Northern Shield Resources Inc. — Management Reports 2021

Apr 29, 2021

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(An Exploration Stage Company)

Northern Shield Resources Inc. Management Discussion and Analysis for the year ended December 31, 2020

55 Metcalfe St, Ottawa, ON K1P 6L5

www.northern-shield.com

Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Set out below is a review of the activities, results of operations and financial condition of Northern Shield Resources Inc. (“Northern Shield”, or the “Company”) for the year ended December 31, 2020.

The following information should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020. The policies applied in the financial statements are based on International Financial Reporting Standards (“IFRSs”) issued and effective as at April 26, 2021 for periods ending on or before December 31, 2020.

All dollar figures included in the following Management Discussion and Analysis (“MD&A”) are quoted in Canadian dollars unless otherwise indicated. This MD&A has been prepared as at April 26, 2021.

The Company is a reporting issuer in British Columbia, Quebec, Alberta and Ontario, and has its head office in Ottawa, Ontario and its registered office in Calgary, Alberta.

The Company is incorporated pursuant to the Canada Business Corporations Act and trades on the TSX Venture Exchange under the symbol “NRN” and on the Frankfurt (Germany) Stock Exchange under the symbol “N9S”.

Additional information related to the Company is available on SEDAR at www.sedar.com.

3. DESCRIPTION OF BUSINESS

Northern Shield Resources Inc. (“the Company” or “Northern Shield”, which includes all wholly owned subsidiaries) is an active junior mining company primarily engaged in the exploration for gold, platinum group elements (“PGEs”), nickel and copper. Northern Shield’s mission is to create a successful mineral exploration company through technical excellence and efficient management, where success is measured by the identification and development of high-quality mineral exploration projects, which ultimately may be optioned, sold or developed for maximum return on investment.

The Company was built from the ground up as a Ni-Cu-PGE explorer and has considerable knowledge and understanding of magmatic systems. The Company utilizes this knowledge and science as part of its exploration strategy which allows it to effectively discriminate prospective magmatic systems and quickly vector in on the mineralization. As such, the Company focuses its exploration efforts on under-explored regions to generate targets and, early-stage projects that can quickly benefit from Northern Shield’s knowledge and experience in this field and in a cost-effective way.

Through its recently created, wholly owned subsidiary, Seabourne Resources Inc. (“Seabourne”), the Company has expanded its model driven approach in exploration to epithermal gold and related mineralization in under-explored regions of eastern Canada.

The information in this Management Discussion and Analysis (“MD&A”) contains forward-looking statements. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those included in the forward-looking statements. See “Cautionary Statement” at the end of this MD&A. This MD&A has been prepared in accordance with the requirements of National Instrument 43101, “Standards of Disclosure for Mineral Projects”, and National Instrument 51-102, “Continuous Disclosure Obligations.”

2. CORPORATE DEVELOPMENTS

During the year period ended December 31, 2020, the Company completed a non-brokered private placement with Mr. Robert McEwen for gross proceeds of $300,000 by issuing 3,333,333 units at $0.09 per unit. Each unit consisted of one common share and one half of one common share purchase warrant. A total of $33,057 of share issue expenses were incurred.

The Company also closed a financing for total proceeds of $2,692,000. The financing comprised i) 9,938,462 units at $0.13 per unit for proceeds of $1,292,000, with each unit consisting of one common share and onehalf of one common share purchase warrant; and ii) 8,000,000 units at $0.175 per unit for proceeds of $1,400,000, with each unit consisting of one common share and one-half of one common share purchase warrant, the common share issued on a flow-through basis within the meaning of the Income Tax Act (Canada). Each whole share purchase warrant is exercisable for one non-flow-through common share at a price of $0.20 per share within 24 months of the closing of the Offering.

Crescat Capital LLP subscribed for 13,230,769 of the offered Units. Crescat is a global macro asset management firm headquartered in Denver, Colorado. In connection with the acquisition of Units by Crescat, the Company has granted Crescat, for as long as Crescat and its affiliates hold at least 3% of the Company’s

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Common Shares (on a non-diluted basis), a right to participate in future equity financings of the Company to maintain Crescat’s pro-rata ownership of the Company.

The Company also closed a financing for total proceeds of $500,000. The financing comprised i) 4,125,000 units at $0.08 per unit for proceeds of $330,000, with each unit consisting of one common share and one-half of one common share purchase warrant; and ii) 1,700,000 common shares at $0.10 per share for proceeds of $170,000, with each common share issued on a flow-through basis within the meaning of the Income Tax Act (Canada). Each whole share purchase warrant is exercisable for common share at a price of $0.20 per share within 24 months of the closing of the Offering.

During the year ended December 31, 2020, 400,000 common shares were issued pursuant to the exercising of warrants for gross proceeds of $44,000.

The Company also issued 700,000 stock options to advisors of the Company. Each option has a strike price of $0.10 and will expire five years after it was issued.

During the year ended December 31, 2020, the Company also announced that it has acquired two licences through online-staking and, through an option agreement, also acquired the right to earn a 100% interest in an adjacent licence (the “Merasheen Option”) on Merasheen Island in Placentia Bay, Newfoundland, about 60 km northeast of the Company’s Root & Cellar gold project. Collectively, the three licences now known as the “Merasheen Property” cover 27 square kilometres. The Property is being explored for gold and silver with local anomalous lead and zinc. For details of the agreement, please see Section 3.1.3.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3. MINERAL PROPERTIES

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As of December 31, 2020
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The Company conducts the majority of its exploration in Eastern Canada.

The Company has not yet determined whether its properties contain economically recoverable mineral reserves. Recoverability is dependent upon the reserve’s existence, the ability of the Company to obtain the necessary financing to complete exploration and development, and upon future profitable production or proceeds from the disposition of the properties. Until such time as it is able to consistently monetize its mineral property holdings, the Company's ability to continue its operations as a going concern is dependent on its ability to secure additional financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future.

PRINCIPAL PROPERTIES

PROPERTY SHOTROCK ROOT& CELLAR MERASHEEN HUCKLEBERRY IDEFIX	COMMODITIES Au-Ag Au-Ag Au-Ag Ni-Cu-PGE Ni-Cu-PGE	INTEREST NUMBER OF CLAIMS/AREA 83% 2,167 / 272 km2 0% 144 / 32 km2 0% 196 / 32 km2 100% 111 / 54 km2 100% 40 / 18 km2

*Subject to option agreement described in Section 3.1.1

**Subject to option agreement described in Section 3.1.2

*** One (1) km[2 ] of the Property is subject to option agreement described in Section 3.1.3

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3.1 PRINCIPAL PROPERTIES

3.1.1 SHOT ROCK - GOLD

The Shot Rock property is located along the Trans-Canada Highway between New Glasgow and Antigonish and covers an epithermal gold setting of a type not previously recognized in Nova Scotia.

The project was brought to the Company’s attention by a prospector who was following up on historic heavy mineral concentrate samples with up to 44,000 ppb Au. This was substantiated by the prospector who continued to identify gold panned from streams in the area. Prospecting also identified low grade gold bearing rocks but with pathfinder elements which are often associated with low sulphidation epithermal gold mineralization. As such a system had never been discovered in Nova Scotia before, the Company recognized the opportunity for a new discovery and “first mover.’

During the year ending December 31[st] , 2018 the Company confirmed the discovery a low sulphidation epithermal (“LSE”) gold system on its Shot Rock Property.

Title

The Company currently owns a 80% interest in the Property after having successfully met all conditions under the Option Agreement.

