GFG Resources Inc. — Interim / Quarterly Report 2021

Feb 17, 2021

GFG Resources Inc. (An Exploration Stage Company)

Management's Discussion & Analysis

For the three and six months ended December 31, 2020 and 2019

FOR FURTHER INFORMATION PLEASE CONTACT:

Marc Lepage, Vice President, Business Development GFG Resources Inc. 202 – 640 Broadway Avenue Saskatoon, Saskatchewan Canada S7N 1A9

Phone: (306) 931-0930 info@gfgresources.com www.gfgresources.com

TRADING SYMBOLS: TSX-V: GFG OTCQB:GFGSF

MANAGEMENT'S DISCUSSION AND ANALYSIS

This Management's Discussion and Analysis ("MD&A"), dated as at February 12, 2021, is to assist readers in understanding GFG Resources Inc.'s ("GFG" or the "Company") financial and operating performance for the three and six months ended December 31, 2020 and 2019. This MD&A should be read in conjunction with the Company's condensed interim consolidated financial statements (unaudited) as at December 31, 2020 and the Company's June 30, 2020 and 2019 audited consolidated financial statements and related notes thereto which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accountings Standards Board, as well as the annual MD&A for the years ended June 30, 2020 and 2019.

The Board of Directors has approved the disclosure presented herein.

Except as otherwise disclosed, all dollar figures included therein and in the following MD&A are quoted in Canadian dollars, which is the functional and presentation currency of the Company. The functional currency of the entity is determined using the currency of the primary economic environment in which that entity operates.

Additional information can be found on the Company's website (www.gfgresources.com) or SEDAR (www.sedar.com).

Certain sections of this MD&A may contain forward-looking statements.

All statements, other than statements of historical fact, made by the Company that address activities, events or developments that the Company expects or anticipates will or may occur in the future are considered forward-looking information, including, but not limited to, statements preceded by, followed by or that include words such as "may", "will", "would", "could", "should", "believes", "estimates", "projects", "potential", "expects", "plans", "intends", "anticipates", "targeted", "continues", "forecasts", "designed", "goal", or the negative of those words or other similar or comparable words.

Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information. Although the Company has attempted to identify important factors and various risks that could cause actual results, performance or achievements to differ materially from those described in forward-looking information, there may be other factors that cause results, performance or achievements not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, and accordingly readers should not place undue reliance on forward-looking information.

See additional discussion under "Risks and Uncertainties" section for a non-exhaustive list of risk factors that could cause actual results to differ materially from the forward-looking information included in this MD&A.

The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forwardlooking information and readers should carefully consider the matters discussed under "Risks and Uncertainties" in this MD&A.

HIGHLIGHTS FOR THE QUARTER AND OTHER SIGNIFICANT EVENTS

• December 17, 2020: Announced initial drill results from the 2020 Phase 2 drill program at the Pen Gold Project West of Timmins, ON;

• November 12, 2020: Identified a new high-grade gold target with grab samples of up to 65.90 grams of gold per tonne ("g/t Au") and provided a drill program update at the Pen Gold Project;

• August 31, 2020: Commenced 8,500 metre ("m") drill program focused on high-grade gold targets at the Pen Gold Project;

• July 15, 2020: Confirmed new high-grade gold target with up to 11 g/t Au from surface sampling and provides exploration update at the Pen Gold Project;

• May 6, 2020: Closed C$5.9 million oversubscribed private placement which included Alamos Gold Inc. ("Alamos") as strategic investor; and

• April 6, 2020: Significant high-grade gold system intersected at the Nib Prospect, Pen Gold Project including:

  • Hole PEN-20-47 intersected 71.27 g/t Au over 8.5 m including 511.00 g/t Au over 1.15 m at a vertical depth of approximately 50 m below surface.

Coronavirus (COVID-19)

On March 11, 2020, the COVID-19 outbreak was declared a pandemic by the World Health Organization. The situation is dynamic and the ultimate duration and magnitude of the impact on the economy and the financial effect on the Company's business is not known at this time. Potential impact on the Company includes the ability to complete planned exploration activities or the ability to obtain equity financing.

CORPORATE DEVELOPMENTS

On May 6, 2020, the Company closed an oversubscribed private placement for gross proceeds of $5.9 million. As part of the private placement, GFG welcomed Alamos (TSX: AGI; NYSE: AGI) as a 9.9% strategic investor. In connection with the offering, Alamos was granted certain participation rights to maintain its pro rata ownership interest in the Company.

On, December 11, 2017, the Company entered into agreements (the "Agreements") to consolidate a large, highly prospective land package west of Timmins, Ontario with each of Rapier Gold Inc. ("Rapier"), Probe Metals Inc. ("Probe") and Osisko Mining Inc. ("Osisko"). Under the respective Agreements, the Company acquired the outstanding common shares of Rapier (the "Rapier Acquisition"), the West Porcupine Property from Probe (the "West Porcupine Property Acquisition") and the Swayze Project from Osisko (the "Swayze Property Acquisition") via property purchase agreements. In addition to the Agreements, the Company completed a non-brokered private placement for gross proceeds of approximately $7.0 million.

In December 2020, the Company monetized a property right on certain Pen Gold properties for $318,825.

Rapier Acquisition

Under the terms of the Acquisition, all of Rapier's issued and outstanding common shares were exchanged on the basis of 0.15 of a common share in the capital of the Company for each one Rapier common share, representing total consideration of approximately $0.08 per Rapier share based on GFG's 20-day volume weighted average share price ending December 7, 2017 on the Exchange. The Rapier Acquisition was carried out by way of a court approved plan of arrangement and received approval of 90% of the votes cast by the shareholders of Rapier. The Rapier transaction closed on February 28, 2018.

During the year ended June 30, 2020, the Company, for administrative purposes, dissolved its wholly-owned subsidiaries, Rapier Gold Inc. and Nat River Gold Inc.

West Porcupine Property Acquisition

On December 21, 2017, the Company purchased 100% of Probe's interest in the West Porcupine property, a land package consisting of 198 claims and covering approximately 245 square kilometres located southwest of Timmins, Ontario, in exchange for the issuance of 6,477,883 shares of the Company.

Swayze Property Acquisition

On December 21, 2017, the Company purchased 100% of Osisko's interest in the Swayze property, a land package consisting of 56 claims, covering approximately 120 square kilometres, and located 40 kilometres from Newmont's Borden gold project, in exchange for 1,110,494 shares of the Company.

Sewell Property Acquisition

On, June 25, 2018, the Company completed the acquisition of the Sewell Property from a subsidiary of Alamos Gold Inc. ("Alamos") in exchange for 390,930 GFG common shares. The Sewell Property is located 10 kilometres west of Pan American Silver's West Timmins Gold Mine and is contiguous to portions of the Pen Gold Project's eastern boundary.

Option and Earn-in Agreement

On September 10, 2018, the Company completed an option and earn-in agreement ("JV Agreement") with Newcrest Resources Inc. ("Newcrest"), a wholly-owned subsidiary of Newcrest to advance GFG's Rattlesnake Hills Gold Project. Under the terms of the JV Agreement, Newcrest had the right to acquire, in multiple stages, up to 75% of the Rattlesnake Hills Gold Project by completing a series of exploration and development expenditures and making staged option cash payments totaling US$1.25 million to GFG over a nine-and-a-half-year period.

On April 3, 2020, GFG was advised by Newcrest of its decision to withdraw from the JV Agreement for the Rattlesnake Hills Gold Project. The Project remains 100% owned and controlled by GFG.

OUTLOOK

The Company is in a strong financial position and will continue to take a multi-disciplinary exploration approach to advance its district scale gold project in Ontario.

At the Company's Pen Gold project, the Company plans to drill approximately 4,000 m by April 2021. The Phase 1 2021 drill program will test several targets with a priority on the Slate Rock. R66, Sewell and Reeves targets. In addition to the drill program, the Company will complete additional surface exploration activities such as prospecting, till sampling and a drone magnetic survey to advance and outline new targets. Following the Phase 1 drill program, the Company plans to complete an additional 4,000 m of drilling in the second half 2021.

At the Company's 100% owned Rattlesnake Hills Gold Project in Wyoming, U.S., the Company continues with its strategic review designed to find a suitable path to advance the project. During this time, the Company will maintain the asset and no exploration activities are scheduled for the first quarter of 2021.

CORPORATE PROFILE

The Company was incorporated on January 24, 2012, under the laws of the Province of British Columbia, Canada. Following the completion of its initial public offering ("IPO") on June 26, 2012, the Company secured designation as a Capital Pool Company ("CPC"), according to the regulations of the TSX Venture Exchange (the "Exchange"). The Company's current corporate structure is primarily a result of the Rapier Acquisition and the following transactions:

i) On September 2, 2016, the Company entered into an arrangement agreement to acquire 100% of the issued and outstanding shares of 1070900 BC Ltd. ("1070900"), in exchange for shares of the Company which would result in a reverse take-over of the Company by the shareholders of 1070900 (the "Transaction"). As 1070900 is deemed to be the accounting acquirer for accounting purposes, its assets, liabilities and operations are included in the financial statements at their historical carrying values.

On October 21, 2016, the Transaction closed and the Company acquired, on a one for one basis, all issued and outstanding shares of 1070900 in exchange for 38,503,483 common shares of the Company.

Effective June 30, 2017, the Company completed the wind-up and dissolution of 1070900.

ii) On July 5, 2016, 1070900 entered into an agreement and plan of share exchange with GFG Resources (US) Inc. ("GFG-US") to acquire all the issued and outstanding shares of GFG-US in exchange for common shares of 1070900, on a one share for one share equivalent basis. This would result in a reverse take-over of 1070900 by the shareholders of GFG-US (the "Arrangement").

On August 24, 2016, the Arrangement closed and the shareholders of 1070900 received 21,194,612 common shares of 1070900 for all the issued and outstanding shares of GFG-US. Out of 21,194,612 commons shares of 1070900, 19,050,419 common shares were issued in exchange for all of GFG-US's issued and outstanding common shares on a one for one basis. In addition to the common shares exchanged, 2,144,193 additional shares were withheld, pending the receipt of clearance certificates from the U.S. Internal Revenue Service. In January 2017, the Company received the required clearance and issued 2,144,193 common shares effective March 7, 2017.

The shareholders of 1070900 also issued 875,000 stock options in exchange for all the issued and outstanding stock options of GFG-US.

On October 27, 2016, upon receiving final acceptance from the Exchange, Crest Petroleum Corp. changed its name to GFG Resources Inc. and began trading on the Exchange as a Tier 2 Mining Issuer under the symbol "GFG". Further, on December 12, 2016, the Company announced that it had also started trading on the OTCQB Venture Market in the U.S. under the symbol "GFGSF".

The Company's head office address is Suite 202 – 640 Broadway Avenue, Saskatoon, Saskatchewan, S7N 1A9. The Company's principal business activity is the exploration and acquisition of mineral properties.

PROJECTS OVERVIEW AND EXPLORATION ACTIVITIES

Pen Gold and Dore Gold Properties Overview

Through four transactions and a series of staking programs, GFG acquired and consolidated two large, highly prospective land packages west and southwest of Timmins, Ontario (see Figure 1). The northern consolidated land package, the Pen Gold Project, consisted of three transactions which included the West Porcupine property purchased from Probe, the Pen Gold property with the acquisition of Rapier, and the Sewell property purchased from Alamos. The southern consolidated land package, the Dore Gold Project, consists of the Swayze property acquired from Osisko, and land added through a regional staking program (see news releases dated December 11, 2017, February 28, 2018, May 10, 2018 and June 25, 2018).

The Pen Gold and Dore Gold projects host highly prospective geology in an underexplored area. Previous exploration work and drilling on the properties have identified several distinctive and prospective zones of gold mineralization and targets that will be the focus of upcoming exploration programs.

Figure 1: Pen and Dore Gold Property Locations West of Timmins, Ontario

Pen Gold Project Overview

The Pen Gold property is located 50 kilometres southwest of the prolific gold district and town of Timmins, Ontario (see Figure 1). The property represents a land package of approximately 475 square kilometres and is situated between Newmont's Borden Gold project and the Pan American Silver's Timmins West Mine. The property covers an approximately 55-kilometre-long section of Archean greenstone that contains the interpreted western extension of the Porcupine-Destor Fault Zone ("PDFZ") within the same geological setting that hosts most of the gold deposits found in the Timmins Gold Camp.

Geology

The Pen Gold Project is located in the Archean Superior Province of Northern Ontario. The Archean Superior Province is host to a variety of lithologies which range in age from 3.5 Ga to less than 2.76 Ga and form an east-west trending pattern of alternating terranes. It is divided into numerous subprovinces, bounded by linear faults and characterized by differing lithologies, structural/tectonic conditions, ages and metamorphic conditions.

The Abitibi Subprovince is a volcano-plutonic terrane comprising low metamorphic grade metavolcanic-metasedimentary belts. It contains lithologically diverse metavolcanic rocks with various intrusive suites and to a lesser extent chemical and clastic metasedimentary rocks. The individual greenstone belts within the Subprovince have been intruded, deformed and truncated by felsic batholiths. The east trending Abitibi and Swayze greenstone belts of the Abitibi Subprovince have historically been explored and mined for a variety of commodities.

The Pen Gold Project lies within the Abitibi Subprovince, proximal to its western boundary with the Kapuskasing Structural Zone and the Ivanhoe Lake Cataclastic Zone. It is situated at the northern limit of the Swayze Greenstone Belt and is thought to be the western extension of the Abitibi Greenstone Belt (see Figure 2).

Dore Gold Project Overview

The Dore Gold Project is located 40 kilometres east of Newmont's Borden Gold project and 30 kilometres northwest of IAMGOLD's Cote Lake gold project in Ontario. The land package consists of approximately 212 square kilometres and covers a 12-kilometre-long section of Archean greenstone within the Swayze Greenstone Belt (see Figure 1).

Geology

The Dore Project is located within the central part of the Swayze Greenstone Belt (see Figure 3) that is part of the western extension of the Abitibi Subprovince, a Neo-Archean granitoid-greenstone belt. This greenstone belt is bounded and transected by major faults and large batholiths including the Kapuskasing Fault, the PDFZ, the Ridout Fault, the Kenogamissi batholith, and the Nat River and Ramsey granitoid complexes.

The Dore Gold property covers mafic and felsic volcanic packages along the Rundle Fault Zone and is located only a few kilometres north of the Rideout Fault Zone that hosts the Cote Lake gold deposit.

