Kermode Resources Ltd.

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MANAGEMENT’S DISCUSSION & ANALYSIS

FOR THE YEAR ENDED OCTOBER 31, 2021

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

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 year ended October 31, 2021. 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 years ended October 31, 2021 and 2020 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’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 October 31, 2021.

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 www.kermode.com.

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.

Additional information related to the Company is available for view on SEDAR at www.sedar.com and on the Company’s website at www.kermode.com.

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

Description of Business

The Company’s main business is the acquisition, exploration and development of natural resource properties. The Company has interest in a gold-silver property located in Churchill County, Nevada and entered into an option agreement to acquire 100% interest in a gold property located in British Columbia.

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

Performance Summary

The following are significant events that occurred during the year ended October 31, 2021. The Company:

resumed trading of its shares on the TSXV as of March 31, 2021
Columbia from Strata GeoData Services Ltd.
issued 25,000,000 common shares at $0.01 per share for gross proceeds of $250,000

Selected Annual Information

Selected Annual Information
	Year Ended	Year Ended	Year Ended
	October 31,	October 31,	October 31,
	2021	2020	2019
Total Revenues	-	-	-
Loss before other items	235,572	97,743	125,719
Net income (loss)	(170,173)	(97,743)	(129,137)
Basic and diluted loss per share	-	-	-
Total assets	270,691	109,324	47,398
Total long-term liabilities	-	-	-

Results of Operations

During the year ended October 31, 2021 the Company incurred a loss before other items of $235,572 (2020 - $97,743) resulting from an increase in expenses. The changes in operational expenses are set out below:

an increase in share-based compensation of $102,255 (2021 - $102,255, 2020 – $nil)
increase in consulting fees of $37,877 (2021 - $37,877, 2020 - $nil) due to increase in promotional activities
an increase in directors’ fees of $19,505 (2021 - $19,505, 2020 - $nil) as a result of the change of control at the AGM 2021
decrease in rent of $10,256 (2021 - $7,744, 2020 - $18,000) from a change in office location
• an increase in telephone costs of $6,228 (2021 - $6,738, 2020 - $510) resulting from increased expenses incurred from a former related party
an increase in transfer agent and filing fees of $7,553 (2021 - $16,928, 2020 - $9,375) resulting from the financing which closed during the year.

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

Summary of Quarterly Results

	October 31, 2021	July 31, 2021	April 30, 2021	January 31, 2021
Total Assets	270,691	128,312	126,335	102,230
Exploration and Evaluation Assets	94,225	68,196	39,000	-
Working Capital (Deficiency)	(285,955)	(298,977)	(257,733)	(391,587)
Shareholders' Equity (Deficiency)	(191,730)	(230,781)	(218,733)	(391,587)
Revenues	Nil	Nil	Nil	Nil
Net Loss	(170,173)	(14,548)	(46,146)	(15,775)
	October 31, 2020	July 31, 2020	April 30, 2020	January 31, 2020
Total Assets	109,324	43,375	47,041	46,856
Exploration and Evaluation Assets	-	-	-	-
Working Capital (Deficiency)	(372,901)	(271,535)	(290,333)	(281,362)
Shareholders' Equity (Deficiency)	(372,901)	(270,535)	(290,333)	(281,362)
Revenues	Nil	Nil	Nil	Nil
Net Loss	(101,366)	(18 798)	(8,971)	(6,204)

There was no significant activity during the quarters ended July 31 and October 31, 2021.

During the quarter ended April 30, 2021 the Company issued 25,000,000 common shares at $0.01 per share for gross proceeds of $250,000. The Company also initiated its option to acquire the Vidette Lake gold project by paying $5,000 in cash and issued 100,000 common shares (valued at $4,000) to Strata GeoData Services Ltd.

During the quarter ended January 31, 2021 the Company received $25,000 in subscription advance.

During the quarter ended October 31, 2020 the Company received $132,500 in subscription advance.

There was no significant activity during the quarters ended July 31, April 30, 2020, and January 31, 2020.

Mineral Properties

Eastgate Gold

The Company entered into a Mineral Property Option Agreement with Blue Ridge Gold LLC, (a

private Nevada company) (“Blue Ridge”). The Eastgate Gold property is comprised of mineral

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

claims located northeast of the Rawhide Mine, and east of Fallon in Churchill, County, Nevada. The Company currently holds a 15% interest in the Eastgate Gold project.

Blue Ridge will retain a 3% NSR royalty, which the Company has an agreement with Blue Ridge to purchase 1% for $1,000,000.

During the year ended October 31, 2015, the Company entered into an agreement to sell part of its interest in its Nevada Eastgate gold project to Eros Resources Corp. (formerly Boss Power Corp.)(“Eros”).

Under the terms of the agreement, Eros purchased one-half of the Company’s 30% interest in the property for $300,500 (US$250,000) and has the right to participate with the Company in the underlying agreement that the Company has with Blue Ridge.

