Golconda Gold Ltd. — Management Reports 2021

Nov 16, 2021

GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

Dated: November 15, 2021

MANAGEMENT’S DISCUSSION AND ANALYSIS

This management’s discussion and analysis (“MD&A”) of financial condition and results of operations of Galane Gold Ltd. (“Galane” or the “Company”) was prepared by management as at November 15, 2021. Throughout this MD&A, unless otherwise specified, “Galane”, “the Company”, “we”, “us” or “our” refer to Galane Gold Ltd. and its subsidiaries and should be read in conjunction with the unaudited condensed interim consolidated financial statements and notes thereto for the three and nine months ended September 30, 2021 (the “Interim Financial Report”), as well as the audited consolidated financial statements and notes thereto for the year ended December 31, 2020 (the “Annual Financial Statements”).

The Annual Financial Statements have been prepared by management and have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”). The Interim Financial Report has been prepared by management in accordance with IFRS applicable to interim financial reporting, including IAS 34, Interim Financial Reporting. All amounts are expressed in U.S. dollars unless otherwise noted. Other information contained in this document has also been prepared by management and is consistent with the data contained in the Annual Financial Statements.

The Company’s certifying officers are responsible for ensuring that Interim Financial Report and MD&A do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made. The Company’s certifying officers certify that the Interim Financial Report together with the other financial information included in the Interim Financial Report fairly present in all material respects the financial condition, financial performance and cash flows of the Company as the date of and for the periods presented in the Interim Financial Report.

The Audit Committee and the Board of Directors provide an oversight role with respect to all public financial disclosures by the Company. The Board of Directors approves the Interim Financial Report, the Annual Financial Statements and MD&A after the completion of its review and recommendation for approval by the Audit Committee, which meets periodically to review all financial reports, prior to filing.

FORWARD LOOKING STATEMENTS

Certain statements contained in this MD&A constitute “forward-looking statements”. All statements other than statements of historical fact contained in this MD&A, including, without limitation, those regarding the Company’s future financial position and results of operations, strategy, proposed acquisitions, plans, objectives, goals and targets, and any statements preceded by, followed by or that include the words “believe”, “expect”, “aim”, “intend”, “plan”, “continue”, “will”, “may”, “would”, “anticipate”, “estimate”, “forecast”, “predict”, “project”, “seek”, “should” or similar expressions or the negative thereof, are forward-looking statements. These statements are not historical facts but instead represent only the Company’s expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve assumptions, risks and uncertainties that are difficult to predict. Therefore, actual results may differ materially from what is expressed, implied or forecasted in such forward-looking statements.

Additional factors that could cause actual results, performance or achievements to differ materially include, but are not limited to: the Company’s dependence on three mineral projects; gold price volatility; risks associated with the conduct of the Company’s mining activities in Botswana, South Africa and New Mexico; regulatory, consent or permitting delays; risks relating to the Company’s exploration, development and mining activities being situated in Botswana, South Africa and New Mexico; risks relating to reliance on the Company’s management team and outside contractors; the Company’s inability to obtain insurance to cover all risks, on a commercially reasonable basis or at all; currency fluctuations; risks regarding the failure to generate sufficient cash flow from operations; risks arising from the Company’s fair value estimates with respect to the carrying amount of mineral interests; mining tax regimes; risks regarding mineral resources and reserves; the Company’s need to replace reserves depleted by production; risks and unknowns inherent in all mining projects, including the

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

inaccuracy of reserves and resources, metallurgical recoveries and capital and operating costs of such projects; contests over title to properties, particularly title to undeveloped properties; risks and expenses related to reclamation costs and related liabilities; lack of infrastructure; employee relations, labour unrest or unavailability; health risks in Africa; supply chain disruptions, major health issues, pandemics, and COVID-19; the Company’s interactions with surrounding communities and artisanal miners; extensive laws and regulations governing the environment, health and safety; the Company’s ability to successfully integrate acquired assets; risks related to ramping-up production; the speculative nature of exploration and development, including the risks of diminishing quantities or grades of reserves; development of the Company’s exploration properties into commercially viable mines; risks related to climate change; risks related to information security; risk of using derivative instruments including credit risk, market liquidity risk and unrealized mark-to-market risk; stock market volatility; conflicts of interest among certain directors and officers; lack of dividends; lack of liquidity for shareholders of the Company; risks related to the market perception of junior gold companies; litigation risk; and difficulties in bringing actions and enforcing judgments for foreign investors. See “Risk Factors” in the Company’s annual information form for the year ended December 31, 2020, a copy of which is available on the Company’s SEDAR profile at www.sedar.com. Management provides forward-looking statements because it believes they provide useful information to readers when considering their investment objectives and cautions readers that the information may not be appropriate for other purposes. Consequently, all of the forward-looking statements made in this MD&A are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, the Company. These forward-looking statements are made as of the date of this MD&A and the Company assumes no obligation to update or revise them to reflect subsequent information, events or circumstances or otherwise, except as required by law.

The forward-looking statements in this MD&A are based on numerous assumptions regarding the Company’s present and future business strategies and the environment in which the Company will operate in the future, including assumptions regarding gold prices, business and operating strategies, and the Company’s ability to operate on a profitable basis.

MINERAL RESERVES AND RESOURCES

Information of a technical and scientific nature that forms the basis of the disclosure in the MD&A has been approved by Kevin Crossling Pr. Sci. Nat., MAusIMM., Business Development Consultant for Galane Gold, and a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

All mineral reserves and mineral resources have been estimated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and NI 43-101. All mineral resources are reported exclusive of mineral reserves. Mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no guarantee that any of the mineral resources disclosed in the MD&A will be converted to mineral reserves. There is also no guarantee that any of the inferred mineral resources will be upgraded to measured or indicated mineral resources. Information on data verification performed on the mineral properties mentioned in this MD&A that are considered to be material mineral properties to the Company are contained in the Company’s most recent annual information form and the current technical report for each of those properties, all available on the Company’s SEDAR profile at www.sedar.com.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

CORPORATE OVERVIEW

The Company’s principal business activities are the exploration for, development of, and operation of gold mining properties. The Company operates through its wholly-owned subsidiary, Galane Gold Mines Ltd. (“GGM”), which in turn operates two mines: (a) a producing mine which also has the rights to certain mineral exploration tenements (the producing mine and mineral exploration tenements collectively, the “Mupane Property”) located in the Republic of Botswana (“Botswana”) through subsidiaries located in Botswana; and (b) a mine in the process of restarting and which has the rights to certain mineral exploration tenements (the mine and mineral exploration tenements collectively, the “Galaxy Property”) located in the Republic of South Africa (“South Africa”) through subsidiaries located in South Africa. The common shares in the capital of the Company (the “Common Shares”) have been listed for trading on the TSX Venture Exchange (the “Exchange”) under the symbol “GG” since September 6, 2011 and trade on the OTCQB in the United States under the trading symbol “GGGOF”.

