Hardcore Discoveries Ltd. — Management Reports 2022

Apr 30, 2022

MAKARA MINING CORP. Management’s Discussion and Analysis For the year from December 31, 2021 Dated: April 29, 2022

The following Management’s Discussion and Analysis (“MD&A”) is prepared as at April 29, 2022 in accordance with National Instrument 51-102F1, and should be read together with audited financial statements for the year ended December 31, 2021 and related notes, which are prepared in accordance with International Financial Reporting Standards (“IFRS”). Additional information regarding the Company will be available through the SEDAR website at www.sedar.com.

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

Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company may differ materially from those reflected in forward-looking statements due to a variety of risks, uncertainties and other factors. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and the Company does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change except as required by law. For the reasons set forth above, investors should not place undue reliance on forward-looking statements. Important factors that could cause actual results to differ materially from the Company’s expectations include uncertainties involved in disputes and litigation, the assumption that the Company will become fully compliant with regulatory filing and continued listing requirements, in addition uncertainty as to timely availability of permits and other government approvals and other risks and uncertainties disclosed in other information released by the Company from time to time and filed with the appropriate regulatory agencies.

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

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

All dollar figures are stated in Canadian dollars unless otherwise indicated.

The Company’s Business

The Company is a mineral property exploration company whose common shares trade on the Canadian Securities Exchange (“CSE”). On April 28, 2020, the Company received a receipt from the British Columbia Securities Commission for its long -form prospectus dated April 27, 2020 and commenced trading on the CSE on May 4, 2020 under the trading symbol “MAKA”.

The Company was incorporated on September 17, 2019 in British Columbia. The head office of the Company is located at 409 Granville Street, Suite 1000, Vancouver, British Columbia, Canada, V6C 1T2 and its registered and records office is located at 1500 – 1055 West Georgia Street, Vancouver, British Columbia, Canada, V6E 4N7.

1 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Mineral properties

	Kenora Gold Property Rude Creek Property Win Property Idaho Property Davis and Paradise Properties Total
	Deferred costs Balance, December 31, 2019 $ 40,000 $ - $ - $ - $ - $ 40,000 Cash payment 50,000 - 5,000 98,101 153,101 Shares issued - - - 38,000 107,000 145,000 Staking cost - - 36,000 - - 36,000 Impairment (40,000) - - - - (40,000)
	Balance, December 31, 2020 - 50,000 36,000 43,000 205,101 334,101 Cash payment - 25,000 - 10,000 30,402 65,402 Shares issued - 495,000 - 20,500 - 515,500 Staking cost - 8,209 - - - 8,209 Impairment - - - - (235,503) (235,503)
	Balance, December 31, 2021 $ - $ 578,209 $ 36,000 $ 73,500 $ - $ 687,709

Summary of exploration expenditures for the years ended December 31, 2021 and 2020.

	Total cumulative expenditure to December 31, 2019 Exploration Expenditures to December 31, 2020 Total cumulative expenditure to December 31, 2020 Exploration Expenditures to December 31, 2021 Total cumulative expenditure to December 31, 2021
	Kenora Gold Property Exploration expenditures Geological $ 15,000 $ 97,345 $ 112,345 $ - $ 112,345
	15,000 97,345 112,345 - 112,345
	Rude Creek and Win Properties Exploration expenditures Assays - 123,895 123,895 - 123,895 Drilling - 374,585 374,585 - 374,585 Field and miscellaneous - 15,514 15,514 93,964 109,478 Geological - 142,296 142,296 - 142,296 Geological report - 16,000 16,000 3,513 19,513 Maintenance payments - - - 17,745 17,745
	- 672,290 672,290 115,222 787,512
	Idaho Property Exploration expenditures Assays - 4,168 4,168 - 4,168 Contractors and suppliers - 32,171 32,171 - 32,171 Field and miscellaneous - 3,966 3,966 7,566 11,532 Labour - 15,981 15,981 - 15,981 Surveying - - - 24,000 24,000 Supervision fees - 3,388 3,388 - 3,388
	- 59,674 59,674 31,566 91,240
	Davis and Paradise Claims Exploration expenditures Assays - 347 347 - 347 Drilling - 7,991 7,991 89,394 97,385 Field and miscellaneous - 9,458 9,458 - 9,458 Geological - 22,814 22,814 - 22,814 Reclamation cost - - - 11,021 11,021 Supervision - 6,468 6,468 - 6,468 Surveying - 24,146 24,146 - 24,146

