Kermode Resources Ltd. — Management Reports 2023

Feb 27, 2023

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KERMODE RESOURCES LTD.

MANAGEMENT’S DISCUSSION & ANALYSIS

FOR THE YEAR ENDED OCTOBER 31, 2022

KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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, 2022. 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, 2022 and 2021 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 October 31, 2022.

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.

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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Overall Performance

There are significant industry and economic factors affecting Kermode’s performance. The availability of risk capital dedicated to finance mining exploration can vary greatly over time and there is great competition from other companies looking to secure such funding. The ability for the Company to secure financing plays an important role in the Company’s performance because the Company does not have other sources of revenue to fund exploration work. If industry funding is unavailable then the Company’s activities are generally limited, however, if industry financing is more available then the Company still faces competitive conditions to secure access to funding and use it to generate meaningful exploration results.

As a company with no revenue, the availability of financing for mineral exploration is an essential factor for success for Kermode. In the year ended October 31 2022, the Company raised $241,315 by issuing 9,652,600 units at a price of $0.025, which consist of one share and one warrant with a two-year term. This level of financing is similar to fiscal year 2021 where the Company raised $250,000 by issuing 25,000,000 shares at a price of $0.01. The fact that the company raised a similar amount of money at a higher share price reflects an apparent increase in support for the company based on new initiatives for generation of exploration project opportunities.

The Company searches for new opportunities on an ongoing basis, in terms of exploration projects and exploration personnel. In particular, the Company searches for projects in Canada that have road-access to old mine sites or showings of high-grade base or precious metals. Also, the Company searches for opportunities where it can obtain a property purchase option agreement that has no exploration spending obligations and no cash payments, but a large royalty that can be bought-down to zero and a sales participation right and a large stock component. With regards to exploration personnel, the Company searches for crews that have an ability to generate digital media documenting their exploration work. In order to meet these specific search criteria, the Company enters into various agreements at the Letter Of Intent (“LOI”) stage in order to conduct due diligence on the project and personnel prior to committing to an option agreement.

The Company entered into the following LOI since November 1, 2021:

• Rye Patch Silver Mine Project in Nevada, USA initiated December 3, 2021 (abandoned August 18, 2022)

• Seahorse Saddle Project in Australia initiated February 10, 2022 (abandoned February 24, 2022)

• Little Bay Project in Newfoundland initiated February 17, 2022 (optioned April 11, 2022)

• Khrysos Project in BC initiated April 26, 2022 (abandoned August 17, 2022)

• Brazeau Rumleski Project in Ontario initiated April 28, 2022 (abandoned August 16, 2022)

• • Grey Copper Project in Newfoundland initiated June 30, 2022 (optioned December 13, 2022)

• Lucky Strike Project in BC initiated June 27, 2022 (optioned July 20, 2022)

• Copper King in BC initiated August 4, 2022 (open)

• Star Of The West in BC initiated August 8, 2022 (optioned October 31, 2022)

• Black Bear in BC initiated August 10, 2022 (open)

• Santana Mine in BC initiated September 2, 2022 (open)

• Marchand Creek in BC initiated September 16, 2022 (open)

• Mount Polley East in BC initiated November 10, 2022 (open)

• Caycuse River in BC initiated November 22, 2022 (optioned December 12, 2022)

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

• Loup Creek in BC initiated December 12, 2022 (optioned December 12, 2022)

The Company has abandoned various LOI for different reasons. The Company abandoned the Seahorse Saddle project LOI on February 24, 2022, because the Company was not prepared for international business in Australia. The reason the Company abandoned the Brazeau Rumleski gold project was because of difficulties finding local prospectors available to do exploration work for Kermode. The reason the Company abandoned the Rye Patch project was because there are significant increases to costs for exploration work in Nevada due to currency exchange rates and relatively high price of exploration services there. The reason the Company abandoned the Khyrsos gold project was because of significant winter season that stopped exploration field work through the winter; the Company had other projects optioned on Vancouver Island that allowed it to continue doing field work through the winter so it decided to focus there and not proceed with the Khyrsos deal at the time. The reason the Company abandoned the Mount Polley East in BC was because of competing priorities to focus on projects on Vancouver Island and Newfoundland. Terminating the LOI for these projects was not a significant cost for Kermode and will not have an effect on the company’s continuing operations.