OUTLOOK

The extent and duration of impacts that COVID-19 may have on the Company’s ability to ship and sell gold dore and gold concentrate, on our suppliers and employees and on global financial markets going forward is not known at this time but could be material. As a result, the Company has not issued annual guidance for 2021.

Mupane

The Company continues to operate while observing compliance with capacity and enhanced operating requirements mandated by the Republic of Botswana Government, including but not limited to social distancing, wearing of face masks, provision of hand sanitizer for employees and visitors, registration upon entry to site and temperature checks. The Company will continue to assess the viability of operating at the government mandated levels and look to manage production in line with any further easing or tightening of operating restrictions.

Galaxy

The Company continues to operate while observing compliance with capacity and enhanced operating requirements mandated by the Republic of South Africa Government, including but not limited to social distancing, wearing of face masks, provision of hand sanitizer for employees and visitors, registration upon entry to site and temperature checks. The Company will continue to assess the viability of operating at the government mandated levels and look to manage production in line with any further easing or tightening of operating restrictions.

SUMMIT MINE ACQUISITION

On May 19, 2021, the Company completed the acquisition (the “Summit Acquisition”), through a wholly-owned subsidiary, of the Summit Mine (the “Summit Mine”) and the infrastructure constituting the Banner crush, mill and flotation plant in New Mexico, located 57 miles from the Summit Mine (together with the Summit Mine, the “Summit Assets”) from Pyramid Peak Mining, LLC, a whollyowned subsidiary of Waterton Precious Metals Fund II Cayman, LP (the “Seller”).

The aggregate consideration to be paid for the Summit Assets is $17.0 million, of which $8.8 million has been paid, consisting of (i) cash consideration of $6.0 million paid on closing of the Summit Acquisition; (ii) issuance to the Seller on closing of the Summit Acquisition of 16 million Common Shares at a deemed issuance price of C$0.22 per Common Share and warrants to purchase up to 16 million Common Shares, exercisable at an exercise price of C$0.30 per Common Share for a period of three years from closing of the Summit Acquisition (the “Summit Acquisition Warrants”); and (iii) cash consideration of $8.2 million to be paid upon commencement of production at the Summit Mine.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

In connection with the Summit Acquisition, the Company also completed a private placement (the “2021 Private Placement”) of 44,028,700 subscription receipts of the Company (“Subscription Receipts”) at a price of C$0.22 per Subscription Receipt for aggregate proceeds of C$9,686,314. Canaccord Genuity Corp. acted as lead agent in connection with the 2021 Private Placement, on behalf of a syndicate of agents, including Research Capital Corporation (collectively, the "Agents").

On closing of the Summit Acquisition, each Subscription Receipt holder received one Common Share and one common share purchase warrant of the Company (the “2021 Warrant”). Each 2021 Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.30, for a period of three years following the closing of the Summit Acquisition.

In connection with the 2021 Private Placement, the Agents received a cash commission of C$670,692 and 3,048,602 broker warrants (“2021 Broker Warrants”). Each 2021 Broker Warrant entitles the holder thereof to purchase one Common Share at a price of C$0.22, for a period of two years following the closing of the Summit Acquisition.

Following the closing of the Summit Acquisition, the Company is currently in the process of completing a detailed plan for the re-commencement of mining at the Summit Mine and processing at the Banner crush, mill and floatation plant. In the near term, the Company expects to incur the holding cost of the assets, currently estimated at $0.1 million per annum, with this cost impacting both the Statement of Earnings and Statement of Cash Flows of the Company.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

DISCUSSION OF OPERATIONS

For the three and nine months ended September 30, 2021

The following is an analysis of the Company’s operating results for the three months ended September 30, 2021 (“Q3 2021”) and the nine months ended September 30, 2021 (“YTD 2021”).

Operating activity :

Commentary regarding the Company’s operating activity during Q3 2021 and YTD 2021:

Mining

The following table sets forth certain key mining statistics for the Mupane Property:

		2021	2021	2021	2021	2020	2020	2020	2020	2020
		Q3	Q2	Q1	Total	Q4	Q3	Q2	Q1	Total
Mupane (Tau)	Ore (t)	38,234 1.95 13,202	42,672 1.79 7,328	48,207 1.89 9,578	129,113	64,309 2.05 5,822	70,837 2.31 10,016	59,532 2.58 6,464	67,368 2.64 16,482	262,046
	Grade (g/t)				1.88					2.39
	Waste (t)				30,108					38,784
Dinokwe	Ore (t)	84,704 1.29 271,321	70,511 1.56 158,937	40,043 1.78 251,743	195,258	15,365 1.79 230,174	21,485 1.88 509,357	4,283 1.67 241,524	4,012 1.37 106,870	45,145
	Grade (g/t)				1.49					1.78
	Waste (t)				682,001					1,087,925
Golden Eagle	Ore (t)	42,222 1.36 250,147	18,589 1.50 130,953	3,652 1.93 10,979	64,463	32,182 2.36 8,162	20,210 2.64 4,852	- - -	- - -	52,392
	Grade (g/t)				1.43					2.46
	Waste (t)				392,079					13,014
Low Grade Stockpiles	Ore (t) Grade (g/t)	8,553 0.75	18,791 0.76	46,174 0.65	73,518 0.69	- -	- -	12,105 1.44	1,527 1.28	13,632 1.42
Monarch Slimes Dump / Historic Tailings Dumps	Ore (t) Grade (g/t)	19,895 0.65	21,793 0.70	34,917 0.89	76,605 0.78	39,687 0.66	85,512 0.73	83,605 0.78	69,465 1.26	278,269 0.87

The Company continued to mine from the Tau deposit at the Mupane Property and the Dinokwe open cut during Q3 2021, while continuing to develop mining at the Golden Eagle property from both open cut and underground sources. The mining was supplemented with the continued reclamation of sands from historic tailings dumps and low grade ore from stockpiles located in close proximity to the Mupane property:

• Tau – For Q3 2021, the Company continued mining in the main reef of the ore body with 38,234 tonnes at 1.95 g/t being mined (three months ended September 30, 2020 (“Q3 2020’) – 70,837 tonnes at 2.31 g/t). The tonnes and grade for Q3 2021 were lower than Q3 2020 with mining activity during the quarter impacted by employee absences due to COVID-19, issues with the main incoming transformer, and production complications due to poor contractor performance. For YTD 2021, 129,113 tonnes at 1.88 g/t were mined compared to 197,737 tonnes at 2.50 g/t for the nine months ended September 30, 2020 (“YTD 2020”). The tonnes and grade for YTD 2021 have been impacted by flooding of lower levels of the mine following substantial rainfall during Q1 2021, the increasing mine depth at Tau, employee absences due to COVID-19, issues with the main incoming transformer, and production complications due to poor contractor performance.

