Gungnir Resources Inc.

GUNGNIR

MANAGEMENT DISCUSSION AND ANALYSIS

For the Three and Six Months ended June 30, 2021

DATED August 27, 2021

Introduction and Overview

Gungnir is a junior mineral exploration company listed on the TSX Venture Exchange as a Tier 2 company under the trading symbol “GUG”. The Company is also inter-listed in the United States as “ASWRF.PK”. The Company is a reporting issuer in the Canadian provinces of British Columbia, Alberta, Ontario, Quebec and Nova Scotia.

Gungnir is in the business of the acquisition, evaluation and exploration of mineral properties with the primary aim of advancing them to a stage where they can be exploited at a profit, or offered for sale or option. We do not currently have any producing mineral properties and our current operations on our various properties are exploratory searches for mineable mineral deposits. Gungnir is focused on exploration in mining-friendly Sweden with the goal of discovery of high-quality gold and base metal deposits.

This MD&A is dated August 27, 2021 and discloses specified information up to that date. Gungnir is classified as a “Venture Issuer” for the purposes of National Instrument 51-102. Our financial statements are prepared in accordance with International Financial Reporting Standards in Canada (“IFRS”) and are expressed in Canadian dollars. This discussion and analysis should be read in conjunction with the annual audited financial statements for the year ended December 31, 2020 and related notes attached thereto (the “2020 Financial Statements”). Throughout this report we refer from time to time to “Gungnir”, the “Company”, “we”, “us”, “our”, or “its”. All these terms are used in respect of Gungnir Resources Inc. which is the reporting issuer in this document.

We recommend that readers consult the “Cautionary Statement” at the end of this report, as well the section on risks and uncertainties.

Cautionary Statement

Forward-Looking Information

This interim management discussion and analysis (“Interim MD&A”) contains forward-looking statements and information relating to Gungnir Resources Inc. (“Gungnir” or the “Company”) that are based on the beliefs of its management as well as assumptions made by and information currently available to Gungnir. When used in this document, the words “anticipate”, “believe”, “estimate”, and “expect” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. This Interim MD&A contains forward-looking statements relating to, among other things, regulatory compliance, environmental matters, changes in legislation or regulations, receipt of required licenses, permits and approvals, the sufficiency of current working capital, the estimated cost and availability of funding for the continued exploration and development of Gungnir’s exploration properties. Many factors could cause the actual results, performance or achievements of Gungnir to be

materially different from any future results, performance or achievements whether expressed or implied by such forward-looking statements. Important factors are identified in this Interim MD&A.

Covid-19

To the date of this report, the spread of COVID-19 has severely impacted many local economies around the globe. In many countries, including Canada, businesses are being forced to cease or limit operations for long or indefinite periods of time. Measures taken to contain the spread of the virus, including travel bans, quarantines, social distancing, and closures of non-essential services have triggered significant disruptions to businesses worldwide, resulting in an economic slowdown. Global stock markets have also experienced great volatility. Governments and central banks have responded with monetary and fiscal interventions to stabilize economic conditions. As at the date of this report, the Company has not been significantly impacted by the spread of COVID-19. The duration and impact of the COVID-19 pandemic, as well as the effectiveness of government and central bank responses, remains unclear at this time. It is not possible to reliably estimate the duration and severity of these consequences, as well as their impact on the financial position and results of the Company for future periods.

Outlook

The Company continues its exploration efforts in Sweden with the primary goal of advancing to a stage where a resource can be defined and exploited at a profit or offered for sale or option. The Company completed its fourth year of drilling in Sweden and announced the final drill results in October of 2020. A total of 1,122 meters were drilled in 2020. Geophysics and drilling are currently underway on the Knaften, Lappvattnet and Rormyrberget properties.

Since commencing drilling in Sweden in 2017, Gungnir has made several new discoveries and announced significant developments including discovery of a potentially sizeable intrusion-related gold system (Knaften 300), discovery of a new volcanogenic massive sulphide (VMS) zinc-copper base metal target and discovery of a new copper-nickel target, all located on the Knaften project. All targets are open for expansion and further discovery. The Company’s current focus at Knaften is on its gold target where further drilling and new geophysical work has been completed.

East of Knaften, the Company upgraded its two nickel-copper-cobalt deposits, Lappvattnet and Rormyrberget, to current resources. The two separate deposits contain 177 million pounds of nickel in inferred resources based on NI43-101 resource estimates commissioned by Gungnir in 2020. Drilling and geophysical surveying are underway on these projects at the time of this report.

Exploration 2021

Diamond drilling in Sweden started in June of 2021 on the Knaften 300 gold target where all permits and approvals have been received.

Following work at Knaften, the Company is planning drilling and geophysical work at its nickel-copper-cobalt-PGE (platinum, palladium and gold) projects, Lappvattnet and Rormyrberget, located in the same general area as Knaften. Drilling is planned to test for grade and distribution of PGEs and deposit extensions. Drilling is currently underway at Lappvattnet.

Approximately 2,500 metres of diamond drilling has initially been planned in 2021, split about equally on gold and nickel-copper-cobalt-PGEs targets.

