Glen Eagle Resources Inc. — Management Reports 2020

Jun 15, 2020

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Management's Discussion and Analysis Glen Eagle Resources Inc.

Year ended December 31, 2019

(in Canadian dollars, unless otherwise stated)

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Index
MANAGEMENT’S DISCUSSION AND ANALYSIS .................................................................................... 3
1.1	RESPONSIBILITY OF FINANCIAL REPORTS ................................................................................ 3
1.2	FORWARD LOOKING STATEMENTS ......................................................................................... 3
1.3	NATURE OF ACTIVITIES .......................................................................................................... 4
1.4	FINANCIAL HIGHLIGHTS ......................................................................................................... 4
1.5	KEY ECONOMIC TRENDS......................................................................................................... 7
	Gold market ..................................................................................................................................... 7
	Phosphate market ............................................................................................................................ 8
1.6	Discussion on exploration and exploitation activities ............................................................. 9
	GOLD PROPERTIES ............................................................................................................................ 9
	Cobra Oro de Honduras S.A. (100% wholly owned subsidiary) ....................................................... 9
	PHOSPHATE PROPERTIES ............................................................................................................... 11
	Moose Lake, Lac St-Jean area (Quebec) ........................................................................................ 11
1.7	CHANGES IN ACCOUNTING POLICIES .................................................................................... 11
1.8	SELECTED FINANCIAL INFORMATION .................................................................................... 12
	A) STATEMENT OF CONSOLIDATED NET INCOME AND COMPREHENSIVE INCOME............. 12
	B) CONSOLIDATED FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2019 and
	2018…………………………………………………………………………………………………………………………………….….. 19
1.9	INVESTING ACTIVITIES ......................................................................................................... 21
1.10	FINANCING ACTIVITIES ......................................................................................................... 23
1.11	SUMMARy OF QUARTER RESULTS ........................................................................................ 24
1.12	RELATED PARTY TRANSACTIONS .......................................................................................... 25
1.13	LIQUIDITY AND CAPITAL RESOURCES .................................................................................... 25
1.14	OFF-BALANCE SHEETS ARRANGEMENTS ............................................................................... 26
1.15	CRITICAL ACCOUNTING POLICIES AND ESTIMATES ................................................................ 26
1.16	RECENT ACCOUNTING STANDARDS ...................................................................................... 26
1.17	FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS ......................................................... 27
1.18	NON-IFRS MEASURES ........................................................................................................... 27
1.19	RISKS AND UNCERTAINTIES .................................................................................................. 27
1.20	SUBSEQUENT EVENTS .......................................................................................................... 31
1.21	QUALIFIED PERSON .............................................................................................................. 31
1.22	OUTLOOK ............................................................................................................................ 32
1.23	DISCLOSURE OF OUTSTANDING SHARE AND WARRANT DATA .............................................. 32
1.24	ADDITIONNAL INFORMATION AND CONTINUOUS DISCLOSURE............................................. 33
CORPORATE INFORMATION ............................................................................................................. 33

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

MANAGEMENT’S DISCUSSION AND ANALYSIS

This management’s discussion and analysis (“MD&A”) follows rule 51-102A of the Canadian Securities administrators regarding continuous disclosure for reporting issuers. It is a complement and supplement to Glen Eagle Resources Inc.’s (the “Corporation”) consolidated financial statements and related notes for the year ended December 31, 2019 and should also be read in conjunction with both the consolidated audited financial statements for the year ended December 31, 2018 and the annual MD&A for the year ended December 31, 2018 to provide further information on historical and past performance. This MD&A represents the views of management on current activities and past and current financial results of the Corporation, as well as an outlook of the activities of the coming months. The Corporation’s significant accounting policies are set out in Note 3 of the audited consolidated financial statements for the year ended December 31, 2019. This report should be read in conjunction with the Corporation’s consolidated financial statements prepared in accordance with the International Financial Reporting Standards (''IFRS'') as issued by the International Accounting Standards Board.

1.1 RESPONSIBILITY OF FINANCIAL REPORTS

This MD&A constitutes management's review of the factors that affected the Corporation's financial and operating performance for the year ended December 31, 2019. Management is responsible for the preparation of the Financial Statements and the MD&A. The Board of Directors (the “Board”) has the responsibility to ensure that management assumes its responsibilities with regards to the preparation of the Financial Statements and the MD&A. To assist management, the Board has created an Audit Committee. The Audit Committee meets with management to discuss the operating results and the financial situation of the Corporation. It then makes its recommendations and submits the Financial Statements and the MD&A to the Board for their review and approval. Following the recommendation of the Audit Committee, the Board has approved the Financial Statements and the MD&A on June 12, 2020.

Glen Eagle Resources is a publicly traded Corporation listed on the TSX Venture Exchange (“TSX-V”) under the symbol “GER”.

1.2 FORWARD LOOKING STATEMENTS

This MD&A contains forward-looking statements that are based on the Corporation’s expectations, estimates and projections regarding its business, the mining industry in general and the economic environment in which it operates as of the date of the MD&A. These statements are reasonable but involve a number of risks and uncertainties, and there can be no assurance that they

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

will prove to be accurate. Therefore, actual outcome and results may differ materially from those expressed in or implied by these forward-looking statements. The estimates contained therein to date are preliminary in nature and are based on a number of assumptions, any one of which, if incorrect, could materially change the projected outcome. Factors that could affect the outcome include, among others: the actual results of current production and exploration, price of gold, silver and phosphate, competition, general business, economic, political and social uncertainties, pandemics, environmental issues, additional financial requirements and the Corporation's ability to meet such requirements. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ from those anticipated.

1.3 NATURE OF ACTIVITIES

The Corporation’s current activities consist in the production of gold and silver from the purchasing and processing of material in Honduras. They also consist in owning mining concessions in Honduras such as ‘’La Cobra’’since May 2017, which is in the social acceptance phase, with the intention to proceed with an exploration and evaluation program on the property. The Corporation plans to make other concession acquisitions and will develop by exploration and evaluation program the properties or sell as exploration assets. Finally, they consist in the exploration and evaluation of its phosphate property called ‘’Moose Lake’ located in Quebec (Canada).

The Corporation currently receives low grade material, from a local deposit, and higher grade material purchased from nearby small mining operations to be processed at its wholly-owned milling facility to produce gold and silver which is sold internationally at market prices.

The recovery of the exploration and evaluation assets is dependent upon: the discovery of economically recoverable reserves and resources, securing and maintaining title and beneficial interest in the properties, the ability to generate cash flow or obtain the necessary financing to complete exploration, evaluation, development and construction of processing facilities, obtaining certain government approvals and proceeds from disposal of assets.

1.4 FINANCIAL HIGHLIGHTS

For the year ended December 31, 2019, the Corporation recorded total sales of $2,098,720 ($2,110,425 in 2018), with a negative operating margin of $138,052 (positive margin of $133,563 in 2018) and a consolidated net comprehensive loss of $1,203,990 (loss of $456,064 in 2018).

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Highlights for the year ended 2019

Operational

• During 2019, the company produced 1,155 onces of gold (1,148 onces in 2018) and 1,850 ounces of silver (9,869 onces of silver in 2018).

• During 2019, the plant processed 15,255 tons of material, for an average of 51 t/day, representing 63% of the plant production capacity. This compares to 14,461 tons of material, for an average of 50 t/day representing 70% of the plant capacity in 2018.