2 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

		-		71,224		71,224		100,415		171,639
Total	$	15,000	$	900,533	$	915,533	$	247,203	$	1,162,736

Kenora Gold Property

By a mineral property option agreement dated November 24, 2019, the Company may acquire up to a 100% interest in the Kenora Gold Property. This property consists of 40 mineral claims (the “Claims”) and is located in the Kenora Mining Region, Ontario. As consideration, the Company will pay cash of $110,000, issue 700,000 common shares of the Company and incur $360,000 in exploration expenditures as follows:

• a) Cash payment of $40,000 within seven days of signing of the Agreement (paid);

• b) Incur a minimum of $110,000 in exploration expenditures within the first year from the agreement date (November 24, 2020) (incurred);

• c) Cash payment of $30,000 and issuance of 300,000 common shares of the Company on the first anniversary of the listing of the Company on the CSE (May 4, 2021); and

• d) Cash payment of $40,000, issuance of 400,000 common shares of the Company and incur a minimum of $250,000 in exploration expenditures on or before the second anniversary date of the agreement (November 24, 2021).

Should the Company acquire 100% of the property, the optionor will retain a 1% net smelter returns royalty, one half of which may be purchased by the Company for $500,000. The property is also subject to an aggregate of 4.5% in net smelter returns royalties in favour of previous owners of the property.

Management determined there is uncertainty with respect to whether the Company will continue exploring the property, and as a result, an impairment charge of $40,000 was recognized for the year ended December 31, 2020.

Rude Creek Gold Property

By a mineral property option agreement dated May 11, 2020, the Company may acquire up to a 70% interest in the Rude Creek Gold Property. This property consists of 204 mineral claims covering 4,157 hectares in the Whitehorse Mining District in the Yukon Territory. As consideration, the Company will pay cash of $125,000, issue 3,750,000 common shares of the Company and fund aggregate expenditures of $3,175,000 as follows:

• a) Cash payment of $50,000 on the effective date (paid);

• b) Complete a going public transaction and fund expenditures on the property of at least $175,000 (incurred) on or before September 30, 2020;

• c) Cash payment of $25,000 (paid) and issue 1,000,000 common shares (issued) on or before March 1, 2021;

• d) Fund expenditures on the property of at least $500,000 on or before September 30, 2021 (incurred);

• e) Cash payment of $25,000 and issue 1,250,000 common shares on or before March 1, 2022; (subsequently paid and issued)

• f) Fund expenditures on the property of at least $1,000,000 on or before September 30, 2022;

• g) Cash payment of $25,000 and issue 1,500,000 common shares on or before March 1, 2023; and h) Fund expenditures on the property of $1,500,000 on or before September 30, 2023.

Should the Company acquire 70% of the property, the optionor will retain a 3% net smelter returns royalty, 1% of which may be purchased by the Company for $2,000,000.

The property consists of claims totaling 4,157 hectares located in west-central Yukon which lies approximately 160 km south of Dawson City and 135 km northwest of Carmacks.

3 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

The project, which comprises 204 Royal, Ann and Poker claims within the Whitehorse Mining district, is bisected by Rude Creek within the Dawson Range of the unglaciated portion of the Yukon Plateau.

Regionally the project is located within the Dawson Range gold district, 45 km southeast of Goldcorp Inc.'s Coffee orogenic type gold deposit and 80 km south southeast of the recent Vertigo discovery and 72 km southeast of the Golden Saddle deposit, both orogenic type gold systems owned by White Gold Corp.

On July 7, 2020, the Company announced that it has completed its phase one exploration program. Field crews were mobilized to the Rude Creek project area on June 19. Work included the collection of 171 soil samples (in the C-horizon) over a close-spaced grid measuring 750 metres by 250 metres (along five lines 750 metres long, spaced 50 metres apart and sampled every 25 metres along each line; plus a sixth line 750 metres long and sampled every 50 metres).