• Dinokwe – For Q3 2021 the Company mined 271,321 tonnes of waste, and 84,704 tonnes of ore at a grade of 1.29 g/t (Q3 2020 – 509,357 tonnes of waste and 21,485 tonnes of ore at a grade of 1.88 g/t). The increase in ore mined for Q3 2021 is due to mining in the main ore body, compared to Q3 2020 when the Dinokwe mine was continuing development as an open cut ore body. For YTD 2021, the Company mined 682,001 tonnes of waste, and 195,258 tonnes of ore at a grade of 1.60 g/t (YTD 2020 – 857,751 tonnes of waste and 29,780 tonnes of ore at a grade of 1.78 g//t). The increase in ore mined for YTD 2021 is due to mining in the main ore body, compared to YTD 2020 when the Dinokwe mine was only commencing development as an open cut ore body.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

• Golden Eagle – During Q3 2021, the Company mined 42,222 tonnes of ore at an average grade of 1.36 g/t., primarily from the Kite open pit. There was no mining activity at Golden Eagle during Q3 2020. For the YTD 2021 the Company mined 64,463 tonnes of ore at an average grade of 1.43 g/t, with the majority of the ore coming from the Kite open pit. There was no mining activity at Golden Eagle during YTD 2020.

• Monarch/Historic Tailings – In Q3 2021, the Company transported 19,895 tonnes of historic tailings at an average grade of 0.65 g/t, (Q3 2020- 85,512 tonnes of Monarch slimes at 0.73 g/t). The hauling of historic tailings for Q3 2021 were lower than hauling from the Monarch sands in Q3 2020 due to restricted access to the historic tailings as compared to the Monarch sands. For YTD 2021 the Company transported 76,605 tonnes of historic tailings at an average grade of 0.78 g/t, (YTD 2020 – 238,582 tonnes of Monarch slimes at 0.90 g/t), with hauling of historic tailings for YTD 2021 lower due to restricted access to the historic tailings as compared to the Monarch sands.

In addition, the Company is currently processing ore from its previously mined low-grade stockpiles, which are located next to the Golden Eagle mine, Signal Hill and Molomolo. In Q3 2021, the Company reclaimed 8,553 tonnes of low-grade ore stockpiles at an average grade of 0.75 g/t (Q3 2020 – nil) with trucks previously used to haul Monarch slimes having been reassigned to low-grade stockpile reclamation. For YTD 2021, the Company reclaimed 73,518 tonnes at an average grade of 0.69 g/t (YTD 2020 – 13,632 tonnes at 1.42 g/t).

Processing

The following table sets forth certain key processing statistics at the Mupane Property:

		2021	2021	2021	2021	2020	2020	2020	2020	2020
		Q3	Q2	Q1	Total	Q4	Q3	Q2	Q1	Total
Ore milled Head grade Recovery Gold production	t g/t % oz	196,365 1.26 71.3% 5,691	166,161 1.45 77.4% 5,990	170,780 1.31 77.6% 5,600	533,306	166,087 1.77 75.4% 7,122	194,906 1.63 75.6% 7,738	157,644 1.52 74.0% 5,691	144,853 2.08 70.4% 6,818	663,490
					1.34					1.74
					75.4%					73.8%
					17,281					27,369

Gold production in Q3 2021 was 5,691 ounces compared to 7,738 ounces in Q3 2020. The ore milled for Q3 2021 was 196kt (Q3 2020 – 195kt). The grade in Q3 2021 of 1.26 g/t was below the grade for Q3 2020 of 1.63 g/t and was reflective of the feedstock available. The recovery for Q3 2021 of 71.3% was below the recovery for Q3 2020 of 75.6%. The reduction in recovery was reflective of the lower head grade for Q3 2021, while the static tail remained relatively consistent.

Gold production for YTD 2021 was 17,281 ounces compared to 20,247 ounces for YTD 2020. The ore milled for YTD 2021 was 533kt (YTD 2020 – 497kt). The grade for YTD 2021 of 1.34 g/t was below the grade for YTD 2020 of 1.73 g/t and was reflective of the feedstock available. The recovery for YTD 2021 of 75.4% was above the recovery for YTD 2020 of 73.3%. The increased recovery was reflective of the increased proportion of hard rock feed of the ore processed for YTD 2021.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

Revenue and earnings from mining operations

The table below outlines the revenue and earnings from mining operations on a total dollar basis, and on a per ounce of gold sold basis:

	Q3 2021	Q2 2021	Q1 2021	YTD 2021
Revenue (000)	$ 11,155	$ 10,455	$ 10,070	$ 31,680
Gold sold (oz.)	6,212	5,851	5,685	17,748
Earnings from mining operations (000)	$ 465	$ 1,484	$ 891	$ 2,840
Operating cash cost excluding royalties ($/oz.)(1)	$ 1,578	$ 1,351	$ 1,391	$ 1,439
	Q3 2020	Q2 2020	Q1 2020	YTD 2020
Revenue (000)	$ 14,927	$ 10,375	$ 9,474	$ 34,776
Gold sold (oz.)	7,974	6,046	6,105	20,125
Earnings from mining operations (000)	$ 3,537	$ 1,980	$ 871	$ 6,388
Operating cash cost excluding royalties ($/oz.)(1)	$ 1,082	$ 1,065	$ 1,037	$ 1,062

Note:[(1)] Operating cash cost excluding royalties per ounce is a non-GAAP measure. See “Supplemental Information to Management’s Discussion and Analysis”.

In Q3 2021, the Company generated $11.2 million in revenue from the sale of 6,212 ounces of gold plus incidental silver at an average combined price of $1,795 per ounce and earnings from mining operations of $0.5 million. This compares to $14.9 million in revenue from the sale of 7,974 ounces of gold plus incidental silver at an average combined price of $1,872 per ounce and earnings from mining operations of $3.5 million in Q3 2020.

