NexMetals Mining Corp — Management Reports 2023

May 3, 2023

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

May 2, 2023

This Management's Discussion and Analysis (this " MD&A ") of Premium Nickel Resources Ltd. (formerly, North American Nickel Inc.) (" Premium Nickel Resources ", the " Company " or " PNRL ") has been prepared with all information available up to and including April 30, 2023. This MD&A is intended to assist the reader to assess material changes in the financial condition of the Company during the year ended December 31, 2022, and the results of operations of the Company for the three- and twelve- month periods ended December 31, 2022 (" Q4 2022 " and "FY 2022" , respectively) and December 31, 2021 (" Q4 2021 " and "FY 2021" , respectively). This MD&A should be read in conjunction with the Company's audited consolidated financial statements and accompanying notes thereto for the fiscal years ended December 31, 2022 and 2021 (the " Annual Financial Statements ").

The Financial Statements and the financial information contained in this MD&A were prepared in accordance with International Financial Reporting Standards (" IFRS ").

In this MD&A, unless the context otherwise requires, references to the Company, PNRL or Premium Nickel Resources refer to Premium Nickel Resources Ltd. and its consolidated subsidiaries. All monetary amounts in the discussion are expressed in Canadian dollars unless otherwise indicated.

This MD&A contains forward-looking information within the meaning of Canadian securities legislation (see "Forward-looking Information" below). Information regarding the adequacy of cash resources of the Company to carry out its exploration program or the need for future financing is considered to be forward-looking information. All forward-looking information, including information not specifically identified herein, is made subject to cautionary language in this MD&A. Readers are cautioned to refer to the disclosure in this MD&A under the heading "Forward-looking Information" when reading any forwardlooking information. This MD&A is prepared in accordance with Form 51-102F1 adopted by the Canadian Securities Administration and has been approved by the Board of Directors of the Company.

Readers are also encouraged to read the other public filings of Premium Nickel Resources, which are available on SEDAR (www.sedar.com) under Premium Nickel Resources' issuer profile. Other pertinent information about the Company can be found on the Company's website (https://premiumnickelresources.ca/).

Company Overview

Premium Nickel Resources Ltd. is the continuing company following a reverse takeover transaction completed on August 3, 2022 between the former TSX Venture Exchange listed company, North American Nickel Inc. (" NAN ") and private Canadian company Premium Nickel Resources Corporation (" PNRC "). Premium Nickel Resources Ltd. is headquartered in Toronto, Ontario, Canada, and the Company is publicly traded on the TSX Venture Exchange under the symbol "PNRL".

PNRL’s global strategy is to identify high quality nickel-copper-cobalt-platinum group elements (" Ni-Cu-Co-PGE ") projects and acquire opportunities that offer high prospectivity in mining friendly jurisdictions located in low-risk countries with supportive foreign investment and resource legislation as well as rule-of-law. The current portfolio includes global projects in Botswana, Greenland, Canada and Morocco, with the projects in Botswana being the Company's significant assets.

Currently, the Company's principal business activity is the exploration and development of PNRL’s flagship asset, the Selebi Ni-Cu-Co sulphide mine in Botswana and, separately, the Company's Selkirk Ni-Cu-Co-PGE sulphide mine, also in Botswana.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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Summary of Activities

The Selebi and Selkirk deposits are permitted with 10-year mining licenses and benefit from significant local infrastructure. The Company’s flagship Selebi mine includes two shafts, the Selebi and Selebi North shafts (together, the " Selebi Mine ") and related infrastructure such as rail, power and roads (together with the Selebi Mine, the " Selebi Assets ").

PNRL concluded the 2022 exploration and drilling program at the Selebi Mine in January 2023. This initial drilling program was focused on an area at the western down dip edge of the historic 2016 South African Mineral Resource Committee (" SAMREC ") resource estimate. The primary objective of this first phase of surface drilling and borehole electromagnetics (" BHEM ") program at Selebi was to provide the Company with the relevant information to demonstrate that the mine horizons could be well mineralized beyond the limits of legacy production, and to support the transition to underground resource drilling at both the Selebi North and Selebi deposits.

The BHEM data acquired as of the date of this report demonstrates that there are multiple sizable anomalies detected on the northern extension of the Selebi Mine. Additionally, the results of the drilling, in conjunction with the BHEM program, have provided compelling evidence that the Selebi and Selebi North deposits are part of a large mineralized system, with multiple mineralized horizons present across the three kilometre area between the Selebi historical mine workings to the south and the Selebi North historic mine workings to the north.

The Company sees significant potential for expanding the resource estimate from the 2016 SAMREC code-compliant historic estimate (see "Historic Estimate"). In 2023, PNRL is planning to undertake a combination of resource and continued exploration drilling at the Selebi Mine to demonstrate the size potential of the Selebi Mine mineral system and ultimately establish a maiden mineral resource estimate prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects (" NI 43-101 ") as well as completing a preliminary economic assessment. The exploration drilling will be on-going, and the resource drilling at the Selebi Mine is expected to start underground from the Selebi North shaft. Upon completion of the underground development program at Selebi North, the Company will shift its development work three kilometres south to the Selebi area with the intention of utilizing a combination of surface and underground drilling methods.

The Company’s primary objective is to prepare NI 43-101 compliant mineral resource estimates which are targeted for completion at Selebi North in Q2 2024, and subsequently Selebi in Q4 2024.

Concurrently, PNRL will continue its work at the Selkirk mine (the " Selkirk Mine ") and its surrounding prospecting licenses, which is the Company’s second asset in Botswana, located approximately 75 kilometres north of the Selebi Mine. The focus of this work will be to understand the legacy work done by previous owners, which had advanced Selkirk to a bankable feasibility study for redevelopment as an open-pit mine. The Company plans to include drilling, geoscience, and metallurgical work to support a mineral resource estimate prepared under NI 43-101. Additionally, the Company is pursuing an alternative ore processing and tailings management strategy to those used in previous economic studies.

Corporate Social Responsibility

PNRL is committed to conducting its business in a socially responsible and sustainable manner, with a focus on environmental stewardship, health and safety, community engagement, and ethical conduct. The Company has established policies and procedures to ensure compliance with applicable laws and regulations, as well as industry standards for responsible mining. PNRL recognizes the importance of stakeholder engagement and works closely with local communities, indigenous groups, and other stakeholders to ensure their concerns and perspectives are heard and addressed.

Highlights and Key Developments in 2022

• On January 31, 2022 PNRC completed the purchase of the Selebi Assets and the related Ni-Cu-Co deposits formerly operated by BCL.

• On March 14, 2022, PNRC commenced the first diamond drilling program at the Selebi Mine. This first phase of surface drilling and BHEM program at the Selebi Mine provides the Company with the relevant information to support the transition to underground resource drilling at both the Selebi North and Selebi deposits.

• PNRC completed, on April 7, 2022, a non-brokered private placement financing of 8,865,619 common shares of PNRC at a price of US$2.00 per share for aggregate gross proceeds of $22,388,599.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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• NAN completed, on April 28, 2022, a private placement offering of 21,118,000 subscription receipts (the " Subscription Receipts ") at a price of $0.48 per Subscription Receipt (in each case, prior to giving effect to the Company’s 5:1 consolidation of its common shares), including the partial exercise of the agents’ option, for total gross proceeds of $10,136,640. Upon the closing of the RTO, on August 3, 2022, the Subscription Receipts were converted into 4,223,600 common shares of the Company (post-consolidation), and the net subscription proceeds were released from escrow and delivered to the Company. This financing improved the liquidity and increased the capital of the Company.

• The Company completed the RTO effective August 3, 2022, creating a new international Ni-Cu-Co mine exploration and development company. With a portfolio of nickel-copper cobalt assets, PNRL will have the ability to execute a phased strategy and focus in the short term on developing the flagship Selebi Mine.

• The Company completed, on August 22, 2022, the purchase of the Ni-Cu-Co-PGE Selkirk Mine formerly operated by Tati Nickel Mining Company (" TNMC ") in Botswana.

• The Company reported assay results for seven drill holes at the Selebi Mine in 2022.

• The Company created Premium Nickel Resources International Metals Group, which will develop direct relations with end consumers in the base metals markets, including electric vehicle battery manufacturers, with the intent to bridge information gaps and provide the Company with critical access to world markets and real-time information that will aid in decisions involving the production and sale of Ni-Cu-Co-PGE that potentially could be produced principally from the Selebi and Selkirk mines.