The western limit and central zone of the Dore Gold property is located within the Bret lake synform, which is composed mainly of metasedimentary rocks and metavolcanic flows from the Swayze-Dore stratigraphic package. The rocks are a mixed group of felsic to intermediate pyroclastic and volcaniclastic rocks intercalated with epiclastic metasedimentary rocks of the Swayze series. Irregular feldspar-quartz porphyry stocks, dykes, and sills, and medium to coarse-grained diorite-gabbro intrude all rocks within the supra-crustal sequences. Northwest striking diabase dikes intrude all older lithologies. Known gold mineralization described for this area is related with shear zones; porphyritic intrusions, and quartz-carbonate-sericite veins with associated carbonatization, silicification, chloritization, and potassic alteration.

The eastern-most claims of the property package cover the central section of the Bret Lake synform at the contact with a large intrusive center that include dioritic and syenitic marginal intrusive phases. Quartz-carbonate-sericite gold mineralization is reported in close special relationship with the intrusive rocks.

2020 Exploration Program

In 2020, the Company conducted its largest exploration program since acquiring the Pen Gold Project in 2018. The 2020 exploration program included 12,500 m of drilling from two drill programs, regional till and prospecting sampling and drone magnetic surveys. See corresponding Tables 1-2 and Figures 4-9.

Phase 2 Drill Program

From August to December, the Company completed a total of 30 holes (8,900 m) at the Pen Gold Project (see Table 1 and Figures 4-8). During the Phase 2 drill program, the Company tested multiple high-grade gold targets at the Sewell, HGM, Crawford, Nib, Boundary, Broadway and Broadsword regional targets. On December 17, 2020, the Company reported initial results from nine holes (see news release: "GFG Announces Initial Drill Results from Recently Completed Phase 2 Drill Program at the Pen Gold Project West of Timmins, ON").

The Company continues to see significant delays in assay lab turnaround, in some instances over seven weeks, and anticipates receiving the remaining 21 assay results over the coming weeks.

Summary of Initial Drill Program Results

Sewell North Prospect

Reconnaissance drilling with three holes at the Sewell North Prospect intercepted a new gold discovery along a parallel structure approximately one km north of the Sewell Prospect. Prior to GFG, the target area had seen no drill testing. Hole PEN-20-054 returned 4.56 g/t Au over 0.7 m at 15.7 m downhole. Gold mineralization is hosted in a quartz-pyrite-tourmaline vein system associated with strongly-sheared, albite-silica altered diorite, a geological setting is similar to the Timmins West Mine, which is located 20 km to the northeast. Based on these encouraging results, two follow-up holes have been completed with assays pending. The Company plans to drill test this prospective zone further in early 2021.

HGM Prospect

Previous drilling at the HGM Prospect has outlined several distinct zones of gold mineralization with high-grade intervals that include 21.59 g/t Au over 3.9 m and 7.53 g/t Au over 2.2 m. As part of the 2020 drill program, two holes were drilled to test for the western and depth extensions to these zones.

Hole PEN-20-052 was designed to test the up-dip western continuity of the system. The hole intersected four distinct zones of gold mineralization associated with disseminated pyrite within silica-carbonate altered, quartz-veined mafic volcanic stratigraphy between 150 and 290 m downhole. Results include 0.55 g/t Au over 5.0 m, 1.24 g/t Au over 1.50 m and 0.88 g/t Au over 4.5 m.

Hole PEN-20-053 was designed to test the western plunge continuity of the system. The hole intersected three distinct zones of mineralization associated with disseminated pyrite within silica-carbonate altered, quartz-veined mafic volcanic stratigraphy between 375 and 407 m downhole. Results include 1.03 g/t Au over 1.3 m, 1.17 g/t Au over 2.0 m and 0.98 g/t Au over 1.8 m.

The program was successful in confirming the stacked nature of the mineralization and the continuity of the system both downplunge and up-dip to the west. The system remains open at depth and down-plunge.

Nib Prospect

Previous drilling by the Company outlined three distinct northeast-trending mineralized zones within sheared and altered diorite at the Nib Prospect. Phase 2 drilling included four holes that focused on the uppermost zone where hole PEN-20-47 encountered 71.27 g/t Au over 8.5 m at 50 m below surface and on the strike and depth extensions of several footwall vein systems.

Assays have been received for two holes that tested the depth continuity of the Nib mineralization on 25 and 50 m step-outs. The two holes outlined new zones and extended those intercepted in hole PEN-20-47 to depth, albeit at lower grades. Hole PEN-20-59 returned 1.65 g/t Au over 1.7 m and 0.57 g/t over 3.6 m from depths of 110 and 142 m downhole. Hole PEN-20- 60 intersected several zones of mineralization from depths of 249 to 495 m downhole highlighted by returned 0.90 g/t Au over 3.0 m, 0.81 g/t Au over 6.0 m and 1.14 g/t Au over 6.0 m. Gold mineralization is associated with disseminated pyritearsenopyrite within quartz-veined and variably albite-silica-carbonate altered diorite. The system remains open at depth and assays are pending on two holes that tested the strike continuity of the system on 50 m step-outs.

Boundary Prospect

The Boundary Prospect was identified in 2019 through systematic till sampling and follow-up prospecting that outlined six new gold showings along a three km trend within the eastern portion of the Project. Surface rock grab and channel sampling returned up to 11 g/t Au associated with quartz veined, carbonate-sericite altered mafic volcanic rocks. During the 2020 Phase 2 drill program, six holes were completed testing a number of targets along the trend. To date, results have been received for 2 holes that returned no significant intercepts while results from the remaining four holes are pending.

Following a significant 2020 exploration program, the Company will now focus on reviewing and analyzing the received and pending drill results and prepare for its up-coming drill program of approximately 4,000 m that is scheduled to begin in February 2021. The up-coming program is fully funded as the Company maintains a strong cash position of approximately C$3.9 million.

Figure 4: Map of 2020 Drill Targets on the Pen Gold Project

Figure 5: Plan Map of Deerfoot Regional Target

Figure 6: Plan Map of the Nib Prospect

Figure 7: Cross Section of the Nib Prospect

Table 1: Initial Results from the 2020 Phase 2 Drill Program at the Pen Gold Project
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Hole ID	From (m)	To (m)	Length (m)	Au g/t	Target
PEN-20-052	128.5	130.0	1.5	0.49
and	146.0	151.0	5.0	0.55
	157.0	159.0	2.0	0.49
	168.0	169.5	1.5	1.24	HGM
	257.5	260.5	1.5	1.16
	282.5	287.0	4.5	0.88
PEN-20-053	375.0	376.3	1.3	1.03
and	384.0	386.0	2.0	1.17
	405.5	407.3	1.8	0.98	HGM
	464.4	465.2	0.8	0.98
	482.6	484.2	1.6	0.47
	490.2	494.2	4.0	0.24
PEN-20-054	15.7	16.4	0.7	4.56	Sewell North
PEN-20-055	224.5	225.0	0.5	0.72	Sewell North
PEN-20-056	176.9	177.6	0.7	0.47	Sewell North
PEN-20-057	87.0	88.5	1.5	0.50	Boundary
PEN-20-058			no significant assays		Boundary
PEN-20-059	109.8	111.5	1.7	1.65	Nib
and	138.5	142.0	3.5	0.57
PEN-20-060	148.2	148.7	0.5	0.62
and	246.6	249.6	3.0	0.90
	268.5	275.6	7.1	0.30
	308.4	313.4	5.0	0.23	Nib
	331.0	337.0	6.0	0.81
	374.0	380.0	6.0	1.14

Q22021 Management's Discussion and Analysis(in Canadian dollars, except as otherwise noted)				Page 11
493.0	494.0	1.0	0.63
494.0	495.0	2.0	0.61

*Gold intervals reported in the above table are at 0.2 g/t cut-off and a minimum 0.5 gram per metre product. Weighted averaging has been used to calculate all reported intervals. True widths are estimated at 70-90% of drilled thickness.

2020 Phase 1 Drill Program Results

During the first quarter of 2020, the Company completed eight holes (3,600 m) as part of its 2020 Phase 1 drill program testing targets at the Nib, HGM and Slate Rock East prospects. The program was highlighted by hole PEN-20-47 at the Nib Prospect that intersected 71.27 g/t Au over 8.5 m, including 511.00 g/t Au over 1.15 m. (see news release: "GFG Drills 71.27 Grams of Gold per Tonne Over 8.5 Metres at the Pen Gold Project West of Timmins, Ontario").

Nib Prospect

At the Nib Prospect, in the central part of the Pen Gold Project, gold mineralization occurs in altered and variably sheared and veined diorite along the western margin of the Reeves Ultramafic Complex (see Figure 4). Extensive swamp and esker cover in this area have hindered historic exploration and prevented explorers from realizing the significance of the gold mineralization at the Nib-Yellowknife occurrence.

In 2018, the Company completed initial drill testing of the Nib Prospect and identified three distinct northeast-trending, mineralized zones with hole PEN-18-017 returning 0.89 g/t Au over 7.0 m (see news release: "GFG Discovers New Gold Zone with 21.26 g/t Gold over 1.7 Metres at Pen Gold Project West of Timmins, ON"). Despite the low gold grade, the occurrence of visible gold in multiple zones of highly-altered rocks and a regional structural setting that includes sheared polymictic conglomerates similar to those in the vicinity of Newmont's Dome Mine in Timmins, lead the Company to drill two additional holes in 2020.

Hole PEN-20-047 was designed to test for the depth extension of the zones intersected in PEN-18-017 as well as any subparallel vein sets. In addition to intersecting the three mineralized vein zones at depth, a very high-grade interval was encountered in a new zone 52.0 m downhole that returned 71.27 g/t Au over 8.5 m including 511.00 g/t Au over 1.15 m.

The high-grade gold zone consists of moderately to strongly silica-carbonate-chlorite-biotite altered and variably quartzcarbonate-veined diorite with 5 to 8% disseminated pyrrhotite and arsenopyrite as vein halos and disseminations. Quartz veining comprises approximately 20% of the mineralized interval. Visible gold was identified in three consecutive samples corresponding to gold grades of 511.00 g/t, 1.50 g/t, and 14.00 g/t. The gold can be associated with veining but also occurs as disseminated grains within altered diorite.

Additional gold mineralized intervals in hole PEN-20-47 were identified at 70.0 m, 204.1 m, 232.6 m and 309.9 m downhole corresponding to 1.01 g/t Au over 5.0 m, 0.90 g/t Au over 7.0 m, 0.73 g/t Au over 4.0 m and 1.11 g/t Au over 3.1 m. These stacked, mineralized intervals consist of variably quartz-veined, chlorite-silica-albite-altered diorite with associated disseminated pyrrhotite and arsenopyrite.

Hole PEN-20-046 was designed to test for the northeastern extension of the vein system identified in PEN-19-017 with a 150 m step-out. While similar diorite host rock was encountered only low gold values were returned.

The identification of stacked gold zones within multiple holes and the identification of very high grades in PEN-20-047 demonstrates the potential for a significant gold system at the Nib Prospect. Regionally within the Reeves area, several other targets have been generated by the Company where north-east and east-trending structural corridors intersect the western margin of the Reeves Complex. The Company continues to evaluate and advance these targets towards a drill ready stage.

Slate Rock

The Slate Rock region hosts an underexplored and highly prospective mineralized system that is centered on a dioritic intrusive complex that extends for over four kilometres in the largely overburden- and lake-covered northwest part of the Project (see Figure 9).

Broadly spaced drilling at Slate Rock East returned multiple, wide intervals of low-grade gold mineralization in variably deformed diorite and porphyritic diorite that are associated with quartz-carbonate veins and veinlets, moderate to intense quartzalbite-sericite-carbonate alteration and disseminated and veinlet pyrite.

Despite the low gold grades encountered at Slate Rock to-date, the target remains a high priority for further drilling due to scarcity of drilling, the potential for high-grade mineralization as exemplified from boulder samples and the presence of coarse visible gold in drill core.

PEN-20-048 targeted the southern contact of the intrusive complex with felsic volcanics, intersected two zones of mineralization within a porphyritic diorite unit internal to the complex that returned 0.22 g/t Au over 7.3 m and 0.31 g/t Au over 14.2 m at 74.5 and 114.4 m down-hole, respectively.

PEN-20-049 was designed to test modelled structures internal to the complex evident in airborne magnetic data and intersected four broad zones of mineralization. The most significant interval returned 0.29 g/t Au over 25.5 m at 127.5 m down-hole. This intercept included 2.36 g/t Au over 1.0 m and 1.38 g/t Au over 1.0 m with the presence of coarse visible gold within a sheared, biotite-rich interval. This is the first documented case of visible gold at Slate Rock and its relationship to a previously unrecognized shear zone provides valuable information to vector towards higher grade gold mineralization.

HGM

The HGM Prospect is in the eastern portion of the Project along the Deerfoot deformation zone. Drill testing for depth extension at HGM continued to intersect multiple zones of gold mineralization and can now be traced to a depth of 500 m below surface. The mineralized zones occur within a central mafic volcanic unit that is bounded by dominantly ultramafic bodies. The highgrade nature of the mineralization at HGM has been confirmed with historical intercepts of 7.53 g/t Au over 2.2 m and 25.96 g/t Au over 1.0 m in hole PEN-19-039 and 21.54 g/t Au over 3.9 m in hole DF94-18.

PEN-20-043 was designed to test for an eastward plunge to the gold zones and encountered the target mafic volcanic unit and intersected two zones of gold mineralization. The first zone, occurring in an intensely quartz-sericite altered felsic dike, returned 0.31 g/t Au over 13.4 m at 329.9 m down-hole. The second zone returned 1.31 g/t Au over 1.2 m in a sulphidized, quartzcarbonate altered and intensely deformed mafic volcanics at 449.1 m down-hole.

PEN-20-045 tested for a westward plunge to the gold zones 150 m from PEN-20-043 and encountered three zones of gold mineralization within the target mafic volcanic unit. The first zone, occurring near the hanging-wall contact with the northern ultramafic body, returned 4.50 g/t Au over 3.1 m and included 12.80 g/t Au over 1.0 m. This zone consists of intensely deformed and quartz-carbonate altered mafic volcanic with stockwork quartz-carbonate veinlets and 3-5% disseminated and veinlet pyrite and an altered felsic dike. The second zone occurs within similar altered mafic volcanic rocks and returned 0.56 g/t Au over 3.0 m and 0.91 g/t Au over 4.9 m. The third zone occurs in intensely deformed mafic volcanics at the southern, or lower, contact with a felsic dike similar to the upper zone.

