CORP.)

MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED AUGUST 31, 2021

(EXPRESSED IN CANADIAN DOLLARS)

GENERAL

This Management's Discussion and Analysis ("MD&A") of Kalo Gold Corp. ("Kalo" or the "Company"), formerly Kalo Gold Holdings Corp., is prepared as of December 14, 2021, provides analysis of the Company's financial results for the year ended August 31, 2021 compared to the year ended August 31, 2020.

The following information should be read in conjunction with the Company's August 31, 2021 consolidated financial statements with accompanying notes and with the Company's audited consolidated financial statements with accompanying notes and related MD&A for the fiscal years ended August 31, 2021 and 2020, which were prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. All dollar figures are expressed in Canadian dollars unless otherwise stated.

There can be no assurance that such information will prove to be accurate, and readers are cautioned not to place undue reliance on this forward-looking information.

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

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This MD&A contains certain statements that may be deemed "forward-looking statements", including statements regarding developments in the Company's operations in future periods, adequacy of financial resources and future plans and objectives of Company. All statements in this document, other than statements of historical fact, which address events or developments that the Company expects to occur, are forward looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential", "interprets" and similar expressions, or events or conditions that "will", "would", "may", "could" or "should" occur. Forward-looking statements in this document include statements regarding future exploration programs, liquidity and effects of accounting policy changes.

Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, exploration success, continued availability of capital and financing, inability to obtain required regulatory or governmental approvals and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Readers are cautioned not to place undue reliance on this forward-looking information.

Forward-looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward-looking statements in the event that Management's beliefs, estimates, opinions or other factors should change except as required by law.

These statements are based on a number of assumptions including, among others, assumptions regarding general business and economic conditions, the timing of the receipt of regulatory and governmental approvals for the transactions described herein, the ability of the Company and other relevant parties to satisfy stock exchange and other regulatory requirements in a timely manner, the availability of financing for the Company's proposed transactions and exploration and development programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause results to differ materially.

COMPANY OVERVIEW

Kalo Gold Corp. ("Kalo" or the "Company"), formerly Kalo Gold Holdings Corp., was incorporated under the Business Corporation Act (British Columbia) on March 6, 2019. On February 25, 2021, the Company changed its name from E36 Capital Corp. to Kalo Gold Holdings Corp. On August 16, 2021, the Company changed its name once more from Kalo Gold Holdings Corp. to Kalo Gold Corp. The Company's common shares are listed on the TSX Venture Exchange under the symbol "KALO". Kalo is a mineral exploration company focused on the Vatu Aurum gold project on Fiji's north island, Vanua Levu. The Company holds two mineral exploration licenses covering over 36,700 hectares of land and on trend with many of the largest gold deposits in the world in the Southwest Pacific Ring of Fire.

The registered office of the Company is located at Suite 1500 - 1055 W Georgia Street, Vancouver, British Columbia V6E 4N7. The head office of the Company is located at Suite 1430, 800 West Pender Street, Vancouver, British Columbia V6C 2V6.

REVERSE TAKEOVER

On February 25, 2021, the Company completed a reverse takeover transaction pursuant to which it acquired Kalo Gold Corp. ("KGC"), a company incorporated on June 8, 2020 under the Business Corporation Act of the Province of British Columbia. On August 6, 2020, as part of a corporate reorganization, KGC completed a reverse takeover transaction pursuant to which it acquired Aloki Mining Limited ("Aloki"), a company incorporated under the laws of the British Virgin Islands on December 8, 2009. Aloki's wholly-owned subsidiary, Kalo Exploration Pte Limited, is a limited liability company formed under the laws of Fiji, holds the license related to the Vatu Aurum Gold Project (see Note 7 of the financial statements), and is the operator of all related mineral exploration activities.

GOING CONCERN

This MD&A and the Annual Financial Statements have been prepared on the basis that the Company will remain a going concern which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the Company's next fiscal year. The Company's ability to continue as a going concern is dependent upon its ability to generate future profitable operations and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due.

