Kermode Resources Ltd. — Interim / Quarterly Report 2023

Jun 27, 2023

KERMODE RESOURCES LTD.

MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE SIX MONTHS ENDED APRIL 30, 2023

Overview

The following management's discussion and analysis ("MD&A") of the financial condition and results of operations of Kermode Resources Ltd. ("Kermode" or the "Company") constitutes management's review of the factors that affected the Company's financial and operating performance for the quarter ended April 30, 2023. This MD&A has been prepared in compliance with the requirements of National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with the audited annual financial statements of the Company for the quarters ended April 30, 2023 and 2022 together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results for the period presented are not necessarily indicative of the results that may be expected for any future period. The Company is presently a "Venture Issuer" as defined in NI 51-102.

The Company trades on the TSX Venture exchange under the Symbol "KLM".

The Company's financial statements and the financial data included in the MD&A have been prepared in accordance with International Financial Reposting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB") and interpretations of the International Financial Reporting Interpretations Committee that are effective as at April 30, 2023.

Throughout this document the terms we, us, our, the Company and Kermode refer to Kermode Resources Ltd. All financial information in this document is prepared in accordance with International financial reporting standards (IFRS) and presented in Canadian dollars unless otherwise indicated. Additional information related to the Company is available for view on SEDAR at www.sedar.com and on the Company's website at https://linktr.ee/kermoderesources.

The MD&A was reviewed and approved by the Board of Directors and is effective as of: JUNE 27, 2023.

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 information includes disclosure regarding possible or anticipated events, conditions or results of operations which are based on assumptions about future economic conditions and courses of action, and includes future oriented financial information with respect to prospective results of operations or financial position or cash flow that is presented either as a forecast or a projection. Forward-looking information is often, but not always, identified by the use of words such as seek, anticipate, believe, plan, estimate, expect and intend; statements that an event or result is due on or may, will, should, could, or might occur or be achieved; and other similar expressions.

Overall Performance

Kermode continues to execute the plan as described in the MD&A for the first quarter of the current fiscal year Q1 F2024. As at the effective date of this MD&A, Kermode has expanded on the work programs with prospectors in several important ways. Chief Executive Officer Peter Bell comments, "One way that Kermode has expanded ongoing work programs is by increasing the maximum amount of exploration spending with the 911 Exploration Corp. We increased the monthly maximum from $20,000 to $100,000 per month starting in May 2023. In the first month, the 911 crew incurred approximately $25,000 of exploration spending that Kermode paid for using shares. This helps us accomplish meaningful exploration work in an otherwise difficult time for exploration finance. We also expanded the scope and scale of our work programs by doing a new property option deal and shares-for-services exploration program with Milosz Mielniczuk's company Aurum Vena Mineral Resources Corp. As of the effective date, Milo has sent a first batch of samples from the Silver Bell project to an accredited lab for assaying and published several videos documenting his field work."

Peter Bell continues, "I am grateful to our investors for their support in our financings and the market. Kermode announced a $250,000 financing in March and closed on approximately $25,000 in May. We then announced and closed a $50,000 financing in June. Thank you Mr. Tek Manhas for joining the Board of Directors of Kermode and investing in our recent financing."

Peter Bell comments, "Kermode cancelled one non-binding letter of intent for a property option in Ontario in May, 2023. I see great potential in Ontario but continue to be unable to get any deals going there successfully. In addition, our projects in Newfoundland have developments. The deadline for Kermode to issue shares under the Little Bay property option agreement has expired and the project is not in good standing. Kermode has not satisfied the work commitment for the Little Bay option for the first year. We have not written the project down this quarter as I am attempting to renegotiate key terms like work commitments, but I have not accomplished that yet. I have not been able to contact the Planet X crew since mid-April and Kermode does not have billing for April or May from the Planet X Exploration Services Ltd. despite asking repeatedly."

Peter Bell comments, "I am concerned with our poor access to financing and weak working capital position. I am also concerned with what I believe to be relatively illiquid trading activity in the secondary market on the TSX Venture at a weak price. I am sorry to those people who see a bleak picture of Kermode's future based on our current market cap below one million dollars, but I believe this situation creates opportunity for speculators. I am committed to the success of Kermode to the benefits of shareholders. In June 2023, I started taking up to $5,000 per month paid in shares of Kermode. Prior to this from August 2021 through May 2023, I did not take any salary or consulting payments of any kind. I was initially awarded one million stock options but those were cancelled at my request and I have not taken any options or PSU performance share units since then. In addition, I have paid for approximately $30,000 in corporate costs like TSX Venture exchange fees that are included in a shares-for-debt transaction that is currently under review. I previously paid for approximately $80,000 in trade payables after the takeover in August 2021. I have also bought shares in the market and in a financing prior to becoming CEO. I believe that my personal investment of time and money into Kermode represents my sincere commitment to the best interest of shareholders and our strategies are working based on our ability to attract talent and execute aggressive mining exploration programs."

