Gunpoint Exploration — Management Reports 2024

Mar 26, 2024

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Management’s Discussion and Analysis

Year Ended December 31, 2023

(Expressed in Canadian dollars, unless otherwise noted)

March 25, 2024

For further information on the Company, reference should be made to its public filings on SEDAR+ at www.sedarplus.ca. Information is also available on the Company’s website at www.gunpointexploration.com. This Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the audited annual consolidated financial statements for the years ended December 31, 2023 and 2022 and related notes thereto which have been prepared in accordance with International Financial Reporting Standards. The MD&A contains certain forward-looking statements, please review the disclaimers that are provided at the last page of this report.

OVERVIEW

Gunpoint Exploration Ltd. (the “Company” or “Gunpoint”) is focused on the acquisition and exploration of gold-silver deposits located primarily in the United States. Gunpoint’s flagship property is the Talapoosa gold project (“Talapoosa”) in Nevada, USA. The Company’s common shares trade on the TSX Venture Exchange under the symbol (“GUN: TSXV”). The Company has its head office in Vancouver, British Columbia, Canada.

During the year ended, the Company reviewed the detailed surface exploration and drilling results undertaken by Newcrest Resources Inc. (“Newcrest”) on the Appaloosa trend (“Appaloosa”) situated within the Talapoosa land package. On November 6, 2023, Newmont Corporation (“Newmont”) acquired Newcrest Mining Ltd. Newcrest is a subsidiary of Newcrest Mining Ltd.

HIGHLIGHTS – Year Ended December 31, 2023

• The Company’s cash position as at December 31, 2023 was $1,328,000.

• In January 2023, Newcrest elected to enter into the Option Phase of the Farm-out agreement (“Newcrest Agreement”) by providing a $1,005,000 (US$750,000) cash payment and undertaking a minimum US$2 million in exploration expenditures over the next 18 months.

• Newcrest announced the results of the drill holes on the Central Target area of Appaloosa, with 4 holes reporting significant mineralization.

• Newcrest completed a detailed, widespread detailed geological mapping, soil grid sampling and ground geophysics program during the year.

MINERAL PROPERTIES

Talapoosa (Nevada, USA)

Overview

The Company owns a 100% interest in Talapoosa located in Lyon County, Nevada. Talapoosa is a low-sulphidation gold-silver property located in the Walker Lane gold trend of western Nevada, approximately 45 kilometers east of Reno. Talapoosa consists of 509 unpatented lode mining claims owned by the Company, 26 leased unpatented lode mining claims, 6 additional leased fee land sections and a portion of one additional fee land section owned by one of the Company’s US subsidiaries. The total land package for the property is contiguous and covers approximately 6,018 hectares (14,870 acres). The aggregate annual payments to the Bureau of Land Management and underlying owners are approximately US$218,000. During the year ended December 31, 2023, the Company made additional

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2023 MD&A (expressed in CAD Dollars, unless otherwise noted) – Year Ended December 31, 2023 www.gunpointexploration.com

reclamation bond deposits of $90,000 (US$68,000) to the Bureau of Land Management. The project is subject to net smelter royalties of up to 5%.

Talapoosa has a National Instrument 43-101 compliant resource estimate hosting a measured and indicated resource of 632,000 ounces of gold (23.1 million tons at a grade of 0.035 oz/t AuEq) and an inferred resource of 326,000 ounces of gold (12.6 million tons at a grade of 0.033 oz/t AuEq) using a cut-off of 0.015 oz/t gold equivalent.

During 2011, the Company completed 15 core holes totaling 3,251 meters at Talapoosa. With the 2011 drill data, the Company re-modeled and re-interpreted the resource with independent consultants. In 2013, Tetra Tech WEI Inc. (“Tetra Tech”) provided an updated NI 43-101 resource estimate adding approximately 380,000 ounces of gold and 5.4 million ounces of silver compared to the previous NI 43-101 resource estimate. In March 2015, WSP Canada Inc. (“WSP”) was commissioned by Timberline to update a technical report on the Project originally completed by Tetra Tech on April 12, 2013.

Set out in the table below is a summary of the resource estimation at Talapoosa by WSP:

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Mr. Todd McCracken (P. Geo) of Tetra Tech is the Qualified Person as defined by NI 43-101 and is responsible for technical information in the updated Resource Estimate for Talapoosa.

