Gelum Resources Ltd. - Management Reports 2021

GELUM RESOURCES LTD. (FORMERLY GELUM CAPITAL LTD.) MANAGEMENT DISCUSSION AND ANALYSIS

FOR THE PERIOD ENDED JULY 31, 2021

OVERVIEW

The following sets out the Management’s Discussion and Analysis (“MD&A”) of results of operations and financial condition of Gelum Resources Ltd. (formerly Gelum Capital Ltd.) (the “Company”, “Gelum”, “our” and “we”) describing the operating and financial results of the Company for the period ended July 31, 2021 and 2020. The following MD&A should be read in conjunction with the Company’s audited financial statements and related notes for the year ended April 30, 2021 copies of which are filed on the SEDAR website: www.sedar.com. The Company prepares its financial statements in accordance with International Financial Reporting Standards (“IFRS”). The audited financial statements of the Company are presented on a historical cost basis. All dollar figures included herein and in the following discussion and analysis are quoted in Canadian dollars unless otherwise noted.

The financial information in this MD&A is derived from the Company’s financial statements prepared in accordance with IFRS. This MD&A may contain forward looking statements based on assumptions and judgments of management regarding events or results that may prove to be inaccurate as a result of risk factors beyond its control. Actual results may differ materially from the expected results.

COMPANY OVERVIEW

The Company was a publicly traded Canadian company listed on the Canadian Securities Exchange under the symbol ‘JEM’, with an emphasis on acquiring and developing oil and gas properties.

The Company ceased to be directly or indirectly engaged in oil and gas activities as of July 24, 2018. Its principal business is the identification and evaluation of assets, or a business, and once identified or evaluated, to negotiate the acquisition or participation in the business. On September 21, 2021 the Company received conditional listing approval from the Canadian Securities Exchange (the “CSE”)

Effective September 24, 2021, the Company changed its name to Gelum Resources Ltd.

OVERALL PERFORMANCE

The Company will continue to seek new opportunities while maintaining the Company’s status as a reporting issuer.

OPERATIONAL UPDATE

Under the terms of the Development Agreement signed on August 7, 2014, the Company paid $4,644,326 (US$4,153,378) to drill, complete and equip three development wells. In the initial phase of the project, 70% of gross proceeds flow to the Company in order to recover its investment. As at 30 April 2017, the Company had realized accumulated investment returns of $2,717,566 (US$2,139,390). During the year ended 30 April 2017, realized investment returns were $485,601 (US$371,483).

According to Central production reports, since the first well started producing oil in October, 2014 until October 26, 2016, gross cumulative production of the three wells drilled in the Catriel Oeste field reached 57,483 barrels of crude oil, generating net proceeds of $2,717,566 which represents the 70% take that Jagercor received from the total sales of crude oil.

The Catriel Oeste concession expired on October 25, 2016. In January, Central advised Jagercor that Central continued to be involved in negotiations with the Rio Negro Province to extend the concession. Then Central advised Jagercor that the Province of Rio Negro rejected its offer, denying an extension of the concession agreement. Central has operated the Catriel Oeste oilfield until the end of February 2017. The Province transfered the asset (concession) to Provincial Hydrocarbons Company. As a result of Central’s inability to obtain a concession extension, production rights over the 3 wells terminate.

The Development Agreement has been impacted (and effectively terminated) by Central’s inability to obtain a concession extension.

On April 27, 2018, the Company sold its interest in its 57.64% owned subsidiary, Jagercor Energia Argentia SA (JEA) to a director of the Company for proceeds of 415,000 argentine pesos ($25,000).

During the year ended April 30, 2019, the Company received proceeds of $151,004 related to the sale and for partial repayment of a previously written-off loan to JEA resulting in a gain on loan receivable of $126,004.

The Company ceased to be directly or indirectly engaged in oil and gas activities. Its principal business is the identification and evaluation of assets, or a business, and once identified or evaluated, to negotiate the acquisition or participation in the business.

The Company has identified and acquired the Eldorado Gold Property (the “Property”) is located within the Bralorne-Bridge River Gold District in south-central British Columbia. On March 24, 2021 the Company entered into an option agreement to acquire 50% ownership interest in and to the Property and form a joint venture with the Optionor in respect of the Property, with the ability of the Company to acquire an additional 30% interest in the Property.

