PPX Mining — Management Reports 2021

Oct 1, 2021

PPX Mining Corp.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the six months ended March 31, 2021 and 2020

This Management’s Discussion and Analysis (“MD&A”) is intended to assist the reader in understanding and assessing the trends and significant changes in the results of operations and financial condition of PPX Mining Corp. (“PPX” or the “Company”). This MD&A should be read in conjunction with the unaudited condensed interim consolidated financial statements of the Company, including the notes thereto, for the six months ended March 31, 2021 and 2020 (the “interim financial statements”) and the Company’s audited consolidated financial statements for the years ended September 30, 2020 and 2019 (the “annual financial statements”), which are prepared in accordance with International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board. This MD&A has taken into account information available up to and including September 30, 2021. All dollar amounts are in Canadian dollars unless otherwise stated.

As at March 31, 2021 the Company has cash of $31,692 and a negative working capital of $11,090,934; the working capital deficiency includes $1,600,299 for a non-secured convertible note which was classified as short-term liability at March 31, 2021, as the note matured in February 2020. The Company needs to raise additional funds in order to continue on as a going concern and there can be no assurances that sufficient funding, including adequate financing, will be available to cover its working capital deficiency or develop its mineral properties and / or cover general and administrative expenses necessary for the maintenance of a public company. The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and mineral property exploration success. In March 2020 there was a global pandemic outbreak of COVID-19. The actual and threatened spread of the virus globally has had a material adverse effect on the global economy and specifically, the regional economies in which the Company operates. The pandemic could result in delays in the course of business, including potential delays to its exploration efforts/activities/programs, and could have a negative impact on the stock market, including trading prices of the Company’s shares and its ability to raise new capital. These material uncertainties may cast significant doubt on the Company’s ability to continue as a going concern. If the Company is unable to raise additional capital in the future and/or attracting joint venture partners for further exploration and development on its properties, management expects that the Company will need to curtail operations, liquidate assets, seek additional capital on less favourable terms and/or pursue other remedial measures. Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the Company’s ability to continue as a going concern beyond March 31, 2022.

This Management’s Discussion and Analysis includes "forward-looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements, identified by are often, but not always the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Such risks and uncertainties include, but are not limited to, risks associated with the mining industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of PPX to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of the Company to fund the capital and operating expenses necessary to achieve the business objectives of the Company, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by the Company. Due to the risks, uncertainties and assumptions inherent in forward-looking statements, prospective investors in securities of PPX should not place undue reliance on these forward-looking statements. Statements in relation to "reserves" are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described can be profitably produced in the future.

Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this document are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forward-looking statements are expressly qualified by this cautionary statement.

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BUSINESS OVERVIEW

PPX Mining Corp. (TSX.V: PPX.V, SSE: PPX, BVL: PPX) is a Canadian-based exploration and development company with assets in northern Peru. The Igor Project, the Company’s flagship 100% owned property, comprises four concessions of about 1,300 hectares and is located in the prolific Northern Peru gold belt in eastern La Libertad Department. The Igor Project includes the Callanquitas structure (the “Igor 4 concession”), where the Company has been conducting underground mining, announced the results of the pre-feasibility study (“PFS”), and has begun building a heap leach processing plant, as well as three exploration targets: Portachuelos, Tesoros, and Domo.

On December 4, 2018 the Company announced the results of an independent PFS for the 100% owned Igor 4 concession. The PFS results include proven and probable reserves of 1.03 million tonnes grading 4.10 gpt gold (136,000 ounces of gold) and 104.08 gpt silver (3.445 million ounces of silver), or 154,000 gold equivalent (“AuEq”) ounces at a grade of 4.66 gpt AuEq. Total measured and indicated resources for the Igor 4 concession (inclusive of reserves) are 1.47 million tonnes grading 4.72 gpt gold (223,000 ounces gold) and 109.5 gpt silver (5.18 million ounces Ag) equal to 246,000 AuEq ounces (5.21 gpt AuEq). Inferred resources totaled 0.613 million tonnes, grading 3.91 gpt gold (77,000 ounces gold), and 139.7 gpt silver (2.75 million ounces of silver) equal to 89,000 AuEq ounces. The 43-101 report can be viewed on SEDAR at ww.sedar.com or on the Company’s web site at www.ppxmining.com.

PPX conducted infill and resource expansion drilling along the Callanquitas structure and exploration drilling south of Callanquitas in the Portachuelos target area. The drill campaign has resulted in the discovery of new high-grade mineralization on the Callanquitas structure and a new gold and silver mineralized zone at Portachuelos.

The Company has an agreement with Proyectos La Patagonia S.A.C. (“Patagonia” or “PLP”), a wholly-owned subsidiary of the Explora Peru Mining Group, Peru, whereby the Company has granted to Patagonia the rights to the Igor 4 mining concession, site of the Callanquitas resource, until the earlier of the date Patagonia extracts 600,000 metric tons of mineralized material or October 1, 2022. During the term of the agreement, the Company and Patagonia share the net profits from the mine operations on the Igor 4 concession, at a rate of 70%/30% up to when the production from the mine reaches 350 tons per day (“MTPD”), and 75%/25% thereafter. Going forward, the area of the underground operations on the Callanquitas structure will be referred to as the “Callanquitas Mine”.