Results of Operations To-Date

Knaften Property

The Company continues to demonstrate continuity of gold-bearing zones which extend more than 400 metres downdip at the Knaften 300 Gold Zone (“Knaften 300”); see drill cross-section below. And with growing indications of a

sizeable mineralized system, the Company also importantly announced that it has tied-up key adjoining license to cover the entire 4 x 5 km quartz diorite intrusion which hosts Knaften 300 along its northern edge. The new licenses significantly expanded the size of the Knaften property by over 75% and significantly increasing the potential of Gungnir’s Knaften intrusion-hosted gold target. The Knaften property now covers 4,887 hectares (or nearly 50 sq. km). Currently, key licenses comprising the Knaften project are valid from 2022 to 2024.

The Knaften property covers a developing intrusion-hosted gold system with potential for broad zones of bulk gold mineralization, as well as zones of high-grade gold. Past and current drilling has focused exclusively on the northern edge of the host quartz diorite intrusion at Knaften 300, and where our recently completed drilling continued to expand arsenopyrite mineralization, the key indicator of gold at Knaften. Promising IP anomalies recently outlined within the intrusion in the southern unexplored half of the property highlight the potential size of this target.

Knaften 300 Drill Results

2021 Drilling:

Along the northern edge of the 4 x 5 km host intrusion, three, 100 metre step-out holes were drilled east, south and north of the “Knaften 300 totaling 700 metres. All three holes intersected zones of disseminated arsenopyrite, with the most abundant mineralization encountered in hole KN21-03, the furthest north hole drilled at Knaften 300. Hole KN21-03, a 250-metre hole, cut three separate zones of disseminated arsenopyrite with the widest zone over a core length of 12 metres. All gold assays are pending.

Drilling highlights at Knaften 300 from Gungnir and previous operators:

14.07 g/t Au over 4.25 m (from 138.75 to 143.00 m) in hole KN19-06
includes 59.6 g/t Au over 1.00 m
5.39 g/t Au over 2.00 m (from 98.00 to 100.00 m) in hole KN19-09
3.45 g/t Au over 10.75 m (from 67.05 to 77.80 m) in hole 96009
3.20 g/t Au over 10.00 m (from 83.50 to 93.50 m) in hole 200707
2.92 g/t Au over 13.00 m (from 81.5 to 94.50 m) in re-sample 200707
3.11 g/t Au over 8.00 m (from 135.80 to 143.80 m) in hole 200714
2.13 g/t Au over 14.45 m (from 55.00 to 69.45 m) in hole KNA01001
2.01 g/t Au over 6.70 m (from 190.50 to 197.20 m) in hole 200710
2.89 g/t Au over 5.00 m (from 118.80 to 123.80 m) in hole 200715

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Knaften Property Extension

The new Knaften permits (Knaften nr 500 and 600) expand the existing property from 2,761 to 4,887 ha. The new area was earlier held by another group as part of a massive regional staking venture along the Gold Line, but all licenses were recently relinquished after the first three-year holding period, including those in the Knaften region. Based on information on hand, the new permits have seen little to no exploration or drilling.

IP Geophysics Update:

In addition to IP (induced polarization) geophysical survey results reported on July 7, 2021 in the southern unexplored part of the Knaften project, the Company reports that it has received final survey results which outline additional survey lines with a new IP anomaly in the southwestern part of survey block “B”. The strongest IP anomalies in the survey (up to 40 mV/V) are the first-priority targets. Since gold mineralization at Knaften is associated with disseminated sulphide minerals (arsenopyrite), IP is a valuable tool to generate drill targets.

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The Gold Target

The target is the bedrock source(s) of the large Knaften gold-in-till anomaly (“Knaften anomaly”), one of the largest in Sweden. The bedrock source is believed to be partially identified at Knaften 300, but based on the sheer size of the Knaften anomaly it is reasonable to expect more gold to be found in situ. Other gold-in-till anomalies in the region cover either current and past-producing gold mines or known gold resources. Sizeable intrusive-hosted gold deposits in the region include Barsele with more than 2 million ounces of gold[(1)] which is located along the same structural trend known as the Gold Line and also covers one of the sizeable gold-in-till anomalies.

Notes: (1) Barsele Minerals, February 21, 2019 Technical Report. Combined Pit and Underground Resources: Indicated 324,000 ozs Au @ 1.81 g/t Au + Inferred 2,086,000 ozs Au @ 2.54 g/t Au (based on 349 drill holes).

Lappvattnet/Rormyrberget

East of Knaften, the Company has completed and filed an updated National Instrument 43-101 (“NI 43-101”) Technical Report on the current nickel-copper-cobalt resources at its Lappvattnet and Rormyrberget deposits. Modeling and extensive sampling by Gungnir indicates additional potential for value-added PGE (platinumpalladium-gold) zones at both deposits with up to 50.91 g/t PGE’s reported by Gungnir, but this will require more drilling to test for grade and continuity.

The NI 43-101 independent technical report entitled “Technical Report on the Lappvattnet and Rormyrberget Deposits, Northern Sweden” with an effective date of November 17, 2020 (the “Technical Report”) has been filed on SEDAR. Highlights of the resource estimates were previously announced by the Company in a news release dated November 18, 2020 entitled “Gungnir Resources Tables 177 Million Pounds of Nickel in Sweden”.

