PPX Mining — Management Reports 2026

Jan 27, 2026

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(the "Company")

INTERIM MANAGEMENT'S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS

For the six months ended June 30, 2020

General

This Interim Management's Discussion and Analysis ("Interim MD&A") supplements, but does not form part of, the unaudited condensed consolidated interim financial statements of the Company for the six months ended June 30, 2020. The following information, prepared as of August 18, 2020, should be read in conjunction with the Company's unaudited condensed consolidated interim financial statements for six months ended June 30, 2020 and the related notes contained therein. The Company reports its financial position, results of operations and cash flows in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). In addition, the following should be read in conjunction with the consolidated financial statements of the Company for the year ended December 31, 2019 and the related MD&A. All amounts are expressed in Canadian dollars unless otherwise indicated. The June 30, 2020 condensed consolidated interim financial statements have not been reviewed by the Company's auditors.

The Company's public filings, including its most recent unaudited and audited consolidated financial statements can be reviewed on the SEDAR website www.sedar.com.

Forward-looking Statements

This Interim MD&A contains certain statements which constitute forward-looking information within the meaning of applicable Canadian securities legislation ("Forward-looking Statements"). All statements included herein, other than statements of historical fact, are Forward-looking Statements and are subject to a variety of known and unknown risks and uncertainties which could cause actual events or results to differ materially from those reflected in the Forward-looking Statements. The Forward-looking Statements in this Interim MD&A may include, without limitation, statements relating to the Company's plans for exploration of its properties; the sufficiency of the Company's cash position; and its ability to raise equity capital or access debt facilities. Often, but not always, these Forward-looking Statements can be identified by the use of words such as "anticipates", "believes", "plans", "estimates", "expects", "forecasts", "scheduled", "targets", "possible", "strategy", "potential", "intends", "advance", "goal", "objective", "projects", "budget", "calculates" or statements that events, "will", "may", "could" or "should" occur or be achieved and similar expressions, including negative variations.

Forward-looking Statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, or achievements of the Company to be materially different from any results, performance or achievements expressed or implied by the Forward-looking Statements. Such uncertainties and factors include, among others:

• the Company's seeking new prospective mineral properties for acquisition;
• risks associated with mineral exploration;
• fluctuations in commodity prices, foreign exchange rates, and interest rates;
• credit and liquidity risks;

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• changes in national and local government legislation, taxation, controls, regulations and political or economic developments in countries in which the Company does or may carry on business;
• reliance on key personnel;
• property title matters and local community relationships;
• risks associated with potential legal claims generally or with respect to environmental matters;
• dilution from further equity financing;
• competition;
• uncertainties relating to general economic conditions; and
• risks relating to a global pandemic, including the coronavirus COVID-19, which unless contained could cause a slowdown in global economic growth and impact the Company's business, operations, financial condition and share price.

as well as those factors referred to in the "Risks and Uncertainties" section in this Interim MD&A.

Forward-looking Statements contained in this Interim MD&A are based on the assumptions, beliefs, expectations and opinions of management, including but not limited to:

• the Company will acquire an interest in a prospective mineral property;
• all required third party contractual, regulatory and governmental approvals will be obtained for the exploration and development of the Company's properties;
• there being no significant disruptions affecting operations, whether relating to labor, supply, power, damage to equipment or other matters;
• exploration activities proceeding on a basis consistent with the Company's current expectations;
• expected trends and specific assumptions regarding commodity prices and currency exchange rates; and
• prices for and availability of fuel, electricity, equipment and other key supplies remaining consistent with current levels.

These Forward-looking Statements are made as of the date hereof and the Company disclaims any obligation to update any Forward-looking Statements, whether as a result of new information, future events or results or otherwise, except as required by law. There can be no assurance that Forward-looking Statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, investors should not place undue reliance on Forward-looking Statements.

Business of the Company

On February 20, 2020, the Company issued a news release on the status of its 70% owned Bayovar 12 phosphate property located in the Sechura District of northern Peru.