• On November 25, 2022, the Company issued a promissory note (the " Promissory Note ") to Pinnacle Island LP (the " Lender ") in connection with its bridge loan (the " Bridge Loan ") financing. The Promissory Note has a principal amount of $7 million and bears interest at a rate of 10% per annum with an original maturity date of February 23, 2023. The obligations of the Company under the Promissory Note are fully and unconditionally guaranteed by each of the Company’s existing and future subsidiaries. No assets of the Company were pledged as collateral under the Promissory Note. In connection with the Bridge Loan, the Company paid a commitment fee of $260,000 to the Lender and issued it 119,229 common share purchase warrants, each of which was exercisable to acquire one common share of the Company at a price of $2.04 per share until November 25, 2023 and which were subsequently cancelled and replaced as detailed below.

Highlights and Key Developments Subsequent to December 31, 2022

• The Company began trading on the OTCQX Best Market at the open of the market on January 20, 2023 under the symbol "PNRLF".

• The Company reported additional assay results from its 2022 drilling program at its Selebi Mine

• Under the terms of the Promissory Note, the Company extended the maturity date from February 23, 2023 to March 22, 2023. On March 17, 2023, the Company entered into an amended and restated promissory note (the " A&R Promissory Note ") extending the maturity date from March 22, 2023 to November 24, 2023. In connection with the entering into of the A&R Promissory Note, the Company paid a fee of $225,000 and issued 350,000 nontransferrable common share purchase warrants to the Lender (the original 119,229 warrants originally issued in connection with the Promissory Note were cancelled). Each warrant is exercisable to acquire one common share of the Company at a price of $1.75 per common share for a period of one year from date of the A&R Promissory Note. Refer to the Consolidated Financial Statements (Note 17 – Subsequent Events) for further details of the impact of the Bridge Loan financing.

• On February 24, 2023, the Company closed a "best efforts" brokered private placement offering under which 4,437,184 common shares of the Company were issued at a price of $1.75 per common share for gross proceeds of $7,765,072.00 (the " Offering "). Paradigm Capital Inc. acted as lead agent and sole bookrunner of the Offering (the " Lead Agent "), on behalf of a syndicate of agents (collectively, with the Lead Agent, the " Agents "). In connection with the Offering, the Company (i) paid to the Agents a cash commission equal to 6% of the gross proceeds (other than on certain president's list purchasers on which a cash commission of 3% was paid), and (ii) issued to the Agents that number of non-transferable broker warrants of the Company (the " Broker Warrants ") as is equal to 6% of the number of common shares sold under the Offering (other than on common shares issued to president's list purchasers on which Broker Warrants equal to 3% were issued). Each Broker Warrant is exercisable to acquire one common share at an exercise price of $1.75 per common share until February 24, 2025.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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• The Company strengthened its management team with the addition of key personnel in mining operations and corporate governance.

• On April 12, 2023, the Company filed a technical report in accordance with NI 43-101 for the Company's Selkirk Mine.

• On April 13, 2023, the Company announced that it had extend to October 16, 2023 the expiry date of a total of 643,299 common share purchase warrants of the Company, which were scheduled to expire on April 16, 2023.

Selebi Mine, Botswana

The Selebi Mine was acquired on January 31, 2022 through an asset purchase agreement with the liquidator of BCL. The Selebi Mine is comprised of a single mining license covering an area of 11,504 hectares located near the town of Selebi Phikwe, approximately 150 kilometres southeast of the city of Francistown, and 410 kilometres northeast of the national capital Gaborone. The Selebi Mine includes two shafts (Selebi and Selebi North with a total combined capacity of 5,100 tons per day)) as well as all related surface (rail, power and roads) and underground infrastructures. The Selebi deposit began production in 1980 and Selebi North began production in 1990. Mining terminated at both operations in 2016 due to a failure in the separate Phikwe smelter processing facility and was subsequently placed under liquidation in 2017.

At the time of liquidation, SAMREC compliant mineral resources within the Selebi Mine was reported as in-situ and depleted for mining as of December 31, 2016 (see "Historic Estimate"). These historical measured and indicated mineral resources used a nickel equivalent (NiEq)[1] cut-off grade of 0.4% and were estimated to total 17.83 Mt at grades of 0.87% Ni and 1.42% Cu containing 155, 000 tonnes (t) Ni and 253,000 t Cu. Historical inferred mineral resources were estimated to total 15.34 Mt at grades of 0.71% Ni and 0.89% Cu containing 109,000 t Ni and 136,000 t Cu. Nickel and copper prices used were US$8.00/lb Ni and US$3.00/lb Cu, respectively. This estimate, which has not been prepared in accordance with NI 43-101, is considered to be historical in nature and should not be relied upon. However, management believes that it could be indicative of the presence of mineralization on the Selebi Mine property. A qualified person has not completed sufficient work to classify the historical mineral estimate as a current mineral resource estimate and the Company is not treating the historical mineral estimates as a current mineral resource estimate. Readers are cautioned that mineral resources are not mineral reserves and do not have demonstrated economic viability.

Exploration and Development Activities

The Company initiated a drilling program in March 2022, with holes targeting the area down plunge of Selebi Mine workings. Concurrent with the drill program, data compilation and verification continued. The program of re-opening historic holes that began in October 2021 is ongoing and up to three drills have been cleaning historic holes to facilitate the collection of new gyro and BHEM geophysical data. Collars of drillholes have been located using a differential Global Positioning System (" DGPS "). An initial downhole program of televiewer and physical property logging has also been completed to support the creation of a structural model. Level plans were digitized, and after significant effort, the Company now has a 3D model of the Selebi and Selebi North underground infrastructure. The gathering of geological information to build a 3D model is ongoing. Information from handwritten drill logs was merged into the BCL drill hole database, and the historic core is being re-logged.

As of December 31, 2022, Mitchell Drilling completed a total of 14,627.36 metres. To date, a total of eight new holes and the extension of one historic hole have reached target depth and intersected mineralized amphibolite; assay results from 477 core samples in seven of these holes have been received from ALS Chemex laboratories in South Africa and results have been released. A total of 38 historic holes have been opened and surveyed with gyro; BHEM surveys have been completed in 44 new and historic holes. Collars of 241 historic holes have been located using DGPS and coordinates collected at another 105 sites where evidence of drilling was found, but no drill hole was seen. Televiewer and physical property surveys have been completed in five holes.

The results from the drilling and geophysical surveys indicate that there is structural thickening at the western down-dip extent of the mineralized amphibolite, and drilling continues in this area to define the plunge and extent of this mineralization.

During the year ended December 31, 2022, the Company incurred $28,046,747 in acquisition and exploration expenditures on the Selebi Assets (December 31, 2021 - $3,099,926).

1 The NiEq cut-off grade was based on a ratio of nickel and copper prices where NiEq = %Ni + (Cu price/Ni price)*%Cu.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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Outlook – Exploration and Development

The proposed work plan for the Selebi Mine includes underground drilling at Selebi North and the surface/underground diamond drilling program at Selebi, expected to commence in July 2023. Drilling will be ongoing for up to 15 months, with the specific objective of delivering an NI 43-101 compliant mineral resource estimate for the Selebi Mine. During that time, data compilation and verification efforts will continue, with additional hole re-openings, downhole gyro, BHEM and televiewer surveys, digitization of historic data, re-logging of historic core and updating of the 3D geological and structural model. In addition to this work, additional metallurgical samples will be collected and sent for detailed studies. The underground infrastructure at Selebi North will be upgraded to support the underground drilling program as well as improve health & safety.

Selkirk Mine, Botswana

The Selkirk Mine was acquired in August 2022 through an asset purchase agreement with the Liquidator of TNMC. The Selkirk property consists of a single mining licence covering an area of approximately 14.6 square kilometres and four prospecting licenses cover 126.7 square kilometres. The project is situated 28 kilometres south-east of the town of Francistown, and 75 kilometres north of the Selebi Mine.

Exploration and Development Activities

The Company has been carrying out due diligence on the Selkirk Mine since 2021. The results of the data verification efforts include examination and sampling of mineralized drill core, sampling from underground workings, collecting DGPS coordinates of drill collars and quality assessment of information in databases.