After soil sampling was completed, a ground geophysical survey consisting of induced polarization and resistivity (IP/resistivity) was conducted over the same grid. IP/resistivity is a tool commonly used in mineral exploration to detect electrical chargeability and conductivity in the subsurface.

At the Northeast anomaly, it is hoped that anomalous levels of gold in the soil will be detected and those anomalies will coincide with areas of conductivity or resistivity, suggesting the presence of gold-related faults.

A drone-based lidar (a laser-based tool used for generating very detailed topographic maps) survey may also be conducted later this summer. This tool could also greatly aid in the detection of potentially goldbearing fault structures.

On August 4, 2020, the Company announced plans to conduct a 2,000 meter reverse circulation (“RC”) drill program. Rude Creek hosts an orogenic gold occurrence that has strong geological similarities to Newmont's nearby Coffee Creek gold deposit. This year's fieldwork at Rude Creek will focus on the large northeast prospect, consisting of a 1,000 m by 1,600 m gold-in-soil anomaly. As announced on July 27, 2020, recent close-spaced, follow-up soil sampling at the northeast prospect returned a strong 150 m by 300 m gold-in-soil anomaly (open to the south) with values up to 1,167 ppb Au.

RC drilling will total 2,000 metres within up to 20 holes (ranging in depth from 100 m to 150 m). The focus of the drilling will be to test the northwest trend identified by recent soil sampling. The northern end of this trend was initially drilled in 2019, returning 9.15 m of 1.42 grams per tonne gold and 20 g/t silver (ROY-RC-19-09); however, the rest of the trend remains untested.

Midnight Sun has been retained for the 2,000-metre RC drilling program at Rude Creek. Midnight Sun is an experienced, Yukon-based drill contractor with expertise in fly-in, reverse circulation drilling.

Geological logging of the Rude Creek reverse circulation (RC) drill holes has been completed. The alteration of the granodiorite host rock first seen in the limited 2019 RC drilling program continues to be observed in the 2020 drilling. The Company is waiting for the assay information from the laboratory in Vancouver and initial results from the large number of samples submitted are expected near the end of November, 2020. Although the assay results will be correlated directly with the drill logs, the company will be seeking additional detail on the geology and widespread alteration and will engage Corescan Pty. Ltd. for further detailed mineralogical mapping of the RC chips. Corescan's expertise is in (i) data acquisition, core photography, 3-D laser profiling and hyperspectral imaging, (ii) data processing, mineral identification, mineral mapping and spectral parameters through hyperspectral measurements covering a spectral range of 450 nanometre to 2,500 nm at a spectral resolution of four nm.

Integration of the Company's contiguous Idaho property data and the Company's Win claims with Rude Creek data is under way as the company plans the 2022 Yukon projects program.

Win Property

4 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

On September 21, 2020, the Company staked an additional 127 claims (Win Claims) which is contiguous with the southern boundary to the Rude Creek Property for a total of $36,000.

Idaho Property

By a property option agreement dated August 19, 2020 and as amended on October 13, 2021, the Company may earn a 100% interest in the Idaho property. The property consists of 58 mineral tenures located in the Whitehorse Mining District in the Yukon Territory. As consideration, the Company will pay of $150,000, issue 750,000 common shares of the Company and incur aggregate expenditures of $2,000,000 as follows:

• a) Cash payment of $5,000 (paid) and issuance of 25,000 common shares (issued) of the Company upon execution of this agreement;

• b) Incur $50,000 in exploration expenditures on or before December 1, 2020 (incurred);

• c) Cash payment of $10,000 (paid) and issuance of 50,000 common shares of the Company on or before May 1, 2021;

• d) Incur an additional $25,000 in exploration expenditures on or before December 1, 2021 (incurred);

• e) Cash payment of $20,000 and issuance of 100,000 common shares of the Company (issued) on or before May 1, 2022;

• f) Incur an additional $225,000 in exploration expenditures on or before December 1, 2022;

• g) Cash payment of $25,000 and issuance of 250,000 common shares of the Company on or before May 1, 2023;

• h) Incur an additional $500,000 in exploration expenditures on or before December 1, 2023;

• i) Cash payment of $90,000 and issuance of 325,000 common shares of the Company on or before May 1, 2024; and

• j) Incur an additional $1,200,000 in exploration expenditures on or before December 1, 2024.