Sweden Nickel Resources:

Rormyrberget: Inferred Resource of 36,800,000 tonnes grading 0.19% nickel for 154 million lbs (70 million kg) of nickel.
Lappvattnet: Inferred Resource of 780,000 tonnes grading 1.35% nickel for 23.1 million lbs (10.5 million kg) of nickel.

Please refer to the Technical Report and news release dated November 18, 2020 for further details regarding these resources. The Technical Report for the Lappvattnet and Rormyrberget deposits was prepared by John Reddick, M.Sc., P.Geo., of Reddick Consulting Inc. (RCI) and Thomas Lindholm, Senior Mining Engineer of Geovista AB. Mr. Reddick, and Mr. Lindholm who are Independent Qualified Persons, as defined under NI 43-101.

2021 Exploration:

In addition to commencing drilling at Lappvattnet, the Company is preparing to start ground electromagnetic (EM) geophysics at its Rormyrberget nickel deposit in August.

Five EM profiles will test (see map below): open area to the east along trend of high-grade, near-surface nickel mineralization including 3.95% Ni over 2 metres within a wider zone grading 0.76% Ni over 19.8 metres starting at a depth of 20.2m (hole ROR-08-11), and subdued magnetic area immediately east of the Rormyrberget deposit, similar to the magnetic signature covering the thickest and most heavily drilled part of Rormyrberget.

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The survey will be completed by Geovista AB, from Lulea, Sweden using WalkTEM equipment from Guideline Geo. The instrument is a light-weight time-domain system with results expected to define the properties, geometry and depth extent of conductive bodies much better compared to a traditional Slingram system. Results of the survey will assist positioning of future drill holes.

Exploration and Evaluation Properties - Overview

Gungnir’s two project areas are located in northern Sweden within the Fennoscandian Shield, a mineral rich but highly underexplored region, which extends into neighbouring Finland. The Fennoscandian shield continues to offer excellent ore discovery potential, in particular under glacial till (sand and gravel) which covers large areas. Major mining companies active in the Nordic Region (mining, exploration, and investing) include Boliden, Agnico Eagle, Anglo American, Goldcorp and Kinross.

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Knaften Property

The Knaften project is situated at the south end of a regional structure known as the “Gold Line” or Knaften-Barsele Arc located within a prolific VMS region including the Skellefte Belt and VMS belts in Finland. Successful exploration by the Company since 2017 has resulted in new target discoveries including two new base metal targets (Rodingtrask VMS zinc-copper and a magmatic copper-nickel target) adding significant up-side to the previously gold-only Knaften project. Further in 2019 and 2020 Gungnir identified stacked gold mineralization at Knaften 300 including discovery of a new lower zone with high-grade gold (up to 59.60 g/t Au). All three targets on Knaften are wide-open for expansion and further discovery. At the time of this report, 33 holes totaling 6,300 metres have been drilled by Gungnir (~ 50 holes to date by a previous operator).

Further in 2021 the Company staked additional claims to the Knaften property to cover the entire prospective intrusion (4 x 5 km) which hosts the Knaften 300 Gold Zone along its northern edge. The expanded Knaften gold project comprises 4,887 hectares (or nearly 50 sq. km) and significantly adds to the potential of Gungnir’s Knaften intrusion-hosted gold target.

Knaften Gold Target

The Knaften property covers up-ice of one of the largest gold-in-till anomalies in Sweden and is likely only partially indicated by current drilling at the Knaften 300 Gold Zone. The intrusion-hosted gold target at Knaften 300 comprises shallow-dipping, stacked arsenopyrite zones that are gold-bearing and extend down-dip for more than 400 metres based on drilling completed from 2017 to 2020. Drill results include 3.45 g/t Au over 10.75 metres and 59.6 g/t Au over 1.00 metre.

Knaften 300 is situated along the northern edge of a large quartz diorite intrusion which was acquired (by staking) in its entirety in January 2021. The Company initiated an IP (induced polarization) geophysical survey over portions of the newly acquired ground resulting in identification of significant IP anomalies; the strongest IP anomalies in the survey (up to 40 mV/V) are the first-priority targets. Since gold mineralization at Knaften is associated with disseminated sulphide minerals (arsenopyrite), see NR dated July 7, 2021 and August 3, 2021.

Knaften - Rodingtrask Target

Rodingtrask is a new VMS target discovery outside traditional Skellefte belt in northern Sweden with similar age to older VMS deposits in Finland. 2018 drilling encountered widespread metal-enrichment (Zn, Cu, Ag) in core lengths > 100 metres in host conglomerate (see news releases Aug/Oct/Nov 2018). To date, only 10 holes have tested this target area, all into the edges or halo of a large hydrothermal VMS system. So far mineralization, alteration and marker horizon defined over a strike length of 200 metres. Known mineralization is centred on a magnetic high anomaly; several similar magnetic highs clustered on >10 km trend. The current working model is a mafic volcanic-sedimentary VMS setting. The goal is to locate the core of it targeting potential higher-grade massive sulphide mineralization.