During the Selkirk core review, five unsampled HQ sized core (63.5 millimeters) holes, drilled immediately prior to the closure of operations by TNMC were identified. These five holes were taken to the core processing facility at Phikwe, where they were sampled in approximately 1 metre intervals, bagged and sent for assays. A total of 56 samples from DSLK278 used for metallurgical testing were analyzed at SGS Canada for nickel and copper and pulps were sent to ALS in Vancouver for a full suite of analyses. The remaining 1010 core samples were sent to ALS Global in Johannesburg for analyses. Results were reported in Q3 and Q4, 2022.

Company geologists also examined underground workings and confirmed continuous visible sulphides along an exploration drift extending 144 metres across the interpreted primary sulphide horizon, in a southwestern direction from the previous mining operations. PNRL collected and submitted twenty 10-kilogram grab samples from this exploration drift for assay to determine the variability in the grade of the mineralization. In November, the Company released results of the exploration drift sampling.

Additionally, the Company completed a concept level metallurgical study to assess if readily marketable copper and nickel concentrates could be produced and, if so, at what metal recovery levels. The Selkirk test program was carried out at SGS Canada in Lakefield, Ontario and followed a similar program conducted on samples from the Selebi Mine, which demonstrated potential for these metallurgical objectives to be achieved. The source of the material was previously unsampled HQ sized drill core from 2016 drill hole DSLK278, positioned 50m from historic mine workings. Highlights of the metallurgical study include: the ability to produce salable market nickel and copper concentrates, nickel concentrate grade of 10% nickel and 6% copper, copper concentrate grade of 33% copper, 0.32% nickel, recoveries of 63% nickel, 85% copper, concentrates clean of deleterious elements and with low (<1%) MgO levels, and attractive amounts of PGE present in the concentrates (36.0 g/t Pd in copper concentrate, 9.0 g/t Pd in nickel concentrate).

The Company filed a technical report, in accordance with NI 43-101 for the Selkirk Mine on April 12, 2023.

During the year ended December 31, 2022, the Company incurred $677,310 in acquisition and due diligence expenditures on the Selkirk assets (December 31, 2021 - $nil).

Outlook – Exploration and Development

The Company currently anticipates that a work plan will be proposed for the Selkirk Mine re-development that will include drilling to better define the existing resources and search for additional resources, develop a 3D geological and structural model, and complete additional metallurgical studies focused on improving recoveries.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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- - Maniitsoq Nickel Copper PGM Project, Southwest Greenland

The Maniitsoq project is centred on the 75 kilometre by 15 kilometre Greenland Norite Belt which hosts numerous high-grade nickel-copper sulphide occurrences associated with mafic and ultramafic intrusions. The property is located 100 kilometres north of Nuuk, the capital of Greenland and is accessible year-round either by helicopter or by boat from Nuuk or Maniitsoq, the latter located on the coast approximately 15 kilometres to the west The Company acquired the Maniitsoq project in 2011 due to its potential for the discovery of significant magmatic sulfide deposits in a camp-scale belt. The Maniitsoq property consists of three exploration licences, Sulussagut No. 2011/54 and Ininngui No. 2012/28 comprising 2,689 and 296 square kilometres, respectively and the Carbonatite property No. 2018/21 (63 square kilometres), and a prospecting licence, No. 2020/05, for West Greenland. The Greenland properties have no mineral resources or reserves.

The three licences, 2011/54, 2012/28 and 2018/31 have sufficient accrued work credits to keep the property in good standing until December 2023, at which time a reduction in the size of the property will be required. Prospecting licence 2011/54 expired in December 31, 2022 and the Company has applied for its renewal. The prospecting licence is in effect until December 31, 2024.

Exploration and Development Activities

No exploration work was carried out in Greenland 2022. Remaining targets were reviewed and prioritized in preparation for a potential field program in 2023.

Prior to the closing of RTO on August 3, 2022, the Maniitsoq property had a book value of $36,692,516. As the transaction is accounted for as a capital transaction with NAN being identified as the accounting acquiree, the net assets of NAN should be measured at fair value. Upon the completion of the RTO, the Company has switched its focus to development of the Botswana assets with the result that limited resources (management time, capital etc.) have since been allocated or will be allocated to the Greenland assets. Management believes that facts and circumstances exist to suggest that the carrying amount of the Maniitsoq property at August 3, 2022 exceeds its fair value. As a result, the carrying value of the Greenland assets has been reduced to nil as of August 3, 2022, for a total impairment of $36,692,516.

From August 3 to December 31, 2022, the Company spent an additional $48,001 in acquisition and exploration expenditures on the Maniitsoq property, which is comprised of the Sulussugut, Ininngui, Carbonatite and 2020/05 licenses. These expenditures were recorded as general exploration expense in the consolidated statements of comprehensive loss.

- Canadian Nickel Projects Sudbury, Ontario

Post Creek Property

The Post Creek property is located 35 kilometres east of Sudbury in Norman, Parkin, Alymer and Rathburn townships and consists of 73 unpatented mining claim cells in two separate blocks, covering a total area of 912 hectares held by the Company. The Company acquired the property through an option agreement in April 2010, subsequently amended in March 2013. As at the date of this MD&A, the Company holds a 100% interest in the Post Creek property and is obligated to pay advances on the NSR of $10,000 per annum, which will be deducted from any payments to be made under the NSR.

The Post Creek property lies adjacent to the Whistle Offset Dyke Structure which hosts the past–producing Whistle Offset and Podolsky Cu-Ni-PGM mines. Post Creek lies along an interpreted northeast extension of the corridor containing the Whistle Offset Dyke and Footwall deposits account for a significant portion of all ore mined in the Sudbury nickel district and, as such, represent favourable exploration targets. Key lithologies are Quartz Diorite and metabreccia related to offset dykes and Sudbury Breccia associated with Footwall rocks of the Sudbury Igneous Complex which both represent potential controls on mineralization.

No exploration work was completed in 2022 on the Post Creek Property. The claims have sufficient work credits to keep them in good standing until 2025.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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Halcyon Property

The Halcyon property is located 35 kilometres northeast of Sudbury in the Parkin and Aylmer townships, and consists of 63 unpatented mining cells for a total of 864 hectares. Halcyon is adjacent to the Post Creek property and is approximately 2 kilometres north of the producing Podolsky Mine of FNX Mining. The property was acquired through an option agreement and as at the date of this MD&A, the Company holds a 100% interest in the Halcyon property and is obligated to pay advances on the NSR of $8,000 per annum, which will be deducted from any payments to be made under the NSR.

No exploration work was completed on the Halcyon Property in 2022. The claims are in good standing through 2025.

Quetico Property

The Quetico Property is located within the Thunder Bay Mining District of Ontario and consists of 99 claim cells in two blocks. Cells were acquired to assess (i) the Quetico Sub-province corridor, which hosts intrusions with Ni-Cu-Co-PGM mineralization related to a late 2690 Ma Archean magmatic event, and (ii). the Neoproterozoic (1100 Ma MCR) magmatic event and related intrusions.

No work was carried out on the Property in 2022. Of the 99 claims, 46 claims will expire in April and May of 2023, with the remaining in good standing until April and May of 2024.

Immediately prior to completion of the RTO, total book value of the Canadian assets was $2,535,873 which has been written off effective as at August 3, 2022, the closing date of the RTO as the Company has switched its focus to development of the Botswana assets with the result that limited management time and capital resources have been allocated or will be allocated to the Canada assets. During the period from August 3 to December 31, 2022, the Company incurred an additional $21,739 in exploration and license related expenditures for the Canadian properties and the expenditures were recorded as general exploration expense in the consolidated statements of comprehensive loss.

High Atlas Project,

The High Atlas Property includes four permits acquired in December 2021 and one permit acquired in February 2022. The property is located in the high Atlas Mountains of Morocco. Jurassic aged troctolitic and gabbroic intrusions occur at the margin of a significant trans-lithospheric structure over a strike length greater than 100 kilometres. The intrusions are host to three major nickel-copper occurrences and another ten minor occurrences. There is no modern geophysical coverage and no drilling on the property.

In October 2022, the Company and ONHYM decided not to pursue the joint venture discussions that initially set out the general framework of a joint venture for the exploration and consolidation of permits owned by ONHYM in the Imilchil region.

No exploration work was carried out in 2022.

The exploration and license related expenditures for the project is recorded as property investigation expense in the consolidated statements of comprehensive loss. The Company has spent $nil on the project during the period from August 3 to December 31, 2022.

