Goldeneye Resources Corp. — Management Reports 2021

Aug 31, 2021

GOLDENEYE RESOURCES CORP.

MANAGEMENT’S DISCUSSION AND ANALYSIS

YEAR ENDED APRIL 30, 2021

SUITE 1000 – 409 GRANVILLE STREET VANCOUVER, BC, V6C 1T2

TELEPHONE: 604-602-0001

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

The following is management’s discussion and analysis (“MD&A”) of Goldeneye Resources Corp. (the “Company” or “Goldeneye”), prepared as of August 30, 2021. This MD&A should be read together with the audited financial statements for the year ended April 30, 2021 and related notes, which are prepared in accordance with International Financial Reporting Standards ("IFRS"). All financial amounts are stated in Canadian dollars unless otherwise indicated.

Certain information included in this MD&A may constitute forward-looking statements. Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements.

Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company may differ materially from those reflected in forward-looking statements due to a variety of risks, uncertainties and other factors. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.

It is the Company’s policies that all forward-looking statements are based on the Company’s beliefs and assumptions which are based on information available at the time these assumptions are made. The forward looking statements contained herein are as of the date of this report, and are subject to change after this date, and the Company assumes no obligation to publicly update or revise the statements to reflect new events or circumstances, except as may be required pursuant to applicable laws. Although management believes that the expectations represented by such forward-looking information or statements are reasonable, there is significant risk that the forward-looking information or statements may not be achieved, and the underlying assumptions thereto will not prove to be accurate.

Actual results or events could differ materially from the plans, intentions and expectations expressed or implied in any forward-looking information or statements, including the underlying assumptions thereto, as a result of numerous risks, uncertainties and other factors such as those described above and in “Risks and Uncertainties” below. The Company has no policy for updating forward-looking information beyond the procedures required under applicable securities laws.

Additional information related to Goldeneye is available for view on SEDAR at www.sedar.com.

The Company’s Business

The Company was incorporated on March 2, 2011 by Certificate of Incorporation issued pursuant to the provisions of the Business Corporations Act of British Columbia. The Company was formed as a “Capital Pool Company” as defined by policy 2.4 of the TSX Venture Exchange (the “TSX-V”) under the name “Barranco Resources Corp.”.

On October 29, 2012, the Company completed a Qualifying Transaction with Goldeneye Resources Inc. (“GRI”) and changed its name to Goldeneye Resources Corp. The Company’s shares currently trade on the TSX-V under the symbol “GOE”.

The Company is an exploration stage Company and is currently searching for other resource opportunities. See subsequent events for potential resource acquisitions.

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

Selected Annual Information

	Year ended April 30, 2021	Year ended April 30, 2020	Year ended April 30, 2019
Revenue	Nil	Nil	Nil
Net Loss	$432,495	$48,897	$55,386
Total Assets	$680,140	$5,780	$7,439
Total Long-term Liabilities	$-	$-	$-
Cash dividends per share	$-	$-	$-

During the year ended April 30, 2021, the Company recorded a net loss of $432,495 as compared to $48,897 for the previous year ended April 30, 2020. The increase can be attributed to an increase in consulting fees paid and the recording of $160,000 in share-based payments. During the year ended April 30, 2020, the Company recorded a net loss of $48,897 which is consistent with the next loss of $55,386 for the year ended April 30, 2019.

Fourth Quarter

During the fourth quarter ended April 30, 2021, the Company reported a net loss of $299,058 as compared to a net loss of $15,424 for the corresponding period in 2020. The increase in the net loss is due to the increase in consulting fees paid and the recording of the $160,000 in share-based payments on stock options granted during the fourth quarter.