PEN-20-051 was designed to test the gap between holes PEN-20-043 and PEN-20-045, intersected three zones of mineralization. The upper two zones occur with deformed and altered mafic volcanics and returned 0.37 g/t Au over 3.0 m and 1.89 g/t Au over 1.0 m. The third zone occurs in an intensely quartz-sericite altered felsic dike with quartz stockwork veining and 3-5% disseminated pyrite.

This association of gold mineralization with felsic dikes observed in PEN-20-45 and PEN-20-051 is not typical of HGM mineralization at shallower depths but does occur 400 m to the west at the Crawford Prospect indicating it is an important characteristic of gold mineralization in this segment of the Deerfoot deformation zone. Drill hole data is being reviewed to prioritize drill targets along this trend which has demonstrated its prospectivity for high-grade gold mineralization.

Hole ID	From (m)	To (m)	Length (m)	Au g/t	Target
PEN-20-043	329.9	343.3	13.4	0.31
and	449.1	450.3	1.2	1.31
PEN-20-045	401.3	404.4	3.1	4.50
incl.	403.4	404.4	1.0	12.80
and	472.7	475.7	3.0	0.56	HGM
and	513.1	518.0	4.9	0.91
PEN-20-051	387.5	390.5	3.0	0.37
and	422.7	423.7	1.0	1.89
and	484.4	495.0	10.6	0.21
PEN-20-048	74.5	81.8	7.3	0.22
and	114.4	128.5	14.2	0.31
PEN-20-049	127.5	153.0	25.5	0.29
incl.	129.0	130.0	1.0	2.36
incl.	151.5	153.0	1.5	1.38	Slate Rock East
and	172.0	178.8	6.8	0.26
and	224.6	241.3	16.7	0.20
and	256.5	281.0	24.5	0.12
PEN-20-050	151.0	158.8	7.8	0.49
PEN-20-0461	no significant assays
PEN-20-0471	52.0	60.5	8.5	71.27
incl.	56.4	59.5	3.2	191.78
incl.	56.4	57.5	1.2	511.00
and	70.0	75.0	5.0	1.01
incl.	73.0	74.0	1.0	2.06
and	82.0	83.0	1.0	0.98	Nib
and	94.6	95.6	1.0	1.55
and	204.1	211.1	7.0	0.90
incl.	205.1	206.1	1.0	2.37
and	232.6	233.6	4.0	0.73
and	309.9	313.0	3.1	1.11
incl.	309.9	310.9	1.0	2.27

Table 2: Nib Prospect Assay Results from 2020 Phase I Drill Program

*Gold intervals reported in the above table are at 0.2 and 1.0 g/t cut-offs. Weighted averaging has been used to calculate all reported intervals. True widths are estimated at 70-90% of drilled thickness. (1) Previously reported composites at the Nib Prospect.

Surface Exploration Programs

In addition to the 2020 drill programs, the Company conducted additional regional till sampling, prospecting, mapping and drone magnetics.

In 2020, the Company collected a total of 160 till samples were collected, bringing the grand total to 793 samples since 2018

(see Figure 9).

During the prospecting program, the Company discovered a new high-grade gold target with grab samples of up to 65.90 g/t Au. The new gold target, the R66 Prospect, is located 2.3 kilometres southeast of the Slate Rock Prospect where the Company has been actively drilling. The R66 target and area was highlighted as a high priority target during the Company's regional structural interpretation when it consolidated the Pen Gold Project in 2018. The R66 surface showing consists of a pair of northeast-trending quartz veins with trace to one percent pyrite and chalcopyrite within sericite-carbonate altered, highly strained mafic to intermediate volcanic rocks. Grab samples of the vein and adjacent wall rocks returned values that include 7.57, 28.60, 52.10 and 65.90 g/t Au.

Figure 9: Overview Map of Regional Till Sampling Results

2019 Exploration Program

In 2019, the Company's exploration plan consisted of approximately 7,000 m of drilling in two phases, regional till sampling, prospecting and mapping at the Pen Gold Project (see Table 3).

2019 Phase 2 Drill Results Commentary

In the fourth quarter of 2019, the Company completed 2,500 m of drilling from eight drill holes testing six targets. The initial results from four drill holes are highlighted by hole PEN-19-39 which successfully outlined mineralized stacked lenses with high-grade gold intercepts at the HGM target grading 7.53 g/t Au over 2.2 m and 25.96 g/t Au over 1.0 m.

Deerfoot Region - HGM Prospect

The HGM prospect was initially discovered and drilled by Hemlo Gold Mines and successively tested between 1994 and 2011 with 15 holes. It is hosted along the Deerfoot Corridor, a one by three kilometre area in the easternmost part of the Pen Gold Project, that contains the westward extension of the PDFZ and second order sub-parallel shear zones and fault splays. Detailed review of historic drill logs and re-logging of available drill core by GFG outlined a series of stacked, replacement style gold lenses within a sequence of carbonate-silica-sericite altered, brecciated mafic volcanic rocks. Historic drilling focused on the first 300 m from surface and returned multiple high-grade assays over broad widths such as to 21.59 g/t Au over 3.9 m and 4.30 g/t Au over 5.0 m.

During Phase 2 of the 2019 drill program, GFG drilled two holes at the HGM target to test the eastern depth and western strike continuity of the system. Assays received to date from drill hole PEN-19-39, the deepest and easternmost hole testing the system, outlined five distinct mineralized intervals within a 225-metre-long section from 146.2 to 372.0 m downhole. Most significant are two, visible gold-bearing intervals that assayed 7.53 g/t Au over 2.2 m (including 31.80 g/t Au over 0.5 m) and 25.96 g/t Au over 1.0 m (including 51.80 g/t Au over 0.5 m) from 309.7 and 371.0 m, respectively. The former is hosted within a strongly silicified and sericitized, quartz breccia-veined mafic volcanic interval with 10% disseminated and stringer pyrite with visible gold. The latter is associated with quartz-carbonate brecciated mafic volcanic hosting 10% disseminated and stringer chalcopyrite, pyrrhotite, pyrite with visible gold. Further up-hole, several lower grade intervals returned 0.49 g/t Au over 1.2 m, 0.63 g/t Au over 0.5 m and 1.24 g/t Au over 1.0 m from 146.2, 215.8 and 233.6 m.

Mineralized intervals from Hole PEN-19-39 are interpreted to link to historic hole 94-18 located 75 m up-plunge that returned 6.52 g/t Au over 2.0 m and 21.59 g/t Au over 3.9 m and to hole 95-23 located 50 m along strike to the west that returned 21.94 g/t Au over 1.0 m.

Drill hole PEN-19-36 tested the western strike extension of the HGM target and intersected two distinct mineralized intervals ranging from 269.6 to 322.7 m downhole. Most significant is a 7.4 m interval that returned 0.93 g/t Au, including 1.2 m at 2.86 g/t Au. The interval is associated with a moderately quartz-carbonate brecciated and veined mafic volcanic interval with 1 to 5% disseminated and stringer pyrite and pyrrhotite. Further downhole, an interval returned 0.42 g/t Au over 1.3 m.

Deerfoot Region– North Sewell

GFG drilled one hole at the Sewell North target to on follow up on a historic hole that returned multiple gold mineralized intervals associated with a structure approximately 250 m northwest of the Sewell prospect. Assays received to date from drill hole PEN-19-35 include two distinct, diorite-hosted, quartz veined intervals hosting tourmaline, pyrite and arsenopyrite. The two intervals assayed 1.21 g/t Au over 1.0 m and 2.89 g/t Au over 1.0 m from 39.1 and 47.0 m, respectively. The system remains open in all directions.

Deerfoot Region - Regional

The Company completed two holes along an untested two-kilometre segment of the PDFZ, between the HGM and Sewell prospects. Hole PEN-19-37 was drilled to test a complex fold structure and structural intersection associated with a resistivity break. No significant assays were returned from the hole.

2019 Phase 1 Drill Results Commentary

The Phase 1 drill program consisted of 4,400 m from 15 holes ranging in length from 150 to 300 m testing targets in the Reeves, Jehann and Slate Rock regions and one follow-up hole at the new Crawford discovery (see Table 3). All but one of the drill targets have seen no historic drilling and were generated from the Company's 2018 systematic integration of geological, geochemical, structural and geophysical datasets.

Slate Rock

The Slate Rock target encompasses a two by four kilometre prospective trend where limited historic work identified gold mineralization associated with diorite and felsic porphyry in an area of extensive till cover. Historic grab samples of boulders returned up to 18.10 g/t Au in altered diorite. High gold grain counts (up to 220 grains; 83% pristine) from till samples taken within and down-ice of the target area in 2018 provide further support for the existence of a local bedrock source. Over a kilometer to the east, recent prospecting samples from bedrock returned anomalous gold values up to 0.57 g/t Au in weaklyaltered and veined felsic porphyry with 1-2% pyrite and magnetite. Prior to the current drill program, only two historic holes were completed along the two kilometre prospective trend.

In the 2019 Phase 1 drill program, a total of four drill holes were completed. All four drill holes intersected the target diorite and felsic porphyry intrusive rocks. Two of the four drill holes intersected anomalous gold values (greater than 0.1 g/t Au) over widths of 12 to 25 m.

Drill hole PEN-19-024 tested the diorite-felsic porphyry complex in the vicinity of the till anomaly and historic float samples. A 13.5-metre interval of moderately altered, quartz-veined diorite cut by altered and deformed felsic porphyry returned 0.41 g/t Au and included a sub-interval of 2.53 g/t Au over 1.5 m.

Drill hole PEN-19-025, located 500 m to the east of hole PEN-19-024, was drilled to test the intrusive complex where it is disrupted by northeast-trending faults evident in airborne magnetic data. It was collared in intensely altered and sheared mafic volcanic rocks, passed through multiple intervals of variably altered (sericite-quartz-carbonate) and deformed diorite and felsic porphyry and ended in mafic volcanic. Both diorite and felsic porphyry intervals were mineralized. A 25.3-metre interval of variably altered and moderately deformed diorite returned 0.47 g/t Au and included a 1.0 m sub-interval of 3.58 g/t Au. The higher-grade section is related to extensional quartz-carbonate-sulphide-magnetite veining.

Currently, the Slate Rock area is the focus of follow-up prospecting and till sampling in the area of these drill holes and along strike towards the east and west where airborne magnetic data indicates further structural complication. Based on these results, the Company plans further drilling of the target, particularly the western and eastern portions that remain untested and host significant gold in rock samples.

Deerfoot

The Deerfoot target encompasses a two by six kilometre area in the easternmost part of the Pen Gold Project that contains the westward extension of the PDFZ and second order parallel shear zones and fault splays. The area is predominantly till-covered with very limited bedrock exposure. To date, three high-grade gold prospects occur along this trend: Sewell, HGM and the recently discovered Crawford prospect, where in 2018 the Company intersected 21.26 g/t Au over 1.7 m in drill hole PEN-18- 016. (see news releases: "GFG Drills 33.77 g/t Gold over 1.05 Metres at Pen Gold Project West of Timmins, ON" and "GFG Discovers New Gold Zone with 21.26 g/t Gold over 1.7 Metres at Pen Gold Project West of Timmins, ON").

During Phase 1 of the 2019 drill program, one follow-up hole was drilled at Crawford to test for the depth extension of the shear zone and gold mineralization intersected in PEN-18-016. Drill hole PEN-19-034 intersected two zones of sulphide-rich quartz veining within the main mafic volcanic package. These graded 2.50 g/t Au over 1.0 m and 2.12 g/t Au over 1.0 m and were associated with discrete minor shear zones. The continuation of the shear zone and felsic porphyry dike encountered in PEN-18-016 was also intersected in the follow-up hole but only weakly anomalous gold values were returned.

Interestingly, a lower zone of gold mineralization was intersected in PEN-19-034 that was not encountered in the previous Crawford drill hole. A broad, low-grade intercept of 0.19 g/t Au over 20.3 m was returned from an interval of sulphidized mafic volcanics that are dissected by syenitic dykes. This interval coincides with a distinct change in core axis angles consistent with a change in orientation of the rock package from north- to south-dipping. This lower zone of gold mineralization occurs within an interpreted fold nose.

Ongoing review of geochemical and structural data will help to refine drill placement to test for the strike extension and plunge of the high-grade mineralization intersected in the discovery hole. Further drilling is also justified to assess the lower zone of mineralization. Additionally, several targets within the Deerfoot region between the HGM and Sewell occurrences warrant further evaluation and drill testing.

Jehann East

The Jehann East target is located within the 20-square-kilometre Jehann regional target and encompasses a one by two kilometre prospective trend adjacent to and immediately north of the PDFZ. The area is largely covered by till and other surficial deposits up to 20 m in thickness and grab samples have returned anomalous gold values (up to 0.5 g/t Au) in quartz veins. Till samples collected in 2018 contained highly anomalous numbers of pristine gold grains (up to 250 grains; 94% pristine) suggesting a proximal bedrock source. Prior to the 2019 drill program, no drill holes were completed within the 'footprint' of the till anomaly or up-ice.

A total of four drill holes were completed in the initial phase of the 2019 drill program. The holes were designed to test various candidate gold-bearing structures with northwest, east-northeast, and northeast-trending orientations.

Drill hole PEN-19-022, designed to test a northeast-trending structural corridor, returned 1.06 g/t Au over 0.5 m in an interval of sheared and carbonate altered mafic volcanic containing pyrite and tourmaline bearing quartz-carbonate shear veining. This intercept and the occurrence of sporadic anomalous gold values through the top 1/3 of the hole confirm that the northeast trending structures and veins are prospective and deserve further follow-up.

Results to date have not explained the source of highly anomalous gold-in-till. Additional in-fill and regional till sampling and prospecting is currently being focused to the north and east of the completed drill holes to further constrain the source of the till anomaly. Further drilling in the area will be guided by results of these programs.

Reeves

The Reeves target encompasses a four-by-four kilometre area containing several prospective structural corridors west of the Reeves Ultramafic Complex.