The prospector will retain a 1% NSR of which half (0.5%) can be bought back by Northern Shield for $1,000,000.

The Company current holds its interest in the Shot Rock property through Seabourne.

Q4’20 Update

During the quarter ending December 31st, 2020, the Company completed a controlled-source audiomagnetotellurics (“CSAMT”) geophysical survey at Shot Rock Gold Project.

Interpretation of the data shows five high angle, deep-seated resistive features that the Company believes could represent quartz veining and/or silicification along fault zones at the core of a large LSE gold system. The Company believes these features are the main and most important components of the low sulphidation epithermal system. Importantly, the trend of the features is consistent with that of anomalous gold mineralization and pathfinder elements seen in drill core and of the large gold anomalous quartz veins intersected in drill-holes 20SR-11, 12 and 16. Furthermore the feeder structures are consistent with the property scale dilatant structure identified and announced on April 29, 2020 (Figure 1).

The survey also shows a large resistive body interpreted to represent a silica cap overlying these structures. Beneath the silica cap, portions of the resistive structures are locally seen to have selvages of less resistive material that could indicate clay alteration which is commonly associated with low sulphidation epithermal gold systems. These are the levels that will be targeted in the next phase of drilling. The targets are generally just beyond the depth of drilling completed in Q1 and Q3.

The CSAMT survey also supports the previously suggested theory that much of the gold mineralization at surface, or near surface, is the result of ascending fluids exploiting weaknesses along the dyke contacts (which are apparent from the survey) thus allowing some veins and disseminated gold to form high above the primary portions of the epithermal system. While these zones carry some gold grades, they are well above the main “boiling zone” of the system and having infiltrated through the silica cap. However, the gold anomalous quartz veins intersected in drill-holes 20SR-11, 12, 15 and 16 do appear to represent the upper levels of the main veins system originating from the “Feeder 1 Structure.”

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Historical Exploration

Exploration commenced at Shot Rock in June 2018. The initial phases focused on stream sediment sampling while at the same time getting a better understanding of the geology of the area. Over the season stream sediment samples were collected. The results:

• confirmed the presence of anomalous gold in the streams in the Barney’s River South area, where historic sampling in the 1970s had identified highly anomalous gold in heavy mineral concentrate samples;

• identified highly anomalous gold in what is now termed the Highway Zone where the two highest gold assays (1,015 and 1,045 ppb Au) from the stream sediment sampling program are located;

• identified several other areas anomalous in gold and/or pathfinder elements often associated with epithermal systems.

Continued exploration resulted in the discovery of large, well-banded low sulphidation, epithermal quartz veins, up to 45 centimetres thick in outcrop, within the Highway Zone. Intensive stockwork veining and breccias were also found in outcrop. Dozens of similarly composed angular boulders (up to 1m) have been uncovered in the area, some exhibiting multiple phases of veining, stockwork and brecciation.

Mapping and interpretation were undertaken in 2019. The local geology is dominated by mudstones, siltstones and lesser sandstones and conglomerates but numerous gabbroic to dioritic sills and dykes were also identified and are spatially associate with much of the epithermal veining and mineralization. Interpretation of the fieldwork suggests four separate fluid cells (epithermal systems) along the ridge overlooking the highway including the newly identified Crystal Hill located 500m east of the Highway Zone. These fluid cells are defined by geochemistry, mineralogy and various alteration and silicification indices. In the western-most cell (Windmill Zone), although anomalous gold and pathfinder elements are present, significant quartz veining or gold mineralization has not been identified to date. Moving eastward, the Middle Zone contains the highest gold grade identified to date at 5.3 g/t Au and is spatially well confined. A further 1,000m east, the Highway Zone possesses the largest footprint to date measuring approximately 600m x 280m. Based on the understanding of these four known occurrences and applying results from previously completed airborne magnetics, Lidar survey, stream sediment geochemistry and prospecting, further cells are expected to exist east of Crystal Hill, and could be associated with gold mineralization at depth.

The textures and mineralogy of the quartz veins in outcrop and boulders from the Highway Zone are believed by the Company to be consistent with the upper levels of epithermal gold systems, likely above the boiling cap. In typical epithermal systems, only modestly anomalous gold is expected to be seen above the boiling cap. If higher grades exist, they are usually found below, or at the level of the boiling cap.

The Company completed the maiden drill program on the Property in March 2020 and a follow up in July totalling 5,000 meters over 16 drill-holes. The most significant intercepts occurred in drill-hole 20SR-04 with intervals of 4.24 g/t Au and 2.4 g/t Ag over 3.15 metres including 22.1 g/t Au and 8.8 g/t Ag over 0.4 metres and 12.6 g/t Au and 9.1 g/t Ag over 2.45 metres including 17.3 g/t Au and 10.3 g/t Ag over 1.0 metre (see Figure 2 & 3). The top of drill hole 20SR-04 also intersected anomalous gold (0.025 to 0.78 g/t Au) from surface to a depth of 39.7 metres averaging 0.09 g/t Au. Importantly, this drill hole exemplifies the rapid increase in gold grade as a function of depth that LSE deposits are known for, from approximately 0.1 g/t Au at surface (silica cap) to 22 g/t Au at a vertical depth of 112 metres below surface. Four other drill holes intersected anomalous gold values between 0.025 g/t and 0.547 g/t Au. The intervals comprise quartz-adularia veins hosted in highly altered and brecciated gabbroic to intermediate sills. the second phase of drilling intersected significant widths of epithermal veins and breccias in drill-holes 20SR-11, 12 and 16. Although they appeared prospective gold assays were lower than expected with a high of 0.53 g/t Au.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Drill-Hole 20SR-04

0SR-04
Including: Including:	From (m) 136.60 136.60 137.75 138.70 139.10 From (m) 163.20 163.20 164.20 165.20	To (m) 140.00 137.50 138.70 139.10 140.00 To (m) 165.65 164.20 165.20 165.65	Interval (m) 3.15 0.90 0.95 0.40 0.90 Interval (m) 2.45 1.00 1.00 0.45	Au (g/t) 4.24 1.66 1.33 22.10 1.97 Au (g/t) 12.58 8.11 17.30 12.00	Ag (g/t)
					2.43 0.90 1.70 8.80 1.00 Ag (g/t)
					9.10 5.20 10.30 15.10

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3.1.2 ROOT & CELLAR – GOLD-SILVER

The Property consists of 12 mineral licenses covering approximately 32 square kilometres and located near Marystown and Creston on the Burin Peninsula, both of which provide deep water ports.

The Property is being explored for low and intermediate sulphidation epithermal-type gold mineralization and has potential for copper porphyry style mineralization.

Title

The Company current holds no interest in the Root & Cellar property. However, the Company has signed an Option Agreement with prospector Jeffery Brushett that gives the Company the right to acquire a 100% interest in the Root and Cellar Gold Project.

Under the terms of the Option Agreement, Northern Shield can earn a 100% interest in the Property by incurring $2,150,000 in expenditures on the Property within four years. The Option Agreement also requires cash payments totaling $165,000 (of which, $35,000 has been paid) and share issuances totaling 3,000,000 shares (of which, 600,000 have been issued).

The Prospector will retain a 2.5% NSR of which 1% can be bought back by Northern Shield for $1,500,000.

The Option Agreement with respect to the Root & Cellar property is between Mr. Brushett and Seabourne.