Financial Capability

The Company is an exploration and re-development stage entity and has not yet achieved profitable operations. The business of the Company entails significant risks. The recoverability of amounts shown for mineral property costs is dependent upon several factors including environmental risk, legal and political risk, the establishment of economically recoverable mineral reserves, confirmation of the Company's interests in the underlying mineral claims, and the ability of the Company to obtain necessary financing to complete exploration and development, and to attain sufficient net cash flow from future profitable production or disposition proceeds.

At the end of FY 2022, the Company had a working capital deficiency of $6,024,026 (FY 2021 - $1,558,011 positive working capital) and reported accumulated deficit of $78,092,605 (FY 2021 - $13,482,624), including a loss on the RTO transaction of $29,174,415. At the end of FY 2022, the Company required additional funds to continue its planned operations and meet its obligations.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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As at December 31, 2022, the Company had $5,162,991 in available cash (December 31, 2021— $1,990,203). There are no sources of operating cash flows. Given the Company's current financial position and the ongoing exploration and evaluation expenditures, the Company will need to raise additional capital through the issuance of equity or other available financing alternatives to continue funding its operating, exploration and evaluation activities, and eventual development of the mineral properties. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

On February 24, 2023, the Company announced it has closed its previously-announced "best efforts" brokered private placement offering under which 4,437,184 common shares of the Company were issued at a price of $1.75 per common share for gross proceeds of $7,765,072. Refer to Note 16 – "Subsequent Events" of the consolidated financial statements.

Selected Financial Information

The following amounts are derived from the Company's consolidated financial statements prepared under IFRS.

In Canadian dollars, except per share amounts		Year ended December 31,	Year ended December 31,
	2022	2021	2020
Net profit (loss)	(36,410,469)	(9,359,605)	(1,225,138)
Basic proft (loss) per share	(0.34)	(0.02)	(0.02)
Divident declared	-	-	-
Share capital	91,175,784	7,952,675	1,475,260
Common shares issued	116,521,343	80,820,623	64,083,487
Weighted average shares outstanding	109,661,379	72,197,650	56,481,689
Total assets	41,656,998	5,238,423	1,585,293
Non-current financial liabilities	2,006,282	8,974,901	-
Investment in exploration and evaluation assets	31,823,982	3,099,926	-

Overall Performance and Results of Operations

The RTO was effective August 3, 2022 and was considered a reverse takeover for accounting purposes as the majority of the shareholders, board of directors and management of the continuing entity are former shareholders, directors and management of PNRC. The combined company is considered a continuation of PNRC with the net assets of NAN acquired on August 3, 2022 and consolidated with the operations of PNRC from that date forward. See "PNRC and NAN RTO" below.

Total Assets

Total assets during FY 2022 increased by a net amount of $36,418,575 from the end of FY 2021. The change is mainly attributed to an increase in exploration and evaluation assets of $28,724,056, increase in cash of $3,172,788, increase in property, plant and equipment of $3,394,670 and increase in receivables and other current assets of $1,127,061 due to increased exploration activities on the Selebi Assets and the Selkirk Assets following the closing of the acquisitions and completion of the RTO.

Investment in Exploration and Evaluation Assets

Investment in exploration and evaluation assets relates to evaluation activities in connection with the acquisition of the Selebi Assets and the Selkirk Mine. During the year ended December 31, 2022, the recorded amount of the Company's exploration and evaluation assets increased by $28,724,056. Principal factors contributing to this change were expenditures related to the acquisition and evaluation of the Selebi Assets. Exploration and evaluation assets acquired through deemed acquisition of the Maniitsoq property and the Canadian properties owned by NAN, effective on completion of the RTO were written off during 2022.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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PNRC and NAN RTO

On April 26, 2022, PNRC and NAN entered into an amalgamation agreement (the " Amalgamation Agreement ") to combine the two companies to create a new international Ni-Cu-Co mineral exploration company. The two companies agreed to combine by way of a three-cornered amalgamation whereby NAN's wholly-owned subsidiary (" NAN Subco ") would amalgamate with PNRC to form one corporation and holders of PNRC shares exchanged their shares at a rate of 1.054 shares of NAN for each share of PNRC (the " Exchange Ratio "), after giving effect to a 5-to-1 share consolidation for each outstanding share of NAN. Outstanding options and warrants of PNRC were adjusted in accordance with their terms so that the number of NAN shares received upon exercise and the exercise price were adjusted proportionately to reflect the Exchange Ratio. The effective date of the RTO was August 3, 2022

In connection with the RTO, NAN has, among other things: (i) changed its name to "Premium Nickel Resources Ltd."; (ii) changed its stock exchange ticker symbol to "PNRL"; and (iii) reconstituted its board of directors and management.

Before the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a 15% warrant which entitled NAN to purchase common shares of PNRC, for up to 15% of the capital of PNRC, upon payment of US $10,000,000 prior to the fifth anniversary of the date of issue. Immediately prior to the closing of the RTO, the PNRC shares and the 15% warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation.

Pursuant to the Amalgamation Agreement, effective August 3, 2022, NAN acquired all of the issued and outstanding shares of PNRC. NAN issued 82,157,536 common shares (on a post-consolidation basis) in exchange for 77,948,368 shares of PNRC outstanding immediately prior to the effective time of the RTO. Subsequent to the RTO, former shareholders of PNRC controlled 72.1% of the outstanding common shares of the Company post-RTO (the " Resulting Issuer "). Prior to this exchange, NAN had 31,748,399 shares outstanding (on a post-consolidation basis). Taking into account the composition of the board and senior management and the relative ownership percentages of NAN and PNRC shareholders in the newly combined enterprise, from an accounting perspective PNRC is considered to have acquired NAN, and hence the transaction has been recorded as a reverse takeover.

Transaction Rationale

The reason and the expected benefits of the RTO stated at the time of the announcement were the following:

• Strengthened marketability for the Resulting Issuer. NAN's interest in PNRC was a material asset to NAN and a key driver for the appreciation of NAN's value following July 2020. Prior to the RTO, NAN and PNRC had been raising capital separately based on the value of PNRC. As the market had perceived the close connection between PNRC and NAN, it was considered to be more efficient and to mitigate future financing risks for the Resulting Issuer to raise additional funds in the future using a single entity.

• Knowledge of the PNRC Assets. NAN had greater familiarity with the potential benefits and risks associated with PNRC's assets than it had with alternative acquisition targets, as it was a founding investor in PNRC and NAN's management was involved in the operations of PNRC. This transaction afforded NAN with an opportunity to participate to a greater degree in a known quality asset through a more effective and efficient structure while continuing to have exposure to NAN's other assets.

• Management of the Resulting Issuer. NAN's management had been providing management support to PNRC on an ongoing basis and had been involved with the day-to-day operations of PNRC's business. Following the consummation of the RTO transaction, certain members of NAN's management continued to provide managerial support to the Resulting Issuer. The special committee of the board of directors of NAN (the " NAN Special Committee ") believed that the continuation of NAN's management in the day-to-day operation of the Resulting Issuer would benefit the shareholders of NAN.

• Process. An extensive due diligence process was undertaken by NAN and in weighing potential strategic alternatives and the current economic prospects of NAN, the transaction was determined to be the most attractive of any such alternatives.

• Business and Industry Risks. The future business, operations, financial performance and condition, operating results and prospects of NAN faced significant risks and uncertainties. In light of these risks and uncertainties, the NAN Special Committee concluded that the RTO was more favourable to shareholders of NAN than continuing with NAN's then current

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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business plan or exercising its warrant to acquire a further equity interest in PNRC.

• Fairness Opinion. The fairness opinion provided by INFOR Financial Group Inc., the financial advisor to the NAN Special Committee, indicated that the RTO was fair, from a financial point of view, to NAN, subject to and based on the considerations, assumptions and limitations described in such fairness opinion.

• Well-Supported Transaction. Pursuant to support agreements, the directors and officers of NAN (as well as certain shareholders of NAN) agreed to vote all of their NAN shares in favour of the transaction at the shareholder meeting to approve certain transactions contemplated in the Amalgamation Agreement. Approximately 54% of NAN shareholders and 69% of PNR shareholders, respectively, entered into support agreements.

• Negotiated Transaction. The terms of the transaction were the result of a comprehensive negotiation process, conducted under the supervision of the NAN Special Committee, in respect of the key elements of the Amalgamation Agreement and related waiver and suspension agreement, each of which included terms and conditions that were reasonable in the judgment of the NAN Special Committee.

