Kingsmen Resources Ltd.

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2023

This discussion and analysis of financial position and results of operation is prepared as at April 18, 2024 and should be read in conjunction with the audited consolidated financial statements for the years ended December 31, 2023 and 2022 of Kingsmen Resources Ltd. (the “Company”). The following disclosure and associated financial statements are presented in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board and Interpretations of the IFRS Committee . Except as otherwise disclosed, all dollar figures included therein and in the following management discussion and analysis (“MD&A”) are quoted in Canadian dollars.

Forward-Looking Statements

This MD&A contains certain statements that may constitute “forward-looking statements”. Forward-looking statements include but are not limited to, statements regarding future anticipated exploration programs and the timing thereof, and business and financing plans. Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate and similar expressions, or which by their nature refer to future events. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future performance, and that actual results may differ materially from those in forward-looking statements as a result of various factors, including, but not limited to, the Company’s ability to identify one or more economic deposits on its properties, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies.

Historical results of operations and trends that may be inferred from this MD&A may not necessarily indicate future results from operations. In particular, the current state of the global securities markets may cause significant reductions in the price of the Company’s securities and render it difficult or impossible for the Company to raise the funds necessary to continue operations.

All of the Company’s public disclosure filings, including its most recent management information circular, material change reports, press releases and other information, may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties.

Company Overview

The Company is a reporting issuer in British Columbia and Alberta and trades on the TSX Venture Exchange (“TSXV”) under the symbol “KNG” and on the OTCQB under the symbol “KNGRF”. The Company is a junior mineral exploration company primarily engaged in the acquisition and exploration of precious metals on mineral properties in Mexico. The Company’s principal office is located at #1305 - 1090 West Georgia Street, Vancouver, British Columbia, V6E 3V7.

Directors and Officers

As of the date of this MD&A the Officers and Directors of the Company are as follows:

Scott Emerson - President, CEO and Director Nick DeMare - CFO and Director Rod Johnston - Director Kieran Downes - Director Carlos Garza - Director Harvey Lim - Corporate Secretary

Las Coloradas Project

Kingsmen controls a 100% interest in a group of claims (the “Las Coloradas Project”) located in the Parral Mining District, State of Chihuahua, Mexico.

The project area is located approximately 30 kilometres southeast of the city of Hidalgo de Parral and 40 kilometers east of the mid-Tertiary polymetallic quartz sulfide vein deposits of the San Francisco del Oro and Santa Barbara mining districts which are amongst the largest Pb-Zn-Cu-Ag deposits in Mexico[(1)(2)]

Historic mining on a small area of the project by the American Smelting and Refining Company (“ASARCO”) was conducted between 1943 - 1952 with production from the La Soledad, Santo Niño, Eva and Rosario veins. The project area has recently been consolidated and is located within a well-established mining district, with the local communities fully supportive of mining.

The Las Coloradas Project is an underground epithermal, high-grade, narrow-vein, silver-gold copper-lead-zinc project within the Carbonate Replacement Deposits belt of Chihuahua state, Mexico. Outcropping mineralization is hosted by the Mezcalera Lower Cretaceous Formation. The Mezcalera Formation is of similar age and composition to the Parral Formation that hosts the mineralization in the San Francisco del Oro and Santa Barbara districts[(3)] .

In July 2023 the Company reported a new 1:5,000 scale geological map of the 100% owned Las Coloradas project and its structural control(s) that delivers an excellent understanding of the mineralization in the Soledad and Soledad II structures and their subsidiaries. The flexures, intersecting structures, en échelon veins, and dilation zones control the development and location of individual bodies of mineralization. The currently exposed geology, structures and mineralization are functions of erosion and imperfect exposure. The significant strike length of the Soledad and Soledad II structures indicate the structures will continue at depth with the potential for high grade silver mineralization. The structures have not been tested/explored at depth, to-date. The mineralized structures may go to significant depths as in the San Francisco del Oro and Santa Barbara district where mineralized structures persist to depths of 800 meters. In addition, Kingsmen also acquired ground magnetic coverage of the project area. The detailed magnetic geophysical information will provide guidance for expanding the mineralization.

