Radius Gold Inc. — Management Reports 2024

Apr 27, 2024

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(the “Company”)

MANAGEMENT’S DISCUSSION AND ANALYSIS

Year End Report – December 31, 2023

General

This Management’s Discussion and Analysis (“MD&A”) supplements, but does not form part of, the annual audited consolidated financial statements of the Company for the fiscal year ended December 31, 2023. The following information, prepared as of April 25, 2024, should be read in conjunction with the December 31, 2023 consolidated financial statements. The Company reports its financial position, results of operations and cash flows in accordance with International Financial Reporting Standards. All amounts are expressed in Canadian dollars unless otherwise indicated.

The Company’s public filings, including its most recent unaudited and audited financial statements can be reviewed on SEDAR+ at (www.sedarplus.ca).

Forward Looking Information

This 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 MD&A include, without limitation, statements relating to:

• the Company’s planned exploration activities for its mineral properties;

• The Company’s equity investments;

• the suspension of receiving royalty payments from the Tambor Project;

• the intended use of proceeds received from past and possible future financing activities;

• the sufficiency of the Company’s cash position and its ability to raise, if needed, equity capital or access debt facilities; and

• maturities of the Company’s financial liabilities or other contractual commitments.

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:

• risks associated with mineral exploration activities, and investing in companies which conduct mineral exploration and development activities;

• due diligence investigations on potential investments not identifying all relevant facts;

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• inability to dispose of illiquid securities;

• receipt of royalty payments from the Tambor Project;

• fluctuations in commodity prices;

• fluctuations in foreign exchange rates and interest rates;

• credit and liquidity risks;

• 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;

• adequacy of insurance coverage;

• dilution from further equity financing;

• competition;

• uncertainties relating to general economic conditions; and

• risks relating to pandemics, epidemics and public health crises, and the impact they might have on the Company’s business, operations, financial condition and/or share price,

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

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

• 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 labour, supply, power, damage to equipment or other matter;

• permitting, exploration and/or development activities proceeding on a basis consistent with the Company’s current expectations;

• ability to sell our equity investments as needed;

• receipt of royalty payments from the Tambor Project will re-commence;

• due diligence investigations on potential investments will reveal all relevant facts;

• 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

The Company has been exploring for precious metals in the Americas for over two decades, which has resulted in the discovery of several gold deposits in Central America. Management is constantly exploring new targets and evaluating opportunities in order to maintain a portfolio of compelling targets and a pipeline of projects in various stages of exploration and drilling. The Company explores projects with the goal of delivering value to the shareholders through exploration discovery, either 100% in the Company or via partnerships where appropriate.

In January 2023, the Company announced the appointment of Adam Buchanan as Vice-President, Corporate Development, who is managing the Company’s communications with shareholders and other stakeholders. In April 2023, Simon Ridgway was appointed Executive Chairman of the Board (formerly non-executive Chairman).

In May 2023, the Company closed a non-brokered private placement of 11,149,983 units at $0.175 per unit for gross proceeds of $1,951,247. Each unit consists of one common share of the Company and one share purchase warrant, each warrant entitling the holder to purchase one additional common share of the Company at $0.35 for two years from closing. The proceeds of this

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financing are intended to be used for exploration and drilling of the Company’s Tropico Project in Mexico (see property description below), and for general working capital.

A summary of the Company’s investments, properties, and royalty interests is provided below:

Investments

For a description of the Company’s equity investments activity during the period from January 1, 2022 to December 31, 2023, please see Note 6 of the Company’s December 31, 2023 consolidated financial statements.

The Company’s current cash and cash equivalents on hand is approximately $560,000 and its current investments consist of:

Electrum Discovery Corp. (“Electrum”) (formerly Medgold Resources Corp.) 632,906 shares Current market value: $47,000	Electrum is a TSX-V listed Canadian-based mineral exploration and development company focused on the Western Tethyan Belt with activities in the Republic of Serbia. The Company has several copper–gold assets with significant exploration potential, including its flagship Timok East Project.
Rackla Metals Inc. (“Rackla”) 3,973,275 shares Current market value: $675,000	Rackla is a TSX-V listed mineral exploration company targeting Reduced Intrusion-Related Gold Systems (RIRGS) mineralization on its gold projects located in the Tombstone Gold Belt within the Selwyn Basin of the Yukon and Northwest Territories.
Volcanic Gold Mines Inc. (“Volcanic”) 830,412 shares Current market value: $128,000	Volcanic is a TSX-V listed company focused on building multi- million ounce gold and silver resources in underexplored countries. It holds an option to acquire a 60% interest in the Company’s Holly and Motagua Norte gold/silver properties located in eastern Guatemala, and has published an Inferred Mineral Resource for the Holly property.