Quarterly Information

SUMMARY OF QUARTERLY RESULTS

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

Quarter Ended		Revenue		Total		Loss for		Basic and
				expenses		the period		Diluted
				before				Loss per
				other items				share
April 30, 2021	$	Nil	$	299,058	$	299,058	$	(0.01)
January 31, 2021	$	Nil	$	37,577	$	37,577	$	(0.00)
October 31, 2020	$	Nil	$	86,284	$	86,284	$	(0.00)
July 31, 2020	$	Nil	$	9,576	$	9,576	$	(0.00)
April 30, 2020	$	Nil	$	15,424	$	15,424	$	(0.00)
January 31, 2020	$	Nil	$	10,742	$	10,742	$	(0.00)
October 31, 2019	$	Nil	$	12,508	$	12,508	$	(0.00)
July 31, 2019	$	Nil	$	10,223	$	10,223	$	(0.00)

During the quarter ended July 31, 2019, the Company recorded a net loss of $10,223 which is higher than the previous quarter of $6,128, which is due to the gain on settlement of debt recorded in the previous quarter. During the quarter ended October 31, 2019, the Company recorded a net loss of $12,508 which is higher than the previous quarter of $10,223, which is due to an increase in filing fees. During the quarter ended January 31, 2020, the Company recorded a net loss of $10,742 which is lower than the $12,508 from the previous quarter, which is due to a reduction in filing fees. During the quarter ended April 30, 2020, the Company recorded a net loss of $15,424 which is greater than the $10,742 from the

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

previous quarter, which is due to the year end audit fee accrual. During the quarter ended July 31, 2020, the Company recorded a net loss of $9,576 which is lower than the $15,424 for the previous quarter which is due to year end audit fee accrual recorded in the fourth quarter ended April 30, 2020. During the quarter ended October 31, 2020, the Company recorded a net loss of $86,284 which is higher than the $9,576 for the previous quarter, which is due to the increase in consulting fees paid in the current quarter. During the quarter ended January 31, 2021, the Company recorded a net loss of $37,577 which was lower than the net loss of $86,284 for the previous quarter due to a reduction in consulting fees paid. During the quarter ended April 30, 2021, the Company recorded a net loss of $299,058 as compared to a net loss of $37,577 an increase of approximately $261,000. The increase in net loss can be attributed to the granting of stock options and consulting fees paid.

Results of Operations

During the year ended April 30, 2021:

During the year ended April 30, 2021, the Company reported a net loss of $432,495 as compared to $48,897 for the comparable year ended April 30, 2020. Total expenses for the year amounted to $432,495 which mainly consisted of $212,300 in consulting fees paid to third parties ($158,300) to assist its search for new business opportunities or resource properties and to the CEO of the Company ($54,000) and $160,000 in share-based payments on stock options granted during the year. Sharebased payments is a non-cash transaction. All other costs were consistent with maintaining its reporting issuer status.

During the year, the Company continued its search for other resource related opportunities. See subsequent event for subsequent acquisitions.

Liquidity and Capital Resources

The Company has not generated revenue from operations. The Company incurred a net loss of $432,495 for the year ended April 30, 2021 and as of that date the Company’s accumulated deficit was $4,636,681. As the Company is in the exploration stage, the recoverability of the costs incurred to date on exploration properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financial resources to complete the exploration and development of its properties and upon future profitable production or proceeds from the disposition of the properties and deferred exploration expenditures. The Company will periodically have to raise funds to continue operations and, although it has been successful in doing so in the past, there is no assurance it will be able to do so in the future. These factors comprise a material uncertainty which may cast significant doubt about the Company’s ability to continue as a going concern.

During the year ended April 30, 2021; cash increased by $355,936. The Company used $283,777 in operating activities and was provided by $936,980 in financing activities mostly from private placements of $967,000 less share $29,520 in share issue cost. The Company used $297,267 in investing activities in regards to a loan receivable.

As at April 30, 2021, the Company had a working capital of $571,603 consisting primary of cash in the amount of $357,432, GST receivable in the amount of $6,558, prepaid expenses of $18,883 and a loan receivable with an amount of $297,267, less accounts payable and accrued liabilities of $92,537 and loans payable of $16,000.