In addition to these LOI, Kermode terminated the option for the Vidette project on April 27, 2022. This property had been under option since April 19, 2021 exchange bulletin and had accumulated value of $88,196 but the carrying value of this amount was reduced to $nil when the option was terminated. There are several reasons why Kermode abandoned the Vidette property option. For one thing, the deal terms had been designed by former management and the new management were not able to renegotiate key terms, such as work commitments. Furthermore, Kermode encountered challenges getting exploration work done on the project as the project vendor was unwilling to do certain basic prospecting exploration techniques and insisted on doing more complicated geochemical sampling procedures, which did not fit with the new management team’s exploration plan for the project. Terminating the option on the Vidette property does not have a significant effect on the continuing operations of Kermode.

The Company also initiated several new property options as follows.

The company initiated the option for the Little Bay project in Newfoundland on April 11, 2022, with initial payments of $12,000 cash and 1,500,000 shares to the vendor group. The project has a firstyear work commitment of $100,000, for which the company has not completed any spending. It is unclear if the company will be able to complete these spending requirements or renegotiate the terms of the option deal. There has been no significant positive or negative impact on the Company from this acquisition. On January 4, 2023, the company initiated a shares for services agreement with Planet X Exploration Services Ltd. which may allow for exploration work completed at the Little Bay project to be paid for with common shares of the company. This agreement is described in further detail below.

The company initiated the option for the Lucky Strike project in BC on July 20, 2022, with initial payments of 9,000,000 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 and established a shares for services agreement for exploration work.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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 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. 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.

The company initiated the option for the Caycuse River 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.

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.

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.

The Company has been more active now than in previous years in terms of project generation because there has been a change in management. Management believes that it is essential to aggressively source new opportunities on an ongoing basis, however, it is unclear if this new pace of project generation will increase or decrease in the future. Management believes furthermore that the overall impact of the increased number of option agreements is positive because it gives the Company more opportunities to conduct meaningful exploration work, and the overall impact of the increased number of abandoned option agreements is positive because it reflects heightened standards on behalf of Management for focusing on projects that fit certain target criteria.

On January 4, 2023, the Company established shares-for-services agreements with exploration services providers known as 911 Exploration Corp. in British Columbia and Planet X Exploration Services Ltd. In Newfoundland & Labrador. Each consultant shall be eligible to receive a maximum amount of compensation under this agreement of $20,000 per month or $240,000 for the full Term from January 1, 2023 to December 31, 2023. The actual amount of compensation in any month shall depend on the services provided in that month as expressly agreed in advance with the

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

company. There are additional limitations on the minimum price for shares issued under this agreement based on the TSX Venture Exchange’s definition of the Discounted Market Price and on the maximum amount of shares such that the consultant may not bring their undiluted share position at or above 10% of the company’s issued and outstanding shares until such time that a Personal Information Form or 2C1 Declaration will be filed with and cleared by the Exchange. Despite these limitations, management believes that these agreements provide a way to get a certain amount of exploration work done on a consistent basis whether the company is able to access significant funding or not. Management has made it a goal to option highly prospective projects that are at early stages of exploration from highly skilled exploration services providers and establish shares for services agreements with those same providers to conduct work on their own properties, as evidenced by these agreements with Planet X and 911 Exploration. Management believes that high quality exploration work will continue to be completed by both of these service providers on an ongoing basis. Management continues to search for opportunities to work with other high-quality partners who can offer to option early stage exploration projects to the company and then conduct preliminary field work under shares for services agreements.

On February 1, 2023, the Company issued shares under the shares-for-services agreements. The total amount of services provided by Planet X Exploration Services Ltd. in January 2023 was $20,000, which will be paid with 1,333,333 shares of Kermode. The total amount of services provided by 911 Exploration Corp. in January 2023 was $5,694.68, which will be paid with 379,645 shares of Kermode. The grand total amount of work completed in January under the agreements was $25,695, which will be paid with 1,712,979 shares of Kermode. All shares issued are subject to a four-month hold.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Selected Annual Information

Selected Annual Information
	Year Ended	Year Ended	Year Ended
	October 31,	October 31,	October 31,
	2022	2021	2020
Total Revenues	-	-	-
Net income (loss and comprehensive
loss)	(550,220)	(170,173)	(97,743)
Basic and diluted loss per share	-	-	-
Total assets	322,140	270,691	109,324
Total long-term liabilities	-	-	-

The Company has been and is still in the stages of identifying, acquiring, and exploring mineral interests. To date, the Company has not been in a position to derive any revenues from its projects. There are several important features reflected in the table above.

The Loss and comprehensive loss was larger as at October 31, 2022 (550,220) than prior years due to a number of factors as outlined below:

• An increase in Property Investigation expenses of $97,221 (2022 - $97,221, 2021 - $nil). These Property Investigation expenses are exploration spending for properties under Letter Of Intent that are abandoned, rather than optioned. This is a new line item for the Company and reflects an important shift in management strategy where the Company spends on field work for new property option agreements. It is unknown if the Company will continue at this pace, increase, or decrease this type of spending but it is important to understand how this item reflects a change in the leadership of the business to be more ambitious about spending on generating new project opportunities.