The reason for the change in earnings from mining operations from Q3 2021 to Q3 2020 is a result of several factors:

• Gold sales for Q3 2021 were 1,762 ounces less than in Q3 2020. The impact of the decreased ounces was compounded by the lower average gold price achieved of $77 per ounce, resulting in an overall revenue decrease of $3.8 million compared to Q3 2020.

• Mining costs in Q3 2021 were $4.0 million, consistent with Q3 2020. The consistent mining costs are reflective of the tonnes mined with 194kt mined in Q3 2021, compared to 198kt for Q3 2020.

• Processing costs in Q3 2021 were $5.2 million compared with $4.9 million in Q3 2020. The actual tonnes milled increased from 194,906 tonnes in Q3 2020 to 196,365 tonnes in Q3 2021, however costs increased disproportionately with the increased hard rock feed affecting reagent and grinding media consumption.

• General and administration costs in Q3 2021 were $0.9 million compared to $0.8 million in Q3 2020.

• Depreciation and amortization expense was $0.6 million in Q3 2021 compared to $1.6 million in Q3 2020. The amortization for Q3 2021 was impacted by a $0.9 million decrease in Tau amortization.

As a result of the above factors the operating cash cost per ounce excluding royalties in Q3 2021 was $1,578 compared to $1,082 per ounce in Q3 2020.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

YTD 2021, the Company generated $31.7 million in revenue from the sale of 17,748 ounces of gold plus incidental silver at an average combined price of $1,785 per ounce and earnings from mining operations of $2.8 million. This compares to $34.8 million in revenue from the sale of 20,125 ounces of gold plus incidental silver at an average combined price of $1,728 per ounce and earnings from mining operations of $6.4 million for YTD 2020.

The reason for the change in earnings from mining operations from YTD 2021 to YTD 2020 is a result of several factors:

• Gold sales for YTD 2021 were 2,377 ounces less than in YTD 2020. The impact of the decreased ounces sold was offset by an increase in the average gold price achieved of $57 per ounce, resulting in an overall revenue decrease of $3.1 million compared to YTD 2020.

• Mining costs YTD 2021 were $11.0 million compared to $9.5 million for YTD 2020. The increase in mining costs is due to an increase in tonnes mined, with 539kt mined YTD 2021, compared to 500kt for YTD 2020. More specifically for YTD 2021 there were 389kt tonnes mined, excluding reclaimed ore sources, compared to 248kt tonnes, excluding reclaimed ore sources, for YTD 2020.

• Processing costs for YTD 2021 were $13.3 million compared with $12.0 million for YTD 2020. The actual tonnes milled increased from 497,403 tonnes for YTD 2020 to 533,306 tonnes for YTD 2021 however costs increased disproportionately with the increased hard rock feed affecting reagent and grinding media consumption.

• General and administration costs for YTD 2021 were $2.5 million, consistent with YTD 2020 spend of $2.4 million.

• Depreciation and amortization expense was $2.0 million for YTD 2021 compared to $4.5 million for YTD 2020. The amortization for YTD 2021 was impacted by a $2.7 million decrease in Tau amortization and a $0.1 million decrease in Monarch preproduction amortization, offset by an increase in Dinokwe pre-stripping amortization of $0.4 million. Depreciation on property, plant and equipment decreased by $0.2 million for the YTD 2021.

As a result of the above factors the operating cash cost per ounce excluding royalties for YTD 2021 was $1,439 compared to $1,062 per ounce for YTD 2020.

Results

The Company’s earnings (loss) comprised of:

	Q3 2021	YTD 2021	Q3 2020	YTD 2020
Earnings (loss) from mining operations Corporate general and administrative costs	$ 465,200 (439,857)	$ 2,840,170	$ 3,536,779 (572,630)	$ 6,387,533
		(1,915,423)		(1,501,340)
Stock-based compensation	(9,337)	(34,395)	(37,691)	(174,629)
Foreign exchange gain (loss)	516,096	431,981	(374,230)	962,510
Interest on long term debt	(132,654)	(437,986)	(133,898)	(364,342)
Galaxy on-going costs	(401,018)	(1,194,519)	(296,242)	(739,485)
Other income (expenses)	(25,364)	(75,749)	(10,690)	(78,476)
Other financing income (costs)	3,373,232	3,696,281	(2,923,135)	(4,034,685)
Net earnings(loss)for theperiod	$ 3,346,298	$ 3,310,359	$ (811,737)	$ 457,086

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

Other financing costs decreased by $6.3 million for Q3 2021, with a $6.3 million decrease in the fair value of the warrant liability. For YTD 2021 there was a decrease of $7.7 million, with a $8.5 million decrease in the fair value of the warrant liability, offset by $0.7 million in financing costs related to the 2021 Private Placement (see “Summit Mine Acquisition”).

Corporate general and administrative costs for Q3 2021 of $0.4 million were $0.2 million lower than Q3 2020, with professional fees relating to business development decreasing by $0.1 million and management fees decreasing by $0.1 million with the bonus accrual in the current year reduced in Q3 2021. Corporate general and administrative costs increased by $0.4 million for YTD 2021, with professional fees relating to business development increasing $0.1 million, and management fees increasing by $0.3 million with the resumption of a bonus accrual for the current year.

Corporate general and administration costs are comprised of the following:

	Q3 2021	YTD 2021	Q3 2020	YTD 2020
Professional fees	$ 147,017	$ 644,933	$ 193,631	$ 540,489
Management fees to officers	98,106	703,898	214,699	426,187
Investor relations	72,326	170,342	56,492	135,745
Corporate general and administration	122,408	396,250	107,808	398,919
	$ 439,857	$ 1,915,423	$ 572,630	$ 1,501,340

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

SUMMARY OF FINANCIAL POSITION

Selected Consolidated Statement of Financial Position Data:

	September 30, 2021 $	June 30, 2021 $	March 31, 2021 $	December 31, 2020 $
Total current assets	10,002,431	10,033,315	9,408,535	11,560,086
Total current liabilities	23,037,895	23,127,606	24,035,650	23,996,806
Working capital deficit	(13,035,464)	(13,094,291)	(14,627,115)	(12,436,720)
Non-current assets	56,312,631	56,276,476	44,285,857	42,586,905
Non-current liabilities	6,978,125	10,733,544	6,200,674	6,335,755
Total shareholders’equity	36,299,042	32,448,641	23,458,068	23,814,430
	September 30, 2020 $	June 30, 2020 $	March 31, 2020 $	December 31, 2019 $
Total current assets	12,296,919	10,107,858	7,766,249	9,345,569
Total current liabilities	21,404,293	23,274,143	21,098,020	23,663,805
Working capital deficit	(9,107,374)	(13,166,285)	(13,331,771)	(14,318,236)
Mining assets	39,535,357	38,355,067	38,867,449	38,912,824
Non-current liabilities	10,638,000	10,864,398	10,898,590	11,675,964
Totalshareholders’equity	19,789,983	14,324,384	14,637,088	12,918,624

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

As at the end of Q3 2021, there was a working capital deficiency of $13.0 million, a decrease of $0.1 million from the end of Q2 2021. The decrease in working capital deficiency was mainly due to the following movements in total current liabilities and cash balance:

• A cash balance decrease of $0.1 million.