Q4’20 Update

During the quarter ended December 31st, 2020, the Company completed the seasons prospecting program and results from an extensive soil sampling program were received and compiled. Rock sample results were received subsequent to the period and are briefly discussed in Subsequent Events

Numerous soil samples were anomalous in gold with four distinct zones highlighted:

• Conquest: The Conquest soil anomaly is about 700 meters in length, 500 meters wide and hosts a gold showing previously discovered by the prospector with grades of up to 47 g/t Au. Samples north of the showing suggest there is likely significantly more gold to be found in bedrock beneath the cover.

• Conquest East: This soil anomaly is newly defined area of interest and would extend the Conquest Zone a further 600 meters eastward.

• Windfall: The anomaly lies one kilometer north of Conquest and occurs at the intersection of ESE and ENE trending structures. This is another newly identified gold target that includes the highest gold assay from the soil sample program of 493 ppb Au.

• Red Rock: The Red Rock soil anomaly is the longest to date at over 1 kilometer in length. Previous prospecting at one specific location along this corridor identified gold-bearing boulders which assayed up to 2.4 g/t Au. However, the length of the soil anomaly suggests that there could be additional mineralization to be found. The Red Rock “corridor” differs from the others in that it also hosts sporadic but highly anomalous copper with soils assaying up to 1170 ppm Cu.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Historical Exploration

The Property includes five distinct showings of which four were the result of the sustained and diligent work of Mr. Brushett.

Drop Zone : a low-sulphidation setting with the three highest grab samples grading: 45.5 g/t Au and 1,365 g/t Ag; 37.8 g/t Au and 1,000 g/t Ag; and 25.8 g/t Au and 487 g/t Ag.

The host rock is a felsic to intermediate fragmental volcanic that exhibits strong silica-pyrite alteration crosscut by veining and related localized brecciation. The breccia zone appears to contain fragments rimmed by comb-textured quartz followed by pale beige chalcedonic silica which produces a “cockade”-style breccia. The above reported results are select samples and are not necessarily representative of the mineralization hosted on the property.

Conquest Zone : a low sulphidation setting with 85 of 153 samples assaying greater than 100 ppb Au in an area measuring 550m x 650m, with localized higher grades including channel samples assaying 47.9 g/t Au and 5.6 g/t Au, each over 0.5m. Mineralization is associated with comb-textured quartz and pale beige chalcedonic silica similar to that observed at the Drop Zone.

Red Rock Zone: up to 2.2 g/t Au hosted in a boulder adjacent to strongly hematized quartz breccia. Such rocks are often observed at the top of low-sulphidation systems.

Discovery Zone/Discovery Zone North : up to 10.5% Cu associated with anomalous Mo, Ag, Zn and Pb and hosted in epidote and hematite altered veins in what may be a porphyry style setting. Within these zones 3 sample assayed greater than 5% Cu, 11 samples between 1% and 5% Cu and 40 samples between 0.1% and 1% Cu.

Braxton-Bradley Zone: possible intermediate-sulphidation setting with deformed silicified hydrothermal breccias and anomalous bedrock gold assays up to 0.9 g/t Au and 2.3 g/t Au in angular samples of float. Other associated assays reported from this zone include 1.8 oz/t Ag (62 g/t Ag) to 4 oz/t Ag (137 g/t Ag), 0.3% Pb, 1.9% Zn, and 1.7% Cu.

A pilot scale till sampling survey covering the central and western portion of the property as well as several structures deemed of interest was completed in 2019. The soil sample results at Drop Zone paint a compelling case of a series of three or four sub-parallel zones that could host further mineralization to that already exposed at the Drop Zone discovery along with a two-kilometre-long gold in till anomaly at Conquest.

The Drop Zone showing is characterised by high silver to gold ratios (approximately 25:1) and the presence of tellurium-bearing minerals including hessite (silver-telluride). A hessite-bearing boulder has also been found recently south of the Drop Zone at a location that coincides with the southernmost silver soil anomaly trend. Three of the anomalous trends coincide with topographic highs. The two shortest trends, including that which hosts the Drop Zone showing have a strike length of approximately 250m. The zone immediately north of the showing has a strike-length of 500m and is open at both ends. A fourth zone defined from the till sampling is just apparent at the northern end of the survey grid.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3.1.3 MERASHEEN GOLD-SILVER

The property consists of four licences totalling 32 square kilometres and is located at the southern end of Merasheen Island in Placentia Bay. The Property is being explored for gold and silver with local anomalous lead and zinc. There is very limited information and data available on the area, but what is found in the Mineral Occurrence Database of Newfoundland, and previously filed assessment reports suggests that the target has characteristics of both bulk tonnage high sulphidation epithermal gold-silver systems and an Eskay Creek-style, precious-metal-rich, Volcanogenic Massive Sulphide deposits.

Title

The Company acquired two licences through online-staking and, through an option agreement, also acquired the right to earn a 100% interest in an adjacent licence (the “Merasheen Option”) on Merasheen Island in Placentia Bay, Newfoundland, about 60 km northeast of the Company’s Root & Cellar gold project. Collectively, the three licences now known as the “Merasheen Property” cover 27 square kilometres. The Property is being explored for gold and silver with local anomalous lead and zinc.

Under the terms of the Option Agreement Northern Shield can earn a 100% interest in the Merasheen Option by incurring $2,000,000 in expenditures within four years. The Option Agreement also contains cash payments totalling $115,000 (of which $5,000 has been paid) and share issuances totalling 1,600,000 Company shares (of which 150,000 have been issued) to the vendor over the four-year period. The vendor will retain a 1.5% NSR of which 1% can be bought back by Northern Shield for $2,000,000.

Q4’20 Update

The Company completed its first reconnaissance of the property in the period ending December 31, 2020 and collected a total of 186 rock samples. Five of these samples assayed between 0.1 and 1.3 g/t Au with approximately half of them being anomalous in zinc with a high of 0.3% Zn.

Historical Exploration

The Merasheen Option covers a gold occurrence discovered in 1998 and a nearby lead-zinc occurrence discovered in 1953. In 2003 and 2008, limited sampling was undertaken by an exploration company, however, the Property has seen no systematic or sustained exploration and no diamond drilling has been reported. The Mineral Occurrence Database of Newfoundland summarizes the occurrence as being:

“within an extensive zone of intense sericite-silica-pyrite alteration that is well exposed along a 1.4 km coastal section, approximately 500 m wide (across strike) at its southern end. It has been traced inland to the north for approximately 3 km along strike. Grab samples collected in 1998 from shoreline outcrop of pyrite-quartz veinlets hosted in semi-massive to massive pyrite returned assays up to 6.8g/t Au and 314g/t Ag. Anomalous gold values from 0.1g/t to 2.0g/t in association with anomalous As, Pb, Zn and elevated Mo and Hg are also reported from other samples collected along the 1.4 km coastal section. Galena and sphalerite occur in this zone associated with abundant disseminated pyrite all hosted within a grey rhyolite or dacite have been reported.”

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3.1.4 HUCKLEBERRY COPPER-NICKEL-PGE

Northern Shield first acquired claims in the Huckleberry area after discovering copper mineralization hosted within a glomeroporphyritic gabbro (“GPG”) at the southern end of the Labrador Trough about 100 km north of Schefferville. Further exploration identified significant and extensive Cu-Ni-PGE mineralization in several different zones.

Huckleberry is being explored as a large-scale, segregated magmatic Cu-Ni-PGE deposit. Similar deposits include Kevitsa and Sakatti in Finland, the Duluth Complex, and Noril’sk-Talnakh. These deposits form when copper-rich fluids segregate from the nickel during unusually slow cooling of the magma. Although the copper-rich portions may be economic on their own, the nickel-rich portion may be contiguous (at depth) with the copper seen on surface or in a separate body.