Property Interests

Regional Exploration

The Company is constantly prospecting and evaluating new properties, with geological field teams evaluating new targets to maintain the Company’s pipeline of projects.

Mexico – Mining Law Reform

The Mexico government’s Mining Law Reform was published in the Federal Register on May 8, 2023, and includes changes to Mexico's Mining Law, National Waters Law, General Law of Ecological Equilibrium and Environmental Protection and General Law for the Prevention and Integral Handling of Wastes. The law reform was widely published and became effective on May 9, 2023, and certain provisions intend to restrict mineral exploration activities. It is unconstitutional to retroactively apply laws in Mexico, and the Company’s management believes the new laws should not apply to the Companies’ existing projects and licenses. As have almost all active exploration and mining companies in Mexico, the Company has filed legal challenges to the application of the reforms on all its properties and projects. The final status of those challenges has not been decided by the courts and the Company is still in preliminary and appeals stages. Opposition members of the Mexican senate (National Action Party parliamentary group) filed an action of unconstitutionality before the Supreme Court to annul the Mining Law Reform. Recently the Supreme Court annulled the major law reforms of the current government including Electoral,

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Energetic and National Guard laws reforms, and the Company’s management believes the current constitutional challenge to the Mining Law Reform has a high chance of success.

One of the court filings made by the Company is a legal demand with a Federal Court in Mexico to obtain title to the Amalia 4 concession, a component of the Amalia Project which had been in the application stage. The mining authority of Chihuahua has processed and approved the submission without fault and passed the license to the Mexico Mining Directorate proposing title issuance. The regulated time for the mining authority to comment and request revision has passed and granting of title is a legal requirement under the mining law. The legal demand filed by the Company is to enforce the granting of title. Legal challenges to all of the Company’s Mexican claims and projects including Amalia 4 are still in process.

Mexico – Amalia Project

The Amalia Project comprises 10,261 hectares located in the Sierra Madre gold belt in the State of Chihuahua, Mexico. In June 2017, the Company signed a binding agreement with a private individual to option 380 hectares of the project area which is host to high-grade epithermal silver-gold mineralization. Following the signing of the option agreement, the Company staked an additional 9,081 hectares surrounding the Amalia Project, covering three new regional target areas.

The Amalia Project is located approximately 25 kilometres SW of the historic Guadalupe y Calvo mining district in Chihuahua, Mexico. During due diligence evaluation the Company’s geologists sampled bonanza grade outcrop containing 20.4 g/t Au and 5,360 g/t Ag from a 1.2 metre chip. The Company established a camp at Amalia and completed an initial exploration program comprising geological mapping, prospecting, and channel sampling of the three main targets: San Pedro, Guadalupe and Dulces. Epithermal Au-Ag mineralization was sampled by the Company in several veins, vein breccias and disseminated zones over 3.5 kilometres of strike length and a 600 metre vertical interval following the trace of the large regional Amalia fault zone.

In July 2018, the Company entered into an agreement with Pan American Silver Corp. (“Pan American”) to drill and explore the Amalia Project – see “Pan American Option Terms” below. In late 2019, the Company signed a binding agreement with a private family to option the 800-hectare Palmillas Property which hosts high-grade epithermal gold-silver mineralization. The Palmillas concessions are immediately adjoining the Amalia Project and cover the northeastern and southwestern strike extension of the Amalia fault zone.

Pan American elected to exercise its right to include the Palmillas Property within the Amalia Project joint venture. Pan American, as the operator is funding and managing the expanded project according to its option agreement with the Company. The Palmillas Property hosts multiple exploration targets, including El Cuervo and Palmillas.

67 drill holes totaling 23,058 metres have been completed at the Amalia project. 10,588 metres in 31 holes have been completed on the Amalia vein system, 3,814 metres in 14 holes completed in the California vein system, and 8,655 metres in 22 holes completed in the El Cuervo vein system. Significant high-grade gold-silver mineralization has been defined at each target.