Eldorado Gold Property

The Eldorado Gold Property is located 22 kilometres north of the Bralorne mine, and 17 kilometres North of the community of Gold Bridge. The 7360 hectare property covers multiple polymetallic Minfile listings and two past producing, small-scale mines that form the northern extent of the Bridge River - Bralorne/Pioneer orogenic gold system. It is underlain by the same rock units and lies along one of the main faults tied to mineralization within the system. Orogenic gold occurs in polymetallic sulphide veins and vein stockwork within broad quartz-carbonate alteration within the Eldorado granodiorite stock and surrounding volcanic, sedimentary, and serpentinized ultramafic rocks. These units are complexly juxtaposed along numerous faults associated with regional-scale structures linked to gold mineralization in the region.

The most recent drilling on the property in 2011 by GFE Exploration Corporation (five holes totaling 1379 metres) intersected numerous, widespread intervals of gold mineralization, including 1.22 metres of 32.6 g/t Au (0.94m true thickness) at 292 metres down-hole, where visible gold occurs within a quartz- carbonate-sulphide vein. This in turn occurs within a broader mineralized zone of 25.6 metres of 2.19 g/t Au between 270.58 - 296.18 metres.

In order to earn a 50% interest in the property, the Company must pay an aggregate $600,000 to the optionors and issue up to 2,800,000 common shares, a further 30% can be earned paying to the optionors $800,000 and issuing up to 2,400,000 common shares. In order to complete the 80% ownership during the five-year option period the company will conduct exploration expenditures totaling $4,250,000.

The Company entered into an agreement to acquire the Roxey claims. The claims are contiguous to the Eldorado Gold Property within the Bralorne-Bridge River Gold District in south-central British Columbia. In order to acquire a 100% right, title and interest in and to the mineral claims, the Company issued 4,000,000 common shares in the capital stock of the Company on August 12, 2021.

Qualified Person

John Drobe, P.Geo., a qualified person as defined by NI 43-101, has reviewed the scientific and technical information and has approved the disclosure herein. Mr. Drobe is not independent of the Company as he is a consultant of the Company

RESULTS OF OPERATIONS

The Company reported net loss and comprehensive loss of $116,723 for the period ended July 31, 2021 (2020 –$17,785).

The Company’s operating expenses for the period ended July 31, 2021, included the following:

Consulting expense of $30,000 (2020 - $nil) increased due to the activities of the Company increasing to acquire various mineral property claims and increased need to expand management support.

General & administrative of $12,108 (2020 - $7,496), Office expense $4,056 (2020 - $nil) and Property investigation $6,344 (2020 - $nil) has increased compared to the same period of the previous year mainly due to increased office administration fees charged by Marval Office Management Ltd for services rendered.

Professional fees of $38,018 (2020 - $nil) has increased due to the increase of activities of the Company which include mineral property acquisitions, financings, convertible note conversion and CSE re-listing application.

Interest expense of $5,326 (2020 - $5,041) and accretion expense of $11,192 (2020 - $5,248) related to convertible notes and loan payable.

SUMMARY OF ANNUAL RESULTS

The following is a summary of the Company’s financial results for the three most recently completed financial years:

Year ended April 30	2021	2020	2019
Net loss	$165,628	$158,813	$1,493
Lossper share – basic and diluted	$0.03	$0.03	$0.00
Total assets	$89,262	$16,061	$87,481
Short-term liabilities	$138,653	$527,041	$481,268
Long-term liabilities	$263,651	$215,582	$173,962
Cash dividends declaredper share	$Nil	$Nil	$Nil

During the year ended April 30, 2019, the Company focused on seeking new opportunities and working towards maintaining the Company’s status as a reporting issuer. The statement of loss and comprehensive loss reflects the decrease in operations for the year ended April 30, 2019. The Company recorded a gain on the recovery of loan receivable $126,004.

During the year ended April 30, 2020, the Company focused on seeking new opportunities and working towards maintaining the Company’s status as a reporting issuer. The statement of loss and comprehensive loss reflects the decrease in operations for the year ended April 30, 2020.