• Trade and other receivables increased by $0.3 million to $3.1 million. Trade receivables increased by $0.7 million as the finalization of concentrate sales invoices was delayed following delays with vessels at Durban port, however $0.5 million of final invoices have been settled since the end of the quarter. This was offset by a decrease of $0.1 million in taxes recoverable and $0.2 million in prepaid expenses.

• Inventories decreased $0.3 million to $4.2 million. The decrease was due to a decrease of $0.5 million in gold in process inventory, offset by a $0.2 million increase in stores inventory.

• Accounts payable and accrued liabilities increased by $0.4 million with trade payables increasing $0.4 million to $10.5 million, while accrued liabilities remained consistent at $1.7 million.

• A decrease of $0.5 million in interest bearing loans and borrowings, with a decrease of $0.7 million for the Barak loan facility, offset by an increase of $0.1 million in deferred mining royalties.

As at the end of Q3 2021, non-current liabilities decreased by $3.8 million compared to Q2 2021. There was an decrease of $3.5 million for the warrant liability following revaluation at balance date, a $0.1 million decrease in the rehabilitation provision and a $0.1 million decrease in lease liabilities.

Total shareholders’ equity for Q3 2021 increased by $3.9 million compared to Q2 2021, the increase was primarily due to earnings for Q3 2021 of $3.3 million, and a $0.6 million increase in share capital following the exercise of 5,200,000 options during Q3 2021.

As at the end of Q3 2021, there was a working capital deficiency of $13.0 million, an increase of $0.6 million from the year ended December 31, 2020. The increase in working capital deficiency was mainly due to the following movements in total current liabilities and cash balance:

• A cash balance decrease of $2.3 million.

• Trade and other receivables increased by $1.1 million to $3.1 million. Trade receivables increased by $0.8 million as the finalization of concentrate sales invoices was delayed following delays with vessels at Durban port, however $0.5 million of final invoices have been settled since the end of Q3 2021, and taxes recoverable increased by $0.3 million.

• A decrease of $0.4 million for inventories, with a decrease of $0.3 million in gold in process and a decrease of $0.1 million in stores inventory.

• Accounts payable and accrued liabilities increased by $2.9 million with trade payables increasing $2.6 million, with a $1.7 million increase at Mupane, $0.5 million increase at Galaxy and $0.4 million increase at Galane. Accrued liabilities increased by $0.3 million with the resumption of a bonus accrual in the current year.

• A decrease of $3.9 million in interest bearing loans and borrowings, with a decrease of $1.6 million in debentures with the conversion to Common Shares, a decrease of $0.3 million in deferred royalties, a decrease of $1.9 million for the Barak loan facility and a $0.2 million decrease in lease liabilities, offset by an increase of $0.1 million due to the reallocation of Barak royalty payable to current.

As at the end of Q3 2021, non-current liabilities increased by $0.6 million compared to YTD 2020. There was an increase of $1.0 million for the warrant liability related to the warrants issued in the 2021 Private Placement and Summit Acquisition and $0.2 million in the rehabilitation provision, offset by a $0.4 million decrease in lease liabilities, and a $0.1 million decrease in Barak royalty payable.

Total shareholders’ equity for YTD 2021 increased by $12.5 million compared to YTD 2020. The increase was due to the equity raise of $8.6 million in the 2021 Private Placement, a $0.6 million increase in share capital following the exercise of 5,200,000 options, and earnings of $3.3 million in YTD 2021.

11

GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

LIQUIDITY, CAPITAL RESOURCES AND GOING CONCERN

The Company defines capital as consisting of shareholders’ equity, being made up of issued capital stock, contributed surplus and deficit and long-term debt. The Company’s objectives when managing capital are primarily to support the creation of shareholder value, but also to ensure that the Company is able to meet its financial obligations as they become due. The Company has not declared or paid any dividends on its Common Shares.

In order to fund the business activities intended in its current business plan, management expects that the Company’s Mupane mining operations will continue to provide positive cash flow from its operations that is more than sufficient to support its corporate expenses, capital expenditure requirements and exploration activities, subject to the Going Concern commentary below related to the current uncertain impact of COVID-19 on the operating environment. As described above under “Summary of Financial Position”, at September 30, 2021, the Company had a working capital deficiency of $13.0 million and generated cash flows from operations of $3.5 million for the nine month period ended September 30, 2021.

The revenue of the Company is dependent upon the spot price of gold. At the current level of operating costs, the Company will continue to generate positive cash flow on an annual basis from operations even if there was a 10% reduction in the spot price of gold as at the date of this MD&A.

The Company’s officers and senior management take full responsibility for managing the Company’s capital and do so through monthly meetings and regular review of financial information. The Company’s Board of Directors is responsible for overseeing this process.

Going Concern

The Interim Financial Report was prepared using international financial reporting standards that are applicable to a going concern.

During the nine months ended September 30, 2021, several measures continue to be in place in Botswana, South Africa and the rest of the world in response to the increased impact from COVID-19. The Company continues to operate while observing compliance with capacity and enhanced operating requirements as mandated by the Republic of Botswana Government and Republic of South Africa Government, including but not limited to social distancing, wearing of face masks, provision of hand sanitizer for employees and visitors, registration upon entry to site and temperature checks. With the ongoing impact of COVID-19, the current circumstances are dynamic and the impacts on our business operations, including the duration and impact on our future production, cannot be reasonably estimated at this time and we anticipate this could have an adverse impact on the Company's financial position, results of operation and cash flows. The Company's liquidity and ability to continue as a going concern may also be impacted.

As at September 30, 2021, the Company had a working capital deficiency (current assets less current liabilities) of $13.0 million compared to a deficiency of $12.4 million at December 31, 2020.

The working capital deficiency includes deferred royalties of $5.0 million classified as a current liability. During 2020, the Company entered into discussions with the Government of Botswana to reschedule the repayment of the outstanding balance, however, the discussions were put on hold while the government dealt with the COVID-19 pandemic, and these discussions have not yet concluded.