Should the Company acquire 100% of the property, the optionor will retain a 2% net smelter returns royalty, 1% of which may be purchased by the Company for $1,000,000.

The Company has agreed that if it does not incur the $300,000 in exploration expenditures on or before December 1, 2022, the Company will pay the optionor the difference on or before December 15, 2022.

The Company is currently working on its upcoming 2022 work program for the Idaho property to meet its work commitments.

Davis and Paradise Properties

By an option agreement dated September 10, 2020, the Company may earn a 60% interest in the Davis and Paradise Valley claim blocks located in Nye county, Nevada from Almadex Minerals Ltd. (“Almadex”) The property encompasses 900 hectares consisting of two contiguous parcels of land comprising of 34 Davis claims and 79 Paradise Valley claims. As consideration, the Company will pay US$25,000 and reimburse annual claim fees, issue 3,500,000 common shares of the Company and incur aggregate expenditures of US$3,500,000 as follows:

• a) Pay to the Optionor US$25,000 (paid) on the effective date and satisfy all underlying obligations, including payment of annual claim fees due in September 2020 (paid) and issue 100,000 common shares of the Company on the effective date (issued);

• b) Issuance of 400,000 common shares of the Company on or before the 1[st] anniversary date;

• c) Issuance of 500,000 common shares of the Company on or before the 2[nd] anniversary date;

• d) Issuance of 500,000 common shares of the Company on or before the 3[rd] anniversary date;

• e) Issuance of 500,000 common shares of the Company on or before the 4[th] anniversary date;

• f) Issuance of 1,500,000 common shares of the Company on or before the 5[th] anniversary date.

5 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

• g) Incur exploration expenditures of not less than an aggregate of US$250,000 in exploration expenditures on or before the 1[st] anniversary date and must incur not less than an aggregate US$250,000 in exploration expenditures on or before each successive anniversary date and not less than an aggregate US$3,500,000 in exploration expenditures on or before the 5[th] anniversary date.

Management decided that it will not continue with the Davis and Paradis Properties and as a result, an impairment charge of $235,503 was recognized during the year ended December 31, 2021.

Selected Annual Financial Information

The table below sets out certain selected financial information regarding the operations of the Company for the period indicated. The selected financial information has been prepared in accordance with IFRS and should be read in conjunction with the Company’s financial statements and related notes.

	For the year ended December 31, 2021	For the year ended December 31, 2020	Period from September 17, 2019 to December 31, 2019
Revenue	$ -	$ -	$ -
Net loss and comprehensive loss	$ 1,964,373	$ 5,053,145	$ 54,256
Loss per share	$ 0.05	$ 0.20	$ 0.01
Total assets	$ 790,695	$ 862,468	$ 380,236

The Company was incorporated on September 17, 2019 and December 31, 2019 was the Company’s first fiscal year end. The Company did not record any revenues in the period ended December 31, 2019 and incurred a net loss of $54,256. The net loss of $54,256 in the period is largely attributed to consulting fees, general exploration cost and share-based compensation which was recorded in conjunction with the October 4, 2019 private placement. The Company’s total assets as at December 31, 2019 were $380,236, which is mainly comprised of cash and cash equivalents and exploration and evaluation assets.

During the year ended December 31, 2020, the Company recorded a net loss of $5,043,145 which is mainly comprised of $3,597,095 in consulting fees and $900,533 in exploration expenditures. The Company’s total assets as at December 31, 2020 were $862,468, which mainly comprised of cash and cash equivalents of $447,352 and exploration and evaluation assets of $334,101.

During the year ended December 31, 2021, the Company recorded a net loss of $1,964,373 which is mainly comprised of $304,453 in consulting fees, $247,203 in exploration expenditures, $895,191 in share-based payments and $235,503 in impairment of exploration and evaluation assets. The Company’s total assets as at ended December 31, 2021 were $790,695, which mainly comprised of cash and cash equivalents of $13,653 and exploration and evaluation assets of $687,709.