During the year ended April 30, 2021, the Company focused on acquiring the Eldorado Gold Project and maintaining the Company’s status as a reporting issuer. The statement of loss and comprehensive loss reflects the increase in operations for the year ended April 30, 2021.

SUMMARY OF QUARTERLY RESULTS

The following is a summary of the Company’s financial results for the eight most recently completed quarters:

For the quarter ended	July 31, 2021– Q1 2022	Apr 30, 2021– Q4 2021	Jan 31, 2021– Q3 2021	Oct 31, 2020– Q2 2021
Net income (loss)	($116,723)	($74,087)	($39,322)	($34,434)
Earnings (loss) per share – basic and diluted	($0.01)	($0.01)	($0.01)	($0.01)
For the quarter ended	July 31, 2020– Q1 2021	Apr 30, 2020– Q4 2020	Jan 31, 2020– Q3 2020	Oct 31, 2019– Q2 2020
Net income (loss)	($17,785)	($73,075)	($20,740)	($34,340)
Earnings (loss) per share – basic and diluted	($0.00)	($0.02)	($0.00)	($0.00)

The net loss in the quarters ended January 31, 2021, October 31, 2020, July 31, 2020, April 30, 2020, January 31, 2020, January 31, 2020, April 30, 2019, January 31, 2019 and January 31, 2019 were primarily due to decreased operations due to the sale of JEA in the year ending April 30, 2018. The net income in the quarter ended January 31, 2019 was primarily due to decreased operating costs associated with the sale of JEA and the receipt of previously expensed loan receivables of $126,004. The quarter ended April 30, 2021 and July 31, 2021 primarily consisted of increased costs associated with the acquisition of the Eldorado Gold Property and preparing for re-listing on the CSE.

LIQUIDITY AND CAPITAL RESOURCES

As of July 31, 2021, the Company had a working capital surplus (deficit) of $549,480 (2020 – ($510,980)) and cash of $704,411 (2020 - $2,253). The increase in cash is explained during the thee months ended July 31, 2021, by private placement financings totaling $818,300 (2020 - $Nil).

Share transactions:

During the three months ended July 31, 2021 the Company issued the following:

a) On July 22, 2021, the Company closed a non-brokered private placement of 8,450,000 units at $0.10 per unit (the “Offering”) for gross proceeds of $845,000. Each unit consisted of one common share in the capital of the Company and two separate one-half (1/2) of one common share purchase warrants (a “1/2 Warrant A” and a “1/2 Warrant B”) and, respectively, each whole warrant, a “Warrant A” and a “Warrant B”, and collectively the “Warrants”.

Each whole Warrant A entitles the holder to purchase one common share in the capital of the Company at an exercise price of $0.25 per share for a period of 24 months from issuance and, each whole Warrant B entitles the holder to purchase one common share in the capital of the Company at an exercise price of $0.50 per share for a period of 24 months from issuance. No value was attributed to the warrant component of the units issued

The Offering closed in three separate tranches, issuing 3,350,000 units on June 28, 2021, 5,000,000 units on July 6, 2021 and 100,000 units on July 14, 2021. The Company paid finders’ fees of $21,700, issued 217,000 finders’ warrants exercisable at a price of $0.25 until June 28, 2021 the fair value of the finders’ warrants was determined to be $6,646 using the Black-Scholes option pricing model with the following inputs: i) exercise price: $0.25; ii) share price: $0.10; iii) term: 2 years; iv) volatility: 100%; v) discount rate: 0.44%.

b) On July 13, 2021, the Company completed the conversion of convertible notes by issuing 5,380,274 common shares at a price of $0.05 and 5,380,274 common share purchase warrants exercisable at $0.06 for one year. No value was attributed to the warrant component of the units issued.

During the three months ended July 31, 2020 the Company did not issue common shares.

Cash Flow Activities:

During the three months ended July 31, 2021, cash used in operating activities was $79,571 compared to $7,035 used during the three months ended July 31, 2020. Cash from financing activities was $818,300 compared to $Nil from the three months ended July 31, 2020. Cash used in financing activities was $39,117 compared to $nil from the three months ended July 31, 2020. The Company completed a private placement financing totaling $818,300 during the period net of share issuance costs. Additionally, operating costs have increased due to the activity surrounding the acquisition of the Eldorado property and the re-listing application of the Company to the CSE.