Three important areas of mineralization are currently recognized. The first is at the southeast end of the Soledad structure, in the area of the Rosario and Soledad shafts, where highlights of the sampling include 2 >500 g/t silver, 4 > 400g/t silver and 9 > 100 g/t silver. The second important area is the cluster of old workings at the northwest end of the Soledad II structure where highlights of the sampling include 1 > 400g/t silver, 1 > 300g/t silver, 1 >200 g/t silver and 1> 100 g/t silver. The third important area is the cluster of old workings in the NW part of the Soledad structure where highlights of the sampling include 1 > 400g/t silver, 1 > 300g/t silver, 1 > 200 g/t silver and 1 > 100 g/t silver. None of these areas have been drill tested.

The Las Coloradas mineralization is on the southeast flank of a prominent aeromagnetic high interpreted to be a buried felsic intrusive body. The felsic intrusives associated with the Soledad and Soledad II structures are likely linked to this body and the setting is favourable for porphyry, skarn and epithermal vein mineralization. Regional prospecting and sampling to the west, north and northeast of the Solidad structures identified elevated to anomalous silver values associated with a previously unrecognized, approximately 2,500 meter long, NE-trending zone of structures. As well, a number of other sites with anomalous silver values were identified. Pathfinder element concentrations occurring in variable combinations in the areas of interest include Au, As, Sb, Pb, Zn, Cu, Hg, Mo, Te and Tl. High pathfinder element concentrations are interpreted to reflect proximity to mineralizing fluid flow. The different combinations of pathfinder elements likely represent different stages or pulses of mineralization. Their distributions provide evidence for district-wide, structurally controlled mineralization which are being followed up. Kingsmen is continuing its field program of prospecting and sampling of the newly recognized 2,500 meter long, NE-trending zone of structures, and the pathfinder element concentrations identified. In April 2024, the Company announced the completion of multi element analyses on all rock samples in and around the old Soledad mine area, these samples yielded significant results which confirm that distinct areas of mineralization are recognizable indicating potential for significant mineralization in the other locales.

Qualified Person

The scientific and technical disclosure in this MD&A has been reviewed and approved by Kieran Downes, Ph.D., P. Geo., a Qualified Person as defined by National Instrument 43-101. Mr. Downes is a Director of the Company.

(1) Grant G.J. and Ruiz J. (1988) The Pb-Zn-Cu-Ag deposits of the Granadena Mine, San Francisco del Oro-Santa Barbara District, Chihuahua. Economic Geology (1988) Vol. 83 pp. 1683–1702.

(2) Megaw, P.K., Ruiz, J. and Titley, S.R. (1988) High-temperature, carbonate-hosted Ag-Pb-Zn(Cu) deposits of northern Mexico. Economic Geology (1988) Vol. 83 pp. 1856-1885

(3) Texidor Carlsson, J.M. and Wilson, V. (2020) NI 43-101 Technical Report on the Parral project, State of Chihuahua, Mexico..

Selected Financial Data

On March 28, 2023 the Company completed a consolidation of its share capital on a one new for two old basis. The share and per share amounts have been adjusted to reflect the share consolidation.

The following selected financial information is derived from the audited annual consolidated financial statements of the Company prepared in accordance with IFRS.

	Years Ended December 31,	Years Ended December 31,	Years Ended December 31,
	2023 $	2022 $	2021 $
Operations:
Revenues	Nil	Nil	Nil
Expenses	(512,894)	(314,633)	(190,492)
Other items	33,364	303,911	1,527
Net loss and comprehensive loss	(479,530)	(10,722)	(188,965)
Basic and diluted lossper share	(0.03)	(0.00)	(0.01)
Dividendsper share	Nil	Nil	Nil
Statement of Financial Position:
Workingcapital	877,592	766,453	901,092
Total assets	1,268,932	940,615	908,831
Total long-term liabilities	Nil	Nil	Nil

The following selected financial information is derived from the unaudited condensed consolidated interim financial statements of the Company prepared in accordance with IFRS.