Peter Bell concludes, "After the quarter end, Kermode started working with a new CFO named Andrew Low. I talked to many qualified candidates, but Mr. Low distinguished himself through his appreciation for our shares as an incentive for key people. Andrew is taking an inducement of approximately $17,000 as a one-time fee paid in shares at $0.01, which will provide him with approximately 1% of the total issued and outstanding share count. Andrew is also taking up to $5,000 per month in shares for services on an ongoing basis starting in June 2023. Andrew has been assigned 2,000,000 stock options at $0.05 for five years. Thanks Andrew for joining our team."

Peter Bell, "As part of the shares-for-debt transaction that has not yet completed, Kermode plans to repay a prospector from Manitoba who did work for the company years ago prior to my involvement. Taking this debt on good faith, I believe it is important to provide this exploration services provider with fair payment. In fact, when I start working with a new crew like 911 Mining or Aurum Vena, I pay a lump sum of cash up front and ask the crew to show me what they can do with that limited budget; if it is bullish then we do more of it. And if we really work together well, then we set up a shares-for-services agreement. The strategy I employ today as CEO of Kermode is expressly designed to avoid the type of mistake that happened with this unpaid prospector from Manitoba. Let's do better."

Peter Bell, "I recently asked if the old management team who hold debts against Kermode would consider taking shares. The reply came back today that they would not take shares because a roll-back is almost surely coming to the stock at the rate Kermode is printing shares for things like property deals, exploration work, settling old debts, paying management, and stock options? As an exploration company, I believe it is important to run Kermode on a no-debt basis and will continue to seek opportunities to clean up the balance sheet. Please note that all of our projects are available for sale in any way to any one at any time under any terms that may please the shareholders, the Board of Directors, and management subject to all relevant laws."

Interim MD&A – Quarterly Highlights

Kermode's financial condition as at the end of the quarter was weak. The rate of spending was similar to prior quarters in terms of the total amount and composition, with most spending focused on exploration work.

As at the date of the MD&A, the Company had completed work with three exploration service providers under the shares-for-services agreements: Planet X Exploration Services Ltd., 911 Exploration Corp., and Aurum Vena Mineral Resources Corp.

With Aurum Vena Mineral Resources Corp., the Company has incurred a small amount of exploration work. The Company established a shares-for-services agreement for up to $100,000 per month in June 2023, but has not yet received any invoices.

With Planet X Exploration Services Ltd., the Company incurred approximately $20,000 of exploration spending in March 2023 under the shares-for-services agreement. The spending towards geological consulting and video production included the fees to the laboratory for the first assays completed at the Lucky Strike and Star of the West projects, which are optioned from 911 Exploration Corp. CEO Peter Bell comments, "I am grateful to see our crews working together like this with Planet X helping pay for assay fees on the 911 projects. Thank you!"

Previously in the first quarter of fiscal year 2024, the Company incurred approximately $37,000 of exploration in January and February 2023 under the shares-for-services agreements with Planet X Exploration Services Ltd. This spending included approximately $15,000 to collect thirteen (13) till samples

With 911 Exploration Corp., Kermode continues ongoing exploration work. The Company incurred approximately $68,000 of exploration in February, March, April, and May 2023 under the shares-for-services agreement, which included 52 days of prospecting and 34 days of office work.

Previously in the first quarter of fiscal year 2024, the Company incurred approximately $15,000 of exploration in January and February, 2023, to conduct thirteen (13) days of prospecting and eight (8) days of office work including video production and sample documentation under the sharesfor-services agreements with 911 Exploration Corp.

Previously again, the Company had a prepaid payment to 911 Exploration Corp. made in July and August 2022 for $70,000 to fund prospecting and staking. This prepaid generated more than seventy-eight (78) days of prospecting and office work from June through December, 2022.

A highlight for the quarter was the first set of assay results for samples from projects under option from the 911 Exploration crew. The total cost of lab fees was approximately $4,000. The total field costs associated with collecting the thirty-seven (37) samples tested is approximately $5,000, although these samples were chosen from the broader set of samples that the 911 crew has collected. The lab received samples on March 30, 2023. The 911 crew had collected approximately 200 samples and incurred total costs of approximately $90,000 composed of $35,000 in shares and $55,000 in cash since starting to work together in July 2022 through March 30, 2023.

Kermode published exploration results from the Lucky Strike and Star Of The West projects for the first time in May, 2023. In the original news release, two samples were marked as ">30% Zinc" and the additional results are 33% Zinc (C-175) and 39% Zinc (D727947) both from the same Camp showing at Lucky Strike.