Appaloosa

Appaloosa lies within the Talapoosa land package located 1 kilometer northeast of the Talapoosa trend. In September 2022, the Company signed the Newcrest Agreement to explore Appaloosa. Newcrest has the right to acquire, in multiple stages, up to a 75% interest in Appaloosa for cumulative exploration and development expenditures of US$35 million, cash payments totaling US$5 million to Gunpoint and completing a minimum level indicated mineral resource estimate of 1 million gold ounces.

Agreement Summary Structure:

Stage	Payment	Expenditure	Newcrest Interest(%)	Time Schedule
Investigation	US$250,000	-	-	completed
Option Phase	US$750,000	US$2,000,000(1)	-	18 months
Stage 1	US$1,500,000	US$10,000,000	51%	3years
Stage 2(2)	US$1,000,000	US$23,000,000	65%	3years
Stage 3	US$1,500,000	Minimum Mineral Resource Estimate of 1.0 million Gold Ounces	75%	2 years

(1) Minimum expenditure commitment required by Newcrest over 18 months during the Option Phase

(2) If Newcrest elects to terminate Stage 2 or does not earn the additional 14%, Newcrest’s interest in Appaloosa will decrease to a 49% interest

Investigation and Option Phases

In September 2022, Gunpoint received $322,000 (US$250,000) upon signing the Newcrest Agreement. In January 2023, Newcrest elected to enter into the Option Phase and continue to explore Appaloosa by providing a $1,005,000 (US$750,000) cash payment to the Company. As part of the agreement, Newcrest will be undertaking a minimum US$2 million in exploration expenditures during the Option Phase over an estimated period of 18 months. Newcrest will not earn a vested interest in Appaloosa during the Investigation and Option Phases.

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Terms of Earn-In

The earn-in phase (“Earn-in Phase”) consists of three stages whereby Newcrest can earn up to a 75% interest in Appaloosa over an eight-year period. Newcrest will act as manager during the Earn-In phase.

Stage 1 Phase

Newcrest may elect to earn a 51% interest by providing a cash payment of US$1.5 million and spending US$10 million in exploration expenditures over 3 years. The Stage 1 Phase may be extended by Newcrest for one year by providing payment of US$250,000 to Gunpoint or for force majeure.

Stage 2 Phase

Newcrest may elect to earn an additional 14% interest (65% total) by making a cash payment to Gunpoint of US$1 million and spending an additional US$23 million over 3 years in exploration expenditures (total of US$35 million). Newcrest is required to spend US$5 million in exploration expenditures per twelve-month period during the 3 years. If Newcrest does not make such election or does not earn the additional 14% interest in Appaloosa in Stage 2, then Newcrest’s interest will decrease to 49% and Gunpoint will have the right to elect to purchase the 49% interest for Fair Value. The Stage 2 Phase may be extended by Newcrest for one year by providing an additional payment of US$250,000 to Gunpoint or for force majeure.

Stage 3 Phase

If Newcrest elects to proceed to the Stage 3 Phase of the earn-in, they will make a US$1.5 million cash payment to Gunpoint and have the right to earn an additional 10% interest (75% total) by delivering a JORC or National Instrument 43-101 compliant indicated mineral resource of at least 1 million gold ounces. The Stage 3 Phase may be extended by Newcrest for one year by providing an additional payment of US$250,000 to Gunpoint or for force majeure.

Purchase Option

If Newcrest has earned a 75% interest in Appaloosa, Newcrest will have the option, within 120 days, to acquire Gunpoint’s remaining 25% interest for the greater of fair value at the time of payment or US$25 million.

Additional Terms

The Newcrest Agreement contains the following additional terms:

• A joint venture will be formed by Newcrest and Gunpoint when Newcrest acquires 51% interest in the Project.

• After the Earn-in Phase, funding will be pro rata, however, prior to a decision to mine, a party may elect to dilute instead of providing funding in which case straight line dilution shall apply, otherwise a failure to meet cash calls will result in default which may be remedied by accelerated dilution. If a party has less than a 10% interest, then this interest is converted to a 2% net smelter royalty (“NSR”). The non-diluting party has a right of first refusal on the 2% NSR.

• Both parties have a right of first refusal on a sale of the other party’s interest in Appaloosa.

• Until the completion of the Earn-in Phase, Gunpoint may not grant a royalty or stream financing at Appaloosa. After the Earn-in Phase, provided Newcrest has earned a 65% interest in Appaloosa, Newcrest has a right of first refusal on any royalty or stream at Appaloosa that Gunpoint seeks to grant.