During the year ended August 31, 2021, the Company incurred an operating loss of $4,409,956 and as at August 31, 2021, the Company had a deficit of $12,231,897. While the Company had working capital of $388,676 as at August 31, 2021, the Company expects to incur further operating losses for the foreseeable future in the development of its business and expects that it will require additional financing.

The Company's ability to continue as a going concern is dependent upon the ability to find, acquire and develop various businesses with growth potential, its ability to obtain the necessary financing to carry out this strategy and to meet its corporate overhead needs and discharge its liabilities as they come due. Although the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms advantageous to the Company. Therefore, this indicates a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.

As a result of the above, realization values may be substantially different from the carrying values shown and the interim financial statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities should the Company be unable to continue as a going concern.

On December 10, 2021, the Company closed a $2 million brokered private placement financing. The Company issued 9,793,929 shares at $0.21 per share. The Company also issued Broker Warrants equal to 8% of the aggregate number of shares issued, each warrant is exercisable for one share at $0.25 per broker warrant for a period of 24 months following the closing date.

MINERAL PROPERTY

	August 31, 2021	August 31, 2020
Vatu Aurum Gold Project	$1,304	$1,304

Kalo Exploration Pte Limited, a wholly owned subsidiary of the Company, acquired Vatu Aurum Gold Project, Special Prospecting Licences 1464 and 1511 in 2009 from Aurum Exploration Ltd. ("Aurum"). Aurum first applied for the licences in the early 2000's, and received the licences in 2009. Vatu Aurum Gold Project is located in Vanua Levu, the second largest island (the North Island) of Fiji.

In 2021, the Company drilled four holes at Qiriyaga Hill with multiple-thick gold intersections starting at surface, included KGD-01 which recorded an average intersection of 101 m averaging 0.94 g/t Au with several higher-grade intervals, including 2m at 6.0g/t Au from 8-10m within 9m thick interval from 4-13m averaging 2.29 g/t Au . Further, the Company completed mapping, soil sampling program in Qiriyaga Zone and Induced Polarization (IP) and magnetic surveys, indicating three significant priority targets beyond the Qiriyaga Hill deposit that have never been drill tested or they occur beyond the limits of historical drilling.

In addition to Qiriyaga Hill exploration activities, the Company also completed reconnaissance mapping, and soil sampling at Mouta, located on the northwest part of the property approximately 9km from Qiriyaga Hill. Two rock chip samples taken from an outcrop returned assays of 6.2g/t Au, 645g/t Ag and 3.12% Cu (19.3g/t AuEq) and 0.82g/t Au, 181g/t Ag and 0.33% Cu (3.774 g/t AuEq). The company also completed in-fill soil sampling in Coqeloa prospect located farther to the south of Mouta. In addition two IP lines and three IP lines were completed in Mouta and Coqeloa, respectively.

Exploration and Evaluation Expenditures

The Company has spent the following amounts on exploration and evaluation activities:

	Assay	Camp	Drilling	Geology	Geophysics	Operations	Overhead	Total

2010	-	64,609	387,009	75,071	-	111,212	-	637,901
2011	79,107	62,741	335,565	124,852	-	100,853	9,378	712,496
2012	61,404	48,550	143,888	180,496	-	104,008	12,029	550,375
2013	43,792	53,618	122,377	133,080	-	69,353	11,944	434,165
2014	27,175	21,351	14,640	113,470	-	42,696	44,152	263,484
2015	5,794	23,676	64,245	47,944	-	32,524	1,434	175,617
2016	1,351	16,466	32,610	-	-	27,896	4,564	82,877
2017	-	39,436	39,683	3,836	-	47,185	39,253	169,393
2018	1,508	17,636	65,526	619	-	39,230	11,821	136,340
2019	151	5,996	32,674	-	-	28,052	86	66,959
2020	15,844	37,601	39,217	20,224	-	91,708	23,388	227,982
2021	206,141	92,971	291,162	190,335	278,514	188,457	21,313	1,268,893
	442,267	484,652	1,568,596	889,927	278,514	883,174	179,362	4,726,492