The Company believes that the current capital resources are not sufficient to pay overhead expenses for the next twelve months and will need to seek additional funding to fund its overhead expenses and its continuous search for other resource opportunities. The Company will continue to monitor the current economic and financial market conditions and evaluate their impact on the Company’s liquidity and future prospects.

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

Since the Company will not be able to generate cash from its operations in the foreseeable future, the Company will have to rely on the issuance of shares or the exercise of options and warrants and loans payable to fund ongoing operations and investment. The ability of the Company to raise capital will depend on market conditions and it may not be possible for the Company to issue shares on acceptable terms or at all.

On September 21, 2020, the Company completed a private placement of 5,250,000 units at a price of $0.06 per unit for total proceeds of $315,000 of which $18,000 is included in share subscriptions receivable as at April 30, 2021. Each unit consists of one common share and one share purchase warrant and each warrant will entitle the holder to purchase one common share of the Company at a price of $0.10 per share for a period of two years expiring on September 21, 2022. In connection with the private placement the Company paid a cash finders fee of $15,120 and issued 252,000 agents’ warrants exercisable at $0.10 for a period of two years from the date of issuance. These agents’ warrants were fair valued at $6,100 using the Black-Scholes Option Pricing Model with the following assumptions: riskfree interest rate of 0.25%; dividend yield of 0%; volatility of 100% and expected life of two years and a stock price of $0.06. Subsequent to April 30, 2021, the $18,000 was received.

On October 20, 2020, pursuant to the exercise of warrants, the Company issued 1,500,000 common shares at a price of $0.06 for total proceeds of $90,000.

On March 19, 2021, the Company completed a private placement of 12,500,000 units at a price of $0.05 per unit for total proceeds of $625,000 of which $45,000 is included in share subscriptions receivable as at April 30, 2021. Each unit consists of one common share and one share purchase warrant and each warrant will entitle the holder to purchase one common share of the Company at a price of $0.07 per share for a period of two years expiring on March 18, 2023. In connection with the private placement, the Company paid a cash finders fee of $14,400 and issued 288,000 agents’ warrants exercisable at $0.07 for a period of two years from the date of issuance. These agents’ warrants were fair valued at $11,520 using the Black-Scholes Option Pricing Model with the following assumptions: risk-free interest rate of 0.22%; dividend yield of 0%; volatility of 142% and expected life of two years and a stock price of $0.05.

Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

Related Party Transactions

Related party transactions are comprised of services rendered by directors and/or officers of the Company or by a company with a director in common. Related party transactions are in the ordinary course of business and are measured at the exchange amount.

		2021		2020
Interest
Investorcap, company controlled by Paul Chow former director	$	183	$	-
Key management compensation
Administrative fees
Harmony Corporate Services Ltd. (“Harmony”), a company
controlled by the CFO, Geoff Balderson		30,000		30,000
Consulting fees
Jatinder Bal, CEO		54,000		-
Surinder Bal, spouse of CEO		7,500		-

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

Share-based payments
Jatinder Bal, CEO		80,000		-
Surinder Bal, Spouse of CEO		16,000		-
Geoff Balderson, CFO		16,000		-
Ian Graham, Director		16,000		-
	$	219,683	$	30,000

Key management personnel compensation

The Company considers its President, Chief Executive Officer, Chief Financial Officer, vice-president of explorations and the directors of the Company to be key management. During the years ended April 30, 2021 and 2020, the Company incurred key management compensation as noted in the above table.

In addition to accrued interest accounts payable and accrued liabilities at April 30, 2021, includes $63,540 (2020 - $52,245) due to Harmony for reimbursement of expense and unpaid administrative fees.

Prepaid expenses include $18,888 (2020 - $Nil) due to the CEO for consulting fees and advances on expenses.