Historic drilling at the Talc-Mine target returned gold values up to 13.0 g/t Au over 4.3 m related to quartz-carbonate veining within intensely carbonate-altered ultramafic rocks. Drilling by the Company at the Nib target in 2018 returned 0.89 g/t Au over 7.0 m with the presence of visible gold in an interval of moderately deformed, altered (carbonate-sericite-quartz) diorite with dark grey quartz veins.

A total of five holes were drilled in the Reeves area during the initial phase of the 2019 drill program. The drill holes were designed to test priority east-northeast-trending corridors at structural intersections or in areas of lithologic complexity. The areas drilled had seen no previous drilling and were in low-lying areas requiring frozen ground for access.

Drill hole PEN-19-028, designed to test a sheared contact of felsic porphyry body interpreted from airborne magnetics, intersected 1.47 g/t Au over 1.5 m in highly altered (carbonate-sericite-quartz) mafic volcanic rocks in the footwall of a felsic porphyry body.

Further work in the Reeves area will focus on refining drill targets along the previously identified gold bearing structures related to the Talc-Mine and Nib targets and along the PDFZ in the southern portion of the Reeves target.

Table 3: 2019 Highlighted Drill Results at the Pen Gold Project

Hole ID	From (m)	To (m)	Length (m)	Au (g/t)	Target
PEN-19-020	no significant assays				Jehann East
PEN-19-021	no significant assays				Jehann East
PEN-19-022	27.6	28.1	0.5	1.06	Jehann East
PEN-19-023	273.8	274.8	1.0	0.64	Jehann East
PEN-19-024(1)	106.5	120.0	13.5	0.41	Slate Rock
incl	106.5	108.0	1.5	2.53
and	281.5	282.5	1.0	0.86
and	309.8	310.3	0.5	0.76
PEN-19-025(1)	72.2	97.5	25.3	0.47	Slate Rock
incl	72.2	73.2	1.0	3.58
incl	91.5	93.0	1.5	1.81
and	202.5	215.0	12.5	0.15
PEN-19-026	165.8	166.9	1.1	0.53	Slate Rock
and	261.0	262.0	1.0	0.86
PEN-19-027	no significant assays				Slate Rock
PEN-19-028	113.5	115.0	1.5	1.47	Reeves
PEN-19-029	no significant assays				Reeves
PEN-19-030	no significant assays				Reeves
PEN-19-031	no significant assays				Reeves
PEN-19-032	no significant assays				Reeves
PEN-19-033	56.5	65.0	8.5	0.26	Jehann Lake
PEN-19-034	140	141	1.0	2.5	Crawford
and	145	146	1.0	2.12
and(1,2)	219.8	240	20.3	0.19
incl(2)	219.8	221	1.3	0.53
PEN-19-35	39.1	40.1	1.0	1.21	Sewell North
and	47.0	48.0	1.0	2.89
PEN-19-36	269.6	277	7.4	0.93	HGM
incl	269.6	270.8	1.2	2.86
and	321.4	322.7	1.3	0.42
PEN-19-37	no significant assays				Deerfoot Regional
PEN-19-39	146.2	147.4	1.2	0.49	HGM
and	215.8	216.3	0.5	0.63

Q22021 Management's Discussion and Analysis

(in Canadian dollars, except as otherwise noted)					Page 18
and	233.6	234.6	1.0	1.24
and	309.7	311.9	2.2	7.53
incl	310.2	310.7	0.5	31.8
and(2)	371.0	372.0	1.0	25.96
incl(2)	371.5	372.0	0.5	51.8

*Gold intervals reported in the above table are at 0.5 g/t cut-off. Weighted averaging has been used to calculate all reported intervals. True widths are estimated at 80-100% of drilled thickness.

(1) Interval calculated at 0.1 g/t cut-off.

(2) True width is unknown.

2018 Exploration Program

The Company employed a systematic belt-scale approach to exploration and targeting on the highly prospective Pen Gold and Dore Gold properties. The 2018 program was aligned with the overall objective to drill test multiple high priority targets that are prospective for high-grade gold mineralization. The 2018 exploration program included airborne and ground geophysics, till sampling, prospecting, mapping, and 4,744 m of diamond drilling. The majority of the 2018 program and all drilling focused on the Pen Gold Project. In addition, LIDAR airborne survey and data compilation was completed to advance the Dore Gold Project to better define drill targets for future drill programs.

As a first step, the Company completed a high-resolution helicopter-borne magnetic survey (9,850 line-kilometres on 50-metre line spacing) over a large portion of Pen Gold property in March. The new magnetic survey, combined with existing data, now provides complete coverage of the property. A property-wide structural model has been constructed from this new data to trace the main deformation zones and prospective second-order structures.

With the structural model and targets in hand, the Company completed a regional till sampling program on the Pen Gold property. Results from the two till sampling programs have outlined six priority regional till anomalies returning up to 2,470 ppb gold and 220 gold grains. For many of the samples with anomalous gold grain counts, the majority of the grains are pristineshaped indicating the gold was likely transported less than one kilometre from the bedrock source. The total number of gold grains reported, and aerial extent of the anomalies, further confirms the district endowment and prospectivity. Of the 467 sites sampled to date, from across the 475 square kilometre property, 70 till samples have values that exceed regional background of 20 gold grains. These anomalous samples are grouped into seven regional target areas: Jehann, Reeves, Deerfoot, Chabot, Slate Rock, Hoodoo and Broadway (see news releases: "GFG Outlines 5 Priority Targets from Regional Till Sampling Program at the Pen Gold Project Near Timmins, ON" and "GFG Expands and Identifies New Gold Anomalies and Completes Phase 1 Drill Program at the Pen Gold Project West of Timmins, ON").

The Company also completed two detailed, IP surveys covering the Reeves and Deerfoot regions for a total of 112 linekilometres. The IP data was used in combination with detailed airborne magnetic data, a structural model of the district, till geochemistry and an extensive surface rock sampling dataset to refine and prioritize drill targets.

During the fourth quarter of 2018, the Company completed its inaugural drill program which consisted of 4,744 m in 18 holes ranging in depth from 150 to 500 m (see Table 4 and news releases "GFG Drills 33.77 g/t Gold over 1.05 Metres at Pen Gold Project West of Timmins, ON" and "GFG Discovers New Gold Zone with 21.26 g/t Gold over 1.7 Metres at Pen Gold Project West of Timmins, ON"). The program was designed to test six targets distributed across a 20-kilometre segment in the eastern portion of the Pen Gold Project. The drill program successfully intercepted several zones of high-grade gold and discovered a new gold zone at the Crawford target from hole PEN-18-016 which intersected 21.26 g/t Au over 1.7 m at 100 m depth. The new mineralized zone is located 500 m west of the HGM occurrence in the Deerfoot regional target. These targets were generated from the integration of historic and new data sets from the Company's 2018 exploration program.

2018 Drill Results Commentary

Deerfoot Region - Sewell

PEN-18-001 tested the western extension of the Sewell system intercepting three distinct mineralized zones hosted in variablydeformed pyroxenite horizons within an intrusive complex composed of predominantly diorite and cut by numerous syenite dikes. The upper zone returned 7.44 g/t Au over 1.9 m within a broader interval that returned 3.57 g/t Au over 5.6 m at a downhole depth of 61.1 to 66.7 m. Gold mineralization is hosted within a strongly-sheared, altered and quartz-veined structure and associated with 2 to 7% disseminated and blebby pyrite. A second structure returned 4.20 g/t Au over 1.0 m from 86.6 to 87.6 m associated with strong quartz-calcite veining and flooding and 15% disseminated pyrite. Further downhole, a third zone of mineralization returned 14.70 g/t Au over 0.8 m associated with quartz-veining and stockwork, 1 to 3% pyrite and finegrained visible gold.

PEN-18-015 was drilled into the core of the Sewell system to confirm historic drill results and provide detailed structural information on the orientation and controls of gold mineralization. The hole intercepted four mineralized zones that are hosted within a package of variably-deformed pyroxenite and syenite dikes. High-grade gold mineralization of 33.77 g/t Au over 1.05 m was returned from a strongly-sheared, sericite-altered and quartz-veined interval at 60m depth. Mineralization is associated with 1 to 3 % pyrite and chalcopyrite and fine-grained visible gold. This result validated the historic drilling down-dip that returned 7.63 g/t Au over 3.6 m including 33.46 g/t Au over 0.6 m.

Deerfoot Region – HGM and Crawford

PEN-18-013 targeted the westward extension of the HGM occurrence within the central portion of the Deerfoot region where historic drilling returned 43.00 g/t Au over 1.5 m. The step-out hole returned 9.20 g/t Au over 0.9 m in altered, deformed and sulphidized mafic volcanics at a depth of 80 m below surface. This intercept confirms that the mineralized zone at HGM is open to the west at shallow depths. Re-logging of drill core from several historic holes is underway to provide a better understanding of the controls on gold mineralization at this prospect and to guide future drilling in the area.

PEN-18-016 targeted the continuation of the same deformation zone as PEN-18-013, 500 m to the west of the HGM prospect, where interpretation of IP resistivity and airborne magnetic data suggested increased lithologic and structural complexity. At 138.4 m down the hole, a zone of intense deformation and silica-sericite alteration was intersected on the contact between felsic porphyry and mafic volcanic stratigraphy. This quartz-veined and sulphide-rich interval contained visible gold and returned 21.26 g/t Au over 1.7 m including 39.70 g/t Au over 0.9 m. In addition to gold mineralization, this interval was elevated in silver, bismuth, tellurium and zinc. A second zone of gold mineralization returned 1.20 g/t Au over 1.2 m from 143.0 m downhole. These intercepts mark a new discovery (Crawford) along a prospective segment of the PDFZ where limited historic drilling has been conducted.

The mineralized intercepts from Crawford and HGM are approximately two kilometres southwest of the Sewell prospect where the Company recently intersected high-grade gold mineralization of 33.77 g/t Au over 1.1 m, including 63.88 g/t Au over 0.6 m and 3.57 g/t Au over 5.6 m, including 7.44 g/t Au over 1.9 m; 4.20 g/t Au over 1.0 m and 14.70 g/t Au over 0.8 m. Within this gap between these targets there has been a limited amount of historic exploration due to extensive till cover.

Reeves Region – Nib

PEN-18-017 targeted the northeastern extension of shear veins exposed at the Nib target within the Reeves region where historic grab samples returned up to 37.60 g/t Au in altered and quartz-veined diorite. Three distinct zones of alteration and deformation were encountered; two of which contained visible gold in quartz veins cutting carbonate-altered diorite. The lowermost zone, intersected from 250 m down the hole, contained up to 15% arsenopyrite and pyrrhotite and 20% quartz vein material, returned 0.89 g/t Au over 7.0 m. In addition to gold, this interval was elevated in tungsten. While only low-grade gold mineralization was intersected, the occurrence of visible gold confirms the prospectivity of this deformation zone along the western margin of the Reeves ultramafic complex.

Hole ID	From (m)	To (m)	Length (m)	Au (g/t)		Target
PEN-18-001	61.2	66.7	5.6	3.57	Sewell
incl	61.2	63.0	1.9	7.44
and	86.6	87.6	1.0	4.20
and	92.9	93.3	0.4	1.87
and	123.9	124.7	0.8	14.70
and	126.9	128.0	1.1	0.75
PEN-18-013	136.3	137.3	1.0	0.73	HGM
and	151.1	152.0	1.0	0.60
and	178.6	179.5	0.9	9.20
PEN-18-015	27.0	29.5	2.5	0.78	Sewell
and	48.0	52.0	4.0	0.77
and	60.0	61.0	1.1	33.77

Table 4: Highlighted 2018 Drill Results from Pen Gold Project

incl	60.5	61.0	0.6	63.88
and	87.5	88.4	0.9	1.96
PEN-18-016	118.0	119.0	1.0	0.80	Crawford
and	138.4	140.0	1.7	21.26
incl	138.4	139.2	0.9	39.70
and	143.0	144.2	1.2	1.20
PEN-18-017	65.4	68.0	2.6	0.55	Nib
and	157.2	159.0	1.8	0.63
and	250.5	257.5	7.0	0.89

*Gold intervals reported in the above table are at 0.5 g/t cut-off and included intervals at 3.0 g/t cut-off. Weighted averaging has been used to calculate all reported intervals. True widths are estimated at 80-100% of drilled thickness.

Historic Exploration Programs

Although there has been a significant amount of exploration work completed in and around the Timmins gold district, the Pen Gold and Dore Gold properties remain highly underexplored. The Pen Gold Project contains the interpreted western extension of the Porcupine-Destor and Pipestone Fault Zones with the same geological setting that hosts the majority of the gold deposits found in the Timmins gold district. The Dore Gold Project contains several high strain zones including the extension of prospective Rundle Fault Zone that hosts gold mineralization at the Rundle gold mine eight kilometres east of the property.

Previous exploration programs in and around the Pen Gold and Dore Gold projects have demonstrated the presence of significant high-grade gold mineralization along the deformation corridors within and/or adjacent to both properties. Many of these intercepts have not seen any follow-up work and they remain to be interpreted in a regional context. Historical highlights include:

• Rapier's 2013 intercept of 13.0 g/t Au over 4.3 m from quartz veining within a section of intensely carbonate-altered ultramafic rocks in the talc mine area of the Pen Gold property;
• Hemlo Gold Mines Ltd. intercept of 43.0 g/t Au over 1.5 m from quartz veins within a section of silicified and sulphidized mafic volcanic rocks within the Deerfoot Deformation Zone on the east portion the Pen Gold property. It has been interpreted that this structure is the extension of the PDFZ;
• The past producing Joburke gold mine, located only 300 m outside of the limits of the Pen Gold Project, has a historic non-compliant resource of 70,000 ounces at 7.0 g/t Au (1). The deformation corridor hosting the Joburke gold mine continues onto the Pen Gold property and is considered highly prospective;
• The Kenty prospect, located only 500 m outside the limits of the Dore Gold property, is known for its very coarsegrained gold and has grab and trench samples with values up to 12.4 and 24.2 g/t Au. The structure that hosts this mineralization and that at the Rundle gold mine, extends onto the Dore Gold property and is also considered highly prospective; and
• Numerous regional gold showings with significant grab samples collected on both properties returned gold values up to 180 g/t.

(1) The reader is cautioned that the above referenced historic non-compliant resource is considered historical in nature and as such is based on prior data and reports prepared by previous property owners. The work necessary to verify the classification of this mineral resource estimate has not been completed and the resource estimate therefore cannot be treated as NI 43-101 compliant resource verified by a Qualified Person. The historical estimate should not be relied upon and there can be no assurance that any of the historical resources, in whole or in part, will ever become economically viable.

