Playfair Mining Ltd. — Interim / Quarterly Report 2020

Oct 30, 2020

FORM 51-102F1 MANAGEMENT DISCUSSION AND ANALYSIS FOR THE SIX AND THREE MONTH PERIOD ENDED AUGUST 31, 2020

Introduction

This management's discussion and analysis (MD&A) of Playfair Mining Ltd. is the responsibility of management and covers the six month period ended August 31, 2020. The MD&A takes into account information available up to and including October 29, 2020 and should be read together with the unaudited financial statements for the six month period ended August 31, 2020 and the audited financial statements, notes and MD&A for the years ended February 29, 2020 and February 28, 2019 all of which are available on the Sedar website at www.sedar.com.

Throughout this document the terms we, us, our, the Company and Playfair refer to Playfair Mining Ltd. All financial information in this document is prepared in accordance with International Financial Reporting Standards ("IFRS") and presented in Canadian dollars unless otherwise indicated.

Additional information related to the Company is available for view on SEDAR at www.sedar.com and on the Company's website at www.playfairmining.com.

Forward-Looking Statements

Statements in this report that are not historical facts are forward-looking statements involving known and unknown risks and uncertainties, which could cause actual results to vary considerably from these statements. Readers are cautioned not to put undue reliance on forward-looking statements.

Forward-looking information includes disclosure regarding possible or anticipated events, conditions or results of operations which are based on assumptions about future economic conditions and courses of action, and includes future oriented financial information with respect to prospective results of operations or financial position or cash flow that is presented either as a forecast or a projection. Forward-looking information is often, but not always, identified by the use of words such as seek, anticipate, believe, plan, estimate, expect and intend; statements that an event or result is due on or may, will, should, could, or might occur or be achieved; and other similar expressions.

Description of Business

The Company's main business is the acquisition, exploration and development of natural resource properties. The Company currently has interests in properties in the following countries:

• Grey River Newfoundland, Canada Tungsten / Gold property
• Granite Lake Newfoundland, Canada Molybdenum
• Ox Mountain, Ireland Gold property
• RKV Project, Norway nickel, copper, cobalt property

Refer to the Exploration Property Summary below for more information regarding the natural resource properties. The Company trades on the TSX Venture Exchange under the symbol "PLY".

Performance Summary

The following is the significant even that occurred during the six month period ended August 31, 2020:

• a) closed a non-brokered private placement and issued 12,000,000 common shares at \$0.05 per share for gross proceeds of \$600,000, of which \$545,000 has been received as of this report.
• b) had received a 100% interest in EMX's contiguous Rostvangen and Vakkerlien projects in South Central Norway after transfer from EMX.
• c) had increased it's RKV property size to 344km

Property and Exploration Summary

Refer to the unaudited Financial Statements and notes for the six month period ended August 31, 2020 for the Exploration Assets and Evaluation table. Michael Moore, P.Geo, is the qualified person who has reviewed the technical information contained in this document regarding Grey River Tungsten and Granite Lake Molybdenum on behalf of the Company. Richard Parker and Andy Bowden are qualified persons as defined by National Instrument 43-101 and have reviewed all technical public disclosure on the Ox Mountain Property. Greg Davidson, P.Geo. acted as a Qualified Person who reviewed the technical information contained in this document regarding RKV project property.

Grey River Tungsten, Newfoundland, Canada

The Company acquired a 100% interest in the Grey River property located in southern Newfoundland, Canada. The property is subject to a 4% NSR of which up to 2% may be purchased by the Company for up to \$2,000,000. Due to a delay in future exploration activity on the property, the Company had recorded an impairment of \$2,993,944 during fiscal 2016. During fiscal 2019 the Company paid \$15,600 license renewal fees to keep the property in good standing.

Exploration summary:

Drilling results for the 2008 Grey River Tungsten deposit successfully defined a significant down plunge zone of tungsten mineralization extending the #10 Vein Deposit at depth and to the north. Highlight drill hole Number 122 yielded a highlight intercept of 1.13% WO3 over 2.4 metres. The main objective of the 2008 drill program was to test the down dip and northern strike extensions of the #10 Vein Tungsten deposit, particularly below the adit level. Analytical results from drill core samples show that #10 Vein tungsten mineralization extends an estimated 250 metres down dip below the previously defined deposit (or about 160 metres vertically below the adit level). This newly identified deposit extension zone appears to have a 45 degree plunge (or rake) and is open to the north and at depth. The company has moved forward significantly in its goal to increase the deposit's overall Tungsten resource.

