potash, $100,000 to Euro Sun Mining Inc., $668,189 to Flora Growth Corp. (“Flora”) and $10,000 to Blue Sky Energy Inc. The Company used $322,384 in exploration and evaluation expenditures during the six months ended January 31, 2021 (six months ended January 31, 2020 - $281,905) .

CAPITAL STRUCTURE

	As at January 31,	As at March 10,
Number of:	2021	2021
Common Shares	60,553,760	60,553,760
Options	1,140,000	570,000

FINANCIAL INSTRUMENTS

Financial assets and financial liabilities as at January 31, 2021:

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----- Start of picture text -----

Financial instrument
Carry amount Fair value
classification
----- End of picture text -----

	classification		arry amoun		ar vaue
As at January 31, 2021
Cash	Amortized cost	$	47,021	$	47,021
Investments	FVPL		13,791,970		13,791,970
Loans receivable	Amortized cost		2,285,037		2,285,037
Amounts receivable and other	Amortized cost		82,251		82,251
Accountspayable and accrued liabilities	Amortized cost		905,396		905,396
As at July 31, 2020
Cash	Amortized cost	$	205,011	$	205,011
Investments	FVPL		13,245,492		13,245,492
Loans receivable	Amortized cost		1,260,626		1,260,626
Amounts receivable and other	Amortized cost		73,585		73,585
Accountspayable and accrued liabilities	Amortized cost		1,023,546		1,023,546

Fair value hierarchy

The three levels of the fair value hierarchy with respect to required disclosures about the inputs to fair value measurements are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 – Inputs that are not based on observable market data.

The following table sets forth the Company’s financial assets and liabilities measured at fair value by level within the fair value hierarchy as at January 31, 2021.

	Level 1	Level 2	Level 3	TOTAL
As at January 31, 2021
Investments	$ 8,040,350	$ 3,411,873	$ 2,339,747	$ 13,791,970
As at July 31, 2020
Investments	9,767,617	1,884,357	1,593,518	13,245,492

The carrying value of cash and cash equivalents, amounts receivable and other, and accounts payable and accrued liabilities reflected in the statements of financial position approximate fair value because of the relatively short-term maturities.

Level 2 Hierarchy

During the three and six months ended January 31, 2021, public investments of $570,944 (year ended July 31, 2020 - $1,217,396) were purchased, $75,800 (year ended July 31, 2020 - $22,754) were disposed and nil (year ended July 31, 2020 - $86,957) were transferred to level 1.

		Six months
	ended January			Year ended
Investments,fair value		31, 2021	July31, 2020
Balance, beginning of period	$	1,884,357	$	536,448
Purchase at cost		570,944		1,217,396
Transferred to Level 1		-		(86,957)
Disposal at cost - shares		(75,800)		-
Disposal at cost - warrants		-		22,754
Unrealized and realizedgain,net		1,032,372		194,716
Balance,end ofperiod	$	3,411,873	$	1,884,357

Level 3 Hierarchy

The following table presents the changes in fair value measurements of financial instruments classified as Level 3 as at January 31, 2021 and July 31, 2020. These financial instruments are measured at fair value utilizing non-observable market inputs. The net realized and unrealized gain are recognized in the statements of income (loss).

statements of income (loss).
	Three months
	ended October			Year ended
Investments,fair value		31, 2020	July31, 2020
Balance, beginning of period	$	1,593,518	$	-
Additions at cost- shares		797,829		808,903
Foreign exchange		(44,074)
Unrealized(loss) gain		(7,526)		784,615
Balance,end ofperiod	$	2,339,747	$	1,593,518

Included in unrealized and realized gain for the period ended January 31, 2021, the total loss that is attributable to change in realized and unrealized gain relating to those assets and liabilities held at January 31, 2021 was $7,526 (January 31, 2020 - nil).

Within Level 3, the Company includes private company investments that are not quoted on an exchange. The key assumptions used in the valuation of these instruments include (but are not limited to) the value at

which a recent financing was done by the investee, company-specific information, trends in general market conditions and the share performance of comparable publicly traded companies.

The following table presents the fair value, categorized by key valuation techniques and the unobservable inputs used within Level 3 as January 31, 2021:

January 31, 2021

			January	31, 2021
					Range of significant
Description		Fair Value	Valuation technique	Significant unobservable inputs(s)	unobservale inputs
Brazil Potash Corp.	$	1,919,230	Recent financing	Marketability of shares	0% discount
Flora Growth Corp.		420,517	Recent financing	Marketabilityof shares	0% discount
	$	2,339,747

As valuations of investments for which market quotations are not readily available, are inherently uncertain, may fluctuate within short periods of time and are based on estimates, determination of fair value may differ materially from the values that would have resulted if a ready market existed for the investments. Given the size of the private investment portfolio, such changes may have a significant impact on the Company’s financial condition or operating results.

