Gunnison Copper Corp. — Management Reports 2021

Mar 25, 2021

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MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED DECEMBER 31, 2020

EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Management’s Discussion and Analysis (“MD&A”) is as of March 24, 2021 and relates to the financial condition of Excelsior Mining Corp. and its subsidiaries (“Excelsior” or the “Company”) as of December 31, 2020. The MD&A supplements and complements Excelsior’s audited Consolidated Financial Statements for the years ended December 31, 2020 and 2019 (the “Consolidated Financial Statements”) and related notes. Comparison of the 2020 financial results in this MD&A is provided to the financial results for the three months and year ended December 31, 2019. Other relevant documents to be read with this MD&A include the Annual Information Form (“AIF”) for the year ended December 31, 2020. These documents are available on the Company’s website at www.excelsiormining.com , and on the SEDAR website at www.sedar.com .

The Consolidated Financial Statements have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”). All dollar amounts in this MD&A are expressed and presented in thousands of United States dollars (unless otherwise noted). Canadian dollars are expressed as “CAD $”.

Readers are cautioned that this MD&A contains forward-looking statements and that actual events may vary from Management’s expectations. Readers are encouraged to read the “Cautionary Statements” section presented later in this MD&A including the factors described in “Risk Factors” and “Forward-Looking Information”.

APPROVAL

The Board of Directors of Excelsior Mining Corp. has approved the disclosure contained in this MD&A as of March 24, 2021.

DESCRIPTION OF BUSINESS

Excelsior is a mineral exploration, development and mining company that is advancing the Gunnison Copper Project (“Gunnison Project”) located in Cochise County, Arizona. Excelsior was incorporated under the Business Corporations Act of British Columbia on June 9, 2005. The Company is listed on the Toronto Stock Exchange (“TSX”) under the symbol “MIN”, the top-tier over-the-counter market (“OTCQX”) under the symbol “EXMGF”, and the Frankfurt Stock Exchange under the symbol “3XS”.

The Gunnison Project is a low-cost, environmentally friendly in-situ recovery copper extraction project that is permitted to 125 million pounds per year of copper cathode production. Excelsior announced the start of construction in December 2018, and the completion of the construction phase in December 2019, including the wellfield drilling and the supporting infrastructure consisting of the electrical power system upgrades, all holding ponds, the pipeline corridor and acid storage tanks. Upgrades to the adjacent Johnson Camp mine (“JCM”) Solvent Extraction and Electrowinning (“SX-EW”) plant were also completed in December 2019. The injection of mining fluids to the wellfield for copper production started on December 31, 2019 and the Company began the start-up and commissioning phase of the project in January 2020. On April 9, 2020 a decision was made to place the project on Care and Maintenance in response to the COVID-19 global pandemic. On August 12, 2020 the Company announced that a small-scale restart had commenced. As the Company continues to ramp up towards full production, it remains cognizant of the continued health risks to the Company’s workforce related to COVID-19. Any significant interruption in the workforce or supply chain could negatively impact the timing of the company’s ramp up process. The Company has put in place various procedures to mitigate the risk of transmission of COVID-19 on site as the Health and Safety of our employees is our primary concern. The Company continues to maintain the wellfield in accordance with all state and federal permit requirements.

COPPER STREAM

On November 30, 2018 the Company finalized an agreement for a $75,000 project financing package (“Project Financing”, or “copper stream” or “copper stream derivative liability”) with Triple Flag Mining Finance Bermuda Ltd. (“Triple Flag”) for the purpose of developing the Gunnison Project. In connection with the Project Financing, the Company issued Triple Flag 3.5 million five-year common share purchase warrants (the “warrants”), under a five-year term beginning on November 30, 2018, entitling Triple Flag to purchase 3.5 million Excelsior common shares at a strike price of CAD$1.50 per share issued.

As of December 31, 2019, the Company has received all funding from the $75,000 project financing, consisting of a $65,000 copper stream (the "Stage 1 Upfront Deposit"), and $10,000 in equity financing.

Under the terms of the Project Financing, Triple Flag committed to fund the Stage 1 Upfront Deposit in return for Excelsior selling to Triple Flag a percentage of the refined copper production from the Gunnison Project at a reduced price equal to 25%

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

of the copper spot price. The exact percentages of copper production to be sold to Triple Flag varies according to the total production capacity, based on a sliding scale.

The percentages applicable at certain projection levels are detailed in the table below.

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Following a decision by Excelsior to expand the production capacity, Triple Flag will have the option to invest a further $65,000 in exchange for an increase in its entitlement to copper under the Stream (“Expansion Option”). Upon completion of an expansion, Excelsior has the option to reduce the amount of the Stream by 50% by making a buy-down payment to Triple Flag (the “Buy-Down Payment”). The Buy-Down Payment is calculated as an amount that provides Triple Flag with an internal rate of return of 15% on 50% of the Stage 1 Upfront Deposit and, if applicable, 15% on 50% of the Expansion Upfront Deposit (in each case after evaluating the value of Stream deliveries (net of the 25% purchase price payment for such deliveries) made to Triple Flag prior to its payment).

The table below shows the range of percentage of production to be purchased by Triple Flag based on specified production levels based on various scenarios that include Triple Flag’s Expansion Option and Excelsior’s Buy-Down Right. Actual amounts will be calculated within the range, based on the proven production history.

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The stream obligation and share purchase warrants are recorded at fair value at each statement of financial position date as the Company has determined that the stream obligation and the share purchase warrants are derivative liabilities carried at FVTPL.

The fair value of the stream obligation was valued using a Monte Carlo simulation model. The significant assumptions developed by management used in the Monte Carlo simulation model included: the copper forward price curve based on COMEX futures, the long-term copper price volatility of 22.08% (2019 – 21.5%), a discount rate which factors in the Company’s credit spread of 9.11% (2019 comparable rate – 8.29%), the life of mine production schedule and expectations including expansion plans and characterization of the stream for tax purposes.

The Monte Carlo simulation model was prepared by an independent valuation specialist and the life of mine production schedule and expectations including expansion plans are based on the information compiled by qualified persons.