OUTSTANDING SHARES

Outstanding Share Data

As at July 31, 2021 there were 24,107,328 common shares outstanding.

As at the date of this report, there were 29,207,328 common shares outstanding.

As at July 31, 2021, there were 150,000 share options.

As at the date of this report, there were 150,000 share options.

As at July 31, 2021, there were 14,597,280 warrants outstanding.

As at the date of this report, there were 15,430,274 warrants outstanding.

			Number of shares	Share capital
Balance July	31,	2021	24,107,328	$ 8,885,862

OFF-BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements as at July 31, 2021 or as of the date of this report.

TRANSACTIONS WITH RELATED PARTIES

The amounts due to/from related parties are amounts due to the directors and officers. The balances are unsecured, noninterest bearing and have no specific terms for repayment. These transactions are in the normal course of operations and have been valued in these financial statements at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

No stock options were granted to related parties during the three months ended July 31, 2021 or July 31, 2020.

The Company transacted with the following related parties:

(a) Stephen Brohman is the Company’s CFO. He is a principal of Donaldson Brohman Martin CPA Inc. (“DBM CPA”) and Oakside Advisory Ltd. (“Oakside”) both firms in which he has significant influence. DBM CPA and Oakside provide the Company with accounting services.
(b) Shares to be issued include incentive bonus payable to compensate the former Chief Executive officer payable in 36,500 common shares at a price of $0.80 per share. Issuance pending since 2016.
(c) On October 14, 2017, convertible notes were issued to two directors, Hendrik Van Alphen and Robert Kopple. These notes have been converted as at July 13, 2021.
(d) Marla Ritchie is the Company’s Corporate secretary and Hendrik Van Alphen is the Company’s director. They share control of Marval Office Management Ltd., (“Marval”) in which they have significant influence. Marval provides office administration services to the Company on a shared cost basis.
(e) David Smith is the Company’s President and Interim Chief Executive Officer. He is the spouse to the owner of Lucas Investments Ltd. (“Lucas”), a company in which he has significant influence.

The aggregate value of transactions and outstanding balances with key management personnel and Directors and entities over which they have control or significant influence were as follows:

	Transactions	Transactions	Balances	Balances
	3 months ended	3 months ended	outstanding	outstanding
	July 31,	July 31,	July 31,	April 30,
	2021	2020	2021	2021
	$	$	$	$
DBM CPA	5,000	2,000	31,700	26,700
Marval	19,548	-	9,929	-
Lucas	13,500	-	10,500	-
Hendrik Van Alphen	-	-	388	6,038
MarlaRitchie	7,500	-	600	-
	45,548	2,000	53,117	32,738

All related party balances are unsecured and are due upon demand without interest.

The transactions with the key management personnel and Directors are included in operating expenses as follows:

(a) Professional fees
Includes the accounting services of Company’s CFO, Stephen Brohman, charged to the Company by DBM; and
Includes the corporate secretary services of Marla Ritchie.
(b) General and administrative expenses, Office expenses and Property investigation
Includes the administrative services charged to the Company by Maval.
(c) Consulting expense and share issuance costs
Includes the services charged to the Company by Lucas.

CRITICAL ACCOUNTING ESTIMATES

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

In the future, actual experience may differ from these estimates and assumptions. The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both.

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the financial statements within the next financial year are discussed in the audited financial statements.

RISKS AND UNCERTAINTIES

The Company believes that the following risks and uncertainties may materially affect its success.

Limited Operating History

The Company has no history of business or exploitation operations, revenue generation or production history. The Company was incorporated on June 8, 1987 and has not yet generated a significant profit from its activities. The Company is subject to all of the business risks and uncertainties associated with any new business enterprise, including the risk that it will not achieve its growth objective. The Company anticipates that it may take several years to achieve positive free cash flow.

Credit risk

Credit risk is the risk of an unexpected loss if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises primarily from the Company’s cash. The Company manages its credit risk relating to cash by dealing with only with highly-rated financial institutions. As a result, credit risk is considered insignificant.

Currency Risk

Currency risk is the risk to the Company’s earnings that arises from fluctuations of foreign exchange rates and the degree of volatility of these rates.