Brazil Potash Corp. (“BPC”)

The valuation was based on BPC’s most recent financing of US$3.75 per share. Management has determined that there are no reasonably possible alternative assumptions that would change the fair value significantly as at January 31, 2021. As at January 31, 2021, a +/- 10% change in the fair value of Brazil Potash Corp. will result in a corresponding +/- $191,900 change in income. Had the Company applied a marketability discount of 5%, it would have resulted in a corresponding decrease of approximately $95,950 in income.

Flora Growth Corp.

The Company purchased shares of Flora Growth Corp. (“Flora”) at US$0.75 per share in July 2020. The valuation was based on Flora’s most recent financing of US$0.75 per unit. Management has determined that there are no reasonably possible alternative assumptions that would change the fair value significantly as at January 31, 2021. As at January 31, 2021, a +/- 10% change in the fair value of Flora will result in a corresponding +/- $42,000 change in income. Had the Company applied a marketability discount of 5%, it would have resulted in a corresponding decrease of approximately $21,000 in income.

The carrying value of cash and cash equivalents, amounts receivable and other, and accounts payable and accrued liabilities approximate fair value because of the relatively short-term maturities.

Interest rate risk

A 1% increase in interest rates, based on the balance of cash, cash equivalents and fixed income investments at January 31, 2021, would result in an increase in annual interest income of approximately $470. All liabilities as at January 31, 2021 are non-interest bearing.

Foreign currency risk

The Company operates in Canada and its functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. The Company has acquired some investments, including its previous investment in an associate, which are denominated in foreign currency. Management believes the foreign exchange risk derived from currency conversions is negligible and therefore does not hedge its foreign exchange risk.

Credit risk

The Company's credit risk is primarily attributable to cash and cash equivalents and amounts receivable. The Company has no significant concentration of credit risk arising from operations.

Cash and cash equivalents are held in financial institutions from which management believes the risk of loss to be remote. Financial instruments included in amounts receivable consist primarily of goods and services tax and harmonized sales tax due from the Federal Government of Canada.

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’s liquidity and operating results may be adversely affected if the Company’s access to the capital markets is hindered, whether as a result of a downturn in stock market conditions generally or related to matters specific to the Company, or if the value of the Company’s investments decline, resulting in losses upon disposition. In addition, some of the investments the Company holds are lightly traded public corporations or not publicly traded and may not be easily liquidated. The Company generates cash flow from dividend income and proceeds from the disposition of its investments, in addition to interest income and advisory fees. The Company believes that it has sufficient marketable securities that are freely tradable and relatively liquid to fund its obligations as they become due under normal operating conditions. All of the Company’s liabilities and obligations are due within one year.

As at January 31, 2021, the Company had net working capital of $15,347,885, which included cash of $47,021, investments of $13,791,970, loans receivable of $2,285,037, and amounts receivable and prepaid expenses of $129,253 offset by current liabilities of $905,396. The Company expects to rely on its existing net working capital to finance its ongoing planned activities.

Price risk

The Company is exposed to price risk with respect to commodity prices. Commodity prices fluctuate on a daily basis and are affected by numerous factors beyond the Company's control. The supply and demand for commodities, the level of interest rates, the rate of inflation, investment decisions by large holders of commodities including governmental reserves and stability of exchange rates can all cause significant fluctuations in commodities prices. Such external economic factors are in turn influenced by changes in international investment patterns and monetary systems and political developments.

Market risk

Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate because of changes in market prices. The Company is exposed to market risk in trading its investments and unfavourable market conditions could result in dispositions of investments at less than favourable prices. In addition, most of the Company’s investments are in the resource sector. The Company mitigates this risk by attempting to have a portfolio that is not singularly exposed to any one issuer, with exception to the Company having two positions as at January 31, 2021 that made up of approximately 11%, and 9% of the total assets (July 31, 2020 - three positions that made up of approximately 15%, 11% and 11% respectively of the total assets).

For the six months ended January 31, 2021, a 10% (decrease) in the closing price of these two concentrated positions would result in an estimated decrease in after-tax net income of $350,000 (July 31, 2020 - $575,000).

For the six months ended January 31, 2021, a 10% (decrease) increase in the closing prices of its portfolio investments would result in an estimated increase (decrease) in after-tax net income (loss) of $1.38 million (July 31, 2020 - $1.3 million). This estimated impact on the statement of comprehensive income (loss) includes the estimated value of the non-traded warrants held, as determined using the Black-Scholes option pricing model.

RELATED PARTY DISCLOSURES

The Company entered into the following transactions in the ordinary course of business with related parties that are not subsidiaries of the Company.