The Company’s objective is to bring the Callanquitas Mine into full production and focus on growing the gold and silver resource base, particularly in areas easily accessible by the underground workings, with the goal of defining sufficient resources to justify an increase in the capacity of the mine and heap leach processing facility.

FISCAL Q2 2021 HIGHLIGHTS[1]

Balance sheet

At March 31, 2021, the Company has cash of $31,692 and a negative working capital of $11,090,934; the working capital deficiency includes $1,600,299 for a non secured convertible note due on February 2020 and $3,294,677 (US$2,620,022) related to amounts due to RIVI Opportunity Fund as principal payments due under the gold stream facility agreement. Financing will be needed for working capital and to complete the heap leach plant.

Processing Plant – fully permitted; manufacturing completed

In November 2017, the Company commenced the permitting process for a gold and silver heap leach processing plant at the Igor Project. Given the timeline of the permitting process and the planned completion of the PFS, the Company opted to start permitting in order to minimize delays in constructing the processing plant. The permitting process was complete with the receipt of the “Final Permit to Initiate Operations” on January 17, 2019.

Advances for assets under construction at March 31, 2021 include $341,712 (US$271,739) toward the manufacturing of the crushing plant and Merrill-Crowe plant for the heap leach operations. The full contracted amount will be paid in various instalments with the final payments due once the equipment is delivered. An impairment charge of $629,190 (US$467,572) was recorded for the year ended September 30, 2020, as certain equipment paid for in advance are no longer available to the Company.

1 The Company’s 2021 fiscal year is from October 1, 2020 to September 30, 2021. Fiscal Q2 2021 represents the six months ended March 31, 2021. These highlights include information for fiscal Q2 2021 and subsequent as noted.

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Financing

During the period ended March 31, 2021 the Company received $131,100 for subscription agreement towards future private placement.

RESULTS OF OPERATIONS

The following is a summary of the Company’s results of operations for the three and six months ended March 31, 2021 and 2020:

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Three months ended March 31, Six months ended March 31,
2021 2020 2021 2020
Operating expenses
Communication and regulatory $15,979 $51,936 $39,265 $99,090
Consulting fees, salaries and benefits 193,810 223,160 433,276 441,368
Depreciation 98 394 198 1,106
Foreign exchange loss (gain) (99,875) 870,496 (182,045) 712,230
Office and miscellaneous 6,249 66,632 71,833 102,146
Premises 769 7,402 1,358 15,767
Professional fees 112,067 109,062 167,302 161,732
Travel and promotion 9,287 32,950 18,209 49,005
Loss from operations (238,384) (1,362,032) (549,396) (1,582,444)
Finance and other items
Finance expense and other (254,106) (282,865) (519,780) (604,398)
Loss before income tax (492,490) (1,644,897) (1,069,176) (2,186,842)
Income tax expense (36,099) - (36,099) -
Net loss ($528,589) ($1,644,897) ($1,105,275) ($2,186,842)
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The Company recorded a net loss of $528,589 and $1,105,275 or $0.00 and $0.00 per share, respectively, for the three and six months ended March 31, 2021 (2020 – $1,644,897 and $2,186,842 or $0.00 and $0.00 per share).

The most significant changes for the three months ended March 31, 2021 as compared to 2020 were as follows:

Communication and regulatory of $15,979 and $39,265 (2020 - $51,936 and $99,090) - Communication and regulatory includes charges related to the Company’s investor relations activities as well as filing and listing fees; the decreased expenditures for 2021 compared to 2020 is due to less activity by the Company due to the Company’s focus on cash conservation.

Consulting fees $193,810 and $433,276 (2020 - $223,160 and $441,368) and travel and promotion of $9,287 and $18,209 (2020 - $32,950 and $49,005) – Expenditures have decreased compared to 2020 due to the Company’s focus on cash conservation.

Foreign exchange gain of $99,875 and $182,045 (2020 – loss of $870,496 and $712,230) – The foreign exchange gain results from fluctuations in the US$/CAD$ exchange rates throughout the periods. The Company’s functional and reporting currency are the Canadian dollar, while the functional currency of its Peruvian subsidiaries is the United States (“US”) dollar. At March 31, 2021 USD amounts were converted at a rate of USD1.00 to CAD 1.2575 (September 30, 2020 - USD 1.00 to CAD 1.3339); Peruvian Soles amounts were converted at a rate of Peruvian Sol 1:00 to CAD 0.3347 (September 30, 2020 - 1.00 to CAD 0.3706).

Professional fees of $112,067 and $167,302 (2020 – $109,062 and $161,732) - Professional fees increased in the current period as a result of higher legal fees. In 2020, lower legal fees were paid as the Company was mostly on care and maintenance. In 2021, higher legal fees were paid due to matters such as the RIVI agreement, Inca One arrangement agreement, private placement, cease trade order, etc.