Rattlesnake Hills Gold Project Overview

The Rattlesnake Hills Gold Project (the "RSH Project") is located in Central Wyoming approximately 100 kilometres southwest of Casper on the western side of Natrona County (see Figures 10-11). The RSH Project encompasses the Rattlesnake Hills Gold District, nearly in its entirety, and is considered a district scale gold exploration play which comprises 1,573 unpatented lode mining claims as well as eight Wyoming State mining leases covering an area of approximately 30,400 acres. The RSH Project is controlled 100% by GFG. On September 10, 2018, GFG signed an option and earn-in agreement whereby Newcrest has the right to acquire, in multiple stages, up to 75% of the RSH Project by completing a series of exploration and development expenditures and making staged option cash payments to GFG. (see news release "GFG Signs Option and Earn-In Agreement with Newcrest to Advance the Rattlesnake Hills Gold Project"). On April 3, 2020, Newcrest withdrew from the option and earn-in agreement. Following the withdrawal notice, the Company announced that it will conduct a strategic review for the RSH Project.

The RSH Project location is close to infrastructure such as paved roads, power and water. Also, the Wyoming business climate is considered productive and is one of the best places to do business. The Wyoming economy is primarily driven by the mineral resource sector. The State is the leader in coal, uranium, trona and bentonite production in the US. Additionally, the State is also a key producer of natural gas and oil.

The RSH Project has the geologic setting, alteration and mineralization similar to other gold deposits of the Rocky Mountain alkaline province which, collectively, have produced over 50 million ounces of gold.

Figure 10: Rattlesnake Hills Gold Project Location

Figure 11: Rattlesnake Hills Gold Project Location Within Rocky Mountain Alkaline Province

The RSH Project is centrally located within a roughly 1,500-kilometre-long belt of alkalic intrusive complexes that occur along the eastern side of the Rocky Mountains from Montana to New Mexico, several of which are associated with multiple gold deposits. Examples of such deposits analogous to the RSH Project, with transitional epithermal to porphyry styles of precious metal mineralization, include Cripple Creek Mine, CO, Wharf Mine, SD and Golden Sunlight Mine, MT (Jensen and Barton, 2000).

	Table 5: Comparing Similar Deposit Characteristics: Cripple Creek to Rattlesnake Hills Gold Project

Characteristic	Cripple Creek	Rattlesnake Hills
Qtz poor alt/min		
Voluminous K & Carb altn		
Minor acid altn		
Fluorite		
Roscoelite		
Peripheral propylitic altn		
Multiple magmatic events		
Multiple hydrothermal events		
Lithologic contacts as fluid paths		
Te rich minerals		TBD
Tetrahedrite		
Sulphosalts		
Barite		
Structure		
High Au/Ag		
High Au/base metals		

Within the RSH Project, three significant zones of alteration and precious metal mineralization have been identified that are associated with Eocene age alkalic intrusions at North Stock, Antelope Basin and Blackjack. All three zones have been drilled and broad zones of low-grade gold mineralization, as well as narrow discrete zones of high-grade gold mineralization have been intersected. A brief description and selected drill highlights of the three zones of mineralization are presented below.

North Stock

Precious metal mineralization at North Stock is hosted in breccia, phonolite and schist and has been defined by historic drilling in a broad, 100 m by 300 m tabular mineralized zone, extending over 500 m deep. The area between Antelope Basin and North Stock, where previous drilling intersected significant gold intervals in broadly spaced holes, demonstrates the possible link between the two deposits. Highlights from historic drilling at North Stock include 1.85 g/t Au over 236.2 m core length (Hole RSC-007), 1.58 g/t Au over 216.4 m core length (Hole RSC-132) and 9.73 g/t Au over 55.7 m core length (Hole RSC-020). The system remains open to the north, west and south toward the Antelope Basin deposit and may also remain open to the east.

Table 6: Selected North Stock Drilling Highlights

Hole	From (m)	To (m)	Length (m)*	Au (g/t)
RSC-003	205.74	240.79	35.05	4.79
RSC-007	108.20	344.36	236.16	1.85
RSC-020	143.26	198.91	55.66	9.73
Incl.	160.02	176.78	16.76	26.21
Incl.	170.69	172.21	1.52	122.00
RSC-039	25.91	176.78	150.88	2.08
Incl.	103.63	106.68	3.05	12.95
RSC-089	83.82	213.36	129.54	2.08
RSC-089	216.41	243.84	27.43	7.85
RSC-089	278.89	286.51	7.62	10.65
Incl.	228.60	230.12	1.52	82.90
RSC-093	134.11	163.07	28.96	5.21
RSC-122	155.45	228.60	73.15	1.78

RSC-123	83.82	163.07	79.25	1.49
RSC-126	196.60	256.03	59.44	2.58
RSC-130	170.69	205.74	35.05	3.95
RSC-132	112.78	329.18	216.41	1.58
Incl.	137.16	140.21	3.05	17.96
RSC-135	83.82	160.02	76.20	4.68
Incl.	144.78	147.83	3.05	45.30
RSC-136	222.50	263.65	41.15	3.10
RSC-141	30.48	172.21	141.73	1.90
RSC-144	91.44	147.83	56.39	2.09
RSC-144	205.74	251.46	45.72	3.23
RSC-145	137.16	192.02	54.86	3.20
RSC-145	204.22	281.94	77.72	4.20
RSC-145	239.27	240.79	1.52	128.00
Incl.	143.26	147.83	4.57	15.67

*Length (m) is core length

Antelope Basin

The mineralization at Antelope Basin is hosted by a quartz monzodiorite dike and remains open along strike to the northeast, east and to the southwest. These possible extensions will be prioritized and tested with future exploration programs. Historic drilling at Antelope Basin demonstrates broad zones of low grade, as well as narrow discrete zones of high-grade gold and silver mineralization. Mineralization at Antelope Basin has been defined over an area of 200 m by 350 m and to a depth of 200 m. Highlights from historic drilling at Antelope Basin include 1.91 g/t Au over 76.2 m core length (Hole RSC-042), 1.21 g/t Au over 97.5 m core length (Hole RSC-019) and 1.6 g/t Au over 77.7 m core length (Hole RSC-078).

Table 7: Selected Antelope Basin Drilling Highlights

Hole	From (m)	To (m)	Length (m)*	Au (g/t)
RSC-001	169.16	182.88	13.72	2.69
RSC-019	83.82	181.36	97.54	1.21
Incl.	167.64	169.16	1.52	9.35
RSC-042	147.83	224.03	76.20	1.91
Incl.	185.93	187.45	1.52	11.80
RSC-045	12.19	48.77	36.58	1.44
RSC-047	97.54	170.69	73.15	1.26
Incl.	167.64	169.16	1.52	6.71
RSC-051	243.84	280.42	36.58	1.33
RSC-078	173.74	251.46	77.72	1.63
Incl.	216.41	217.93	1.52	7.48
RSC-087	166.12	204.22	38.10	1.34
RSC-099	77.72	143.26	65.53	1.76
RSC-100	196.60	271.27	74.68	1.21
Incl.	245.36	246.89	1.53	6.26
RSC-153	143.26	160.02	16.76	2.97
RSC-153	111.25	120.40	9.14	2.28
RSC-153	164.59	195.07	30.48	2.09
RSC-155	134.11	187.45	53.34	1.25
RSC-180	199.64	202.69	3.05	9.30

*Length (m) is core length

Blackjack

Precious metal mineralization at Blackjack is more typical of a low sulphidation epithermal system and is hosted within a rhyolite breccia emplaced along the North Granite Mountain Fault zone and within the underlying Precambrian granite and gneiss. The Blackjack target has had a limited amount of drilling with highlights including 1.33 g/t Au over 33.5 m core length from surface (Hole NVJ-001) and 0.74 g/t Au over 13.7 m (RC Hole NVJ-008). The Blackjack mineralization remains open at depth, down-dip and along strike.

Hole	From (m)	To (m)	Length (m)	Au (g/t)
NVJ-001	0.00	33.53	33.53	1.33
Incl.	18.28	19.81	1.53	3.55
NVJ-001	42.67	57.91	15.24	0.55
NVJ-001	97.54	129.54	32.00	0.54
NVJ-002	0.00	4.57	4.57	0.53
NVJ-003	0.00	6.10	6.10	0.67
NVJ-004	0.00	6.10	6.10	0.37
NVJ-005	45.72	48.77	3.05	0.83
NVJ-005	51.82	56.39	4.57	0.79
NVJ-007	111.25	118.87	7.62	1.07
NVJ-008	68.58	82.30	13.72	0.74

Table 8: Blackjack Drilling Results

*Length (m) is core length

2019 Exploration Program

The 2019 drill program, started in July and completed in October of 2019, consisted of 3,900 m of core drilling from three holes for a total budget of approximately US$3.5 million. The program was fully-funded by GFG's partner Newcrest, through its option and earn-in agreement (see news release*: "GFG Signs Option and Earn-In Agreement with Newcrest to Advance the Rattlesnake Hills Gold Project").* The drill program was designed to test the South Deep and North Deep targets as well as strike extensions to North Stock and Antelope Basin deposits (see Figures 12 and 13). These targets were developed in the context of a new deposit-scale alteration model generated from Corescan hyperspectral scanning of historic drill core, recently completed geophysical inversions and the application of machine-learning technology. Modelling of the brownfield environment suggests the presence of high-grade, feeder zones to the gold mineralization at the North Stock diatreme-hosted deposit. These deep feeder zones are thought to be structural conduits that have focused intrusive activity, mineralizing fluids and gold mineralization. Alteration is typically moderate to intense within and approaching the corridors, consisting of adulariacarbonate-sericite and high temperature clays (montmorillonite-illite). The establishment of deposit scale zonation has been a critical step in vectoring towards drill targets within this large gold system.

Drill Results Commentary

RSC-194 tested four distinct targets, namely the strike extension of the Antelope Basin deposit, the Cowboy Target, the South Deep Target and the North Deep Target (see Table 9 and Figures 12 and 13).

The upper portion of the hole hosted 0.55 g/t Au over 57.7 m in altered schist cut by quartz monzodiorite dykes including a sub-interval of 0.99 g/t Au over 19.8 m. The dyke is strongly fractured, clay-altered and hosts carbonate stockwork veining and the schist is weakly sericitized and cut by quartz veins and carbonate stockwork veining. This intercept extends mineralization previously intercepted at the Cowboy Target significantly southward and sub-parallel to the Antelope Basin deposit (see news release: "GFG Resources Drills 0.82 g/t Gold over 99.1 Metres & Provides Summary of 2017 Drill Program at Rattlesnake Hills Gold Project"). The hole intersected a second quartz monzodiorite from 832 m to 977 m depth that is interpreted as the northern strike and down-dip extension of the Antelope Basin system. This dyke is fractured, clay- and sericite-altered, variably sulphidized and hosts carbonate veinlets. Anomalous gold grades of up to 0.24 g/t Au were returned from narrow sections of this interval.

Further downhole, the hole tested the South Deep target, a down-dip extension of the mineralized zone seen in historic drill hole RSC-027 that hosted 2.47 g/t Au over 22.9 m associated with multiple strong, sub-vertical, resistivity gradients and numerous mineralized feldspar porphyry dykes. The hole intersected the South Deep Target from 1,122 m to 1,338 m, returning zones of weakly to moderately altered schist and heterolithic breccia cut by carbonate- and potassic-altered feldspar porphyry dykes that host pyrite and attain thicknesses of up to 13 m. Peak gold grades of up to 0.44 g/t Au were intersected within a porphyry dyked and brecciated interval that graded 0.14 g/t Au over 25.9 m.

Near the base of the drill hole, the North Deep Target was tested as the hole passed through the Precambrian/Tertiary contact around 1,692 m. It intersected broad zones of intensely fractured, fluorite-bearing, pyritic, potassic- and carbonate-altered heterolithic breccia. The bottom 26 m of the hole hosted a feldspar porphyry with strong potassic alteration, cut by abundant pyrite and magnetite veining. Despite the encouraging geological setting, no significant gold grades were returned from this interval.

RSC-195 was drilled to test the North Deep Target down-dip of gold mineralization associated with the North Stock deposit.

The hole passed through broad zones of heterolithic breccia and phonolite before passing into monolithic schist breccia cut by phonolite and feldspar porphyry dykes and finally terminating in schist at 1,081 m depth. Logging indicates an increasing intensity of potassic and clay alteration as well as increasing amounts of sulfide and iron oxide with depth in the phonolite and feldspar porphyry units. Multiple low-grade gold intervals were returned over narrow intervals including 0.16 g/t over 6.1 m, 0.22 g/t over 6.1 m and 0.15 g/t over 7.2 m from 122.5, 505.4 and 906.0 m, respectively.

RSC-196 was drilled to test the western extent of the North Deep Target; approximately 200 m west of RSC-195.

The hole passed through a broad interval of altered, heterolithic breccia before passing into intercalated heterolithic breccia and phonolite from 484 through 825 m; bottoming in potassic- and carbonate-altered phonolite through to the base of the hole at 1,010 m. As with RSC-195, the intensity of potassic alteration is strongest near the phonolite and increases with depth, along with iron oxide veining and fracture intensity. A significant zone of gold mineralization was intercepted from 19.2 through 132.0 m depth returning 0.25 g/t Au over 112.8 m. This interval of heterolithic breccia is fractured, strongly stained with iron oxides and hosts moderate potassic and clay alteration. Further downhole, several narrow intervals returned 0.10 to 0.44 g/t Au including 0.33 g/t Au over 7.6 m from 758.7 m hosted in heterolithic breccia and phonolite.

Based on geological review, 3D modelling and CSAMT data, holes RSC-195 and RSC-196 are interpreted to have either remained in the diatreme throughout their length or to have passed from the North Stock diatreme through its north contact into the Precambrian schists, and only partially testing the North Deep target. The majority of gold mineralization associated with the North Stock deposit is related to the southern contact of the diatreme and this contact remains to be tested at depth.