The impact of the COVID-19 pandemic, and the Company’s financial position, result in material uncertainties which may give rise to significant doubt as to the ability of the Company to continue as a going concern. Because of these uncertainties, there can be no assurance that the measures that management is taking to mitigate the Company’s liquidity position and the impact of the COVID-19 pandemic will be successful.

Earnings from mining operations were $2.8 million for the nine months ended September 30, 2021, compared to $6.4 million for the same period in 2020, with cashflow from operating activities of $3.5

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

million for the nine months ended September 30, 2021, compared to $9.5 million for the same period in 2020. The Company has no material commitments for capital expenditures at the Mupane or Galaxy mine as of September 30, 2021.

The current commodity price and exchange rate environment can be volatile, which may have an impact on the Company’s cash flows. Despite the higher gold price currently being realized, the Company continues to review its near-term operating plans and to take steps to reduce costs and maximize cash flow generated from operations.

These condensed consolidated interim financial statements do not reflect adjustments to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used, that would be necessary if the Company were unable to realize its assets and settle its liabilities as a going concern in the normal course of operations. Such adjustments could be material.

SUMMARY OF QUARTERLY RESULTS

The following table summarizes the Company’s selected quarterly information for each of the eight most recently completed quarters:

		Three months ended	Three months ended
	September 30, 2021 $	June 30, 2021 $	March 31, 2021 $	December 31, 2020 $
Revenue	11,155,158	10,454,982	10,069,739	14,292,821
Total miningcosts	(10,689,958)	(8,970,572)	(9,179,180)	(9,494,611)
Non-miningexpenses	2,881,098	(1,151,455)	(1,259,450)	(821,267)
(Loss) earnings	3,346,298	332,955	(368,891)	3,976,943
(Loss) earnings per share - Basic - Diluted	0.01 0.01	0.00 0.00	(0.00) (0.00)	0.02 0.02
Total assets at end ofquarter	66,315,062	66,309,791	53,694,392	54,146,991
Total liabilities at end ofquarter	30,016,020	33,861,150	30,236,324	30,332,561
Total equityat end ofquarter	36,299,042	32,448,641	23,458,068	23,814,430

		Three months ended	Three months ended
	September 30, 2020 $	June 30, 2020 $	March 31, 2020 $	December 31, 2019 $
Revenue	14,927,120	10,375,274	9,473,565	9,038,969
Total miningcosts	(11,390,341)	(8,395,220)	(8,602,865)	(9,778,762)
Non-miningexpenses	(4,348,516)	(2,370,808)	788,876	(1,482,536)
Earnings (loss)	(811,737)	(390,754)	1,659,576	(2,222,329)
Earnings (loss) per share - Basic - Diluted	(0.00) (0.00)	(0.00) (0.00)	0.01 0.01	(0.01) (0.01)
Total assets at end ofquarter	51,832,276	48,462,925	46,633,698	48,258,393
Total liabilities at end ofquarter	32,042,293	34,138,541	31,996,610	35,339,769
Total equityat end ofquarter	19,789,983	14,324,384	14,637,088	12,918,624

Note:

(1) Information for all periods is derived from interim financial statements prepared in accordance with IFRS applicable to interim financial reporting and in U.S. dollars.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

FINANCIAL INSTRUMENTS

The Company’s financial instruments consist of cash, trade and other receivables, accounts payable and accrued liabilities, interest bearing loans and borrowing, and warrants denominated in foreign currencies. The fair value of the Company’s trade and other receivables, and accounts payable and accrued liabilities approximate their carrying value. The Company’s other financial instruments, specifically interest bearing loans and borrowings are recorded at amortized cost using the effective interest rate method.

Credit risk is the risk that one party to a financial instrument will cause a loss for the other party by failing to discharge an obligation. The Company is subject to normal industry credit risks. The credit risk related to the trade receivable is considered minimal as gold and gold concentrate is sold to creditworthy major banks and offtake partners and settled promptly, usually within the following month, and the other receivable balance consists of amounts outstanding on tax credits from governmental authorities, each of which are expected to be paid in the near term at face value. Management believes that the Company’s exposure to credit risk is minimal.

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The Company’s approach to managing liquidity risk is to try to ensure that it will have sufficient liquidity to meet liabilities when due. As at September 30, 2021, the Company had current assets of $10,002,431 (December 31, 2020 - $11,560,086) to settle current liabilities of $23,037,895 (December 31, 2020 - $23,996,806). See “Liquidity and Capital Resources” section for further commentary on the Company’s liquidity risks.

Interest risk is the risk that the fair value of future cash flows will fluctuate as a result of changes in market risk.

Currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s operations are in Botswana, South Africa and Canada and its presentation currency is U.S. dollars. The international nature of the Company’s operations results in foreign exchange risk as transactions are denominated in foreign currencies, including the Botswana Pula, the South African Rand and Canadian Dollars. The operating results and the financial position of the Company are reported in U.S. dollars. The fluctuations of the operating currencies in relation to the U.S. dollar will, consequently, have an impact upon the reported results of the Company and may also affect the value of the Company’s assets and liabilities. The Company monitors the volatility of foreign exchange rates and will hedge its currency risk if it determines that the need arises.

Market risk is the risk that the fair values of financial instruments or that the Company’s future cash flows will fluctuate because of changes in market commodity rates. The Company’s efforts are currently focused on the production of gold. As such, the Company’s future cash flows and valuation of its mineral assets will be exposed to market risk on the price fluctuations of gold as a commodity.

ISSUED AND OUTSTANDING SHARE CAPITAL

The Company’s authorized capital consists of an unlimited number of Common Shares, of which 356,366,541 Common Shares are issued and outstanding as of the date of this MD&A.

The Company adopted a stock option plan (the “Option Plan”). Under the terms of the Option Plan, officers, directors, employees and consultants are eligible to receive grants of stock options to purchase Common Shares for a period of up to ten years from the date of grant, provided that the number of Common Shares reserved for issuance may not exceed 10% of the total issued and outstanding Common Shares at the date of the grant. As of the date of this MD&A, subject to the terms of the Option Plan, options to purchase 5,500,000 Common Shares are outstanding and options to purchase 30,136,654 Common Shares are available for grant.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

The Company adopted a share purchase plan (“SPP”) on June 12, 2012. Under the terms of the SPP, each participating officer, director, or employee that has been employed with the Company or its subsidiaries for at least six months is entitled to receive the matching number of Common Shares acquired pursuant to the SPP at no cost to such officer, director or employee. Subject to certain conditions, such deferred matching shares will be issued to the participating officers, directors or employees over a three-year period following the date of the purchase of the qualifying shares. As of the date of this MD&A, no deferred matching shares are owed to the participating officers, directors and employees of the Company.