Title

In 2016, the Company signed an option agreement and pre-negotiated joint venture agreement with South32 Limited of Perth, Australia (“South32”) regarding its Huckleberry property. Under the terms of the agreement South32 could have earned a 50% interest in the Huckleberry property by incurring $2,500,000 in exploration expenditures within the first two years of the agreement with an option to its interest to 70% by incurring a further $2,500,000 of exploration expenditures by the end of the third year. However, after successfully meeting 50% earn-in requirements South32 elected to terminate the option agreement. The Company currently holds a 100% interest in Huckleberry.

Q4’20 Update

No exploration was undertaken on the Huckleberry property in the quarter ending December 31, 2020.

Historical Exploration

Initial prospecting at Huckleberry in 2014 and 2015 identified two main mineralized zones of which the Western Zone could be traced for 3 kilometres with average grades of grab samples of 1.0% Cu, 0.2% Ni and 0.72g/t PGE and highs of 14% Cu, 17 g/t PGE+Au and 1.2% Ni. Sporadic copper mineralization was also found in the Eastern Zone but with generally lower associated Ni and PGEs.

The high Cu:Ni ratios in the mineralization found on surface at Huckleberry is indicative of a segregated deposit whereby the copper has separated from the nickel. As such, Huckleberry is being explored as a large-scale, segregated magmatic Cu-Ni-PGE deposit. Similar deposits include Kevitsa and Sakatti in Finland, the Duluth Complex, and Noril’sk-Talnakh. These deposits form when copperrich fluids segregate from the nickel during unusually slow cooling of the magma. A magma can only cool so slowly if it is part of a very large magma chamber or if there is constant influxes of fresh hot magma. Either method has very positive implications for the presence of large-scale Ni-Cu-PGE mineralization. Although the copper-rich portions may be economic on their own, the nickel-rich portion may be contiguous (at depth) with the copper seen on surface or in a separate body. However, the discovery of a large xenolith hosting nickel-bearing semi-massive sulphides suggests that nickelrich sulphides does, or at least did exist, within the magmatic system.

Geological observations indicate the magmatic history of the host rocks to the mineralization at Huckleberry to be dynamic, violent, episodic, and long-lived. These are common characteristics of many giant Cu-Ni-PGE deposits. The evidences are the presence of: 1) various magmatic breccias throughout the intrusion; 2) flow-banding in some of the ultramafic layers; 3) multiple phases of mineralization; 4) a variety of mineralized host rocks; 5) xenoliths, including mineralized metasedimentary country rock and nickel-rich semi-massive sulphides; and 6) sulphide globules.

To date, exploration at Huckleberry has included mapping, sampling, a VTEM survey, a ground gravity survey, a drone magnetic survey and diamond drilling.

Geology

The magmatic geology and geochemistry of the Huckleberry Complex is challenging and somewhat atypical. The Complex consist of multiple phases of mafic/ultramafic intrusions, some of which have

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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undergone in-situ fractionation and/or differentiation; the parental magma from which these were all derived was highly differentiated (basaltic). There is considerable inter-mixing of at least two of the phases of magma; faulting and deformation was on-going during time of intrusion and, some of the mineralization and sills are the result of downward “injection” of magma.

The three main phases at Huckleberry are an anorthosite-rich Glomeroporphyritic Gabbronorite (GPG), unit which has been intruded by the Layered Gabbroic Sequence (LGS), and the Layered Noritic Sequence (LNS), which includes the lower olivine websterite unit which forms at, or just below the base of the LNS. The LGS is approximately 100m thick and the LNS is 200m-250m thick. The base of the LNS is often strongly interlayered with the GPG.

It is the Lower Olivine Websterite unit that hosts much of the mineralization in the western zone though some mineralization has percolated into the surrounding GPG.

Western Copper Zone

The principal mineralized zone is in the western portion of the property and includes the Discovery Zone.

Drill holes HK16-01, 02, 06 and 07 and HK17-08,09,12 and 16 tested various aspects of the Lower Olivine Websterite (LOW) in the Western Copper Zone. All drill the above-mentioned drill holes intersected mineralization in the LOW which can now be traced through drilling and surface sampling for a 3,000m strike-length and a down-dip extension of over 1,200m. It remains open along strike to the north and south and, down-dip to the east. The thickness of the mineralized Lower Olivine Websterite increases down-dip (eastward) from 9.46m in drill hole 16HK-01 (Discovery Zone area) through 15.08m in drill hole 17HK-08 to a total of 31.85m in 17HK-12 where the zone bifurcates.

Perhaps significantly, average, Ni, Cu and PGE grades increase down-dip as does Ni and PGE tenor whereas Cu tenor decreases. This could indicate a vector to the feeder in this direction.

A large gabbro xenolith (approx. 0.5m to 1m -long) hosting semi-massive sulphides was observed at one location in the Discovery Zone at the base of the LOW. A sample of the xenolith assayed 1.17% Ni, 0.83% Cu and 1.08 g/t PGE+Au. The presence of the xenolith indicates that nickel-rich, semimassive sulphides exist somewhere nearby in the magmatic system. Also of importance is the discovery of a large angular boulder within the property consisting of an anorthosite breccia cemented by chalcopyrite that assayed 4.04% Cu. Coarse bronzite crystals have also formed between the fragments. The fragments of anorthosite that compose the breccia also contain finely disseminated chalcopyrite and are identical to mineralized anorthosite seen elsewhere within the property. Thus the boulder is very likely to originate from within the Huckleberry property and suggests that there is more high-grade copper mineralization yet to be found at Huckleberry.

Eastern and Other Zones

Drill holes HK16-03 and 04 and HK17-10,13,14 and 15 were collared in the Eastern Copper Zone to target surface mineralization and test for potential upward “leakage” of Ni-Cu-PGE mineralization through a fault zone from a magma chamber at depth. Drill holes HK17-13 and 15 both intersected widespread, weakly to moderately disseminate pyrrhotite and chalcopyrite that could be consistent with upward permeating sulphides through a co-magmatic fault zone. The Eastern Copper Zone is generally poor in Ni and PGE compared to the Western Zone.

Further sampling in the Eastern Zone in 2017 identified several new copper occurrences (0.71%, 0.72% and 0.75% Cu). Some of this mineralization is hosted within ultramafic rocks, which is the first time this lithology has been seen in the eastern Copper Zone. The Eastern Copper Zone is separated from the Western Copper Zone by a structural corridor and the relationship between the two is not yet fully understood by the Company. The high copper to nickel ratio in the east could be the result of the remobilization of copper up through (co-magmatic) fault structures or the result of magmatic segregation.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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3.1.5 IDEFIX – NI-CU-PGE

The Idefix property is being explored for PGEs and Ni-Cu-PGEs hosted by a differentiated gabbronorite sill.

Title

The Company holds 100% ownership of the Idefix property.

On May 5, 2012, the Company signed an Option and Joint Venture Agreement with Impala Platinum Holdings Limited of South Africa (“Impala”) allowing Impala to earn a 50% interest in Idefix by making cash payments to Northern Shield totaling $300,000 over two years and incurring $3.2 million in exploration expenditures at Idefix or the surrounding area over three years, with total expenditures of $1,950,000 committed for the first two years. Impala had the right to also earn a 50% interest in up to two additional “designated properties” within an agreed upon area of mutual interest in Quebec by incurring a further $1.25 million of expenditures per additional property. For budgetary reasons Impala elected not to pursue the option at Idefix and never earned an interest in the property.

Q4’20 Update

No exploration was undertaken on the Idefix property in the quarter ending December 31, 2020.