Figure 13: 2019 Drill Targets at Rattlesnake Hills Gold Project in Cross-Section A-A`

Table 9: Highlighted Assay Results from the 2019 Drill Program at the Rattlesnake Hills Gold Project

Hole ID	From (m)	To (m)	Au (g/t)	Length (m)	Cut Off (g/t)
RSC-194	122.7	180.4	0.55	57.7	0.2
includes	125.6	129.1	1.33	3.5	0.5
includes	154.5	174.4	0.99	19.8	0.5
and	1179.0	1204.9	0.14	25.9	0.2
RSC-195	122.5	128.6	0.16	6.1	0.1
and	505.4	511.5	0.22	6.1	0.1
includes	505.4	508.4	0.35	3.1	0.2
and	906.0	913.2	0.15	7.2	0.1
RSC-196	19.2	132.0	0.25	112.8	0.2
includes	22.2	31.4	0.36	9.2	0.5
includes	63.4	68.0	0.71	4.6	0.5
and	213.1	217.6	0.26	4.6	0.2
and	758.7	766.3	0.33	7.6	0.2

*Gold intervals reported in the above table are reported at a minimum 3 m width and a 0.1, 0.2 or 0.5 g/t Au cut-off. Weighted averaging has been used to calculate all reported intervals. True widths are estimated at 50-100% of drilled thicknesses.

2018 Exploration Program

Following the announced option and earn-in agreement with Newcrest, the Company initiated a drill program at the RSH Project on October 10, 2018 (see news release: "GFG and Newcrest Initiate Drill Program at Rattlesnake Hills Gold Project, Wyoming") The 2018 drill program was designed to drill approximately 3,000 m with the objective to test the concept that a bulk-tonnage, porphyry-style system may underlie the shallower, diatreme-hosted gold mineralization at the North Stock deposit.

There have been a limited number of historic drill holes testing a porphyry model at depth. A review of these holes combined with new geophysical interpretations and modeling suggest the system may be underlain by a mineralized porphyry. The deepest holes from previous drilling, RSC-027, RSC-111.1, RSC-118.1 and RSC-137 intersected zones of gold mineralization that may be intrusive hosted and all contained intervals of strong potassic alteration. In particular, hole RSC-027 intercepted 2.49 g/t Au over 22.9 m in heterolithic breccia and feldspar porphyry dykes from approximately 707.1 to 730.0 m depth. These results are significant as gold grades in heterolithic breccia ranged as high as 7.20 g/t Au and gold grades in feldspar porphyry ranged as high as 3.12 g/t Au. In addition, the intercepts exhibit anomalous molybdenum with potassic alteration in feldspar porphyry dykes. This is an important geochemical pathfinder and may indicate proximity to a source porphyry.

Due to winter conditions, GFG and Newcrest elected to suspend the drilling at the beginning of November 2018. The Company completed approximately 1,000 m of drilling in two drill holes. The drill holes did not reach their intended target depth and were left open for completion in 2019 (see news release: "GFG and Newcrest Complete 2018 Drill Program at Rattlesnake Hills Gold Project, Wyoming").

2017 Exploration Program

In June 2017, the Company outlined a significant exploration program at the RSH Project. The US$3.7 million exploration program consisted of additional soil and rock sampling and 46 holes or 13,783 m of drilling focused on four brownfield targets and four greenfield targets. Drilling began in early July and was completed by the end of November 2017.

Brownfield Exploration

The majority of the 2017 exploration program (approximately 10,000 m or 35 holes) focused on brownfield targets proximal to the North Stock and Antelope Basin deposits and at the Blackjack target.

North Stock and Antelope Basin

Drilling around the North Stock and Antelope Basin deposits, outlined in Figure 14, was designed to test extensions of the known mineralization, including the area between the two deposits where previous intercepts demonstrate the potential to link North Stock and Antelope Basin. Drilling also tested the western extension of the North Stock deposit across a modelled northwest-oriented fault system as well as the eastern extension where historic drilling intercepted heterolithic breccia.

Figure 14: 2018 Drill Target Areas at North Stock and Antelope Basin Region

Greenfield Exploration

The Company has outlined over 30 greenfield targets and in 2017, prioritized four targets to drill test. These targets were generated from historic and recent geophysical and geochemical programs. Results from the 2016 VTEM survey highlighted several anomalies that are interpreted to be structures, several of which were previously unknown. This type of geophysical survey and interpretation was successfully applied in the Cripple Creek Mining District. The greenfield program consisted of approximately 4,000 m or 10 holes, testing multiple targets that are located west of North Stock (MGT and Pronghorn), northwest of North Stock (44) and southwest and southeast of the Blackjack area. These target areas are considered greenfield and have no historic drilling. Figure 15 outlines the location of the prioritized greenfield targets the Company focused on in 2017.

Figure 15: Regional Map Outlining Greenfield Targets

On February 5, 2018, the Company announced the completion of the 2017 program and released all drill assays from the program (see Figure 16). The key highlights from the program include:

• Step-out drilling significantly expanded the western strike extension at North Stock by 175 m with hole RSC-189 which intersected three broad zones of mineralization including 0.82 g/t Au over 99.1 m, 0.48 g/t Au over 57.9 m and 0.71 g/t Au over 50.3 m;
• Extended gold mineralization at Antelope Basin 200 m to the east towards the Cowboy target with an intercept of 0.43 g/t Au over 73.2 m, including 0.61 g/t Au over 36.6 m in hole RSC-184 and 0.52 g/t Au over 19.8 m and 0.60 g/t Au over 9.1 m in hole RSR-026;
• Drill hole RSR-030 extended the discovery at the Cowboy target to the north by 75 m with an intercept of 0.88 g/t Au over 9.2 m; and
• Intercepted broad intervals of gold mineralization in the Middle Ground (RSR-011: 0.88 g/t Au over 18.3 m and 0.59 g/t Au over 53.3 m) between North Stock and Antelope Basin demonstrating the potential to link the two deposits and outline a system that is approximately 1.1 kilometres in length.

Figure 16: Plan Map of North Stock and Antelope Basin 2017 Drill Results and Historic Drill Highlights

Drill Results Commentary

North Stock

Step-out drilling on the west side of North Stock returned the most significant assay results from the 2017 program. Drilling expanded the North Stock deposit by 175 m and is highlighted by newly released hole RSC-189 that returned 0.82 g/t Au over 99.1 m, including 1.30 g/t Au over 54.9 m, 0.48 g/t Au over 57.9 m and 0.71 g/t Au over 50.3 m outlining a broad zone of mineralization over a core length of approximately 360 m. Mineralization in hole RSC-189 starts at a vertical depth of approximately 35 m below surface. Previously released holes RSC-188 (0.45 g/t Au over 114.0 m) and RSR-019 (0.95 g/t Au over 22.9 m, including 5.07 g/t Au over 3.1 m) also demonstrate grade continuity within this extension. These results are significant as they successfully tested the breccia zone adjacent to North Stock as well as the contact between the diatreme breccia and the schist. Core logging indicates that strongly potassically-altered heterolithic breccias and mineralized phonolite intrusive contacts are hosting the highest-grade mineralization.

Additional drilling around the North Stock deposit in 2017 focused on expanding gold mineralization to the southwest. Results from hole RSR-013 (0.49 g/t Au over 19.8 m) and hole RSR-014 (0.88 g/t Au over 27.4 m and 0.36 g/t Au over 76.2 m) successfully extended gold mineralization by 150 m.

The North Stock area remains prospective for gold mineralization to the west and southwest and warrants further drill testing.

The Middle Ground area, between North Stock and Antelope Basin, continues to be an area of interest as drilling has outlined a thick zone of gently west-dipping mineralization. The results suggest the potential to link the two deposits over a distance of nearly 1.1 kilometres. Highlights from this area include previously reported RSR-011 (0.59 g/t Au over 53.3 m, including 0.70 g/t Au over 25.9 m) and new results from RSR-033 (0.32 g/t Au over 38.1 m). Future drilling is warranted for this area with a goal to prove continuity of mineralization between Antelope Basin, North Stock and the western extension of the North Stock deposit.

Antelope Basin and Cowboy Target

The drill program at Antelope Basin was focused on testing the east flank of the deposit and a potential linkage with the 2016 Cowboy discovery. A total of three holes were drilled on the east side of Antelope Basin and five holes to follow-up on hole RSC-185 (0.84 g/t Au over 38.1 m). Each of the three holes drilled toward the east of the Antelope Basin intersected thick zones of gold mineralization with the best hole, RSC-184, returning an intercept of 0.43 g/t Au over 73.2 m, including 0.61 g/t Au over 36.6 m. Hole RSR-026 returned 0.60 g/t Au over 9.1 m and 0.52 g/t Au over 19.8 m before being lost in a mineralized fault zone. These results are significant as they intersected a broad zone of mineralization, hosted in brecciated Precambrian schist, that extends nearly 200 m east of the quartz monzodiorite dike that hosts gold mineralization at Antelope Basin. Furthermore, drilling to date and modelling indicate a potential link to the Cowboy target, 230 m to the northeast.

To the northeast at the Cowboy target, five holes were completed with RSR-030 returning 0.88 g/t Au over 9.2 m, 0.28 g/t Au over 24.4 m and 0.24 g/t Au over 38.1 m, extending the Cowboy target 75 m northeast from the discovery hole RSC-185. Mineralization in this area is associated with potassically-altered, igneous and heterolithic breccia and feldspar porphyry dikes.

Further drilling is warranted to evaluate both the eastern flank of Antelope Basin and the potential continuity with the Cowboy target.

Blackjack

The drill program at Blackjack was designed to test an extensive soil anomaly and several geophysical anomalies. Results from the drilling beneath the soil anomaly were encouraging as holes BJR-001 (0.51 g/t Au over 10.7 m) and BJR-005 (0.79 g/t Au over 18.3 m) indicate mineralization remains open to the west. Hole BJR-002 (0.20 g/t Au over 27.4 m) targeted the east side of the soil anomaly, intersected lower grade material but demonstrated the system remains open towards the east as well.

Greenfield Targets

Several greenfield targets were tested including McDougal Gulch, Pronghorn, West 44, North 44 and around the Blackjack area. While the drilling intersected interesting geologic features, results did not return economic intercepts. The Company has several other greenfield targets and will prioritize the West Baldy and STP targets to test in the future.

RESULTS OF OPERATIONS

The following financial data is derived from the Company's condensed consolidated interim financial statements for the six months ended:

	December 31, 2020	December 31, 2019
General & administrative expense	$767,412	$812,380
Net loss	$(97,919)	$(444,655)
Basic and diluted loss per share	$(0.00)	$(0.00)
Total current assets	$4,433,395	$3,656,343
Total current liabilities	$1,310,850	$1,275,111
Working capital	$3,122,545	$2,381,232
Exploration and evaluation assets	$31,690,341	$28,048,627

Net loss

For the three months ended December 31, 2020, the Company incurred a Net loss of $42,556, or $0.00 per share, which included $23,742 in non-cash share-based compensation offset by the $366,491 non-cash gain on the derecognition of the Flow-through share premium liability. This compares to the comparative period's Net loss of $198,098, or $0.00 per share, which included $67,291 in non-cash share-based compensation offset by the $238,773 non-cash gain on the derecognition of the Flow-through share premium liability.

For the six months ended December 31, 2020, the Company incurred a Net loss of $97,919, or $0.00 per share, which included $52,460 in non-cash share-based compensation which was offset by the $695,810 non-cash gain on the derecognition of the Flow-through share premium. This compares to the comparative period's Net loss of $444,655, or $0.00 per share, which included $167,011 in non-cash share-based compensation offset by the $349,623 non-cash gain on the derecognition of the Flow-through share premium.

Expenses

For the three months ended December 31, 2020, the Company incurred total operating expenses of $394,441 versus $416,278 for the comparative period. Prior to non-cash share-based compensation of $23,742, total operating expenses for the current quarter were $370,699. For the comparative period, total operating expenses prior to non-cash share-based compensation of $67,291 were $348,987.

For the six months ended December 31, 2020, the Company incurred total operating expenses of $767,412 versus $812,380 for the comparative period. Prior to non-cash share-based compensation of $52,460, total operating expenses for the first half of fiscal 2021 were $714,952. For the comparative period, total operating expenses prior to non-cash share-based compensation of $167,011 were $645,369. Generally, this $69,583 increase was due to higher professional fees and rent in the current period combined with certain comparative period costs being recovered pursuant to the joint venture with Newcrest.

Period over period expense variations are described below:

• Consulting fees decreased by $21,036 for both the quarter over quarter and for the first half of fiscal 2021 versus the prior year's comparable period. This decrease was due to less corporate activity during the second quarter of 2020;
• Investor relations expenditures decreased by $20,447, or 15%, quarter over quarter, and increased by $2,945 for the first six months of fiscal 2021 over the prior year's comparable period. Notwithstanding the impact of COVID-19, marketing activities increased overall, a result of an increase in the use of virtual marketing platforms;
• Membership and dues were relatively unchanged quarter over quarter but increased by $3,994 during the first six months of fiscal 2021 versus the prior year's comparable period. This was due to certain of these costs in the prior period being recovered pursuant to the joint venture with Newcrest;
• Professional fees increased by $45,737, quarter over quarter, and increased by $56,218 for the first six months of fiscal 2021 over the prior year's comparable period. This was due primarily to increased corporate activity during the current quarter. In addition, certain legal costs in the comparative periods were recovered pursuant to the joint venture with Newcrest;
• Rent increased by $29,974, quarter over quarter, and increased by $60,133 for the first six months of fiscal 2021 over the prior year's comparable period. This was due to certain of the comparative period costs being recovered pursuant to the joint venture with Newcrest;
• Salaries and benefits increased by $2,657, quarter over quarter, and decreased by $1,907 for the first six months of fiscal 2021 over the prior year's comparable period. As there was no change in compensation from the prior period, the results were due to changes in corporate allocations and vacation pay accruals;
• Share-based compensation decreased during the current quarter to $23,742 from $67,291 for the same comparative period in 2020. Share-based compensation for the first six months of this year fell by $114,551 versus last year's comparative period. The decrease is due to the timing of expensing the estimated fair value of stock options and restricted share units ("RSUs") granted in prior periods; and
• Travel costs decreased by $6,229, quarter over quarter, and decreased by $22,147 for the first six months of fiscal 2021 over the prior year's comparable period. This was primarily due to COVID-19.