Related party balances

The Company shares office space, resources and certain services with other corporations. The costs associated with these services, including the provision of office equipment and supplies, and certain other services, are administered by 2227929 Ontario Inc. to whom the Company pays a monthly flat fee. For the three and six months ended January 31, 2021, the Company was charged $75,000 and $150,000, respectively, for these services (three and six months ended January 31, 2020: $75,000 and $150,000). As well, the Company was charged an additional $nil by 2227929 Ontario Inc. for other services (six months ended January 31, 2020: $14,098).

As at January 31, 2021, the Company owes an amount of $250,000 (July 31, 2020 - $250,000) to African Gold Group Inc. related to the purchase of an investment, this amount is presented in accounts payable and accrued liabilities on the condensed interim consolidated statement of financial position. The Company’s executive chairman, Stan Bharti, a former director of the Company, Pierre Pettigrew and CFO, Ryan Ptolemy, are a former director and director and officer of this company. Subsequent to January 31, 2021, the amount was paid to African Gold Group, Inc.

As at January 31, 2021, the Company owes an amount of $285,000 (July 31, 2020 - $375,000) to Q-Gold Resources Ltd. related to the exercise of share purchase warrants, this amount is presented in accounts payable and accrued liabilities on the condensed interim consolidated statement of financial position. The Company’s former Chief Financial Officer, Deborah Battiston, is an officer of this company. Subsequent to January 31, 2021, the amount was paid to Q-Gold Resources Ltd.

Compensation of key management personnel of the Company

The remuneration of directors and other members of key management personnel were as follows:

Three months ended	Three months ended	Three months ended	Three months ended		Six months	Six months	ended
	January		31,		January		31,
2021 Management salaries and fees $103,941		2020 $121,567		$	2021 207,882	$	2020 245,947
Directors fees	71,250		18,750		90,000		37,500
Share-based payments	1,500		(1,765)		750		5,199
$	176,691	$	138,552	$	298,632	$	288,646

In accordance with IAS 24, key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and non-executive) of the Company. The remuneration of directors and key executives is determined by the board of directors of the Company having regard to the performance of individuals and market trends.

As at January 31, 2021, the Company holds investments in certain public resource and other sector companies that are related party entities, related by virtue of the relationship with common directors and officers.

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Estimated Fair
Security Description Cost
Value
African Gold Group i. 4,026,500 common shares 722,793 664,373
7,232,143 warrants 629,953 213,375
Blue Sky Energy Inc. ii. 955,000 common shares 911,770 138,475
Brazil Potash Corporation iii. 400,465 common shares 1,106,732 1,919,230
EarthRenew Inc. iv. 3,947,051 common shares 1,686,607 1,539,350
Flora Growth Corp. v. 490,196 common shares 500,000 420,517
Jourdan Resources Inc. vi. 9,100,000 common shares 240,420 1,137,500
6,100,000 warrants 40,553 688,690
Origin Gold Corporation vii. 3,750,000 common shares 278,175 843,750
Q-Gold Resources Ltd. viii. 6,000,000 common shares 878,571 1,500,000
Medivolve Inc. (formerly QuestCap Inc.) ix. 2,826,000 common shares 312,514 1,582,560
2,040,000 warrants 179,080 1,016,328
Yukoterre Resources Inc. x. 1,950,000 common shares 195,000 195,000
$ 7,682,169 $ 11,859,148
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i. The Company’s executive chairman, Stan Bharti, a former director of the Company, Pierre Pettigrew and CFO, Ryan Ptolemy, are a former director and director and officer of this company.

ii. The Company’s former director Pierre Pettigrew and CFO, Ryan Ptolemy serve as a director and an officer of this company.

iii. The Company’s executive chairman, Stan Bharti, former director of the Company, Pierre Pettigrew and CFO, Ryan Ptolemy serves as executive chairman, director and CFO of this company.

iv. The Company’s CFO, Ryan Ptolemy, serves as CFO of the Company.

v. The Company’s executive chairman, Stan Bharti is a former director of this company.

vi. The Company is a 10% shareholder of this company.

vii. The Company’s former CFO, Deborah Battiston, serves as CFO of this company.

viii. The Company’s former CFO, Deborah Battiston, serves as CFO of this company.

ix. The Company’s director, Wen Ye, serves as a director of the company.

x. The Company’s former CFO, Deborah Battiston, and CFO, Ptolemy serves as former CFO and CFO of this company.

COMMITMENTS AND CONTINGENCIES

The Company is party to certain management contracts. These contracts contain minimum commitments of approximately $390,000 (as at July 31, 2020 - $390,000) and additional contingent payments of approximately $2,370,000 (as at July 31, 2020 - $2,370,000) upon the occurrence of a change of control. As a triggering event has not taken place, the contingent payments have not been reflected in these consolidated financial statements.

The Company is obligated to deliver common shares of the Company to the holders of RSUs granted under the terms of its RSU Plan. See Note 9.

