Grounded Lithium Corp. — Management Reports 2021

Feb 2, 2021

VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.)

Management’s Discussion and Analysis

For the year ended October 31, 2020

Contact Information:

VAR Resources Corp. 2489 Bellevue Avenue West Vancouver, BC V7V 1E1 Phone: (604) 922-2030 Fax: (604) 922-2037 Contact Person: Mr. Douglas L. Mason

VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

DESCRIPTION OF BUSINESS AND OVERVIEW OF OPERATIONS AND FINANCIAL CONDITION

The following is management’s discussion and analysis (“MD&A”), prepared as of February 1, 2021. This MD&A should be read in conjunction with the Company’s audited Consolidated Financial Statements for the year ended October 31, 2020 and 2019 and the accompanying notes thereto, all as prepared in accordance with International Financial Reporting Standards (“IFRS”). All amounts are stated in Canadian dollars unless otherwise indicated.

This report includes certain statements that may be deemed “forward looking statements” within the meaning of applicable securities legislation. All statements, other than statements of historical facts, that address such matters as future exploration, drilling, exploration activities, potential mineralization and resources and events or developments that the Company expects, are forward looking statements and, as such, are subject to risks, uncertainties and other factors of which are beyond the reasonable control of the Company. Such statements are not guarantees of future performance and actual results or developments may differ materially from those expressed in, or implied by, this forward-looking information. With respect to forward looking statements and information contained herein, the Company has made numerous assumptions, including among other things, assumptions about the price and future prices of ores and/or mineralization that are being explored for by the Company, anticipated costs and expenditures and the Company’s ability to achieve its goals. Although management believes that the assumptions made, and the expectations represented by such statements or information are reasonable, there can be no assurance that a forward-looking statement or information herein will prove to be accurate. Forward looking statements and information by their nature are based on assumptions and involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward looking statements or information. These factors include but are not limited to such matters as market prices, exploitation and exploration results, continued availability of capital and financing, and general economic, market or business conditions. Although we have attempted to identify factors that would cause actual actions, events or results to differ materially from those disclosed in the forward-looking statements or information, there may be other factors that cause actual results, performances, achievements or events not to be anticipated, estimated or intended. Accordingly, readers should not place undue reliance on forward looking statements for information. Any forward-looking statements are expressly qualified in their entirety by this cautionary statement. The information contained herein is stated as of the current date and subject to change after that date and the Company does not undertake any obligation to update publicly or to revise any of the forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

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

Description of Business

The Company was previously engaged in the acquisition and exploration of mineral resource properties and at that time traded on the TSX Venture Exchange (the “Exchange”) under the symbol BPC, however, as announced on June 9, 2015, the Company began pursuing new business opportunities in the area of pharmaceutical and nutraceutical manufacturing and distribution, and in connection therewith, the Company applied to the Exchange to be voluntarily transferred to the NEX Board of the Exchange (“NEX”). On June 19, 2015, the Company announced its application with the Exchange had been approved. In connection with the Company’s new business pursuits and transfer to NEX, the Company changed its name to “Canadian International Pharma Corp.” and is trading under the trading symbol “CIP.H” as of June 22, 2015. The Company changed its name on January 29, 2021 to VAR Resources Corp. and has received approval to trade on the TSX Venture Exchange (“TSX-V”) as a Tier 2 Mining Issuer under the symbol “VAR”.

The Company did not complete its transition to become a pharmaceutical and nutraceutical manufacturing and distribution company and has returned to its pursuit of mineral resource acquisition and exploration.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

EXPLORATION AND EVALUATION ASSETS

Realization of assets

Realization of the Company’s investment in these assets is dependent upon the establishment of legal ownership, the attainment of successful production from the properties or from the proceeds of their disposal.

Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore.

Environmental

The Company is subject to the laws and regulations relating to environmental matters in all jurisdictions in which it operates, including provisions relating to property reclamation, discharge of hazardous material and other matters. The Company may also be held liable should environmental problems be discovered that were caused by former owners and operators of its properties and properties in which it has previously had an interest. The Company conducts its mineral exploration activities in compliance with applicable environmental protection legislation. Environmental legislation is becoming increasingly stringent and costs and expenses of regulatory compliance are increasing. The impact of new and future environmental legislation on the Company’s operations may cause additional expenses and restrictions. If the restrictions adversely affect the scope of the exploration and development on an exploration and evaluation assets, the potential for production on the property may be diminished or negated.