Granite Lake Molybdenum, Newfoundland, Canada

The Company acquired a 100% interest in certain claims in the Granite Lake area in Newfoundland, Canada, via staking at a cost of \$9,960 and a 100% interest in certain additional mineral claims during fiscal 2008 and 2009 at a cost of \$68,640.

During fiscal 2006 the Company also acquired a 100% interest in certain additional claims pursuant to which the Company issued 100,000 shares valued at \$99,000. To acquire its interest, the Company incurred exploration expenditures of \$50,000. The claim was acquired from a company with a common director. The property is subject to either a 3% NSR or 35% participating interest in the property which can be purchased back from the Company by paying 65% of the Company's expenditures.

Due to a delay in future exploration activity on the property the Company recorded on impairment of \$2,511,900 during fiscal 2013.

Exploration summary:

The Granite Lake Molybdenum Property is located in central Newfoundland. Playfair's drilling of the property's Moly Hill Zone has identified a large-scale bulk tonnage molybdenum enriched area which warrants extensive additional drilling. Drill testing of a limited portion of the Moly Hill Zone has outlined a priority area of altered and mineralized rocks measuring at least 600m long by 500m wide. The priority area is located on northeast corner of the 2.4 by 2.6 kilometre Moly Hill Zone and is open in all directions except to the north. Molybdenum commonly occurs from the top of drill holes, with many of the holes ending in mineralization. The project has the rare benefit of electrical power, roads, minimum environmental impact and a willing and able Newfoundland workforce to draw on. Playfair views this large bulk-tonnage molybdenum potential as a bonus to the outstanding tungsten assets that are the company's primary focus.

Ox Mountain Property, Ireland

During fiscal 2014, the Company entered into an Option Agreement to acquire up to a 100% interest in Bowpark Exploration (Ireland) Ltd. ("Bowpark") subject to TSX-V acceptance. Bowpark is a private company registered in Ireland and holds 3 contiguous prospecting licenses over the Ox Mountains in County Sligo, Ireland. Bowpark sole operation is exploring the Ox Mountain property and sole asset is the capitalized expenditures incurred on Ox Mountain.

Under the terms of the option agreement, the Company may acquire a 90% interest in Bowpark by expending \$2,280,000 directly on exploration and delivering 1,800,000 shares of the Company to the current owners of Bowpark, exercisable over 4 stages. The Company may acquire the final 10% by paying the current owners \$1,000,000 in cash (or equivalent value of shares at the Company's election) and grant a 3% NSR, of which the Company may purchase up to 1% for \$500,000 per 0.5%.

During the year ended February 28, 2015 the Company paid \$150,000 to Bowpark for exploration expenditures as per agreement. During the year ended February 28, 2017 the Company paid \$230,000 to Bowpark for exploration expenditures as per the agreement and issued 200,000 shares valued at \$0.10 per share for a total value of \$20,000. The Company has completed the requirement to acquire 25% interest in Bowpark. During the year ended February 28, 2017, the Company entered into a drilling contract on the property, committing the Company to fund a minimum of 4,500m in drilling. During the year ended February 28, 2019 the Company spent \$184,989 on exploration and made additional \$15,000 acquisition payment to Bowpark. Due to a delay in future exploration activity on the property, the Company has recorded an impairment of \$909,380 during fiscal 2019.

Exploration summary:

Prospecting at Cabragh identified a 70 cm boulder of strongly micro-fractured white quartz with abundant galena on one side and minor pyrite and malachite. This boulder returned 23.9 gpt gold and is located approximately 350m ESE on strike of previously located boulders that returned 3.45 and 3.09 gpt gold.

The Cloonacool Prospect is located about 10 km WSW from Cabragh. Previous work by Bowpark on behalf of the Company located a coherent area of 1,500 metres by 500 metres containing several well mineralised boulders and an outcropping gold-bearing quartz vein. Eight boulders in this area range from 1.30 gpt gold to 17.2 gpt gold. An additional 14 samples in the area are anomalous in gold with values between 112 ppb and 697 ppb.

Two lines of chip samples were completed over parallel outcropping quartz veins at Cloonacool. Results showed 3.38 gpt gold over 1.20 metres comprising 5.58 gpt gold over 50 cm from 210-260cm, and 1.80 gpt gold over 70cm from 140-210cm. The total width of the quartz vein is 2.90 metres with marginal samples 50-140cm and 260-340cm returning low anomalous gold values. It is notable that the highest grade (5.58 gpt gold) occurs in the centre of the vein where pyrite and galena were observed. This correlates with a previously reported boulder located approximately 20m north which returned 3.57 gpt gold and also

contained pyrite and galena. Geological mapping at Cloonacool identified a WNW trending shear structure over a 2km strike length which is poorly exposed but is probably the source of the mineralisation.