SELECTED FINANCIAL INFORMATION

	Year Ended	Year Ended
Balance Sheet:	August 31, 2021	August 31, 2020
Total assets	680,365	308,703
Current assets	567,977	257,751
Current liabilities	179,301	333,705

Operations:
Net loss	5,874,173	483,062
Net comprehensive loss	5,846,006	473,760
Basic and diluted loss per share	0.15	0.58

SUMMARY OF QUARTERLY RESULTS

Key financial information for the three months ended August 31, 2021, as well as, the quarters spanning the most recently preceding fiscal years is summarized as follows, reported in Canadian dollars:

	F2021-Q1	F2021-Q2	F2021-Q3	F2021-Q4
	November 30,	February 28,	May 31,	August 31,
	2020	2021	2021	2021
	($)	($)	($)	($)
Total operating expenses	(624,273)	(1,304,065)	(1,421,874)	(1,059,744)
Net loss	(624,273)	(2,769,120)	(1,420,704)	(1,060,076)
Loss per share	(0.02)	(0.10)	(0.03)	(0.01)
	F2020-Q1	F2020-Q2	F2020-Q3	F2020-Q4
	November 30,	February 29,	May 31,	August 31,
	2019	2020	2020	2020
	($)	($)	($)	($)
Total operating expenses	(78,947)	(46,319)	(70,868)	(287,637)
Net loss	(78,947)	(46,319)	(70,868)	(286,933)
Loss per share	(789)	(463)	(709)	(0.09)

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED AUGUST 31, 2021

Operating expenses for the three months ended August 31, 2021 were $1,059,744, compared to $287,637 incurred the same period in the prior year. The significant differences in expenditures were as follows:

Exploration and evaluation expenditures were $314,475 during the three months ended August 31, 2021 compared with $113,212 during the three months ended August 31, 2020. The increase in exploration and evaluation expenditures was primarily costs related to the resumption of the exploration program beginning late November 2020. Costs in the same period in the prior year are primarily related in the maintenance of the exploration site.
Consulting expenses were $69,993 during the three months ended August 31, 2021, compared to $3,370 incurred during the same period in the prior year. Increases in consulting expenses are due to the new management additions for the Company.
General and administrative expenses were $216,315 during the three months ended August 31, 2021, compared to $18,706 incurred during the same period in the prior year. The increase of general and administrative fees is primarily attributed to the increase of transfer agent, filing fees and rent.
Investor relation and marketing expenses were $311,772 during the three months ended August 31, 2021, compared to $nil during the same period in the prior year. During the prior year, the Company was a private company without investor relations and marketing activity.

As a result of the foregoing, the Company recorded a comprehensive loss for the three months ended August 31, 2021 of $1,044,804, as compared to a comprehensive loss of $281,850 during the same period in the prior year.

RESULTS OF OPERATIONS FOR THE YEAR ENDED AUGUST 31, 2021

Operating expenses for the year ended August 31, 2021 were $4,409,956, compared to $483,766 incurred the same period in the prior year. The significant differences in expenditures were as follows:

Exploration and evaluation expenditures were $1,268,893 during the year ended August 31, 2021 compared to $227,982 during the year ended August 31, 2020. The increase in exploration and evaluation expenditures was primarily costs related to the resumption of the exploration program beginning late November 2020. Costs in previous year are primarily maintenance costs for the exploration site.
Consulting expenses were $445,646 during the year ended August 31, 2021, compared to $13,972 incurred during the same period in the prior year. Increases in consulting expenses are due to the additional consultants and management hired for the company.
General and administrative expenses were $342,611 during the year ended August 31, 2021, compared to $40,732 incurred during the same period in the prior year. The increase of general and administrative fees is primarily attributed to the increase of transfer agent, filing fees and rent, which are new to the Company.
Investor relation expenses were $760,841 during the year ended August 31, 2021, compared to $nil during the same period in the prior year. During the prior year, the Company was a private entity without investor relations activity.
Legal and professional expenses were $388,535 during the year ended August 31, 2021, compared to $163,966 incurred during the same period in the prior year. The increase in legal and professional fees is primarily due to costs related to the reverse takeover of Kalo Gold Holdings Corp.
A non-recurring amount of $1,456,291 was the listing expense for the reverse takeover of Kalo Gold Holdings Corp.
Share based payments were $1,167,774 during the year ended August 31, 2021, compared to $31,521 for the same period in the prior year. $318,500 of the share based payments charged for the year ended August 31, 2021 is the result of the fair value difference between the issue price of the shares issuance on September 10, 2020 of $0.001 per share and September 11, 2020 of $0.05 per share. The fair value of the shares issued on September 10, 2020 is deemed to be $0.05, and the difference between the proceeds received and the fair value of the shares was recorded as a share based payment. $849,274 was recorded as share based payments for the stock options issued on during the year ended August 31, 2021.

As a result of the foregoing, the Company recorded a comprehensive loss for the year ended August 31, 2021 of $5,846,006, as compared to a comprehensive loss of $473,760 for the year ended August 31, 2020.

LIQUIDITY AND CAPITAL RESOURCES

SHARE DATA

As at the date of this MD&A, the Company has 63,552,004 common shares, 5,890,000 stock options, and 669,361 share purchase warrants issued and outstanding.

During the year ended August 31, 2021, the Company issued common shares as follows:

On February 25, 2021, the Company issued 18,594,500 common shares for proceeds of $3,718,900. In connection with the offering, the Company incurred share issuance costs of $114,134 in cash and issued 1,535,000 at $0.20 per share as finder's fees. The proceeds of this issuance were received as share subscription in part of the RTO transaction of KGC
On February 25, 2021, the Company issued 6,178,575 common shares in connection with the RTO (Note 6). The fair value of the shares is $0.20 per share for a total value of $1,235,715.
On September 10, 2020, the Company issued 6,500,000 common shares for proceeds of $6,500. The deemed fair value of the shares is $0.05 per share and a share based payment of $318,500 is recorded.
On September 11, 2020, the Company issued 8,950,000 common shares for proceeds of $447,500.

Stock Options

Stock options outstanding and exercisable as at the date of the MD&A

		Options Outstanding		Options Exercisable
Exercise Price	Number ofSharesIssuable onExercise	WeightedAverageRemainingLife (Years)	WeightedAverageExercisePrice	Number ofSharesIssuable onExercise	WeightedAverageExercisePrice
$0.34	120,000	9.51	$0.34	120,000	$0.34
$0.26	900,000	1.90	$0.26	180,000	$0.26
$0.20	4,270,000	9.49	$0.20	4,270,000	$0.20
$0.10	600,000	8.50	$0.10	600,000	$0.10
	5,890,000	8.23	$0.20	5,170,000	$0.19

On February 24, 2021, the Company issued 3,620,000 stock options expiring February 24, 2031 with an exercise price of $0.20. The fair value of the options at the date of the grant was estimated using the Black-Scholes Option Pricing Model, assuming a risk free interest rate of 0.14% per annum, an expected life of option of 10 years, an expected volatility of 100% and no expected dividends. The fair value of the options of $642,150 has been recorded as share based payment expense.

On February 25, 2021, 600,000 stock options expiring February 28, 2030 issued prior to the reverse takeover of Kalo have been revalued using the Black-Scholes Option Pricing Model, assuming a risk free interest rate of 0.14% per annum, an expected life of option of 9 years, an expected volatility of 100% and no expected dividends. The fair value of the options has been determined to be $108,964 and is incorporated as part of purchase price.