33% Zinc (C-175) and 39% Zinc (D727947)

Over-limit zinc samples from the "CAMP" Showing at Lucky Strike Additional information available on Google Drive data room at this link: https://drive.google.com/drive/folders/1GZUNS7HaTejFxvjuNp3ahw5OaHIDj2IG

Rock Sample Highlights for LUCKY STRIKE Property	Assay	Assay
Sample #	Easting	Northing	Elev.	Location Name	Rock Type	Copper(Cu) %	Zinc(Zn) %
C-154	376329.483	5416003.226	107.73	Camp	Sulphide Breccia	0.47	29.40
C-175	376329.921	5416005.202	107.77	Camp	Sulphide Breccia	0.34	>30
D727908	376329.483	5416003.226	107.68	Camp	Sulphide Breccia	0.27	14.50
D727918	376330.371	5416006.639	107.82	Camp	Sulphide Breccia	8.39	0.08
D727947	376330.312	5416007.302	107.81	Camp	Massive Sulphide	0.54	>30
CAMP-150	376249.919	5415521.804	99.91	Copper	Sulphide Breccia	0.15	9.93
D727943	376251.967	5415517.688	99.71	Copper	Sulphide Breccia	18.90	0.28
D727945	376254.779	5415510.319	99.51	Copper	Sulphide Breccia	19.00	0.09
D727946	376250.091	5415515.18	99.38	Copper	Sulphide Breccia	9.51	0.13
D727938	375954.449	5417249.918	141.09	Lucky 7	Sulphide Breccia	0.15	13.95
NC-162	376491.224	5416768.123	236.01	New Camp	Sulphide Breccia	0.09	13.70
NC-163	376496.284	5416752.422	236.54	New Camp	Sulphide Breccia	0.11	21.10
D727910	380413.441	5420215.524	464.5	New Copper	Massive Sulphide	16.20	0.06
D727911	380413.355	5420206.951	460.04	New Copper	Massive Sulphide	24.60	0.06
D727940	380405.16	5420200.61	458.14	New Copper	Massive Sulphide	18.70	0.04
D727941	380421.861	5420214.045	461.35	New Copper		22.10	0.03

KERMODE RESOURCES LTD.

Management's Discussion & Analysis

For the Six Months Ended April 30, 2023

Rock Sample Highlights for STAR OF THE WEST Property	Assay
Sample #	Easting	Northing	Elevation	Location Name	Rock Type	Copper (Cu) %
CB 01	372280.345	5439906.463	494.45	Outlook		0.63
CB 02	372289.32	5439907.543	493.34	Outlook		5.50
COR-LR1	372283.76	5439512.332	405.99	Cor-1	Sulphide Breccia	2.80
COR-LR2	372365.161	5439402.696	427.44	Cor-2	Sulphide Breccia	2.40
D727802	367077.008	5431208.596	145.53	Bamfield Main Quarry	Sulphide Breccia	0.30
D727804	367075.176	5431196.583	146.89	Bamfield Main Quarry	Sulphide Breccia	0.24
D727807	367065.416	5431196.621	146.51	Bamfield Main Quarry	Sulphide Breccia	0.15
D727810	372365.001	5439402.606	425.06	Cor-7	Massive Sulphide	11.40
D727812	372238.974	5440575.675	281.37	Thomas Main L. Road	Sulphide Breccia	0.55
D727818	367133.594	5430045.582	283.18	Heather Main S-1	Quartz-SulphideVein	2.58
D727829	372362.559	5439398.658	422.74	Cor-3	Sulphide Breccia.	10.60
D727833	368330.793	5429740.718	537.34	Eagle	Sulphide Breccia	2.12
D727835	368325.749	5429746.743	539.34	Eagle	Sulphide Breccia	6.17
D727836	368326.787	5429738.318	538.23	Eagle	Sulphide Breccia	2.38
D727837	368325.749	5429749.374	415.34	Heather Main S-2	Quartz-SulphideVein	3.93
D727840	367736.754	5430545.589	421.12	100 M. Zone UpperRd.	Sulphide Breccia	4.63
D727844	367276.111	5431204.536	144.53	Bamfield Main Quarry	Sulphide Breccia	0.04
D727845	367717.434	5430632.335	416.87	100 Metre Zone	Quartz-SulphideVein	5.35
D727849	366861.092	5430948.697	130.99	Mor	Sulphide Breccia	7.63
OUTLOOK 1	372378.058	5439470.771	448.4	Loggers Lens		0.56
OUTLOOK2LL 01	372378.058	5439470.771	448.4	Loggers Lens		0.29

Pictures of these select samples are shown in the videos: "Star of the West Property - Mineral Samples Headed To The Assay Lab!" https://www.youtube.com/watch?v=ATt1kdxh7eU&list=PLIkjfYt7POhQYQZrYqTQwbONYCCYAfZb&index=51&t=415s

"Lucky Strike Property - Mineral Samples Headed To The Assay Lab!" https://www.youtube.com/watch?v=Ycsgd0aVoBg&list=PLIkjfYt7POhQYQZrYqTQwbONYCCYAfZb&index=52

The technical information in these tables has been reviewed and approved by Mr. Jacques Houle, P. Eng, a Qualified Person responsible for the scientific and technical information contained herein under National Instrument 43-101 standards.