The Company has provided indemnities to the subscribers of flow-through shares for certain tax related amounts that may become due if the Company does not meet its expenditure obligations related to those flow-through shares.

SUBSEQUENT EVENTS

Subsequent to January 31, 2021, Greenway Investments International Ltd. repaid in full the promissory note of $198,000 plus accrued interest of $26,906 and the amount receivable of $22,000.

Subsequent to January 31, 2021, 570,000 stock options of the company expired unexercised.

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION AND CRITICAL ACCOUNTING ESTIMATES and CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

The Company’s financial statements are the responsibility of the Company’s management. The annual

consolidated financial statements were prepared by the Company’s management in accordance with IFRS. A description of the Company's significant accounting policies can be found in the notes of the Company's audited annual consolidated financial statements for the year ended July 31, 2020 with any new policies outlined in the condensed interim consolidated financial statements for the period ended January 31, 2021.

The preparation of financial statements in conformity with IFRS requires the Company’s management to make judgments, estimates and assumptions about future events that affect the amounts reported in the condensed interim financial statements and related notes to the financial statements. Although these estimates are based on management’s best knowledge of the amount, event or actions, actual results may differ from those estimates. The areas which require management to make significant judgments, estimates and assumptions in determining carrying values include, but are not limited to:

Valuation of Exploration and evaluation assets - The Company carries its mineral properties at cost less any impairment losses. The Company capitalizes exploration and evaluation costs, which are related to specific projects, until the commercial feasibility of the project is determinable, or the project is determined to be impaired. Costs are charged to operations when a property is abandoned or when impairment in value has been determined. The Company reviews the carrying values of mining properties and related expenditures whenever indicators of impairment exist or changes in circumstances indicate that their carrying values may not be recoverable. In undertaking this review, management is required to make significant estimates which are subject to various risks and uncertainties. Estimates may include, but are not limited to estimates of future metal prices, capital and operating costs, the quantities of mineral reserves to be mined and expected recoveries of minerals contained in ore, the ability to convert resources into economically mineable reserves, discount rates and; in the case of fair value less costs to sell, the discounted future after-tax cash flows expected to be derived from the Company’s mining properties, costs to sell the properties and the appropriate discount rate. Reductions in metal price forecasts, increases in estimated future costs of production, increases in estimated future capital costs, reductions in the amount of recoverable mineral reserves and mineral resources and/or adverse current economics can result in a write-down of the carrying amounts of the Company’s mineral properties and exploration and evaluation assets.
Fair value of investment in securities not quoted in an active market or private company investments - Where the fair values of financial assets and financial liabilities recorded on the consolidated statement of financial position cannot be derived from active markets, they are determined using a variety of valuation techniques. The inputs to these models are derived from observable market data where possible, but where observable market data are not available, judgment is required to establish fair values.

Fair value of financial derivatives - Investments in options and warrants which are not traded on a recognized securities exchange do not have a readily available market value. When there are sufficient and reliable observable market inputs, a valuation technique is used; if no such market inputs are available, the warrants and options are valued at intrinsic value.

Impairment of financial assets at amortized cost and determining expected credit losses - The Company recognizes a loss allowance for expected credit losses on amounts receivable and loans receivable. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument. The Company recognizes lifetime ECLs for amounts receivable and loans receivable. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of both the current as well as the forecast direction of conditions at the reporting date, including time value of money where appropriate. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs

represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

Determining an allowance for expected credit losses ("ECLs") requires management to make assumptions about the historical patterns for the probability of default, the timing of collection and the amount of incurred credit losses, which are adjusted based on management’s judgment about whether economic conditions and credit terms are such that actual losses may be higher or lower than what the historical patterns suggest. Financial assets in this category include amounts receivable and loans receivables.