Title to exploration and evaluation assets

Title to exploration and evaluation assets involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyancing history characteristic of many exploration and evaluation assets. The Company has investigated title to all of its exploration and evaluation assets and, to the best of its knowledge, title to all of its properties are in good standing. However, such properties may be subject to prior agreements or transfer and title may be affected by undetected defects.

The Company had previously entered into agreements to acquire, explore and develop certain exploration and evaluation assets located in certain regions of Canada. Several aboriginal groups are claiming inextinguishable aboriginal title to the lands and resources in various regions of Canada, which may include one or more of the mineral claims beneficially owned by the Company. The extent to which any successful aboriginal claim would materially affect the ability of the Company to exploit its exploration and evaluation assets is not determinable at this time.

Exploration programs

A summary of the Company’s prior exploration programs is set out below, however, for additional information and details regarding such matters, reference is made to the Company’s news releases and related filings that can be viewed on Sedar (www.sedar.com).

The technical information regarding the Company’s mineral exploration properties and projects referred to herein has been reviewed and approved by Gordon Gibson, P. Geo., who was acting as the Company’s Qualified Person, in accordance with regulations under NI 43-101. With respect to the technical information disclosed prior to Gordon Gibson becoming the Company’s Qualified Person, such technical information was reviewed and approved by Robert Middleton, P. Eng.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

Seagull Property, Ontario

The Company entered into an option agreement dated October 2, 2008 with Rainy Mountain Royalty Corp. (“Rainy Mountain”), and White Metal Resources Corp., formerly named Trillium North Minerals Ltd. (“White Metal”) whereby the Company was granted an option to earn an initial 30% interest (earned) in the Seagull property located near Thunder Bay, Ontario. In order to acquire its initial 30% interest, the Company was required to spend $500,000 in exploration expenditures by February 28, 2009 (completed). By amending agreement dated October 15, 2010, the Company increased its ownership interest in the Seagull property from 30% to 40% interest, (based on its exploration expenditures incurred) with White Metal and Rainy Mountain each owning a 30% interest. The Seagull property is subject to two separate royalties (2.4% NSR in total), of which 1.4% can be purchased for $2 million.

By agreements dated March 7, 2019, the Company and Rainy Mountain sold their respective 40% and 30% property interest in the Seagull property to White Metal. For its 40% property interest, the Company received 200,000 shares of White Metal (valued at $9,000 as of March 20, 2019) and retained a 0.4% net smelter return royalty (the “NSR”), which NSR can be purchased by White Metal at any time up until commencement of commercial production for $600,000. The Company recorded a recovery of $9,000 on receipt of 200,000 common shares. The Company recorded a recovery of $9,000 on receipt of 200,000 common shares. The shares were then sold resulting in a gain of $2,051. The Company and Rainy Mountain had certain directors in common.

PERFORMANCE SUMMARY

• On January 29, 2021, the Company received approval of its application to graduate from the NEX board of the TSX Venture Exchange (the “Exchange”) to the Exchange as a Tier 2 Mining Issuer in connection with acquisition of an undivided 100% interest in the Hook Bay Property (the “Property”) located in British Columbia from Longford Capital Corp. pursuant to the terms of a mineral option agreement dated October 30, 2020 (the “NEX Reactivation Transaction”). In addition, the Company completed a non-brokered private placement, whereby the Company issued 6,250,000 subscription receipts at a price of $0.105 per subscription receipt for aggregate proceeds of $656,260. Each subscription receipt entitles the holder to acquire, for no additional consideration, into one unit consisting of one share of the Company and one transferable share purchase. Each warrant shall entitle the holder thereof to acquire one share for a period of five years at a price of $0.14 per share until December 2, 2025. All securities issued in connection with the financing are subject to a statutory hold period expiring four months and one day after closing of the financing. The proceeds of the financing are expected to be used for general working capital and for the expenditures under the Option Agreement. In connection with the NEX Reactivation Transaction, the Company changed its name from Canadian International Pharma Corp. to VAR Resources Corp. effective January 29, 2021. The common shares of the Company are set to resume trading at the market open on Tuesday, February 2, 2021.