RKV Project property, Norway

The Company has entered into an Option and Exploration Agreement with EMX Royalty Corporation (EMX-TSX.V) to acquire a 100% interest in EMX's contiguous Rostvangen and Vakkerlien properties in South Central Norway. The properties cover almost 300 square kilometers in a historic mining area about 100km south of Trondheim by road. The Rostvangen-Kvikne-Vakkerlien Project (RKV Project) covers 2 past-producing Besshi-type Volcanogenic Massive Sulphide (VMS) copper mines (Rostvangen and Kvikne), a nickel-copper deposit (Vakkerlien) and over 20 additional known mineral occurrences.

Exploration Summary:

The Company completed field collection of 1,050 Mobile Metal Ion (MMI) soil samples to evaluate 24 targets identified by an Artificial Intelligence (AI) evaluation of a historic mining district in Norway. The results of this MMI evaluation developed a compelling VMS drill target on the Company's RKV property in South Central Norway in an area of the project with no record of previous exploration. The Storboren Copper Anomaly is at least 200m long and 75m wide. It is open to the NW and SE where no MMI samples have been taken. Many deposits in this general area have significant plunge lengths and can extend to significant depths. MMI Cu values as high as 53,300ppb were found in recent follow-up sampling surpassing the previous high of 48,400ppb MMI Cu which, according to a short report by SGS, is "one of the highest recorded values of MMI Cu in a soil". The Storboren Copper Anomaly now contains 18 values over 6,000ppb MMI Cu. The SGS short report notes regarding values over 6,000ppb MMI Cu that: "Many if not all of these are likely to be associated with weathering copper sulphides". Further exploration is planned for Storboren and fourteen other MMI anomalies identified by the 2018 MMI sampling.

Results of Operations

The financial statements reflect the financial condition of the Company's business for the six month period ended August 31, 2020.

During the six month period ended August 31, 2020, the Company incurred Expenses of \$147,906 (2019 - \$101,810). Excluding material non-cash-based deductions, operating expenditures for the six month period ended August 31, 2020 were \$141,269 (2019 - \$101,782).

Significant increases in expenses are as follows: investor relations \$10,500 (2019 - \$4,250), management fee \$30,000 (2019 - \$Nil), property costs \$5,312 (2019 - \$Nil), share-based payments \$6,615 (2019 - \$Nil), and telephone \$3,782 (2019 - \$Nil). Significant decreases in expense are as follows: professional fees \$15,000 (2019 - \$24,512) and rent \$17,728 (2019 - \$22,945). Overall increase in expenses are due to increase in promotional and financing activities.

Summary of Quarterly Results:

Management's Discussion and Analysis					Q2 August 31, 2020
Summary of Quarterly Results:
			Three Months Ended
	August 31, 2020		May 31, 2020	February 29, 2020	November 30, 2019
Total Assets	\$ 10,179,107	\$	675,932	\$ 684,985	\$ 602,386
Mineral Properties and Deferred Costs	610,382		511,825	511,825	368,380
Working Capital (deficiency) Shareholder's Equity (Deficiency)	284,939 936,761		(88,906) 424,369	(155,784) 445,002	(216,212) 291,772
Other Income Net Income (loss)	- (102,272)		- (45,635)	- (89,302)	- (124,956)
Earnings (loss) per share	\$ (0.00)	\$	(0.00)	\$ (0.00)	\$ (0.00)
			Three Months Ended
	August 31, 2019		May 31, 2019	February 28, 2019	November 30, 2018
Total Assets	\$ 672,196	\$	490,709	\$ 171,756	\$ 1,123,114
Mineral Properties and Deferred Costs Working Capital (deficiency)	368,380 (128,478)		274,994 (106,643)	- (186,506)	893,501 4,378
Shareholder's Equity	416,728		276,361	(23,962)	932,153
Other Income	-		-	-	-
Net Income (loss)	(44,633)		(57,177)	(46,735)	(7,785)

		Three Months Ended
	August 31,		February 29,	November 30,
			2020	2019
		Three Months Ended
	August 31, 2019	May 31, 2019	February 28, 2019	November 30, 2018
Total Assets	\$ 672,196	\$ 490,709	\$ 171,756	\$ 1,123,114
Mineral Properties and Deferred Costs	368,380	274,994	-	893,501
Working Capital (deficiency) Shareholder's Equity	(128,478) 416,728	(106,643) 276,361	(186,506) (23,962)	4,378 932,153
Other Income	-	-	-	-
Net Income (loss)	(44,633)	(57,177)	(46,735)	(7,785)
Earnings (loss) per share	\$ (0.00)	\$ (0.00)	\$ (0.00)	\$ (0.00)

During the quarter period ended August 31, 2020 the Company issued 12,000,000 common shares at \$0.05 per share for gross proceeds of \$600,000 of which \$55,000 is in subscription receivable. The Company incurred share issuance costs of \$4,450.