• Newcrest has a right of first refusal on a sale, earn-in, royalty or stream at Talapoosa sought to be entered into by Gunpoint during the Earn-in Phases and additionally while Newcrest owns at least a 51% interest in Appaloosa. If Newcrest exercises this right, it must pay Gunpoint 105% of the price offered by the third party.

During the first quarter in 2023, Newcrest provided a technical summary of the exploration work undertaken on Appaloosa in 2022. The field work included geological mapping, soil sampling, ground geophysics, high-definition drone photogrammetry and district scale SpecTIR Airborne hyperspectral survey. The exploration results confirmed the existence of a large mineralized hydrothermal, gold-bearing system.

In late April 2023, Newcrest began drilling the Central Target area of Appaloosa. Six diamond drill holes totaling 1,900 meters were completed. Four drill holes holes returned significant mineralization.

At a 0.2 g/t gold cut off, the four holes returned:

• APP-0001 28.97 meters @ 0.47 g/t gold, 7.9 g/t silver APP-0002 12.38 meters @ 0.47 g/t gold, 2.6 g/t silver APP-0003 19.0 meters @ 0.41 g/t gold APP-0004 26.94 meters @ 0.59 g/t gold, 12 g/t silver

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Evidence for a deep high-grade zone is supported by 0.3 meters of 7.9 g/t gold and 30 g/t silver intersected on hole APP-0004 starting at 323.6 meters. All widths reported are apparent widths. True thickness is not yet known.

Summary of Newcrest’s Drill Results is highlighted below:

Hole ID	Hole Type	Easting (m)	Northing (m)	RL (m)	Total Depth (m)	Azimuth	Dip	From (m)	To (m)	Interval (m)	Au (ppm)	Ag (ppm)	Cut off (Au ppm)
APP-0001**	DD	303100	4372308	1916	250	180	-45	103.33	132.3	28.97	0.47	7.9	0.2
							Incl.	108.25	109.76	1.51	1.3	28	1.0
							Incl.	114	115.4	1.4	1.3	17	1.0
APP-0002**	DD	303100	4372308	1916	310	180	-70	104.62	117	12.38	0.47	2.6	0.2
							Incl.	114.4	116	1.6	1.3	17	1.0
APP-0003**	DD	303100	4372308	1916	275	360	-45	63.3	65.1	1.8	0.32	5.3	0.2
							and	133.5	152.5	19	0.41	-	0.2
							Incl.	151	152.5	1.5	1.0	-	1.0
APP-0004**	DD	303070	4372485	1944	403	180	-50	168.16	195.1	26.94	0.59	12	0.2
							Incl.	178.55	183.5	4.95	1.2	14	1.0
							and	323.6	323.9	0.3	7.9	30	1.0
							and	336.38	336.9	0.52	1.6	1.6	0.2
APP-0005**	DD	303100	4372050	1884	310	360	-45	251	252.5	2.5	0.44	1.9	0.2
APP-0006**	DD	302923	4372495	1940	405	180	-75	190	194	4.0	0.35	19	0.2
							and	208	209.5	1.5	1.9	2.5	0.2

1 **final data package from Newcrest is pending

During the year, Newcrest completed a 10-hole (over 3,300m) diamond drilling program. No significant results were reported in the final four holes. Systematic field work continued through November, including infill soil sampling and geophysics surveys of multiple areas on Appaloosa and Talapoosa.

OTHER EXPLORATION PROJECTS

Cerro Minas (Oaxaca State, Mexico)

The Cerro Minas Property (“Cerro Minas”) is located 130 kilometers southwest of Oaxaca City and comprises 899 hectares. In October 2022, Madoro Metals Corp. (“Madoro”). completed the acquisition of Cerro Minas by making a cash payment of $55,000 (US$40,000) and issuing 300,000 common shares to the Company with a fair value of $12,000. The cash and fair value of common shares received for the option agreement were recorded in other income.

El Escorpion (Guatemala)

The Company acquired a 100% interest in El Escorpion by issuing 500,000 common shares to Chesapeake and assuming the remaining property payments to the prior concession owner. To date, the concession owner has received US$331,000 of the US$351,000 purchase price.