Summary of Quarterly Results for the Last Eight Consecutive Quarters

Historical quarterly financial information derived from the Company's eight most recently completed quarters is as follows:

	Dec 312020	Sept 302020	June 302020	Mar 312020	Dec 312019	Sept 302019	June 302019	Mar 312019
Net loss	$(42,556)	$(55,363)	$(280,114)	$(82,661)	$(198,098)	$(246,557)	$(299,972)	$(213,680)
Net loss pershare	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00	$0.00
Total assets	$36,520,308	$37,226,660	$37,269,928	$31,840,088	$32,471,035	$29,609,397	$29,508,304	$30,440,444
Total liabilities	$1,710,114	$2,406,085	$2,426,898	$1,028,357	$1,664,282	$1,164,323	$923,648	$1,649,512

Generally, the Net loss has been relatively consistent over the eight quarters which is a result of similar expenditure patterns combined with certain Rattlesnake Property expenditures recovered pursuant to the JV Agreement with Newcrest. The significant improvement for the December 31, 2020, September 30, 2020 and March 31, 2020 quarters was a result of higher non-cash Recovery of premium on flow-through shares (see Note 9 to the interim consolidated Financial Statements).

Total assets have been relatively constant over the past eight quarters. Any increase to Total assets over the eight quarters was primarily a result of Exploration and evaluation spending, funded by equity issues. The large increase in Total assets for the three months ended June 30, 2020 was due to the closing of a private placement in May 2020.

Generally, fluctuations in Total liabilities over the past eight quarters is due to the timing of trade payables, as they related to exploration expenditures, and the recording of a Flow-through share premium liabilities (see Note 9 to the interim consolidated Financial Statements).

LIQUIDITY AND CAPITAL RESOURCES

The Company has financed its operations to date through the issuance of common shares. The Company will continue to seek capital through various means including the issuance of equity. The Company has not pledged any of its assets as security for loans, or otherwise, and is not subject to any debt covenants.

The Company's liquidity and capital resources are as follows:

	December 31, 2020	June 30, 2020
Cash	$3,875,641	$7,029,509
Total current assets	$4,433,395	$7,194,476
Total current liabilities	$1,310,850	$2,011,675
Working capital	$3,122,545	$5,182,801

At December 31, 2020, the Company had cash of $3,875,641 (June 30, 2020 - $7,029,509) and working capital of $3,122,545 (June 30, 2020 - $5,182,801). The decrease in working capital was primarily a result of administrative expense and exploration expenditures incurred at both the Pen and Dore Gold properties and Rattlesnake Hills property. As the Company currently has no source of recurring income or operating cash flow to fund projected levels of exploration activities and associated overhead costs, it is dependent upon and will continue to be dependent on equity financing.

	December 31, 2020	December 31, 2019
Cash flow from (used) in:
Operating activities	$(516,323)	$(361,360)
Investing activities	$(2,622,512)	$(786,026)
Financing activities	$(15,033)	$3,071,358
Net increase (decrease) in cash	$(3,153,868)	$1,923,972
Cash, beginning of period	$7,029,509	$1,561,317
Cash, end of period	$3,875,641	$3,485,289

Operating Activities

During the six months ended December 31, 2020, the Company's cash flow used in operating activities was $516,323 versus cash flow used in operating activities of $361,360 reported for the six months ended December 31, 2019. This result was primarily due to a decrease in cash flow from operations prior to changes in non-cash working capital items, a result of certain prior period expenditures being recovered pursuant to the JV Agreement with Newcrest, as well as an increase in certain administrative costs, increased foreign currency losses and less contribution from non-cash working capital items.

Investing Activities

Cash used in investing activities for the six months ended December 31, 2020 was $2,622,512 (December 31, 2019 - $786,026). Expenditures for the first six months of fiscal 2021 were comprised of exploration expenditures of $2,761,792 ($2,199,667 plus non-cash transaction adjustments of $562,125) and a refund of $139,280 in reclamation bonds from the Wyoming Department of Environmental Equality.

The following is a continuity of the Company's exploration and evaluation expenditures:

	Wyoming	Ontario
	Rattlesnake	Pen & Dore	Total
	$	$	$
Balance at June 30, 2020	10,640,667	18,850,007	29,490,674
Additions:
Exploration expenses
Claim maintenance fees	361,359	7,050	368,409
Consulting	4,171	603,607	607,778
Salaries and benefits	106,507	224,807	331,314
Other	4,555	-	4,555
Drilling	-	962,071	962,071
Geophysics	-	63,863	63,863
General field expenses	-	180,502	180,502
Monetization of property right	-	(318,825)	(318,825)
	476,592	1,723,075	2,199,667
Balance at December 31, 2020	11,117,259	20,573,082	31,690,341

	Wyoming	Ontario
	Rattlesnake	Pen & Dore	Total
	$	$	$
Balance at June 30, 2019	10,865,542	16,313,051	27,178,593
Additions:
Exploration expenses
Claim maintenance fees	409,735	25,376	435,111
Consulting	40,199	750,574	790,773
Salaries and benefits	495,662	398,185	893,847
Management fees	378,967	-	378,967
Other	206,997	-	206,997
Drilling	2,934,116	853,894	3,788,010
Geochem	175,078	-	175,078
Geophysics	-	239,241	239,241
General field expenses	43,301	269,686	312,987
Travel and accommodation	28,872	-	28,872
Asset retirement obligation	11,983	-	11,983
	4,724,910	2,536,956	7,261,866
Recovery of Exploration and evaluation
assets expenditures	(4,949,785)	-	(4,949,785)
	(224,875)	2,536,956	2,312,081
Balance at June 30, 2020	10,640,667	18,850,007	29,490,674

Financing Activities

For the six months ended December 31, 2020, pursuant to disclosure requirements of IFRS 16 Leases, the Company reported lease payments of $19,033 (December 31, 2019 - $35,693).

For the six months ended December 31, 2020, 25,000 stock options, with a grant price of $0.16 per common share of GFG, were exercised pursuant to the Company's stock option plan.

For the six months ended December 31, 2019, the Company completed the following financing transactions:

On October 29, 2019, the Company closed the second tranche of its non-brokered private placement with the issuance of: i) 610,000 units of the Company ("Units") at a price of $0.18 per Unit for gross proceeds of $109,800, with each Unit consisting of one common share of the Company and one-half of one share purchase warrant, with each whole share purchase warrant (a "Warrant") entitling the holder thereof to acquire one additional common share of the Company at an exercise price of $0.27 for a period of 24 months from the date of issuance; ii) 34,000 common shares of the Company that qualify as "flow-through shares" for the purposes of the Income Tax Act (Canada) ("FT Shares") at a price of $0.22 per FT Share for gross proceeds of $7,480;

On October 24, 2019, the Company closed the first tranche of its non-brokered private placement with the issuance of: i) 5,025,555 Units at a price of $0.18 per Unit for gross proceeds of $904,600, with each Unit consisting of one common share of the Company and one-half of one share purchase warrant, with each Warrant entitling the holder thereof to acquire one additional common share of the Company at an exercise price of $0.27 for a period of 24 months from the date of issuance; ii) 3,334,546 common shares of the Company that qualify as "flow-through shares" for the purposes of the Income Tax Act (Canada) at a price of $0.22 per FT Share for gross proceeds of $733,600; and iii) 5,192,267 charity units of the Company ("Charity Units") at a price of $0.275 per Charity Unit for gross proceeds of $1,427,873 with each Charity Unit consisting of one FT Share and one-half of one Warrant.

Net proceeds raised for the first and second tranche was $3,107,051.

COMMITMENTS

i) As of December 31, 2020, the Company has two separate commercial leases with the following expected, undiscounted payments:

	$
2021	70,264
2022	76,401
2023	23,771
Total	170,436

ii) To satisfy its commitment pursuant to the May 2020 issuance of flow-through shares, the Company is required to expend $4,598,415 of qualifying Canadian Exploration Expenses, as defined in the Income Tax Act (Canada), prior to December 31, 2021. At December 31, 2020, $2,662,556 remains to be incurred.

RELATED PARTY TRANSACTIONS

Summary of key management personnel compensation:

Key management personnel include those persons having authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The Company has determined that key management personnel consist of members of the Company's Board of Directors and corporate officers.

		Three Months Ended		Six Months Ended
	December 31,2020	December 31,2019	December 31,2020	December 31,2019
	$	$	$	$
Salaries and benefits capitalized to
exploration and evaluation assets	78,197	31,243	153,929	59,581
Salaries and benefits(1)	132,322	127,909	273,356	277,214
Director fees	16,095	18,160	34,271	36,321
Share-based compensation	22,533	63,446	51,345	159,321
Share-based compensation capitalized to
exploration and evaluation assets	4,435	9,442	8,623	18,883
	253,582	250,200	521,524	551,320

(1) Includes salaries and benefits reported within Investor relations.

Compensation of the Company's key management personnel includes salaries, non-cash benefits and board retainers. Executive officers and members of the board of directors may also participate in the stock option program.

As at December 31, 2020, there was $240 (December 31, 2019 - $nil) owing to the officers or directors of the Company.

OFF-BALANCE SHEET TRANSACTIONS

The Company does not have any off-balance sheet arrangements as at December 31, 2020, or as of the date of this report.

CRITICAL JUDGMENTS AND ESTIMATES

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates. Areas requiring a significant degree of estimation and judgment relate to Exploration and evaluation asset valuation, share-based transactions, functional currency determination and income tax provisions.

PROPOSED TRANSACTIONS

Unless otherwise disclosed, the Company does not have any proposed transactions that have been approved by the Board of Directors. It continues to review and evaluate potential exploration properties.

RISKS & UNCERTAINTIES

The securities of the Company are highly speculative due to the present stage of the Company's business as well as the nature of the mineral exploration industry in general. The reader is cautioned that the following description of risks and uncertainties is not all-inclusive as it pertains to conditions currently known to management. There can be no guarantee or assurance that other factors will or will not adversely affect the Company.

Risks Inherent to Mineral Exploration

The Company is an exploration company focused primarily on the acquisition and exploration of mineral properties. There is no assurance that any of the Company's projects can be mined profitably. Accordingly, it is not assured that the Company will realize any profits in the short to medium term, if at all. Any profitability in the future from the business of the Company will be dependent upon developing and commercially mining an economic deposit of minerals, which is subject to numerous risk factors. The exploration and development of mineral deposits involves a high degree of financial risk over a significant period of time that even a combination of management's careful evaluation, experience and knowledge may not eliminate. While discovery of ore-bearing structures may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to establish reserves by drilling and to construct mining and processing facilities at a particular site. It is impossible to ensure that the current exploration programs of the Company will result in profitable commercial mining operations. The profitability of the Company's operations will be, in part, directly related to the cost and success of its exploration programs, which may be affected by a number of factors. Substantial expenditures are required to establish mineral reserves that are sufficient to support commercial mining operations and to construct, complete and install mining and processing facilities on those properties that are actually developed.

Further, the terms "resource(s)" or "reserve(s)" cannot be used to describe any of the Company's exploration properties due to the early stage of exploration at this time. Any reference to potential quantities and/or grade is conceptual in nature, as there has been insufficient exploration to define any mineral resource and it is uncertain if further exploration will result in the determination of any mineral resource. Any information, including quantities and/or grade, described in this MD&A should not be interpreted as assurances of a potential resource or reserve, or of potential future mine life or of the viability or profitability of future operations.

Financing/Dilution

The Company currently has no source of recurring income to fund projected levels of exploration activity and associated overhead costs. The Company is therefore dependent upon equity financing to fund its exploration plans. There can be no assurance that the Company will be able to obtain additional financing in the future on terms acceptable to the Company or at all. The inability to raise further funds through additional equity issuances or by other means, could result in delays or the indefinite postponement of planned exploration or, in certain circumstances, the loss of some or all of its property interests or cessation of all exploration activities. The occurrence of any of these events could have a material adverse effect upon the value of the Company's securities. If additional financing is raised by the issuance of additional common shares, holders of shares previously issued will suffer immediate dilution.

Community Relationships

The Company's relationships with the communities in which it operates are critical to ensure the future success of its existing operations and the development of its projects. There is no reason to believe at this time that there are, or will be, issues related to Indigenous land claims or objections locally. While the Company is committed to operating in a socially responsible manner and working towards entering into agreements in satisfaction of such requirements, there is no guarantee that its efforts will be successful, in which case interventions by third parties could have a material adverse effect on the Company's business, financial position and operations.

History of Losses

The business of developing and exploring resource properties involves a high degree of risk and, therefore, there is no assurance that current exploration programs will result in profitable operations. The Company has not determined whether any of its properties contains economically recoverable reserves of mineralized material and currently has not earned any revenue from its projects; therefore, the Company does not generate cash flow from its operations. There can be no assurance that significant additional losses will not occur in the future. The Company's operating expenses and capital expenditures may increase in future years with advancing exploration, development and/or production from the Company's properties. The Company does not expect to receive revenues from operations in the foreseeable future and expects to incur losses until such time as one or more of its properties enters into commercial production and generates sufficient revenue to fund continuing operations. There is no assurance that any of the Company's properties will eventually enter commercial operation. There is also no assurance that new capital will become available, and if it is not, the Company may be forced to substantially curtail or cease operations.

Title

Although the Company has exercised due diligence with respect to title to properties in which it has interests, there is no guarantee that title to the properties will not be challenged or impugned. The Company's mineral property interests may be subject to prior unregistered agreements or transfers or land claims, and title may be affected by undetected defects. In addition, the Company may be unable to operate its properties as permitted or to enforce its rights with respect to its properties. The failure to comply with all applicable laws and regulations, including a failure to pay taxes or to carry out and file assessment work, can lead to the unilateral termination of concessions by mining authorities or other governmental entities.

Permitting

The Company's exploration operations are subject to government legislation, policies and controls. For the Company to carry out its exploration activities, its various licences and permits must be obtained and kept current. There is no guarantee that the Company's licences and permits will be granted, or that once granted will be extended. In addition, the terms and conditions of such licences or permits could be changed and there can be no assurances that any application to renew any existing licences will be approved. There can be no assurance that all permits that the Company requires will be obtainable on reasonable terms, or at all. Delays or a failure to obtain such permits, or a failure to comply with the terms of any such permits that the Company has obtained, could have a material adverse impact on the Company. The Company will also have to obtain and comply with permits and licences that may contain specific conditions concerning operating procedures, water use, waste disposal, spills, environmental studies, abandonment and restoration plans and financial assurances. There can be no assurance that the Company will be able to comply with any such conditions.