The Company has not declared any dividends since its incorporation and does not anticipate paying cash dividends in the foreseeable future on its common shares and intends to retain any future earnings to finance internal growth, acquisitions and development of its business. Any future determination to pay cash dividends will be at the discretion of the board of directors of the Company and will depend upon the Company's financial condition, results of operations, capital requirements and such other factors as the board of directors of deems relevant.

6 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Selected Quarterly Financial Information

A summary of results for the eight quarter since incorporation follows:

	Dec 31, 2021 Qtr 4	Sep. 30, 2021 Qtr 3	June 30, 2021 Qtr 2	Mar 31, 2021 Qtr 1
Revenue	$ -	$ -	$ -	$ -
Net loss	$ 655,943	$ 105,535	$ 793,753	$ 409,142
Comprehensive loss	$ 655,943	$ 105,535	$ 793,753	$ 409,142
Loss per share	$ 0.02	$ 0.00	$ 0.02	$ 0.01
	Dec 31, 2020 Qtr 4	Sep.30, 2020 Qtr 3	Jun 30, 2020 Qtr 2	Mar 31, 2020 Qtr 1
Revenue	$ -	$	$ -	$ -
Net loss	$ 441,044	$ 3,019,224	$ 1,541,592	$ 51,285
Comprehensive loss	$ 441,044	$ 3,019,224	$ 1,541,592	$ 51,285
Loss per share	$ 0.01	$ 0.11	$ 0.08	$ 0.00

During the three months ended March 31, 2020, the Company recorded a net loss of $51,285 which is comparable to the previous quarter of $52,644. During the three months ended June 30, 2020, the Company recorded a net loss of $1,541,592 as compared to $51,285 for the previous quarter. The increase can be attributed to the Company incurring a significant amount of cost associated with media relations and $175,000 in exploration cost on the Rude Creek Property. During the three months ended September 30, 2020, the Company recorded a net loss of $3,019,224 as compared to $1,541,592 for the previous quarter. The increase can be attributed to the Company incurring additional marketing and media related costs and exploration expenditures. During the three months ended December 31, 2020, the Company recorded a net loss of $441,044 as compared to $3,019,224 for the previous quarter. The decrease can be attributed to a reduction in consulting fees for marketing and media related cost. During the three months ended March 31, 2021, the Company recorded a net loss of $409,142 as compared to $441,044 for the previous quarter. The decrease can be attributed to the recording of the impairment of $40,000 on Kenora property and the recording of the share-based payment on stock options granted in the previous quarter. During the three months ended June 30, 2021, the Company recorded a net loss of $793,753 as compared to $409,142 for the previous quarter. The increase can be attributed to the recording of share-based payments and the recording of an impairment on the Davis and Paradise claims. During the three months ended September 30, 2021, the Company recorded a net loss of $105,535 as compared to $793,753 for the previous quarter. The decrease can be attributed to the recording of an impairment on Davis and Paradise claims and the recognition of share-based payments in the previous quarter. During the three months ended December 31, 2021, the Company recorded a net loss of $655,943 as compared to $105,535 for the previous quarter. The increase can be attributed to an increase in consulting fees and share-based payments.

Results of Operations

During the year ended December 31, 2021, the Company recorded a net loss of $1,964,373 as compared to $5,053,145 for the comparable year ended December 31, 2020. The net loss of $1,964,373 in the year is largely attributed to the following:

Share-based payments of $895,191 on stock options granted or vested during the year and issuances of restricted share units. Share-based payments is a non-cash transaction.

7 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Consulting fees totalling $304,453 were paid to external party for media relations and marketing programs, administrative services and to the directors of the Company. Included in the consulting fees were fees to directors of the Company totalling $237,000 (see related parties for details).

General exploration costs totalling $247,203 were incurred during the year with the majority of the costs incurred on the Rude Creek and Win Properties and Davis and Paradise Claims. During the year the Company decided not to continue with the Davis and Paradise Claims and have wrote-off the acquisition cost of $235,503.

Professional fees of $89,764 were incurred in connection with general corporate matters and disputes raised by concerned directors.

Shareholder information totalling $76,829 was paid to Northern Edge Enterprises to provide investor relation services.