• an increase in transfer agent and filing fees of $27,893 (2022 - $44,821, 2021 - $16,928) resulted from several causes, including the financing which closed during the year and increased generation of news releases reflecting increased activity.

• a decrease in share-based compensation of $29,621 (2022 - $72,635, 2021 - $102,255)

• • a decrease in consulting fees of $25,877 (2022 - $12,000, 2021 - $37,877) due to changes made by new management appointed in August 2021 to reduce overhead spending in favour of exploration

• a decrease in directors’ fees of $19,505 (2022 $nil, 2021 - $19,505, 2020 - $nil) as a result of cost-cutting measures implemented by the Board of Directors.

• an increase in Professional fees of $28,766 (2022 - $52,050, 2021 $23,284) as a result of increased spending on exploration service providers.

• The write-down of the Vidette Lake and Eastgate property option agreements for $117,026 was a one-time event, however, this event may reflect a trend in the future whereby the company may write-down additional properties as it terminates property option agreements that do not meet performance criteria set by management.

Total Assets increased by $6,449 (2022 - $277,140, 2021 - $270,691) based on the confluence of many factors. For example, the changes in the Company’s project portfolio affected the calculation of Total Assets: there was an increases caused by new property option agreements such as Little Bay ($42,000 acquisition cost) and Lucky Strike ($135,000 acquisition cost), and a decrease caused by the write-off of the Vidette Lake ($88,195 write-off). Also, the proceeds of the financing where the Company raised $241,315 by issuing 9,652,600 units at a price of $0.025

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

increased total assets whereas cash spending of all kinds decreased it. These changes reflect typical trends which Management expect the Company to continue to experience in the future.

Discussion of Operations

During the year ended October 31, 2022 the Company incurred a loss of $550,220 (2021 - $170,173) resulting from an increase in expenses. The changes in operational expenses are set out below:

• a write down of Vidette Lake and Eastgate properties of $117,026 (2021 - $nil)

• an increase in property investigation expenses of $97,221 (2021 - $nil) related to work done on projects including to Rye Patch, Brazeau Rumleski, and Khrysos projects where the LOIs were terminated instead of optioned

Total assets have continued to increase year-over-year (2022 - $277,140, 2021 - $270,691, 2020 - $109,324) based on the confluence of many factors. For example, the changes in the Company’s project portfolio affected the calculation of Total Assets: there was an increases caused by new property option agreements such as Little Bay ($42,000 acquisition cost) and Lucky Strike ($135,000 acquisition cost), and a decrease caused by the write-off of the Vidette Lake ($88,195 write-off). Also, the proceeds of the financing where the Company raised $241,315 by issuing 9,652,600 units at a price of $0.025 increased total assets whereas cash spending of all kinds decreased it. These changes reflect typical trends which Management expect the Company to continue to experience in the future.

The working capital deficiency is due to current liabilities exceeding total current assets which are comprised of cash, prepaids and receivables. As at October 31, 2022 Kermode had accounts payable and accrued liabilities of $246,982. Of this amount, $116,419 was due to current and former directors and officers as unsecured, non-interest 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.

The following table outlines the expected and actual use of proceeds from the private placement which closed February 9, 2022:

Use of Proceeds (Q1-2021 Financing; Approximate)	Planned (As at closing February 9, 2022)	Actual (Current)
Auditor Fees	10,000	30,000
Legal Fees	20,000	30,000
Other fees	17,000	70,000 (Including: CFO 10,000; Consultants 40,000; Transfer agent 10,000; Geological fees 10,000)
Spending towards Vidette & Eastgate	100,000	20,000
LOI Due Diligence	100,000	80,000

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Total: 241,315 241,315

The variances for the use of proceeds of the prior financing from February 2022 include increased administrative costs and decreased exploration spending.

There is no significant impact of the variances on Kermode’s ability to achieve business objectives and milestones.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Summary of Quarterly Results

	October 31, 2022	July 31, 2022	April 30, 2022	January 31, 2022
Total Assets	277,140	380,051	345,724	277,159
Exploration and Evaluation Assets	218,040	203,030	68,030	94,225
Working Capital (Deficiency)	(217,690)	(84,418)	(15,835)	(187,674)
Shareholders' Equity (Deficiency)	350	118,612	52,195	(93,449)
Revenues	Nil	Nil	Nil	Nil
Net Loss	(323,063)	(68,583)	(114,617)	(43,957)

	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	(93,407)	(14,548)	(46,146)	(15,775)

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

During the quarter ended October 31, 2022, 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. However, there was an aseasonal one-off item in this consideration where the Company held the Annual General Meeting on October 19, 2022, and had increased overhead costs associated with meeting fees and paying fees to the TSX Venture Exchange to keep the stock option plan into good standing.