Finance expense, net is as follows:

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	Three months ended March 31,	Three months ended March 31,	Six months ended March 31,	Six months ended March 31,
Gold stream facility interest expense	2021 $187,299	2020 $203,363	2021 $384,315	2020 $400,777
Convertible note interest expense and acretion	31,650	41,795	64,225	135,277
Promissory notes interest expense	23,731	26,759	48,523	46,912
Unwinding of the discount - environmental
closure provision	10,774	10,164	21,535	19,850
Bank charges and other	652	784	1,182	1,582
Finance expenses and other	$254,106	$282,865	$519,780	$604,398

Gold streaming facility – The Company has a gold stream facility (the “Facility”) with RIVI Opportunity Fund LP (‘RIVI”), whereby the Company received a total of US$5.0 million from RIVI (2[nd] tranche of US$2.5M received in Fiscal Q1 18; the Company incurred $288,113 of transaction costs in relation to the 2[nd] tranche). The Company pays interest of 12% (10% until the 2[nd] tranche was received) on the Facility until the Company’s processing plant average monthly production from the Igor 4 concession is at least 85% of 150 MTPD or the Company delivers a monthly average of 150 MTPD from the Igor 4 concession to a smelter.

The Facility provides for RIVI to receive the greater of 10% of the Company’s portion of the combined production of gold and silver ounces from the Igor 4 concession on a Gold Equivalent Ounce (“GEO”) basis and 50 GEOs at a price per GEO of the lesser of US$400 or 80% the market price of gold on a monthly basis. Seventy-two months after the Monthly Production Milestone has been met, and when 20,000 GEOs have been delivered under the Facility Agreement (whichever occurs first), the Company has the option to reduce RIVI’s entitlement to 5% of the GEOs produced on the Igor 4 concession by making a one-time payment of US$5 million to RIVI, subject to the price of gold being greater than US$1,200 per ounce. During the three and six months ended March 31, 2021, the Company paid to RIVI $nil and $nil of interest related to the Facility (2020 – $nil and $nil).

The principal balance of US$5 million is reduced as the GEOs are delivered to RIVI. The amount of reduction for each period is determined based on the GEOs from the Igor 4 pre-production, multiplied by the difference between the market price of gold and the lesser of US$400 or 80% the market price of gold. The face value of the gold stream facility at March 31, 2021 and September 30, 2020 was US$4,683,613. Upon expiry of the term which is the earlier of 40 years and depletion of the mine, any balance remaining unpaid shall be refunded to RIVI.

The Facility has been classified as a financial liability at FVTPL and is revalued at its fair value on each subsequent reporting date with the changes in the fair value recorded in profit or loss. Due to the uncertainty of the total expected ounces to b e delivered and the timing of cash flows, the Facility is currently recorded at its face value with derivative measured at a nominal value.

The Company has granted RIVI a first and preferred mining tenements mortgage of US$5 million on the Igor concession and surface land and general security interest (the “Security”) over all of the present and after-acquired assets within the property. The Security provided to RIVI will cease once the Company has fully paid the US$5 million investment by RIVI.

Convertible note interest expense and accretion of $31,650 and $64,225 (US$25,000 and US$50,000), includes accrued interest expense of $31,650 (US$25,000) and $64,225 (US$50,000) for the three and six months ended March 31, 2021 (2020 – $41,795 (US$31,077 ) and $ 135,277 (US$101,898 ), including accrued interest expense of $27,599 (US$20,521) and $88,082 (US$66,342)), with the remaining balance representing accretion expense – On August 9, 2018, the Company issued a convertible note for gross proceeds of US$1.0 million; the note bears interest at 10%, payable in 18 months and is convertible at the holder’s option at a price of US$0.11 per common share. The note matured in February 2020 and is included as short-term liability on the balance sheet.

SUMARY OF QUARTERLY INFORMATION

The following table sets out selected quarterly financial data from the Company’s unaudited quarterly financial statements. There were no revenues reported in any of the periods reflected below:

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Fiscal quarter ended	March 31, 2021	December31,2020	September30,2020	June 30,2020
Revenue	$-	$-	$-	$-
Net loss	($1,105,275)	(576,686)	(1,240,538)	(371,907)
Netlossincome pershare*basic and diluted	($0.00)	($0.00)	($0.00)	($0.00)
Fiscal quarter ended	March31,2020	December31,2019	September30,2019	June 30,2019
Revenue	$-	$-	$-	$-
Net loss	($1,644,897)	($541,945)	($879,922)	($581,903)
Netlossincome pershare*basic and diluted	($0.00)	($0.00)	($0.00)	($0.00)

* Net income (loss) per share is calculated based on the weighted average number of shares outstanding for the quarter

EXPLORATION AND EVALUATION ACTIVITIES REVIEW

The Company is focused on exploring and developing the Igor property, located in Peru, South America. The Igor concession includes three projects: Igor 4, where the Company has an ongoing underground mining program, as well as two other exploration projects - Igor and Igor 3. The Company has acquired surface rights totaling 65.3 hectares within the Igor property area. The surface rights facilitate the development of the surface infrastructure associated with the underground mining program and would allow access to important areas of the property for surface exploration, including drilling. The production from Igor 4 concession is subject to the requirements of the gold streaming facility with RIVI as discussed above on this MD&A.