• The average capacity of the plant increased to 80 t/day in 2019, from 70 tons/d in 2018. At the end of 2019, the potential capacity of the plant, on an annual basis, was 90 t/day (70 t/day at the end of 2018).

• During 2019, the average material recovery rate was 61% compared to 73% in 2018.

• During 2019, the average grade per ton of material processed was 3.8 gr/t compared to an average 3.4 gr/t in 2018.

• The average material cost per ton processed during 2019 was $48/ ton at 3.8 gr/t for a cost per gram purchased of $12.7, compared to $37/ton in 2018 at a 3.4 gr/t for a cost per gram purchased of $10.7. This represents an increase of 19% in the material cost comparing 2019 to 2018.

Financial

• Consolidated net loss of $1,048,817 in 2019 compared to a consolidated net loss of $587,358 in 2018.

• Negative EBITDA of $872,410 in 2019 compared to a negative $257,602 in 2018 (1).

• Negative cash flows of $828,362 from operating activities before change in working capital in 2019 compared to a negative cash flows of $209,371 in 2018 (2).

Strategy for 2020

Improvement of the production capacity usage and of the material recovery ratio

• The production process was in a maintenance and repair program mode during the fourth quarter of 2019. Furthermore, difficulties in obtaining spare parts from international suppliers in Q4 resulted in a reduction of the material recovery rate of 83% in the third quarter to 50% during the last quarter of 2019.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

• A new civil engineer with extensive experience in production process, joined the team beginning of Q2-2019; this will contributed to improve the production maintenance procedures and processes during 2020.

• A new plant manager was nominated during Q2-2019 resulting in the restructuration of the production processes and implementing of the production maintenance procedures. This will result in improved equipment efficiency, and in concrete improvements of the material recovery rate and usage of the plant capacity.

• Since Q3-2019, local management is proceeding with daily review of equipments and the monitoring of an adequate spare parts inventory. These procedures should reduce the production stops of 102 days during 2019 (78 days during 2018) and improve the process closer to its potential capacity of 90 tons per day in the course of 2020. The second objective of an accurate maintenance program procedure for 2020, is the improvement of the material recovery ratio to a minimum of 80%.

Reduction of material cost per ton (gram processed)

• Management is meeting material suppliers to increase the daily volume of material processed at the plant and to increase the average grade per ton processed to a minimum of 4 gr/t during 2020.

• When comparing the cost paid per ton of material purchased and grams processed in 2019 compared to 2018, the cost for gram purchased in 2019 was 19% higher than in 2018. Management believes that in order to minimize the cost of material, the plant should also be feeded with material produced on its own concession during 2020. For that reason, since many months, it is actively searching for new concessions to ensure constant material availability to the plant, at a lowest cost. (Subsequent events 1.20).

• (1) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. The Corporation uses this non-IFRS measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation with others by canceling effects of different assets bases, effects due to different tax structures as well as the effects of different capital structures. EBITDA is calculated on p.18 of this MD&A. See the “Non- IFRS Measures” section 1.18 of this MD&A.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

• (2) Cash-flow per share is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another corporation. This measure is calculated on p.18 of this MD&A. See the “Non-IFRS Measures” section 1.18 of this MD&A. The Corporation uses this non-IFRS measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.

1.5 KEY ECONOMIC TRENDS

Subsequent to year-end, an outbreak of a new strain of coronavirus (COVID-19) resulted in a major global health crisis which continues to have impacts on the global economy and the financial markets at the date of completion of the financial statements. These events may cause in the future significant changes on the Corporation’s ability to complete planned exploration and evaluation activities, execute its 2020 business plan in the expected time frame, or our ability to obtain debt and equity financing.

Following these events, the Corporation has taken and will continue to take action to minimize the impact. However, it is impossible to determine the financial implications of these events for the moment.

Gold market

During the current year ended on December 31, 2019, gold price rose steadily with a closing price of $1,519/oz compared to $1,279/oz at the end of 2018 for an increase of 19% during 2019. During - 2019, the averaged market price for gold was $1,392/oz compared to $1,268/oz during 2018.

The price of gold and exchange rates influenced the selling revenue of metals and the exchange rate between the US and Canadian dollars had an impact on transfers of funds between the entities.

So far, the market was driven by the following developments:

It’s late in the credit cycle, and it appears the end of the expansion phase is in sight. This being the case, we can see that government deficits are going to increase, due to lower tax receipts and higher welfare commitments as economic activity contracts. This will be covered by an increase in the rate of monetary inflation, which we are already seeing.

Besides the decline in global trade being a clear signal that the global economy is in trouble, the budget deficit in the US will rise and therefore the trade deficit will tend to rise as well. This is bound to provoke the Fed into financing the US government deficit through yet more QE.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Expectation that the U.S. Federal Reserve will not hike interest rates and curb its asset purchase program;

The overarching driver of the gold price for the year 2019 and beyond will be the development of the global financial situation including the levels of debt piled by Western governments. The present situation preserves gold as an attractive insurance asset or store of value for many conservative investors. Geopolitical risks will also further support this position of gold as a safe haven. Some analysts estimate that the Chinese debt, yuan devaluation, Real Estate situation and US/China trade war could be the determining factors supporting steep rises in the price of gold as they expect a correction over the next 12 to 18 months, as the market in these sectors of economy, seems to be overbought.

The main economies in Asia (China, Russia, India and Iran) are all turning their backs on the dollar for trade settlement. This will have a profound effect on central bank reserves not just in Asia, but elsewhere as well, with the dollar being sold. Some countries, notably Russia, are buying gold instead.

Exchange rates

The quarter end and quarterly exchange rates for 2019 and 2018 were as follows:

December 31 (closing rate) Q-4 (average rate) September 30 (closing rate) Q-3 (average rate) June 30 (closing rate) Q-2 (average rate) March 31 (closing rate) Q-1 (average rate)	$US/$CAD HNL/$CAD 2019 2018 2019 2018 1.305 1.362 0.0538 0.0536 1.320 1.321 0.0537 0.0545 1.324 1.292 0.0538 0.0536 1.320 1.307 0.0537 0.0545 1.311 1.314 0.0531 0.0549 1.338 1.290 0.0547 0.0546 1.335 1.289 0.0543 0.0547 1.329 1.266 0.0544 0.0536

The price of gold and exchange rates influenced the price per onze sold and the exchange rate between the US and Lempiras, compared to Canadian dollar, had an impact on transfers of funds between the entities.

Phosphate market

The continued unstable political situation in the western Sahara, where a large portion of the world supply of phosphate is mined continues to put pressure on investors and fertilizer producers (which are all highly integrated) to develop safer more stable sources. North America

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

runs a deficit of roughly 4 million tonnes per year expected to increase to 8 million tonnes per year by 2020. Global demand for phosphate is increasing at approximately 3% per year due to global population growth and a shift in dietary habits towards more protein-rich foods.

These factors contribute to the accelerated development of projects in North America, and specifically in the province of Québec where several high phosphate concentrate deposits have been identified.

1.6 DISCUSSION ON EXPLORATION AND EXPLOITATION ACTIVITIES

GOLD PROPERTIES

Cobra Oro de Honduras S.A. (100% wholly owned subsidiary)

Production development

During the first quarter of 2019, the Corporation experienced a low material recovery ratio, due to problems with the thickener system equipment and due to an insufficient level of production supplies in its spare parts inventory. As the lead time to receive parts from the international suppliers is around two months, more funds will have to be allocated to increase the number of spare parts, equipment and production supplies in this inventory, in order to minimize the time needed to repair equipments.