The relative increase in total assets as at April 30 and July 31, 2022 continue to reflect the results of the private placement financing, prepaid expenses and deposits related to advance payments made for work on Lucky Strike property.

During the quarter ended July 31, 2022, the Company issued 9,000,00 common shares at $0.015 per share to acquire Lucky Strike property. Total assets increased due to the acquisition of Lucky Strike property. The working capital deficiency at April 30 and July 31, 2022 continue to reflect the results of the private placement financing, prepaid expenses and deposits related to advance payments made for work on Lucky Strike property.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

During the quarter ended April 30, 2022, the Company issued 9,652,600 common shares at $0.025 per share for gross proceeds of $241,315. The Company also issued 1,500,000 common shares at $0.02 per share and paid $12,000 cash to acquire Little Copper Bay property. Exploration and Evaluation assets decreased with the termination of the option agreement at Vidette Lake property and the write down of the Property to $nil.

There was no significant activity during the quarter ended July 31, 2021.

On August 10, 2021, there was a change in Management and the Board of Directors. This change did not have a significant impact on the Company’s financial conditions or cash flows, year-end, or other adjustments.

During the quarter ended October 31, 2022, the Company had a net loss of $323,063 compared to a net loss of $93,407 the quarter ended October 31, 2021. There was an increase in stock-based compensation of $102,255, a decrease in management fees of $25,124, rent of $18,000, and gain on settlement of debt in the amount of $65,399. The reduction in management fees and rent were directly related to the change in management.

There was no significant activity during the quarter ended January 31, 2022.

During the quarters ended April 30, 2021, there 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 property by paying $5,000 in cash and issued 100,000 common shares (valued at $4,000) to Strata GeoData Services Ltd.

The quarter ended January 31, 2021 reflects a slight decrease in cash resulting from cash paid for G&A expenses. There was no significant activity during the quarter ended January 31, 2021.

The quarter ended October 30, 2020, reflects an increase in assets, mostly cash resulting from a subscription advance.

There was no significant activity during the quarter ended October 31, 2020.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Mineral Properties

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 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.

As at October 31, 2022, the Company has spent approximately $17,948 on exploration and staking at this project. The Company has not issued any shares for this project interest.

Caycuse River property, BC

The company initiated the option for the Caycuse River 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.

The Company has not spent anything $nil on this project so far.

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.

The Company has not spent anything $nil on this project so far.

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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

The Company has spent $20,000 on exploration at this project so far.

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.

So far, the Company has completed no exploration work $nil at this project.

Lucky Strike, British Columbia

The Company entered into an option agreement with a vendor group comprised of three private Canadian individuals, one of whom is 911 Mining Co. 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.

The Company has spent approximately $23,093 on this project and issued shares worth $135,000.

Vidette Lake Gold Project property, British Columbia

The Company entered into an 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 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.

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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

In March 2022, the Company amended the terms of the option for the Vidette Lake project, which expanded the area of interest to include specific claims that the property vendor had previously staked in November 2021.

During the year ended October 31, 2022 the Company paid $10,000 in cash for the second property payment. There was no work done at the Vidette Lake Gold Project.

Kermode terminated the option for the Vidette project on April 27, 2022. This property had been under option since April 19, 2021, exchange bulletin and had accumulated value of $88,196 but the carrying value of this amount was reduced to $nil when the option was terminated. Kermode abandoned the Vidette property option for the following reasons:

• the deal terms had been designed by former management and the new management were not able to renegotiate key terms, such as work commitments, and

• Kermode encountered challenges getting exploration work done on the project as the project vendor was unwilling to perform certain basic prospecting exploration techniques and insisted on doing more complicated geochemical sampling procedures, which did not fit with the new management team’s exploration plan for the project

Terminating the option on the Vidette property does not have a significant effect on the continuing operations of Kermode.

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 claims located northeast of the Rawhide Mine, and east of Fallon in Churchill, County, Nevada. The Company currently holds at least 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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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.