Exploration activities have been curtailed in response to the Global Covid-19 pandemic.

During the year ended September 30, 2020, the Peruvian Ministry of Energy and Mines issued a notice that the Company’s environmental license at the Igor 1 and 3 exploration projects had expired. During the year ended September 30, 2019, the Company’s water use permit had expired. During the six months ended March 31, 2021, the exploration license at the Igor 4 exploration project also expired, while the exploitation license remains in good standing. Management is in the process of having these expired licenses and permits reinstated.

A summary of Company’s spending on exploration and evaluation activities for the six months ended March 31, 2021 and 2020 is shown below:

Six months ended March 31,	2021	2020
Drilling, road and site preparation	$97,592	$104,847
Salaries, claims maintenance and staking	12,905	45,460
Social development	99,507	111,849
Environmental	23,746	81,263
Environmental rehabilitationprovision	-	(5,499)
Total additions	$233,751	$337,921

Igor 4 Concession Pre-Feasibility Study

On December 4, 2018, the Company announced the results of an independent Pre-Feasibility Study for an integrated underground mine and gold-silver recovery plant at the Igor 4 concession. The PFS was prepared by Mine Development Associates (“MDA”) of Reno, Nevada in accordance with the requirements of Canadian National Instrument 43-101 “Standards of Disclosure for Mineral Projects” (NI 43-101), with highlights as below (US$:CAD$ = 1:1.33):

• Pre-tax Internal Rate of Return (“IRR”) of 64% at US$1250/oz gold and US$16.50/oz silver (59% post-tax); 76% pre-tax IRR with US$1350/oz gold and US$17.82/oz silver prices (71% post-tax);

• Average Life of Mine (“LOM”) cash operating costs of US$601/oz gold AuEq recovered and AISC of US$813/oz gold equivalent LOM;

• Pre-tax Net Present Value at a 5% discount rate (“NPV-5”) of US$37.7 million ($50.1 million) at US$1250/oz gold and US$16.50/oz silver (US$30.1million post-tax); US$46.1 million pre-tax NPV-5 ($61.3 million) with US$1350/oz gold and US$17.82/oz silver prices (US$35.7 million post-tax);

• Post-tax Project pay-back period of approximately twenty-four months and a mine life of seven years after a three month ramp up and construction phase;

• LOM gold production of 108,000 gold ounces and 1,137,000 silver ounces for a total of 122,000 AuEq ounces;

• Total diluted Proven and Probable Reserves of 1.03 million tonnes grading 4.10 gpt gold (136,000 gold ounces) and 104.08 gpt silver (3.445 million silver ounces), or 154,000 AuEq ounces at a grade of 4.66 gpt AuEq.

• Total Measured and Indicated Resources of 1.47 million tonnes, grading 4.72 gpt gold (223,000 gold ounces) and 109.5 gpt Ag (5.18M silver ounces) equal to 246,000 AuEq ounces (5.21 gpt AuEq). Inferred Resources totaled 0.613 million

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tonnes, grading 3.91 gpt gold (770,000 gold ounces), and 139.7 gpt silver (2.75M silver ounces) equal to 89,000 AuEq ounces. The reported resources are inclusive of the mineral reserves.

Cash operating costs include mine and processing costs and mine general and administration expenses; AISC includes cash operating costs, payments to RIVI capital under the gold stream facility and reclamation spending. Cash operating cost and AISC per tonne and ounce (based on 1.03 million tonnes of mined and processed ore and 122,000 AuEq ounces) are shown below:

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US$/tonne US$/AuEq ounces
Expensed Mine Development $2.45 $20.61
Underground Mine Costs - Ore 49.38 415.89
Processing Costs 17.13 144.29
General and Administration 2.42 20.39
Cash Operating Costs $71.38 $601.18
RIVI Stream Payments 10.09 85.00
Reclamation Spending 3.69 31.11
Capital Expenditures 11.38 95.92
All In Sustaining costs $96.54 $813.21
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Capital expenditures include estimated capital mine development costs of US$6.6 million, a contractor adjustment of US$2.4 million, and estimated remaining capital costs for the heap leach processing facility of US$3.6 million (excluding advances for equipment manufacturing and spending to December 4, 2018 for various plant infrastructure), net of estimated salvage od US$0.9 million. For more details on the PFS, refer to the press release dated December 4, 2018 filed on SEDAR at ww.sedar.com or on the Company’s web site at www.ppxmining.com.