During the middle of the second quarter, new funds received by the Corporation allowed the purchase of required parts for equipment repairs so the problems experienced during Q1-2019 with the agitator/tickner tanks and with the cone crusher were almost solved. Furthermore, by the engagement of a new civil engineer specialized in production processes by the end of May, the strengthening of the laboratory technical team combined with the implementation by employees of new maintenance procedures, the Corporation obtained better results in terms of production capacity (77%) and material recovery ratio (83%) for the third quarter.

However, during the month of October, the grade of material received was low at an average of 1.6 gr/t, which is not favorable for a good recovery rate. For the two last months of the year, the company receiving material coming from another source, had to adapt to a new metallurgic situation. In November and December, equipment maintenance was performed to increase the recovery ratio. Consequently, during the fourth quarter, a ratio of 50% recovery was recorded, resulting in an annual recovery rate of 61% for 2019 compared to 73% in 2018.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Material supply

On May 17, 2017, the Corporation acquired through its wholly owned Hondurian subsidiary, the mining claim for the property called "La Cobra", which was assigned to the Corporation by the Ministry of Mines of Honduras. The property covers approximately 775 hectares, is located in Nacaome Department, Honduras.

On September 27, 2018, the Corporation reached a cooperation agreement with Inception Mining, a Nevada company that is publicly quoted on the OTCQB market. According to the agreement, the Corporation will process Inception Mining’s high-grade ore material containing sulfides that can not be heap leached by their process, but can be recovered by Cobra Oro processing plant.

During the first quarter of 2019, the Corporation signed agreements with local material providers that can provide high grade materials to the plant. Through its new partnership, Minera Moloncosa has committed to supply Cobra Oro with high grade ore coming from its private underground mine. The mine has been in operation for more than 30 years and currently employs 160 direct workers. The event was publicly announced on Choluvision, the main TV channel in Southern Honduras based on the importance and impact of the alliance on the small mining community in Southern Honduras.

On April 14[th] , 2019, the Ministry of Mines of Honduras, in conjunction with the Small Miners Cooperative (“COOP”) of the municipality of el Corpus, Choluteca, Honduras, have called a meeting with Cobra Oro, Glen Eagle’s production subsidiary in Honduras. The miners wish to discuss forming a joint venture between Cobra Oro and the COOP under the Ministry’s umbrella. The Corpus concession is located 20 minutes away from Cobra Oro’s Gold Mill.

On May 7[th] , 2019, the Company announced that a one (1) year contract was signed with Inception Mining (Clavo Rico), for the supply of mineral accessible on a paved road and located less than 30 minutes away from its gold processing plant in Choluteca, Honduras.

On June 4[th] , 2019, the Company signed an agreement with Sociedad Industria Extractiva S.A., being the third contract added this to secure the supply of material at the plant.

Although, during 2019, the property ‘’La Cobra’’ was in process of socialization with the community, the Corporation was always searching for other concessions available to ensure future feed to the plant at the lower cost to ensure maximum profitability.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Permits

On November 24, 2016, the Corporation announced that the most valuable permit (beneficiary permit) to meet mining compliance in Honduras has been renewed irrevocably in favor of Cobra Oro for the next fifteen years while its environmental permit was approved and validated. This confirmed that the Hondurian minister of mine reviewed Cobra Oro production facilities and approved the production process applied by the Corporation.

PHOSPHATE PROPERTIES

Moose Lake, Lac St-Jean area (Quebec)

On February 18, 2015, the Corporation announced the results of a very successful drilling program on Moose Lake located near highway 172, approximately 100 km North of Chicoutimi, Quebec. A total of 3,300 meters were drilled and designed with a two folds purpose which was to deepen 11 holes previously drilled in 2012 that did not cross at depth the entire phosphate bearing unit. The current drilling program successfully increased the phosphate intercepts at depth in every hole. This section of the drill program accounted for 585 meters. The main phosphate bearing body which was estimated to be 1.5 kilometer long by 250 meters wide can now be confirmed with a greater degree of certainty. The program seems to have tested the outer limit of the deposit along strike to the East as grade and thickness of the mineralization decreased with drill holes LO-14-16 to LO-14-20 intercepting limited widths. Since 2017, no exploration work was done, as the focus is on the Honduras project and as market conditions for financing are difficult.

The Corporation plans an exploration program when phosphate market conditions are favorable.

1.7 CHANGES IN ACCOUNTING POLICIES

Exploration and Evaluation Expenses

On October 1st, 2019, the Corporation changed its accounting policy related to exploration and evaluation expenses, which previously consisted of capitalizing all such expenditures. The Corporation believes that expensing early stage exploration and evaluation costs as incurred provides more reliable and relevant financial information. Under the new policy, the cost of acquiring prospective properties and exploration rights continues to be capitalized and exploration and evaluation costs, subsequent to acquisition, are expensed until it has been established that a mineral property is commercially viable and a mine development decision has been made by the Corporation. Thereafter, the Corporation will capitalize expenditures incurred to develop the mine, prior to the start of mining operations. The audited consolidated financial statements as at and for

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

the year ended December 31, 2018 have been adjusted retroactively to reflect adjustments made as a result of this change in accounting policy. Details of the restatement to the December 31, 2018 audited consolidated financial statements are presented in Note 2 of the Corporation’s December 31, 2019 and 2018 consolidated financial statements.

1.8 SELECTED FINANCIAL INFORMATION

The Corporation prepared its consolidated financial statements in accordance with IFRS, as published by the International Accounting Standards Board. The Corporation's consolidated financial statements are presented in Canadian dollars, which is also the functional currency of the Corporation.

A) STATEMENT OF CONSOLIDATED NET INCOME AND COMPREHENSIVE INCOME

Years ended December 31, 2019, 2018 and 2017

REVENUES AND EXPENSES	2019 $	2018 $	2017 $
Sales		(Adjusted – section 1.7)
Gold & silver	2,098,720	2,110,425	1,255,434
Cost of sales
Stockpile ore	(791,457)	(529,826)	(699,183)
Consumables	(146,904)	(115,984)	(77,635)
Salaries,benefits and other employee expenses	(471,430)	(451,459)	(333,136)
Electricity	(267,776)	(251,296)	(93,213)
Equipment repair and maintenance	(175,018)	(178,485)	(85,602)
Production supplies	(273,354)	(275,392)	(225,371)
Depreciation and amortization	(188,213)	(146,371)	(101,803)
Variation of finishedgoods	(88,662)	(34,866)	85,500
Variation of work inprocess inventory	166,042	6,817	-
Total Cost of sales	(2,236,772)	(1,976,862)	(1,530,443)
Gross operating Income(loss)	(138,052)	133,563	(275,009)
General and administration charges
Office expenses and rent	(93,552)	(87,805)	(84,908)
Consultingand management fees	(262,646)	(254,174)	(267,996)