NEBARI FINANCING

On October 31, 2019 the Company entered into an agreement with Nebari Natural Resources Credit Fund I LP (“Nebari”) for a $15,000 credit facility (the "Credit Facility"). As of December 31, 2020, the $15,000 credit facility was fully drawn. The Credit Facility is secured against the assets of Excelsior and certain of its subsidiaries. The Credit Facility bears interest at 14.2% per annum, payable monthly. An arrangement fee of 2.0% ($300) of the total available funds under the Credit Facility was paid on closing. The arrangement fee is creditable against interest payable on the draws under the Credit Facility, to a maximum of $100 of interest per each draw. The Credit Facility had an initial term of 15 months from the date of the Initial Draw which occurred on December 23, 2019. The Credit Facility may be extended for up to two additional six-month periods (21 months and 27 months from the date of the Initial Draw).

Subsequent to December 31, 2020 the Company requested and Nebari provided an extension of the term of the Credit Facility to March 23, 2022.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

PAYCHECK PROTECTION PROGRAM LOAN

On May 21, 2020 the Company signed a Promissory Note with the Bank of America under the Paycheck Protection Program (PPP) and was subsequently advanced a loan in the amount of $1,206. The loan may be partially forgivable under the terms of the CARES Act if the Company is able to satisfy certain conditions as prescribed by the CARES Act. The Company had 24 weeks from the date funds were advanced to assess whether it qualifies for partial or full loan forgiveness. This time elapsed on November 4, 2020 and the Company has submitted the required paperwork to its lender. The amount of loan forgiveness applied for is $1,090 which is subject to the approval of the Company’s lender applying the Small Business Administration rules and subsequent approval by the Small Business Administration.

On January 5, 2021 the Company was notified that the Small Business Administration had approved forgiveness of $162 of the loan and on March 1, 2021 the Company was notified that the second application for loan forgiveness of $928 had also been approved by the Small Business Administration.

The loan bears a fixed annual interest rate of 1% with a monthly payment of $7 starting March 20, 2021. The term of the loan is two years from the funding date of the loan, May 21, 2020.

GUNNISON PROJECT

Wellfield Start-up and Commissioning Status

The Company received approval in December 2019 from the Environmental Protection Agency to commence mining operations and began injecting mining fluids to the copper ore body on December 31, 2019. The mining fluids will circulate through a volume of rock of approximately 400ft x 400ft x 700ft, in a closed-loop system until the concentration of copper held in solution meets a sufficient grade to be treated through the SX-EW facilities to extract the copper and produce LME grade copper cathode sheets.

During the start-up process in January 2020, initial copper recovery grades exceeded feasibility study expectations. Pregnant leach solution grade measured 0.15 grams per liter of copper in the primary recovery pond, which also exceeded start-up expectations. Acid injection was steadily increased during the start-up process, up to approximately 50% of the full production rate.

In February 2020, in order to improve efficiency for long-term production performance the Company initiated several optimization changes to the production wellfield. The goal of the wellfield optimization is to assist in acid breakthrough and continued copper mobilization. Breakthrough will be achieved when free acid is detected at designated recovery wells; thereby maintaining the desired pH level (acidity level) where copper will remain in solution.

Specific optimizations that were completed in February and March 2020 include making the wellfield reversible in terms of fluid flow. Injection wells were retrofitted with pumps, allowing them to be used as recovery wells when needed. In addition, recovery wells were reconfigured to allow for injection. By making the wellfield reversible, Excelsior will have the option of moving mobilized copper only a portion of the full distance between the wells before reversing the fluid flow, and thus reducing the effective distance that the copper must travel before it is recovered. This new capacity to move fluids back and forth (or, “push and pull”) is expected to help achieve breakthrough, at which point copper would remain in solution throughout the production process.

In parallel during February and March 2020, infrastructure was installed that will allow for concentrated acid to be injected into each well, which will dissolve any reprecipitated copper (copper sulphate) in the area of the pumps, thereby ensuring effective fluid flow. Preventative maintenance programs to limit pump and wellfield down-time are also in place.

On April 9, 2020 a decision was made to place the project on Care and Maintenance in response to the COVID-19 global pandemic. The Company has put in place various procedures to mitigate the risk of transmission of COVID-19 on site as the Health and Safety of our employees is our primary concern. On August 12, 2020 the Company announced that a small-scale restart had commenced, , thus exiting the care and maintenance mode.

On November 10, 2020 the Company announced that following the small-scale restart copper recovery has achieved concentrations that now allow for initial production to commence at the Gunnison Project. The Company also confirmed its wellfield optimization program has been successful. Highlights from the wellfield optimization program include:

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

• The issue of copper precipitates and other precipitates blocking wells has been solved; the upgrades to the wellfield implemented earlier in the year have proven effective;

• Copper grades in the wells that have been consistently operated are in-line with expectations;

• These activities have generated sufficient copper in solution to commence operation of the Solvent ExtractionElectrowinning (SX-EW) production facility, which has been turned on;

• Ramp up phase copper cathode production commenced in December 2020 ;

• Staffing levels remain reduced and restricted due to the COVID-19 Pandemic. Operations have been conducted in a safe manner with a low number of COVID-19 cases at Gunnison reported. In response, successful contact tracing and isolation measures were implemented without any requirement to shut-down operations;

• Expansion of activities to surrounding wells is occurring, with a view to ramping-up to full, nameplate, capacity through 2021; and

• It is expected that additional time will be required during this ramp-up to optimize the wells and resolve any challenges as they occur.

On December 21, 2020, Excelsior announced that first copper cathode production has been achieved at the Gunnison Project. On January 28, 2021 Excelsior announced that it had sold its first copper cathode from the Gunnison Project. Assays confirm that the copper content achieved 99.998%. Copper purity is projected to achieve 99.999% as per the feasibility design for all future copper harvests.

See additional discussion below in “Outlook”.

The Company had 58 employees as of December 31, 2020.