Heap Leach Processing Plant

The Company started the permitting process for the heap leach processing plant on November 1, 2017. Given the timelines and anticipation of PFS completion, the Company started permitting activities to minimize delays in constructing the processing plant. The facility will include a primary, secondary and tertiary rock crusher, agglomerator, heap leach pads, a Merrill-Crowe precious metal recovery plant capable of producing doré (gold and silver) on site and associated support facilities. The crushing circuit will be permitted at 350 tonnes per day (‘tpd”) but have sufficient excess capacity to allow production of up to 700 tpd of crushed material for future expansion. The Plant layout is being permitted so that other processing facilities can be added with minimal costs. To date the Company has all necessary permits for plant construction and operation.

Once the heap leach plant is operational, the Company plans to start the permitting and engineering design to expand the plant capacity to 700 tpd. The process is expected to take approximately two years and involves implementing a ball mill and leaching tanks to replace the heap leach pads, to improve recoveries on gold (from 80% to 95%) and silver (from 33% to 65%), and facilitate the final disposition of processed material in underground open spaces (backfill), reducing the need for surface land. The heap leach pads would be re-processed (milled and tank leached) together with the material coming from the mine.

In May 2018, the Company contracted the services of Big Rock Consulting Inc. (“BRC”), a Canadian entity, for the manufacturing of a crushing plant and Merrill Crowe plant for the Company’s heap leach operation (to be located 3km from Mina Callanquitas) for a total of US$1,913,250. Advances for assets under construction at March 31, 2020 include $341,712 (US$271,739) advanced to BRC toward the price of the equipment. The full contracted amount will be paid in various instalments with the final payments due once the equipment is delivered. An impairment charge of $629,190 (US$467,572) was recorded for the year ended September 30, 2020, as certain equipment paid for in advance are no longer available to the Company.

Community Agreement

On November 20, 2018, the Company signed an agreement with the Igor community, located within the Company’s concessions, that provides the Company with the Social License to build and operate the heap leach facility for processing of the ore from the Igor 4 concession. The agreement provides for employment opportunities for the people of the Igor community, improved road maintenance in the vicinity of the community, and infrastructure improvements to local schools and medical facility

Drilling Campaign at Igor Concession

On December 6, 2018, the Company announced that it has begun planning its 2019 exploration drilling program at the Igor concession. Based on the results of the PFS for the Callanquitas, the Company has identified multiple drill targets in the Callanquitas area with the goal of adding gold and silver resource ounces in the immediate proximity of existing and planned underground mine workings. The Company also intends to aggressively drill the new Portachuelos discovery located 800 metres

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south of the Callanquitas reserves. The drilling campaign start up depends upon the Company having the necessary financial resources.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

The Company is not in commercial production on any of its mineral properties and accordingly, it does not generate cash from operations. The Company finances its activities by raising capital through the equity markets and / or various other financing instruments.

As at March 31, 2021 the Company has cash of $31,692 and a negative working capital of $11,090,934 (September 30, 2020 – $28,676 and a negative working capital of $9,848,841).

On April 24, 2019, the Company received $132,373 (US$100,000) from promissory notes with two directors. The promissory notes are unsecured, bear interest at 12% per annum payable semi-annually, starting on December 31, 2019, and matured on June 30, 2020.

On June 30, 2019, the Company entered into an unsecured promissory note agreement to repay amounts owing to the former CFO of the Company. The promissory note has a principal amount of $112,160, bears interest at 12% per annum payable semiannually, starting on December 31, 2019, and matured on June 30, 2020.

On July 22, 2019, the Company entered into an unsecured promissory note agreement for proceeds of US$400,000 ($525,680). The promissory note bears interest at 12% per annum and matured on September 30, 2019.

On January 9, 2020 and January 16, 2020, the Company entered into unsecured promissory note agreements with another director of the Company for total proceeds of US$16,754 ($21,912). The promissory notes bear interest at 12% per annum payable semi-annually and matured on January 31, 2021.

Between December 16, 2019 and March 24, 2020, the Company entered into several unsecured promissory note agreements with another director of the Company for total proceeds of US$26,928 ($35,425). The promissory notes bear interest at 12% per annum payable semi-annually and matured on January 31, 2021.

On February 25, 2020, the Company closed the first tranche of the non-brokered private placement previously announced on January 30, 2020 for up to 8,333,334 common shares of the Company at a price of $0.06 per share for gross proceeds of up to $500,000. Pursuant to the closing of the first tranche of the private placement, the Company issued 6,917,901 shares for aggregate gross proceeds of $415,074. In consideration for introducing certain first tranche subscribers to the private placement, the Company is paying a cash finders’ fee of $33,206 to one arm’s length finder, representing 8% of the total funds raised from subscribers introduced to the Company by such finder. In addition, the Company incurred cash transaction costs of $15,360 related to the financing.

During the period ended March 31, 2021 the Company received $131,100 for subscription agreement towards future private placement.

During the six months ended March 31, 2021, net cash used in operating activities (before changes in working capital) was $613,485 compared to $956,867 used in the previous year. The Company spent $233,751 in investing activities, which was offset by $590,428 of net profit interest received, compared with $186,863 used in previous year in investing activities, including spending of $317,476 for permitting, engineering and preparatory work at the heap leach plant facility as well as spending on evaluation and social development on Igor 4 property, which was offset by the $130,612 payment received from the loan receivable,. Net cash from financing activities for the six months ended March 31, 2021 was proceeds of $133,100 from subscriptions received towards future private placement.