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Share basedpayments	(141,558)	(35,001)	(161,258)
Professional fees	(68,860)	(65,769)	(99,919)
Public companyexpenses	(35,151)	(36,813)	(33,289)
Depreciation and amortization	(42,178)	(40,349)	(32,199)
Business development	(47,421)	(70,880)	(80,787)
Other expenses	-	-	(527)
Total G&A	(691,366)	(590,791)	(760,883)
Sellingexpenses	(121,037)	(97,582)	(85,215)
General exploration,net of tax credits	(1,099)	(3,379)	(9,755)
Impairment of exploration and evaluation assets	-	(3,845)	-
Operating loss	(951,554)	(562,034)	(1,130,862)
Interest income	22	1,465	8,277
Interest expense and bank charges	(101,189)	(11,742)	(9,597)
Other expenses		-	(12,375)
Foreign exchange loss	(17,348)	(15,047)	(8,473)
Loss on acquisition (disposition) of subsidiary		-	(1,392)
Unrealized loss on fair value of derivative	21,252	-	-
Net loss before income tax	(1,048,817)	(587,358)	(1,154,422)
Other comprehensive loss (income) net of income tax: Currency translation adjustment	(155,173)	131,294	(208,035)
Comprehensive loss for the year	(1,203,990)	(456,064)	(1,362,457)
Basic and diluted Net lossper share	(0.01)	(0.01)	(0.02)

No dividends were declared or paid in 2019, 2018 and 2017.

Until March 31, 2017, the Hondurian subsidiary (Cobra Oro De Honduras) was considered in a preproduction stage; therefore, gold and silver revenues earned and production expenses incurred up to that date, were recorded as a reduction or increase of the property and equipment costs which were capitalized at the Consolidated Statement of Financial Position.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

OVERALL PERFORMANCE

SALES

During the year ended December 31, 2019, gold and silver sales amounts to $2,098,720 (1,178 gold onces equivalent) while in 2018, sales amounted to $2,110,425 (1,286 gold onces equivalent). The total sales for the current year decreased by 8% compared to total sales for the year ended on December 31, 2018.

During the year 2019, the gold price continued its increase trend between $1,279 us and $1,519 us per ounce on December 31, 2019 with an average price of $1,392 us per ounce sold during the current quarter ($1,268 us during 2018). This variation of the price per once coupled with the variation in the foreign exchange impacted favorably the sales level.

Two important production factors can explain the decrease of sales in 2019, compared to 2018.

Material recovery rate

Recovery rates for the quarters of 2019 compared to quarters in 2018 are listed in the table below in the cost of sales section. We can observe that after two deceiving quarters in 2019 (62% and 52%), the third quarter gave an encouraging signal with 83% recovery. However, during the fourth quarter, a ratio of 50% recovery was calculated, resulting in an annual recovery rate of 61% for 2019 compared to 73% in 2018.

The adequate production supplies inventoried for prompt repair of production equipments, combined with major equipment improvements during Q3-2019 should help increasing the material recovery ratio. During the month of October, the grade of material received was low at an average of 1.6 gr/t, which is not favorable for a good recovery rate. For the two last months of the year, the company receiving material coming from another source, had to adapt to a new metallurgic situation. In November and December, equipment maintenance was performed to increase the recovery ratio.

Usage of production capacity

The number of days with no production in 2019 was 102 days compared to 78 days in 2018.

During the year 2019, the Corporation processed 15,255 tons representing 63% usage of the production capacity, compared to 14,461 tons in 2018 representing 70% of the production capacity. Although the number of tons processed are comparable, the potential of the plant is higher since July 2019 (90 tons/day) compared to the first part of 2019 and 2018 (70 tons/day).

If the equipment maintenance is adequately done and spare parts are in store, the lost of production time for repairs is minimised and the usage of production capacity is maximised.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

A civil engineer with extensive experience in production processes, joined the team at the end of the first quarter to work on improving the efficiency of production equipments and on completing the production maintenance procedures.

A new plant manager was nominated during Q2-2019 with the mandate of restructuring the production process and implementing the production maintenance procedures at employee level. This resulted in improved equipment efficiency since then, and resulted in significant improvements of the material recovery rate and of the usage of the plant capacity.

The maintenance of an adequate spare parts inventory, results in ensuring that defective production units can be repaired or replaced promptly. Because of the lead time of two months to receive spare parts and supplies from its suppliers, the Corporation has to invest more funds in order to increase the number of items stored in its inventory, which ultimately will lower the time needed for solving a production problem.

Local management is confident the corrections to the production facilities made during the fourth quarter of 2019 and the first quarter of 2020, will result in substantial improvements in 2020.

COST OF SALES

Material supplies

- Material purchased grade per ton

During 2019, the grade per ton of the material processed increased for an yearly average of 3.8g/t compared to the average 3.4g/t of material processed during 2018.

The Corporation has tested materials from various suppliers and is in process of negociating agreements to obtain sufficient material at a higher grade (3gr/t +), for ensuring full production capacity and an optimized grade per ton material processed. Management is meeting material suppliers with the objective of increasing the average grade processed at the plant to a minimum of 4 gr/t.

Local management is dedicated to find new material with higher grade, to improve the profitability of the plant.

Cost per ton purchased

During 2019, material costs (incl. consumables) incurred amounted to $938,361 on sales of $2,098,720 resulted in material cost representing 45% of sales compared to 2018 where the material cost of $645,810, on sales net of $2,110,425 represented 31% of sales.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

The cost of material increased for two reasons:

• 1) The recovery ratio was 61% in 2019 compared to 73% in 2018, as a result of processing various materials from various clients. The company must adjust the production procedure to ensure maximal recovery.

• 2) When comparing the cost paid per ton of material purchased (excl. consumables) and processed in 2019 compared to 2018, the cost in 2019 was $12.6/gram compared to $10.7 in 2018, representing a 19% increase. Management believes that the lowest cost for materal will be paid when the plant is feeded with material produced on its own concession. For that reason, it is actively searching a new concession to ensure constant material availability to the plant, at a lower cost.

Table of statistics:	Tons per	Tons per	% usage	% Material	Grade
	day average		plant capacity () recovery rate () per ton*
YEAR 2018 ( 12 months)
Period January 1st– December 31th		50	70%	73%	3.4
Q1-2018
Period January 1st – March 31th		41	71%	66%	5.1
Q2-2018
Period April 1st– June 30th		47	67%	93%	3.3
Q3-2018
Period July 1st – September 30th		52	74%	71%	2.5
Q4-2018
Period October 1st– December 31th		46	67%	62%	2.9
YEAR 2019 ( 12 months)
Period January 1st– December 31th		51	63%	61%	3.8
Q1-2019
January 1st– March 31th		42	60%	62%	5.3
Q2-2019
April 1st– June 30th		30	45%	52%	3.4
Q3-2019
Jul 1st- September 30th		69	77%	83%	2.5
Q4-2019
Period October 1st– December 31th		58	64%	50%	4.7

(*) Excludes the silver ounces recovered as the Corporation is paying the material supplies received from locals, based on the gold grams determined to be in the material, after laboratory analysis. During 2019, the silver content represents an additional 1% to 2% recovery rate not considered.

16

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

(**)Since January 1[st] 2018, the tons per day achievable considering all equipments in place is 70 tons per day for 26 days per month. On July 1[st] , 2019, the new standard was revised from 70 tons per day to 90 tons per day, being the new standard for daily production level targeted.

Salaries

During the year ended December 31[th] , 2019, labor costs amounted to $471,430 ($30.90/ton processed) , compared to $451,459 ($31.20/ton processed) for 2018. Until the level of production increases significantly, the salary cost per ton processed will remain stable.

