McFarlane Lake Mining Incorporated Management Discussion and Analysis

For the year ended August 31, 2021 and period ended August 31, 2021

Introduction

The following Management Discussion and Analysis ("MD&A") of McFarlane Lake Mining Incorporated (the "Company") is current as of August 31, 2021, unless otherwise indicated, and should be read together with the Company's audited financial statements and related notes for the year ended August 31, 2021 and the period ended August 31, 2020, which have been prepared in accordance with International Financial Reporting Standards ("IFRS").

All dollar figures in this MD&A are stated in Canadian dollars unless otherwise indicated.

Caution Regarding Forward-Looking Information and Statements

This MD&A contains forward-looking statements intended to provide readers with a reasonable basis for assessing the Company's performance. Forward-looking statements can be identified by such words as "plans", "expects", "budgets", "estimates", "intends", "anticipates", "believes", "continues", "may", "could", "would", "should", "might" or "will", or equivalents or variations thereof. Forward-looking statements include those with respect to the Company's future strategy, plans, transactions, objectives and adequacy of working capital, including statements relating to acquiring, exploring, and monetizing current and future mineral exploration properties. Forward-looking statements rely on underlying assumptions, including management's expectations as to transaction opportunities, exploration potential, and precious metals prices, that, if not realized, can result in such forward-looking statements not being achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, those described under "Risks and Uncertainties" below and among others, the exploration or monetization potential of the Company's mineral properties, transaction execution risk, volatility in financial markets, economic conditions, precious metals prices and unanticipated increases in expenses. Although the Company has attempted to identify important factors that could cause actions, events or results not to be as predicted, there can be no assurance that forward-looking statements will prove to be accurate. Other than as required by applicable Canadian securities laws, the Company does not undertake to update any such forward-looking statements to reflect events or circumstances after the date hereof. Accordingly, readers should not place undue reliance on any forward-looking statements herein.

General Overview

The Company was incorporated under the laws of the Province of Ontario on August 21, 2020. The head office and registered office of the Company is located at 15 Kincora Court, Sudbury, Ontario P3E 2B9. The Company is currently in the process of analyzing and acquiring mineral properties and will ultimately become a mineral property exploration company.

Overall Performance

The Company was incorporated on August 21, 2020 and had no operational activity for the period ended August 31, 2020. During the period from August 21, 2020 to August 31, 2020, the Company issued 32,000,000 common shares for total share consideration of \$320.

For the year ended August 31, 2021, the Company did not record any revenues and incurred a net and comprehensive loss of \$1,220,433, (2020 – nil). During the period the Company incurred exploration and evaluation expenditures of \$470,309, professional fees of \$212,335 and other operating expenses of \$15,821 and issued share-based compensation of \$531,968.

During the period ended August 31, 2021, the Company issued common shares and completed private financing transactions to provide initial funds for the analysis and acquisition of mineral properties.

The funds raised through the issuance of common shares of the Company to August 31, 2021 are as follows:

Date	Number of Common Shares	Gross Share Proceeds
August 21, 2020	32,000,000	\$320
April 30, 2021	5,000,000	\$5,000
May 20, 2021	22,075,000	\$2,207,500

Total	59,075,000	\$2,212,820

During the period, the Company was also advanced funds totalling \$195,000 from two companies controlled by certain directors of the Company.

Selected Annual Financial Information

The table below sets out certain selected financial information regarding the operations of the Company for the period indicated. The selected financial information has been prepared in accordance with IFRS and should be read in conjunction with the Company's financial statements and related notes.