Transfer agent fees totalling $20,872 included cost associated with its annual mail outs and monthly transfer agent services.

Fourth Quarter

During the fourth quarter ended December 31, 2021, the Company recorded a net loss of $655,943 as compared to $441,044 for the comparable quarter ended December 31, 2020. The net loss in 2021 included $354,488 in share-based payments in connection with stock options vested and granted in the quarter, $26,208 in exploration expenditures, $43,069 in legal fees associated with respects to concerned directors and $175,701 in consulting fees. Fourth quarter included year end adjustments.

Liquidity and Capital Resources

The Company’s cash position as at December 31, 2021 was $13,653 (2020 – $447,352) with a working capital deficiency of $263,278 (2020 – working capital of $492,160). Total assets as at December 31, 2021 was $790,695 (2020 – $862,468).

The Company’s budget is its working capital and believes that the current capital resources is not sufficient to pay overhead expenses and exploration program for the next twelve months and continues to raise additional funding to fund its future exploration program, marketing and general working capital and towards potential mineral projects, if such opportunities arise. The Company will continue to monitor the current economic and financial market conditions and evaluate their impact on the Company’s liquidity and future prospects.

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

On February 23, 2021, pursuant to the terms of the May 11, 2020 property option agreement, the Company issued 1,000,000 common shares fair valued at $495,000.

On May 1, 2021, pursuant to the August 19, 2020 property option agreement, the Company issued 50,000 common shares fair valued at $20,500.

On December 8, 2021, the Company issued 1,230,833 common shares to debt settle $147,700 in debts, resulting in a loss on debt settlement of $6,154.

8 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

During the year ended December 31, 2021 pursuant to the Restricted Share Unit Plan, the Company issued an aggregate of 1,087,500 common shares fair valued at $611,250. This amount is recorded in sharebased payments.

During the year ended December 31, 2021, the Company issued 1,500 common shares pursuant to the exercise of share purchase warrants for total proceeds of $300.

The Company manages its capital structure in order to ensure sufficient resources are available to meet operational requirements and safeguard its ability to continue as a going concern. There are no externally imposed capital requirements on the Company. Management considers the items included in shareholders’ equity (deficit) and working capital as capital. The Company manages the capital structure and makes adjustments in response to changes in economic conditions, including the risk characteristics of the underlying assets. The Company’s primary objective with respect to its capital management is to ensure that it has sufficient cash resources to fund the operation of the Company. To secure additional capital necessary to pursue these plans, the Company intends to raise additional funds through equity or debt financing.

There were no changes to the Company’s approach to capital management during the year ended December 31, 2021.

Going Concern

The financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. At December 31, 2021, the Company has not achieved profitable operations, has accumulated losses of $7,071,774since inception and expects to incur further losses in the development of its business.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations at this time.

The Company’s business financial condition and results of operations may be further negatively affected by economic and other consequences from Russia’s military action against Ukraine and the sanctions imposed in response to that action in late February 2022. While the Company expects any direct impacts, of the pandemic and the war in the Ukraine, to the business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect the business.

The above material uncertainties cast significant doubt about the Company’s ability to continue as a going concern. The Company’s continuation as a going concern is dependent upon successful results from its exploration and evaluation activities, its ability to attain profitable operations to generate funds and/or its ability to raise equity capital or borrowings sufficient to meet its current and future obligations. Although the Company has been successful in the past in raising funds to continue operations, there is no assurance it will be able to do so in the future.

Off Balance Sheet Arrangements

The Company does not have any off balance sheet arrangements.

9 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Financial Instruments

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

Credit risk

Financial instruments that potentially expose the Company to credit risk is cash and cash equivalents. To minimize the credit risk on cash the Company places the instrument with a high credit quality financial institution. The maximum exposure to loss arising from these advances is equal to their total carrying amounts.

Interest rate risk

The Company is not exposed to significant interest rate risk.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. The key to success in managing liquidity is the degree of certainty in the cash flow projections.

The Company monitors its cash flows to meet the Company’s normal operating requirements on an ongoing basis and its planned capital expenditures. All of the Company’s financial liabilities have contractual maturities of 30 days or are due on demand and are subject to normal trade terms. As at December 31, 2021, the Company had a working capital deficiency of $263,278 (2020 – working capital of $492,160).