Health and Safety

The Company's operations are subject to various health and safety laws and regulations that impose various duties on the Company's operations relating to, among other things, worker safety and obligations in respect of surrounding communities. These laws and regulations also grant the relevant authorities broad powers to, among other things, close unsafe operations and order corrective action relating to health and safety matters. The costs associated with the compliance with such health and safety laws and regulations may be substantial and any amendments to such laws and regulations, or more stringent implementation thereof, could cause additional expenditure or impose restrictions on, or suspensions of, the Company's operations.

Gold Price

The price of the Company's securities, its financial results, and its access to the capital required to finance its exploration activities may in the future be adversely affected by declines in the price of precious and base metals. Gold prices fluctuate widely and are affected by numerous factors beyond the Company's control such as the sale or purchase of gold by various dealers, central banks and financial institutions, interest rates, exchange rates, inflation or deflation, currency exchange fluctuation, global and regional supply and demand, production and consumption patterns, speculative activities, increased production due to improved mining and production methods, government regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, environmental protection, and international political and economic trends, conditions and events. If these or other factors adversely affect the price of gold the market price of the Company's securities may decline.

COVID-19

The Company's operations could be 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, due to uncertainties relating to the geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions.

Environment

Environmental legislation affects nearly all aspects of the Company's operations. Compliance with environmental legislation can require significant expenditures and failure to comply with environmental legislation may result in the imposition of fines and penalties, clean-up costs arising out of contaminated properties, damages and the loss of important permits. There can be no assurances that the Company will be at all times in compliance with all environmental regulations or that steps to achieve compliance would not materially adversely affect the Company. Environmental laws and regulations are evolving in all jurisdictions where the Company has activities. The Company is not able to determine the specific impact that future changes in environmental laws and regulations may have on the Company's operations and activities, and its resulting financial position; however, the Company anticipates that capital expenditures and operating expenses will increase in the future as a result of the implementation of new and increasingly strident environmental regulation. Further changes in environmental laws, new information on existing environmental conditions or other events, including legal proceedings based upon such conditions or an inability to obtain necessary permits, could require increased financial resources or compliance expenditures or otherwise have a material adverse effect on the Company.

Legal Proceedings

The nature of the Company's business may subject it to numerous regulatory investigations, claims, lawsuits, and other proceedings. The result of these legal proceedings cannot be predicted with certainty. There can be no assurances that these matters will not have a material adverse effect on the Company.

Foreign Currency Risk

The Company has operations in Canada and the United States subject to foreign currency fluctuations. The Company's operating expenses are incurred in Canadian and in United States dollars, and the fluctuation of the Canadian dollar in relation to United States dollar will have an impact upon the cash flows of the Company and may also affect the value of the Company's assets and the amount of shareholders' equity.

Information Systems Security Threats

The Company's operations depend upon information technology systems which may be subject to disruption, damage or failure from different sources, including, without limitation, installation of malicious software, computer viruses, security breaches, cyber-attacks and defects in design.

Although to date the Company has not experienced any losses relating to cyber-attacks or other information security breaches, there can be no assurance that the Company will not incur such losses in the future. The Company's risk and exposure to these matters cannot be fully mitigated because of, among other things, the evolving nature of these threats. As a result, cyber security and the continued development and enhancement of controls, processes and practices designed to protect systems, computers, software, data and networks from attack, damage or unauthorized access remain a priority. As cyber threats continue to evolve, the Company may be required to expend additional resources to continue to modify or enhance protective measures or to investigate and remediate any security vulnerabilities.

Key Management Personnel

The Company's success depends to a certain degree upon key members for its management. It is expected that these individuals will be a significant factor in the Company's growth and success. The loss of the service of members of the management team or certain key employees could have a material adverse effect on the Company.

Potential Conflicts of Interest

The directors and officers of the Company may serve as directors and/or officers of other public and private companies and may devote a portion of their time to manage other business interests. This may result in certain conflicts of interest. To the extent that such other companies may participate in ventures in which the Company is also participating, such directors and officers of the Company may have a conflict of interest in negotiating and reaching an agreement with respect to the extent of each company's participation. The laws of British Columbia and Saskatchewan, Canada, require the directors and officers to act honestly, in good faith, and in the best interests of the Company and its shareholders. However, in conflict of interest situations, directors and officers of the Company may owe the same duty to another company and will need to balance the competing obligations and liabilities of their actions.

Substantial Volatility of Share Price

In recent years, the securities markets have experienced a high level of price and volume volatility, and the securities of many junior companies have experienced wide fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. The price of the Company's common shares is also likely to be significantly affected by short-term changes in mineral prices or in the Company's financial condition or results of operations as reflected in its quarterly financial reports.

Competition

Significant and increasing competition exists for the limited number of mineral property acquisition opportunities available. As a result of this competition, some of which may be with large established mining companies with substantial capabilities and greater financial and technical resources than the Company, the Company may be unable to acquire additional attractive mineral properties on terms it considers acceptable.

FINANCIAL INSTRUMENT RISKS

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors approves and monitors the risk management processes, inclusive of documented investment policies, counterparty limits, and controlling and reporting structures. The type of risk exposure and the way in which such exposure is managed is provided as follows:

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company's primary exposure to credit risk is on its cash and cash equivalents held in bank accounts. The Company has deposited the cash and cash equivalents with a high credit quality financial institution as determined by rating agencies. The risk of loss is low.

Liquidity Risk

Liquidity risk is the risk that the Company will incur difficulties meeting its financial obligations as they are due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions without incurring unacceptable losses or risking harm to the Company's reputation. At December 31, 2020, the Company has working capital of $3,122,545 which is sufficient to fund certain 2021 Pen and Dore exploration programs as well as general and administrative costs and RSH Project costs.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Company is not exposed to significant market risk.

Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk, from time to time, on its cash balances. Surplus cash, if any, is placed on call with financial institutions and management actively negotiates favorable market related interest rates. The risk of loss is low.

Foreign Exchange Risk

Foreign exchange risk is the risk that fair value of future cash flows will fluctuate due to changes in foreign exchange rates.

The Company classifies its fair value measurements in accordance with the three-level fair value hierarchy as follows:

• Level 1 Unadjusted quoted prices 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 or indirectly; and
• Level 3 Inputs that are not based on observable market data.

The carrying value of the Company's financial assets and liabilities are approximate to their fair values due to their short-term nature.

Capital Management

The Company manages its capital to ensure that there are adequate capital resources to safeguard the Company's ability to continue as a going concern through the optimization of its capital structure. The capital structure consists of shareholders' equity. The basis for the Company's capital structure is dependent on the Company's expected business growth and changes in business environment. To maintain or adjust the capital structure, the Company may issue new shares through private placement, incur debt or return capital to shareholders.

DISCLOSURE OF DATA FOR OUTSTANDING COMMON SHARES, OPTIONS and WARRANTS

As at December 31, 2020, and the date of this report, the Company had:

	December 31, 2020	Date of this report
Common shares	132,574,481	132,574,481
Warrants	5,413,910	5,413,910
Stock options	6,078,547	6,003,547

The following table summarizes the period's warrants activities as follows:

	Six Months EndedDecember 31, 2020		Year EndedJune 30, 2020
	Number ofwarrants	Weightedaverageexerciseprice	Number ofoptions	Weightedaverageexercise price
		$		$
Outstanding, beginning of period	5,413,910	0.27	3,970,000	0.75
Granted	-	-	5,413,910	0.27
Expired	-	-	(3,970,000)	0.75
Outstanding, end of period	5,413,910	0.27	5,413,910	0.27

A summary of the warrants outstanding exercisable at December 31, 2020 is as follows:

Exercise Price	Number Outstanding	Expiry Date
$
0.27	5,108,910	October 24, 2021
0.27	305,000	October 29, 2021
	5,413,910

The following table summarizes the period's stock options activities as follows:

		Six Months EndedDecember 31, 2020		Year EndedJune 30, 2020
	Number ofWeighted averageoptionsexercise price		Number ofoptions	Weighted averageexercise price
		$		$
Outstanding, beginning of period	6,253,547	0.45	4,740,519	0.58
Granted	-	-	1,895,068	0.17
Exercised	(25,000)	0.16	-	-
Forfeited/Expired	(150,000)0.30		(382,040)	0.66
Outstanding, end of period	6,078,547	0.46	6,253,547	0.45

A summary of the stock options outstanding and exercisable at December 31, 2020 is as follows:

Exercise Price	Number Outstanding	Number Exercisable	Expiry Date
$
US 0.25	75,000	75,000	January 4, 2021
US 0.25	125,000	125,000	September 1, 2021
0.33	425,349	358,682	April 2, 2023
0.405	625,000	416,667	March 2, 2023
1.09	1,600,000	1,600,000	March 17, 2022
0.195	1,358,130	804,377	February 27, 2024
0.22	178,048	178,048	August 1, 2024
0.16	1,692,020	919,520	February 13, 2025
	6,078,547	4,477,294

MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL INFORMATION

The Company's Consolidated Financial Statements and the other financial information included in this management report are the responsibility of the Company's management and have been examined and approved by the Board of Directors. The financial statements were prepared by management in accordance with IFRS and include certain amounts based on management's best estimates using careful judgment. The selection of accounting principles and methods is management's responsibility.

Management recognizes its responsibility for conducting the Company's affairs in a manner to comply with the requirements of applicable laws and established financial standards and principles, and for maintaining proper standards of conduct in its activities.

The Board of Directors supervises the financial statements and other financial information through its audit committee, which is comprised of at least a majority of independent directors.

This committee's role is to examine the financial statements and recommend that the Board of Directors approve them, to examine the internal control and information protection systems and all other matters relating to the Company's accounting and finances. In order to do so, the audit committee meets annually with the external auditors, with or without the Company's management, to review their respective audit plans and discuss the results of their examination. This committee is responsible for recommending the appointment of the external auditors or the renewal of their engagement.

Qualified Persons

Brian Skanderbeg, P.Geo. and M.Sc., President and CEO, is the Qualified Person for the information contained in this MD&A and is a Qualified Person within the meaning of National Instrument 43-101. Mr. Skanderbeg has reviewed the sampling and QA/QC procedures and results thereof as verification of the sampling data disclosed above and has approved the information contained in this MD&A.

Sampling and Quality Control for the Pen Gold Project

For the Pen Gold Project, till samples were collected from hand-dug pits by experienced samplers at depths up to 1 m in a grid pattern with nominal spacing of 500 m by 1,000 m in areas of till cover. Geochemical samples (~2 kilograms) were sieved to minus 230 mesh and analyzed for gold and multi-element using an aqua regia digestion and ICP-ES/MS finish by Bureau Veritas Commodities Canada Ltd. in Vancouver in facilities accredited by the Standards Council of Canada. Gold grains were separated from bulk till samples (~10 kilograms) at IOS Services Geoscientifiques Inc. using their ArtPhot optical recognition methodology. Composition of separated gold grains were confirmed using a Scanning Electron Microscope. Comparison of geochemical results with accepted values for inserted certified reference materials confirms the accuracy of gold concentration results.

Till is a transported surficial media produced during active glaciation that is affected by subsequent surficial process that may affect the gold content and lead to further transport. As such the occurrence of a gold anomaly in till is not conclusive evidence of a mineral deposit existing within the Property. GFG drill core samples are being analyzed by Bureau Veritas Commodities Canada Ltd. Preparation of a 1-kilogram pulp and gold assay of a 50-gram aliquot by Pb collection fire assay with an Atomic Absorption Spectrometry finish (Package FA450) are being done in Timmins, Ontario. Samples assaying above 3 ppm Au are being routinely re-run using gravimetric finish (Package FA550). Mineralized zones containing visible gold will also be analyzed by screen metallic fire assay. Multi-element analysis for 59 other elements using a four-acid digestion and an ICP-MS finish (Package MA250) is being done in Vancouver, British Columbia. Quality control and assurance measures include the monitoring of results for inserted certified reference materials, coarse blanks and preparation duplicates of drill core.

Sampling protocol, quality control and assurance measures and geochemical results related to documented historic till, rock grab, and drill core samples have not been verified by the Qualified Person. However, the grades and locations of these samples have been cross referenced with available maps and reports and GFG believes them to be of reasonable accuracy.

Quality Analysis and Quality Control for the Rattlesnake Hills Gold Project

For the Rattlesnake Hills Gold Project, the quality analysis and quality control measures utilized by Evolving Gold Corp. in respect of the historical drilling data disclosed above included the following: drill hole intervals were weighted averages with each assay interval weighted according to the core length. Rigorous quality assurance and quality control procedures were implemented including routine insertion of internal standard reference materials, certified reference materials, blank material and duplicate samples from both crush and pulp material. Gold assays were completed by SGS Canada Inc. in Toronto, using a 30-gram charge, fire assay, with an ICP finish. SGS Canada laboratory in Toronto is ISO accredited.

RC and Core Drilling

Once core is extracted from the ground, it is placed in core boxes located on the drill pad. Core boxes are labeled and stacked on the drill site. Once or twice a day, the core is picked up by GFG personnel and transported to the Casper office. Once received at the office, the core is photographed, measured for RQD, logged, and sampled by a GFG geologist. Sample intervals are marked on the core and entered in the logging spreadsheet. Sample numbers are assigned, based upon the hole number and footage interval.

Following logging, the core is cut in half with a Husqvarna TS 510 core saw. The halved sample is placed within its respective sample bag, labeled with the sample number. The samples are stored in sample bins provided by the lab and stored at the Casper office. Lids are placed on each bin to cover the samples. The lid would be strapped to the bin to protect the samples and to maintain sample integrity.

The RC sample bags and chip trays were labeled prior to drilling of each hole and delivered to the drillers for sample collection by GFG personnel. Sample splitters attached to each drill rig were employed, in order to obtain a chip tray sample and assay lab sample. Sample numbers are assigned, based upon the hole number and footage interval. Samples were collected by the drillers' helpers, who also sealed the bags and placed each sample into a sample bin, located on the drill pad. Once the sample bin became full, or the hole was finished, the drill crew relocated the sample bin to their laydown area. At this point, a lid would be placed on the bin to cover the samples. The lid would be strapped to the bin to protect the samples and to maintain sample integrity.

Prior to shipment of drill samples, QA/QC samples are prepared and inserted into the sample sequence every 10 samples, alternating with a marble blank or a known standard.

OTHER MD&A REQUIREMENTS

Additional information relating to the Company may be found on the Company's website at www.gfgresources.com and on SEDAR at www.sedar.com.

This MD&A has been approved by the Board on February 12, 2021.