	August 31, 2021 (\$)	August 31, 2020
Total assets	1,851,055	320
Total liabilities	413,010	nil
Shareholder's equity	1,448,045	320
Total revenue	Nil	nil
Net and comprehensive income (loss)	(1,220,433)	nil
Basic and diluted income (loss) per share	(0.031)	nil

Notes Payable and Related Parties

During the fiscal year ended August 31, 2021, the Company was advanced funds in the amount of \$195,000 from companies controlled by two directors evidenced by secured, demand promissory notes issued by the Company which bear interest at 12% per annum. As of August 31, 2021 these notes payable totaled \$195,000 (August 31 2020 – nil). Accrued interest owed on these notes payable in the amount of \$10,491 (August 31, 2020 – nil) is included in the accounts payable and accrued liabilities of the Company as of August 31, 2021.

Discussion of Operations

The Company had no operational activity for the period ended August 31, 2020. For the current fiscal period, the Company is currently in the process of analyzing and acquiring mineral properties and will ultimately become a mineral property exploration company. As of August 31, 2021, the Company has entered into an option agreement and two letters of intent encompassing six properties containing gold mineralization in Manitoba and Ontario (collectively, the "Mineral Properties"). Three of the Mineral Properties have historic mines which were past producers of gold, while two of the Mineral Properties contain NI 43-101 non-compliant gold resources. The details of the Mineral Properties and the related option agreement and letters of intent are as set out below.

Mineral Properties

The West Hawk Lake Property, High Lake Property and the McMillan Property

On February 23, 2021, the Company executed an option agreement with Canadian Star Minerals Ltd. (the "Optioner"), which was amended by an amending agreement dated September 7, 2021 (collectively, as amended, the "Option Agreement"), whereby the Company may acquire up to a 100% interest in 33 mining claims, rights and leases in respect of:

1. a property located in Southeastern Manitoba approximately 5 kilometres west of the Ontario-Manitoba board near the community of Hawk Lake, Manitoba (the "West Hawk Lake Property");
1. a property located immediately east of the Ontario-Manitoba border approximately 45 kilometres west of the town of Kenora, Ontario (the "High Lake Property"); and
1. a property located 70 kilometres southwest of Sudbury, Ontario near the town of Espanola, Ontario (the "McMillan Property" and collectively with the West Lake Property and the High Lake Property, the "Optioned Properties").

Pursuant to the terms of the Option Agreement, the Optioner granted the Company an exclusive option to purchase the Optioned Properties for an option term expiring at the end of day on April 30, 2022. As consideration for the granting of the option to purchase, the Company is obligated to pay \$250,000 as consideration for the first six months of the option and \$50,000 per month to the Optioner beginning the seventh month from the date of the Option Agreement until the option is exercised and the transaction is completed. The purchase price to be paid by the Company upon exercise of the option is \$5,500,000, which shall be satisfied as follows: (a) \$2,750,000 of cash consideration; (b) the issuance of common shares in the capital of the Company with a value of \$2,750,000 to be reduced by the cumulative amount paid by the Company in option payments up to a maximum of \$550,000; and (c) the transfer to the Optioner of 7,000,000 issued and outstanding common shares in the capital of the Company held by certain officers and directors of the Company upon closing of the transaction.

The Mongowin Property

The Company executed a binding letter of intent dated May 25, 2021 (the "Mongowin LOI") with Transition Metals Corp. (the "Mongowin Vendor") in respect of the acquisition by the Company of a 100% interest in 125 mining claims located in Northeastern Ontario in Mongowin Township approximately 70 kilometres southwest of Sudbury, Ontario near the town of Espanola, Ontario (the "Mongowin Property"). Pursuant to the terms of the Mongowin LOI, the Mongowin Vendor granted the Company a period of exclusivity ending October 25, 2021 in which to negotiate and enter into a definitive agreement to purchase the Mongowin Property, subject to the following terms and conditions:

the Company must become a publicly traded entity on a Canadian exchange;
the Company must make a non-refundable cash payment of \$15,000 to the Mongowin Vendor upon signing of the Mongowin LOI;
the Company may extend the period of exclusivity for an additional 3 months provided that the Company makes non-refundable cash payments to the Mongowin Vendor of \$15,000 per month;
upon the signing of a definitive agreement, the Company must make a payment to the Mongowin Vendor of \$85,000;
the Mongowin Vendor shall be entitled to common shares in the issuer resulting from a go-public transaction at a value of \$500,000 at a deemed price per common share equal to the go public value of the resulting issuer to which the Company will assign the Mongowin Property upon its listing on a Canadian exchange;
upon earning a 100% interest in the Mongowin Property, the Company shall grant the Mongowin Vendor a 1.5% Net Smelter Return Royalty;
a portion of the property is subject to an additional existing NSR of which 0.5% may be purchased for \$600,000;
commencing the 5th year following the execution of a definitive agreement, the Company will pay the Mongowin Vendor advanced royalty payments of \$25,000 per year (in cash or stock) to be deducted from future royalty payments following commercial production to a maximum total of \$250,000. Any exploration expenditures spent on the Mongowin Property will offset the payments on a dollar for dollar basis. If the Company does not pay the advanced royalty payments or spend the required exploration expenditure, the Mongowin Vendor may chose to purchase the property for \$1;
the Mongowin Vendor is entitled to a one-time milestone payment of \$2,500,000 at any time commercial production is achieved; and
on October 22, 2021, the Company paid an additional \$15,000 to extend the period of exclusivity as per the agreement.

The Michaud/Munro Properties

The Company executed a binding letter of intent dated June 28, 2021 (the "Michaud/Munro LOI") with 1929941 Ontario Limited (the "Vendor") in respect of the acquisition by the Company of a 100% interest in 17 mining leases located in Northeastern Ontario in the townships of Michaud and Munro in the Larder Lake Mining District near the town of Matheson, Ontario (the "Michaud/Munro Properties"). Pursuant to the terms of the Michaud/Munro LOI, the Vendor granted the Company a period of exclusivity ending October 1, 2021 in which to negotiate and enter into a definitive agreement to purchase the Michaud/Munro Properties, subject to the following terms and conditions:

the Company must become a publicly traded entity on a Canadian exchange;
the Company must make a non-refundable cash payment of \$20,000 to the Vendor upon signing of the Michaud/Munro LOI;
the Company may extend the period of exclusivity for an additional 3 months provided that the Company makes a non-refundable cash payment to the Vendor of \$15,000 on or before October 1, 2021;
the Company must make a payment of \$30,000 to the Vendor; The Vendor shall be entitled to common shares in the issuer resulting from a go-public transaction at a value of \$550,000 at a deemed price per common share equal to the go public value of the resulting issuer to which the Company will assign the Mongowin Property upon its listing on a Canadian exchange;
upon earning a 100% interest in the Michaud/Munro Properties, the Company shall grant the Vendor a 1.5% Net Smelter Return Royalty of which 1% can be purchased for \$1.5 million; and
on October 22, 2021 the Vendor agreed to extend the period of exclusivity and the Company paid an additional \$15,000 on this date.

Proposed Exploration Expenditures

West Hawk Lake Property

Upon completion of the acquisition of the West Hawk Lake Property, the Company intends to commence an exploration program commencing during the fourth quarter of 2021 quarter of 2022. The Company has obtained the mining permit to conduct exploration activity on this property. This initial exploration program is designed to, in part, confirm prior historical results and confirm structural continuity and includes the following activities:

Task	Details
Diamond Drilling	3,000 metres
Line Cutting	25 kilometres
Geophysics	IP Survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modelling/Mapping

Total Cost	\$800,000

Task	Details
Diamond drilling	3,000m
Line cutting	25km
Geophysics	IP survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modeling / mapping
Total Cost	\$800,000

High Lake Property

Upon completion of the acquisition of the High Lake Property, the Company intends to commence an exploration program during the second or third quarter of 2022, subject to obtaining required permits and consultation with local First Nations groups which is expected to take approximately 6 months. Drilling will be completed to confirm and expand known mineralization in the most prospective areas. The details of the proposed exploration program are as follows:

Task	Details
Diamond Drilling	8,200 metres
Line Cutting	25 kilometres
Geophysics	IP Survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modelling/Mapping

Total Cost	\$1,450,000

Task	Details
Diamond drilling	8,200m
Line cutting	25km
Geophysics	IP survey
Logging/Sampling	Au, Ag, Cu, Fe, S
Modeling / mapping
Total Cost	\$1,450,000

Summary of Quarterly Results

McFarlane Lake Mining Summary of Quarterly Results

Quarter ended	Net income (loss)	Earnings (loss) per share -
	for the period	basic and diluted

August 31, 2020	Nil	Nil

November 30, 2020	Nil	Nil

February 28, 2021	(\$11,104)	Nil

May 31, 2021	(\$821,916)	(\$0.023)

August 31, 2021	(\$397,413)	(\$0.010)

Liquidity and Capital Resources

The Company's cash position as of August 31, 2021 was \$1,820,454 (August 31 2020 - \$320) with a net working capital of \$1,438,045 (August 31 2020 - \$320). The company had total assets as of August 31, 2021 of \$1,851,055 (August 31 2020 - \$320).

The Company believes that the current capital resources are not sufficient to pay overhead expenses and fund its proposed mineral property acquisitions and exploration programs for the next twelve months and consequently has entered into an agreement with Canaccord Genuity Corp. In respect of a proposed equity financing as detailed below. The Company will continue to monitor the current economic and financial market conditions and evaluate their impact on the Company's liquidity and future prospects.

Since the Company may not be able to generate cash flow from its operations for the foreseeable future, the Company will have to rely on the issuance of shares or the exercise of options and warrants to fund ongoing operations and investment. The ability of the Company to raise capital will depend on market conditions and it may not be possible for the Company to issue shares on acceptable terms or at all.

The Company manages its capital structure in order to ensure sufficient resources are available to meet operational requirements and safeguard its ability to continue as a going concern. There are no externally imposed capital requirements on the Company. Management considers the items included in shareholders' equity and working capital as capital. The Company manages the capital structure and adjusts it in response to changes in economic conditions and the risk characteristics of the underlying assets. The Company's primary objective with respect to its capital management is to ensure that it has sufficient capital resources to fund the operation of the Company. To secure additional capital necessary to pursue these objectives, the Company intends to raise additional funds through equity of debt financing.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements requiring disclosure under this section.

Transactions Between Related Parties

Related party transactions are comprised of services rendered by directors and/or officers of the Company or by a company with a director and/or officer in common. Related party transactions are in the normal course of business and are measured at the exchange amount.

Consulting Agreements

The Company entered into a one-year consulting agreement with its Vice President of Geology, (the "Consultant") on June 14, 2021. The terms of the agreement include a grant of 500,000 stock options to the Consultant and consulting fees payable by the Company of \$15,000 per month.

Notes Payable

During the year the Company was advanced funds totalling \$195,000 from companies controlled by certain directors of the Company. These promissory notes payable are secured by a general guarantee by the Company, bear interest at 12% per annum and are due on demand. Included in accounts payable and accrued liabilities as of August 31, 2021 is accrued interest owed on these notes payable in the amount of \$10,491. The monies were advanced to assist in the financing of the Company's operations.