The interim financial statements of the Company for the six months ended March 31, 2021 have been prepared on the basis of accounting principles applicable to a going concern. This assumes the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its obligations in the normal course of operations. The Company needs to raise funds in order to continue on as a going concern and there can be no assurances that sufficient funding, including adequate financing, will be available to cover its working capital deficiency or develop its mineral properties and / or cover general and administrative expenses necessary for the maintenance of a public company. The ability of the Company to arrange additional financing in the future depends in part, on the prevailing capital market conditions and mineral property exploration success. In March 2020, there was a global pandemic outbreak of COVID-19. The actual and threatened spread of the virus globally has had a material adverse effect on the global economy and specifically, the regional economies in which the Company operates. The pandemic could result in delays in the course of business, including potential delays to its exploration efforts/activities/programs, and could have a negative impact on the stock market, including trading prices of the Company’s shares and its ability to raise new capital. These material uncertainties may cast significant doubt on the Company’s ability to continue as a going concern. Accordingly, the interim financial statements for the six months ended March 31, 2021 and the

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financial results presented on this MD&A do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities, contingent obligations and commitments other than in the normal course of business and at amounts different from those in the interim financial statements.

RELATED PARTY TRANSACTIONS

Compensation of key management personnel

The Company’s key management personnel consist of the Company’s officers, directors and companies associated with them including Maher Global Exploration, a company controlled by Brian Maher, Chief Executive Officer.

Compensation includes salaries and professional fees paid to the President and a company in which the current CFO is an owner, as well as amounts paid to directors.

Three months ended March 31,	Three months ended March 31,	Six months ended March 31,	Six months ended March 31,
2021 Consulting fees, salaries and benefits $87,573	2020 $92,627	2021 $177,090	2020 $183,220
Professional fees 15,108	21,907	36,150	43,087
$102,681	$114,534	$213,240	$226,307

Accounts payable and accrued liabilities at March 31, 2021 includes $721,000 (September 30, 2020 – $594,478) due to the CEO of the Company, the former CFO of the Company, and a company in which the current CFO was an associate until July 31, 2018 and an owner thereafter. The balances owing are non-interest bearing, payable on demand, and have no fixed repayment terms. Related party transactions are conducted in the normal course of business and are measured at the exchange amount, which is the amount of consideration established and agreed to by the parties.

On April 24, 2019, the Company entered into unsecured promissory note agreements with two directors of the Company for proceeds of US$100,000 ($132,373). The promissory notes bear interest at 12% per annum payable semi-annually, starting on December 31, 2019, and matured on June 30, 2020.

On June 30, 2019, the Company entered into an unsecured promissory note agreement to repay amounts owing to the former CFO of the Company. The promissory note has a principal amount of $112,160, bears interest at 12% per annum payable semiannually, starting on December 31, 2019, and matured on June 30, 2020.

On January 9, 2020 and January 16, 2020, the Company entered into unsecured promissory note agreements with another director of the Company for total proceeds of US$16,754 ($21,912). The promissory notes bear interest at 12% per annum payable semi-annually and matured on January 31, 2021.

Between December 16, 2019 and March 24, 2020, the Company entered into several unsecured promissory note agreements with another director of the Company for total proceeds of US$26,928 ($35,425). The promissory notes bear interest at 12% per annum payable semi-annually and matured on January 31, 2021.

SUBSEQUENT EVENTS

On April 16, 2021, a total of 1,937,500 warrants at a price of $0.10 per warrant expired unexercised.

On April 30, 2021, the Company signed a Net Smelter Royalty Agreement with RIVI, whereby RIVI is granted an option to acquire a royalty equal to 2% of Net Smelter Returns (“NSR”) over the Igor, Igor 3 and Igor 4 concessions, in exchange for reducing US$500,000 of the amounts owed to RIVI by the Company. In addition, the Company has the option to repurchase 1% of the NSR royalty for US$750,000 until October 21, 2021.

On July 20, 2021, the Company completed a non-brokered private placement pursuant to which the Company issued 7,307,542 common shares in the capital of the Company at a price of $0.06 per share for gross proceeds to the Company of $438,452. In connection with the private placement, PPX paid aggregate finder’s fees of $26,307 to arm’s length finders and issued 146,151 common shares to an arm’s length finder.

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OUTSTANDING SHARE INFORMATION AT DATE OF REPORT

Common shares - issued and outstanding	501,415,848
Securities exercisable or convertible into common shares
Warrants (including finder warrants)	686,000
Share options	17,086,000

FINANCIAL INSTRUMENTS RISK EXPOSURE

The Company is exposed to financial risks sensitive to changes in commodity prices, foreign exchange and interest rates. The Company’s Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Currently the Company has not entered into any material options, forward and future contracts to manage its price-related exposures. Similarly, derivative financial instruments are not used to reduce these financial risks.