• On December 8, 2020, the Company announced that at its annual general and special meeting held on December 7, 2020, the shareholders appointed Drew Bonnell as a director of the Company. Douglas Mason and Ron Schmitz were also nominated to continue as directors and Andrzej Kowalski did not stand for re-election as a director but remains as the Company’s chief financial officer.

• On November 4, 2020, the Company announced that it has entered into an option agreement with Longford Capital Corp., an arm’s length private company, to earn an undivided 100% interest in and to one mineral claim covering 1078.85 hectares located in located in Hook Bay, British Columbia.

The Property is located approximately 34 km south of the town of Port Alberni along Alberni Inlet, near Nahmint Bay, on Vancouver Island, British Columbia. Forest service roads provide access to and throughout the property. The underlying geology includes the contact between the Island Plutonic Suite intrusive rocks and the Karmutsen Formation volcanic rocks.

Under the terms of the Option Agreement, the Company has the exclusive right and option to acquire a 100% interest in the Property by making a cash payment of $50,000, issuing an aggregate of 2,700,000 common shares in the capital of the Company and incurring an aggregate of $400,000 in exploration expenditures, all in accordance with the

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

schedule set out below:

Payment Date	Cash Payment	Shares	Expenditures
Within 5 days of the Closing Date (as defined in the Option Agreement)	$50,000	2,200,000	-
Within 30 days of the Closing Date (as defined in the Option Agreement)	-	-	$100,000
Within 18 months of the Closing Date (as defined in the Option Agreement)	-	500,000	$300,000
TOTAL:	$50,000	2,700,000	$400,000

The Company can, at its option, accelerate the exercise of the Option at any time by completing the applicable Option Payments as set forth in the table above.

Any excess Expenditures completed by the Company in any of the payment periods set out in the table. Above shall be carried forward and credited to the Expenditures required in the next Payment Period.

All securities issued in connection with the Transaction will be subject to a statutory hold period expiring four months and one day after the date of issuance.

Upon completion of the Option Payments, the Company will be deemed to have exercised the Option and will have earned an undivided 100% legal and beneficial interest in and to the Property, subject to a 2.0% net smelter return royalty to be granted to Longford.

• October 27, 2020 – Canadian International Pharma Corp. announces that, further to the news releases of August 21, 2020 and October 6, 2020, the TSX Venture Exchange has approved the consolidation of the common shares of the Company on the basis of ten pre-consolidation Shares for one post-consolidation Share. The Consolidation will become effective at the opening of the market on October 28, 2020. The Company’s symbol will remain as “CIP.H”.

• On September 3, 2020, the Company announced it has appointed Ron Schmitz as a director of the Company.

Mr. Schmitz is the Principal and President of ASI Accounting Services Inc., which has provided administrative, accounting and office services to public and private companies since July 1995. Mr. Schmitz has served as a Director and/or Chief Financial Officer of various public companies since 1997 and currently holds these positions with several public and private companies.

• On August 21, 2020, the Company announced that it intends to proceed with a consolidation of its common shares based on ten (10) pre-consolidation Shares for one (1) post-consolidation Share.

Currently, a total of 38,453,013 Shares are issued and outstanding. Accordingly, if the Consolidation is put into effect, a total of 3,845,302 Shares would be issued and outstanding, assuming there are no other changes in the issued capital of the Company. There is currently no maximum number of authorized Shares. The Consolidation will provide CIPC with increased flexibility to seek additional financing opportunities and is subject to approval of the TSX Venture Exchange. There is no name change in conjunction with the Consolidation.

• On May 21, 2020, the Company announced that Mehrun Payravi had resigned as a director of the Company.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

• On February 24, 2020, the Company announced that Mr. Andrzej Kowalski had been appointed as the Chief Financial Officer of the Company.

Andrzej Kowalski is a lawyer experienced in commercial law and litigation and is also an entrepreneur and multiple business owner. Much of Andrzej’s business career has involved founding, financing, operating, and selling technology companies in the private and public sectors. He is a trustee of the BC Sports Hall of Fame Foundation and was a governor of Collingwood School, West Vancouver for 8 years.