The El Escorpion property is located 85 kilometers southeast of Guatemala City, Guatemala. El Escorpion is situated 7 kilometers southwest of Pan American Silver Corp.’s world class Escobal silver deposit. The Escobal land package surrounds El Escorpion. If Chesapeake elects to purchase the existing 1.0% NSR from the concession owner, Chesapeake will be granted a 0.5% NSR royalty from Gunpoint.

On August 19, 2015, the Ministry of Energy and Mines granted title for the El Escorpion concessions. In late 2016, the Constitutional Court of Guatemala temporarily suspended permits for several mineral concessions in the country including El Escorpion. The Constitutional Court is seeking a review of the stakeholder engagement process. Gunpoint has initiated a follow up consultation with the local community to support the cancellation of the suspension. The

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prior concession owner has agreed to an extension of the final payment of US$20,000 to purchase El Escorpion until the exploration suspension is lifted.

RESULTS OF OPERATIONS

The following table summarizes selected financial data for the Company for the years ended December 31, 2023, 2022 and 2021. The information set forth below should be read in conjunction with the consolidated financial statements for the years ended December 31, 2023 and 2022.

($000's)		31-Dec-23	31-Dec-22 Years ended	31-Dec-22 Years ended		31-Dec-21
Expenses
Exploration	$	89	$	3	$	12
General and administration		123		137		90
Professional fees		179		169		122
Share-based compensation		156		259		49
Total expenses		547		568		273
Loss before other income (expense)		(547)		(568)		(273)
Finance costs		(2)		(2)		(28)
Foreign exchange gain (loss)		(74)		(7)		6
Gain on debt settlement		-		103		(851)
Other income		32		68		-
Unrealized loss on available for sale investment		(425)		(450)		216
Net loss and comprehensive loss	$	(1,016)	$	(856)	$	(930)
Revenue	$	-	$	-	$	-
Total assets	$	7,497	$	8,336	$	7,441
Non-current financial liabilities	$	310	$	225	$	1,032
Basic/diluted lossper share		($0.02)		($0.02)		($0.02)

The Company incurred a net loss of $1,016,000 for the year ended December 31, 2023 compared to a net loss of $856,000, for 2022 and $930,000 in 2021.

The Company incurred $89,000 of exploration costs during the year ended December 31, 2023 compared to $3,000 in 2022 and $12,000 in 2021. The Company conducted due diligence investigations on other projects and in addition, began expensing exploration costs in 2023 rather than capitalizing them as a result of the Newcrest Agreement on Appaloosa.

The Company incurred $123,000 of general and administration costs during the year ended December 31, 2023 compared to $137,000 in 2022 and $90,000 in 2021. The general and administrative costs are related to project support and overhead costs.

The Company incurred $179,000 of professional fees during the year ended December 31, 2023 compared to $169,000 in 2022 and $122,000 in 2021. The slightly higher professional fees in 2023 were mainly the result of higher accounting and consulting fees.

The Company recognized a share-based compensation expense of $156,000 during the year ended December 31, 2023 compared to an expense of $259,000 for 2022 and $49,000 in 2021. The higher expense in 2022 and 2023 was due to the amortization of the expenses for share options granted in 2022.

A foreign exchange loss of $74,000 was recognized for the year ended December 31, 2023 compared to an exchange loss of $7,000 in 2022 and an exchange gain of $6,000 in 2021. The change in foreign exchange gain was due to the fluctuation of the foreign exchange rates.

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The Company recognized other income of $32,000 for year ended December 31, 2023 compared to $68,000 in 2022 and $nil in 2021. The higher income earned in 2022 was mostly attributed to cash proceeds received from Madero’s acquisition of Cerro Minas.

The Company had an unrealized loss on investments of $425,000 during the year ended December 31, 2023 compared to an unrealized loss of $450,000 in 2022 and an unrealized gain of $216,000 in 2021. The unrealized investment gains and losses are due to the fluctuations in market value from the Company’s equity holdings in Timberline Resources Corp., South Atlantic Gold Inc., Precipitate Gold Corp., Riverside Resources Inc., Madoro Metals Corp., Capitan Silver Corp., and Inomin Mines Inc.

Total assets as at December 31, 2023 decreased by $839,000 compared to as at December 31, 2022 due to reduction in the investment in mineral properties from the farm out for the Newcrest Agreement, reduction in the fair market value of investments, and from the use of funds for the Company’s corporative activities including maintaining its mineral properties in good standing.