In 2016, the Company prepared a pre-feasibility study for the possible production of phosphate rock from the Bayovar project. Shortly thereafter, the market prices for phosphate rock to be sold into the fertilizer industry dropped dramatically – well below the price that would justify the development of the Bayovar 12 deposit – and the prices remain soft today.

As stated in the Company's news release of December 11, 2018, management turned its efforts towards finding other uses for Bayovar's phosphate. The Company completed a beneficiation testwork program on phosphate beds from Bayovar, the results of which indicate that the phosphate rock quality would be suitable as the key raw material feed stock in the added-value industrial phosphorus market, specifically to produce elemental phosphorus (P4), a chemical compound used extensively in many sectors. Management then initiated discussions with various large, international consumers and producers of P4.

The Company was optimistic that these discussions would result in the financing of a feasibility study that would look at the viability of producing P⁴ at the Bayovar 12 project. While the strong interest expressed by these companies led to this sense of optimism, the talks stalled as the cost of conducting such a study appears to be a major stumbling block and there is little appetite for investing in a development-stage phosphate property.

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In order to hold the Bayovar 12 concession and the rights to the phosphate rock deposit, the Peru mining agency requires that the Company mine gypsum from the Bayovar property. Revenue from the sale of gypsum, however, have not been covering the cost of production, and the Company has also been paying significant amounts in annual mining taxes and community support. In light of the cost to maintain the concession and the lack of interest from third parties to invest in the development of phosphate from the property, the Board of Directors of the Company determined that it is in the best interests of the Company and its shareholders to relinquish the Company's rights to the Bayovar 12 project.

The Company is currently taking the necessary steps to dissolve Juan Paulo Quay, SAC ("JPQ"), the Peru company which holds the Bayovar 12 concession, and to transfer the concession back to the Peru government.

Management is actively investigating new prospective projects for acquisition by the Company.

Current Status

Due to restrictions on travel and for the safety of our employees because of the COVID-19 pandemic, the Company has curtailed certain operations during the current period. Most of the geological staff returned home and in our corporate offices, most staff are working from home. We will return to the field and office when it is safe and cost effective to do so.

Selected Quarterly Information

The following table provides information for the eight fiscal quarters ended June 30, 2020:

	Second Quarter ended June 30, 2020 (\$)	First Quarter ended Mar. 31, 2020 (\$)	Fourth Quarter ended Dec. 31, 2019 (\$)	Third Quarter ended Sep. 30, 2019 (\$)	Second Quarter ended June 30, 2019 (\$)	First Quarter ended Mar. 31, 2019 (\$)	Four month period ended Dec. 31, 2018 (\$)	Third Quarter ended Aug. 31, 2018 (\$)
Gypsum revenue	-	-	-	309,980	114,305	112,683	59,118	112,608
Gypsum production expenses	74,810	35,100	75,535	347,292	282,169	150,211	131,823	139,681
Phosphate exploration expenditures	7,516	19,834	78,417	45,027	142,982	154,324	209,630	151,372
Loss attributed to equity shareholders of the
Company Total Basic & diluted	(429,747)	(298,322)	(4,729,167)	(169,545)	(121,002)	(409,153)	(1,165,695)	(407,458)
loss per share	(0.01)	(0.00)	(0.07)	(0.00)	(0.00)	(0.01)	(0.02)	(0.01)

Gypsum revenue and production expenses relate to the gypsum operation which consisted of extraction costs, costs that were needed to keep the Bayovar 12 project concession in good standing, and other operating costs. Gypsum production expenses could still be incurred during periods when there was no extraction activity. The loss attributable to equity shareholders of the Company during the quarter ended December 31, 2019 was higher than all quarters presented due to the write-down of the Bayovar 12 project carrying cost of \$9,677,404. The loss attributable to equity shareholders of the Company during the four month period ended December 31, 2018 was higher than most quarters presented due to an impairment of goodwill charge of \$430,988 and a loss on extinguishment of long-term debt of \$438,937.

Results of Operations

All references to 'net loss' in the results of operations discussion below refers to the loss and comprehensive loss attributed to equity shareholders of the Company.