Carrying values of financial instruments

The carrying values of the financial assets and liabilities at March 31, 2021 and September 30, 2020 are as follows:

==> picture [503 x 195] intentionally omitted <==

----- Start of picture text -----

As at March 31, 2021 September 30, 2020
Financial Assets
At fair value through profit or loss
Cash $31,692 $28,676
At amortized cost
Loan receivable 5,030 5,336
$36,722 $34,012
Financial Liabilities
At fair value through profit or loss
Gold streaming facility $5,889,643 $6,247,471
At amortized cost
Accounts payable and accrued liabilities 5,051,260 4,518,790
Convertible note 1,600,299 1,630,831
Promissory notes 959,311 959,010
$13,500,513 $13,356,102
----- End of picture text -----

Fair values of financial instruments

The fair value of receivables and accounts payable and accrued liabilities, and promissory note payable approximate their carrying amounts due to their short terms to maturity.

The fair value hierarchy of financial instruments measured at fair value on the statement of financial position is as follows:

As at	March 31, 2021	September 30, 2020
	Level 1	Level 1
Cash	$31,692	$28,676
	Level 3	Level 3
Gold streaming facility	$5,889,643	$6,247,471

The Company does not offset financial assets with financial liabilities and there were no transfers between Level 1 and Level 2 input financial instruments.

The fair value of the Gold stream facility is measured at fair value through profit and loss, with the embedded derivative at March 31, 2021 and September 30, 2020 measured at nominal value.

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OFF - BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

COMITMENTS AND CONTINGENCIES

On February 14, 2018, the Company signed a ten year agreement with the community of Callanquitas in Northern Peru that provides the Company with the Social License to conduct mining and exploration activities at the Igor Project, including the ongoing test-mining and bulk-sampling program at Igor 4 concession. The agreement provides for employment opportunities for the people of Callanquitas, improved road maintenance in the vicinity of the community, and infrastructure improvements to the local elementary school.

On November 20, 2018, the Company signed an agreement with the Igor community in Northern Peru that provides the Company with the Social License to build and operate the heap leach facility for processing of the ore from the Igor 4 concession. The agreement provides for employment opportunities for the people of the Igor community, improved road maintenance in the vicinity of the community, and infrastructure improvements to local schools and medical facility.

The Company has contracted the services of Big Rock Consulting Inc. (“BRC”) for the manufacturing of certain equipment for the Company’s heap leach plant for US$1,913,250. To March 31, 2021, the Company has advanced $986,167 (US$739,311) to BRC with the rest of the contracted amount to be paid by the time the equipment is delivered. An impairment charge of $629,190 (US$467,572) was recorded for the year ended September 30, 2020, as certain equipment paid for in advance are no longer available to the Company.

In addition, the Company had undiscounted environmental closure obligations for remediation and rehabilitation work on the Company’s Igor properties with estimated total obligations at March 31, 2021 of $493,569 (US$392,500).

During the year ended September 30, 2020, the Company was notified of a claim filed by AMM against the Company, for early termination fees associated with the construction of the Company’s mineral processing plant in the amount of $13.5 million. A second claim by AMM was filed against the Company in the amount of $1.12 million for fees allegedly payable for construction of the processing plant. As AMM had not presented significant progress in the construction of the plant to the Company, management believes PPX has valid arguments to defend against the claims and as a result no amounts have been recorded for these claims as at March 31, 2021.

CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Company’s accounting policies, which are described in note 3 of the audited annual financial statements of the Company for the years ended September 30, 2020 and 2019, management is required to make judgments, estimates and assumptions about the carrying amount and classification of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revisions affect only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

The following are the critical judgments and areas involving estimates, that management have made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements.

Critical Judgments in Applying Accounting Policies

Critical accounting judgments are accounting policies that have been identified as being complex or involving subjective judgments or assessments, as follows:

• the point in time that an economic feasibility study has established the presence of proven and probable reserves;

• deferred tax assets recorded in the consolidated financial statements;

• the determination of the functional currency in accordance with International Accounting Standards (“IAS”) 21, The Effects of Changes in Foreign Exchange Rates ; and

• determination of derivative liability.

Key Sources of Estimation Uncertainty

Useful life of plant and equipment

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As discussed in note 3(e) of the audited annual financial statements of the Company for the years ended September 30, 2020 and 2019, the Company reviews the estimated lives of its plant and equipment at the end of each reporting period. There were no material changes in the lives of plant and equipment for the years ended September 30, 2020 and 2019.

Deferred income taxes

Judgment is required in determining whether deferred tax assets are recognized on the statement of financial position. Deferred tax assets, including those arising from unutilized tax losses require management to assess the likelihood that the Company and/or its subsidiaries will generate taxable earnings in future periods, in order to utilize recognized deferred tax assets. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company and/or its subsidiaries to realize the net deferred tax assets recorded at the statement of financial position date could be impacted. Additionally, future changes in tax laws in the jurisdictions in which the Company and its subsidiaries operate could limit the ability of the Company to obtain tax deductions in future periods.