Since Kermode started working with 911 Exploration Corp. and sharing videos of field work, the total time spent by the YouTube audience watching all videos 237,200 hours as at the effective date. Kermode and 911 Exploration have published a total of 75 videos on YouTube. The audience retention is approximately 9.9% for videos and 69% for shorts. Recently, there was a total of 1,500 hours watched from 22 videos and 89 hours from 7 shorts. The total number of views was approximately 300,000 views from 35 videos in last three months.

Kermode and 911 Exploration have collected approximately 619 samples since July 2022. Since the end of Q1 January 31, 2023, Kermode and 911 Exploration have collected 248 rock samples, 3 soil samples, 5 moss matt samples, 3 stream sediment samples, and 7 drill holes for approximately 28 metres of core samples drilled using a 41mm drill bit.

The Company continues to face a high degree of uncertainty with regard to our ability to raise money by equity financing. The sentiment in primary and secondary markets for early-stage mining exploration companies continues to be highly variable over time. Additional uncertainty in metals prices, broader financial markets, and global economic conditions creates challenges for the Company to establish and execute ambitious plans for relatively large spending programs such as exploration drilling. The Company has identified new trends where project vendors continue to bring new opportunities to the Company and the associated exploration service contractors are willing to work for shares.

There were no discontinued operations in the current quarter. Management believes changes in financial condition and financial performance reflected in the current quarter reflect the high-risk nature of mining exploration and uncertain access to risk capital. Furthermore, management believes that the new shares-for-services agreements provide an important way for the Company to continue to advance the exploration projects and generate the kinds of initial results that can help to attract significant exploration funding in the future.

The Company initiated one new property purchase option agreement in May 2023 for the Khrysos and Silver Bell projects. The company issued 15,000,000 shares at a price of $0.01 as the initial option payment. The final payment of the option agreement is 15,000,000 shares any time in the next five years. There are no work commitments or royalties. There is a ten percent sales participation right for ten years. The company has submitted samples from Silver Bell for assay.

The Company also initiated three new property purchase option agreements in June 2023. The projects are the Slesse Creek project, the 911 KNOCKOUT project, and the Eastgate BC project. The company issued 4,000,000 shares at a price of $0.01 as the initial option payment for the Slesse Creek, with an additional payment of 4,000,000 shares in one year and 9,000,000 shares in two years. There are no cash payments and no work commitments. There is a 1% royalty with a $1M buy-down to eliminate the royalty and a 10% "Sale Participation Right" for ten years.

The Company also established several non-binding letter of intent ("LOI") deals for new projects. On March 3, 2023, the Company entered into two deals that entail no share payments: 911 Knockout project in BC and the Turd Blossom Lithium project in Newfoundland. Kermode also has an open LOI on the Slesse Creek gold project in BC with proposed terms as follows: 4,000,000 shares on approval; 4,000,000 shares at one year anniversary; 9,000,000 shares at two years; 1% royalty with a $1M buy-down to eliminate the royalty; and a 10% "Sale Participation Right" for ten years with no work commitments. Kermode has completed exploration work on the projects under LOI in BC using the shares-for-services agreement with 911 Exploration for a total value of approximately $15,000 in March, April, and May 2023.

On March 1, 2023, the Company entered into a non-binding letter of intent to acquire the Brazeau Copper project in Ontario from a group of private individuals. The company abandoned the LOI on May 31, 2023.

There are significant differences between Q2 in fiscal year 2024 versus Q2 fiscal year 2023.

In the prior year, the Company signed four (4) non-binding LOI deals in February-April 2022: Seahorse Saddle in Australia; Khrysos in BC; Little Bay in Newfoundland; and the Brazeau Rumleski project in Ontario. The Company cancelled the LOI for the Seahorse Saddle, Brazeau Rumleski, and Khrysos projects. The Company optioned the Little Bay project, but this project is now impaired as detailed above. The Company subsequently renegotiated the Khrysos project and optioned it together with another project called Silver Bell in May, 2023. Also, Kermode abandoned the property option agreement for the Vidette Lake project on April 27, 2022.

In the current year, the Company signed five (5) non-binding LOI deals in February-April 2023: Brazeau Copper project in Ontario; Khrysos & Silver Bell project in BC; 911 Knockout project in BC; Turd Blossom project in Newfoundland; and the Slesse Creek project in BC. The Company cancelled four (4) LOI deals in the same period February-April 2023, which is Q2 fiscal year 2024: Marchand Creek, Black Bear, Copper King, Mount Polley East.

In the prior year, the Company closed a financing for $241,315 on February 9, 2022. In the current year, the Company closed a financing for $25,730 on May 8, 2023, and a financing for $50,000 on June 13, 2023.

In the prior year, the Company reported exploration results from projects under LOI at the time in Nevada that were subsequently abandoned. In the current year, the Company reported the first set of assay results from two projects under option as reported above. On May 14 and 15, Mr. Jacques Houle, P. Eng, made a site visit with 911 Exploration to the Lucky Strike and Star of the West projects.