• On February 6, 2020, the Company announced that Sead Hamzagic had resigned as a director and as the Chief Financial Officer of the Company.

SUMMARY OF QUARTERLY RESULTS

	October 31,	October 31,		July 31,		April 30,	January 31,	January 31,
		2020		2020		2020		2020
Total assets	$	5,038	$	2,780	$	6,431	$	7,764
Working capital (deficit)		(352,526)		(335,464)		(304,690)		(311,865)
Shareholders’ equity		(352,526)		(335,464)		(322,690)		(306,865)
Total revenue		-		-		67		-
Operating expenses		17,062		12,774		15,892		38,477
Net loss		(17,062)		(12,774)		(15,825)		(38,477)
Basic and diluted lossper share		(0.00)		(0.00)		(0.00)		(0.00)
	October 31,			July 31,		April 30,	January 31,
		2019		2019		2019		2019
Total assets	$	14,449	$	35,376	$	41,040	$	29,962
Working capital		(273,388)		(223,658)		(185,755)		(144,890)
Shareholders’ equity		(268,388)		(218,658)		(180,755)		(139,890)
Total revenue		-		12		19		19
Operating expenses		49,730		40,747		48,884		47,641
Net loss		(49,730)		(37,903)		(40,865)		(47,403)
Basic and diluted loss per share		(0.00)		(0.00)		(0.00)		(0.00)

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

SELECTED ANNUAL INFORMATION

ELECTED ANNUAL INFORMATION
		Year Ended		Year Ended	Year Ended
		October 31,		October 31,	October 31,
		2020		2019		2018
Revenues	$	67	$	50	$	110
Operating loss		84,205		187,002		219,678
Net loss		84,138		175,901		222,423
Basic and diluted loss per share		(0.02)		(0.00)		(0.01)
Total assets	$	5,038	$	14,449	$	46,744

Results of Operations

The following discussion addresses the operating results and financial condition of the Company for the year ended October 31, 2020 compared with the year ended October 31, 2019. The Management Discussion and Analysis should be read in conjunction with the Company’s audited consolidated financial statements and the accompanying notes for the years ended October 31, 2020 and 2019.

For the three months period ended October 31, 2020:

Net loss for the period

The Company had a net loss for the three months period ended October 31, 2020 of $17,062 (October 31, 2019 - $49,730). The net decrease of $32,668 in the net loss for the three months period ended October 31, 2020 compared to the three months period ended October 31, 2019.

Other items

During the three months period ended October 31, 2020, the Company reported net other income of $nil compared to net other income of $nil in the three months period ended October 31, 2019 from other items. Items that caused the net change in other items are noted in the following:

In comparison to the three months period ended October 31, 2019:

• Interest income of $nil (2019 - $nil) did not change.

• Loss on sales of marketable securities of $nil (2019 $nil) remained consistent.

• Unrealized gain on marketable securities of $nil (October 31, 2019 $nil) remained consistent.

Operating Expenses

General and administrative expenses of $17,062 (2019 - $49,730) are primarily comprised of consulting fees, professional fees, interest, transfer agent fees and filing fees, general office expenses and wages and benefits. The net decrease was $32,668 compared to the three months period ended October 31, 2019. Items that caused the net decrease are noted in the following:

In comparison to the three months period ended October 31, 2019:

• Consulting fees of $750 (2019 - $8,250) decrease by $7,500 due to reductions in consulting services in the current period as the Company examines its current direction.

• Interest of $1,584 (2019 - $nil) increased by $1,584 due to interest at a rate 1%per month (12% per annum) on loan agreements.

• Office and miscellaneous of $1,850 (2019 - $10,795) decreased by $8,945 mainly due to computer expenses incurred in the current period when compared to the same period in the prior year.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

• Professional fees of $3,096 (2019 - $13,101) decrease by $10,005 due to reductions in legal services in the current period.

• Rent of $nil (2019 - $5,955) decreased by $5,955 due to the deferment of lease agreement in the current period.

• Transfer agent and regulatory fees of $6,353 (2019 - $1,801) increased by $4,552 mainly due to the timing of service received.