Subsequent to year end, on March 1, 2021, the Company completed a merger of its wholly-owned subsidiaries Excelsior Mining Arizona, Inc. and Excelsior Mining JCM, Inc., with Excelsior Mining Arizona, Inc. as the surviving entity. This merger will not have a material impact on operations and was completed for administrative purposes.

Copper Offtake Agreement

On March 5, 2020 the Company entered into a purchase and sale agreement with Trafigura Trading LLC for 100% of copper cathode production from the Gunnison Project in 2020 on commercially competitive terms. The agreement has been extended through to the end of 2021.

COVID-19

The current outbreak of the novel coronavirus (COVID-19) that was first reported from Wuhan, China, in December 2019, and any future emergence and spread of similar pathogens could have a material adverse effect on global economic conditions which may adversely impact our business and results of operations and the operations of our suppliers, contractors, service providers and the demand for our production. While initially the outbreak was largely concentrated in China and caused significant disruptions to its economy, it has now spread to many other countries and infections have been reported globally.

Worldwide the mineral extraction sector was impacted significantly as national, state, regional and local governments issued public health orders in response to COVID-19, including restricting the movement of people and goods.

Although multiple vaccines have been released and are being administered to the public, there have been coincidental mutations to the virus known as COVID-19 and which have been reported to be more virulent. Should vaccines prove less effective against the new virus strains resulting in a resurgence of COVID-19 during the year, it is anticipated that many governments would again issue public health orders which might include restricting the movement of people and goods. This in turn might impact the Company’s supply chain. Although copper prices have recovered with some subsidence of the global pandemic and the release of vaccines to counter the virus, copper prices could again be negatively impacted should there be a global resurgence of COVID-19. A continuing period of lower prices could significantly affect the Company’s economic potential or intentions with respect to the Gunnison Project.

While the media reports both new strains of the virus and a resurgence in COVID-19 cases globally, as of the date of this MD&A the State of Arizona has no travel restrictions in place. However, the State has previously demonstrated a willingness

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

to issue defensive orders where it sees the need. Any such order that would significantly restrict the movement of people or goods could impact the Company's ability to access its properties and complete exploration, development or production programs in the current year. The Company has considered that there may be a continuation of periodic restrictions on activities until a sufficient proportion of the population has been vaccinated in the fight against COVID-19. As a result, the Company maintains a cautious approach as to the timing of ramping up operations activities.

The longer-term impact of these factors on the Company is not yet determinable, however they may have a material impact on the Company’s financial position, results of operations and cash flows in future periods. In particular, there may be heightened risk of mineral property impairment and liquidity or going concern uncertainty. As a result, impairment indicators for our mineral properties could arise if current conditions persist. We continue to work on revisions to our forecasts and operational plans in light of the continuing situation.

See “Outlook” for additional information on the Company’s response to COVID-19.

OUTLOOK

Construction of the Gunnison Project was completed as of the end of the year 2019, copper production in solution from the wellfield started, and the Company advanced to the start-up and commissioning phase. Total project-related capital expenditures for the Gunnison Project were previously forecast at approximately $88,000. Total capitalized expenditures including accruals on the Gunnison Project as of December 31, 2020 were $89,973. The forecast exceedance is the result of capitalizing operating costs to the project during the longer than expected production ramp up phase.

Excelsior is maintaining a cautious approach and gradually expanding wellfield operations to allow for an operation that minimizes the risks of COVID-19 transmission and is in response to frequent supply chain disruptions. Excelsior’s focus continues to be on attaining a sustained production rate of 25 million pounds of copper per year, after which Excelsior will focus on expanding that production rate. The Company anticipates achieving the nameplate production rate of 25 million pounds per annum later in 2021. Achieving this outcome is contingent on managing COVID-19 conditions and successfully implementing many of our wellfield continuous improvement programs.

SELECTED ANNUAL INFORMATION

A summary of the Company’s consolidated financial results for the years ended 2020, 2019, and 2018 are presented below:

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REVIEW OF FINANCIAL RESULTS

The net loss for the years ended 2018, 2019 and 2020 is the result of the Company advancing the Gunnison Project from exploration and evaluation, through feasibility and sustainability, and project advancement activities. In addition, the net losses for the three years includes the non-cash losses arising on the valuation of the copper stream derivative liability. There were no distributions or cash dividends declared in the years ended 2018, 2019 and 2020.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

A comparison of the financial results for the year and the three-month period ended December 31, 2020 and December 31, 2019 is provided below.

Expenses Johnson Camp holding and maintenance cost Evaluation and permitting Office and administration Professional fees Directors and officers fees Investor relations Share-based compensation Regulatory fees Depreciation Other Items Loss on derivative at fair value Financing expense Interest income Unrealized loss (gain) on foreign exchange Other (income) loss Loss and comprehensive loss for the period Loss per common share: Basic and diluted Weighted average number of common shares outstanding: Basic and diluted	2020 2019 - $ 78 $ 365 50 83 217 182 317 493 98 54 129 471 552 38 21 154 168 15,720 8,816 59 92 (23) (135) (2) (4) (105) (84) 17,489 $ 10,315 $ 0.07 $ 0.04 $ 239,723,036 239,111,495 Ended December 31, Three months	2020 2019 2,270 $ 444 $ 948 298 1,328 1,003 616 1,382 999 2,374 249 512 1,642 2,936 97 78 588 576 10,845 14,844 870 335 (328) (602) 18 (7) 122 (293) 20,264 $ 23,880 $ 0.08 $ 0.10 $ 239,650,395 238,765,048 For the year Ended December 31,

For the year ended December 31, 2020 compared to the year ended December 31, 2019:

For the year ended December 31, 2020 the Company’s net loss was $20,264 ($0.08 per share) compared to a net loss of $23,880 ($0.10 per share) for the year ended December 31, 2019. The lower net loss for the year ended December 31, 2020 as compared to the same period of 2019 resulted primarily from a non-cash loss of $10,845 in 2020, compared to $14,844 in 2019 arising from the change in fair value of the copper stream derivative liability. Partly offsetting the decreased loss, is the expensing of Gunnison Project costs during the COVID-19 related care and maintenance that took place from April through July 2020.