On February 24, 2021, the Company provided a loan of $297,267 to another public company with a common CEO and director. The amount was non-interest bearing, unsecured and due on demand. On May 1, 2021, the Company entered into a loan agreement for the noted amount bearing interest at 5% per annum and repayable within 12 months from the date of the agreement.

Proposed Transactions

N/A

Subsequent Event

Subsequent to April 30, 2021:

On June 15, 2021, the Company entered into a purchase agreement with Unity Resources Inc. (the “Seller”) to acquire 100% interest in two mineral licences comprising of 153 claims in the Gander River Ultamafic Belt East (“GRUBE”) project located within the province of Newfoundland, Canada. As consideration, the Company agreed to make a cash payment of $25,000 and issue 1,100,000 common shares within five business days of the receipt of TSXV approval (pending). This agreement is subject to the 3% Net Smelter Royalty (“NSR”) to be held by the Seller with the Company having the right to buy back 2% for a cash payment of $1,500,000.

On June 15, 2021, the Company entered into a purchase agreement with the Seller to acquire 100% interest in six mineral licences comprising of 143 claims in the Roberts Arm Cu + Au Project & Grand Lake Au Project located within the province of Newfoundland, Canada. As consideration, the Company agreed to make a cash payment of $100,000 and issue 3,100,000 common shares within five business days of the receipt of TSXV approval (pending) and within six months of TSXV approval, make another cash payment of $100,000 and issue an additional 3,100,000 common shares. This agreement is subject to the 3% NSR to be held by the Seller with the Company having the right buy to back 2% for a cash payment of $1,500,000.

On July 16, 2021, the Company entered into a property option agreement with Windfall Geotek Inc. (the “Optionor”) for the right to acquire 95% interest in and to the claims located near Corallen Lake Region, Ontario known as the “Corallen” project. As consideration, the Company agreed to a cash payment of $250,000 and issue 3,000,000 common shares within 30 days following receipt of approval from the TSXV Exchange (pending) and also: (i) on or before December 31, 2021, incur $200,000 in expenditures

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

whereafter the Company shall have earned a 25% legal and beneficial interest in the property; (ii) on or before December 31, 2022, enter into a master service agreement (“MSA”) and hiring the Optionor to provide services for artificial intelligence for consideration of $150,000 pursuant to the MSA, and incurring $300,000 in additional expenditures whereafter the Company shall have earned a 50% legal and beneficial interest in the property; (iii) on or before December 31, 2023, hire the Optionor to provide services for artificial intelligence for consideration of $150,000 pursuant to the MSA, and incurring $400,000 in additional expenditures whereafter the Company shall have earned a 75% legal and beneficial interest in the property and; (iv) on or before December 31, 2024, pay $150,000 in cash to Windfall Geotek AI Services and incurring $450,000 in additional expenditures whereafter the Company shall have earned the 95% interest in and to the property. The Optionor is entitled to a 2% NSR.

The Company entered into the MSA on August 19, 2021, whereby the Optionor agrees to provide artificial intelligence services that help identify targets on the Company’s properties and deliver information and other documents pursuant to the statement of work. The Optionor grants in favour of the Company a sole non-transferable, non-sublicensable, royalty-free worldwide license to use the intellectual property from the deliverables provided by the Optionor for the purposes of conducting exploration in the Area of Interest. Meanwhile, the Company grants the Optionor the right to purchase 0.5% NSR for $500,000 payable in cash and/or common shares with an indefinite term, and the right to purchase 0.5% NSR for $1,000,000 payable in cash and/or common shares with an expiry of 10 years from the date the first target provided by the Optionor is drilled by the Company.

The Company intends to complete a non-brokered private placement of up to 15 million units of the Company at a price of $0.06 per unit for aggregate proceeds of up to $900,000, of which approximately $198,000 was received up to the date of the MD&A. Each unit will consist of one common share and onehalf common share purchase warrant. Each whole share purchase warrant will entitle the holder to purchase one additional common share, up to a total of 7,500,000 share purchase warrant, at a warrant exercise price of $0.09 per share for a period of 3 years from the date of closing. This financing is subject to customary regulatory approval.