• Wages and benefits of $3,492 (2019 - $9,855) decreased by $6,426 due to a decrease in staff and employee benefits during the period.

For the twelve-month period ended October 31, 2020

Net loss for the period

The Company had a net loss for the twelve-month period ended October 31, 2020 of $84,138 (October 31, 2019 - $175,901). The net decrease of $91,763 in the net loss for the twelve-month period ended October 31, 2020 compared to the twelve-month period ended October 31, 2019 was primarily due to a decrease in consulting fees of $25,000, office expenses of $13,485 and wages and benefits of $16,754 for the current period.

Other items

During the twelve-month period ended October 31, 2020, the Company reported net other income of $67 compared to net other income of $11,101 in the twelve-month period ended October 31, 2019 from other items. Items that caused the net change in other items are noted in the following:

In comparison to the twelve-month period ended October 31, 2019:

• Interest income of $67 (October 31, 2019 - $50) did not change significantly and mainly fluctuated with the cash balance in the bank.

• Gain/Loss on sales of marketable securities of $nil (2019 - gain of $2,051) changed by $2,051 due to the timing of the sales of marketable securities.

• Recovery of exploration and evaluation assets of $nil (2019 - $9,000) decreased by $9,000 due to the sale of the Company’s interest in the Seagull Property.

Operating Expenses

General and administrative expenses of $84,205 (October 31, 2019 - $187,002) are primarily comprised of consulting fees, professional fees, interest, transfer agent fees and filing fees, general office expenses and wages and benefits. The net decrease was $102,797 compared to the twelve-month period ended October 31, 2019. Items that caused the net decrease are noted in the following:

In comparison to the twelve-month period ended October 31, 2019:

• Consulting fees of $9,000 (2019 - $34,000) decrease by $25,000 due to reductions in consulting services in the current period as the Company examines its current direction.

• Interest of $3,296 (2019 - $nil) increased by $3,296 due to interest at a rate 1%per month (12% per annum) on loan agreements.

• Office and miscellaneous of $13,654 (2019 - $27,139) decreased by $13,485 mainly due to decreases in computer and insurance expenses incurred in the current period when compared to the same period in the prior year.

• Professional fees of $23,911 (2019 - $55,017) decrease by $31,106 due to reductions in legal services in the current period.

• Rent of $5,954 (2019 - $23,818) due to the deferment of lease agreement in the current period.

• Transfer agent and regulatory fees of $14,076 (2019 - $15,960) decreased by $1,884 due to the timing of expenses for the Company’s Annual General Meeting.

• Wages and benefits of $14,314 (2019 - $31,068) decreased by $16,754 due to a decrease in staff and employee benefits during the year.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

LIQUIDITY AND CAPITAL RESOURCES

The Company’s activities have been funded to date primarily through the issuance of common shares, and the Company expects that it will continue to be able to utilize this source of financing until it develops cash flow from its pharmaceutical and nutraceutical operations. Other than as discussed herein, the Company is not aware of any trends, demands, commitments, events or uncertainties that may result in its liquidity either materially increasing or decreasing at present or in the foreseeable future.

Material increases or decreases in the Company’s liquidity will be substantially determined by the success or failure in developing a generic drug and nutraceutical manufacturing and distribution system, as well as its continued ability to raise capital.

The Company is currently reviewing its capital resource requirements as it will require funding to develop its new business in addition to covering its administrative expenses.

The Company assesses its financing requirements and its ability to access equity or debt markets on an ongoing basis. The assessment considers: the stage and success of the Company’s evaluation activities to date; the continued participation of the Company’s investors in evaluation activities; and financial market conditions.

As at October 31, 2020, the Company has a working capital deficit of $352,526 compared to $273,388 as at October 31, 2019. As at October 31, 2020, the Company had cash of $3,032 compared to cash of $7,327 as at October 31, 2019.

Net cash used in operating activities for the period ended October 31, 2020 was $59,295 (2019 - $26,398) consisting primarily of the operating loss for the period and the change in non-cash items.

Net cash provided by investing activities for the period ended October31, 2020 was $nil (2019 - $12,808), consisting of proceeds on the disposition of marketable securities.