Income, value added, withholding and other taxes -The Company is subject to income, value added, withholding and other taxes. Significant judgment is required in determining the Company’s provisions for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income, value added, withholding and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax related filings are subject to government audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the tax related accruals and deferred income tax provisions in the period in which such determination is made.
Income taxes and recoverability of potential deferred tax assets - In assessing the probability of realizing income tax assets recognized, management makes estimates related to expectations of future taxable income, applicable tax planning opportunities, expected timing of reversals of existing temporary differences and the likelihood that tax positions taken will be sustained upon examination by applicable tax authorities. In making its assessments, management gives additional weight to positive and negative evidence that can be objectively verified. Estimates of future taxable income are based on forecasted cash flows from operations and the application of existing tax laws in each jurisdiction. The Company considers relevant tax planning opportunities that are within the Company’s control, are feasible and within management’s ability to implement. Examination by applicable tax authorities is supported based on individual facts and circumstances of the relevant tax position examined in light of all available evidence. Where applicable tax laws and regulations are either unclear or subject to ongoing varying interpretations, it is reasonably possible that changes in these estimates can occur that materially affect the amounts of income tax assets recognized. Also, future changes in tax laws could limit the Company from realizing the tax benefits from the deferred tax assets. The Company reassesses unrecognized income tax assets at each reporting period.
Share-Based Payments - Management determines costs for share-based payments using marketbased valuation techniques. The fair value of the market-based and performance-based non-vested share awards are determined at the date of grant using generally accepted valuation techniques. Assumptions are made and judgment used in applying valuation techniques. These assumptions and judgments include estimating the future volatility of the stock price, expected dividend yield, future employee turnover rates and future employee stock option exercise behaviors and corporate performance. Such judgments and assumptions are inherently uncertain. Changes in these assumptions affect the fair value estimates.
Assets and disposal groups held for sale -- As security for default on a loan with APIO Africa Ltd (“APIO”), in June 2016, the Company received 8,169 shares of APIO’s subsidiary, Daos International Ltd. (“Daos”), a Mauritius company. As a result, the Company owned an 82% interest in Daos. The Company appointed three members to the board of Daos in June 2016 and controls the board of Daos. In October 2016, Daos issued additional shares to the Company in compensation for costs incurred by the Company related to Daos and the APIO loan. During the year ended July 31, 2020, the Company sold its interest in Daos to an arms length third party for $1. As at July 31, 2019, the Company owned 98% of the issued and outstanding shares of Daos. During the year ended July 31, 2018, Daos entered into an agreement to sell its 75% interest in a Mozambique company in exchange for common shares

of Global Gaming Technologies Corp. (formerly Global Blockchain Technologies Corp.) (the “Bloc shares”). The sale was completed during the year ended July 31, 2019 and the Bloc shares were sold for gross proceeds of $66,730.

Determination of Significant Influence of Investment in Associates - As at January 31, 2021, the Company has classified its investment in Q-Gold Resources Ltd.(“Q-Gold”) as a financial asset based on management’s judgement that it does not consider its ownership of 14% of the outstanding shares of Q-Gold as an investment where the Company has significant influence.
Contingencies - See note 15 of the condensed interim consolidated financial statements for details

DISCLOSURE CONTROLS AND PROCEDURES

Subject to the limitations, if any, described below, the Company’s CEO and CFO have, as at the end of the six months ended January 31, 2021, designed Disclosure and Control Procedures, (“DC&P”) or caused it to be designed under their supervision, to provide reasonable assurance that:

Material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and
Information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation;

Internal control over financial reporting has been designed, based on the framework established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in Canada.

There have been no significant changes to the Company’s disclosure controls and procedures and internal controls over financial reporting that occurred during the three and six months ended January 31, 2021 that have materially affected, or are reasonably likely to materially affect, the Company’s disclosure controls and procedures and internal control over financial reporting.

Management, under the supervision of the CEO and CFO, has evaluated the effectiveness of our internal control over financial reporting using the framework designed as described above and based on this evaluation, the CEO and CFO have concluded that internal control over financial reporting was effective as of January 31, 2021.

Because of inherent limitations, internal control over financial reporting and disclosure controls can provide only reasonable assurances and may not prevent or detect misstatements. Furthermore, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The CEO and CFO have certified that Internal Controls over Financial Reporting have been designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. The Audit Committee of the Company has reviewed this MD&A, and the condensed interim consolidated financial statements for the three and six months ended January 31, 2021, and the Company’s board of directors approved these documents prior to their release.

NON-IFRS MEASURES

The Company has identified certain measures that it believes will assist understanding of the financial

performance of the business. As the measures are not defined under IFRS they may not be directly comparable with other companies’ adjusted measures. The Non-IFRS measures are not intended to be a substitute for, or superior to, any measures of performance but management has included them as these are considered to be important comparables and key measures used within the business for assessing performance. These measures are explained further below:

Working capital

This MD&A refers to working capital, which is not a recognized measure under IFRS. This Non-IFRS performance measure does not have any standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other issuers. Management uses this measure internally. The use of this measure enables management to better assess performance trends. Management understands that a number of investors and others who follow the Company's performance assess performance in this way. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

The definition for working capital and reconciliation of the Non-IFRS measure to reported IFRS measures is as follows:

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January 31, July 31,
As at: 2021 2020
Cash $ 47,021 $ 205,011
Investments, at fair market value through profit and loss 13,791,970 13,245,492
Loans receivable 2,285,037 1,260,626
Amounts receivable and other 82,251 73,585
Prepaid 47,002 70,971
16,253,281 14,855,685
Current Liabilities
Accounts payable and accrued liabilities 905,396 1,023,546
Working Capital (current assets less current liabilities) $ 15,347,885 $ 13,832,139
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CAPITAL MANAGEMENT

The Company considers its capital structure to consist of share capital and share purchase options. The Company manages its capital structure and makes adjustments based on the funds available to support the acquisition, exploration and development of its mineral properties. The board of directors has not established quantitative return on capital criteria for management and relies on the expertise of management and the board of directors to sustain the future development of the business.