Historical Exploration

A two-day reconnaissance of the Idefix property was conducted in early September 2011. Twentyfive rock samples were collected from the property of which twenty-one were from the maficultramafic sill with four coming from the country rock. These results led to the option agreement signed with Impala Platinum Holdings Limited in May 2012.

The original focus at Idefix was for reef-type PGE mineralization after the discovery of significant and extensive PGE mineralization in 2012 along a gabbronorite escarpment with grades up to 16 g/t Pt+Pd at a ratio of 1:3. Significant new PGE mineralization was discovered 900m immediately south of the Idefix Ridge at La Colline in 2013. At this location, 41 of 92 surface samples collected over an outcrop measuring approximately 220m by 50m assayed over 1 g/t Pt+Pd+Au. This includes a zone defined by 34 continuous sawn channel samples which average 1.4 g/t Pt+Pd+Au, 0.28% Cu and 0.1% Ni over 31.35m within which there is a higher-grade zone averaging 1.9 g/t Pt+Pd+Au, 0.38% Cu and 0.13% Ni over 15.85m. Also of significance are several grab sample collected 900m east of Idefix Ridge which assayed 11.1 g/t PGE+Au (4.6 g/t Pt, 3.8 g/t Pd, 2.7g/t Au) and 0.92% Cu and 2.8 g/t PGE+Au (1.3 g/t Pt, 1.1 g/t Pd, 0.4 g/t Au) and 0.26% Cu. This occurrence differs from others within the Idefix property as it has a 1:1 Pt:Pd ratio (compared to a 1:3 Pt:Pd ratio found along the Idefix Ridge). This discovery is suggestive of yet another PGE zone, or perhaps reef, on the eastern side of Idefix, which has seen very little exploration in the past.

In 2013, fourteen drill holes totaling 1,501m were completed at Idefix. Drilling did not intercept similar grades of PGEs as seen on surface but did prove the existence of reef type mineralization ( senso stricto ) averaging 0.2-0.4 g/t PGE over 16m-34m widths that can be traced continuously for 3.5km and intermittently for a further 3.5km. Of the 1,614 samples collected at Idefix, 934 assays greater than 0.1 g/t PGE+Au. This highlights the significant enrichment of PGE at Idefix.

However, the presence of large Ni-Cu-PGE bearing sulphide globules seen in nearly every drill hole completed along the Idefix Ridge points to the possible existence or massive magmatic sulphides, perhaps similar to Noril’sk-type model.

Based on analysis with a hand-held XRF analyzer, these globules average 3-5% Ni, 2-3% Cu and over 20 g/t Pd. Globules form from bubbles of then liquid sulphide being transported away from a pool of massive sulphide by an injecting pulse of magma during the formation of the sill; somewhat akin to a pebble being transported down-stream in a river. Globules are dense and fragile, and research has shown that they travel very short distances, typically on the order of a few hundred metres. Thus, it can be concluded from this information alone, that at the time of formation of the Idefix Gabbro sill, a pool of liquid sulphide (massive sulphide) existed nearby with high grades of Ni, Cu and PGE. The uncertainties are: 1) does the massive sulphide still exist or did the pulse of magma

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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that formed the Idefix gabbro completely destroy the pool of massive sulphide and 2), if the massive sulphide still exists, where is it located relative to the drill holes. These globules are also very similar to those seen adjacent to the massive sulphides at Noril’sk.

The possible existence of massive sulphides is supported by the geochemical signatures of the NiCu-PGE mineralization seen at La Colline. The mineralization at La Colline was first thought to be a continuation of the reef-type mineralization seen in drill-core along the Idefix Ridge. However, La Colline does not possess the same reef-type signature as seen along the ridge, but instead has a signature more commonly attributed to massive sulphides. Hence, it is interpreted that the disseminated mineralization at La Colline represents the fringe of a massive sulphide lens that extends northwards and located about 400m east of the Idefix Ridge. This is supported by a northsouth magnetic anomaly that underlies this area.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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4. FINANCIAL UPDATE

The Company's financial success is dependent upon the discovery of properties that could be economically viable to develop. Such development could take years to complete and the resulting income, if any, is difficult to determine. The sales value of any mineralization discovered by the Company is dependent upon factors beyond its control. The Company is not aware of any trends, uncertainties, demands, commitments, or events affecting Northern Shield in particular and not all junior mining companies, which are reasonably likely to have a material effect on the Company's capital resources or that would cause reported financial information not necessarily to be indicative of future operating results.

4.1 Operational Results

The level of operational expenditures is related to the financing and exploration activities that are being conducted by the Company, which in turn may depend on the Company's recent exploration experience and prospects, as well as the general market conditions relating to the availability of funding for exploration-stage resource companies. Consequently, the Company does not acquire properties or conduct exploration work on a pre-determined basis and, thus, there may not be predictable or observable trends in the Company's business activities and comparisons of financial operating results with prior years may not be meaningful. The Company has no operating revenue to date as its mineral properties are all in the exploration and analysis stage.

The Company incurred a comprehensive loss of $588,849 for the year ended December 31, 2020 (2019 - $1,899,737).

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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4.1.1 MINERAL PROPERTY ACTIVITIES

	QC QC QC NS NL NL	QC QC QC NS NL NL
January 1, 2019 Balance Expenditures Acquisition: Exploration: Sample Analysis Airborne Geophysics Ground Geophysics Geology Remuneration Drilling/Sampling Mob/Demob Travel/Accom Total Exploration Total Property Expenditures Government Assistance Expensed current exploration Property write-down	Idefix Huckleberry Séquoi Shot Rock Root&Cellar Merasheen Other 81,148 $ 180,392 $ 790,512 $ 318,892 $ - $ - $ 81,330 $ 2,295 2,700 - 71,892 44,005 - 35,692 - 1,238 - 79,111 4,420 - - - - - 61,905 1,120 - - - - - 9,750 - - - 963 413 - 174,390 26,889 - 5,200 - - - 26,040 11,437 - - - - - 30,584 1,262 - 13,173 - 1,498 - 64,510 17,723 - -	Total 1,452,274 $ 156,584 84,769 63,025 9,750 207,855 37,477 45,019 83,731
	963 3,149 - 446,290 62,851 - 18,373	531,626
	3,258 5,849 - 518,182 106,856 - 54,065 - - - (29,440) - - - - - - - - - (17,123) - - (790,512) - - - (60,534)	688,210 (29,440) (17,123) (851,046)
December 31, 2019 Balance Expenditures Acquisition: Exploration: Sample Analysis Airborne Geophysics Ground Geophysics Geology Remuneration Drilling/Sampling Mob/Demob Travel/Accom Total Exploration Total Property Expenditures Government Assistance Expensed Current Exploration Property write-down	84,406 $ 186,241 $ - $ 807,634 $ 106,856 $ - $ 57,738 $ 3,288 7,124 - 85,910 48,105 49,480 - - - - 127,946 88,483 5,929 8,541 - - - - 70,650 - - - - - 122,650 - - - 2,763 5,500 - 385,108 140,931 34,570 15,551 - - - 776,486 - - - - - - 232,239 20,252 37,194 684 - - - 53,289 32,003 20,408 -	1,242,875 $ 193,907 230,899 70,650 122,650 584,423 776,486 290,369 105,700
	2,763 5,500 - 1,697,718 352,319 98,101 24,776	2,181,177
	6,051 12,624 - 1,783,628 400,424 147,581 24,776 - - - (88,211) - - - - - - - - - (24,776) - - - - - - (48,744)	2,375,084 (88,211) (24,776) (48,744)
December 31, 2020 Balance	90,457 $ 198,865 $ - $ 2,503,051 $ 507,280 $ 147,581 $ 8,994 $	3,456,228 $

On December 31, 2020, the Company’s resource asset carrying value was $3,456,228 (2019 - $1,242,875).