On March 1, 2021, 650,000 stock options expiring March 1, 2031 with an exercise price of $0.20. The fair value of the option at the date of the grant was estimated using the Black-Scholes Option Pricing Model, assuming a risk-free interest rate of 0.14% per annum, an expected life of option of 10 years, an expected volatility of 100% and no expected dividends. The fair value of the options has been determined to be $115,303.

On March 4, 2021, 120,000 stock options expiring March 4, 2031 issued prior to the reverse takeover of Kalo Gold Holdings Corp. have been revalued using the Black-Scholes Option Pricing Model, assuming a risk-free interest rate of 0.14% per annum, an expected life of option of 10 years, an expected volatility of 100% and no expected dividends. The fair value of the options has been determined to be $37,320.

On July 26, 2021, the Company issued 900,000 stock options expiring July 26, 2023 with an exercise price of $0.26. Of the 900,000 stock options, 20% vest immediately, 30% vest 6 months from the grant date, and remaining 50% vest 6 months thereafter. The fair value of the options at the date of the grant was estimated using the Black-Scholes Option Pricing Model, assuming a risk-free interest rate of 0.45% per annum, an expected life of option of 5 years, an expected volatility of 100% and no expected dividends. The fair value of the options of $125,740 has been recorded as share based payment expense.

Warrants

The following warrants are outstanding as of the date of the MD&A:

Grant Date	Expiry Date	Number ofwarrants issued	Weighted AverageExercise Price
February 28, 2020	February 28, 2022	176,425	$0.10
		176,425	$0.10

Escrow

Pursuant to the RTO transaction on February 25, 2021, 20,825,000 common shares of the Company were held in escrow. As at August 31, 2021, 15,618,750 common shares remain in escrow. The release dates and number of common shares to be released are as follows

Release Dates	Number ofcommon sharesto be released
February 25, 2022August 25, 2022February 25, 2023August 25, 2023February 25, 2024	3,123,7503,123,7503,123,7503,123,7503,123,750
	15,618,750

CAPITAL RESOURCES

The Company defines capital as consisting of shareholder's equity and cash. The Company manages its capital structure to maximize its financial flexibility making adjustments to it in response to changes in economic conditions and the risk characteristics of the underlying assets and business opportunities. The Company does not presently utilize any quantitative measures to monitor its capital, but rather relies on the expertise of the Company's management to sustain the future development of the business. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

As at August 31, 2021, the Company is not subject to any externally imposed capital requirements or debt covenants. There was no change to the Company's approach to capital management during the year ended August 31, 2021.

LIQUIDITY

The Company's objective in managing liquidity risk is to maintain sufficient liquidity in order to meet operational and investing requirements at any point in time. The Company has historically financed its operations primarily through the sale of share capital by way of private placements.

At August 31, 2021 the Company had cash of $420,988 and working capital of $388,676. At August 31, 2020, the Company had cash of $257,751 and working capital deficit of $75,954.

Cash used in operating activities was $2,827,883 during the year ended August 31, 2021 compared to $187,079 used in operating activities during the prior period.

Cash flows from investing activities were $2,849,545 for the year ended August 31, 2021 and cash flows from investing activities $186,819 for the year ended August 31, 2020. Cash flows from investing activities consist primarily of cash received from the reverse acquisition of Kalo Gold Holdings Corp.

Cash flows from financing activities was $112,418 during the year ended August 31, 2021 and $49,303 during same period in the prior year. Cash flow from financing consists from proceeds from the issuance of common shares during the year ended August 31, 2021 and from capital contributions from shareholders in the same period from the prior period.

The development of the Company in the future will depend on the Company's ability to obtain additional financings. In the past, the Company has relied on the sale of equity securities to meet its cash requirements. Future developments, in excess of funds on hand, will depend on the Company's ability to obtain financing through joint venturing of projects, debt financing, equity financing or other means. There can be no assurance that the Company will be successful in obtaining any such financing or in joint venturing its property; failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of the Company's properties.