Significant changes in the “Expenses” categories listed in the consolidated statements of loss and comprehensive loss for the year ended December 31, 2020 and 2019 are described below:

For the year ended December 31, 2020 the Company incurred JCM holding and maintenance costs of $2,270 (2019 - $444). For the 2019 period, these costs were capitalized as Gunnison Project construction costs, except for property taxes and costs which are related to the care and maintenance of the heap leach pad. During 2020, project commissioning and construction costs were capitalized from January through March as Gunnison Project construction costs, and from August through December as Mineral Properties. During the COVID-19 related care and maintenance period which took place from April through July, all costs related to the Gunnison Project were expensed.

For the year ended December 31, 2020 evaluation and permitting expenses amounted to $948 (2019 - $298). The costs for the year ended December 31, 2020 were higher than the comparable period of 2019 due to the exploration program that has taken place in 2020. The costs in 2019 primarily represent ongoing compliance costs at JCM.

For the year ended December 31, 2020, office and administration costs were $1,328 which were $325 above the comparable 2019 period of $1,003 mainly due to increased legal fees.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Professional fees for the year ended December 31, 2020 were $616 which were $766 lower than the comparable 2019 period of $1,382. Advisory fees incurred in 2019 associated with the Triple Flag financing were the main reason for the decrease.

Directors’ and officers’ fees incurred during the year ended December 31, 2020, were $999 compared to $2,374 during the same period of the prior year, a decrease of $1,375. Lower directors’ and officers’ fees resulted from the non-payment of all bonuses that were accrued in 2019 for 2020, additionally no bonuses were accrued or paid for the 2020 fiscal year.

Investor relations costs incurred in 2020 of $249 were lower than the comparable 2019 period of $512 as many activities were halted due to the COVID-19 pandemic.

During the year ended December 31, 2020, the Company incurred share-based compensation expense of $1,642 (2019 – $2,936). The decrease in non-cash share-based compensation expense of $1,294 is primarily due to a decrease in stock options granted to directors, officers, employees and consultants, and the lower fair value per stock option of options granted.

Depreciation expense for the year ended December 31, 2020 was $588 compared to $576 for the year ended December 31, 2019. The Depreciation expense remained approximately constant.

Significant changes in the “Other Items” listed in the consolidated statements of loss and comprehensive loss for the year ended December 31, 2020 and 2019 are described below:

The stream obligation was valued using a Monte Carlo simulation model. The significant assumptions developed by management used in the Monte Carlo simulation model included: the copper forward price curve based on Comex futures, the long-term copper price volatility, a discount rate which factors in the Company’s credit spread, the life of mine production schedule and expectations including expansion plans and characterization of the stream for tax purposes.

The Monte Carlo simulation model was prepared by an independent valuation specialist and the life of mine production schedule and expectations including expansion plans are based on the information compiled by qualified persons.

Financing expense for the year ended December 31, 2020 was $870 compared to $335 for the year ended December 31, 2019. The increase in financing expense is due to the interest on the Nebari loan not being capitalized while the Gunnison Project was on care and maintenance.

During the year ended December 31, 2020, the Company realized interest income of $328 versus interest income of $602 for the comparable period of 2019. Interest income was lower in 2020 compared to the same period of 2019 mainly due to a decrease in interest income on cash investments from the Company’s lower cash balance in 2020, and a lower interest rate.

Other loss of $122 for the year ended December 31, 2020 compared to Other income of $293 for 2019 resulted in a $415 change year over year. This resulted from an acid prepayment of $554 foregone due to the Covid 19 Care and Maintenance period requiring no acid, offset by revenue of $432 from the sale of JCM waste rock and limestone material.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

SELECTED QUARTERLY INFORMATION

The following table summarizes selected financial information for the Company for each of the past eight quarters ending December 31, 2020:

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The net (income)/loss for the last eight quarters reflects the advancement of the Gunnison Project from exploration and evaluation, through feasibility and sustainability, through the construction phase, into the start-up and commissioning phase, care and maintenance phase, and current ramp-up phase. The volatility in market factors due to the COVID-19 pandemic caused significant fluctuations in the valuation of the copper stream derivative and consequently net (income)/loss. The net loss for the quarter-ended December 31, 2020 of $17,489 included a loss of $15,720 on revaluation of the copper stream derivative liability.

The quarterly results presented above do not necessarily reflect any recurring expenditure patterns or predictable future trends. The Company was in the construction phase, the start-up and commissioning phase, then into care and maintenance due to Covid-19, and once again into ramp-up, resulting in no revenues in each of the last eight quarters.

Three months ended December 31, 2020 compared to the three months ended December 31, 2019:

For the three-months ended December 31, 2020 the Company’s net loss was $17,489 ($0.07 per share) compared to a net loss of $10,315 ($0.04 per share) for the three-months ended December 31, 2019. The higher net loss for the three-month period ended December 31, 2020 as compared to the same period of 2019 derived primarily from the non-cash loss of $15,720 on the revaluation of the copper stream derivative liability, $6,904 higher than the 2019 period.

Significant changes in the “Expenses” categories listed in the consolidated statements of loss and comprehensive loss for the three-months ended December 31, 2020 and 2019 are described below:

For the three-months ended December 31, 2020 the Company incurred JCM holding and maintenance costs of $0 (2019 - $78). For the 2020 period, all costs were capitalized to Mineral Properties, these costs are primarily employee salaries, wages and benefits, utilities, insurance, plant and equipment maintenance, and environmental compliance costs. For the 2019 period, these same costs are being capitalized as Gunnison Project construction costs. When the Gunnison Project is in production, all the above cost types will be included in operating costs.

For the three months ended December 31, 2020 evaluation and permitting expenses incurred were $365 (2019 - $50). Costs for the three-months ended December 31, 2020 were higher than the comparable period of 2019 due to the exploration for minerals in 2020.

Office and administration expenses for the three-months ended December 31, 2020 were $83 compared to $217 during the same period of the prior year. The decrease of $134 was primarily due to insurance costs capitalized in October 2020 that were expensed in previous months.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Professional fees incurred during the three months ended December 31, 2020 were $182 compared to $317 during the same period of the prior year, representing a decrease of $135. Lower professional fees resulted from a decrease in tax and audit related costs.