Key Management Compensation

Key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly and include the Company's executive officers and members of the Board of Directors. During the year ended August 31, 2021, key management compensation consisted of the following:

Name and position	Year	Salary, consulting fee, retainer or commission (CDN\$)	Bonus (CDN\$)	Committee or meeting fees (CDN\$)	Value of perquisites (CDN\$)	Value of all other compensation (CDN\$)	Total compensation (CDN\$)
Mark	2021	20,000	Nil	Nil	Nil	193,443	213,433
Trevisiol,
Chief
Executive
Officer,
President and
Director

Name and position	Year	Salary, consulting fee, retainer or commission (CDN\$)	Bonus (CDN\$)	Committee or meeting fees (CDN\$)	Value of perquisites (CDN\$)	Value of all other compensation (CDN\$)	Total compensation (CDN\$)
Chuck Lilly, Chief Financial Officer and Director	2021	10,000	Nil	Nil	Nil	96,721	106,721
Roger Emdin, Vice President, Project Development and Director	2021	112,519	Nil	Nil	Nil	96,721	209,352
Perry Dellelce, Director	2021	Nil	Nil	Nil	Nil	96,721	96,721
Robert Kusins, Vice President Geology	2021	58,500	Nil	Nil	Nil	48,361	106,861

Proposed Transactions

Proposed Business Combination with 1287401 B.C. Ltd.

The Company entered into a non-binding letter of intent dated August 16, 2021 with 1287401 B.C. Ltd ("1287401"), a reporting issuer in the provinces of Alberta and British Columbia, whereby the Company and 1287401 have agreed to enter into good faith negotiations in respect of a transaction to combine their respective businesses (the "Proposed Transaction").

The structure of the Proposed Transaction will be determined following a review of the applicable tax, securities, and corporate law, and other relevant considerations. The issuer resulting from the Proposed Transaction (the "Resulting Issuer") will carry on the business currently carried on by the Company. The closing of the Proposed Transaction is subject to, among other customary conditions, entering into a definitive agreement setting out the terms of the Proposed Transaction, the completion of a concurrent financing (see "Subsequent Events" below) and the Resulting Issuer receiving conditional approval to have its common shares listed on the Neo Exchange Inc. (the "NEO"). While the Company and 1287401 intend to apply to list the common shares of the Resulting Issuer on the NEO, there can be no assurances that the Proposed Transaction will be completed or that the listing will be approved.

Changes in Accounting Policies including Initial Adoption

There have been no changes in the existing accounting policies of the Company in the period nor have any new accounting policies been adopted during this period.

Financial Instruments and Other Instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or an equity instrument of another entity.

The Company does not have any outstanding hedging or derivative contracts as of the year end date.

The carrying value of the Company's financial instruments approximate fair value due to the short-term or demand nature of these financial instruments.

Outstanding Share Data

As of the date of this MD&A, the Company had the following equity securities outstanding:

Security Description	August 31, 2021	August 31, 2020
Common shares	59,075,000	32,000,000
Stock options to acquire common shares	5,500,000	Nil
Share purchase warrants and other instruments	Nil	Nil
Common Shares Fully Diluted	64,575,000	32,000,000

Subsequent Events

Private Placement led by Canaccord Genuity Corp.

The Company entered into an agreement with Canaccord Genuity Corp. ("Canaccord Genuity") on September 20, 2021 pursuant to which the Company engaged Canaccord Genuity to act as the lead agent (or if applicable, on behalf of a syndicate of agents) to assist the Company in the offering for sale of up to 15,000,000 units (the "Offered Securities") of the Company at a price of \$0.40 per unit to raise aggregate gross proceeds of up to \$6,000,000 (the "Offering") on the terms described below. The agreement was amended on October 27, 2021 to introduce a flow-through portion of the Offering for up to 10,000,000 flow-through shares of the Company (the "Flow-through Shares") at a price of \$0.40 per Flow-Through Share to raise maximum gross proceeds of \$4,000,000 from the issuance of Flow-Through Shares. The combined size of the Offering will increase to up to \$10,000,000.

Each Offered Security shall be comprised of one common share (a "Common Share") of the Company and one-half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant shall be exercisable to acquire a Common Share at a price of \$0.60 per Common Share for a period of 36 months from the closing of the Offering.