The management and board of directors of the Company review its capital management approach on an ongoing basis and believe it reflects a reasonable approach given the relative size of the Company’s assets. The Company and its subsidiaries are not subject to externally imposed capital requirements.

RISK AND UNCERTAINTIES

The Company is subject to risks and challenges similar to other companies in a comparable stage of development. These risks include dependence on key individuals. The operations of the Company are speculative due to the high-risk nature of its business, which are the acquisition, exploration and development of mining projects. These risks could materially affect the Company’s future operating results and could cause actual events to differ materially from those described herein and in forward-looking statements and forward-looking information relating to the Company. The risks of the Company are also described in the Company’s AIF, which can be found under the Company’s profile at www.sedar.com.

Novel Coronavirus (“COVID-19”)

No Revenues

To date, the Company has not recorded any revenues from operations nor has the Company commenced commercial production on any property. There can be no assurance that the Company has sufficient capital resources to continue as a going concern, that significant losses will not occur in the near future or that the Company will be profitable in the future. The Company’s expenses and capital expenditures will increase as consultants, personnel associated with the exploration, and possible development are advanced. The Company 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 Company’s property will continue to require the commitment of substantial resources. There can be no assurance that the Company will continue as a going concern, generate any revenues or achieve profitability.

Current Global Financial Conditions

Financial markets globally have been subject to increased volatility. Access to financing for the Company has been negatively affected by low precious metals prices, uncertain economic conditions and uncertainty with respect to sovereign defaults and liquidity throughout the world. These factors may negatively affect the ability of the Company to obtain financing in the future and, if obtained, on terms favourable to the Company. If these levels of volatility and market turmoil continue or worsen, the Company may not be able to secure appropriate debt or equity financing when needed, which could affect the trading price of the Company’s securities in an adverse manner.

Investment Exposure

Given the nature of SMC’s activities and recent investments made by the Company to deploy its capital in the short term, the results of operations and financial condition of the Company are dependent upon the market value of the securities purchased. Market value can be reflective of the actual or anticipated operating results of companies in the portfolio and/or the general market conditions that affect the resource and other sectors. Various factors affecting the resource and other sectors could have a negative impact on the Company’s investments and thereby have an adverse effect on its business. Additionally, the Company’s investments are mostly in small-cap businesses that may never mature or generate adequate returns or may require a number of years to do so. Junior exploration companies may never achieve commercial discoveries and production. Company-specific and industry-specific risks that materially adversely affect the Company’s investments may have a materially adverse impact on operating results.

Nature of Mining, Mineral Exploration and Development Projects

Mineral exploration is highly speculative in nature. There is no assurance that exploration efforts will be successful. Even when mineralization is discovered, it may take several years until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish proven and probable mineral reserves through drilling. Because of these uncertainties, no assurance can be given that exploration programs will result in the establishment or expansion of mineral resources or mineral reserves. There is no certainty that the expenditures made by the Company towards

the search and evaluation of mineral deposits will result in discoveries or development of commercial quantities of ore.

Mining operations generally involve a high degree of risk. The Company’s operations are subject to the hazards and risks normally encountered in mineral exploration and development, including environmental hazards, explosions, and unusual or unexpected geological formations or pressures. Such risks could result in damage to, or destruction of, mineral properties, personal injury, environmental damage, delays in mining, monetary losses and possible legal liability.

No Mineral Resources or Mineral Reserves have been estimated at East Sullivan

The East Sullivan Property is in the exploration stage and sufficient work has not been done to describe mineralization on the property with enough geological confidence for such mineralization to be reported as a mineral resource or mineral reserve. There is no assurance given by the Company that continuing work on the property will lead to defining the mineralization with enough confidence and in sufficient quantities to report it as a mineral resource or mineral reserve, or to economically extract it.

Mineral Resource Estimates May be Inaccurate

There are numerous uncertainties inherent in estimating mineral resources, including many factors beyond the control of the Company. Such estimates are a subjective process, and the accuracy of any mineral resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. These amounts are estimates only and the actual level of mineral recovery from such deposits may be different. Differences between management’s assumptions, including economic assumptions such as metal prices and market conditions, could have a material adverse effect on the Company’s financial position and results of operations.