The company has achieved no major operating milestones in Q2 fiscal 2024 and has none planned. Management believes that the operational priorities are to do exploration work on properties that we have under option and to find new properties to option in the future. In particular, management is focused on finding partners who can provide prospective early-stage projects with simple access, where the property purchase option deal terms are primarily sharesbased, and who can do exploration work on their projects on a shares-for-services basis.

There were no unexpected events that have materially affected the Company's operations, liquidity or capital resources in the interim period nor are reasonably likely to have a material effect going forward. There were no significant changes from disclosure previously made about how the Company was going to use proceeds from the prior financing completed in Q2 F2022. There were no significant transactions between related parties that occurred in the interim period.

Discussion of Operations

During the quarter ended April 30, 2023 the Company had no revenue, no cost of sales, and no gross profit. There were no significant factors affecting such items.

The Company has significant projects that have not yet generated revenue, including Star Of The West, Lucky Strike, and others. The Company's plans for each project and the status of the project relative to that plan are described below. Note that the Company does not have any producing mines or mines under development.

	Caycuse		Eastgate	Copper /Jonathan's	GreyPond	LittleCopper	Bay		LoupCreek		LuckyStrike		StarofTheWest		VidetteLake	Total
Balance, October 31, 2021	$	-	-$	$	-	$	-	$	-	$	-	$	-	$68,195		$ 94,225
Acquisition CostsProspecting		--	6,03020,000		--		--		--		--		--	59,195	9,000	15,03079,195
Balance, January 31, 2022	$	-	$ 26,030	$	-	$	-	$	-	$	-	$	-		$	$
Acquisition Costs		-	-		-	42,000			-	135,000			-	10,000		187,000
ProspectingStaking		--	--		--		--		--	19,517	3,576		12,1175,830	10,000	-	41,6349,406
Fees & licenses		--	2,801(28,831)		--		--		--		--		--	(88,195)	-	2,801(117,026)
Write downBalance, October 31, 2022	$	-	-$	$	-	$42,000		$	-	$158,093		$17,947		$	-	$ 218,040
Acquisition Costs	225,000		-	105,000			-		-		-		-		-	330,000
ProspectingBalance, April 30, 2023	$230,668	5,558	--$	$105,000	-	$42,000	-	$8,096	8,096	$163,944	5,851	$50,229	32,282	$	--	51,897$599,937

Lucky Strike, British Columbia

The Company entered into an option agreement with a vendor group comprised of three private Canadian individuals. The option agreement was signed July 20, 2022 and is an arm's length transaction. No finder's fees are payable in connection with the transaction and 9,000,000 shares were issued (valued at $135,000 based on value of $0.015 per share). The option is exercisable over a period of three years. There are no work commitments. Over the life of the deal, the total payments include 27,000,000 common shares in the capital of KLM. The agreement provides for a two percent royalty ("2% NSR") with a buy-back of 1% for $1,000,000.

Star Of The West property, BC

The company initiated the option for the Star Of The West project in BC on October 31, 2022 after signing the initial LOI on August 8, 2022. There are no shares or cash payable under this option agreement. The Company grants the vendor group a royalty of 2.5% that can be reduced to zero for $5M payment. And the Company grants the vendor group a sales participation right

KERMODE RESOURCES LTD. Management's Discussion & Analysis

For the Six Months Ended April 30, 2023

whereby they shall receive 30% of the gross proceeds from any transaction where the Company sells the project in the next ten years. The project has no work commitments.

Caycuse Copper property, BC

The company initiated the option for the Caycuse Copper project in BC on December 12, 2022 with initial payments of 15,000,000 shares to the vendor group. The project has no work commitments and no cash payments. There has been a significant positive impact on the Company from this acquisition because it has provided encouraging initial results from prospecting exploration and led to further collaboration with the project vendors who have brought other opportunities including Star Of The West to the company.

Loup Creek property, BC

The company initiated the option for the Loup Creek project in BC on December 12, 2022. There are no shares or cash payable under this option agreement. The Company grants the vendor group a royalty of 2% that can be reduced to zero for $2M payment. And the Company grants the vendor group a sales participation right whereby they shall receive 20% of the gross proceeds from any transaction where the Company sells the project in the next ten years. The project has no work commitments. There has been a significant positive impact on the Company from this acquisition because it has provided encouraging initial results from prospecting exploration and led to further collaboration with the project vendors who have brought other opportunities including Lucky Strike to the company.

Grey Copper & Jonathan's Pond properties, Newfoundland

The company initiated the option for the Grey Copper Project in Newfoundland on December 13, 2022, with initial payments of 7,000,000 shares to the vendor group. The project has no work commitments and no cash payments. There has been a significant positive impact on the Company from this acquisition because it has provided encouraging initial results from prospecting exploration under a shares-for-services agreement.