Interest rate risk

The Company is exposed to interest rate risk because of fluctuating interest rates. Fluctuations in market rates do not have

a significant impact on the Company’s operations due to the short term to maturity and no penalty cashable feature of its cash. For the three months ended July 31, 2021 every 1% fluctuation in interest rates up or down would have an insignificant impact.

Substantial Capital Requirements and Liquidity

No assurances can be given that the Company will be able to raise the additional funding that may be required. Debt financing, if available, may also involve restrictions on financing and operating activities. There is no assurance that additional financing will be available on terms acceptable to the Company or at all. If the Company is unable to obtain additional financing as needed, it may be required to reduce the scope of its operations or anticipated expansion.

The Company manages liquidity risk by maintaining an adequate level of cash and cash equivalents to meet its ongoing obligations. The Company continuously reviews its actual expenditures and forecast cash flows and matches the maturity dates of its cash and cash equivalents to capital and operating needs. The Company has been successful in raising equity financing in the past; however, there is no assurance that it will be able to do so in the future.

Financing Risks and Dilution to Shareholders

The Company will have limited financial resources. There can be no assurance that the Company will be able to obtain adequate financing in the future or that such financing will be available on favorable terms or at all. It is likely such additional capital will be raised through the issuance of additional equity, which will result in dilution to the Company’s shareholders.

Reliance on Management and Dependence on Key Personnel

The success of the Company will be largely dependent upon on the performance of the directors and officers and the ability to attract and retain key personnel. The loss of the services of these persons may have a material adverse effect on the Company’s business and prospects. The Company will compete with numerous other companies for the recruitment and retention of qualified employees and contractors. There is no assurance that the Company can maintain the service of its directors and officers or other qualified personnel required to operate its business. Failure to do so could have a material adverse effect on the Company and its prospects.

Litigation

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

FORWARD-LOOKING STATEMENTS

This MD&A contains forward-looking statements. Forward-looking statements are projections of events, revenues, income, future economic performance or management’s plans and objectives for future operations. In some cases, you can identify forward-looking statements by the use of terminology such as “may”, “should”, “expects”, “plans”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of these terms or other comparable terminology. Examples of forward-looking statements made in this MD&A include statements about the Company’s business plans; the costs and timing of its developments; its future investments and allocation of capital resources; success of exploration activities; requirements for additional capital; government regulation of mining operations. These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including: general economic and business conditions, fluctuations in worldwide prices and demand for minerals; our lack of operating history; the actual results of current exploration activities; conclusions or economic evaluations; changes in project parameters as plans continue to be refined; possible variations in grade and or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labor disputes or other risks of the oil & gas industry and mineral property exploration industry; delays in obtaining government approvals or financing or incompletion of development or construction activities, any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

The Company has no working interest in any Property and does not claim to report any reserves, resources other than reserves or measurements thereof. Gelum´s interest was limited to a funding agreement in the form of the Agreement entered into with Central which has been terminated.

Any references in this MD&A to test rates, flow rates, initial and/or final raw test or production rates, early production, test volumes behind pipe and/or "flush" production rates are useful in confirming the presence of hydrocarbon, however, such rates are not necessarily indicative of long-term performance or of ultimate recovery. Readers are cautioned not to place reliance on such rates in calculating the aggregate production for Gelum or its partners.

All calculations converting natural gas to barrels of oil equivalent ("boe") have been made using a conversion ratio of six thousand cubic feet (six "Mcf") of natural gas to one barrel of oil, unless otherwise stated. The use of boe may be misleading, particularly if used in isolation, as the conversion ratio of six Mcf of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.

While these forward-looking statements and any assumptions upon which they are based are made in good faith and reflect our current judgment regarding the direction of the Company’s business, actual results will almost always vary, sometimes materially, from any estimates, predictions, projections, assumptions or other future performance suggested herein. Except

as required by applicable law, including the securities laws of the Canada, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

MANAGEMENT’S REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING

In connection with Exemption Orders issued in November 2007 by each of the securities commissions across Canada, the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Company will file a Venture Issuer Basic Certificate with respect to the financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying MD&A.

In contrast to the certificate under National Instrument (“NI”) 52-109 (Certification of Disclosure in Issuer’s Annual and Interim Filings), the Venture Issuer Basic Certification includes a ‘Note to Reader’ stating that the CEO and CFO do not make any representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financing reporting, as defined in NI 52-109.