During the quarter period ended February 29, 2020 the Company also issued 6,000,000 shares for RKV project property acquisition in Norway valued at \$240,000.

Significant exploration costs were incurred on the properties during the following periods resulting in an increase to Mineral Properties and Deferred Costs:

• a) Three month period ending August 31, 2020: \$98,557
• b) Three month period ending February 29, 2020: \$143,445
• c) Three month period ending August 31, 2019: \$93,386
• d) Three month period ending May 31, 2019: \$274,994
• e) Three month period ending February 28, 2019: \$15,879

During the three month period ending August 31, 2019 the Company has issued 8,700,000 common shares at \$0.05 per share for gross proceeds of \$435,000.

During the three month period ending February 28, 2019 the Company wrote down \$909,380 of its Bowpark property due to delay in future exploration activity.

Liquidity and Capital Resources

Playfair's mineral exploration and development activities do not provide a source of income and we therefore have a history of losses, working capital deficiencies and an accumulated deficit. However, given the nature of our business, the results of operations as reflected in the net losses and losses per share do not provide meaningful interpretation of our valuation.

The Company has financed its operations to date primarily through the issuance of common shares. The Company will continue to seek capital through the issuance of common shares.

Operating activities: The Company does not generate any revenues and generally does not receive any cash from operating activities. Net cash used in operating activities for the six month period ended August 31, 2020 was \$155,069, compared to net cash used in \$53,246 for the six month period ended August 31, 2019. The increase in cash used was mainly attributed to increase in expenditures from promotional and financing activities.

Investing activities: Net cash used in investing activities related to mineral property expenditures. Net cash provided by investing activities for the six month period ended August 31, 2020 was \$98,455 compared to net cash used in \$220,171 for the six month ended August 31, 2019. The increase in cash provided by is due to decrease in acquisition expenditures.

Financing activities: Net cash provided by financing activities for the six month period ended August 31, 2020 was \$633,050 compared to \$392,500 for the six month period ended August 31, 2019.

The financial statements for the six month period ended August 31, 2020 do not reflect adjustments, which could be material, to the carrying value of assets and liabilities, which may be required should the Company be unable to continue as a going concern.

Contractual Obligations

Except as described herein or in the Company's financial statements at the date of this report, the Company had no material financial commitments.

Off-Balance Sheet Arrangements

At the date of this report, the Company had no material off-balance sheet arrangements such as guarantee contracts, contingent interest in assets transferred to an entity, derivative instruments obligations or any obligations that trigger financing, liquidity, market or credit risk to the Company.

Outstanding Share Data

As at the date of this report, the Company had 90,775,095 common shares issued and outstanding. The Company has granted options to acquire common shares as follows:

	Number of Shares	Exercise Price	Expiry Date
Options	1,700,000 250,000	\$0.10 \$0.12	August 22, 2021 July 6, 2022
	2,700,000*	\$0.05	December 20, 2024

Related Party Transactions

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

Included in accounts payable at August 31, 2020 is \$1,143 (February 29, 2020 - \$18,143) due to directors of the Company. Included in advances receivable at August 31, 2020 is \$41,251 (February 29, 2020 - \$88,751) due from a company owned by a former officer of the Company. Included in accounts receivable at August 31, 2020 is \$12,720 (February 29, 2020 - \$Nil) due from a company with common directors. Included in prepaid expenses at August 31, 2020 is \$20,000 (February 29, 2020 - \$50,000) paid to a company owned by a former officer of the Company. Included in accounts payable and accrued liabilities at August 31, 2020 is \$Nil (February 29, 2020 - \$4,280) due to a company with common directors.

Compensation of the Company's key management personnel is comprised of the following:

	August 31, 2020	August 31, 2019
Professional Fees	\$ 7,500	\$ 15,000

Proposed Transactions

There is currently no proposed transaction under consideration.

Financial and Capital Risk Management

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values.

The fair value of the Company's receivables, advances receivable, and accounts payable and accrued liabilities approximate their carrying values due to their short-term nature. The Company's other financial instrument being cash are measured at fair value using Level 1 inputs.