Risk and Uncertainties

The more significant risks and uncertainties not discussed elsewhere in this MD&A include:

Financing Risk

The Company will need to continue raising funds to finance its operations beyond twelve months. There is no certainty that the Company will be able to raise money on acceptable terms or at all.

Exploration Risk

Exploration for natural resources involves a high degree of risk. The cost of conducting exploration programs may be substantial and the likelihood of success is difficult to assess. Few explored properties are ultimately developed into producing properties. The Company attempts to mitigate its exploration risk by maintaining a diversified portfolio that includes several different exploration prospects in a number of favorable geologic environments.

Metal Price Risk

Even if the Company’s exploration programs are successful in locating resources, factors beyond the Company’s control may affect the value and marketability of such resources. Natural resource prices have wide historic fluctuations due to many factors, including inflation, currency fluctuations, interest rates, consumption trends and local and worldwide financial market conditions. The prices of such natural resources greatly affect the value of the Company and the potential value of its properties. This, in turn, greatly affects its ability to form joint ventures and the structure of any joint ventures formed.

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

Environmental Risk

The Company seeks to operate within environmental protection standards that meet or exceed existing requirements in the countries in which the Company operates. Present or future laws and regulations, however, may affect the Company’s operations. Future environmental costs may increase due to changing requirements or costs associated with exploration and the developing, operating and closing of mines. Programs may also be delayed or prohibited in some areas. Although minimal at this time, site restoration costs are a component of exploration expenditures.

Critical Accounting Estimates

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

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the year of the change, if the change affects that year only, or in the year of the change and future years, if the change affects both.

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial statements within the next financial year are discussed in note 4 to the financial statements.

Financial Instruments and Other Instruments

The Company’s financial instruments are exposed to certain financial risks which are in common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. The following note describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them.

General Objectives, Policies and Processes

The Board of Directors have overall responsibility for the determination of the Company’s risk management objectives and policies and have delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Company’s finance function. The Board of Directors are kept apprised on the process and would monitor the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility.

The Company’s financial instruments consist of cash, accounts payable and accrued liabilities and loans payable. The recorded value of cash, accounts payable and accrued liabilities and loans payable approximate their fair values due to their demand nature and their short term to maturity.

The Company’s risk exposures and the impact on the Company’s financial statements are summarized below.

Credit risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. The Company limits its exposure to credit loss by placing its cash with major

GOLDENEYE RESOURCES CORP. Management’s Discussion and Analysis For the year ended April 30, 2021

financial institutions. The Company is exposed to credit risk with respect to the loan receivable, and the maximum exposure is its carrying amount on the statements of financial position.

Interest rate risk

The Company is exposed to interest rate risk to the extent that the cash maintained at the financial institutions is subject to floating rate of interest. The interest rate risks on cash and on the Company’s obligations are not considered significant.

Liquidity risk

All of the Company’s financial liabilities are classified as current and are anticipated to mature within the next fiscal period. As at April 30, 2021 the Company had a working capital of $571,603.

At present, the Company’s operations do not generate cash flow. The Company’s primary source of funding has been the issuance of equity securities. Despite previous success in acquiring financing, there is no guarantee of obtaining future financings.

Outstanding Share Data

Below is the summary of the Company’s share capital as at April 30, 2021 and as of the date of this report:

	As at	As at
Security description	April 30, 2021	August 30, 2021
Common shares – issued and outstanding	42,829,829	42,829,829
Agent’s warrants outstanding	540,000	540,000
Stock options outstanding	4,000,000	4,000,000
Warrant’s outstanding	17,750,000	17,750,000
Common shares – fully diluted	65,119,829	65,119,829

Approval

The Board of Directors of the Company has approved the disclosure contained in this MD&A. A copy of this MD&A will be provided to anyone who requests it.