Directors’ and officers’ fees incurred during the three months ended December 31, 2020, were $493 compared to $98 during the same period of the prior year, representing an increase of $395. Higher directors’ and officers’ fees in 2020 resulted from bonus incentive adjustments made in December 2019.

Investor relations costs for the three months ended December 31, 2020 were $54 which were lower than the comparable 2019 period of $129 as activities remain minimized due to the COVID-19 pandemic.

During the three months ended December 31, 2020, the Company incurred share-based compensation expense of $471 (2019 – $552). The decrease in non-cash share-based compensation expense of $81 is due to higher stock options granted to directors and officers, consultants, and management personnel in 2019.

Depreciation expense for the three months ended December 31, 2020 was $154 compared to $168 for the three months ended December 31, 2019. The depreciation expense remained constant.

Significant changes in the “Other Items” listed in the consolidated statements of loss and comprehensive loss for the threemonths ended December 31, 2020 and 2019 are described below:

The copper stream derivative liability is recorded at fair value at each period end using a Monte Carlo simulation valuation model. See the full-year discussion above for the variables that are used in the period-end valuation. During the three months ended December 31, 2020, the non-cash loss of $15,720 for revaluation of the derivative liability was primarily driven by an increase in the copper price and the impact of a higher credit spread in the valuation model assumptions.

During the three-months ended December 31, 2020, the Company realized interest income of $23 versus interest income of $135 for the comparable period of 2019. Interest income was lower in 2020 compared to the same period of 2019 mainly due to a decrease in interest income on cash investments from the Company’s overall lower cash balance and a lower interest rate in 2020.

Other income of $105 for the three-month period of 2020 and $84 for the three-month period of 2019 mainly represents sales of waste rock material from JCM.

LIQUIDITY AND CAPITAL RESOURCES

The Company had cash and cash equivalents of $13,606 as of December 31, 2020 (December 31, 2019 - $24,900). Cash and cash equivalents decreased $11,294 during the year ended December 31, 2020 compared to a decrease of $19,268 during 2019. The decrease in usage is primarily due to financing received in 2020 from Nebari ($10,000) and the Paycheck Protection Program Loan ($1,206). In 2019, cash expenditures for Gunnison Project construction costs were offset by $59,580 in financing received.

Net cash used in operating activities for the year ended December 31, 2020 was $11,146 compared to net cash used of $5,758 in 2019. The increase in operating cash outflows for 2020 compared to 2019 was mainly due to the Gunnison Project being placed on care and maintenance for four months in 2020.

Net cash used in operating activities for the three months ended December 31, 2020 was $2,377 compared to $1,356 for the same period of 2019. The change in operating cash flow for the three-month period of 2020 compared to the same period of 2019 resulted mainly from the consumption of reagents inventory during the ramp-up phase of production in the last quarter of 2020.

Net cash used in investing activities for the year ended December 31, 2020 of $11,329 was lower than the net cash used of $73,097 for the same period of 2019 primarily due to the cash expenditures for the Gunnison Project construction costs in 2019. Similarly, net cash used in investing activities for the three months ended December 31, 2019 was $2,252 compared to net cash used of $8,646 for the same period of 2019. The net cash used in 2019 was mainly the result of cash expenditures for the Gunnison Project construction costs.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Net cash provided by financing activities for the year ended December 31, 2019 was $11,199 compared to $59,580 for the year of 2019. During 2020, the Company received $10,000 from Nebari financing and $1,206 from the Paycheck Protection Program Loan. During 2019, the Company received $55,000 from Triple Flag under the copper stream and $5,000 (less fees of $420) from the Nebari financing.

The Company had working capital of $7,109 at December 31, 2020 (December 31, 2019 – $17,871). The decrease in working capital primarily resulted from the decrease in cash discussed above, along with an increase in the current portions of note payable and the copper stream derivative liability offset by a decrease in accounts payable and accrued liabilities and amounts due to related parties.

The Company continues to ramp up the Gunnison Project towards full nameplate production of 25 million lbs per annum.

As of December 31, 2020 the Company does not have any pre-arranged sources of financing.

Subsequent to year end, on February 22, 2021, the Company announced that it had closed a “bought deal” public offering (the “Offering”) of units of the Company (the “Units”) with Scotiabank and PI Financial Corp. as joint bookrunners and underwriters. The Company issued a total of 33,350,000 Units. Each Unit consisted of one common share and one common share purchase warrant. The Company received $23,383 as net proceeds from the Offering. With the completion of the Offering, and expected cash flow from future copper production and sales, the Company expects to have enough funds to cover corporate costs and operating costs for the first phase of the Gunnison Project for at least the next year.

STATEMENT OF FINANCIAL POSITION INFORMATION

The following is a summary of the Company’s financial position at December 31, 2020 compared to the annual statement of financial position at December 31, 2019.

Cash and cash equivalents Receivables Prepaid expenses Materials and supplies Property, plant and equipment, net Restricted cash	As at December 31, 2020	As at December 31, 2019
	13,606 $ 690 861 938 112,471 3,311	24,900 $ 533 1,044 645 98,393 3,304
Total Assets	131,877 $	128,819 $
Accounts payable and accrued liabilities Amounts due to related parties Restricted share units Insurance premium financing Lease liabilities (current and long-term) Derivative liability (current and long-term) Debt (current and long-term) Asset retirement obligation Capital stock Other equity reserves Deficit Accumulated other comprehensive loss	As at December 31, 2020	As at December 31, 2019
	2,694 $ 112 123 434 46 90,472 16,178 14,955 89,480 11,406 (93,194) (829)	4,183 $ 821 73 281 149 79,627 4,876 13,327 89,306 9,935 (72,930) (829)
Total Liabilities and Equity	131,877 $	128,819 $

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Assets

Cash and cash equivalents decreased by $11,294 during the year ended December 31, 2020 as previously discussed in “Liquidity and Capital Resources” above.