Net cash provided by financing activities for the period ended October 31, 2020 was $55,000 (2019 - $nil), consisting of the loan agreement Company received for working capital purposes.

The Company’s deficit as of October 31, 2020 was $15,975,592 as compared to a deficit of $15,891,454 as at October 31, 2019.

At present, the Company’s operations generate little cash flow and its financial success is dependent on the Company’s ability to successfully complete its manufacturing process, commercialize its products and receive regulatory approvals for its business, the outcome of which cannot be predicted at this point. Management believes the Company will be successful at securing additional funding so that its capital resources will be sufficient to carry its operations through the next twelve months.

In order to finance the Company’s intention to advance its new business opportunities in the area of pharmaceutical and nutraceutical manufacturing and distribution and to cover administrative and overhead expenses, the Company raises money through equity sales and from the exercise of convertible securities. Many factors influence the Company’s ability to raise funds, including the health of the resource market, the climate for pharmaceutical investment, the Company’s track record, and the experience and caliber of its management. Actual funding requirements may vary from those planned due to a number of factors, including the progress of pharmaceutical and nutraceutical manufacturing activities. Management believes it will be able to raise equity capital as required in the long term but recognizes there will be risks involved that may be beyond their control.

OFF BALANCE SHEET ARRANGEMENTS

The Company is not a party to any off-balance sheet arrangements or transactions.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

PROPOSED TRANSACTIONS

The Company does not have any current proposed asset or business acquisition of dispositions; however, the Company continues to seek new business opportunities to raise capital.

TRANSACTIONS WITH RELATED PARTIES

Included in accounts payable and accrued liabilities at October 31, 2020 is $219,425 (October 31, 2019 - $203,113) owing to companies controlled by directors, directors in common.

		October 31,	October 31,
Name ofCompany or Director	Directors/Officers	2020	2019
Beachfront Enterprises Limited	A limited partnership, a majority
Partnership	interest of which is owned by a	$ 63,865	$ 57,613
(Rent)	director, namely, Douglas L. Mason
MP Business Development	A company controlled by a former
(Consulting fees)	director, namely, Mehrun Payravi	52,500	52,500
Sead Hamzagic, Inc.	A company controlled by a former
(Financial consulting fees)	director, namely, Sead Hamzagic	34,125	26,250
Waterfront Capital Partners Inc.	A company with a director in common,
(Loan Proceeds)	namely, Douglas L. Mason	40,000	-
(Interest)		2,902	-
Waterfront Communications Inc.	A company with directors in common,
(Wages and benefits and shared	namely, Douglas L. Mason and former	66,033	66,750
expense recoveries)	director, Sead Hamzagic
		$259,425	$203,113

During the year ended October 31, 2020, the Company entered into the following transactions with companies controlled by directors or companies having directors in common:

Name of Company or Director	Directors/Officers		2020		2019
	A limited partnership, a majority
Beachfront Enterprises Limited Partnership	interest of which is owned by a
(Rent)	director, namely, Douglas L. Mason	$	5,954	$	23,818
Sead Hamzagic, Inc.	A company controlled by a former
(Financial consulting fees)	director, namely, Sead Hamzagic		7,500		30,000

The Company reimbursed Waterfront Communications Inc. (a company with certain directors in common) on a cost basis, to cover shared administrative and payroll costs in the amount of $14,314 (October 31, 2019 - $31,068) and shared expenses in the amount of $15,382 (October 31, 2019 - $22,945).

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

COMMITMENTS

The Company has entered into three 5 year term renewable agreements with companies controlled by two directors and one former director of the Company for the provision of consulting and/or legal services at a cost of $2,500 per month ($30,000 per annum) for each of the three agreements. If any of such agreements are terminated without cause, or if there is a change in control of the Company, the Company is required to pay $150,000 to such contracted party so affected. During the year ended October 31, 2020, a director voluntarily resigned and accordingly no fees are owing under the agreement.

The Company has also entered into two agreements with certain directors/officers for services rendered in such capacities. If such agreements are terminated without consent of the director/officer or the director/officer resigns within 120 days following a change in control, the Company must pay $50,000 to such director/officer and allow any unvested stock options to vest. During the year ended October 31, 2020, a director voluntarily resigned and accordingly no fees are owing under the agreement.