Gross exploration expenditures were $2,375,084 for the year ended December 31, 2020 (2019 - $688,210).

The Company incurred $24,776 worth of prospecting activity during the year ended December 31, 2020 (2019 – $17,123).

During the year ended December 31, 2019, the Company wrote down its small property Five Islands, resulting in a charge of $48,744 (2019 - $851,046).

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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4.1.2 ADMINISTRATIVE ACTIVITIES

General and administrative expenses of $896,581 were incurred during the year ended December 31, 2020 (2019 – $1,063,971).

The details of the comparative amounts for the years ended December 31 are summarized in the following table:

	2020 2019 Change as %
Remuneration and consulting fees Office expenses Travel expenses Marketing expenses Professional fees Public company expenses Insurance expenses Amortization Share-based compensation	344,836 $ 337,032 $ 7,804 2% 97,958 90,005 7,953 9% 16,986 79,310 (62,324) -79% 189,848 74,011 115,837 157% 81,147 115,411 (34,264) -30% 57,642 33,144 24,498 74% 17,944 18,376 (432) -2% 38,420 40,682 (2,262) -6%
	844,781 787,971 56,810 7% 51,800 276,000 (224,200) -81%
	896,581 $ 1,063,971 $ (167,390) -16%

• Remuneration was comparable year to year.

• Office activity was modestly higher across most expense types in 2020.

• Administrative travel was reduced primarily due to the COVID-19 pandemic.

• Marketing costs increased due to the engagement of a marketing agency.

• Professional fees were significantly lower due to less corporate and more capital transaction activity.

• Public company expenses increased due increased market activity and fees around capital issuances.

• Annual insurance rates were comparable year to year.

• Amortization costs reduced as assets were amortized without significant replacements or additions required.

• Stock option issuances were much smaller in 2020.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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4.2 SUMMARY OF QUARTERLY RESULTS

The following table sets forth financial information for the Company’s recently completed quarters:

	2020	Jun 30 Sep 30 Dec 31 - - - $241,911 $216,796 $154,387 $850 $23,614 $48,744 ($206,327) ($157,679) ($114,772) ($0.00) ($0.00) ($0.00) Jun 30 Sep 30 Dec 31 Sep 30 Dec 31 - - - - - $201,606 $181,990 $223,277 $82,197 $484,637 $60,534 $2,823 803,479 $84,444 $12,350 ($535,428) ($168,013) ~~(~~$1,026,756)($118,194) ($217,695) ($0.00) ($0.00) ($0.00) ($0.00) ($0.00)
Total Revenues G & A Expense Expensed Exploration* (Loss)/Income for the period Basic and diluted loss per share	Mar 31 - $231,687 $312 ($110,071) ($0.00)	Jun 30 Sep 30 Dec 31 - - - $241,911 $216,796 $154,387 $850 $23,614 $48,744 ($206,327) ($157,679) ($114,772) ($0.00) ($0.00) ($0.00)
	2019
Total Revenues G & A Expense Expensed Exploration* (Loss)/Income for theperiod Basic and diluted loss per share	Mar 31 - $181,098 $1,333 ($159,540) ($0.00)	Jun 30 Sep 30 Dec 31 - - - $201,606 $181,990 $223,277 $60,534 $2,823 803,479 ($535,428) ($168,013) ~~(~~$1,026,756) ($0.00) ($0.00) ($0.00)

• excluding share-based compensation

** including write-downs of previously capitalized property expenditures

4.3 Liquidity

The Company is presently exploring its projects for economically viable mineral deposits. None of the Company’s projects are yet in production and consequently do not produce revenue. The Company currently funds all operations with its working capital. On April 26, 2021, the Company had working capital of approximately $650,000.

On December 31, 2020, the Company had working capital of $1,466,824 (2019 – $1,040,837).

4.4 Capital Resources

On December 31, 2020, the Company was not involved in any agreements for which it had commitments to satisfy any expenditure requirements.

4.5 Acquisitions and Dispositions of Resources Properties and Write-offs

During the three-month period ended December 31, 2020, the Company wrote off its small Five Islands property in Nova Scotia, as it did not intend to continue its exploration activities there.

4.6 Off-Balance Sheet Arrangements

On December 31, 2020 and as of the date of this report, the Company does not have any off-balance sheets arrangements.

4.7 Key Management Compensation

The following table presents the compensation earned by key members of management during the years ended December 31, noted below:

ended December 31, noted below:
	2020 2019
Salaries Benefits Share-based compensation	$ 237,703 $ 232,161 6,426 6,608 - 55,200
	$ 244,129 $293,969

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Key Management Personnel

Key management personnel include those persons having authority and responsibility for planning, directing and controlling the activities of the Company as a whole. The Company has determined that key management personnel consists of executive and non-executive members of the Board of Directors and corporate officers, including the Company’s Chief Executive Officer and Chief Financial Officer.

4.8 Related Party Transactions

The following table presents the legal fees that, during the years ended December 31, the Company incurred with two law firms which, at one, a Director of the Company is a partner and at the other, the Company’s corporate secretary is a partner.

	2020	2019
Board Member	$ 2,677	$ 13,005
Corporate Secretary	69,190	63,117

Amounts owed to the two related-party firms at the dates indicated:

	September 30,	December 31,
	2020	2019
Board Member	$ -	$ 2,769
Corporate Secretary	9,485	6,822

4.9 Significant Accounting Estimates

The preparation of these annual consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. The consolidated financial statements include estimates, which, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the consolidated financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised, and the revision affects both current and future periods.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the consolidated statement of financial position date, which could result in a material adjustment to the carrying amounts of assets and liabilities, if actual results differ from assumptions made, relate to, but are not limited to, the following:

• impairment of non-financial assets;

• the estimated useful lives of property, plant and equipment which are included in the consolidated statement of financial position and the related depreciation included in the consolidated statement of comprehensive loss;

• the inputs used in accounting for share-based compensation expense in the consolidated statement of comprehensive loss;

• the inputs used in accounting for warrant value associated to reserves.

4.11 Financial Instruments

The fair value of the Company's cash, receivables, accounts payable and accrued liabilities and lease liability approximates their carrying amount due to the short-term nature of these instruments.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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4.12 Internal Controls Over Financial Reporting

During the year ended December 31, 2020, there were no changes in the design of the Company's internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting.

4.13 Subsequent Events

Subsequent to the Period ending December 31[st] 2020 the Company reported further significant gold and silver discoveries from Root & Cellar. Prospecting in the vicinity of strong gold in soil anomalies resulted in the discovery of numerous large angular gold-silver anomalous quartz boulders containing appreciable sulphides at the Windfall Zone. Twenty-nine of these samples assayed between 0.1 and 17 g/t Au and up to 53 g/t Ag. The gold-bearing quartz boulders were found almost continuously over a traverse of a 200 m wide deformation zone that marks the contact between a volcanic sequence that dominates the Root & Cellar Property and underlying metasedimentary rocks. The showing is at the western end of a 1,500 m long gold-in-soil anomaly that coincides with the deformation zone. Based on these results the Company has expended the Root & Cellar Property from 32 square kilometres to 127 Square kilometres.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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5. RISK FACTORS

5.1 Exploration and Development

Exploration for minerals is a speculative venture involving substantial risk. There is no certainty that the expenditures to be made by the Company with respect to its properties will result in discoveries of potentially minable deposits. Few properties that are explored for minerals are ultimately developed into producing mines.