The increase of $14,078 in net Property, plant and equipment at December 31, 2020 primarily reflects capitalized expenditures and accruals for Gunnison Project construction and Mineral Properties.

Liabilities

Accounts payable and accrued liabilities decreased by $1,489 for the year ended December 31, 2020, mainly resulting from the decrease in expenditures related to the construction activities on the Gunnison Project.

Derivative liability of $90,472 at December 31, 2020 consists of the fair value of the copper stream ($89,663) and the fair value of the common share purchase warrants ($809). The $10,845 increase in 2020 is principally related to changes in the valuation model assumptions related to the USD swap rates commensurate with the expected term of the Stream, the credit spread and copper price volatility and the copper forward price curve.

The increase in the asset retirement obligation (“ARO”) of $1,628 for the year ended December 31, 2020 consists of $1,425 for a change in estimated costs from updating the inflation and discount rate assumptions, and $203 for the accretion of the ARO estimate at December 31, 2020.

Equity

During the year ended December 31, 2020, the other equity reserves account increased by $1,471 primarily as a result of sharebased compensation costs of $1,645, including expensed and capitalized costs.

During the year ended December 31, 2020, capital stock increased by $174 due to stock option exercises.

Outstanding Share Capital

The Company’s authorized capital consists of an unlimited number of common shares without par value and an unlimited number of non-voting common shares without par value. The Company has securities outstanding as follows:

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During the year ended December 31, 2020, a total of 2,075,000 stock options were exercised, of which 1,975,000 stock options were exercised in exchange for a substituted right, resulting in the net issuance of 1,481,086 common shares. Of the 1,481,086 common shares issued, 646,507 were settled in 2020, with the remaining 834,579 shares settled in January 2021.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Contractual Obligations

The Company has the following contractual obligations as of December 31, 2020:

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Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

RELATED PARTIES

Related parties and related party transactions are summarized below:

Key Management Personnel

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company. The Company has determined that key management personnel consists of the Company’s Board of Directors and corporate officers, including the Company’s Chief Executive Officer and President, SVP Business Development, Chief Financial Officer, SVP/GM, Vice President of Corporate Affairs and Corporate Secretary.

Remuneration attributed to key management personnel is summarized as follows:

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Salaries, fees and benefits to key management includes all salaries, bonuses, fees, and other employment benefits, pursuant to contractual employment agreements, consultancy or management services arrangements.

Other Related Parties

King & Bay West Management Corp, (“King & Bay”) is an entity owned by Mark Morabito, the Chairman of the Company, which employs or retains certain officers and personnel of the Company. King & Bay provides legal, regulatory and corporate secretarial services to the Company. These services are provided to the Company on an as-needed basis and are billed based on the cost or value of the services provided to the Company. The amounts shown in the table below represent amounts paid and accrued to King & Bay for the services of King & Bay personnel and for overhead and third-party costs incurred by King & Bay on behalf of the Company. The fees for such services were made on terms equivalent to those that King & Bay charges to arm’s length parties.

Kinley Exploration LLC (“Kinley”) is an entity owned by Colin Kinley, a Director of the Company. Kinley provides certain technical services regarding project preparation and development to the Company. These services are provided to the Company on an as-needed basis and are billed based on the cost or value of the services provided to the Company. The amount shown in

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

the table below represents amounts paid to Kinley for the services of Kinley personnel and for out-of-pocket reimbursable expenses incurred by Kinley on behalf of the Company. The fees for such services were made on terms equivalent to those that Kinley charges to arm’s length parties.

Transactions with related parties other than key management personnel included the following:

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As of December 31, 2020, amounts accrued and due to key management personnel and other related parties include the following:

• Corporate officers - $91 (December 31, 2019 - $810)

• King & Bay - $21 (December 31, 2019 - $11)

ACCOUNTING POLICIES, ESTIMATES AND JUDGMENTS

The accounting policies applied in the preparation of the audited consolidated financial statements for the year ended December 31, 2020 are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2019. A summary of the Company’s significant accounting policies is provided in Note 2 to the audited consolidated financial statements for the year ended December 31, 2020 and 2019.

The preparation of the consolidated financial statements in conformity with IFRS requires management to make estimates and judgments. These estimates, judgments and assumptions affect the reported amounts of assets, liabilities, shareholders’ equity, and the disclosure of contingent assets and liabilities, as at the date of the financial statements, and expenses for the periods reported. A summary of the Company’s critical estimates and judgments is provided in Note 2, Basis of Presentation, of the audited consolidated financial statements for the year ended December 31, 2020 and 2019.

The Company applied judgment in determining that the copper stream arrangement, in its current form, is a derivative liability for accounting purposes. This judgment will be monitored as facts and circumstances change such as the exercise or expiry of the expansion and buyback options and the relationship of the metal deliverable under the arrangement to the Company’s actual production.

The Company is subject to income taxes in the United States. Significant judgment is required to determine the provision for income taxes. There are assumptions and uncertainties for which the ultimate tax determination is uncertain. The Company recognizes tax-related assets and liabilities based on the Company’s current understanding of tax laws as applied to the Company’s circumstances. The final tax outcome could be materially different from tax amounts initially recorded and such differences will impact the current and deferred tax provisions in the period in which the tax outcome is determined. In addition, the tax treatment of the initial proceeds received from Triple Flag as well as the tax withholding impact of copper sales under the agreement involves significant judgment.

FINANCIAL INSTRUMENTS

A summary of the Company’s financial instruments is provided in Note 16 in the audited consolidated financial statements for the year ended December 31, 2020 and 2019. As of December 31, 2020, the Company’s risk exposures and the impact on the Company’s financial instruments are summarized below.

The Company has exposure to a variety of financial risks: market risk (including currency risk, interest rate risk and commodity price risk), credit risk and liquidity risk from its use of financial instruments.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Information about the Company's exposure to each of these risks, the Company's objectives, policies and processes for measuring and managing risk, and the Company's management of capital is provided below. Risk management is the responsibility of Management and is carried out under policies approved by the Board of Directors. Material risks are monitored and are regularly discussed with the Audit Committee and Board of Directors.