CAPITAL MANAGEMENT

The Company’s shareholders deficiency comprises its capital under management. The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue new business opportunities in the area of pharmaceutical and nutraceutical manufacturing and distribution and to maintain a flexible capital structure that optimizes the costs of capital at an acceptable risk.

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue new debt, acquire or dispose of assets.

In order to facilitate the management of its capital requirements, the Company prepares expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

In order to maximize on-going development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interest-bearing investments with maturities of 365 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.

To fund future operating activities, the Company will need to become profitable in perusing its new business and/or raise funds through future share issuances, issue new debt or dispose of assets.

The Company is not subject to externally imposed capital requirements.

FINANCIAL INSTRUMENTS

Fair value

The Company classifies its cash and cash equivalents and marketable securities as fair value through profit or loss; receivables and reclamation deposits as financial assets at amortized cost; and accounts payable and accrued liabilities at amortized cost.

The carrying values of receivables, accounts payable and accrued liabilities and loan payable approximate their fair values due to the short-term maturity of these financial instruments.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

The Company’s measurement of fair value of financial instruments in accordance with the fair value hierarchy is as follows:

	Total Level 1 Level 2 Level 3
October 31, 2020 Assets Cash and cash equivalents October 31, 2019 Assets Cash and cash equivalents	$ 3,032 $ 3,032 $ - $ -
	$ 3,032 $ 3,032 $ - $ -
	$ 7,327 $ 7,327 $ - $ -
	$ 7,327 $ 7,327 $ - $ -

The Company’s risk exposure and the impact on the Company’s financial instruments are summarized below.

Credit risk

Credit risk is the risk of potential loss to the Company if a counter party to a financial instrument fails to meet its payment obligations. The Company is exposed to credit risk with respect to its cash and other receivables.

The Company's credit risk is primarily attributable to cash and short-term investments. Management believes that the credit risk concentration with respect to cash and short-term investments is remote as it maintains accounts with highly rated financial institutions.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations as they become due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing and financing activities. As at October 31, 2020, the Company had accounts payable and accrued liabilities of $302,564 (October 31, 2019 $282,837). Based on the current funds held, the Company does not have sufficient working capital for the short term, and thus will need to rely upon financing from shareholders and/or debt holders to obtain sufficient working capital. There is no assurance that such financing will be available on terms and conditions acceptable to the Company.

Based on the current funds held, the Company does not have sufficient working capital for the short term, and thus will need to rely upon financing from shareholders and/or debt holders to obtain sufficient working capital. There is no assurance that such financing will be available on terms and conditions acceptable to the Company.

Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices. Market risk comprises three types of risk: interest rate risk, foreign currency risk and other price risk.

(i) Interest rate risk

Interest rate risk consists of two components:

• (a) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

• (b) To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is not exposed to significant interest rate risk.

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VAR RESOURCES CORP. (formerly CANADIAN INTERNATIONAL PHARMA CORP.) Management’s Discussion and Analysis October 31, 2020

(ii) Foreign currency risk

The Company is not exposed to foreign currency risk.

• (iii) Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company is not exposed to other price risk since it has sold its marketable securities.

Management’s Responsibility for Financial Statements

The information provided in this report, including the financial statements, is the responsibility of management. In the preparation of these statements, estimates are sometimes necessary to make a determination of future values for certain assets or liabilities. Management believes such estimates have been based on careful judgements and have been properly reflected in the financial statements.

OUTSTANDING SHARE DATA as at February 1, 2021:

a) Authorized Share Capital:

Unlimited number of common shares without par value

• b) Issued Share Capital:

3,845,302 common shares with a stated value of $14,342,545

c) Outstanding incentive stock options:

		Number of	Exercise
	ExpiryDate	Options	Price
	April 15,2021	101,100	$0.7
Outstandingand exercisable		101,100

• d) Outstanding warrants:

Nil

• e) Shares in escrow or pooling agreements: Nil

OFFICERS AND DIRECTORS

Douglas Mason, CEO and Director (Chairman) Andrzej Kowalski, CFO Ron Schmitz, Director Drew Bonnell, Director

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