Financial Reporting

For financial reporting purposes, the Company is considered to be a continuation of PNRC except with regard to the authorized and issued share capital, which is that of NAN. The consolidated statements of operations and cash flows for the year ended December 31, 2022 include the results of operations and cash flows of PNRC for the period from January 1, 2022 to December 31, 2022, and the results of operations and cash flows of NAN for the period from August 3, 2022 to December 31, 2022. The primary reason for the RTO was to create a leading international Ni-Cu-Co mineral exploration company. With a portfolio of nickel-copper cobalt assets, the Company will have the ability to execute a phased strategy and focus in the short term on developing the Selebi Mine.

The transaction does not constitute a business acquisition as the amalgamation does not meet the definition of a business combination under IFRS 3. As a result, the transaction is accounted for as a capital transaction with NAN being identified as the accounting acquiree and the equity consideration being measured at fair value (" FV ").

The purchase price was determined based on the number of shares that PNRC would have had to issue on the date of closing to give the owners of NAN the same percentage equity (27.9%) of the combined entity as they hold subsequent to the RTO.

The costs of the acquisition have been allocated as follows:

FV of shares transferred	$ 77,431,152
FV of options, warrants and agent warrants	9,665,577
FV of preferred shares	31,516
Settlement of pre-existing relationship – 15% warrant and shares*	(47,985,863)
Total FV of consideration transferred	$ 39,142,383
Cash	11,051,917
Trade and other receivables	450,522
Property, plant and equipment	14,111
Trade payables and accrued liabilities	(1,548,582)
Net assets acquired	9,967,968
Loss on acquisition	29,174,415

*Pre-existing relationship

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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Before the closing of the RTO, NAN owned 7,667,707 common shares of PNRC and a 15% warrant which entitled NAN to purchase common shares of PNRC, for up to 15% of the capital of PNRC, upon payment of US$10,000,000 prior to the fifth anniversary of the date of issue. Prior to the date that the Amalgamation became effective, the PNRC shares and the 15% warrant held by NAN were contributed to NAN Subco, as part of the securities contribution, resulting in such securities being cancelled by operation of the triangular amalgamation.

Prior to the RTO, the fair value of the 15% warrant and the shares held by NAN were $28,275,255 and $19,710,608, respectively. The fair value of the shares was calculated based on the last offer price of PNRC financing prior to the RTO, and the fair value of the warrants was calculated using the Black-Sholes Model with the following assumptions: expected life of 2.57 years, expected dividend yield of 0%, a risk free rate of 3.14% and an expected volatility of 141.63%. As they were the securities contributed by NAN on the closing of the RTO, the fair value of the warrants and shares were included as part of the consideration on the acquisition date.

Pursuant to the RTO, an aggregate of 8,827,250 options to purchase common shares of the Company (" Replacement Options ") were issued (on a post 5:1 consolidation basis) to the former holders of options to purchase common shares of PNRC (prior to the RTO) (" PNRC Options ") in exchange for 8,375,000 PNRC Options. The Replacement Options issued to the former holders of PNRC Options were on the same terms and conditions as those exchanged by PNRC holders except all the previously unvested options vested immediately. Immediately prior to the completion of the RTO, PNRC had 2,383,333 unvested options outstanding which re-evaluated at a FV of $6,194,521 upon the completion of the RTO according to IFRS2. See Note 11 (d) of the Annual Financial Statements for details.

Given that the RTO has been accounted for as a reverse takeover of NAN by PNRC, from an accounting perspective, PNRC is deemed to have issued options and warrants to the former security holders of NAN. Immediately prior to the closing of the RTO, NAN had 2,995,794 options and 2,228,340 warrants outstanding, respectively, as well as 118,186 preferred shares that could be converted to 13,131 common shares of NAN (on a post-consolidation basis). The aggregate fair value of such 2,995,794 options, 2,228,340 warrants and 118,186 preferred shares of NAN was $9,665,577 and this amount has been included as a component of the purchase price. Costs related to the transaction were $2,327,125 and were expensed as incurred.

The fair value of NAN’s options and warrants as at August 3, 2022 was calculated using the following assumptions:

As of August 3, 2022 Expected dividend yield Share price of last financing Expected share price volatility Risk free interest rate Remaining life of warrants & options	Warrants 0% $0.48 64.91% -113.22% 3.18% 0.03 - 2 years	Options
		0% $0.48 133.15% - 143.3% 2.85% - 3.08% 2.56 – 4.23 years

For purposes of determining the fair value of the share consideration exchanged on the RTO, the shares of PNRC were valued at USD$2.00 per share, the offering price for the PNRC shares on the last PNRC equity financing prior to the RTO.

The RTO resulted in a loss of $29,174,415 with respect to the fair value of the consideration transferred over the fair value of identifiable net assets, which has been recorded as a loss during the year in other income.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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Results of Operations

The Company’s unaudited consolidated condensed interim financial statement as at September 30, 2022 and for the three and nine months then ended (“Q3 2022) filed under Sedar and with Canadian and US securities regulatory authorities (the “Q3 Unaudited Statements”) disclosed a loss on the RTO in the amount of $75,375,567. In the course of preparation of the Annual Financial Statements, the Company re-assessed the loss on the RTO at $29,174,415. The difference, namely, $46,201,152, is a reduction in the Company’s comprehensive loss for Q3 2022. The Company intends to file, as soon as practicable, amended unaudited consolidated condensed interim financial statements for Q3 2022 to reflect this change in treatment.

The principal factors affecting the re-assessment of the loss on the RTO are summarized as follows. Firstly, the re-assessment reflects a further reduction in carrying costs of the Greenland and Canadian exploration and development properties of the Company in an amount of $18,945,335 in excess of the reduction reflected in the Q3 Unaudited Statements. Secondly, the calculation of the loss on the RTO reflected in the Q3 Statements failed to take into account the impact of the cancellation, effective on the date of the RTO, of certain securities in the capital of PNRC, which were held by NAN immediately prior to the RTO and cancelled on the RTO. Cancellation of these securities resulted in a reduction of the loss on acquisition by $47,985,863 from the amount previously reported. In addition, the fair value of options, warrants and preferred shares of NAN outstanding immediately prior to the effective time of the RTO, in the aggregate amount of $9,665,577, was added to the total fair value of consideration transferred on the RTO. Finally, the fair value of the consideration for the exchange of shares on the RTO was revalued based on more reliable inputs.

After giving effect to these adjustments, the loss on acquisition is reduced from $75,375,567 to $29,174,415. For more detail regarding the calculation of the loss, reference is made to the disclosure under “Financial Reporting” commencing on page 10, and to Note 4 to the Audited Financial Statements.

In this MD&A, all references to the financial position of the Company as at the end of Q3 2022 or Q4 2022 and the results of operations for either such quarter reflect the impact of the re-assessment of the loss on the RTO as described above.

The following table summarizes the Company's Statement of Comprehensive Loss for the three- and twelve-month periods ended December 31, 2022 and PRNC’s Statement of Comprehensive Loss for the three- and twelve-month periods ended December 31, 2021.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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EXPENSES Corporate and administration expenses Management fees Due diligence BCL Advisory and consultancy Depreciation General exploration expenses Interest and bank charges Share-based payment DSU granted Warrant fair value movement Net foreign exchange gain (loss) Operating loss Interest expense Acquisition loss on RTO NET LOSS FOR THE PERIOD Exchange differences on translation of foreign operations TOTAL COMPREHENSIVE LOSS FOR THE PERIOD	Three months ended Year ended	Three months ended Year ended
	December 31, 2022 December 31, 2021 December 31, 2022	December 31, 2021
	(461,479) (298,934) (3,317,039) (717,773) (238,375) (2,418,984) (13,025) (52,286) (18,039) (879,903) (247,236) (1,895,004) (95,661) - (96,543) (43,987) - (69,366) (78,086) 32 (93,937) - (500,411) (7,731,117) (298,000) - (298,000) - (6,345,310) 8,974,901 16,328 (6,102) 143,777	(564,666) (675,001) (138,935) (357,980) - - (2,511) (1,261,891) - (6,345,310) (13,311)
	(2,571,587) (7,688,622) (6,819,351) (302,938) - (416,703) - - (29,174,415)	(9,359,605) - -
	(2,874,526) (7,688,622) (36,410,469) 321,351 (46,299) (1,151,975)	(9,359,605) (48,906)
	(2,533,175) (7,734,921) (37,562,444)	(9,408,511)

Three Months Ended December 31, 2022, and December 31, 2021

The Company incurred a net loss of $2,874,526 in Q4 2022, lower by $4,814,096 compared to a net loss of $7,688,622 in Q4 2021. The lower loss in Q4 2022 resulted from the cancellation of the 15% warrant held by NAN upon the completion of the RTO compared to an increase in fair value of the 15% warrant ($6,345,310) recorded in Q4 2021.