Unknown Environmental Risks for Past Activities

Exploration and mining operations incur risks of releases to soil, surface water and groundwater of metals, chemicals, fuels, liquids having acidic properties and other contaminants. In recent years, regulatory requirements and improved technology have significantly reduced those risks, however, such risks have not been eliminated, and significant risk of environmental contamination from present and past exploration or mining activities still exists for mining companies. Companies may be liable for environmental contamination and natural resource damages relating to properties that they currently own or operate or at which environmental contamination occurred while or before they owned or operated the properties. No assurance can be given that potential liabilities for such contamination or damages caused by past activities at the East Sullivan Property or for the Troilus project do not exist.

Liquidity Concerns and Future Financings

The Company will require capital and operating expenditures in connection with the exploration and development of its properties and for working capital purposes. There can be no assurance that the Company will be successful in obtaining required financing as and when needed. The only sources of future funds presently available to the Company are the sale of equity capital, the sale of securities held, or the offering by the Company of an interest in its properties to be earned by another party or parties carrying out exploration or development thereof. There is no assurance that any such funds will be available for operations. Failure to obtain additional financing on a timely basis could cause the Company to reduce, delay or terminate its proposed operations, with the possible loss of such operations.

Volatile markets may make it difficult or impossible for the Company to obtain debt financing or equity financing on acceptable terms, if at all. Failure to obtain additional financing on a timely basis may cause the Company to postpone or slow down its development plans, delay or forfeit rights to certain acquisitions, forfeit rights in some or all of its properties or reduce or terminate some or all of its activities.

Share Price Fluctuations

The market price of securities of many companies, particularly junior exploration stage companies, experience wide fluctuations in price that are not necessarily related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that fluctuations in the Company’s share price will not occur. As well, the Company has invested in a small number of junior companies. Fluctuation in the share prices of these companies may significantly affect the valuations of the Company’s assets.

Foreign Exchange

Mineral commodities and acquisition opportunities are typically sold in U.S. dollars. The Company has also invested in foreign investments, including its previous investment in associate. The Company’s operations are in Canada. As a result, the Company is subject to foreign exchange risks relating to the relative value of the U.S. dollar as compared to the Canadian dollar.

Country Risk

The Company’s investment in Fura is subject to risks normally associated with the conduct of business in Columbia and Mozambique. These risks and uncertainties include, but are not limited to, currency exchange rates; price controls; import or export controls; currency remittance; high rates of inflation; labour unrest; renegotiation or nullification of existing permits, applications and contracts; tax disputes; changes in tax policies; restrictions on foreign exchange; changing political conditions; community relations; currency controls; and governmental regulations that may require the awarding of contracts of local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. Changes, if any, in mining or investment policies or shifts in political attitudes in Columbia or Mozambique may adversely affect the operations of Fura and affect the Company’s investment.

Insufficient Insurance Coverage

The Company’s business is capital intensive and subject to a number of risks and hazards, including environmental pollution, accidents or spills, industrial and transportation accidents, labour disputes, changes in the regulatory environment, natural phenomena (such as inclement weather conditions, earthquakes, pit wall failures and cave-ins) and encountering unusual or unexpected geological conditions. Many of the foregoing risks and hazards could result in damage to, or destruction of: the Company’s mineral properties or future processing facilities, personal injury or death, environmental damage, delays in or interruption of or cessation of their exploration or development activities, delay in or inability to receive regulatory approvals to transport their products, or costs, monetary losses and potential legal liability and adverse governmental action. The Company may be subject to liability or sustain loss for certain risks and hazards against which they do not or cannot insure or which it may reasonably elect not to insure because of the cost. This lack of insurance coverage could result in material economic harm to the Company.

Competition

The Company competes with many other mining companies that have substantially greater resources. Such competition may result in the Company being unable to acquire desired properties, recruit or retain qualified employees or acquire the capital necessary to fund the Company’s operations and develop its properties. The Company’s inability to compete with other mining companies for these resources would have a material adverse effect on the Company’s results of operations and business.

Dependence on Outside Parties

The Company has relied and will rely upon consultants, geologists, engineers and others and intends to rely on these parties for exploration and development expertise. Substantial expenditures are required to pursue acquisition opportunities and, in the case of new properties, to develop the exploration and plant infrastructure at any particular site. If such parties’ work is deficient or negligent or is not completed in a timely manner, it could have a material adverse effect on the Company.

Conflicts of Interest

Certain of the Company’s directors and officers serve or may agree to serve as directors or officers of other mining companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting such participation.

Income and other taxes

The Company is subject to income and other taxes in Canada. Significant judgment is required in determining the provision for taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. The determination of the Company’s income and other tax liabilities requires interpretation of complex laws and regulations. The Company’s interpretation of taxation law as applied to transactions and activities may not coincide with the interpretation of the tax authorities. All tax filings are subject to audit and potential reassessment subsequent to the financial statement reporting period. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will affect the income tax and deferred tax provisions in the period in which such determination is made. As of the date of the statement of financial position, no liability in respect of pending tax issues has been recognized in the financial statements.