The long-term profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs, which may be affected by several factors, which are beyond the control of the Company.

5.2 Financing

The Company is presently exploring its projects for economically viable gold, PGE, Ni-Cu, Cu-Zn-Ag and other ore deposits. None of the Company’s projects are yet in production and consequently do not produce revenue. Accordingly, the Company’s ability to conduct operations, including the acquisition, exploration, and development of mineral properties, when it doesn’t have sufficient working capital to do so is based on its ability to raise funds, primarily through equity issuances and potentially through proceeds from the disposition of its properties.

There can be no assurance that the Company will succeed in obtaining required financing, now or in the future. Failure to raise additional financing could cause the Company to suspend exploration and eventually to sell or forfeit its interest in some or all its properties and could result in the Company ultimately ceasing to continue as a going concern.

The ability of the Company to obtain financing is somewhat dependent on the equity market conditions. The trading price of the common shares of the Company may be subject to wide fluctuations in response to variations in operating results, results of exploration programs and other events and factors outside of the control of the Company. In addition, the stock market has experienced extreme price and volume fluctuations that have particularly affected the market price for many junior mining companies like the Company. These broad market fluctuations may adversely affect the market price of the common shares of the Company and hence its ability to raise funds or to create significant dilution from funds raised.

5.3 Mining Operations

Mining operations involve a high degree of risk. Hazards such as unusual or unexpected formations and other conditions may arise. The Company may become subject to liability for pollution, abandonment, and reclamation and environmental or other hazards against which it cannot insure or against which it may elect not to insure. Such liabilities may have a material adverse effect on the Company’s financial position and prospects.

5.4 Economics of Developing Mineral Properties

Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineral deposit, no assurance can be given that minerals will be discovered in sufficient quantities or grades to justify development of the deposit, or that the funds required for development can be obtained at all or, if attainable, can be obtained on a timely basis.

5.5 Marketability of Gold, PGEs, Gold and Base Metals

Gold, PGEs and base metal exploration and development are speculative businesses, which involve a high degree of risk. The marketability of gold, PGEs and/or base metals acquired or discovered by the Company (if sufficient amounts are acquired or discovered) will be affected by numerous factors beyond the control of the Company. These factors include market fluctuations, government

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting and environmental protection. The exact effect of these factors cannot be accurately predicted, and the combination of these factors may result in the Company receiving insufficient returns on invested capital. Additionally, depending on the price of minerals produced, the Company may determine that it is not commercially feasible to commence or continue commercial production.

5.6 Prices for Gold, PGEs, and Base Metals

The value of the Company and its common shares will depend in some degree on the prevailing prices obtainable for mineral commodities in the market. The price of those commodities can fluctuate, and is affected by numerous factors beyond the Company’s control including international economic and political conditions, expectations of inflation, international currency exchange rates, interest rates, economic conditions globally and nationally, global or national consumption patterns, speculative activities, levels of supply and demand, increased production due to new mine developments and improved mining and production methods, stock levels maintained by producers and others and inventory carrying costs. The effect of these factors on the prices of any commodities cannot be accurately predicted.

5.7 Environmental Requirements

To date the Company has conducted all its exploration activities in the provinces of Ontario, Quebec, Nova Scotia, and Newfoundland. All phases of its operations have been subject to the environmental legislation of each of the provinces and of the Government of Canada. Even though the Company does not operate a mine and is not developing a mine, at the current ‘exploration’ stage of its business cycle it must still abide by numerous laws and regulations relating to the environment. Environmental legislation is evolving; more corporate responsibility, stricter fines and penalties, and more stringent guidelines, could in the future, adversely affect the Company's operations. The cost of compliance with these changes could have a material adverse effect on the Company, its financial condition, and prospects.

5.8 Competition

The mining industry (exploration and development) is intensely competitive in all its phases. The Company competes with many companies possessing greater financial resources and technical facilities and expertise than itself for the acquisition and exploration of mineral concessions, claims, leases and other mineral interests as well as for the recruitment and retention of qualified management and employees.

5.9 Title

While the Company has registered its claims, licenses and leases with the appropriate mining authorities and has filed all pertinent information to industry standards, this should not be construed as a guarantee of title. The Company’s properties may also be subject to prior unregistered agreements or transfers or native land claims, and the Company’s title may be affected by these and other undetected defects. The Company’s properties may include recorded third-party mineral claims, which have not been surveyed, and therefore, the precise area and location of such claims and licenses may be in doubt. The Company may also lose entitlement to claims if certain exploration expenditures are not made by certain set dates as required by provincial mining regulators and regulations.

In the Province of Nova Scotia, while the Company may maintain the mineral rights, surface landowners (including the Crown) may restrict access to and working the mineral right until the consent of the owner or tenant of the property is obtained. If the Company is not able to obtain such consents, it may be required to make an application to the Minister of Natural Resources for a permit authorising the Company to pass over or enter and work the mineral rights. There is no certainty that any such permit will be granted in a timely manner, on terms and conditions favorable to the Company, or at all.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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5.10 Mining Regulation

Mining operations in Canada are subject to extensive governmental regulations. Future changes in government regulation could adversely affect mining in Canada. The development of mines and related facilities is contingent upon government approval, which must be obtained through statutory review processes. The Company does not have and has not applied for approvals for the development of any of its properties.

5.11 Required Capital and Ongoing Business

The Company has not yet generated any earnings or cash flow to fund its operations and there can be no assurance that the Company will generate any earnings or cash flow in the future. If the Company does not generate cash flow in the future, additional external funding will be required to finance the Company’s ongoing operations. This funding may not be available at all or, if available, may not be available on terms acceptable to the Company and could result in the Company ultimately ceasing to exist as a going concern.

5.12 Dilution

Shareholders will suffer dilution with respect to future private and/or public offerings of the Company’s common shares (or securities convertible into common shares).

5.13 Key Management

The Company does not hold any "key man" insurance with respect to any of its directors, officers or key employees to the date hereof. The loss of the Company’s President and Chief Executive Officer could have an adverse impact on the Company and its business, financial position and prospects.

5.14 Conflicts of Interest

Certain of the directors and officers of the Company currently, and may in the future, serve as directors and officers of other companies, and therefore it is possible that a conflict may arise between their duties as a director or officer of the Company and their duties as a director and officer of such other companies. The directors and officers of the Company are aware of the existence of laws governing accountability of directors and officers for corporate opportunity and requiring disclosures by directors of conflicts of interest and the Company will rely upon such laws in respect of any directors' and officers' conflicts of interest or in respect of any breaches of duty by any of its directors or officers.

5.15 Market Volatility

In the past, there has been limited trading in the Company’s common shares. Additionally, the trading price of the common shares may be subject to wide fluctuations in response to variations in operating results, results of exploration programs, market conditions and other events and factors outside the control of the Company. In addition, the stock market has experienced extreme price and volume fluctuations, which have particularly affected the market price for many junior resource companies. During the year ended December 31, 2020, the price of the Company's shares fluctuated between $0.05 and $0.18. There can be no assurance that significant price fluctuations will not occur.

5.16 Aboriginal Claims

Aboriginal rights may be claimed on Crown or other types of tenure with respect to which mining rights have been granted. The Company is fully aware of the mutual benefits afforded by cooperative relationships with indigenous people in conducting exploration activity and is fully supportive of measures established to achieve such cooperation.