Electricity

During the year ended December 31th, 2019, electricity costs amounted to $267,776 ($17.55/ton processed) , compared to $251,296 ($17.37/ton processed) for 2018. It is expected that the electricity cost will increase in proportion to the level of production.

Equipment repair and maintenance

During the year ended December 31th, 2019, the costs for repair and maintenance amounted to $175,018 ($11.47/ton processed) , compared to $178,485 ($12.34/ton processed) for 2018. It is expected that the equipment repair and maintenance cost will increase in proportion to the level of production.

Production supplies

During the year ended December 31th, 2019, the costs for production supplies amounted to $277,823 ($18.21/ton processed) , compared to $275,392 ($19.04/ton processed) for 2018. It is expected that the production supplies cost will increase in proportion to the level of production.

Gross operating margin

During the year ended December 31, 2019, a gross operating loss of $138,052 was recorded compared to a gain of $133,563 during 2018. This negative margin is attributable to the lower material recovery rate of 61% during the current year compared to 73% during 2018, a lower usage of the production capacity of the plant of 63% compared to 70% in 2018 and an higher cost per gram purchased during 2019 compared to 2018. Management is working on improving each of these issue to ensure profitability during 2020.

G&A

The general and administration total expense of $691,366 for 2019 and $590,791 for 2018 are stable when excluding the charge for Share base payments of $141,558 for 2019 and $35,001 for

17

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

1. Excluding the Share base compensation, total G&A amounts to $549,808 in 2019 compared to $555,790.

In summary:

During 2019, the level in the production capacity usage of 63%, a material recovery ratio of 61% and an increase of 23% in the cost of material during 2019 compared to 2018, resulted in the lack of revenue and higher material cost per on and a gross operating loss of $138,052. By improving the maintenance procedures and determining with more accuracy the spare parts to be inventoried, the Corporation can reduce the production stoppages and therefore increased plant efficiency as it did during the third quarter of 2019 with 77% of usage of production capacity and 83% of material recovery.

Since last quarter, the Corporation is testing materials from various suppliers. In the first quarter of 2020, it intends to finalize final agreements in order to obtain sufficient quality material (4grams+) to be processed at the plant.

To reduce the material cost per ounce produced, local management is actively searching new concessions to ensure constant material availability and reduce the material cost.

RECONCILIATION OF NET LOSS AND COMPREHENSIVE LOSS TO EBITDA

EBITDA reconciliation Reconciliation of net comprehensive loss to EBITDA (1) Net and comprehensive loss Financial expense Depreciation EBITDA(1) Reconciliation of net cash flow from operating activities before change in working capital items per share(2) Net cash flow used in operating activities before change in working capital items(2) Basic weighted average number of common shares outstanding			2019 2018 Adjusted section 1.7 (1,203,990) (456,064) 101,189 11,742 230,391 186,720
			(872,410)(257,602) (828,362) (209,371) 82,868,108 82,868,108

(1) EBITDA: “Earnings before interest, taxes and depreciation” is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another Corporation. The Corporation uses this non-IFRS measure as an indicator of the cash generated by the operations and allows investor to compare the profitability of the Corporation with others by canceling effects of different assets bases, effects due to different tax structures as well as the effects of different capital structures. See the “Non-IFRS Measures” section 1.18 of this MD&A.

18

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

• (2) Net cash-flow from operating activities before change in working capital per share is a non-IFRS financial performance measure with no standard definition under IFRS. It is therefore possible that this measure could not be comparable with a similar measure of another Corporation. See the “Non-IFRS Measures” section 1.18 of this MD&A. The Corporation uses this non-IFRS measure which can also be helpful to investors as it provides a result which can be compared with the Corporation market share price.

General exploration and evaluation expenditures for the years ended December 31, 2019, 2018 and 2017.

The general exploration charge net of tax credits during the year ended December 31, 2019 of $1,099 [$3,379 in 2018 and $9,755 in 2017] represents exploration expenses incurred where the Corporation did not have the option to acquire the claims.

B) CONSOLIDATED FINANCIAL POSITION FOR THE YEARS ENDED DECEMBER 31, 2019 and 2018

As at December 31, 2019, the total assets amount to $3,589,988 ($3,983,499 on December 31, 2018). The property and equipment amounts to $3,066,089 [$3,406,948 on December 31, 2018] and the variation is for the most part, resulting from the depreciation and variation in foreign exchange. The exploration and evaluation assets amounts to $214,727 as at December 31, 2019 [$210,161 on December 31, 2018] capitalized as per the policy modification described in section 1.6. As at December 31, 2019, the current liabilities of $1,002,887 [$730,297 as at December 31, 2018] includes an amount of $431,736 for tax and other non-compliance penalty for which no scheduled payment terms have been determined and an amount due to insiders of $62,495; a provision for asset retirement obligations for an amount of $65,678 was recorded on December 31, 2019 ($66,150 on December 31, 2018).

Financial Position	December 31, 2019 $	December 31, 2018 $
		(Adjusted- 1.7)
Current assets	309,172	366,390
Property and equipment	3,066,089	3,406,948
Exploration and evaluation assets	214,727	210,160
Total Assets	3,589,988	3,983,498
Current liabilities	1,002,887	730,297
Term loans	660,000	250,000
Provision	65,678	66,150
Convertible debentures	137,596	150,793
Shareholders’ equity	1,723,827	2,786,259
Total liabilities and Equity	3,589,988	3,983,499

19

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Property and equipment (P&E)

Cost As at January 1, 2019 Additions Foreign exchange As at December 31, 2019 Accumulated depreciation As at January 1, 2019 Depreciation Foreign exchange As at December 31, 2019 Net book value December 31, 2019 Cost As at January 1, 2018 Transfer Additions Foreign exchange As at December 31, 2018 Accumulated depreciation As at January 1, 2018 Depreciation Foreign exchange As at December 31, 2018 Net book value December 31, 2018	Land $ Building $ Plant equipment $	Land $ Building $ Plant equipment $	Land $ Building $ Plant equipment $	Vehicle $ Machinery and Equipment $	Vehicle $ Machinery and Equipment $
						Total
						$
	550,366 414,853 2,256,039 19,227 492,405 - - - - 49,464 (26,349) (19,861) (108,007) (920) (24,685)
	524,017 394,992 2,148,032 18,307 517,184
	- (36,353) (219,533) (6,662) (63,394) - (44,548) (147,005) (3,693) (35,145) - 2,569 13,245 387 3,689
	- (78,332) (353,293)			(9,968) (94,850)
	524,017 316,659 1,794,739 8,339 422,334
	Land $ Building $ Plant equipment $
	324,419 244,841 1,522,740 18,449 831,378 - 156,048 647,054 - (803,102) 204,169 - - - 442,103 21,778 13,964 86,245 778 22,026
	550,366 414,853 2,256,039 19,227 492,405
	- (36,353) (219,533) (6,662) (63,394)
	550,366 378,500 2,036,506 12,565 429,011

20

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Exploration and evaluation assets (E&E) – section 1.9

Capitalized exploration and evaluation assets are comprised of wholly owned mining rights, undivided interests in properties as described in the section 1.9:

Costs of E&E assets at the end of the year:

Mining properties Balance January 1, 2018 Additions Write-down Balance December 31, 2018 Additions Balance December 31, 2019		Moose Lake- Canada (phosphate) $
			La Cobra -
			Honduras
			(gold)	Total
			$	$
		204,004 10,000 (3,845)	1 - -	204,005 10,000 (3,845)
		210,159 4,567 214,726	1 -	210,160 4,567
			1	214,727

During the year, the Corporation has not spent on exploration and evaluation assets as funds were allocated to the Honduran processing plant.