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Quarter ended June 30, 2020

For the three-month period ended June 30, 2020, the Company had a net loss of \$429,747 compared to a net loss of \$121,002 for the three-month period ended June 30, 2019, an increase of \$308,745. This increase is due to the quarter current recording a fair value adjustment loss of \$220,331 on derivative liabilities whereas the comparative quarter recorded a gain of \$262,971, a difference of \$483,302.

The current quarter recorded phosphate property expenditures of \$7,516 compared to \$142,982 for the comparative quarter, a decrease of \$135,466.

General and administrative expenses during the current quarter were \$181,720 compared to \$210,382 for the comparative quarter, a decrease of \$28,662. Significantly impacting both the current and comparative quarters were finance expenses of \$154,208 and \$132,577, respectively. The finance expense is related to accretion of convertible debenture interest. All other general and administrative expenses for the current quarter were either lower than or similar to those in the comparative quarter as a result of cost cutting efforts and reduced activity.

Six months ended June 30, 2020

For the six-month period ended June 30, 2020, the Company had a net loss of \$728,069 compared to a net loss of \$530,155 for the six-month period ended June 30, 2019, an increase of \$197,914. As with the quarterly comparison, the current period recorded a fair value adjustment loss of \$250,418 on derivative liabilities whereas the comparative period recorded a gain \$275,517. The current period also recorded a foreign exchange gain of \$885 compared to a gain of \$68,151 for the comparative period.

The current period recorded phosphate property expenditures of \$27,350 compared to \$297,306 for the comparative period, a decrease of \$269,956. There was no revenue from the gypsum operation to offset \$109,910 in operation expenses for the current period whereas the comparative period resulted in revenue of \$226,988 and operation costs of \$432,380.

General and administrative expenses during the current period were \$374,074 compared to \$398,024 for the comparative period, a decrease of \$23,950. Significantly impacting both the current and comparative periods, as with the quarterly comparison, were finance expenses of \$306,271 and \$262,333, respectively. Also similar to the quarterly comparison, all other general and administrative expenses were either similar or lower for the current period as a result of cost cutting efforts and reduced activity.

Financial Condition, Liquidity and Capital Resources

The Company had cash resources of \$97,455 and a working capital deficiency of \$1,333,302 as of June 30, 2020 compared to cash resources of \$32,423 and a working capital deficiency of \$968,596 at December 31, 2019.

In August 2018, the outstanding principal and accrued interest balance of \$4,068,465 from a previous loan (US\$3,114,019) was paid in full by issuing secured convertible debentures and 25,427,912 share purchase warrants to the lender. Also in August 2018, the Company raised \$500,000 through the issuance of unsecured convertible debentures and 3,125,000 share purchase warrants to related parties.

In January 2019, the Company closed a non-brokered private placement of 11,180,000 units at \$0.05 per unit for proceeds of \$559,000. Each unit consisted of one common share of the Company and one share purchase warrant. The 11,180,000 share purchase warrants included in this placement expired unexercised during the current period.

During the 2019 fiscal year, a related party advanced to the Company for general working capital purposes a total of \$353,197, and an additional \$61,000 during the current period. These advances are not interest-bearing and are due on demand. During the current period, the Company also received a loan of \$60,000 from a shareholder of the Company for general working capital purposes. This loan bears an interest rate of 8% per annum and is due on demand.

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As of the end of the 2019 fiscal year, working capital no longer includes gypsum inventory at the Bayovar 12 Project as the remaining 118,679 tonnes of gypsum inventory were donated to the Fundacion Comunal San Martin de Sechura during the current period and the carrying value of \$232,196 for the inventory was written off by the Company in the 2019 fiscal year.

The Company does not expect its current capital resources to be sufficient to cover its corporate operating costs, closure costs relating to the Bayovar 12 project, and any new property acquisition or development programs through the next twelve months. As such, the Company will need to raise additional capital. Actual funding requirements may vary from those planned due to a number of factors, including the progress of property acquisition and exploration activity. The Company believes it will be able to raise additional equity capital as required, but recognizes the uncertainty attached thereto.