5.16 Global Pandemics and Outbreaks of Communicable Diseases

The Company’s business, operations and financial condition could be adversely impacted by the effects of COVID-19 or other health epidemics and/or outbreaks of communicable diseases. Such

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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epidemics and/or outbreaks of communicable diseases could significantly disrupt the Company’s exploration and development activities and may have a material adverse effect on Company’s business and financial condition. The World Health Organization declared a global pandemic in March 2020 related to COVID-19 and as a result global travel and workplace restrictions have been implemented. The extent to which COVID-19 impacts the Company’s business, including the Company’s operations and the market for the Company’s securities, will depend on future developments, which are highly uncertain and cannot be predicted at this time, including the duration, severity and scope of the COVID-19 outbreak and the actions taken to contain or treat the outbreak. In particular, the continued or perceived spread of COVID-19 globally could materially and adversely impact the Company’s business including, without limitation, employee health, workforce productivity, increased insurance premiums, limitations on travel, the availability of industry experts and personnel, and/or stoppage or suspension of its operations in Canada. Further restrictions include restrictions to the Company’s drilling, development and exploration programs and/or the timing to process drill and other metallurgical testing and other factors that will depend on future developments beyond the Company’s control, which may have a material adverse effect on the Company’s business, financial condition and results of operations. Moreover, the actual and threatened spread of COVID-19 globally could have a material adverse effect on the regional economies in which the Company operates; continue to negatively impact stock markets, including the trading price of the Company’s common shares; adversely impact the Company’s ability to raise capital; cause continued interest rate volatility and movements that could make obtaining financing more challenging or more expensive: adversely affect global economies and financial markets resulting in an economic downturn that could have an adverse effect on the demand for base and precious metals and the Company’s future prospects; and result in any operations affected by COVID-19 becoming subject to quarantine. Any of these developments, and others, could have a material adverse effect on the Company’s business and results of operations. There can also be no assurance that the Company’s personnel will not be impacted by these pandemic diseases and ultimately see all or a portion of its operations suspended, workforce productivity reduced or incur increased medical costs and/or insurance premiums as a result of these health risks.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Outstanding Share Data as of April 26, 2021

Common Shares
Issued and Outstanding	279,887,716
Warrants	27,487,659
Options	16,500,000
Fully Diluted	323,875,375

	Warrants Outstanding
Exercise Price $0.10 $0.14 $0.14 $0.10 $0.10 $0.11 $0.18 $0.10 $0.20 $0.11	Expiry Qty Date 1,766,667 6-Mar-22 1,700,000 19-Jun-21 1,593,750 31-Jul-21 7,287,963 9-Dec-21 2,050,000 17-Dec-21 157,546 17-Dec-21 1,666,667 27-Jan-22 233,333 27-Jan-22 8,969,232 21-Aug-22 2,062,501 30-Dec-22 27,487,659*	Potential Proceeds 176,667 238,000 223,125 728,793 205,000 15,755 300,000 23,333 1,793,846 226,875
		3,931,397

* Subsequent to the 2020 year-end, the expiry date of this option grant was extended to March 6, 2022.

	Options Outstanding
Exercise Price $0.16 $0.17 $0.10 $0.10 $0.10	Expiry Qty Date 6,450,000 10-Jun-21 350,000 15-Jul-21 5,000,000 30-Jun-22 4,000,000 25-Jun-24 700,000 15-Jan-25 16,500,000	Potential Proceeds 1,032,000 59,500 500,000 400,000 70,000
		$ 2,061,500

Additional information on the Company is available on its website www.northernshield.com or on SEDAR www.sedar.com.

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Form 51-102-F1 Management Discussion & Analysis for the year ended December 31, 2020

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Cautionary Statements

Certain statements included in this Management Discussion and Analysis constitute forwardlooking statements under applicable securities legislation. Forward-looking statements or information typically contain statements with words such as "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", or similar words suggesting future outcomes or statements regarding an outlook. Forward looking statements or information in this Management Discussion and Analysis include, but are not limited to, statements regarding:

• business objectives, plans and strategies;

• exploration objectives, plans and strategies; and

• certain geological interpretations and expectations.

Such forward-looking statements or information are based on several assumptions which may prove to be incorrect. In addition to other assumptions identified in this Management Discussion and Analysis, assumptions have been made regarding, among other things:

• the ability of Northern Shield to continue to fund its operations through financings, options and joint ventures;

• the ability of Northern Shield to obtain equipment, services and supplies in a timely manner to carry out its activities;

• the level of exploration activities;

• the ability of Northern Shield to retain and access its mineral claims; and

• current and future mineral commodity prices.

Although Northern Shield believes that the expectations reflected in such forward-looking statements or information are reasonable, undue reliance should not be placed on forward looking statements because Northern Shield can give no assurance that such expectations will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve several risks and uncertainties which could cause actual results to differ materially from those anticipated by Northern Shield and described in the forward-looking statements or information. These risks and uncertainties include but are not limited to:

• the ability of management to execute its business and exploration objectives, plans and strategies;

• the risks of the mining industry, such as operational risks in exploring for minerals and market demand;

• risks and uncertainties involving geology of mineral deposits;

• potential delays or changes in plans with respect to exploration projects;

• Northern Shield's ability to retain and access its mineral claims;

• fluctuations in current and future mineral commodity prices;

• health, safety and environmental risks;

• uncertainties as to the availability and cost of financing;

• general economic, business and market conditions;

• the possibility that government policies or laws may change;

• aboriginal claims; and

• other risks and uncertainties described elsewhere in this Management Discussion and Analysis or in Northern Shield's other filings with Canadian securities authorities.

The forward-looking statements or information contained in this Management Discussion and Analysis are made as of the date hereof and Northern Shield undertakes no obligation to update publicly or revise any forward-looking statements or information, whether because of new information, future events or otherwise, unless so required by applicable securities laws.

25

Head Office Address

Northern Shield Resources Inc. 55 Metcalfe Street, Suite 500 Ottawa, Ontario, Canada, K1P 6L5

TEL: 613-232-0459 FAX: 613-232-0760

Website: www.northern-shield.com email: info@northern-shield.com

Directors and Officers

Board of Directors

Russell M. Richards (Chair) Ian Bliss (President & CEO) Scott Jobin-Bevans Marcus Archer Don Bubar

Officers

Ian Bliss (President & CEO) Sam Legg (Chief Financial Officer) James O’Sullivan (Corporate Secretary)

Compensation Committee Marcus Archer (Chair) Russell M. Richards Don Bubar

Audit Committee

Russell M. Richards (Chair) Scott Jobin-Bevans Marcus Archer

Technical Committee

Scott Jobin-Bevans (Chair) Don Bubar

Listing

Capitalization (April 26, 2021)

TSX Venture: “NRN” Frankfurt (Germany) Exchange: “N9S”

Shares Issued: 279,887,716 Fully Diluted: 323,875,375

Counsel

Auditor

Norton Rose Fulbright Canada LLP 3700 Canterra Tower 400 Third Avenue S.W. Calgary, Alberta T2P 4H2

Davidson & Company LLP 1200 – 609 Granville Street Vancouver, BC V7Y 1G6

Registrar/Transfer Agent

Dentons Canada LLP 850 2nd Street SW Calgary, AB T2P 0R8

Computershare Trust Company of Canada 600 - 530 8[th] Avenue S.W. Calgary, Alberta T2P 3S8

Banks

CIBC 119 Sparks Street Ottawa, Ontario K1P 5B5

RBC 90 Sparks Street Ottawa, Ontario K1P 5T6