1.9 INVESTING ACTIVITIES

GOLD PROPERTIES

Cobra Oro de Honduras – Honduras

On November 24, 2016, Cobra Oro de Honduras obtained the renewal for a period of 15 years, of the ‘’Beneficiary permit’’ which confirms that the Corporation meets mining compliance in Honduras; the environmental permit was approved and validated.

On May 17, 2017, the Corporation acquired through its wholly owned Honduran subsidiary, the property called "La Cobra", which was assigned to the Corporation by the Ministry of Mines of Honduras. The property covering approximately 775 hectares, is located in the Valle Department, Honduras.

The Corporation is at the level of socialization process with the community, to have an exploration program executed in the respect of the community and the environment.

21

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Land purchase

On February 2, 2018, the Corporation purchased an additional land adjacent to the current plant facilities for $161,727 us ($199,118 cad). This acquisition of 4,967 square meters of land was to build a tailings pound, to allow increased production throughput.

PHOSPHATE PROPERTIES

Moose Lake – (Lac St-Jean Quebec).

On October 12, 2011, the Corporation entered into an option agreement with a private company and two individuals, to acquire a 100% interest in a phosphate property (“Moose Lake”), composed originally of 90 claims, located in St-Jean Lake area (Quebec), approximately 150 km South of Lisette Lake. As per the agreement, the Corporation has agreed to pay an amount of $428,000 in cash or in share equivalent and to spend $400,000 on E&E work over a seven year period. Under the terms of the agreement, the vendors agreed to grant the Corporation the exclusive and irrevocable right to earn a 100% interest in the property in consideration of the following: i) upon acceptance by the TSX Venture Exchange, the Corporation issued to the Vendors 200,000 shares representing a $93,000 payment; ii) after six months, the Corporation shall pay $100,000 (paid in share equivalent); iii) at the first anniversary date of the signing of the agreement, the Corporation shall pay $75,000 (paid in share equivalent); iv) after 20 months of the signing of the agreement, the Corporation must have spent $100,000 in E&E work (completed); v) at the second anniversary date of the signing of the agreement, the Corporation shall pay $60,000 (paid in share equivalent); vi) at the third anniversary date of the signing of the agreement, the Corporation shall pay $60,000 (in cash or in share equivalent), and have spent an additional $100,000 on E&E work on the property(completed); vii) at the fourth anniversary date of the signing of the agreement, the Corporation shall pay $40,000 (in cash or in share equivalent) (revised from $60,000) payable by one payment of $10,000 on December 15, 2015 and three yearly payments of $10,000 starting September 30th, 2016 (paid), September 30th, 2017 (paid) and on September 30th, 2018 (paid), and have spent an additional $200,000 (completed) on E&E work on the property; as the obligations of the option agreement are fully respected, the right to property was transferred to the Corporation.

Following an addendum to the original agreement, the Corporation could stake claims adjacent to the Moose property and therefore, more than doubled the size of the property. All claim charges for annual fees and costs for transferring and managing the claims will be at the charge of the Corporation. The vendor, being an exploration company, will be in charge of the realization of the E&E work on the field. Furthermore, when claims are transferred, the Corporation will assume a 1% NSR payable to the vendor and redeemable by tranche of 0.5% for $500,000 each.

22

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

On December 31, 2018, the Corporation abandoned 60 claims which resulted in an impairment charge of $69,347.

The Corporation complied with all obligations to maintain the rights on the property. The Corporation owns a total of 81 claims.

1.10 FINANCING ACTIVITIES

The Corporation is pursuing its financing alternatives mainly through the issuance of new equity and with the collaboration of its financial advisors.

CONVERTIBLE DEBENTURE

On December 13th, 2018, the Corporation completed the financing of a $150,000 convertible debenture bearing interest at a rate of 12% per annum and maturing on December 12, 2021. The principal amount of the debenture will be payable at the maturity date and accrued interest will be paid on June 30 and December 31 of each year until maturity date. The debenture is convertible at $0.20 into units, composed of one common share and one common share purchase warrant. The unit is to be converted at $0.20 a share until maturity date for a total of 750,000 shares and 750,000 common share purchase warrants to be exercised at $0.30 for two years after conversion of the debenture.

TERM LOANS

A first loan of $100,000 by an insider, is a non-guaranteed loan due on April 30th, 2021, that was closed on October 20, 2018, bears interest at an annual rate of 15%. The interest are payable twice a year on June 30 and December 31st. An Officer of the Corporation has guaranteed this loan.

A second loan of $150,000 by an insider, is a non-guaranteed long term loan due on April 30, 2021, that was closed on October 20, 2018, bears interest at an annual rate of 15%. The interest are payable twice a year on June 30 and December 31. The two loans were contracted with an insider of the Corporation.

A third loan of $410,000 by an insider, is a non-guaranteed loan due on May 29, 2023, that was closed on May 30, 2019, bears interest at an annual rate of 12%. The interest are payable monthly.

EXERCICE OF WARRANTS

There are no outstanding warrants left as all warrants were all exerciced.

23

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

1.11 SUMMARY OF QUARTER RESULTS

The following table contains a summary of quarterly results of the last eight quarter-ends.

	Net	Comprehensive	Net earnings/(loss)
Quarter ended	income (loss)	Income (loss)	per share
December 31, 2019	(130,578)	(171,819)	(0.00)
September 30, 2019	(52,184)	(10,801)	(0.00)
June 30, 2019	(577,428)	(647,153)	(0.01)
March 31, 2019	(288,627)	(374,217)	(0.00)
December 31, 2018	(413,975)	(290,992)	(0.00)
September 30, 2018	(182,930)	(264,412)	(0.00)
June 30, 2018	116,799	137,732	0.00
March 31, 2018	(172,754)	(103,894)	(0.00)

During the quarter ended December 31, 2019, a net loss of $130,578 was recorded compared to a net loss of $413,975 for the same period in 2018; the variation is mainly due to the variation in the gross margin between the two periods.

During the quarter ended September 30, 2019, a net loss of $52,184 was recorded compared to a net loss of $182,930 for the same period in 2018; the variation is mainly due to the variation in the gross margin of $166,371 between the two periods.

During the quarter ended June 30, 2019, a net loss of $577,428 was recorded compared to a net gain of $116,799 for the same period in 2018; the variation is mainly due to the variation in the gross margin of $655,541 between the two periods.

During the quarter ended March 31, 2019, a net loss of $288,627 was recorded compared to a net loss of $172,754 for the same period in 2018; the variation is mainly due to the variation in the gross margin of $127,792.

During the quarter ended December 31, 2018, a net loss of $413,975 was recorded compared to a net loss of $275,477 for the same period in 2017. The variation is explained by the high cost of ore material and depreciation during 2017. This was the result of a poor recovery rate of 51% for the period.

During the quarter ended September 30, 2018, a net loss of $182,930 was recorded compared to a net loss of $194,428 for the same period in 2017; the variation is mainly due to the gross operating loss during Q3-2018 compared to Q3-2017.