The Company has adopted a deferred share unit plan (the “DSU Plan”). Subject to adjustment in certain circumstances, the maximum aggregate number of Common Shares that may be reserved for issuance pursuant to the DSU Plan is 13,262,888 Common Shares. As of the date of this MD&A, subject to the terms of the DSU Plan, participating officers, directors, employees and consultants of the Company may be issued an aggregate of up to 7,170,046 Common Shares pursuant to outstanding deferred share units awarded under the DSU Plan and 1,125,782 Common Shares have been issued under the DSU Plan.

On May 19, 2021, in connection with the Summit Acquisition and 2021 Private Placement (see “Summit Mine Acquisition” section), the Company issued 44,028,700 2021 Warrants, and 16,000,000 Summit Acquisition Warrants, with each such warrant entitling the holder thereof to acquire one Common Share at an exercise price of C$0.30 until May 19, 2024. As of the date hereof, all 44,028,700 2021 Warrants and all 16,000,000 Summit Acquisition Warrants remain outstanding.

On April 8, 2021, in connection with the 2021 Private Placement, the Company issued 3,048,602 2021 Broker Warrants, with each 2021 Broker Warrant entitling the holder thereof to acquire one Common Share at an exercise price of C$0.22 until May 19, 2023. As of the date hereof, all 3,048,602 2021 Broker Warrants remain outstanding.

DEBENTURES

As part of the acquisition of the Galaxy Property in 2015, the Company issued approximately $2.4 million aggregate principal amount of unsecured convertible debentures (the “Galaxy Debentures”) to settle outstanding debt or contractual obligations owed by Galaxy Gold Mining (Pty) Limited (formerly Galaxy Gold Mining Limited, “Galaxy”) and its subsidiary Galaxy Gold Reefs (Pty) Ltd. The original terms of the Galaxy Debentures were: (i) to mature on November 20, 2019, (ii) to bear 4% interest per annum, accrued and paid at maturity, (iii) to allow conversion of the principal at the option of the holder into Common Shares at a price of C$0.58[(1)] per Common Share, based on a pre-determined exchange rate of $1.00: C$1.30, and (iv) to allow conversion of the interest at the option of the holder into Common Shares, based on a pre-determined exchange rate of $1.00: C$1.30, at a price per Common Share equivalent to the greater of C$1.00 and the Discounted Market Price (as defined by the Exchange) at the time of conversion, subject to acceptance of the Exchange. On September 27, 2019, the Company prepaid $728,000 of principal amount of the Galaxy Debentures. On September 30, 2019, the Company entered into an agreement with a requisite percentage of Galaxy Debenture holders to amend certain terms of the Galaxy Debenture. Under the terms of the amended Galaxy Debentures: (i) the maturity date is extended to November 20, 2021, (ii) the principal is convertible at the option of the holder into Common Shares at a price of C$0.20 per Common Share, at a pre-determined exchange rate of $1.00:C$1.30, (iii) the interest is convertible at the option of the holder into Common Shares, based on a pre-determined exchange rate of $1.00: C$1.30, at a price per Common Share equivalent to the greater of C$0.20 and the Discounted Market Price (as defined by the Exchange) at the time of conversion, subject to acceptance of the Exchange, and (iv) the Company has the right of forced conversion with respect the principal if the trading price of the Common Shares exceeds C$0.20 for 10 consecutive trading days. On December 15, 2019, the Company prepaid an additional $838,486 of the principal and $12,517 of the interest on the Galaxy Debenture.

In addition, on March 29, 2016, the Company announced that it and its subsidiary, Galaxy, entered into a full and final settlement agreement with Traxys Europe SA, Mine2Market S.à.r.l. and certain others (collectively the “Traxys parties”) with respect to various outstanding claims arising from the time period when the Traxys parties operated Galaxy’s mining operations. In connection with the settlement, the Traxys parties settled their claim for $4.3 million of indebtedness in exchange for the issuance by the Company of an unsecured convertible debenture of approximately $3.2 million in aggregate principal

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

(the “Traxys Debenture”). On June 29, 2018, the Company entered into an agreement with applicable Traxys parties to replace the existing Traxys Debenture with an amended and restated debenture (the “A&R Debenture”). Under the terms of the A&R Debenture: (i) the principal is repayable on November 20, 2021 and is convertible at the option of the holder into Common Shares at a price of C$0.15 per Common Share, based on a pre-determined exchange rate of $1.00:C$1.35; (ii) interest is convertible at the option of the holder into Common Shares, based on a pre-determined exchange rate of $1.00:C$1.35, at a price equivalent to the greater of C$0.15 and the Discounted Market Price (as defined in the policies of the Exchange) at the time of conversion; (iii) the Company has a right of forced conversion with respect to the principal where the trading price of the Common Shares exceeds C$0.15 for 10 consecutive trading days; (iv) commencing January 1, 2018, interest for a calendar year will be due and payable on March 31 of the subsequent year, with the first such payment being due on March 31, 2019. The first payment of interest under the rescheduled agreement was made in April 2019.

Prior to the date hereof, the trading price of the Common Shares exceeded both the C$0.15 and C$0.20 thresholds for 10 consecutive trading days and, as a result, the Company has a right to force conversion of the principal amount of the outstanding debentures at any time prior to maturity.

On May 27, 2021, a debenture holder converted (i) $600,000 of principal amount of Traxys Debenture into 5,400,000 Common Shares at a price of C$0.15 per Common Share and at a pre-determined exchange rate of $1.00:C$1.35 and (ii) $29,195 of interest payable on such principal into 210,200 Common Shares at a price of C$0.1875 per Common Share, being the Discounted Market Price as of the date of the notice of conversion, and at a pre-determined exchange rate of $1.00:C$1.35.

On June 16, 2021, the Company exercised its right to force the conversion of (i) $834,350 of principal amount of Galaxy Debenture into 5,423,275 Common Shares at a price of C$0.20 per Common Share and at a pre-determined exchange rate of $1.00:C$1.30 and (ii) $199,186 of interest payable on such principal into 1,294,709 Common Shares at a price of C$0.20 per Common Share and at a pre-determined exchange rate of $1.00:C$1.30.

On November 11, 2021, the Company exercised its right to force conversion of $2,649,433 of principal amount of Traxys Debenture into 23,844,897 Common Shares at a price of C$0.15 per Common Share and at a pre-determined exchange rate of $1.00:C$1.35.