Little Bay Copper Project property, Newfoundland

The Company entered into an option agreement with vendor group comprised of six private Canadian individuals to acquire a 100% interest in the Little Bay copper project in Newfoundland. The Option Agreement was signed April 11, 2022 and is an arm's length transaction. No finder's fees are payable in connection with the transaction. Acquisition Costs of $12,000 cash were paid, and 1,500,000 shares were issued (valued at $30,000 based on value of $0.02 per share). The option is exercisable over a period of 4 years. The total work commitments are $4,250,000 over 5 years with $100,000 due by the first anniversary. Over the life of the deal, the total payments include 33,000,000 common shares in the capital of KLM plus $262,000 cash. The agreement provides for a two percent royalty ("2% NSR") with a buy-back of 1% for $2,000,000. Planet X Exploration Services Ltd. has a right of first refusal for all exploration work contracted by Kermode over the life of the option deal.

Eastgate Gold

The Company entered into a property purchase option agreement with Blue Ridge Gold LLC, on May 11, 2012. Due to delay in exploration work, the property was written off during the year ended October 31, 2016. After changes to management and the Board of Directors, the Company paid annual claims fees of $6,030 and incurred $20,000 of exploration expenditures. However, due to continued challenges finding exploration service providers who will work on a shares-forservices basis, the Company wrote off the costs of $28,831 in the year ended October 31, 2022.

Strategic Review

For all the projects that the Company has under option, the anticipated timing and costs to take this project to the next stage of the project plan are uncertain. The current stage of the project is early-stage exploration where management are using prospecting methods to identify areas with surface showings of high-grade copper, zinc, or other metals. If the outcome of this first stage is unsuccessful then further work may be delayed or the property purchase option agreement may be terminated. If the outcome of this first stage is successful, then the next stage may include an attempt to define a mineral resource through drilling or seeking a partner to provide operational or financial support. The duration of the first stage of the project is uncertain because it depends on the quality of the initial results; if the exploration crews don't find prospective showings then the first stage of work will end. However, if the exploration crews do find prospective showings then they are given more time and money to exhaustively work such showings and continue to search for others. The total cost of the first stage of any such exploration project is uncertain, however, management anticipates that these costs will be paid for using the shares-for-services agreements with the exploration service providers associated with each project.

There are no commitments that management believe will materially affect the Company's future performance. In particular, the property purchase option agreements for all our property options (other than Little Bay) have no spending requirements. This lack of spending requirements provides the Company with an increased degree of flexibility as to how to prioritize exploration spending based on results on-the-fly, rather than based on terms set out at the beginning of the option agreement. However, the Company is significantly effected by price inflation as the exploration service providers pass on the increased costs of fuel and equipment. While these price increases do not affect the Company's profit or loss from continuing operations, it does affect how much work we can get done. To mitigate these increased costs, management is focused on situations where the exploration service providers can access the project simply by road year-round.

	April 30, 2023	January 31, 2023	October 31,2022	July 31, 2022
Total Assets	623,007	594,202	277,140	380,051
Exploration and Evaluation Assets	599,937	569,736	218,040	203,030
Working Capital (Deficiency)	(303,425)	(290,918)	(217,690)	(84,418)
Shareholders' Equity (Deficiency)	296,512	278,917	350	118,612
Revenues	Nil	Nil	Nil	Nil
Net Loss	(139,900)	(123,303)	(323,063)	(68,583)
	April 30, 2022	January 31, 2022	October 31,2021	July 31, 2021
Total Assets	345,724	277,159	270,691	128,312
Exploration and Evaluation Assets	68,030	94,225	94,225	68,196
Working Capital (Deficiency)	(15,835)	(187,674)	(285,955)	(298,977)
Shareholders' Equity (Deficiency)	52,195	(93,449)	(191,730)	(230,781)
Revenues	Nil	Nil	Nil	Nil
Net Loss	(114,617)	(43,957)	(93,407)	(14,548)

Summary of Quarterly Results

Kermode Resources Ltd. Reported no discontinued operations and declared no dividends for any period presented.

During the quarter ended April 30, 2023, the Company conducted exploration work, which reduced cash and prepaid expenses, and conducted ongoing compliance activities with the TSX Venture Exchange, which reduced cash. Together, these items caused total assets to decrease relative to the prior quarter. Furthermore, the reduction in Cash and Prepaid Expenses caused the working capital deficiency to increase significantly relative to the prior quarter. Management believes these variations reflect routine aspects of the operation of the Company, which do reflect important aspects of seasonality. For example, the Company is likely to spend more aggressively on exploration work during the summer months.

The relative increase in total assets as at April 30, 2023, reflects the fact that Kermode continues to issue shares for property option agreements, shares-for-services, and financing. During the quarter ended April 30, 2023, Kermode completed approximately $85,000 exploration work using shares-for-services agreements.

The increase in the deficiency of the working capital as at April 30, 2023, reflects the draw-down of cash to pay for operating costs.

Liquidity and Capital Resources

This section should be read in conjunction with the unaudited condensed interim consolidated financial statements for the period ended April 30, 2023, and the corresponding notes thereto.