Market risk

Market risk is the risk that changes in market price, such as copper prices, foreign exchange rates and interest rates will affect the Company’s cash flows or the value of its financial instruments.

Currency risk

The Company is subject to currency risk on financial instruments which are denominated in currencies that are not the same as the functional currency of the entity that holds them. Exchange gains and losses relating to these financial instruments would impact earnings (loss).

The Company is exposed to currency risk through cash and cash equivalents, accounts payable and accrued liabilities which are denominated in CAD$. The balances in these accounts are not significant, therefore, the Company’s exposure to currency risk is considered minimal. The Company has not hedged its exposure to currency fluctuations at this time.

Interest rate risk

The Company is subject to interest rate risk with respect to its investments in cash and cash equivalents and the stream obligation. The Company’s current policy is to invest excess cash in guaranteed investment certificates issued by its Canadian banking institution. The Company periodically monitors the investment it makes and is satisfied with the credit ratings of its banks. These investments generally have a fixed interest rate and therefore the risk is minimal. The Company’s outstanding debt obligations are at fixed interest rates and accounted for on the basis of amortized cost. Therefore, the carrying value of the Company’s debt is not exposed to changes in market interest rates.

A 1% increase in the interest rate would decrease the value of the stream obligation by $6,444, whereas a 1% decrease in the interest rate would increase the value of the stream liability by $7,226.

Commodity price risk

The Company is subject to commodity price risk from fluctuations in the market prices for copper. Commodity price risks are affected by many factors that are outside the Company’s control including global or regional consumption patterns, the supply of and demand for metals, speculative activities, the availability and costs of metal substitutes, inflation, and political and economic conditions. The financial instrument impacted by commodity prices is the Stream obligation. A 10% increase in the market price of copper would increase derivative liabilities by $7,558, whereas a 10% decrease in the market price of copper would decrease derivative liabilities by $7,964.

Credit risk

Credit risk is the risk of potential loss to the Company if the counterparty to a financial instrument fails to meet its contractual obligations. The Company's credit risk is primarily attributable to its liquid financial assets including cash and cash equivalents, and restricted cash.

The Company limits its exposure to credit risk on financial assets through investing its cash and cash equivalents with highquality North American financial institutions.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s objective in managing liquidity risk is to maintain sufficient liquidity to meet its liabilities when due. The Company manages liquidity risk by monitoring actual and projected cash flows and matching the maturity profile of its financial assets and liabilities. Cash flow forecasting is performed regularly. The Company also holds surety bonds to support future environmental obligations.

As of December 31, 2020, the Company has cash and cash equivalents of $13,606 to settle current liabilities of $8,986.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Fair value estimation

The Company’s financial assets and liabilities are measured and recognized according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable inputs.

The three levels of the fair value hierarchy are as follows:

Level 1: Quoted prices in active markets for identical assets or liabilities that the Company is able to access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3: Inputs for the asset or liability that are not based on observable market data.

The carrying values of cash and cash equivalents, receivables, restricted cash, accounts payable and accrued liabilities, debt and amounts due to related parties approximate their fair values due to the short-term maturity of these financial instruments.

The following table presents the Company’s financial assets and liabilities by level within the fair value hierarchy.

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LEGAL

On June 24, 2020 a contractor filed suit in Texas to recover unpaid amounts related to drilling services that were provided to the Company. The Company disputed the action and all claims and causes of action were dismissed on December 7, 2020. Subsequent to year end, the contractor refiled suit in Arizona against the Company seeking to recover unpaid amounts related to drilling services that were provided to the Company. The Company is disputing this action and the amounts payable to the contractor and believes that the Company will ultimately prevail. The Company filed a Motion to Dismiss the Arizona matter on March 4, 2021.

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Management of the Company is responsible for establishing and maintaining disclosure controls and procedures. Management has designed such disclosure controls and procedures, or caused them to be designed under its supervision, to provide reasonable assurance that material information relating to the Company, including its consolidated subsidiaries, is made known to the CEO and the CFO by others within those entities.

The CEO and CFO have certified that they have designed disclosure controls and procedures (or caused them to be designed under their supervision) and they are operating effectively to provide reasonable assurance that material information relating to the Company and its consolidated subsidiaries is made known to them by others within those entities as of December 31, 2020.

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

Internal Control Over Financial Reporting

The Company maintains a system of internal controls over financial reporting, as defined by National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings in order to provide reasonable assurance that assets are safeguarded and financial information is accurate and reliable and in accordance with IFRS.

Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2020, based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management believes that, as of December 31, 2020, the Company’s internal control over financial reporting is effective.

During the year ended December 31, 2020, there were no changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitation of Controls and Procedures

Our management, including the CEO and CFO, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well-designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

ADDITIONAL INFORMATION

Additional disclosure concerning the Company, including the AIF for the year ended December 31, 2019, is available on the SEDAR website, www.sedar.com.

TECHNICAL INFORMATION

Excelsior's technical work on the Gunnison Project is supervised by Stephen Twyerould, Fellow of AUSIMM, President & CEO of Excelsior and a Qualified Person as defined by National Instrument 43-101 (“NI 43-101”). Mr. Twyerould has reviewed and approved the technical information contained in this MD&A.

Additional information about the Gunnison Project can be found in the technical report filed on SEDAR at www.sedar.com entitled: "Gunnison Copper Project, NI 43-101 Technical Report, Feasibility Study" dated effective December 17, 2016.

CAUTIONARY STATEMENTS

Risk Factors

The exploration for and development of mineral deposits involves significant risks and uncertainties, which even a combination of careful evaluation, experience and knowledge may not eliminate. The more prominent risk factors that may materially affect the Company’s future performance, in addition to those referred to herein, are discussed in the AIF for the year ended December 31, 2020.

Forward-Looking Information

This MD&A contains "forward-looking information" within the meaning of applicable Canadian securities laws concerning anticipated developments and events that may occur in the future. Forward-looking information contained in this MD&A includes, but is not limited to, statements with respect to: (i) the market and future price of copper and related products; (ii) requirements for additional capital; (iii) development, construction and production timelines and estimates; (iv) statements relating to the economic viability of the Gunnison Project, including mine life, total tonnes mined and processed and mining

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

operations; (v) the future effects of environmental compliance requirements on the business of the Company; and (vi) the statements under the heading “Outlook” in this MD&A, including statements about the production of copper.