Total non-current financial liabilities as at December 31, 2023 increased by $85,000 compared to as at December 31, 2022 due to an increase in asset retirement obligations.

SUMMARY OF QUARTERLY RESULTS

The following table summarizes selected financial data for the Company for each of the eight most recently completed financial quarters. The information set forth below should be read in conjunction with the consolidated financial statements for the relevant period, prepared in accordance with International Financial Reporting Standards.

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Three months ended 31-Dec-23 30-Sep-23 30-Jun-23 31-Mar-23 31-Dec-22 30-Sep-22 30-Jun-22 31-Mar-22
($000's) $ $ $ $ $ $ $ $
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($000's)	$	$	$	$	$	$	$	$
Revenue	-	-	-	-	-	-	-	-
Comprehensive income (loss)	(160)	(184)	(373)	(299)	103	(418)	(1,159)	618
Basic & diluted income (loss) per share	($0.00)	($0.00)	($0.01)	($0.01)	$0.00	($0.01)	($0.02)	$0.01
Total assets	7,497	7,660	7,790	8,146	8,336	8,605	8,673	9,668
Total non-current liabilities	310	290	282	288	225	228	214	207

FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

($000's)		Years December 31, 2023	ended	December 31, 2022
Cash outflow from operating activities	$	(504)	$	(437)
Cash inflow from financing activities		12		1,685
Cash inflow(outflow)from investingactivities		675		(187)
Net cash flows	$	183	$	1,061
Cash balance	$	1,328	$	1,145

Cash outflow from operating activities was $504,000 for the year ended December 31, 2023 compared to a cash outflow of $437,000 in 2022.

Cash inflow from financing activities was $12,000 for the year ended December 31, 2023 from the exercise of stock options compared to a cash inflow of $1,685,000 from the private placement financing and exercise of options in 2022.

Cash inflow from investing activities for the year ended December 31, 2023 was $675,000 compared to an outflow of $187,000 for 2022. The cash inflow in 2023 related to the receipt of $1,005,000 from Newcrest Agreement less underlying property payments and corporate administration. The cash outflow in 2022 was related to Talapoosa’s underlying property payments and corporate administration.

As at December 31, 2023, the Company has working capital of $1,778,000 compared to a working capital of $1,951,000 at December 31, 2022. The increase in working capital is mainly due to the cash payment received from Newcrest, less operating expenditures.

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The Company’s ability to continue as a going concern is dependent on management’s ability to raise funds. The Company incurs approximately US$200,000 per year to maintain its mineral properties in good standing. Although the Company successfully completed a financing in 2022, there can be no assurance that it will be able to obtain adequate financing in the future or that the terms of such financing may be favorable.

SHAREHOLDERS’ EQUITY

As at December 31, 2023, and the date of this report the Company had 50,894,933 shares issued and outstanding and 1,740,000 options outstanding. On February 28, 2024, 1,500,000 warrants exercisable at $0.75 per share expired.

During the year ended December 31, 2023, 50,000 stock options at a price of $0.25 per share were exercised for proceeds of $12,500, 100,000 stock options at a price of $0.25 per share expired, and 75,000 stock options at a price of $0.60 per share were cancelled.

The following is a summary of the stock options outstanding as at December 31, 2023 and as at the date of this report:

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|||||||
|---|---|---|---|---|---|
|December 31, 2023|December 31, 2022|
|Number of|Number of|
|Expiry Date|Exercise Price|Options|Options Vested|Options|Options Vested|
|May 2, 20223|$0.25|- -|150,000 150,000|
|November 23, 2026|$0.60|1,540,000|770,000|1,615,000|403,750|
|November 10, 2027|$0.60|200,000|50,000|200,000|-|
|1,740,000|820,000|1,965,000|553,750|

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The following is a summary of the warrants outstanding as at December 31, 2023 and as at the date of this report:

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|||||
|---|---|---|---|
|December 31, 2023|December 31, 2022|
|Expiry Date|Exercise Price|Number of Warrants|Number of Warrants|
|February 28, 2024|$0.75|1,500,000|1,500,000|

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REGULATORY DISCLOSURES

Related Party Transactions

The following table summarizes the transactions with the Company’s key management and directors:

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||||
|---|---|---|
|($000's)|December 31, 2023|December 31, 2022|
|Management fees|$ 25|$ 67|
|Stock-based compensation to officers and directors|$ 156|$ 259|

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During the year ended December 31, 2023, fees of $25,000 (December 31, 2022 – $67,000) were paid to the Company’s former Chief Financial Officer (“CFO”) and have been included in professional fees.