The following lower expenditures in Q4 2022 compared to Q4 2021 also contributed to the lower Q4 2022 loss:

• Share-based payment relating to options issuance was Nil in Q4 2022 compared to $500,411 in Q4 2021.

• Due diligence related expenditures totalled $13,025 in Q4 2022 and were lower by $39,261 compared to costs of $52,286 in Q4 2021. Higher costs in Q4 2021 resulted from commencing capitalization of these costs in late Q4 2021 where the Company was awarded exclusivity to acquire the assets and started to incur costs directly in association with the acquisition and evaluation of the properties.

• Foreign exchange gain totaled $16,328 during Q4 2022 and was higher by $22,430 compared to a loss of $6,102 in Q4 2021. The gain in Q4 2022 was due to increased volume in transactions denominated in foreign currencies and strengthening Canadian dollar against the United States dollar.

The lower loss in Q4 2022 was partially offset by the following higher expenditures in Q4 2022 compared to Q4 2021:

• Corporate and administrative expenses of $461,479 were higher by $162,545 compared to $298,934 costs in Q4 2021. Activities related to the RTO were the key contributing factors to higher costs in Q4 2022.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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• Management fees were $717,773 in Q4 2022 and were higher by $479,398 compared to $238,375 in Q4 2021. This increase is a direct result of operational activities in Botswana following the purchase of the Selebi Assets and the Selkirk Mine, expansion of consultancy management in support of the re-development of the Selebi Assets as well as management of the Company’s subsidiaries in Barbados, which did not exist in Q4 2021.

• Advisory and consultancy fees were $879,903 and were higher by $650,667 compared to $247,236 incurred in Q4 2021 due to increased activities in Botswana and Barbados upon the closing of Selebi and Selkirk acquisitions in January and August 2022, respectively.

• Interest and bank charges were $78,086 in Q4 2022 and were higher by $78,118 compared to income of $32 in Q4 2021.

• Interest fees were $302,938 in Q4 2022 compared to $nil interest in Q4 2021. The interest result from bridge loan financing closed in Q4 2022 as well as the interest charge on the lease liability associated with the acquisition of Syringa Lodge.

Depreciation expense was $95,661 during Q4 2022 compared to $nil in Q4 2021.

Year Ended December 31, 2022 and December 31, 2021

The Company incurred a net loss of $36,410,469 in FY 2022 compared to a net loss of $9,359,605 in FY 2021, resulting in an increased loss of $27,050,864 (year-over-year). The net loss in FY 2022 was mainly driven by a loss on the RTO transaction of $29,174,415,and also to the following events:

• The share-based payment expenses were $7,731,117 and were $6,469,226 higher compared to $1,261,891 in FY 2021 due to the revaluation of the vesting options upon completion of the RTO transaction.

• Corporate and administrative expenses were $3,317,039 and were higher by $2,752,373 compared to $564,666 incurred in FY 2021. Activities related to undertaking the RTO were the key contributing factors to higher costs in FY 2022.

• Management fees were $2,418,984 in FY 2022 and were higher by $1,743,983 compared to $675,001 in FY 2021. This increase is a direct result of increased operational activities in Botswana following the purchase of the Selebi Assets and the Selkirk Mine, expansion of consultancy management in support of the re-development of the Selebi Assets as well as activities in Barbados, which did not exist during FY 2021.

• Advisory and consultancy fees were $1,895,004 and were higher by $1,537,024 compared to $357,980 incurred in FY 2021. Higher fees were due to activities related to the closing of Selebi and Selkirk acquisitions in January and August 2022, respectively.

• Interest and bank charges were $93,937 in FY 2022 and were higher by $91,426 compared to $2,511 in FY 2021. Higher interest costs relate to lease interest that commenced in August 2022 and did not exist in FY 2021.

• Interest expense was $416,703 in FY 2022 compared to interest expense of $Nil in FY 2021. The interest was a result of bridge loan financing.

• Depreciation expense was $96,543 during FY 2022 compared to $nil in FY 2021.

The higher loss in FY 2022 was partially offset by the following lower expenditures in FY 2022 compared to FY 2021:

• The 15% warrant held by NAN was cancelled upon the completion of the RTO, resulting in a reversal of the fair value of the 15% warrant by $8,974,901 compared to a fair value increase of $6,345,310 recorded in FY 2021

• Foreign exchange gain totalled $143,777 and was higher by $157,088 compared to $13,311 loss in FY 2021.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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• Due diligence related expenditures totalled $18,039 in FY 2022 and were lower by $120,896 compared to $138,935 costs in FY 2021. Higher costs in FY 2021 resulted from commencing capitalization of these costs in late FY 2021 upon the Company being awarded exclusivity to acquire the assets.

Quarterly Results of Operations

All amounts in	table are expressed in	2022	2022	2022	2022
thousands of	CDN dollars, except	4th quarter	3rdquarter	2nd quarter	1st quarter
shares and per share amounts			(re-stated)
Statement	of Comprehensive
Loss
Net loss		(2,875)	(9,300)	(983)	(390)
Net lossper share - basic and diluted		0.02	(0.09)	(0.04)	(0.01)
Statement of	Financial Position
Cash		5,163	5,757	1,321	690
Total assets		41,657	35,367	41,859	41,970
Net assets		27,188	29,038	40,210	41,193
Share capital		91,176	89,667	93,970	93,970
Common shares issued		116,521,343	115,442,343	26,774,006	26,774,006
Weighted average shares outstanding		115,968,168	105,842,672	26,774,006	26,647,885
All amounts in	table are expressed in	2021	2021	2021	2021
thousands of	CDN dollars, except	4th quarter	3rd quarter	2nd quarter	1st quarter
shares and per share amounts
Statement	of Comprehensive
Loss
Net loss		2,214	236	421	1,125
Net lossper share - basic and diluted		0.09	0.01	0.02	0.05
Statement of	Financial Position
Cash, cash equivalents and short-term		1,973	1,322	1,936	716
investments
Total assets		41,683	41,298	41,486	40,185
Net assets		41,203	40,676	40,876	39,391
Share capital		93,451	91,607	91,827	90,534
Common shares issued		26,240,925	24,969,866	24,889,866	23,222,373
Weighted average shares outstanding		25,653,156	24,914,214	23,945,386	22,649,004

Note: Prior to the RTO, PNRC was a private company and no quarterly financial statements were prepared and published. The amounts in the above table from 2021 1[st] quarter to 2022 2[nd] quarter are those of NAN’s, and are based on the information contained in the financial statements of NAN for the applicable periods, which are available on SEDAR (www.sedar.com) under the Company’s issuer profile.

Financing

Prior to the RTO, NAN closed a private placement offering of 21,118,000 Subscription Receipts at a price of $0.48 per Subscription Receipt, including the partial exercise of the Agents' option, for total gross proceeds of $10,136,640. The net proceeds of $9,368,365 were received upon closing of the RTO transaction on August 3, 2022.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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In April 2022, PNRC completed a non-brokered private placement of 8,936,167 shares at a price of US$2.00 per share for gross proceeds of $22,388,599 (US$17,731,238). In connection with the private placement, the Company paid to eligible finders a fee of 6% of the gross proceeds raised from subscribers introduced to the Company by certain finders, being an aggregate of $1,535,727, and (ii) issued a number of common shares equal to 6% of the subscriber shares attributable to certain finders under the private placement, being an aggregate of 70,548 shares with total value of $176,398 at the offering price of the private placement.

During FI 2022, the Company received $1,292,475 in cash inflow from exercised warrants and options.

Liquidity, Capital Resources and Going Concern

Liquidity

The Company has financed its operations to date primarily through the issuance of common shares. The Company continues to seek capital through various means including the issuance of equity, royalty/streaming transactions and the securing of joint venture partners where appropriate.

The Company's principal requirements for cash over the next twelve months will be to fund the ongoing work program at the Selebi Mine (as more particularly described in the Selebi Technical Report and Appendix "C" – Information Concerning PNR) in the Form 3D2, Information Required in a Filing Statement for a Reverse Takeover or Change of Business (the " Filing Statement ") prepared in accordance with the policies of the TSX Venture Exchange, a copy of which is available on SEDAR (www.sedar.com) under Premium Nickel Resources' issuer profile), general corporate and administrative costs and to service the Company's current trade and other payables. Please see "Financing Activities" above for details regarding the Company's recent financings.