As of the date of this MD&A, no Galaxy or Traxys Debentures remain outstanding.

(1) The initial conversion price of the Galaxy Debentures was C$1.00 per Common Share. As a result of the completion of the rights offering of the Company in May 2016, the conversion price was adjusted downward to C$0.58 per Common Share.

GALAXY SHARE DONATION

On March 19, 2019, the Company donated 17% of the issued and outstanding shares of Galaxy to Phakamani Foundation Trust (operating as Phakamani Foundation NPC). The donation was made in relation to the terms of the Mineral and Petroleum Resources Development Act, 2004 of South Africa, together with the Broad-Based Social-Economic Empowerment Charter for Mining and Mineral Industry, 2018 and the requirement for Galaxy, as holder of existing gold mining rights, to be comprised, directly or indirectly, of at least a 20% shareholding by historically disadvantaged persons (the “BEE Requirement”).

On March 19, 2019, 10% of the issued and outstanding shares of Galaxy Gold Reefs (Pty) Ltd, was donated to a South African community-based trust and a South African local employee share scheme. The donation was made in relation to the BEE Requirement.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

TRANSACTIONS WITH RELATED PARTIES

During the period ended September 30, 2021, there were no related party transactions entered into.

On August 13, 2020, the Company entered into loan agreements with its CEO, COO and CFO (the “Executives”) as partial compensation for the services provided by the Executives in 2019. The loans are non-interest bearing, non-recourse loans with a term of three years. Pursuant to the terms of the loan agreements, the Executives used the proceeds of the loans to exercise 4,563,000 common share purchase warrants, exercisable at C$0.05 per Common Share, held by the Executives (the “2018 Warrants”). The shares issued to the Executives on exercise of the 2018 Warrants are held by the Company as security for the outstanding loan balance. The loan receivable balance at September 30, 2021 is $172,481.

COMMITMENTS

As at the date of this MD&A, the Company did not have any commitments.

OFF-BALANCE SHEET ARRANGEMENTS

Other than the low value operating lease arrangements not recognized on the initial adoption of the revised IFRS 16 Leases, the Company currently has no off-balance sheet arrangements.

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GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

SUPPLEMENTAL INFORMATION TO MANAGEMENT’S DISCUSSION AND ANALYSIS

CASH COSTS

The Company’s MD&A refers to operating cash cost per ounce, and operating cash cost excluding royalties per ounce, both non-GAAP performance measures, in order to provide investors with information about measures used by management to monitor performance. Management of the Company uses this information to assess how well the producing gold mines are performing compared to plan and prior periods, and also to assess the overall effectiveness and efficiency of gold mining operations. Cash cost figures are calculated in accordance with a standard developed by the Gold Institute, which was a worldwide association of suppliers of gold and gold products and included leading North American gold producers. The Gold Institute ceased operations in 2002, but the standard is still an accepted standard of reporting cash costs of gold production in North America. Adoption of the standard is voluntary, and the cost measures presented herein may not be comparable to other similarly titled measures of other companies. Cash cost includes mine site operating costs such as mining, processing, administration, but are exclusive of impairment, amortization, reclamation, and exploration and development costs. Operating cash cost is the total cash cost less those costs capitalized as attributable to the removal of excess waste in developing new resources. These costs are then divided by the Company’s ounces of gold produced to arrive at the cash cost measures on a per ounce basis. These measures, along with sales, are considered to be key indicators of a company’s ability to generate operating earnings and cash flow from its mining operations. These measures of cash costs do not have any standardized meaning prescribed by IFRS and differ from measures determined in accordance with IFRS. 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 measures are not necessarily indicative of net earnings or cash flow from operations as determined under IFRS.

The following tables provide a reconciliation of cash cost measures for the mine to the mining costs excluding impairment, depreciation and amortization reflected in the Annual Financial Statements.

	Q3 2021	Q2 2021	Q1 2021	Q4 2020
Mining costs excluding impairment, depreciation and amortization	$ 10,076,574	$ 8,471,367	$ 8,242,418	$ 8,490,051
Adjust for:
Inventory movement	(537,231)	150,932	56,928	1,840
Total operating cash cost	$ 9,539,343	$ 8,622,299	$ 8,299,346	$ 8,491,891
Royalties	(558,887)	(529,905)	(507,591)	(717,397)
Total operating cash cost excluding royalties	$ 8,980,456	$ 8,092,394	$ 7,791,755	$ 7,774,494
Gold production (ounces)	5,691	5,990	5,600	7,122
Total operating cash cost excluding royalties per oz.	$ 1,578	$ 1,351	$ 1,391	$ 1,092

	Q3 2020	Q2 2020	Q1 2020	Q4 2019
Mining costs excluding impairment, depreciation and amortization	$ 9,770,640	$ 6,889,365	$ 7,215,634	$ 8,243,831
Adjust for:
Inventory movement	(640,376)	(304,234)	339,922	550,819
Total operating cash cost	$ 9,130,264	$ 6,585,131	$ 7,555,556	$ 8,794,650
Royalties	(756,174)	(523,194)	(484,419)	(457,142)
Total operating cash cost excluding royalties	$ 8,374,090	$ 6,061,937	$ 7,071,137	$ 8,337,508
Gold production (ounces)	7,738	5,691	6,818	6,839
Total operating cash cost excluding royalties per oz.	$ 1,082	$ 1,065	$ 1,037	$ 1,214

18

GALANE GOLD LTD. MANAGEMENT’S DISCUSSION AND ANALYSIS For the three and nine months ended September 30, 2021

INTERNAL CONTROLS OVER FINANCIAL REPORTING

The Company is responsible for designing internal controls over financial reporting or causing them to be designed under the supervision of the CEO and CFO in order to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.

The Company’s CEO and CFO are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in their certificates regarding the absence of misrepresentations and fair disclosure of financial information. Investors should be aware that inherent limitations on the ability of certifying officers of a TSX-V issuer to design and implement on a cost effective basis disclosure controls and procedures as well as internal controls over financial reporting as defined in NI 52-109 may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.

RISKS AND UNCERTAINTIES

There are a number of risk factors that could cause future results to differ materially from those described herein. A discussion of the principal risk factors relating to the Company’s operations and business appear in the Company’s annual information form for the year ended December 31, 2020, which may be viewed on the Company’s SEDAR profile at www.sedar.com. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business.

APPROVAL

The Board of Directors of the Company has approved the disclosure contained in this MD&A.

ADDITIONAL INFORMATION

Additional information relating to the Company, including the Company’s annual information form for the year ended December 31, 2020, can be found on the Company’s SEDAR profile at www.sedar.com.

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