Impairment of assets

The carrying amounts of mining properties and plant and equipment, and advances for assets under construction are reviewed for impairment if events or changes in circumstances indicate that the carrying value may not be recoverable. If there are indicators of impairment, an exercise is undertaken to determine whether the carrying values are in excess of their recoverable amount. Such review is undertaken on an asset by asset basis, except where such assets do not generate cash flows independent of other assets, and then the review is undertaken at the cash generating unit (“CGU”) level.

The assessment requires the use of estimates and assumptions such as, but not limited to, long-term commodity prices, foreign exchange rates, discount rates, future capital requirements, resource estimates, exploration potential and operating performance as well as the CGU definition. It is possible that the actual fair value could be significantly different from those assumptions, and changes in these assumptions will affect the recoverable amount of the mining interests. In the absence of any mitigating valuation factors, adverse changes in valuation assumptions or declines in the fair values of the Company’s CGUs or other assets may, over time, result in impairment charges causing the Company to record material losses.

The Company considers both external and internal sources of information in assessing whether there are any indications that mining interests are impaired. External sources of information the Company considers include changes in the market, economic and legal environment in which the Company operates that are not within its control and affect the recoverable amount of mining interests. Internal sources of information the Company considers include the manner in which mining properties and plant and equipment are being used or are expected to be used and indications of economic performance of the assets.

Gold streaming facility

The Company has entered into a Gold Streaming Agreement which contains a derivative liability. The valuation of this derivative utilizes a number of assumptions, including discount rate, future gold prices, the probability of achieving commercial production from the Igor 4 property, change in expected ounces to be delivered and future production levels. As at the statement of financial position date, management, due to uncertainties related to the amount of reserve and timing of future ounces to be delivered, has determined the derivative value to be nominal.

Environmental rehabilitation

Significant estimates and assumptions are made in determining the environmental rehabilitation costs as there are numerous factors that will affect the ultimate liability payable. These factors include estimates of the extent and costs of rehabilitation activities, technological changes, regulatory changes, cost increases, and changes in discount rates.

Those uncertainties may result in actual expenditures in the future being different from the amounts currently provided in the financial statements. The provision represents management’s best estimate of the present value of the future rehabilitation costs required.

Share based payments

Management assesses the fair value of stock options granted in accordance with the accounting policy stated in note 3(h) of the audited annual financial statements for the years ended September 30, 2020 and 2019. The fair value of stock options granted is measured using the Black-Scholes option valuation model and is only an estimate of their potential value and requires the use of estimates and assumptions.

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CHANGES IN ACCOUNTING POLICIES AND ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

Changes in Accounting Policies

The Company has adopted the following new standards, along with any consequential amendments, effective October 1, 2020. These changes were made in accordance with the applicable transitional provisions. The adoption of the new standards and consequential amendments did not have a material impact on the Company’s consolidated financial statements.

Amendments to IFRS 3 Business Combinations

Amendments to IFRS 3, Business Combinations assist in determining whether a transaction should be accounted for as a business combination or an asset acquisition. It amends the definition of a business to include an input and a substantive process that together significantly contribute to the ability to create goods and services provided to customers, generating investment and other income, and it excludes returns in the form of lower costs and other economic benefits. These amendments are effective for reporting periods beginning on or after January 1, 2020.

Accounting Standards Issued But Not Yet Effective

Amendments to IAS 16 Property, Plant and Equipment

With the amendments to IAS 16 Property, Plant and Equipment, proceeds from selling items before the related item of property, plant and equipment is available for use should be recognized in profit or loss, together with the costs of producing those items. The Company will therefore need to distinguish between the costs associated with producing and selling items before the item of property, plant and equipment (pre-production revenue) is available for use and the costs associated with making the item of property, plant and equipment available for its intended use. For the sale of items that are not part of a Company’s ordinary activities, the amendments will require the Company to disclose separately the sales proceeds and related production cost recognized in profit or loss and specify the line items in which such proceeds and costs are included in the statement of loss and comprehensive loss. These amendments will have an impact on the Company’s financial statements. These amendments are effective for reporting periods beginning on or after January 1, 2022.

DISCLOSURE CONTROLS AND POCEDURES AND INTERNAL CONTROLS OVER FINANCIAL REPORTING

Disclosure controls and procedures are intended to provide reasonable assurance that information required to be disclosed is recorded, processed, summarized, and reported within the time periods specified by securities regulations and that the information required to be disclosed is accumulated and communicated to management. Internal controls over financial reporting are intended to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. In connection with National Instrument 52-109 (Certificate of Disclosure in Issuer's Annual and Interim Filings) (''NI 52-109''), the Chief Executive Officer and Chief Financial Officer of the Company have filed a Venture Issuer Basic Certificate with respect to the financial information contained in the condensed interim consolidated financial statements for the six months ended March 31, 2021 and this accompanying MD&A (together, the “Interim Filings”).

In contrast to the full certificate under NI 52-109, the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. For further information the reader should refer to the Venture Issuer Basic Certificates filed by the Company with the Interim Filings on SEDAR at www.sedar.com.

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