OUTLOOK

The Company plans to conduct further exploration on the Vatu Aurum Gold Project. Further exploration and corporate costs are expected to be funded through future equity financing.

RELATED PARTY TRANSACTIONS

The Company's related parties include key management personnel and companies related by way of directors or shareholders in common.

Key Management Personnel Compensation

During the years ended August 31, 2021 and 2020, the Company paid and/or accrued the following fees to key management personnel:

	August 31, 2021	August 31, 2020
ManagementDirector	$579,8743,798	$	6,4417,531
	$583.671	$	13,972

Additional to the fees paid to management personnel in the table above, during the year ended, there were also share based payments of $354,779 and $141,912 (2020 – $nil) paid to management and directors respectively. Key management includes the Corporation's Board of Directors and members of senior management.

Due to/from Related Parties

As at August 31, 2021, the Company has accounts payable of $29,340 (August 31, 2020 – $931) due to a related parties and prepaid expenses of $nil (August 31, 2020 - $1,739).

Due to Shareholder

	August 31, 2021August 31, 2020
Due to shareholder	$	-	$190,784
	$	-	$190,784

As at August 31, 2021, $nil (August 31, 2020 - $190,784) is operating expenses paid by the shareholder of the private company prior to RTO. The amount owed to the shareholder is interest free and was repaid during the year ended August 31, 2021.

OFF BALANCE SHEET ARRANGEMENTS

The Company currently has no off-balance sheet arrangements.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial assets and liabilities are classified in the fair value hierarchy according to the lowest level of input that is significant to the fair value measurement. Assessment of the significance of a particular input to the fair value measurement requires judgement and may affect placement within the fair value hierarchy levels.

The hierarchy is as follows:

Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 fair value measurements are those derived from inputs that are unobservable inputs for the asset or liability.

The fair value of cash approximates their carrying value due to the short-term maturity. The Company considers that the carrying amount of all its financial assets and financial liabilities recognized at amortized cost in the financial statements approximates their fair value due to the demand nature or short-term maturity of these instruments.

Fair value estimates of financial instruments are made at a specific point in time, based on relevant information about financial markets and specific financial instruments. As these estimates are subjective in nature, involving uncertainties and matters of significant judgment, they cannot be determined with precision. Changes in assumptions can significantly affect estimated fair values.

As at August 31, 2021 and 2020, the Company does not have any level 2 or 3 financial assets or liabilities.

Financial Risk Factors

The Company's risk exposure and the impact on the Company's financial instruments are summarized below:

Credit risk

Credit risk is the risk of potential loss to the Company if 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 receivables. The Company limits exposure to credit risk on liquid financial assets through maintaining its cash with high-credit quality 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 currently settles its financial obligations with cash. The ability to do this relies on the Company raising equity financing in a timely manner and by maintaining sufficient cash in excess of anticipated needs. The Company is exposed to liquidity risk.

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company has no interest-bearing debt. The Company's sensitivity to interest rates is minimal.

Foreign Currency Risk

Foreign Currency Risk is the risk on fluctuation of currency related to monetary items with a settlement currency other that Canadian dollars. The functional currency of Kalo and its subsidiary located in Canada is Canadian Dollars, its subsidiaries located in the BVI is US Dollar and the functional currency of the subsidiary in Fiji is Fijian dollars. The Company is exposed to foreign currency risk on fluctuations related to cash, receivables, prepayments, and accrued liabilities that are denominated in Fijian dollars. The Company has not used derivative instruments to reduce its exposure to foreign currency risk nor has it entered into foreign exchange contracts to hedge against gains or losses from foreign exchange fluctuations.