OFF BALANCE SHEET ITEMS

The Company does not have any off-balance sheet terms.

ADDITIONAL INFORMATION AND CONTINUOUS DISCLOSURE

Additional information on the Company is available through regular filings of press releases on SEDAR (www.sedar.com), or by visiting the Company’s website at www.sulliden.com.

FORWARD-LOOKING INFORMATION AND CAUTIONARY STATEMENTS

Except for statements of historical fact relating to the Company certain information contained herein constitutes forward-looking information. Forward-looking information includes, but is not limited to, statements with respect to future economic estimates, including mineral resource estimates; acquisition opportunities of the Company; currency exchange rates; merits of litigation; ability to receive repayment on loans; government regulation of mining operations; and environmental risks. Generally, forward-looking information can be identified by the use of forward-looking terminology such as ‘‘plans’’, ‘‘expects’’ or ‘‘does not expect’’, ‘‘is expected’’, ‘‘budget’’, ‘‘scheduled’’, ‘‘estimates’’, ‘‘forecasts’’, ‘‘intends’’, ‘‘anticipates’’ or ‘‘does not anticipate’’, or ‘‘believes’’, or variations of such words and phrases or statements that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, ‘‘might’’ or ‘‘will be taken’’, ‘‘occur’’ or ‘‘be achieved’’. Forward-looking information is based on the opinions and estimates of management as of the date such statements are made, and they are 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: unexpected events and delays during construction, expansion and start-up; variations in mineral grade and recovery rates; delay or failure to receive government approvals; timing and availability of external financing on acceptable terms; actual results of current exploration activities; changes in project parameters as plans continue to be refined; future prices of gold and other minerals; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes; other risks of the mining industry and other risks described herein. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward- looking information.

All forward-looking statements made in this MD&A are qualified by these cautionary statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable securities law.

LIST OF OFFICERS AND DIRECTORS

Stan Bharti, Executive Chairman and Interim Chief Executive Officer Ryan Ptolemy Chief Financial Officer William Connell Steers Director William Clarke Director Wen Ye Director Stephane Amireault Director

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FUTURE MINERAL RESOURCES INC. — Management Reports 2021

47232_rns_2021-03-15_22d61286-dabb-4522-8bc8-85435c24e081.pdf

MANAGEMENT’S DISCUSSION AND ANALYSIS

Date: March 15, 2021

INTRODUCTION

Novel Coronavirus (“COVID-19”)

UPDATE AND OUTLOOK

EAST SULLIVAN PROPERTY

Mineral Resource Estimate and characterization of the Former East-Sullivan Mine

Ongoing work

RESULTS OF OPERATIONS

Share-based compensation expense

Professional, consulting and management fees

General and administrative expenses

Other

For the six months ended January 31, 2021

Share-based compensation expense

Professional, consulting and management fees

General and administrative expenses

Other

SUMMARY OF QUARTERLY RESULTS

FINANCIAL POSITION

LIQUIDITY AND CAPITAL RESOURCES

CASH FLOWS

Operating

Financing

Investing

CAPITAL STRUCTURE

FINANCIAL INSTRUMENTS

Fair value hierarchy

Level 2 Hierarchy

Level 3 Hierarchy

January 31, 2021

Brazil Potash Corp. (“BPC”)

Flora Growth Corp.

Interest rate risk

Foreign currency risk

Credit risk

Liquidity risk

Price risk

Market risk

RELATED PARTY DISCLOSURES

Related party balances

Compensation of key management personnel of the Company

COMMITMENTS AND CONTINGENCIES

SUBSEQUENT EVENTS

MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL INFORMATION AND CRITICAL ACCOUNTING ESTIMATES and CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION

DISCLOSURE CONTROLS AND PROCEDURES

NON-IFRS MEASURES

Working capital

CAPITAL MANAGEMENT

RISK AND UNCERTAINTIES

Novel Coronavirus (“COVID-19”)

No Revenues

Current Global Financial Conditions

Investment Exposure

Nature of Mining, Mineral Exploration and Development Projects

No Mineral Resources or Mineral Reserves have been estimated at East Sullivan

Mineral Resource Estimates May be Inaccurate

Unknown Environmental Risks for Past Activities

Liquidity Concerns and Future Financings

Share Price Fluctuations

Foreign Exchange

Country Risk

Insufficient Insurance Coverage

Competition

Dependence on Outside Parties

Conflicts of Interest

Income and other taxes

OFF BALANCE SHEET ITEMS

ADDITIONAL INFORMATION AND CONTINUOUS DISCLOSURE

FORWARD-LOOKING INFORMATION AND CAUTIONARY STATEMENTS

LIST OF OFFICERS AND DIRECTORS

More from FUTURE MINERAL RESOURCES INC.

FUTURE MINERAL RESOURCES INC. Management Reports 2021