During the year ended December 31, 2023, the Company recognized share-based compensation expense of $156,000 (December 31, 2022 - $259,000) for stock options issued to employees, officers, and directors of the Company.

- Off Balance Sheet Arrangements

As at December 31, 2023 and the date of this report, the Company does not have any off-balance sheet arrangements.

Financial Instruments and risk management

a) Financial instrument classification and measurement

The Company classifies the fair value of these transactions according to the following hierarchy:

• Level 1 – quoted prices in active markets for identical financial instruments.

• Level 2 – quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.

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• Level 3 – valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

The following table sets forth the Company’s assets and liabilities measured at fair value on a recurring basis by level within the fair value hierarchy. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

December 31,2023	Level 1	Level 2 Level 3 Total
Investments(000's)	$465	$-$-$465
December 31,2022
Investments(000's)	$890	$-$-$890

The fair value of other financial instruments, including cash, and accounts payable and accrued liabilities, approximate their carrying values due to the relatively short-term maturity of these instruments. The Company’s policy for determining when a transfer occurs between levels in the fair value hierarchy is to assess the impact at the date of the event or the change in circumstances that could result in a transfer. There were no transfers between the levels during the years ended December 31, 2023 and 2022.

b) Fair values of financial assets and liabilities

The fair values of financial instruments are summarized as follows:

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December 31, 2023 December 31, 2022
(000's) Carrying Value Fair Value Carrying Value Fair Value
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Financial assets
Cash	$ 1,328 $ 1,328 $ 1,145 $ 1,145
Investments	$ 465 $ 465 $ 890 $ 890
Financial liabilities
Accountspayable and accrued liabilities	$51$51$127$127

c) Credit risk

The Company's credit risk is primarily attributable to cash. Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company has no significant concentration of credit risk arising from operations. Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. The Company’s cash is held through large Canadian financial institutions. As at December 31, 2023, management considers the Company’s exposure to credit risk is minimal.

d) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they come due. The Company manages liquidity risk through the management of its capital structure as described in the notes to the financial statements. The accounts payable and accrued liabilities are due within the current operating period.

As at December 31, 2023, the Company had a cash balance of $1,328,000 (December 31, 2022 – $1,145,000) to settle current liabilities of $51,000 (December 31, 2022 – $127,000). So far, the Company is not profitable and primarily relies on the issuance of equity securities for cash, primarily through private placements and from related and other parties. The Company’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

e) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. The Company’s financial instruments include investments which are publicly traded and therefore subject to the risks related to the fluctuation in the equity markets. The Company closely monitors market values to determine the most appropriate course of action.

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f) Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows from a financial instrument will fluctuate because of changes to market interest rates. The Company is exposed from time to time to interest rate risk as a result of holding fixed income cash equivalents and investments, of varying maturities. A 1% change in market interest rates would result in no significant change in value of cash or fixed income securities. The risk that the Company will realize a loss as a result of a decline in the fair value of these assets is limited as they are generally held to maturity.

g) Currency risk

Currency risk is the risk of a loss due to the fluctuation of foreign exchange rates and the effects of those fluctuations on the Company’s foreign currency denominated monetary assets and liabilities. The Company currently operates in the United States, Mexico, and Guatemala. Certain costs and expenses are incurred in US dollars, Mexican pesos, and Guatemalan quetzal. The Company attempts to mitigate currency risk through the preparation of short- and long-term expenditure budgets in the foreign currencies and planning for the conversion of Canadian dollars into foreign currencies whenever exchange rates are favourable.

h) Price risk

The Company is exposed to price risk with respect to commodity prices. The Company’s ability to raise capital to find exploration and development activities is subject to risk associated with fluctuations in the market price of commodities.

Capital Management

The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to pursue the development of its resource properties and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

In the management of capital, the Company includes the components of shareholders’ equity as well as cash and investments.

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

In order to maximize ongoing development efforts, the Company does not pay out dividends.

The Company’s investment policy is to invest its cash in Canadian chartered banks or the equivalent in the United States and in highly liquid short-term interest-bearing investments, such as Canadian Government treasury bills, banker’s acceptances or Guaranteed Investments Certificates, with initial maturity terms less than one year from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.