Kermode's mineral exploration and development activities do not provide a source of income and we therefore have a history of losses, working capital deficiencies and an accumulated deficit. However, given the nature of our business, the results of operations as reflected in the net losses and losses per share do not provide meaningful interpretation of our valuation.

The Company has financed its operations to date primarily through the issuance of common shares. The Company will continue to seek capital through the issuance of common shares.

The Company has not yet realized profitable operations and has incurred significant losses to date resulting in a cumulative deficit of $10,378,915. As at April 30, 2023, the Company had cash and cash equivalents of $2,338 to settle current liabilities of $326,495.

To continue operations and to fund future obligations, the Company will be required to raise funds through equity or other financing alternatives. Recent global economic conditions and market uncertainty may have an impact on the Company's ability to raise funds through the equity markets. Management believes that there are sources of financing available. The Company has been successful in securing financing during the year ended October 31, 2022. See Note 7 to the unaudited condensed interim financial statements for the period ended October 31, 2022.

The Company has total assets of $623,007 (October 31, 2022 - $277,140). The primary assets of the Company are cash and cash equivalents of $2,338 (October 31, 2022 - $30,041), prepaid expenses and deposits of $2,647 (October 31, 2022 - $25,486), and exploration and evaluation assets of $599,937 (October 31, 2022 - $218,040). The Company has no long-term liabilities and has working capital deficiency of $303,425 (October 31, 2022 - $217,690).

As at April 30, 2023, Kermode had accounts payable and accrued liabilities of $296,687. Of this amount, $160,391 was due to current and former directors and officers as unsecured, noninterest bearing with no fixed terms of repayment. As the liabilities due to current and former officers and directors have no fixed terms of repayment, Kermode is afforded some degree of flexibility with respect to timing of payment. For the liabilities which arise in the normal course of business, Kermode will need to raise funds in order to meet those obligations.

To remedy the working capital deficiency, management plans to lead an aggressive program of project generation and exploration. As the Company advances higher calibre projects, management believes that there will be increased opportunities to raise larger amounts of capital and bring Kermode to a positive financial position.

Furthermore, management has designed new property option agreements with no work commitments. Although work commitments under an option are different from debts, they all factor together in the liquidity and capital resources calculations of a junior mining company. Kermode plans to continue to use equity financing to fund our high-risk exploration activities. Kermode does not have any major commitments for capital expenditures at this time.

In addition to funding exploration with cash, management plans to use Kermode shares to pay for certain exploration services as allowed by TSXV exchange policy. This non-cash exploration budget helps Kermode generate more important information about the prospectivity of our projects even when our access to cash is limited. The company established such Shares for Services Agreements with 3 exploration services providers as at the effective date.

As a result of the above, Management believes Kermode will be able to continue as a going concern.

The discovery, development and acquisition of mineral properties are unpredictable events. Future metal prices, the success of exploration programs and other property transactions can have a significant impact on capital requirements. The Company does not expect to receive significant income from any of its properties within the foreseeable future. Should the Company decide to further develop any of its properties, the Company may fund its capital requirements by arranging further equity financing, issuing long-term debt, selling royalties, arranging joint ventures with other companies, or through a combination of the above. The Company may also consider the sale of certain non-core properties in order to raise additional capital.

Contractual Obligations

Except as described herein or in the Company's financial statements at the date of this report, the Company had no material financial commitments.

Off-Balance Sheet Arrangements

At the date of this report, the Company has no material off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company.

Related Party Transactions

Related parties include directors, officers, close family members, certain consultants and enterprises that are controlled by these individuals as well as certain persons performing similar functions.

Related party transactions conducted in the normal course of operations are measured at the exchange value (the amount established and agreed to by the related parties).

The Company had the following transactions in the normal course of operations with related parties:

	April 30, 2023	April 30, 2022
Director fees (i)	-	-
Management fees (ii)	12,000	4,000

• (i) The Company paid or accrued $Nil (2022 $Nil) in director fees,
• (ii) The Company paid or accrued $12,000 (2022 $4,000) in management fees to the CFO of the Company. Management fees were paid to the holding company of the CFO, Nadon Professional Corporation.

Key management personnel of the Company are Directors, Chief Executive Officer and the Chief Financial Officer.

As at April 30, 2023, $26,024 is due to Peter Bell, the CEO, for payments made on behalf of the Company for operational expenses; and $159,965 (October 31, 2022 - $159,965) in accounts payable and accrued liabilities to former directors and officers including Neil Briggs, Donald Moore, Playfair Mining, Ricardo Ho, Shoni Bernard, and Kathleen Mitchell and Wasco Management. The business purpose of these transactions was corporate administration associated with the former management team. The measurement basis used was cash paid for each transaction. There are no ongoing contractual or other commitments resulting from these related party transactions. These amounts include the balance payable at April 30, 2023 of $29,808 (October 31, 2022 - $29,808) due to Wasco Management Inc. a company owned by Kathleen L. Mitchell, a spouse of Donald Moore the former officer and director. The services provided in the six months ended April 30, 2023, were $nil by the management company Wasco Management Inc. for office administration. These amounts are unsecured, non-interest bearing and have no fixed terms of repayment.