As at December 31, 2022, the Company had $5,162,991 in available cash. On February 24, 2023, the Company closed its previously-announced "best efforts" brokered private placement offering under which 4,437,184 common shares of the Company were issued at a price of $1.75 per common share for gross proceeds of $7,765,072.

Use of Proceeds

The following table provides an update on principal purposes for which the funds available to the Company at the time of the RTO were expected to be used, as disclosed in the Filing Statement, along with amounts expended to December 31, 2022. The funds available to the Company to achieve the purposes set out below include: the net proceeds of approximately $9.37 million from the issuance of the Subscription Receipts, which was released from escrow and delivered to the Company in connection with the closing of RTO on August 3, 2022; remaining cash, at the time of the completion of the RTO, from the private placement of US$17.7 million (C$22.5 million) by PNRC that closed April 2022; and pre-existing cash on hand.

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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Principal Purpose Selebi Project – Phase I Work Program Exploration and Infill Drilling Programs, BHEM and televiewer surveys Preliminary Economic Assessment Metallurgical Testing Site Administration Costs Care and Maintenance Sub-total Selkirk Project Site Administration Costs Completion of a NI 43-101 technical report Sub-Total Other Project Cost General Operating Costs & G&A Contingency Total Estimated Spend for 18-month period from July 1, 2022	Estimated Amount(1) Use of Proceeds to December 31, 2022 US$ C$ equivalent(2) C$ 3,500,176 4,510,327 3,723,221 280,008 360,818 - 199,480 257,050 40,755 1,364,004 1,757,656 722,414 2,498,000 3,218,923 908,640
	7,841,668 10,104,773 5,395,030 299,880 386,425 106,492 25,000 32,215 -
	324,880 418,640 106,492 253,034 326,060 15,169 3,885,072 5,006,304 1,415,194 615,223 792,776 -
	12,919,886 16,648,565 6,931,885

Notes:

(1) For further detail regarding the Company's principal purposes of its funds at the time of the RTO, please refer to the Filing Statement under the heading Principal Purposes of Funds.

(2) US$1.00 = CDN $1.2886, as per the Filling Statement.

Approximate use of proceeds is based on expenditures of the Company for the nine-month period ended December 31, 2022, adjusted for non-cash expenses such as share-based compensation, amortization and depreciation.

Working Capital

As at December 31, 2022, the Company had a negative working capital of $6,024,026 (December 31, 2021 – $1,558,011 positive working capital), calculated as total current assets less total current liabilities. The decrease in working capital is mainly due to increase in cash and other current assets, offset by an increase in accounts payable and accrued liabilities and promissory note payable.

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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Going Concern

As at December 31, 2022, the Company had accumulated losses totaling $78,092,605. The continuation of the Company is dependent upon the continued financial support of shareholders, its ability to raise capital through the issuance of its securities, and/or obtaining long-term financing.

When managing capital, the Company's objective is to ensure the Company continues as a going concern as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the acquisition and exploration of mineral properties.

The properties in which the Company currently has an interest are in the exploration and evaluation stage. As such, the Company is dependent on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

The Company will continue to assess new properties and seek to acquire an interest in additional properties if it believes there is sufficient geologic or economic potential and if it has adequate financial resources to do so.

Contractual Obligations and Contingencies

Selebi Assets

As per the Selebi asset purchase agreement (the " Selebi APA "), the aggregate purchase price payable to the seller for the Selebi Assets is the sum of US$56,750,000 which amount shall be paid in three instalments:

• US$1,750,000 payable on the closing date. This payment has been made.

• US$25,000,000 upon the earlier of: a) approval by the Ministry of Mineral Resources, Green Technology and Energy Security (" MMRGTES ") of the Company's Section 42 and Section 43 Applications (further extension of the mining license and conversion of the mining licence into an operating license respectively), and b) on the expiry date of the study phase, January 31, 2025, which could be extend for one year with written notice.

• The third instalment of $30,000,000 is payable on the completion of mine construction and production start-up by the Company on or before January 31, 2030, but not later than four years after the approval by the Minister of MMRGTES of the Company's Section 42 and Section 43 Applications.

• Payment of care and maintenance funding contribution in respect of the Selebi Assets for a total of US$5,178,747 from March 22, 2021 to the closing date. This payment has been made.

As per the term and conditions of the Selebi APA, the Company has the option to cancel the second and third payments and give back the Selebi Assets to the liquidator in the event where the exploration program determines that the Selebi Assets are not economical. The Company also has an option to pay in advance the second and third payments in the event where the exploration program determines that the Selebi Assets are economical. The Company's accounting policy, as permitted by IAS 16 – Property, Plant and Equipment, is to measure and record contingent consideration when the conditions associated with the contingency are met. As of December 31, 2022, none of the conditions of the second and third instalment are met. Hence, these amounts are not accrued in the Interim Financial Statements.

In addition to the Selebi APA, the purchase of the Selebi Assets is also subject to a contingent compensation agreement as well as a royalty agreement with the liquidator.

Selkirk Assets

In regard to the Selkirk assets (the Selkirk Mine and related infrastructures), the purchase agreement does not provide for a purchase price or initial payment for the purchase of the assets. The Selkirk purchase agreement provides that if the Company elects to develop Selkirk first, the payment of the second Selebi instalment of US$25 million would be upon the approval by the Minister of MMRGTES of the Company's Section 42 and Section 43 Applications (further extension of the Selkirk mining

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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license (years) and conversion of the Selkirk mining licence into an operating license respectively). For the third Selebi instalment of US$30 million, if Selkirk were commissioning earlier than Selebi, the payment would trigger on Selkirk's commission date.

Right-of-Use Assets

On July 9, 2022, the Company executed a sales agreement with Tuli Tourism Pty Ltd. ("Tuli") for the Syringa Lodge (the "Lodge") in Botswana and obtained possession of the property in August 2022.

Pursuant to the sales agreement, the aggregate purchase price payable to the Seller is $3,213,404. A deposit of $482,011 was paid on August 17, 2022. The balance is payable into two instalments of $1,365,697 on July 1, 2023 and August 1, 2024. In addition to the above purchase price, the Company will pay to Tuli agreed interest in 12 equal monthly instalments of $13,657 each, followed by 12 equal monthly instalments of $6,828.

Post Creek

Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $10,000 per annum. During FY 2022, the Company paid $10,000 which will be deducted from any payments to be made under the NSR.

Halcyon

Commencing August 1, 2015, the Company is obligated to pay advances on the NSR of $8,000 per annum. During FY 2022, the Company paid $8,000 which will be deducted from any payments to be made under the NSR.

Related Party Transactions

Related party transactions are summarized below and include transactions with the following individuals or entities:

Key management personnel

Key management personnel are defined as members of the Board of Directors and senior officers.

Key management compensation was as related to the following:

Management fees Due diligence BCL Corporate and administration expenses Share base payment	December 31, 2022 2,418,984 - 102,884 4,623,089 7,144,957	December 31, 2021
		675,001 131,600 108,193 1,019,932
		1,934,726

During the year ended December 31, 2022, ThreeD Capital subscribed for a further 1,213,538 common shares of PNRC (1,279,069 shares on a post-RTO and post-consolidation basis), for a further investment of $3,064,582 (US$2,427,076) (2021 - $374,123). As of December 31, 2022, ThreeD Capital beneficially owned 8,662,347 shares (2021 - 7,383,278 shares) on a post-RTO and post-consolidation basis, constituting approximately 7.5% (2021 – 9.14%) of the issued and outstanding shares of the Company.

Between March 2 and March 3, 2022, PNRC issued promissory notes to certain officers and directors as well as certain shareholders as below:

n March 2 and March 3, 2022, PNRC issued promissory olders as below:	notes to certain officers
Directors and Officers of the Company ThreeD Capital NAN	35,000 762,180 1,270,000
	2,067,180

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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On April 30, 2022, all amounts owing in respect of the above promissory notes were repaid in full by payment of cash in an amount of $2,018,568, including interest and fees, and by issuing 310,000 PNRC shares (326,740 shares of the Company on a post-RTO and post-consolidation basis).