	Fiscal	2023			Fiscal	2022
Dec. 31 2023 $	Sep. 30 2023 $	Jun. 30 2023 $	Mar. 31 2023 $	Dec. 31 2022 $	Sep. 30 2022 $	Jun. 30 2022 $	Mar. 31 2022 $

Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil
(181,819)	(96,007)	(136,801)	(98,267)	(116,316)	(50,382)	(72,961)	(74,974)
(348)	12,546	12,780	8,386	3,071	23,482	16,277	261,081
(182,167)	(83,461)	(124,021)	(89,881)	(113,245)	(26,900)	(56,684)	186,107
(0.01)	(0.00)	(0.01)	(0.01)	(0.00)	(0.00)	(0.00)	0.01
Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

877,592	1,101,829	1,239,104	1,450,664	766,453	1,003,616	1,030,516	1,087,200
1,268,932	1,402,248	1,498,498	1,646,596	940,615	1,016,619	1,052,137	1,107,772
Nil	Nil	Nil	Nil	Nil	Nil	Nil	Nil

Results of Operations

Three Months Ended December 31, 2023 Compared to Three Months Ended September 30, 2023

During the three months ended December 31, 2023 (“Q4”) the Company reported a net loss of $182,167 compared to a net loss of $83,461 for the three months ended September 30, 2023 (“Q3”), an increase in loss of $98,706. The increase in loss was primarily due to a $85,812 increase in general and administrative expenses, from $96,007 during Q3 to $181,819 during Q4, mainly due to:

(i) a $11,378 increase in corporate development activities due to the Company’s participation in the New Orleans investment conference in November 2023;
(ii) a $23,911 increase in travel due to the Company’s directors travelling to New Orleans to attend an investment conference and to Mexico to finalize minor amendments to the option agreements and review ongoing activities on the Las Coloradas Project ; and
3 -
(iii) a $27,869 increase in professional fees for corporate advisory services rendered.

Three Months Ended December 31, 2023 Compared to Three Months Ended December 31, 2022

During the three months ended December 31, 2023 (“Q4/2023”) the Company reported a net loss of $182,167 compared to a net loss of $113,245 for the three months ended December 31, 2022 (“Q4/2022”) an increase in loss of $68,922. The increase in loss is mainly due to a $65,503 increase in general and administrative expenses, from $116,316 in Q4/2022 to $181,819 in Q4/2023, which was partially offset by a $4,238 increase in interest income and a $4,628 increase in foreign exchange in Q4/2023. Significant fluctuations in expenses are as follows:

(i) a $62,634 increase in professional fees for corporate advisory services rendered. There were no corporate advisory services in Q4/2022;
(ii) a $40,960 decrease in general exploration from $42,022 in Q4/2022 compared to $1,062 in Q4/2023. During Q4/2022 the Company was conducting due diligence on properties in Mexico;
(iii) a $16,885 decrease in legal fees, from $17,604 in Q4/2022 compared to $719 in Q4/2023. During Q4/2022 legal services were required to review prospective property agreements;
(iv) a $23,350 increase in director and officer compensation, from $30,000 in Q4/2022 to $53,350 in Q4/2023;
(v) a $16,614 increase in corporate development for market awareness programs and participation in the New Orleans investment conference. There were no corporate development expenses in Q4/2022;
(vi) a $14,864 increase in travel from $12,206 in Q4/2022 to $27,070 in Q4/2023. The increase was due to travel to New Orleans for an investment conference and the Company’s directors traveling to Mexico to review the Company’s resource properties.

Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022

During the year ended December 31, 2023 (“fiscal 2023”) the Company reported a net loss of $479,530 compared to a net loss of $10,722 for the year ended December 31, 2022 (“fiscal 2022”), an increase in loss of $468,808. The increase in loss was primarily attributable to the $270,064 gain recorded in fiscal 2002 from the disposition of the Company’s remaining 51% interest in the La Trini Property combined with a $198,261 increase in general and administrative expenses in fiscal 2023, from $314,633 during fiscal 2022 to $512,894 during fiscal 2023. Specific fluctuations in expenses are as follows:

(i) during fiscal 2023 the Company incurred audit expenses of $18,500 compared to $10,000 in fiscal 2022 due to increased activities and transactions conducted by the Company;
(ii) during fiscal 2023 the Company incurred $35,200 (2022 - $20,300) for accounting and administrative services provided by Chase Management Ltd., a private corporation owned by Mr. DeMare, for accounting and administration services provided by Chase personnel, excluding Mr. DeMare;
(iii) during fiscal 2023 the Company incurred $59,990 for corporate development mainly for ongoing market awareness programs. No corporate development activities were conducted in fiscal 2022;
(iv) during fiscal 2023 the Company incurred $13,268 (2022 - $4,895) for transfer agent fees. The increase in fiscal 2023 was due to additional services required for the Company’s consolidation of its share capital and private placement financing conducted in March 2023;
(v) during fiscal 2023 the Company incurred professional fees totalling $104,478 for corporate advisory services. No such services were provided to the Company in fiscal 2022;
(vi) during fiscal 2023 the Company incurred regulatory fees of $35,464 compared to $25,213 for fiscal 2022. The increase was due to filing fees associated with the share consolidation, share options plan renewal and foreign background search for a director;
(vii) during fiscal 2023 the Company incurred $5,269 (2022 - $57,097) for general exploration for review of properties in Mexico; and
(viii) during fiscal 2023 the Company incurred director and officer compensation of $158,850 compared to$120,000 during 2022. See “Related Party Disclosures”.

Financings

During fiscal 2023 the Company completed a non-brokered private placement for 5,333,500 common shares for proceeds of $800,025.

No equity financings were conducted during fiscal 2022.

Financial Condition / Capital Resources

As at December 31, 2023 the Company had working capital in the amount of $877,592. Although management considers that the Company has adequate resources to maintain its core operations, make option or property payments as required, conduct planned exploration programs on its existing exploration and evaluation assets and discharge its obligations as they become due in the next twelve months, the Company recognizes that exploration expenditures may change with ongoing results and, as a result, it may be required to obtain additional financing. While the Company has been successful in securing financings in the past there can be no assurance that it will be able to do so in the future.

Contractual Commitments

Other than its property agreements, the Company has no other contractual commitments. See “Las Coloradas Project”.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Proposed Transactions

The Company has no proposed transactions.

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Examples of significant estimates made by management include estimating the fair values of financial instruments, valuation allowances for deferred income tax assets and assumptions used for share-based compensation. Actual results may differ from those estimates.

A detailed summary of the Company’s critical accounting estimates and sources of estimation is included in Note 3 to the December 31, 2023 audited annual consolidated financial statements.

Changes in Accounting Policies

There were no changes in accounting policies.

A detailed summary of the Company’s significant accounting policies is included in Note 3 to the December 31, 2023 audited annual consolidated financial statements.

Related Party Disclosures

Transactions made with related parties are made in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties. Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of members of the Company’s Board of Directors and executive officers.

(a) During fiscal 2023 and 2022 the following amounts were incurred with respect to its key management personnel:

personnel:
	2023	2022
	$	$
Mr. Emerson - CEO and director	123,000	96,000
Mr. DeMare - CFO and director	6,000	6,000
Mr. Johnston - director	6,000	6,000
Mr. Henstridge - former director(1)	2,500	6,000
Mr. Downes - director(2)	28,925	-

Mr. Garza - director(2) Mr. Lim - Corporate Secretary	2023 $ 6,925 6,000 179,350	2022 $ - 6,000
		120,000

(1) Mr. Henstridge did not stand for re-election at the AGM on June 2, 2023.

(2) Messrs. Downes and Garza were elected as directors at the AGM on June 2, 2023.

During fiscal 2023 the Company incurred total compensation of $179,350 (2022 - $120,000) to key management personnel of which $158,850 (2022 - $120,000) was expensed to director and officer compensation and $20,500 (2022 - $nil) was capitalized to exploration and evaluation assets.

As at December 31, 2023 $3,500 (2022 - $nil) remained unpaid.

(b) During fiscal 2023 the Company incurred a total of $35,200 (2022 - $20,300) to Chase, a private corporation owned by Mr. DeMare, for accounting and administration services provided by Chase personnel, excluding Mr. DeMare. As at December 31, 2023 $3,100 (2022 - $3,500) remained unpaid.

Outstanding Share Data

The Company’s authorized share capital is unlimited common shares with no par value. As at April 18, 2024 there were 19,349,919 common shares issued and outstanding.

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Kingsmen Resources Ltd. Management Reports 2024

44975_rns_2024-04-18_c3d51305-7ccd-4af3-b88e-32272fe72d90.pdf