During the year ended October 31, 2022, the Company collected new channel samples and reported initial fire assays in November 2021 with follow-up metallic screen fire assays in December 2021. In January 2022, the Company found new documentation of historical drilling results from the Eastgate project. It used this data to support an Exploration Target as per section 2.3(2) of the National Instruments 43-101 policy, which provides a conceptual estimate of the possible gold endowment at the project. However, the relatively small size of this Target and the high cost of exploration in Nevada led management to make no expenditures on the property during the year ended October 31, 2022. Due to continued challenges finding exploration service providers at affordable rates who will work on a shares-for-services basis, the Company wrote off the costs of $28,831 in the year ended October 31, 2022.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Liquidity and Capital Resources

This section should be read in conjunction with the unaudited condensed interim consolidated financial statements for the period ended October 31, 2022, 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 $10,239,014. As at October 31, 2022, the Company had cash and cash equivalents of $30,041 to settle current liabilities of $276,790.

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 $277,140 (October 31, 2021 - $270,691). The primary assets of the Company are cash and cash equivalents of $30,041 (October 31, 2021 - $93,664), prepaid expenses and deposits of $25,486 (October 31, 2021 - $73,915), and exploration and evaluation assets of $218,040 (October 31, 2021 - $94,225). The Company has no long-term liabilities and has working capital deficiency of $217,690 (October 31, 2021 - $285,955).

As at October 31, 2022, Kermode had accounts payable and accrued liabilities of $246,982. Of this amount, $116,419 was due to current and former directors and officers as unsecured, non-interest 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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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 two exploration services providers on January 4, 2023.

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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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:

	October 31, 2021	October 31, 2021
Director fees (i)	-	19,505
Management fees (ii)	16,000	8,630
Office rent and supplies (iii)	-	7,500
Professional fees(iv)	-	38,000

• (i) The Company paid or accrued $Nil (2021 - $19,505) in director fees,

• (ii) The Company paid or accrued $16,000 (2021 - $8,630) in management fees to the CFO of the Company. Management fees were paid to the holding company of the CFO, Nadon Professional Corporation.

• (iii) The Company paid $Nil (2021 - $7,500) for rent, supplies and administrative expenses; and

• (iv) The Company paid $Nil (2021 - $38,000) in professional fees.

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

Net accounts payable and accrued liabilities include $116,419 (2021 - $213,146) due to current and former related parties. As at October 31, 2022, the Company owes $105,887 (2021 - $135,400) in accounts payable and accrued liabilities to current and 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 October 31, 2022 of $29,808 (October 31, 2021 - $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 year ended October 31, 2022, 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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

Proposed Transactions

Kermode has five proposed transactions as follows:

• On August 4, 2022, the Company entered into a non-binding letter of intent to acquire the Black Bear project in British Columbia from a private individual.

• On August 4, 2022, the Company entered into a non-binding letter of intent to acquire the Copper King project in British Columbia from a group of private individuals.

• 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 September 16, 2022, the Company entered into a non-binding letter of intent to acquire the Marchand Creek project in British Columbia from a group of private individuals.

• On November 10, 2022, the Company entered into a non-binding letter of intent to acquire the Mount Polley East project in BC from a private individual.

Three of these transactions (Black Bear, Copper King, Santana Mine, and Marchand Creek) are exempt transaction within TSXV exchange policy and do not require shareholder approval. One of these transactions (Mount Polley East) is an expedited 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.

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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 October 31, 2021, the Company had a cash balance of $30,041 (October 31, 2021 - $ 93,664) available to settle current liabilities of $ 276,790 (October 31, 2021- $ 462,421). 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

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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

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KERMODE RESOURCES LTD. Management’s Discussion & Analysis Year Ended October 31, 2022

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 October 31, 2021.

Outstanding Share Data

As at the date of this MD&A, the Company has 143,343,149 common shares issued and outstanding as well as: (a) stock options to purchase an aggregate of 6,000,000 common shares expiring September 24, 2026, February 15, 2027 and August 26, 2027, exercisable at $0.05 per common share; (b) share purchase warrants to purchase an aggregate of 9,812,600 common shares expiring February 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 in November 2, 2026, November 4, 2026, and November 29, 2026.

Fourth Quarter

The fourth quarter for fiscal year 2022 comprised the period July 31, 2022, to October 31, 2022. There were no major events that occurred in the fourth quarter that affected the Company. However, there are certain seasonal aspects of the fourth quarter that are relevant to operations. In particular, the Company is likely to spend more aggressively on exploration work during the summer months included in the fourth quarter. Furthermore, there was an aseasonal one-off item where the Company held the Annual General Meeting on October 19, 2022, and had increased overhead costs associated with meeting fees and paying fees to the TSX Venture Exchange to keep the stock option plan into good standing associated with the meeting.

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.

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