Contingent Liabilities

There are no environmental liabilities associated with the Selebi Assets and the Selkirk Assets as at the acquisition dates as all liabilities prior to the acquisitions are the responsibility of the sellers, BCL and TNMC, respectively. The Company has an obligation for the rehabilitation costs arising subsequent to the acquisitions. As of December 31, 2022, management is not aware of or anticipating any contingent liabilities that could impact the financial position or performance of the Company related to its exploration and evaluation assets.

The Company’s exploration and evaluation assets are affected by the laws and environmental regulations that exist in the various jurisdictions in which the Company operates. It is not possible to estimate the future contingent liabilities and the impact on the Company's operating results due to future changes in Company’s development of its projects or future changes in such laws and environmental regulations.

Off-Balance Sheet Arrangements

There are no off-balance sheet arrangements as at December 31, 2022.

Financial Instruments and Financial Risk Management

The Company thoroughly examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include interest rate risk, credit risk, liquidity risk and currency risk. The carrying value of cash, trade payables and accrued liabilities approximate their fair value due to their short-term nature. The fair value of the A&R Promissory Note, vehicle financing and lease liability are equal to their carrying values as all these amounts carry a fix interest rate. The fair value of the Deferred Share Units is the closing price of the Company’s common shares at the end of each reporting period. . Fair value measurements of financial instruments are required to be classified using a fair value hierarchy that reflects the significance of inputs in making the measurements. The levels of the fair value hierarchy are defined as follows:

Level 1 – Quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3 – Inputs for the asset or liability that are not based on observable market data.

On December 31, 2022, the fair value of the Company’s warrant liabilities is based on Level 3 measurements and the fair value of cash and the Deferred Stock Units are based on Level 1 measurements.

All amounts in table are expressed in thousands of CDN dollars	Fair Value at December 31, 2022	Basis of Measurement	Associated Risks
Cash	5,162,991	FVTPL	Credit
Trade payables and accrued liabilities	4,025,716	Amortized cost	Liquidity
Lease liability	2,731,394	Amortized cost	Liquidity
Promissory note	7,070,959	Amortized cost	Liquidity
Vehicle financing	164,644	Amortized cost	Liquidity
Financial liability – warrant	-	FVTPL	Liquidity
Deferred share unit liability	298,000	FVTPL	Liquidity

The Company's accounting policies regarding financial instrument classification, measurement, impairment and derecognition are described in the Interim Financial Statements (see Note 2(3) – Basis of Presentation and Significant Accounting Policies – Exploration and evaluation assets).

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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Risk and Uncertainties

The business of the Company entails significant risks that may have a material and adverse impact on the future operations and financial performance of the Company and the value of the common shares of the Company. Although the Company has been successful in its past fund-raising activities, there is no assurance as to the success of future fundraising efforts or as to the sufficiency of funds raised in the future.

In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, have adversely affected workforces, economies and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company's business or results of operations at this time.

Readers are encouraged to read and consider the risk factors which are more specifically described, inter alia, in (i) this MD&A (see "Risk and Uncertainties"), (ii) the Filing Statement (see "Risk Factors"), (iii) the Interim Financial Statements (see Note 12 – Risk Management), and (iv) the Annual Financial Statements (see Note 14 – Risk Management). Such risk factors could materially affect the future operating results of the Company and could cause actual events to differ materially from those described in the forward-looking statements relating to the Company.

Share Capital Information

As of the date of this MD&A the following number of common shares of the Company and other securities of the Company exercisable for common shares of the Company are outstanding:

Securities	Common shares
Common shares	120,958,527
Preferred shares	13,131
Deferred shares	200,000
Warrants	1,510,399
Stock options	10,407,044
Fully diluted share capital	133,089,101

Disclosure Controls and Procedures

Management has established processes to provide them sufficient knowledge to support representations that they have exercised reasonable diligence that: (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial statements; and (ii) the consolidated financial statements fairly present in all material respects the financial condition, results of operations and cash flows of the Company, as of the date of and for the periods presented.

Caution Regarding Forward Looking Statements

Statements contained in this MD&A that are not historical facts are forward-looking information (within the meaning of the Canadian securities legislation) that involve risks and uncertainties. In this MD&A, forward-looking information includes, but is not limited to, statements with respect to the RTO, ongoing payments and covenants with respect to the Selebi acquisition and the Selkirk acquisition, the Company's anticipated plans and work program at the Selebi Mine, establishment and estimation of mineral reserves and mineral resources, the realization of mineral reserve estimates, the timing and amount of estimated future capital expenditures, success of exploration activities, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and the timing and possible outcome of pending litigation. In certain cases, forward-looking information can be identified by the use of words such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or

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MANAGEMENT'S DISCUSSION AND ANALYSIS For the Fourth Quarter and Full Year Ended December 31, 2022

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variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved". Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such risks and other factors that could cause actual results to differ materially from those anticipated in forward-looking information are described, inter alia, in (i) this MD&A (see "Risk and Uncertainties"), (ii) the Filing Statement (see "Risk Factors"), (iii) the Interim Financial Statements (see Note 12 – Risk Management), and (iv) the Annual Financial Statements (see Note 13 – Risk Management). Although the Company has attempted to identify important factors that could affect the Company and may cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that forwardlooking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking information. The forward-looking information in this MD&A speak only as of the date hereof. The Company does not undertake any obligation to release publicly any revisions to these forward-looking information to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events, except as required by law.

Historical Estimate

The historical SAMREC compliant resource (the " Historic SAMREC Resource ") that was calculated for the Selebi Mine in 2016 is considered to be historical in nature and should not be relied upon as a current mineral resource estimate. While management believes that the Historic SAMREC Resource could be indicative of the presence of mineralization on the Selebi deposit, a qualified person has not completed sufficient work to classify the historical mineral estimate as a current mineral resource estimate and PNRL is not treating the historical mineral estimates as current mineral resource estimate.

Selebi Technical Report

The Scientific and technical information in this MD&A relating to the Selebi Mine is supported by the technical report titled "Technical Report on the Selebi Mines, Central District, Republic of Botswana, Report for NI 43-101", dated June 16, 2022 (with an effective date of March 1, 2022) (the " Technical Report "), and prepared by SLR Consulting (Canada) Ltd. for Premium Nickel Resources, in accordance with NI 43-101. Reference should be made to the full text of the Technical Report, including the assumptions, limitations and qualifications contained therein, as well as the data verification relating to the historic data compilation presented in this MD&A, and is available electronically on SEDAR (www.sedar.com) under Premium Nickel Resources' issuer profile.

Qualified Person and Technical Information

The scientific and technical information in this MD&A has been reviewed and approved by Sharon Taylor, Chief Geophysicist of the Company, who is a "qualified person" for the purposes of NI 43-101.

The drilling was completed by Mitchell Drilling of Botswana utilizing a Sandvik UDR1500 and a Boart Longyear LF-160 diamond drill rig. Drill core samples (47.75mm NQ) are cut in half by a diamond saw on site. Half of the core is retained for reference purposes. Samples are generally 1.0 to 1.5 metre intervals or less at the discretion of the site geologists. Sample preparation and lab analysis was completed at the ALS Chemex in Johannesburg, South Africa. Commercially prepared Blank samples and certified Cu/Ni sulphide analytical control standards with a range of grades are inserted in every batch of 20 samples or a minimum of one set per sample batch. Analyses for Ni, Cu, Co and S are completed using a peroxide fusion preparation and ICP-AES finish (MEICP81). Ag analyses are completed using a four acid digestion with ICP-AES Finish (ME-ICP61).

Lengths of assays are reported as down hole intervals. True thickness can be calculated assuming a dip/dip direction of 43°/206°.

The scientific and technical information in this MD&A relating to the assets of the Company in Greenland and Canada has been prepared by or under the supervision of Peter C. Lightfoot, PhD, P. Geo, the Consulting Chief Geologist of the Company, who is a "qualified person" for the purposes of NI 43-101. Dr. Lightfoot has reviewed and approved the disclosure in this MD&A relating to the assets of the Company in Greenland and Canada.

For further information relating to the Maniitsoq Project in southwest Greenland, please see the technical report titled Updated Independent Technical Report for the Maniitsoq Nickel-Copper-Cobalt-PGM Project, Greenland" dated March 17, 2017 ( with

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MANAGEMENT'S DISCUSSION AND ANALYSIS

For the Fourth Quarter and Full Year Ended December 31, 2022

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an effective date of March 17, 2017) prepared for the Company by SRK Consulting (US) Inc., and is available on SEDAR (www.sedar.com) under Premium Nickel Resources' issuer profile.

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