Proposed Transactions

Kermode has ten proposed transactions as follows:

• On September 2, 2022, the Company entered into a non-binding letter of intent to acquire the Santana Mine project in British Columbia from a group of private individuals.
• On March 3, 2023, the Company entered into a non-binding letter of intent to acquire the Turd Blossom Lithium project in Newfoundland from a group of private individuals.

Two of these transactions (Santana Mine and Turd Blossom Lithium) are exempt transaction within TSXV exchange policy and do not require shareholder approval.

At this time, the Board of Directors has not authorized Kermode to enter into these agreements because the impacts of undertaking these options remain to be determined. It is expected that the service providers will conduct potential work programs under shares for services agreements and the projects have potential for significant mineral endowment.

Financial and Capital Risk Management

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The fair value of the Company's advanced receivable and payable, and accounts payable and accrued liabilities approximate their carrying values due to the short-term nature of these instruments. The Company's cash and marketable securities are measured at fair value using Level 1 inputs.

The Company is exposed to varying degrees to a variety of financial instrument related risks:

Credit risk

Credit risk is the risk of loss associated with a counterparty's inability to fulfill its payment obligations. The Company's credit risk is primarily attributable to advances receivable. Management believes that historically the credit risk concentration with respect to financial instruments included in advanced receivable is remote the credit risk from the advanced receivable is addressed with the security and guarantee.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when they come due. As at April 30, 2023, the Company had a cash balance of

KERMODE RESOURCES LTD. Management's Discussion & Analysis

For the Six Months Ended April 30, 2023

$2,338 (October 31, 2022 - $30,041) available to settle current liabilities of $326,495 (October 31, 2022 - $276,790). All of the Company's financial liabilities are subject to normal trade terms.

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. These fluctuations may be significant.

(a) Interest rate risk

The Company has cash balances held with financial institutions. The Company's current policy is to invest excess cash in short-term treasury bills issued by the Government of Canada and its banking institutions. The Company periodically monitors the investments it makes and is satisfied with the credit ratings of its banks.

(b) Foreign currency risk

The Company does not have any balances denominated in a foreign currency and believes it has no significant foreign currency risk.

(c) Price risk

The Company is exposed to price risk with respect to commodity prices. Changes in commodity prices will impact the economics of development of the Company's mineral properties. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as shareholder's equity.

The property in which the Company currently has an interest is in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. Current financial markets are very difficult and there is no certainty with respect to the Company's ability to raise capital. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management.

Risk Factors

Companies in the exploration stage face a variety of risks and, while unable to eliminate all of them, the Company aims at managing and reducing such risks as much as possible. The Company faces a variety of risk factors such as project feasibility and practically, risks related to determining the validity of mineral property title claims, commodities prices and environmental laws and regulations. Management monitors its activities and those factors that could impact them in order to manage risk and make timely decisions.

Critical Accounting Policies and Estimates

The financial statements have been prepared in accordance with IFRS as adopted in Canada and form the basis for the following discussion and analysis of critical accounting policies and estimates. The Company makes estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and related disclosure of contingent assets and liabilities during the course of preparing these financial statements. On a regular basis, the Company evaluates estimates and assumptions including those related to the recognition of share-based payments.

Estimates are based on historical experience and on various other assumptions that the Company believes to be reasonable. These estimates form the basis of judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from those estimates.

There are no new accounting policies adopted during the year ended January 31, 2023.

Outstanding Share Data

As at the date of this MD&A, the Company has 169,758,041 common shares issued and outstanding as well as: (a) stock options to purchase an aggregate of 10,000,000 common shares expiring, including 1,000,000 on August 29, 2023, 1,000,000 on February 15, 2027, 1,000,000 on April 5, 2027, 1,000,000 on August 26, 2027, and 6,000,000 on May 6, 2028, all execrable at $0.05 per common share. (b) share purchase warrants to purchase an aggregate of 9,812,600 common shares expiring February 9, 2024, exercisable at $0.05 per common share; (c) Charitable Stock Options to purchase an aggregate of 1,196,301 common shares expiring November 1, 2027 exercisable at $0.05 per common share; (d) Performance Share Units of 7,000,000 expiring, including 1,000,000 on November 2, 2025, 1,000,000 on November 4, 2025, 3,000,000 on November 28, 2025, and 2,000,000 on June 23, 2026.

COVID-19

As the effects of COVID-19 begin to subside, the ability to transact business and engage in more normal activities will allow Kermode to resume its practice of looking for high quality projects in which to invest. As the economic environment hampered by COVID-19 begins to return to prepandemic normalcy, management believes that Kermode is well positioned to improve its financial position in order to continue as a going concern. To date, Kermode has not been significantly affected by COVID-19.