24

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

During the quarter ended June 30, 2018, a net income of $116,799 was recorded compared to a net loss of $572,620 for the same period in 2017; the variation is mainly due to the variation in gross margin for $462,815, share base payments for $122,996 and Impairment of exploration and evaluation assets for $83,301.

During the quarter ended March 31, 2018, a net loss of $172,754 was recorded compared to a net loss of $195,198 for the same period in 2017; the variation is mainly due to the currency translation adjustment variation between the periods and a positive gross operating margin of $58,190 in the first quarter of 2018.

1.12 RELATED PARTY TRANSACTIONS

Remuneration of key management

Key management includes directors and senior executives of the parent company and its subsidiary. The compensation recognized as an expense and paid to key management for services is presented below:

Related party transactions Management fees Share based payments	2019 $ 2018 $
	210,000 209,400 116,036 19,445
	326,036 228,845

During the year, companies controlled by officers and directors charged an amount of $17,660 ($14,809 - 2018) for office expenses and rent. An amount of $60,650 is due to Officers of the Corporation at the end of the year (2018: nil).

1.13 LIQUIDITY AND CAPITAL RESOURCES

As at December 31, 2019, the Corporation has a negative working capital of $693,715 (negative of $363,907 as at December 31, 2018). In the event that cash flows from its operations in Honduras would be insufficient, management is of the opinion that additional financings would be necessary to maintain the status of its current and future obligations.

The Corporation’s principal source of financing is equity financing, the success of which depends on capital markets, the attractiveness of exploration companies to investors, and metal prices. To continue its future exploration activities and be able to support its ongoing operations, the

25

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

Corporation will need to maintain and expand its relationships with the financial community in order to obtain further equity financing which is often necessary to support exploration programs.

Management estimates that current funds will not be sufficient to meet the Corporation’s obligations and budgeted expenses through December 31, 2020. Any additional funding may be met in the future in a number of ways including but not limited to, increase in production, the issuance of new equity instruments and debt financing.

1.14 OFF-BALANCE SHEETS ARRANGEMENTS

The Corporation has not entered into any off-balance sheet arrangements including, without limitation, in respect of guarantee contracts, contingent interests in assets transferred to unconsolidated entities, derivative financial obligations, or in respect to any obligation under a variable interest equity arrangement.

1.15 CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. There is a full disclosure and description of the Corporation's significant accounting policies, critical policies estimates, judgments and assumptions in notes 3 and 4 of the audited financial statements for the year ended December 31, 2019. Management has established these amounts in a reasonable manner, in order to ensure that the financial statements are presented fairly in all material respects.

1.16 RECENT ACCOUNTING STANDARDS

New standards and interpretations adopted

IFRS 16, Leases (“IFRS 16”)

In January 2016, IASB issued IFRS 16, Leases, which specifies how to recognize, measure, present and disclose leases. The standard provides a single lessee accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less or the underlying asset has a low value. Lessors continue to classify leases as operating or finance, with IFRS 16’s approach to lessor accounting substantially unchanged from its predecessor, IAS 17, Leases. The standard is mandatory for the Corporatoin’s annual periods beginning on January 1, 2019. The Corporation has evaluate the impact of this standard on its financial statements. On January 1, 2019, the Corporation adopted IFRS 16, Leases, and determined that there is no impact upon the adoption of IFRS 16 on January 1, 2019 and 2018 and on the comparative information presented.

26

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

1.17 FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Financial assets and liabilities have been classified into categories that determine their basis of measurement and, for items measured at fair value, whether changes in fair value are recognized in the consolidated statement of income or comprehensive income. Those categories are: fair value through profit or loss; loans and receivables; available for sale financial assets; and, for liabilities, amortized cost. The table reproduced in the consolidated financial statements as at December 31, 2019, shows the carrying values and fair values of assets and liabilities for each of these categories as at December 31th, 2019 and December 31th, 2018. Furthermore, financial risks factors are well described in these financial statements.

1.18 NON-IFRS MEASURES

Throughout this document, the Corporation has provided measures prepared according to IFRS as well as some non-IFRS financial performance measures. Because the non-IFRS performance measures do not have any standardized definition prescribed by IFRS, they may not be comparable to similar measures presented by other companies. The Corporation provides these non-IFRS financial performance measures as they may be used by some investors to evaluate our financial performance. Accordingly, they are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. These non-IFRS financial performance measures were reconciled to reported IFRS measures within the document. (Refer to section 1.8 for description and reconciliation of those non-IFRS measures).

1.19 RISKS AND UNCERTAINTIES

An investment in the common shares of the Corporation should be considered highly speculative for a variety of reasons. The following is a general description of certain significant risk factors which should be considered:

a) Mining industry and mining projects

Exploration and development projects have no operating history upon which to base estimates of future operating costs and capital requirements. Mining projects frequently require a number of years and significant expenditures during the mine development phase before production is possible. Development projects are subject to the completion of successful feasibility studies, obtaining the necessary governmental permits and securing necessary financing. The economic feasibility of such development projects is based on many factors such as estimation of reserves, metallurgical recoveries, future metal prices, and capital and operating costs of such projects. Exploration and development of mineral deposits thus involve significant financial risks

27

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of an ore body may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. In fact, a mine must generate sufficient revenues to offset operating and development costs such as the costs required to establish reserves by drilling, to develop metallurgical processes, to construct facilities and to extract and process metals from the ore. Once in production, it is impossible to determine whether current exploration and development programs at any given mine will result in the replacement of current reserves with new reserves. The Corporation is subject to risks and hazards inherent to the mining industry, including fluctuations in metal prices, costs of constructing and operating a mine as well as processing and refining facilities in a specific environment, availability of economic sources of energy and adequacy of water supply, adequate access to the site, unanticipated transportation costs, delays and repair costs resulting from equipment failure, changes in the regulatory environment (including regulations relating to prices, royalties, duties, taxes, restrictions on production, quotas on exportation of minerals, as well as the costs of protection of the environment and agricultural lands), and industrial accidents and labor actions or unrest. The occurrence of any of these factors could materially and adversely affect the development of a project and as a result materially and adversely affect the Corporation’s business, financial condition, results of operations and cash flow.

b) Licence and permits

Should the exploration activities be conducted by the Corporation and be successful, it may not be able to obtain the necessary licenses or permits to conduct or pursue its exploration and mining operations on its properties, and thus would realize no benefit from its exploration activities on its properties. Furthermore, as part of its ore processing activities, the Corporation is required to obtain several permits. Although the Corporation believes it will obtain the required permits, it may face administrative delays in doing so, which could impact its operations.

c) Political and country risk

The principal interest of the Corporation is located in Honduras. The Corporation believes that government of Honduras supports the development of its natural resources by foreign companies. However, there is no assurance that future political and economic conditions in Honduras will not result in the government adopting different policies regarding foreign ownership of mineral resources, taxation, exchanges rates, environmental protection, labor relations, and the repatriation of funds. The possibility that a future government may adopt substantially different policies, which might extend to the expropriation of assets, cannot be ruled out. The Corporation's current and future mineral exploration and mining activities could be impacted by widespread civil unrest and rebellion. Country risk refers to the risk of investing in a country, dependent on changes

28

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

in the business environment that may adversely affect operating profits or the value of assets in a specific country. For example, financial factors such as currency controls, devaluation or regulatory changes, or stability factors such as mass riots, civil war and other potential events contribute to companies' operational risks. Currently and since its operation began in Honduras, the Corporation has not suffered any of these risks.

d) Supply and quality of feedstock

The Corporation’s operations involve the purchase of mineral ore from local producers which is then converted to supply the production of its plant. The increase in production and revenues of the Corporation will depend on the availability of the mineral ore being supplied by the local producers. To mitigate this risk, the Corporation is increasing the number of suppliers of mineral ore.