Following the above initial 15% purchase, Eros purchased an additional 15% interest in the property in consideration for a payment of US$200,000 to Blue Ridge. Eros has the right to purchase an additional 15% interest for US$200,000.

Eros holds a 45% interest, the Company holds a 15% interest and Blue Ridge holds the remaining 40% interest in the Property subject to the Blue Ridge agreement with the Company.

The Company and Eros will jointly and equally participate in the remaining purchases of a 15% interest and a 25% interest in the Property pursuant to and as contemplated by the Blue Ridge Agreement.

Either the Company or Eros may elect not to complete its share of the purchases and the other party may complete the purchases entirely for its own account or may also elect not to complete its share in which case they will enter into a joint venture and joint venture agreement with each other and Blue Ridge pursuant to and as contemplated by the Blue Ridge agreement.

The Company has received $300,500 (USD$250,000) as of the year ended October 31, 2015 for the sale of the initial 15% interest in the property. Consequently, the Company’s remaining 15% interest was written down to $300,500 during the year ended October 31, 2015.

Due to delay in exploration work, the property has been written off during the year ended October 31, 2016.

During the year ended October 31, 2021, the Company paid an annual fee of $6,030 for 28 of the 101 claims at Eastgate. The Company also incurred $20,000 of exploration expenditures.

Vidette Lake Gold Project property, British Columbia

The Company entered into an option agreement (the "Option Agreement") with Strata GeoData Services Ltd. to acquire a 100% interest in the Vidette Lake gold project in British Columbia. The Option Agreement was signed on May 23, 2020 and is an arm's length transaction. No finder's fees are payable in connection with the transaction. The option is exercisable over a period of 3

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

years but may be accelerated at the Company's discretion. To exercise the option, the Company must pay an aggregate of $35,000 in cash, issue an aggregate of 500,000 common shares in the capital of the Company, and expend an aggregate of $225,000 on the planning, development and execution of a work program based on a mutually approved budget, over the next 3 years. All shares issued pursuant to the Option Agreement will be subject to resale restrictions under applicable securities legislation and the rules of the TSX Venture Exchange (“TSXV”).

During the year ending October 31, 2021 the Company paid $5,000 in cash, issued 100,000 common shares (valued at $4,000), and the Company also incurred $59,195 of exploration expenditure.

Liquidity and Capital Resources

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.

Operating activities: The Company does not generate any revenues and generally does not receive any cash from operating activities. Net cash used in operating activities during year ended October 31, 2021 was $25,796, compared to net cash used in operating activities for year ended October 31, 2020 was $73,623. The decrease in cash used was mainly attributed to decrease in expenses.

Investing activities: Net cash used in investing activities relates to mineral property expenditures and advances paid. Net cash used in investing activities for the year ended October 31, 2021 was $52,060, compared to net cash used in investing activities for year ended October 31, 2020 was $nil. The increase to cash used was due to exploration costs incurred.

Financing activities: Net cash provided by financing activities for the year ended October 31, 2021 was $112,589 compared to $132,500 for the year ended October 31, 2020.

The financial statements for the year ended October 31, 2021 do not reflect adjustments, which could be material, to the carrying value of assets and liabilities, which may be required should the Company be unable to continue as a going concern.

Refer to the Financial Instrument section for further discussion of liquidity.

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.

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

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.

Outstanding Share Data

As at the date of this MD&A, the Company has 109,130,170 common shares issued and outstanding as well as: (a) stock options to purchase an aggregate of 5,000,000 common shares expiring September 24, 2026 and February 15, 2027, exercisable at $0.05 per common share and, (b) share purchase warrants to purchase an aggregate of 9,652,600 common shares expiring February 2024 exercisable at $0.05 per common share.

Related Party Transactions

During the year ended October 31, 2021, the Company entered into the following transactions with related parties not disclosed elsewhere in the financial statements:

a) Paid or accrued $38,000 (2020 - $7,500) for professional fees to a director and former officer of the Company,
b) Paid or accrued $7,500 (2020 - $15,000) for consulting included in office and sundry to a former officer of the Company,
c) Paid or accrued $28,135 (2020 – Nil) to current and former officers and directors of the Company

The balance payable as at October 31, 2021 of $29,808 (October 31, 2020 - $35,340 receivable) is due to a company owned by a spouse of a former director. The balance receivable as at October 31, 2021 of $Nil (October 31, 2020 - $13,350) is due from a company with common former directors and is non-interest bearing, unsecured with no specified terms of repayment.

The key management personnel of the Company are the Directors, Chief Executive Officer, and the Chief Financial Officer. As at October 31, 2021, the Company owes $213,146 (2020 - $135,400) in accounts payable and accrued liabilities to current and former directors and officers.

Proposed Transactions

There is currently no proposed transaction under consideration.

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;

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

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 October 31, 2021, the Company had a cash balance of $93,664 (October 31, 2020 - $58,931) available to settle current liabilities of $462,421 (October 31, 2020 - $349,725). 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.

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

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.

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2021

There are no new accounting policies adopted during the year ended October 31, 2021.

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Kermode Resources Ltd. Management Reports 2022

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