Knaften – Copper-Nickel Target

Copper-nickel mineralization on Knaften was discovered by Gungnir in 2017, with a second hole drilled near-by in 2018 cutting a core length of magmatic sulphides assaying 0.38% CuEq over 14.4m (see NR dated Oct 4, 2018). Near-surface intersections are located 400 metres east of the Rodingtrask target. Mineralization consists of disseminated, blebby, patchy and erratically banded pyrrhotite with lesser chalcopyrite. Host rock is gabbro including vari-and orbicular textures which are documented textural styles closely associated with potential massive sulphide accumulations. There is ample blue sky potential on this target as well with only 2 holes into the mineralized system.

Lappvattnet and Rormyrberget

The Lappvattnet and Rormyrberget nickel deposits are located in the eastern part of the Vasterbotten District, 60 km and 100 km respectively east of the Company’s Knaften gold exploration project. The deposits are held 100% by Gungnir under two separate permits covering an area of 471.3 hectares. The properties are accessible year-round with good transportation and industrial infrastructure including shipping facilities as there are a number of active mines in the area. Gungnir acquired both deposits in open-staking in 2015. In 2021 the Company was granted extension on both properties to 2026.

In addition to upgrading nickel resources in 2020 (see news release dated November 18, 2020 entitled “Gungnir Resources Tables 177 Million Pounds of Nickel in Sweden and Technical Report dated November 17, 2020 filed on SEDAR), the Company also previously completed 3-D modelling, ground geophysics and extensive sampling of archived drill core for PGEs. On March 30, 2020 the Company reported 50.91 g/t PGE’s (39.0 g/t platinum, 11.8 g/t palladium, 0.11 g/t gold) and 2.13% nickel over 0.45 metres at the Lappvattnet property in Sweden.

Exploration programs have been initiated including a drill program on the Lappvattnet and geophysics on the Rormyrberget properties.

Diamond drilling on the Lappvattnet began in early August. Drilling will focus on the shallow, western part of the Lappvattnet deposit. The work plan consists of 10 or more holes, for approximately 1,200 metres, along six to seven

sections spaced about 40 metres apart. Along sections, planned hole intercepts are positioned roughly 20 to 70 metres from historic intersections of massive sulphide. In addition to assaying for nickel, copper and cobalt, all mineralized sections will importantly be analyzed for PGEs which were not assayed in the 1970’s drill holes. New drilling and assays are expected to be incorporated into future resource upgrades.

Exploration and Evaluation Properties as at June 30, 2021:

		Exploration		Loss on sale
Exploration and Evaluation Properties	December 31, 2020	and evaluation	Impairment	of property/ Recoveries	June 30, 2021
Gungnir Sweden Properties	2,117,439	55,605	-	-	2,173,044

General

The Company’s properties consist of both early-stage grassroots projects and projects with current resources. There has been insufficient exploration on its early-stage properties to define mineral resource and it is uncertain if further exploration will result in any such targets being delineated as mineral resources. The properties with current resources are categorized as inferred resources and it is uncertain if further work will be able to advance these resources to indicated resources. In 2020 the Company completed and filed an updated National Instrument 43-101 (“NI 43-101”) Technical Report on the current nickel-copper-cobalt resources at its Lappvattnet and Rormyrberget deposits.

Quality Control and Quality Assurance Procedure

During exploration programs all data is rigorously evaluated by Gungnir’s geologists and contractors, and also by its Qualified Person, to ensure that the data is reliable and accurate, based on the analysis of the blanks, standards and duplicate samples. If the laboratory results for a Gungnir reference standard are plus or minus three standard deviations of the mean value of the certified value, or, if consecutive reference standard values are equal to plus or minus two standard deviations of the mean value, then the samples associated with that standard are re-analyzed by the laboratory.

The information in this MD&A was prepared under the direction of Mr. Jari Paakki, P.Geo, CEO of the Company, a Qualified Person as defined by NI 43-101.

Selected Annual Information

The following table summarizes selected financial data for Gungnir for each of the three most recently completed financial years. The information set forth below should be read in conjunction with the consolidated audited financial statements, prepared in accordance with International Financial Reporting Standards, and related notes.

	Year Ended	Year Ended	Year Ended
	December 31,	December 31,	December 31,
	2020	2019	2018
Total Revenues	NIL	NIL	NIL
General & administrative expenses	637,498	655,953	426,245
Write off of exploration costs on outside properties
and properties abandoned	-	-	-

Stock Based Compensation	134,614	219,013	-
Comprehensive income from continuing operations:
- In total	(628,022)	940,267	680,092
- Basic and diluted earnings per share	(0.01)	0.01	0.01
Total Assets	3,457,727	3,382,352	2,340,519
Total long-term liabilities	Nil	Nil	NIL
Cash dividends declared	Nil	Nil	NIL

Summary of Quarterly Results – Loss from Operations

The following table sets out selected quarterly financial information of Gungnir. Gungnir’ interim financial statements are prepared by management, in accordance with International Financial Reporting Standards and expressed in Canadian dollars.