Upon closing of the Offering, the Company has agreed to pay cash commission equal to (i) 7% of the aggregate gross proceeds of the Offering payable in cash or Offered Securities and (ii) warrants exercisable at any time prior to the date that is 36 months from the closing of the Offering to acquire that number of Offered Securities which is equal to 7% of the aggregate number of Offered Securities issued pursuant to the Offering. Upon Closing of the Offering the Company shall also pay Canaccord Genuity a corporate finance fee in an amount equal to 2.5% of the aggregate number of Offered Securities.

The Offering is subject to certain terms and conditions contained in the agreement, including that each of the Company's officers, directors, and certain key shareholders to be identified agree prior to closing of the Offering to lock down periods. The length of the lockdown periods and release schedules for the locked-up persons shall vary based on terms agreed to with Canaccord Genuity.

Company Forecast - 12 month Operating Expenditures

The Company is forecasting to incur the following expenditures in the upcoming 12 month operating period:

Additional Disclosure for Venture Issuer without Significant Revenue

Risks and Uncertainties

Going Concern

The financial statements have been prepared on the assumption that the Company will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company was not expected to continue operations for the foreseeable future. As of August 31, 2021 the Company has not achieved profitable operations, has accumulated losses of \$1,220,433 (August 31 2020 – nil) since inception and expects to incur further losses in the development of its business.

No Operating History

The Company was incorporated on August 21, 2020 and has not commenced commercial operations. The Company has no history of earnings or paid any cash dividends, and it is unlikely to produce earnings or pay dividends in the immediate or foreseeable future.

Speculative Nature of Investment Risk

An investment in securities of the Company involves a high degree of risk and must be considered highly speculative due to the nature of the Company's business and the present stage of development of its mineral properties. In addition to information set out or incorporated by reference in this MD&A, prospective investors should carefully consider the risk factors set out below. Any one risk factor could materially affect the Company's financial condition and future operating results and could cause actual events to differ materially from those described in forward looking statements relating to the Company

Exploration and Mining Risks

Resource exploration and development and mining operations are highly speculative and characterized by a number of significant risks which even a combination of careful evaluation, experience and knowledge may not eliminate, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but from finding mineral deposits which, though present, are insufficient in quantity and quality to be mined profitability. Few properties that are explored are ultimately developed into producing mines. There is no assurance that the Company's mineral exploration and development programs will result in any discoveries of bodies of commercial mineralization. There is also no assurance that even if commercial quantities of mineralization are discovered, a mineral property will be brought into commercial production. The Company will continue to rely upon the advice and work of consultants and others for exploration, development, construction, and operating expertise.

Substantial expenditures are required to establish and upgrade mineral resources, to establish mineral reserves, to develop metallurgical processes to extract metals from mineral resources and, in the case of new properties, to develop the mining and processing facilities and infrastructure at any site chosen for mining. No assurance can be given that the funds required for development can be obtained on a timely basis. Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size and grade; metal prices which are highly cyclical; and government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. Unsuccessful exploration and development programs could have a material adverse impact on the Company's operations and financial condition.

Factors beyond the Company's Control

The mining exploration business is subject to several factors beyond the Company's control including changes in economic conditions, intense industry competition, variability in operating costs, changes in government and in rules and regulations of various regulatory authorities. An adverse change in any one of such factors would have a material adverse effect on the Company, its business and results of operations which might result in the Company not identifying a body of economic mineralization, completing the development of a mine according to specifications in a timely, cost-effective manner or successfully developing mining activities on a profitable basis.

Additional Funding Required

Exploration and development of the Company's mineral properties may require significant additional financing. Accordingly, the continuing development of the Company's properties will depend upon the Company's ability to obtain financing through equity financing, debt financing, the joint venturing of projects or other external sources. Failure to obtain sufficient financing may result in a delay or an indefinite postponement of exploration, development, or production on any or all of the Company's properties, or even a loss of property interest, or have a material adverse impact on the Company's future cash flows, earnings, results of operations and financial condition or result in the substantial dilution of its interests in its properties. There can be no assurance that additional capital or other types of financing will be available if needed or that, if available, the terms of such financing will be favorable to the Company. If the Company was required to arrange for debt financing it could be exposed to the risk of leverage, while equity financing may cause existing shareholders to suffer dilution. There can be no assurance that the Company will be successful in overcoming these risks or any other problems encountered in connection with such financings. Failure to raise capital when needed would have a material adverse effect on the Company's business, financial condition, and results of operations.