FINANCIAL AND OTHER INSTRUMENTS

The Company’s financial instruments consist of cash, amounts receivable, trade and other payables and due to related parties and convertible note.

The carrying value of cash, amounts receivable, trade and other payables and due to related parties, approximates their fair value because of the short-term nature of these instruments.

Convertible note is presented on an amortized cost basis and will be accreted to their face value at their effective interest rates, over the term to maturity.

Financial instruments measured at fair value on the statement of financial position are summarized into the following fair value hierarchy levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Management of financial risks

The financial risk arising from the Company’s operations are credit risk, liquidity risk, interest rate risk, currency risk and commodity price risk. These risks arise from the normal course of operations and all transactions undertaken are to support the Company’s ability to continue as a going concern. The risks associated with these financial instruments and the policies on how to mitigate these risks were set out in the “Risks and Uncertainties” section on page 7. Management manages and monitors these exposures to ensure appropriate measures are implemented on a timely and effective manner.

Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest or commodity risk arising from these financial instruments.

DIRECTORS

Certain directors of the Company are also directors, officers and/or shareholders of other companies that are similarly engaged in the business of acquiring, developing and exploring natural resource properties. Such associations may give rise to conflicts of interest from time to time. The directors of the Company are required to act in good faith with a view to the best interests of the Company and to disclose any interest they may have in any project opportunity of the Company. If a conflict of interest arises at a meeting of the board of directors, any director in a conflict will disclose his/her interest and abstain from voting in the matter(s). In determining whether or not the Company will participate in any project or opportunity, the directors will primarily consider the degree of risk to which the Company may be exposed and its financial position at the time.

OUTLOOK

The Company's primary focus for the foreseeable future will be ongoing on the evaluation of possible projects related to acquire and development activities in mineral exploration projects.

OTHER REQUIREMENTS

Additional disclosure of the Company’s material documents, information circular, material change reports, new release, and other information can be obtained on SEDAR at www.sedar.com.

OTHER MATTERS

Legal proceedings

The Company is not aware of any legal proceedings.

Contingent liabilities

At the date of report, management was unaware of any outstanding contingent liability relating to the Company’s activities.

Proposed transaction

The Company is not aware of any proposed transactions.

EVENTS AFTER THE REPORTING PERIOD

On August 31, 2021, the Company completed a non-brokered private placement offering of 1,100,000 units at a price of $0.10 per unit raising aggregate gross proceeds of $110,000. Each unit consists of one Common Share and two separate one-half (1/2) of one common share purchase warrants (a “1/2 Warrant A” and a “1/2 Warrant B” and, respectively, each whole warrant, a “Warrant A” and a “Warrant B”, and collectively the “Warrants”). Each whole Warrant A entitles the holder to purchase one Common Share at an exercise price of $0.25 per share for a period of 24 months from issuance, and each whole Warrant B entitles the holder to purchase one Common Share at an exercise price of $0.50 per share for a period of 24 months from issuance. Further, in the event the closing price of the Company’s Common Shares on the CSE is equal to or greater than $0.35 for the Warrant As and $0.65 for the Warrant Bs, for a minimum of ten consecutive trading days a notice of acceleration is provided in accordance with the terms of the Warrants. Finder’s fees were paid pursuant to the closing consisting of a cash commission of 7% of the gross proceeds raised and 76,650 finder’s warrants with each such warrant entitling the holder thereof to purchase one Common Share at an exercise price of $0.25 per share for a period of 24 months.

OFFICERS AND DIRECTORS OF THE COMPANY

As at September 29, 2021, the officers and directors of the Company are:

Robert Kopple –Director Hendrik Van Alphen – Director Susannah Coille Van Alphen - Director David Smith – President, Interim CEO Stephen Brohman - CFO

APPROVAL

The board of Directors of the Company has approved the disclosure contained in this Management Discussion and Analysis. A copy will be provided to anyone who requests it.

On Behalf of the Board of Directors,

/s/ Robert Kopple

Robert Kopple Director September 29, 2021

/s/ Hendrik Van Alphen

Hendrik Van Alphen Director September 29, 2021