	June 30	Mar. 31	Dec. 30,	Sept. 30,	June 30,	Mar. 31,	Dec. 31,	Sept. 30,
	2021	2021	2020	2020	2020	2020	2019	2019
	$	$	$	$	$	$	$	$
Resource
Properties	2,173,044	2,154,042	2,117,439	2,053,162	1,840,257	1,793,344	1,775,747	1,713,628
Working		1,115,709	1,265,155	1,168,787	1,158,747	1,317,648	1,439,013	611,685
Capital
Revenues	NIL	NIL	NIL	NIL	NIL	NIL	NIL	NIL
Net Income
(loss)	(107,153)	(115,981)	(281,961)	(145,138)	(97,236)	(103,287)	889,393	(416,506)
Earnings
(loss) per	(0.00)	(0.00)	(0.01)	(0.00)	(0.00)	(0.00)	0.01	(0.01)
share

Discussion

The operating results of junior exploration companies typically demonstrate wide variations from quarter to quarter and year to year. These variances are attributed to changes in stock-based compensation, exploration costs expensed or written down, professional and consulting fees related to financings and property exploration and evaluation and reporting, transfer and filing fees which are attributed to financings and annual filings, shareholder information and general office expenses. Large billings received from completion of an exploration program can also affect any given period depending upon the timing of the billing.

Any significant changes during the current reporting period or to the year ended 2020 audited financial statements can be attributed to whether the Company completed any equity financings within the year or the volume of exploration and development activities on its properties.

For the Periods Ended June 30,	Note		2021	2020		2021	2020
			3 months	3 months		6 months	6 months
Operating expenses
General and administration	10	$	14,755	13,678	$	34,508	26,450
Compensation	10		89,706	86,913		182,831	182,109
Professional fees	10		3,106	1,387		3,706	1,687
			(107,567)	(101,978)		(221,045)	(210,246)
Other items
Interest income			28	4,950		66	10,256
Foreign exchange			386	(206)		(2,180)	(933)
Comprehensive income (loss)		$	107,153	(97,236)	$	(223,159)	(200,923)

Weighted average number of shares			75,383,173	66,097,785		75,383,173	66,097,785
outstanding
Basic and diluted earnings (loss) per	7	$	0.00	0.00	$	0.00	0.0
share							0

During the second quarter of 2021, Gungnir sustained a loss from operations of $107,153 (Q2-2020 - $97,236). Previous quarters for 2021 and 2020 have expenses incurred throughout the years that are fairly well balanced from quarter to quarter when excluding non-cash based charges and any impairment to the Company’s properties.

General administrative costs in the second quarter of 2021 were $14,755 compared to the same period in 2020 of $13,678. Shareholder and Regulatory fees of $9,414 in Q2-2021 compared to $10,705 in Q2-2020. Travel and Promotional expenses were minor in Q2-2021 of $70 compared to $nil in Q2 2020 due to Covid restrictions.

Compensation was $89,706 in Q2-2021 and $86,913 in Q2-2020 with $NIL Stock based Compensation recorded for either reporting period. Office expenses were $7,486 and $670 for the second quarter of 2021 and 2020 respectively and Professional fees in Q2-2021 were $3,106 and $1,387 in Q2-2020. Interest and other income at Q2-2021 was $28 and $4,950 at Q2-2020.

During the six months ended June 30, 2021 the Company recorded $34,508 in G&A while $26,450 was recorded as at June 30, 2021. Compensation totaled $182,831 and $182,109 for the first half of 2021 and 2020 respectively. Foreign exchange for the half year 2021 was ($2,180) compared to ($933) in 2020. Professional fees were $3,706 at end of Q2-2021 and $1,687 at Q2-2020. Interest and other income at Q2-2021 was $66 and $10,256 at Q2-2020. Business travel and promotion was $320 and $404 at June 30, 2021 and 2020. General exploration at June 30, 2021 was $2,000 and $NIL for the same period 2020. Finally, Shareholder and regulatory expenses as at June 30, 2021 was $24,702 and $19,345 end of June, 2020.

Liquidity

Gungnir does not currently have any producing mineral properties and our current operations on our various properties in Sweden are exploratory searches for mineable mineral deposits.

Successful drill programs over the last four years at Knaften resulted in new gold and base metal target discoveries; the Rodingtrask VMS, a Cu-Ni target located only 400 metres to the east plus the recent drill success on the Knaften 300 gold zone this year. These targets add significant up-side to the Knaften project, and now the Company has numerous opportunities at deposit discovery by way of multiple targets and metals. All three targets on Knaften are wide-open for expansion and further discovery.

East of Knaften, in 2020 the Company upgraded its two nickel-copper-cobalt deposits, Lappvattnet and Rormyrberget, to current resources. The two separate deposits contain 177 million pounds of nickel in inferred resources based on NI 43-101 resource estimates commissioned by Gungnir. Further drilling and sampling are planned on these projects through 2021.

The Company’s future mineral exploration and mining activities may be affected in varying degrees by prevailing market prices, political stability and government regulations, the success of existing or future partners, all of which are beyond the control of the Company.