BUSINESS RISKS AND UNCERTAINTIES

Kalo is engaged in mineral exploration and development activities, which by their nature, are speculative due to the high risk nature of the business and the present stage of the development of the Project. Any investment in the common shares of Kalo should be considered a highly speculative investment due to the nature of the Company's business. Such risk factors could materially affect Kalo's future financial results and could cause actual results and events to differ materially from those described in forward looking statements and forward looking information relating to Kalo or the business, property or financial results, any of which could cause investors to lose part or all of their investment in Kalo.

CONTRACTUAL OBLIGATIONS

The Company presently has no contractual obligations pursuant to which the Company has any payments owing in the next five years other than pursuant to the Purchase Agreement and agreements entered into in the ordinary course of business.

CRITICAL ACCOUNTING ESTIMATES

The preparation of the Company's financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management's experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes may differ significantly from these estimates.

Areas requiring a significant degree of judgment relate to the recoverability and measurement of deferred tax assets and liabilities, the ability to continue as a going concern and the capitalization of development costs. Actual results may differ from those estimates and judgments. Areas requiring a significant degree of estimation include allowances for doubtful accounts.

Areas requiring a significant degree of judgement that have the most significant effect on the amounts recognized in the Company's consolidated financial statements are as follows:

• Going Concern

The assessment of the Company's ability to continue as a going concern involves critical judgement based on historical experience and expectations of the Company's ability to generate adequate financing. Significant judgements are used in the Company's assessment of its ability to continue as a going concern.

• Income taxes

Deferred tax assets and liabilities are determined based on differences between the financial statement carrying values of assets and liabilities and their respective income tax bases ("temporary differences"), and losses carried forward.

The determination of the ability of the Company to utilize tax loss carry-forwards to offset deferred tax liabilities requires management to exercise judgement and make certain assumptions about the future performance of the Company. Management is required to assess whether it is probable that the Company will benefit from these prior losses and other deferred tax assets. Change in economic conditions, metal prices and other factors could result in revision to the estimates of the benefits to be realized or the timing of utilizing the losses.

• Exploration and Evaluation Assets

The net carrying value of each mineral property is reviewed regularly for conditions that suggest potential indications impairment. This review requires significant judgment. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the property's value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the property's acquisition, development or cost of holding; and whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future.

• Valuation of Share-Based Payments

The Corporation uses the Black-Scholes Option Pricing Model for valuation of share-based payments. Option pricing models require the input of subjective assumptions including the share price, expected share price volatility, interest rate and forfeiture rate. Changes in the input assumptions can materially affect the fair value estimate and the Corporation's net loss and equity reserves.

• Functional Currency

The functional currency for the Corporation's subsidiaries is the currency of the primary economic environment in which the entity operates. The following table outlines the functional currency of each subsidiary:

Company	Functional Currency
Kalo Gold Corp.	CAD
Kalo Gold Canada Inc.	CAD
Aloki Mining Limited	USD
Tego Mining Limited	USD
Kalo Exploration Limited	FJD

Determination of functional currency may involve certain judgments to determine the primary economic environment and the Corporation reconsiders the functional currency of its entities if there is a change in events and conditions which determined the primary economic environment.

SIGNIFICANT ACCOUNTING POLICIES

The Company's significant accounting policies are summarized in Note 5 to the audited consolidated financial statements for the year ended August 31, 2021.

COVID-19 PANDEMIC

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.

While Fiji has been under COVID-19 inter-island travel restrictions since mid-April 2021the government of Fiji has announced that effective November 11, 2021 it will relax travel restrictions to Fiji and also to the northern island Vanua Levu, where the Vatu Aurum project is located. Drilling in Qiriyaga Zone on the Vatu Aurum gold project will resume when restrictions on inter-island travels are lifted to allow the Company's drillers to return to site. Meantime, the Company will continue with the review of surface and core geology and soil geochemistry in Qiriyaga Zone, review of the potential of the other prospects in addition to Mouta and Coqeloa including prospect site visits. There is no material impact on the Company's operations and consolidated financial statements from the COVID-19 pandemic.