Significant Accounting Policies

Please refer to the audited annual financial statements for the years ended December 31, 2023 and 2022 which have been filed on SEDAR+.

RISKS AND UNCERTAINTIES

The Company is in the business of acquiring, exploring and developing gold and silver properties. The Company is exposed to a number of risks and uncertainties that are common to other resource exploration companies in the same business.

The risks and uncertainties described in this section are considered by management to be the most important in the context of the Company’s business. The risks and uncertainties below are not inclusive of all the risks and uncertainties the Company may be subject to and other risks may apply.

Early Stage – Need for Additional Funds

Gunpoint has no history of profitable operations and its present business is at an early stage. The Company anticipates that it may make substantial capital expenditures for the acquisition, exploration, development and

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production of its mineral properties in the future. The Company currently has no revenue and may have limited ability to raise the capital necessary to undertake or complete future exploration or development programs. As such, the Company is subject to many risks common to other companies in the same business, including undercapitalization, cash shortages, and limitations with respect to personnel, financial and other resources and the lack of revenues. There is no assurance that Gunpoint will be successful in achieving a return on shareholders’ investment and the likelihood of success must be considered in light of its early stage of operations.

The Company hopes to obtain financing in the future primarily through further equity and/or debt financing, as well as through joint venturing and/or optioning out the Company’s properties to other mineral exploration companies. There can be no assurance that the Company will succeed in obtaining additional financing, now or in the future. Failure to raise additional financing on a timely basis could cause the Company to suspend its operation and eventually to forfeit or sell its interest in its properties.

Exploration and Development

Resource exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding mineral deposits that, though present, are of insufficient size and/or grade to return a profit from production.

The Company does not have any operating mines at present. All the Company’s properties are in the exploration stage. There is no assurance that a commercially viable mineral deposit exists on any of the Company’s properties and substantial additional work will be required in order to determine the presence of any such deposit.

All of the mineral claims to which Gunpoint has a right to acquire an interest are in the exploration stages only, and are without a known body of commercial ore. Upon discovery of a mineralized occurrence, several stages of exploration and assessment are required before its economic viability can be determined. Development of the subject mineral properties would follow only if favorable results are determined at each stage of assessment. Few precious and base metal deposits are ultimately developed into producing mines.

There is no assurance that Gunpoint’s mineral exploration activities will result in any discoveries of commercial bodies of ore. The long-term profitability of Gunpoint’s operations will in part be directly related to the costs and success of its exploration programs, which may be affected by a number of factors.

There is no assurance that upon completion of the Option Phase that Newcrest will proceed with the Stage 1 Phase under the Newcrest Agreement.

Operating Hazards and Risks

Mining operations involve many risks, which even a combination of experience, knowledge and careful evaluation may not be able to overcome.

In the course of exploration, development and production of mineral properties, certain risks, and in particular unexpected or unusual geological operating conditions, including rock bursts, cave-ins, fires, flooding and earthquakes, may occur. Operations in which Gunpoint has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration, development and production of mineral deposits, any of which could result in damage to or destruction of mines and other producing facilities, damage to life and property, environmental damage and possible legal liability for any or all damages.

Although Gunpoint maintains liability insurance in an amount which it considers adequate, the nature of these risks is such that liabilities could exceed policy limits, in which event Gunpoint could incur significant costs that could have a materially adverse effect upon its financial conditions.

Supplies, Infrastructure, Weather and Inflation

Gunpoint’s property interests are often located in remote, undeveloped areas and the availability of infrastructure such as surface access, skilled labor, fuel and power at an economic cost cannot be assured. These are integral requirements for exploration, production and development facilities on mineral properties. Power may need to be generated on site.

Due to the partial remoteness of its exploration projects, Gunpoint may be forced to rely on the accessibility of secondary roads and air transport for the supply of goods and services.

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Metal Prices

The mining industry, in general, is intensely competitive and there is no assurance that a profitable market will exist for the sale of metals produced even if commercial quantities of precious and/or base metals are discovered. Factors beyond the control of Gunpoint may affect the marketability of metals discovered. Pricing is affected by numerous factors beyond Gunpoint’s control, such as international economic and political trends, global or regional consumption and demand patterns, increased production and smelter availability. There is no assurance that the price of metals recovered from any mineral deposit will be such that they can be mined at a profit.