The Company’s mineral exploration activities have been funded through the sales of common shares and the sale of the Kenville property. While the Company has also been successful in continuing development and exploration of its properties, there is no assurance that these trends will continue indefinitely. The ongoing general and administrative obligations are dependent on financings as well and the Company expects to continue to utilize this source of

funding until it develops cash flow from its operations. There can be no assurance, however, that the Company will be able to obtain the required financing in the future on acceptable terms, or at all.

At June 30, 2021 the Company had working capital of $989,448 (December 31, 2020 - $1,317,648). At the time of this report the Company does have sufficient funds to meet its general and administrative expenses through 2021.

Capital Resources

At June 30, 2021 Gungnir had paid up capital of $30,624,048 representing 78,597,785 common shares without par value, and an accumulated deficit of $35,125,083, resulting in a shareholder’s equity (or net assets) of $3,210,298 ($3,433,457 at December 31, 2020). Gungnir has working capital of $989,448 at June 30, 2021 compared to working capital of $1,158,747 at June 30, 2020.

Business Risks, Uncertainties and Commitments

The Company’s business of mineral exploration has a high level of inherent risk associated with it. Although the Company is optimistic about the potential of many of its projects, there is no guarantee that any mineral deposits will be identified or that, if deposits are identified, it will be economically feasible to put them into production. The Company’s exploration activities may also be affected by changes in environmental and other governmental regulation.

The financial condition of the Company is influenced by operational performance and a number of market risks. Fluctuations in market prices, foreign exchange rates and unit costs of production are the most significant risks experienced by the Company.

The Company purchases insurance to mitigate losses that may arise from certain liability and property risks. The cost of this insurance and the specific protection provided by the policies will vary from year to year depending on the conditions in the insurance market. The Company believes that the insurance program it has in place continues to prudently address its major liability and property risk exposures.

Risks associated with operations are numerous and include environmental pollution, accidents or spills, industrial and transportation accidents, labour disputes, blockades, changes in regulatory environment, natural phenomena and unexpected geological conditions. Many of the foregoing risks and hazards could result in damage to, or destruction of the Company’s mineral properties, personal injury or death, environmental damage, delays in or interruption of or cessation of production in its exploration or development activities.

The Company is subject to normal worker health, safety and environmental risks associated with its exploration operations. The Board of Directors regularly reviews the health and safety of the Company’s operations to mitigate potential hazards and optimize the health and safety of employees, contractors and the public in general. Operational changes are increasingly subject to regulatory approval that may include delays due to longer and more complex regulatory review and approval process. These increasing requirements are expected to continue to result in higher administration costs and capital expenditures for compliance.

Related Party Transactions

Related party transactions that are in the normal course of business and have commercial substance are measured at the exchange amount. The following are the related party transactions for the period.

Salaries paid to key management personnel for the periods ended June 30, 2021 total $162,500 (2020 - $270,239). Stock-based compensation paid to key management personnel and directors for the period ended June 30, 2021 totalled $nil (2020 – $nil). Key management personnel are comprised of the Company’s Chief Executive Officer and Chief Financial Officer.

At June 30, 2021, accounts payable and accrued liabilities include $nil (2020 - $10,000) due to directors and organizations controlled by directors.

Financial Instruments

Gungnir’ financial instruments consist of cash, receivables, marketable securities, deposits and accounts payable. Unless otherwise noted, it is the Company’s opinion that we are not exposed to significant interest, currency or credit risks. Gungnir has to date not entered into the use of derivative instruments or foreign exchange contracts to hedge gains or losses arising from foreign exchange fluctuations.

Significant accounting judgements and estimates

A summary of all the Company’s significant accounting policies is included in Note 2 to the quarterly financial statements for the period ended June 30, 2021.

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements, and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised-and-the-revision-affects-both-current-and-future-periods.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the statements of financial position date, that could result in a material adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

the recoverability of amounts receivable and prepayments which are included in the consolidated statements of financial position;
the recoverability and probability of future economic benefits of amounts capitalized as exploration and evaluation costs
the inputs used in valuing share-based payments which are included in the consolidated statements of comprehensive income or loss;
the income taxes provision which is included in the consolidated statements of comprehensive income or loss and the composition of deferred income tax assets and liabilities which are included in the consolidated statements of financial position;
the inputs used in determining the various commitments which are accrued in the consolidated statements of financial position.

Evaluation and exploration properties

Acquisition costs of resource properties together with direct exploration expenditures thereon are deferred until the property to which they relate is placed into production, sold or abandoned or become impaired. Option or other payments received in respect of property interests are applied to reduce the carrying value of the properties. The carrying values of exploration and evaluation properties are, where necessary, written down to the estimated fair value based on discounted estimated future net cash flows.

The Company reviews the carrying values of its resource properties whenever events or circumstances indicate that there may be a potential impairment. Where estimates of future cash flows are not available and where exploration results or other information suggest impairment has occurred, management assesses whether the carrying value can be recovered, and if not, an appropriate write-down is recorded.

Although the company has taken steps to verify title to exploration and evaluation properties in which it has an interest, according to the usual industry standards for the stage of exploration of such properties, these procedures do not guarantee the company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects in title registration.