Price risk

The Company is exposed to price risk with respect to commodity and equity prices. Equity price risk is defined as the potential adverse impact on the Company’s earnings due to movements in individual equity prices or general movements in the level of the stock market. Commodity price risk is defined as the potential adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely monitors commodity prices of gold and other precious and base metals, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

Market Risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, investment fluctuations, and commodity and equity prices. The Company's ability to raise capital to fund mineral resource exploration is subject to risks associated with fluctuations in mineral resource prices. Management closely monitors commodity prices, individual equity movements, and the stock market to determine the appropriate course of action to be taken by the Company.

Related Party Transactions

10 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

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

Key Management Compensation

Key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, and include the Company’s executive officers and members of the Board of Directors. Key management compensation consisted of the following:

	December 31,	December 31,	December 31,	December 31,
		2021		2020
Consulting fees
Andrew H. von Kursell, CFO	$	84,000	$	30,000
Grant A. Hendrickson, President and		96,000		31,000
Hugh Maddin, Director		24,000		4,000
Stefan Szary, Former Director		6,000		1,500
Uranbileg Yondon, Director		12,000		-
Gurcham Singh Deol, Former Director		15,000		-
John Arthur Fiddick, Former Director		-		14,000
Peter Espig,Former Director		-		10,000
		237,000		90,500
General exploration costs
Uranbileg Yondon, Director		14,000		-
Share-based
Andrew H. von Kursell, CFO		107,457		40,266
Grant A. Hendrickson, President and		548,813		46,976
Hugh Maddin, Director		86,454		26,844
Stefan Szary,former Director		44,933		22,817
		787,657		136,903
	$	1,038,657	$	227,403

Included in prepaid expenses is $2,254 (2020 - $20,189) paid to directors of the Company for advances on expenses and consulting fees. Included in accounts payable is $76,456 (2020 – $2,443) owed to directors of the Company for unpaid consulting fees and expense reimbursements.

Included in due to related party is $2,500 (December 31, 2020 - $Nil) owing to a director of the Company for advances on working capital.

These amount are non-interest bearing, unsecured and payable on demand.

11 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Proposed Transaction

N/A

Events Subsequent to December 31, 2021

Subsequent to December 31, 2021:

On January 25, 2022, the Company issued 1,350,000 common shares pursuant to the terms of the property option agreements.

On January 31, 2022, the Company issued 1,356,562 common shares to debt settle $108,525 in debt.

Outstanding Share Data

Below is the summary of the Company’s share capital as at December 31, 2021 and as of the date of this report:

	As at	As at
Security description	December 31, 2021	April 29, 2022
Common shares – issued and outstanding	38,542,176	41,248,738
Warrants issued in private placements	1,913,000	1,913,000
Share purchase options	1,297,500	1,297,500
Common shares – fully diluted	41,752,676	44,459,238

Critical Accounting Estimates and Judgments

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

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

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

Business and Industry Risks

There are a number of risk factors that could cause future results to differ materially from those described herein. The following sets out the principal risks faced by the Company. Additional risks and uncertainties, including those that the Company does not know about or that it currently deems immaterial, could also adversely impact the Company’s business and results of operations.

12 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Limited Operating History

The Company has no history of earnings. There are no known commercial quantities of mineral reserves on any properties in which the Company has an interest. There is no guarantee that economic quantities of mineral reserves will be discovered on any properties in which the Company has an interest in the near future or at all. If the Company does not generate revenue or is unable to raise further funds, it may be unable to sustain its operations in which case it may become insolvent and investors may lose their investment.

Speculative Nature of Mineral Exploration

Resource exploration 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 insufficient in quantity and quality to return a profit from production. The marketability of minerals acquired or discovered by the Company may be affected by numerous factors which are beyond the control of the Company and which cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection, the combination of which factors may result in the Company not receiving an adequate return of investment capital. There is no assurance that the Company’s mineral exploration activities will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’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. Substantial expenditures are required to establish reserves through drilling and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis.