In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved" suggesting future outcomes, or other expectations, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. Forward-looking information contained in this MD&A is based on certain factors and assumptions regarding, among other things, the estimation of mineral reserves and resources, expectations and anticipated impact of the COVID-19 outbreak, the realization of mineral resource and reserve estimates, copper and other metal prices, the timing and amount of future exploration and development expenditures, the estimation of expansion and sustaining capital requirements, the estimation of labor and operating costs, the availability of necessary financing and materials to continue to develop, operate and expand the Gunnison Project in the short and long-term, the progress of development activities, the receipt of and compliance with necessary regulatory approvals and permits, the estimation of insurance coverage, and assumptions with respect to currency fluctuations, environmental risks, title or surface rights disputes or claims, and other similar matters. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Forward looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information including, without limitation, the following risks and uncertainties referred to under the heading “Risk Factors” in the Company’s AIF for the year ended December 31, 2020:

• risks relating to the fact that the Company depends on a single mineral project;

• operational risks inherent in the conduct of mining activities, including the risk of accidents, labour disputes, availability of reagents and power, increases in capital and operating costs and the risk of delays or increased costs that might be encountered during the development process;

• risks inherent in the exploration and development of mineral deposits, including risks relating to changes in project parameters as plans continue to be redefined including the possibility that mining operations may not commence at the Gunnison Project;

• assumptions regarding expected capital and operating costs and expenditures, production schedules, economic returns and other projections;

• our production estimates, including accuracy thereof;

• risks related to general economic conditions and in particular the potential impact of the COVID-19 pandemic on the Company or its operations and the mining industry;

• the fact that we have no mineral properties in commercial production and no history of production or revenue;

• risks relating to variations in mineral resources and reserves, grade or recovery rates resulting from current exploration and development activities;

• risks related to fluctuations in the price of copper as the Company’s future revenues, if any, are expected to be derived from the sale of copper;

• risks related to a reduction in the demand for copper in the Chinese market which could result in an extended period of lower prices and demand for copper;

• financing, capitalization and liquidity risks, including the risk that the financing necessary to fund the development and construction activities at the Gunnison Project may not be available on satisfactory terms, or at all;

• the Company has no history of mining operations and no revenues from operations and expects to incur losses for the foreseeable future;

• risks associated with secured debt and the copper stream agreement;

• risks related to the Company obtaining and maintaining various permits required to conduct its current and anticipated future operations;

• risks related to disputes concerning property titles and interest;

• risks relating to the ability to access infrastructure;

• risks related to the significant governmental regulation to which the Company is subject;

• environmental risks;

• climate change risks;

• risks related to the adequacy of financial assurance arrangements with State and Federal Governments;

• reliance on key personnel;

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

• risks related to increased competition in the market for copper and related products and in the mining industry generally;

• cybersecurity risks;

• risks related to potential conflicts of interests among the Company’s directors and officers;

• exchange rate fluctuations between the Canadian and United States dollar;

• uncertainties inherent in the estimation of inferred mineral resources;

• land reclamation requirements may be burdensome;

• risks associated with the acquisition of any new properties;

• risks related to legal proceedings to which the Company may become subject;

• potential liabilities associated with the acquisition of Johnson Camp;

• our ability to comply with foreign corrupt practices regulations and anti-bribery laws;

• changes to relevant legislation, accounting practices or increasing insurance costs;

• significant growth could place a strain on our management systems;

• share ownership by our significant shareholders and their ability to influence our governance; and

• risks relating to the Company’s Common Shares, including that future sales or issuances of our debt or equity securities may decrease the price of our securities.

Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking information is made as of the date of this MD&A.

RISK FACTORS

Readers are cautioned that the risk factors discussed above are not exhaustive. The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update or revise any forward-looking information and readers should also carefully consider the matters discussed under the heading, "Forward Looking Information", in this MD&A and under the heading, “Risk Factors”, in the AIF.

CAUTIONARY NOTE TO U.S. INVESTORS – INFORMATION CONCERNING PREPARATION OF RESOURCE AND RESERVE ESTIMATES

Technical disclosure regarding the Company’s properties included in this MD&A and in the documents incorporated herein by reference has been prepared in accordance with the requirements of Canadian securities laws. Without limiting the foregoing, such technical disclosure uses terms that comply with reporting standards in Canada and certain estimates are made in accordance with NI 43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all mineral reserve and mineral resource estimates contained in the technical disclosure have been prepared in accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards on Mineral Resources and Reserves ("CIM Definition Standards").

Canadian standards, including NI 43-101, differ significantly from the historical requirements of the Securities and Exchange Commission (the “SEC”), and mineral reserve and resource information contained or incorporated by reference in this Prospectus Supplement may not be comparable to similar information disclosed by U.S. companies.

The SEC has adopted amendments to its disclosure rules to modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC. These amendments became effective February 25, 2019 (the “SEC Modernization Rules”) and, following a two-year transition period, the SEC Modernization Rules will replace the historical property disclosure

requirements for mining registrants that are included in SEC Industry Guide 7. U.S. companies are required to provide disclosure on mineral properties under the SEC Modernization Rules for fiscal years beginning January 1, 2021 or later.

Under the SEC Modernization Rules, the definitions of “proven mineral reserves” and “probable mineral reserves” have been amended to be substantially similar to the corresponding CIM Definition Standards and the SEC has added definitions to

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EXCELSIOR MINING CORP. MANAGEMENT’S DISCUSSION & ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2020

recognize “measured mineral resources”, “indicated mineral resources” and “inferred mineral resources” which are also substantially similar to the corresponding CIM Definition Standards; however, there are still differences in the definitions and standards under the SEC Modernization Rules and the CIM Definition Standards. Therefore, the Company’s mineral resources and reserves as determined in accordance with NI 43-101 may be significantly different than if they had been determined in accordance with the SEC Modernization Rules.

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