Title Risks

Although Gunpoint has exercised the usual due diligence with respect to determining title to properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. Gunpoint’s mineral property interests may be subject to prior unregistered agreements, or transfers, or indigenous claims, and title may be affected by undetected defects.

Environmental Regulations, Permits and Licenses

Gunpoint’s operations are subject to various laws and regulations in the various jurisdictions in which the Company operates that govern the protection of the environment, exploration, development, production, taxes, labor standards, occupational health, waste disposal, safety and other matters.

Environmental legislation provides restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailings disposal areas, which would result in environmental pollution. A breach of legislation may result in imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact statements. Environmental legislation is evolving in a direction of stricter standards and enforcement, and higher fines and penalties for non-compliance. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations. Gunpoint intends to fully comply with all environmental regulations.

The current operations of Gunpoint require permits from various United States and Guatemalan domestic authorities and such operations are governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental, mine safety and other matters.

In the event that the Company advances the Talapoosa project towards a mine construction decision, it will be required to apply for, receive and obtain, among other approvals, permits and authorizations, the utilization of water rights from both state agencies and private water rights holders, and a special use mining permit which is granted by applicable county and state regulatory authorities. In 2021 the Division of Water Resources of the Nevada Department of Conservation and Natural Resources cancelled a water right held by the Company for non-use. The Company appealed that decision, and during the year ended December 31, 2023, the Company won the appeal and the water right permit was reinstated. The Company intends to apply to the Nevada Division of Water Resources to extend its period to put its water right to beneficial use but there can be no assurance that such applications, permits, authorizations or appeals will be successful.

Gunpoint believes that it is in substantial compliance with all material laws and regulations which currently apply to its activities. There can be no assurance, however, that all permits which Gunpoint may require for its operations and exploration activities will be obtainable on reasonable terms or on a timely basis or that such laws and regulations would not have an adverse effect on any mining project which the Company might undertake.

Competition and Agreements with Other Parties

The mining industry is intensely competitive in all its phases, and Gunpoint competes with other companies that have greater financial resources and technical capacity. Competition could adversely affect Gunpoint’s ability to acquire suitable properties or prospects in the future.

Gunpoint may, in the future, be unable to meet its share of costs incurred under such agreements to which it is a party and it may have its interest in the properties subject to such agreements reduced as a result. Also, if other

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parties to such agreements do not meet their share of such costs, Gunpoint may not be able to finance the expenditures required to complete recommended programs.

Economic Conditions

Unfavorable economic conditions may negatively impact Gunpoint’s financial viability. Unfavorable economic conditions could also increase Gunpoint’s financing costs, decrease net income or increase net loss, limit access to capital markets and negatively impact any of the availability of credit facilities to the Company.

Dependence on Management

The Company is very dependent upon the personal efforts and commitment of its existing management. To the extent that management’s services would be unavailable for any reason, a disruption to the operations of Gunpoint could result and other persons would be required to manage and operate Gunpoint.

FORWARD LOOKING STATEMENTS

This MD&A contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking statements and information herein include, but are not limited to, statements regarding prospective metal production, timing and expenditures to develop the properties, mineral resources, grades and recoveries, cash costs per ounce, capital and operating expenditures and sustaining capital and the ability to fund mine development. The Company does not intend to, and does not assume any obligation to update such forwardlooking statements or information, other than as required by applicable law.

Forward-looking statements or information involve known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company and its operations to be materially different from those expressed or implied by such statements. Such factors include, among others: ability to finance mine development, fluctuations in the prices of metals, fluctuations in the currency markets (particularly Canadian dollar and U.S. dollar); changes in national and local governments, legislation, taxation, controls, regulations and political or economic developments in Canada and the United States; operating or technical difficulties in mineral exploration, development and mining activities; risks and hazards of mineral exploration, development and mining (including environmental hazards, industrial accidents, unusual or unexpected geological conditions, pressures, caveins and flooding); inadequate insurance, or inability to obtain insurance; availability of and costs associated with mining inputs and labor; the speculative nature of mineral exploration and development, diminishing quantities or grades of mineral reserves as properties are mined; risks in obtaining necessary licenses and permits, and challenges to the Company’s title to properties.

Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or information, there may be other factors that cause results to be materially different from those anticipated, described, estimated, assessed or intended. There can be no assurance that any forward-looking statements or information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information. Accordingly, readers should not place undue reliance on forward-looking statements or information.

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