Financing Risks

The Company has no history of earnings and, due to the nature of its business, there can be no assurance that the Company will be profitable. The Company has paid no dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The only present source of funds available to the Company is through the sale of its securities. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether or not a commercially mineable deposit exists on the properties owned by the Company.

While the Company may generate additional working capital through further equity offerings or through the sale or possible syndication of the Property, there is no assurance that any such funds will be available. If available, future equity financing may result in substantial dilution to existing shareholders. At present it is impossible to determine what amounts of additional funds, if any, may be required.

COVID-19 Public Health Crisis

The Company’s business, operations and financial condition could be materially and adversely affected by the outbreak of epidemics or pandemics or other health crises, including the recent outbreak of COVID-19. To date, there have been a large number of temporary business closures, quarantines and a general reduction in consumer activity in Canada. The outbreak has caused companies and various governmental bodies to impose travel, gathering and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to businesses locally and internationally and the related financial impact cannot be reasonably estimated at this time. Similarly, the Company cannot

13 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021

Dated: April 29, 2022

estimate whether or to what extent this outbreak and the potential financial impact may extend. Such public health crises can result in volatility and disruptions in the supply and demand for gold and other metals and minerals, global supply chains and financial markets, as well as declining trade and market sentiment and reduced mobility of people, all of which could affect mineral prices, interest rates, credit ratings, credit risk, share prices and inflation. The risks to the Company of such public health crises also include slowdowns or temporary suspensions of operations in locations impacted by an outbreak, interruptions to supply chains and supplies upon on which the Company relies, restrictions that the Company and its contractors and subcontractors impose to ensure the safety of employees and others, increased labor costs, regulatory changes, political or economic instabilities or civil unrest.

The Company has and will continue to take measures recommended by Health Canada and applicable regulatory bodies, as appropriate. To date, the Company has introduced a “work from home policy” affecting its two executive officers and has reduced travel and transitioned to virtual meetings where feasible. At this point, the extent to which COVID-19 will or may impact the Company is uncertain and these factors are beyond the Company’s control; however, it is possible that COVID-19 may have a material adverse effect on the Company’s business, results of operations and financial condition.

Ukraine Conflict

The Company’s business financial condition and results of operations may be further negatively affected by economic and other consequences from Russia’s military action against Ukraine and the sanctions imposed in response to that action in late February 2022. While the Company expects any direct impacts, of the pandemic and the war in the Ukraine, to the business to be limited, the indirect impacts on the economy and on the mining industry and other industries in general could negatively affect the business.

Property Interests

If the Company loses or abandons its interest in the Property, there is no assurance that it will be able to acquire another mineral property of merit or that such an acquisition would be approved by the Exchange. There is also no guarantee that the Exchange will approve the acquisition of any additional properties by the Company, whether by way of option or otherwise, should the Company wish to acquire any additional properties. Unless the Company acquires additional property interests, any adverse developments affecting the Property could have a material adverse effect upon the Company and would materially and adversely affect any profitability, financial performance and results of operations of the Company.

If the Company cannot raise additional equity financing, then it may lose some or all of its interest in

the Property

The Company is required to make cash payments to the optionor of the Property, and to incur work expenditures in order to maintain its interest in the Property. The Company’s ability to maintain an interest in the Property may be dependent on its ability to raise additional funds by equity financing. Failure to obtain additional financing may result in the Company being unable to make periodic payments or expenditures required for the maintenance of the Company’s interest in the Property and could result in a delay or postponement of further exploration and the partial or total loss of the Company’s interest in the Property.

Commercial Ore Deposits

The Property is in the exploration stage only and is without a known body of commercial ore. Development of the Property would follow only if favourable exploration results are obtained. The business of exploration for minerals and mining involves a high degree of risk. Few properties that are explored are ultimately developed into producing mines.

14 | P a g e

Makara Mining Corp. Management Discussion’s and Analysis For the year ended December 31, 2021 Dated: April 29, 2022

Uninsurable Risks

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. It is not always possible to fully insure against such risks and the Company may decide not to take out insurance against such risks as a result of high premiums or other reasons. Should such liabilities arise, they could reduce or eliminate any future profitability and result in increasing costs and a decline in the value of the securities of the Company.

15 | P a g e