Related Party Transactions

See Note 15 of the condensed interim consolidated financial statements for the six months ended June 30, 2020 for details of related party transactions which occurred in the normal course of business.

Other Data

Additional information related to the Company is available for viewing at www.sedar.com.

Share Position and Outstanding Warrants, Convertible Debentures, and Stock Options

As at the date of this Interim MD&A, the Company's outstanding share position is 69,890,620 common shares and the following share purchase warrants, convertible debentures, and incentive stock options are currently outstanding:

WARRANTS
No. of warrants	Exercise price	Expiry date
4,668,000	\$0.80	November 11, 2020
25,427,912	\$0.08	August 23, 2021(1)
3,125,000	\$0.08	August 30, 2021(2)
25,553,525	\$0.40	March 22, 2022
58,774,437

• (1) The expiry date for these warrants may be accelerated to immediately upon the debentures issued on August 23, 2018 being repaid or converted in full.
• (2) The expiry date for these warrants may be accelerated to immediately upon the debentures issued on August 30, 2018 being repaid or converted in full.

CONVERTIBLE DEBENTURES

No. of debentures	Conversion rate	Expiry date
40,684,660(1)	\$0.10	August 23, 2021
5,000,000(2)	\$0.10	August 30, 2021
45,684,660

• (1) Effective August 23, 2019, the conversion rate of these debentures increased from \$0.08 to \$0.10, and the maximum number of shares issuable on conversion decreased from 50,855,824 to 40,684,660.
• (2) Effective August 30, 2019, the conversion rate of these debentures increased from \$0.08 to \$0.10, and the maximum number of shares issuable on conversion decreased from 6,250,000 to 5,000,000.

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STOCK OPTIONS
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No. of options	Exercise price	Expiry date
18,750	\$1.20	June 28, 2021
320,000	\$0.84	June 19, 2022
37,500	\$0.84	July 10, 2022
560,000	\$0.88	December 17, 2023
11,250	\$0.88	January 14, 2024
3,750	\$1.04	June 4, 2024
951,250

Accounting Policies and Basis of Presentation

The Company's significant accounting policies and future changes in accounting policies are presented in the audited consolidated financial statements for the year ended December 31, 2019.

Risks and Uncertainties

Global Pandemic

The Company faces risks related to health epidemics and other outbreaks of communicable diseases, which could significantly disrupt its operations and may materially and adversely affect its business and financial conditions. The Company's business could be adversely impacted by the effects of the COVID-19 coronavirus which was declared a global pandemic by the World Health Organization in March 2020. COVID-19 infections have been reported globally.

The extent to which COVID-19 may impact the Company's business, including its operations and the market for its securities, will depend on future developments which cannot be predicted, and include the duration, severity and scope of the outbreak and the actions taken to contain or treat the outbreak. The continued spread of COVID-19 globally could materially and adversely impact the Company's business, financial condition and results of operations including without limitation, employee health, workforce productivity, increased insurance premiums, limitations on travel, the availability of industry experts and personnel, restrictions to any drill 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.

The international response to the spread of COVID-19 has led to significant restrictions on travel, temporary business closures, quarantines, global stock market volatility and a general reduction in consumer activity. Such public health crises can result in operating and supply chain delays and disruptions, global stock market and financial market volatility, declining trade and market sentiment, reduced movement of people and labour shortages, and travel and shipping disruption and shutdowns, including as a result of government regulation and prevention measures, or a fear of any of the foregoing, all of which could affect commodity prices, interest rates, credit ratings, credit risk and inflation.

Mineral Property Exploration and Mining Risks

The business of mineral deposit exploration and extraction involves a high degree of risk. Few properties that are explored ultimately become producing mines. The main operating risks include: securing adequate funding to maintain and advance exploration properties; ensuring ownership of and access to mineral properties by confirmation that option agreements, claims or leases are in good standing; and obtaining permits for drilling and other exploration activities.