The Company is exposed to varying degrees to a variety of financial instrument related risks:

Credit risk

Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company's cash is held at large Canadian financial institution in interest bearing accounts. The Company has no investment in asset backed commercial paper. Receivables consist of receivables due from the government of Canada and amounts due from related parties.

Liquidity risk

The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when they come due. As at August 31 2020, the Company had a cash balance of \$389,649 to settle current liabilities of \$142,346. To maintain liquidity, the Company is currently investigating financing opportunities and new exploration projects. Current market conditions make the present environment for raising additional equity financing unfavourable and there can be no assurance these efforts will be successful in the future. All of the Company's financial liabilities are subject to normal trade terms. The Company is exposed to liquidity risk.

Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and commodity and equity prices. These fluctuations may be significant.

• (a) Interest rate risk The Company has a limited exposure to interest rate risk.
• (b) Foreign currency risk

The Company is not currently exposed to significant foreign currency risk as most transactions are denominated in Canadian dollars.

(c) Price risk

The company is exposed to price risk with respect to commodity prices. Changes in commodity prices will impact the economics of development of the Company's mineral properties. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Capital management

The Company manages its capital structure and makes adjustments to it, based on the funds available to the Company, in order to support the acquisition and exploration of mineral properties. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company's management to sustain future development of the business. The Company defines capital that it manages as shareholders' equity (deficiency).

The properties in which the Company currently has an interest are in the exploration stage; as such the Company has historically relied on the equity markets to fund its activities. Current financial markets are very difficult and there is no certainty with respect to the Company's ability to raise capital. The Company will continue to assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic potential and if it has adequate financial resources to do so. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable.

The Company currently is not subject to externally imposed capital requirements. There were no changes in the Company's approach to capital management.

Risk Factors

Companies in the exploration stage face a variety of risks and, while unable to eliminate all of them, the Company aims at managing and reducing such risks as much as possible. The Company faces a variety of risk factors such as project feasibility and practically, risks related to determining the validity of mineral property title claims, commodities prices and environmental laws and regulations. Management monitors its activities and those factors that could impact them in order to manage risk and make timely decisions.

Critical Accounting Policies and Estimates

The preparation of the financial statements requires management to make certain estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported expenses during the year. Actual results could differ from these estimates.

Significant assumptions about the future and other sources of estimation uncertainty that management has made at the end of the reporting period, that could result in a material adjustment to the carrying amounts of assets and liabilities in the event that actual results differ from assumptions made, relate to, but are not limited to, the following:

• i) The carrying value and the recoverability of exploration and evaluation assets, which are included in the statements of financial position. The cost model is utilized and the value of the exploration and evaluation assets is based on the expenditures incurred. At every reporting period, management assesses the potential impairment which involves assessing whether or not facts or circumstances exist that suggest the carrying amount exceeds the recoverable amount.
• ii) The valuation of shares issued in non-cash transactions, including shares issued for property option payments and in the settlement of debt. Generally, the valuation of non-cash transactions is based on the value of the goods or services received. When non-cash transactions are entered into with employees and those providing similar services, the non-cash transactions are measured at the fair value of the consideration given up using market prices.
• iii) The recognition of deferred tax assets. The Company consider whether the realization of deferred tax assets is probable in determining whether or not to recognize these deferred tax assets.
• iv) Share-based payments are subject to estimation of the value of the award at the date of grant using pricing models such as the Black-Scholes option valuation model. The option valuation model requires the input of highly subjective assumptions including the expected stock price volatility. Such value is subject to measurement uncertainty because the Company's stock options have characteristics significantly different from those of traded options and the subjective input assumptions can materially affect the calculated fair value.

Adoption of new accounting standards

IFRS 16 – Leases

IFRS 16 – replaces the current standards IAS 17, "Leases", and its associated interpretative guidance. Early adoption is permitted, provided the Company has adopted IFRS 15. This standard sets out a new model for lease accounting. A lessee can choose to apply IFRS 16 using either a full retrospective approach or a modified retrospective approach.

The adoption of IFRS 16 did not impact the Company's classification and measurement of leases as the Company does not have any lease obligations.

Subsequent Event

Subsequent to the period ended August 31, 2020, the Company completed a second round of the CARDS Artificial Intelligence (AI) process in a historic mining district in Norway. Windfall Geotek Inc. (WIN-TSX.V), under contract to the Company, carried out the evaluation on 44 square kilometers acquired by the Company after completion of the first AI evaluation. The RKV project now comprises contiguous claims covering 344 square kilometers.