Stock-based Compensation

The standard now requires that all stock option-based awards made to consultants and employees be recognized in these consolidated financial statements and measured using a fair value-based method.

Consideration received on the exercise of stock options and compensation options and warrants is recorded as share capital. The related contributed surplus originally recognized when the options were granted, is transferred to share capital.

Critical accounting policies and changes in accounting policies

The accounting policies followed by the Company are set out in Note 2 to the audited financial statements for the year ended December 31, 2020, and have been consistently followed in the preparation of these financial statements. New accounting standards adopted during the year:

IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”)

IAS 8 is applied in selecting and applying accounting policies, accounting for changes in estimates and reflecting corrections of prior period errors. Changes in accounting policies and correction of errors are generally retrospectively accounted for, whereas changes in accounting estimates are generally accounted for on a prospective basis. The adoption of IAS 8 did not have a material impact on the Company’s financial statements. Future accounting pronouncements

Amendments to IAS 16, Property, Plant and Equipment: Proceeds before Intended Use (“IAS 16”)

In May 2020 the IASB issued amendments to IAS 16, Property, Plant and Equipment: Proceeds before Intended Use which is effective for annual period beginning after January 1, 2022. The amendments prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognize such sales proceeds and related costs in profit (loss). The amendments to IAS 16 will have no material impact on the Company’s financial statements.

Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Report – Phase 2

In August 2020, the IASB issued amendments to IFRS 9, Financial Instruments (IFRS 9), IAS 39, Financial Instruments: Recognition and Measurements (IAS 39), IFRS 7, Financial Instruments: Disclosures (IFRS 7), IFRS 4, Insurance Contracts (IFRS 4), and IFRS 16, Leases (IFRS 16) as a result of Phase 2 of the IASB’s Interest Rate Benchmark Reform project. The amendments address issues arising during reform of benchmark interest rates including the replacement of one benchmark rate with an alternative one. The amendments are effective January 1, 2021. The adoption of these amendments will have no material impact on the Company’s financial statements.

Disclosure Controls and Procedures

As of June 30, 2021, the Company carried out an evaluation, under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer of the effectiveness of the design and operation of our disclosure controls and procedures. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure control and procedures are effective to ensure that information required to be (a) disclosed is recorded, processed, summarized and reported in a timely manner and (b) disclosed in the reports that we file or submit is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

We have designed, or caused to be designed under our supervision, internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in Canada.

Outstanding Share Data

The authorised share capital in Gungnir Resources Inc. consists of 500,000,000 common shares. On October 1, 2020, the Company completed a private placement for 10,000,000 units at a price of $0.06 per unit, for gross proceeds of $600,000. Each unit consists of one common share and one warrant. Each warrant entitles the holder to acquire an additional common share of the Company at $0.09 for 36 months. The warrants were ascribed an aggregate fair value of $259,739 under the Black-Scholes valuation model, with the residual being allocated to share capital. The Company incurred finder’s fees of $48,000 and issued an aggregate of 800,000 compensation options with a fair value $48,855. Each compensation option consists of one common share and one compensation warrant and is exercisable at $0.06 for 36 months. Each compensation warrant is exercisable into one common share at $0.09 for 36 months.

On October 27, 2020 and November 10, 2020, the Company issued 2,000,000 and 500,000 common shares, respectively, pursuant to the exercise of warrants at $0.05 per share, for gross proceeds of $125,000. $16,621 previously recognized in Warrants reserve was reclassified to Share capital on the exercise of the warrants.

At June 30, 2021 there are 78,597,785 common shares issued and outstanding.

Share-based Compensation

Options

The Company has adopted a 2019 Incentive Stock Option Plan which provides that the Board of Directors of the Company may from time to time, in its discretion and in accordance with the TSX-V requirements, grant to directors, officers, employees and technical consultants to the Company, non-transferable stock options to purchase common shares, provided that the number of common shares reserved for issuance in any twelve month period will not exceed 10% of the Company’s issued and outstanding common shares.

Such options will be exercisable for a period of up to 10 years from the date of grant at a price not less than the closing price of the Company’s shares on the last trading day before the grant of such options less any discount, if applicable, but in any event not less than $0.05 per share. Options may be exercised no later than 6 months following cessation of the optionee’s position with the Company.

The following table summarizes information about the stock options for periods ended June 30, 2021 and 2020:

	June 30,2021	June 30,2021	June 30,2021	December 31,2020 Options Weighted average exercise price 6,350,000 3,200,000 (1,200,000) $ 0.07 0.09 0.05 8,350,000 $ 0.08 2021 2020	December 31,2020 Options Weighted average exercise price 6,350,000 3,200,000 (1,200,000) $ 0.07 0.09 0.05 8,350,000 $ 0.08 2021 2020	December 31,2020 Options Weighted average exercise price 6,350,000 3,200,000 (1,200,000) $ 0.07 0.09 0.05 8,350,000 $ 0.08 2021 2020
	Options		Weighted average exercise price	Options
Options outstanding, beginning of year Granted Expired/Cancelled	8,350,000 - -	$	0.08 - -	6,350,000 3,200,000 (1,200,000)	$	0.07 0.09 0.05
Options outstanding, end of period	8,350,000	$	0.08	8,350,000	$	0.08
Options exercisable,end ofperiod Weighted average contractual remaininglife(years)
			8,350,000 8,350,000
			2.37 2.87