Title to Mineral Property Risks

The Company does not maintain insurance against title. Title on mineral properties and mining rights involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyance history of many mining properties. The Company has diligently investigated and continues to diligently investigate and validate title to its mineral claims; however, this should not

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be construed as a guarantee of title. The Company cannot give any assurance that title to properties it acquired will not be challenged or impugned and cannot guarantee that the Company will have or acquire valid title to these mineral properties.

Commodity Price Risk

The Company is exposed to commodity price risk. Declines in the market price of gold, base metals and other minerals may adversely affect the Company's ability to raise capital in order to fund its ongoing operations. Commodity price declines could also reduce the amount the Company would receive on the disposition of a mineral property to a third party.

Financing and Share Price Fluctuation Risks

The Company has limited financial resources, no source of operating cash flow other than proceeds from sales of mineral properties or mineral property rights and has no assurance that additional funding will be available to it for further exploration and development of its projects. Further exploration and development of the Company's projects may be dependent upon the Company's ability to obtain financing through equity or debt financing or other means. Failure to obtain this financing could result in delay or indefinite postponement of further exploration and development of its projects which could result in the loss of one or more of its properties.

Securities markets have at times in the past experienced a high degree of price and volume volatility, and the market price of securities of many companies, particularly those considered to be exploration stage companies such as the Company, have experienced wide fluctuations in share prices which have not necessarily been related to their operating performance, underlying asset values or prospects. There can be no assurance that these kinds of share price fluctuations will not occur in the future, and if they do occur, how severe the impact may be on the Company's ability to raise additional funds through equity issues.

Political, Regulatory and Currency Risks

The Company has been operating in a country that has a relatively stable political and regulatory environment. However, changing political aspects may affect the regulatory environment in which the Company operates and no assurances can be given that the Company's plans and operations will not be adversely affected by future developments. Any property interests held and any proposed exploration activities by the Company in emerging nations are subject to political, economic and other uncertainties, including the risk of expropriation, nationalization, renegotiation or nullification of existing contracts, mining licenses and permits or other agreements, changes in laws or taxation policies, currency exchange restrictions, and changing political conditions and international monetary fluctuations.

The Company's equity financings are sourced in Canadian dollars, but it incurs certain expenditures in Peruvian Soles and US dollars. At this time there are no currency hedges in place. Therefore, a weakening of the Canadian dollar against the Peruvian Sole or US dollar could have an adverse impact on the amount of exploration conducted.

Insured and Uninsured Risks

In the course of exploration, development and production of mineral properties, the Company is subject to a number of hazards and risks in general, including adverse environmental conditions, operational accidents, labor disputes, unusual or unexpected geological conditions, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods, and earthquakes. Such occurrences could result in damage to the Company's properties or facilities and equipment, personal injury or death, environmental damage to properties of the Company or others, delays, monetary losses and possible legal liability.

Although the Company may maintain insurance to protect against certain risks in such amounts as it considers reasonable, its insurance may not cover all the potential risks associated with its operations. The Company may also be unable to maintain insurance to cover these risks at economically feasible premiums or for other reasons. Should such liabilities arise, they could reduce or eliminate future profitability and result in increased costs, have a material adverse effect on the Company's results and a decline in the value of the securities of the Company.

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Environmental Risks

The activities of the Company are subject to environmental regulations issued and enforced by government agencies. Environmental legislation is evolving in a manner that will require stricter standards and enforcement and involve increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects, and a heightened degree of responsibility for companies and their officers, directors and employees. There can be no assurance that future changes in environmental regulation, if any, will not adversely affect the Company's operations. Environmental hazards may exist on properties in which the Company holds interests which are unknown to the Company at present.

Community Risks

The activities of the Company may be subject to negotiations with the local communities on or nearby its mineral property concessions for access to facilitate the completion of geological studies and exploration work programs. The Company's operations could be significantly disrupted or suspended by activities such as protests or blockades that may be undertaken by such certain groups or individuals within the community.

Competition

The Company will compete with many companies and individuals that have substantially greater financial and technical resources than the Company for the acquisition and development of its projects as well as for the recruitment and retention of qualified employees.

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