As the Corporation does not mine its own ore, it does not have entire control over the ore grade supplied from its suppliers. Therefore this situation can have an impact over the volume of gold produced and gold sales. The Corporation mitigates this risk by working with a minimum cutoff purchase grade when possible to ensure best efficiency and profitability of its plant operations.

e) Competition

The Corporation is in competition with other processing companies in Honduras. Although the Corporation has been able in the past, to maintain and even increase its market share and build a good reputation with its suppliers, in that field of operation, there can be no assurance that it will indefinitely retain its position in this market. The Corporation is increasing efforts on the ground to develop the growth of its processing business. The Corporation is also in competition with other mining companies for the acquisition of interests in precious and base metal mining exploration properties. In the pursuit of such acquisition opportunities, the Corporation competes with several Canadian and foreign companies that may have substantially greater financial and other resources. Although the Corporation has acquired many such assets in the past, there can be no assurance that its acquisition efforts will succeed in the future.

f) Dependance on management

The success of the operations and activities of the Corporation is dependent to a significant extent on the efforts and abilities of its management team. See "Directors and Officers" for details of the Corporation's current management. Investors must be willing to rely to a significant extent on their discretion and judgment. The Corporation does not maintain key employee insurance on any of its employees. The Corporation depends on key personnel and cannot provide assurance that it will be able to retain such personnel. Failure to retain such key personnel could have a material adverse effect on the Corporation's business and financial condition.

29

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

g) Regulation and Environmental Requirements

The activities of the Corporation require permits from various governmental authorities and are governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour standards, occupational health, environmental protection and other matters. Increased costs and delays may result of the need to comply with applicable laws and regulations. If the Corporation is unable to obtain or renew licenses, approvals and permits, it may be curtailed or prohibited from proceeding with exploration or development activities.

h) Capital Needs

The exploration and evaluation, development, mining and processing of the Corporation’s properties may require substantial additional financing. The only current source of future funds available to the Corporation is the sale of additional equity capital and the borrowings of funds. There is no assurance that such funding will be available to the Corporation or that it will be obtained on terms favourable to the Corporation or will provide the Corporation with sufficient funds to meet its objectives, which may adversely affect the Corporation's business and financial position.

In addition, any future equity financings by the Corporation may result in a substantial dilution of the existing shareholders. Failure to obtain sufficient financing may result in delaying or indefinite postponement of further exploration and evaluation, development or production on any or all of the Corporation’s properties or even a loss of property interest.

i) Commodity Prices

The market price of the Corporation’s common shares, its financial results and its exploration and evaluation, development and mining activities have previously been, or may in the future be, significantly adversely affected by the volatility in the price of precious or base minerals, including gold, and phosphate.

j) Uninsured Risks

The Corporation’s business is subject to a number of risks and hazards, including environmental conditions adverse, environmental regulations, political uncertainties, industrial accidents, labour disputes, unusual or unexpected geological conditions, ground or slope failures, cave-ins, and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Corporation’s properties or the properties of others, delays in mining, monetary losses and possible legal liability.

30

Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

• k) Going Concern

The future of the Corporation depends on its ability to finance its activities and to develop its assets. Failure to obtain sufficient financing may result in the Corporation not being able to continue its operations, realize its assets and discharge its liabilities in the normal course of business in the foreseeable future.

• l) Coronavirus (COVID-19)

The Corporation faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt, directly or indirectly, its operations and may materially and adversely affect its business and financial conditions.

1.20 SUBSEQUENT EVENTS

On February 13, 2020, the Corporation issued a total of 425,000 options to a director and employees, exercisable at the price of $0.10, for a period of five (5) years , according to conditions of the option plan.

On April 14, 2020, the Corporation appointed Mr. Andrew Waller as a member of the Board Of Directors of the Corporation.

Subsequent to year-end, an outbreak of a new strain of coronavirus (COVID-19) resulted in a major global health crisis which continues to have impacts on the global economy and the financial markets at the date of completion of the financial statements. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains and workforce participation and created significant volatility and disruption of financial markets. The extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute our 2020 business plan in the expected time frame, will depend on future developments, including the duration and severity of the pandemic and related restrictions, all of which are uncertain and cannot be predicted. Following these events, the Corporation has taken and will continue to take action to minimize the impact. However, it is impossible to determine the financial implications of these events for the moment.

1.21 QUALIFIED PERSON

Gilles Laverdière P.Geo., is the Qualified Person under National Instrument 43-101 who has reviewed the scientific and technical information in this document.

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

1.22 OUTLOOK

The availability of funds is a function of the capital markets. The Corporation is searching for financing in a difficult market, impacted by the COVID-19 . It is confident to be in a position to finance itself and to find new mining properties.

The Corporation’s ability to continue as a going concern is dependent upon raising additional funds. The outcome of these matters cannot be predicted at this time.

1.23 DISCLOSURE OF OUTSTANDING SHARE AND WARRANT DATA

Disclosure of outstanding securities as at June 11th, 2020

Common shares outstanding: 82,868,108

Options outstanding: 6,455,000

	Number of options	Exercise Price	ExpiryDate
1,800,000		$0.07	December 29, 2020
1,335,000		$0.105	July 13, 2021
	70,000	$0.12	February 13, 2022
	850,000	$0,20	April 26, 2022
	175,000	$0.225	January 25, 2023
	350,000	$0.13	January 24, 2024
1,450,000		$0.105	June 25, 2024
	425,000	$0.10	February 13, 2020

Warrants outstanding: none

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Glen Eagle Resources Inc. Management’s Discussion and Analysis Year ended December 31, 2019

1.24 ADDITIONNAL INFORMATION AND CONTINUOUS DISCLOSURE

Additional information on the Corporation is available through regular filings of quarterly and annual financial statements and press releases on SEDAR (www.sedar.com) or on our web site www.gleneagleresources.com

(s) Jean Labrecque Jean Labrecque President & Chief Executive Officer

(s) Daniel Bélisle Daniel Bélisle Chief Financial Officer & Corporate Secretary

CORPORATE INFORMATION

Directors

Transfer Agents

Jean Labrecque Gilles Laverdière (1) Hossam Shatta Guy Chamard (1) Charles Taschereau (1) (1) Audit Committee member

Computershare Canada 1500 University, Suite 700 Montreal, Quebec H3A 3S8

Solicitors

DS Welch Bussières 1080 Côte du Beaver Hall Montreal, Quebec H2Z 1S8

Officers

Exchange Listing

Jean Labrecque President & Chief Executive Officer

Daniel Bélisle Chief Financial Officer & Corporate Secretary

TSX-V

Ticker symbol: GER Cussip: 87973L103 ISIN: CA87973L1031

Auditors

Head Office

PricewaterhouseCoopers LLP 1250 René-Lévesque Boulevard West Suite 2500 Montreal, Quebec H3B 4Y1

4710 St-Ambroise Suite 308 Montreal, Quebec H4C 2C7

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