Summary of stock options outstanding at June 30, 2021:

Number outstanding	Exercise price ($)	Expiry date
2,350,000	0.06	October 3,2021
800,000	0.05	January20,2022
533,333*	0.06	September 24,2023
266,667*	0.06	October 2,2023
2,000,000	0.11	September 11,2024
2,400,000	0.10	November 18,2025
8,350,000

Compensation options (see Note 7)

Share-based compensation of $nil was incurred during 2021 (2020 - $134,614).

The fair value of stock options was estimated at the grant date based on the Black-Scholes option pricing model, using the expected dividend yield of $nil (2020 - $nil), average risk-free interest rate of 0.44% (2020 – 0.44%), expected life of 5 years (2020 – 5 years), stock price of $0.10 (2020 - $0.10) and an expected volatility of 123% (2020 – 123%).

Option pricing models require the input of highly subjective assumptions, particularly as to the expected price volatility of the stock based on historical volatility. Changes in these assumptions can materially affect the fair value estimate and therefore it is management’s view that the existing models do not necessarily provide a single reliable measure of the fair value of the Company’s stock option grants.

Warrants

The following table summarizes information about the warrants for periods ended June 30, 2021 and 2020:

	June 30,2021	June 30,2021	June 30,2021	December 31,2020 Warrants Weighted average exercise price 15,351,000 10,000,000 (2,500,000) (3,000,000) $ 0.05 0.09 0.05 0.05 19,851,000 $ 0.07 2021 2020	December 31,2020 Warrants Weighted average exercise price 15,351,000 10,000,000 (2,500,000) (3,000,000) $ 0.05 0.09 0.05 0.05 19,851,000 $ 0.07 2021 2020	December 31,2020 Warrants Weighted average exercise price 15,351,000 10,000,000 (2,500,000) (3,000,000) $ 0.05 0.09 0.05 0.05 19,851,000 $ 0.07 2021 2020
	Warrants		Weighted average exercise price	Warrants
Beginning of year Granted Exercised Expired/Cancelled	19,851,000 - - -	$	0.07 - - -	15,351,000 10,000,000 (2,500,000) (3,000,000)	$	0.05 0.09 0.05 0.05
Warrants outstanding, end ofperiod	19,851,000	$	0.07	19,851,000	$	0.07
Weighted average contractual remaininglife(years)
				0.87 1.29

Summary of warrants outstanding at June 30, 2021:

Number outstanding	Exercise price ($)	Expiry date
9,851,000	0.05	September 28,2021
6,666,667	0.09	September 24,2023
3,333,333	0.09	October 1,2023
19,851,000

Contributed surplus

Contributed surplus includes the accumulated fair value of expired or cancelled stock options and warrants. Contributed surplus is comprised of the following:

		Options	Options	Warrants	Warrants	Total
December 31, 2020 Options and warrants expired	$	3,692,293 -	$	3,058,609 -	$	6,750,902 -
June 30, 2021	$	3,692,293		3,058,609	$	6,750,902

Loss per Share

Periods ended		June 30, 2021		December 31, 2020
Numerator: Net income (loss) attributable to common shareholders – basic and diluted	$	(223,159)	$	(628,022)
Denominator: Weighted average number of common shares outstanding – basic and diluted		75,383,173		69,184,543
Basic and diluted earnings (loss) per share	$	(0.00)	$	(0.01)

Diluted earnings (loss) per share did not include the effect of 8,350,000 (2020 – 8,350,000) share purchase options and 19,851,000 (2020 – 19,851,000) warrants as they are anti-dilutive. Share-based compensation of $nil was incurred during 2021 (2020 - $134,614).

Subsequent Events

Gungnir on August 4, 2021 announced its plans to issue up to 5,000,000 units ("Units") in a non-brokered private placement at a price of $0.05 per Unit for total gross proceeds of up to $250,000 (the “Offering”). Each Unit will consist of one common share in the capital of the Company (each, a “Common Share”) and one common share purchase warrant (each, a “Warrant”), with each Warrant entitling the holder thereof to acquire one Common Share for a period of two years from the closing of the Offering at an exercise price of $0.08 per share, subject to accelerated expiry in the event the Common Shares trade at or above $0.20 on the TSX Venture Exchange (the “Exchange”) for a period of 20 consecutive trading days after expiry of the four month hold period. The Offering is anticipated to close by August 31, 2021.

The net proceeds from the Offering will be used to top-up existing funds for the Company's on-going exploration activities in Sweden and for general corporate purposes.

Additional Information

Additional information is available at the Company website at www.gungnirresources.com or on its SEDAR page site accessed through www.sedar.com.

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Gungnir Resources Inc. — Interim / Quarterly Report 2021

44546_rns_2021-08-27_b686b006-1ce9-4122-983c-9ca0fde2f79b.pdf

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