The Company has and will continue to have negative operating cash flow until its mineral property commence commercial production should exploration and development efforts demonstrate that commercial production from such mineral properties is feasible.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its obligations. The Company's credit risk relates to the amounts due from related parties and demand note balances. The Company mitigates its exposure by monitoring the counterparty's ability to repay.

Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial obligations as they come due. The Company's liquidity and operating results may be adversely affected if its access to the capital market is hindered, whether as a result of a downturn in stock market conditions generally or matters specific to the Company. The Company generates cash flow primarily from its financing activities. The Company prepares annual capital expenditure budgets, which are monitored and updated as required. In addition, the Company requires authorization from the Board of Directors for expenditures on projects to assist with the management of capital. As of August 31, 2021, the Company had a working capital surplus of \$1,448,045 (2020 - \$nil).

Reliance on Independent Contractors

The Company's success depends to an extent on the performance and continued service of certain independent contractors. The Company has or will be contracting the services of professional drillers and others for exploration, environmental, engineering, and other services. Poor performance by such contractors or the loss of such services could have a material and adverse effect on the Company, its business and results of operations and result in the Company failing to meet its business objectives.

COVID-19

The global outbreak of COVID-19 has had a significant impact on businesses through restrictions put in place by the federal and provincial governments regarding travel, gatherings, and other public health restrictions. While these effects are expected to be temporary, the duration of the various disruptions to the Company and the related financial impact cannot be reasonably estimated at the present time. At this time, the Company is yet uncertain the extent to which COVID-19 will impact its operations. However, we anticipate this outbreak may cause supply chain disruptions, staff shortages and increased government regulations, all of which may negatively impact the Company's business and financial condition.

Fluctuating Mineral Prices

The Company's revenues in the future, if any, are expected to be in large part derived from the extraction and sale of precious and base minerals and metals, which in turn depend on the results of the Company's exploration on these properties and whether development will be commercially viable or even possible. Factors beyond the control of the Company may affect the marketability of metals discovered, if any. Metal prices have fluctuated widely, particularly in recent years, partially due to the significant market reaction to COVID-19. Consequently, the economic viability of any of the Company's exploration projects cannot be accurately predicted and may be adversely affected by fluctuations in mineral prices.

Competition

The mining industry is intensely competitive in all its phases. The Company competes for the acquisition of mineral properties, claims, leases and other mineral interests as well as for the recruitment and retention of qualified employees with many companies possessing greater financial resources and technical facilities than the Company. The competition in the mineral exploration and development business could have an adverse effect on the Company's ability to hire or maintain experienced and expert personnel or acquire suitable properties or prospects for mineral exploration in the future.

Resale of Common Shares

The continued operation of the Company will be dependent upon its ability to generate operating revenues and to procure additional financing. There can be no assurance that any such revenues can be generated or that other financing can be obtained. If the Company is unable to generate such revenues or obtain such additional financing, any investment in the Company may be lost. In such event, the probability of resale of the Common Shares by any investor of the Company would be diminished.

Community Groups

There is an ongoing level of public concern relating to the effects of mining on the natural landscape, on communities and on the environment. Certain non-governmental organizations, public interest groups and reporting organizations ("NGOs") who oppose resource development can be vocal critics of the mining industry. Any such actions and the resulting media coverage could have an adverse effect on the reputation and financial condition of the Company or its relationships with the communities in which it operates, which could have a material adverse effect on the Company's business, financial condition, results of operations, cash flows or prospects.