Since completion of drilling at El Cuervo in August 2022, geological mapping and surface sampling has further defined and extended drill targets across the property and in particular at the California structure.

At California, the main California-Oro Viejo system has been extended 750 metres northwest, defining 1.5 kilometres of undrilled strike extension from the last drill section at California which returned one of the best drill holes with AMDD21-39 intersecting 26.9 metres @ 2.59 g/t Au and 353 g/t Ag. Recent mapping has also discovered new parallel vein systems.

ZONE	# HOLES	# METRESDRILLED
Amalia	31	10,588.6
California	14	3,813.8
El Cuervo	22	8,655.6
TOTALS:	67	23,058.0

Detailed drill results, cross-sections, long-section, plan map and core photos are available on the Company’s website (http://www.radiusgold.com/s/amalia.asp).

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Quality Assurance / Quality Control

Reported drilling was carried out using NQ and HQ size tooling. Drill core was cut in half using a rock saw with one half of the core then taken as a sample for analysis. Sample intervals are generally 1 metre intervals, producing samples of between 2 to 9 kilograms. Half-core samples are delivered to the ALS Geochemistry laboratory facilities in Chihuahua, Mexico. The samples are fire assayed for Au and are analysed for Ag and multi-elements using method code ME-ICP61 following a fouracid digestion. Over-limits are analysed using an appropriate method. Multi-element geochemical standards and blanks are routinely entered into the drill core sample stream to monitor laboratory performance. Quality control samples submitted to ALS were returned within acceptable limits.

Concessions

The Company’s Amalia project consists of 1,180 hectares of core granted licenses and a 9,081 hectare Amalia 4 claim application. The Company and project JV partner Pan American Silver Corp. have completed all the requirements, fee payments and surveys for the Amalia 4 application. The mining authority of Chihuahua has processed and approved the submission without fault and passed the license to the Mexico Mining Directorate proposing title issuance. The regulated time for the mining authority to comment and request revision has passed and granting of title is a legal requirement under the mining law. On May 4, 2023, the Company filed a legal demand to enforce the granting of title. Legal counsel believes the Company has clear legal right to the application and title. Legal counsel has been successful in obtaining granted concessions in similar situations recently.

Pan American Option Terms

Pursuant to an agreement signed in June 2018, Pan American has exercised its option to earn an initial 65% interest in the Company’s Amalia Project and Palmillas Properties, having made cash payments to the Company totaling US$1.5 million and expending a minimum of US$2 million on exploration and reimbursement of the Company’s costs to maintain its option agreements with the owners of Amalia and Palmillas. Pan American may earn an additional 10% by advancing the property to preliminary feasibility by June 2025.

Property Outlook

The Amalia project is a large gold-silver epithermal system with an excess of 10 kilometres strike of vein systems, and mineralization extending over 1,000 vertical metres. Significant mineralization has been defined at the three main targets drilled to date (Amalia, California & El Cuervo). The targets are open at depth and along strike and many other targets remain to be drill tested including: Oro Viejo, La Caverna, California SE, El Durazno and Palmillas.

The Company’s management is in discussion with Pan American to chart the best way forward for both companies.

Mexico – Plata Verde Project

In 2020, the Company entered into option agreements with local concession holders to acquire a 100% interest in the Plata Verde Project which consists of the 300 hectare Don Benja concession covering an historic silver mining camp located in Chihuahua, Mexico, and the 500 hectare Don Jose concession which surrounds Don Benja. The Plata Verde Project is located north of the Company’s Amalia Gold-Silver project and east of the historic Batopilas silver mining district (1708 to 1920) which reputedly produced over 300 million ounces of silver from high-grade veins and structures. The property is accessible by road, with a one hour hike required to access the historic mines.

The Don Jose concession has no exploration history and covers the same prospective rocks that host the Don Benja silver mineralization. The Company has conducted limited prospecting and stream sediment geochemistry at Don Jose.

When the Company’s geologists discovered Plata Verde Project, the property was accessed by a strenuous 6 hour hike and all supplies and samples for subsequent exploration programs were transported by mules. A local landowner has since constructed 4x4 road access to the property and has signed an agreement providing the Company with legal right of way and use of the road to access the property.

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At Plata Verde, the Company’s geologists re-discovered a large scale underground bulk mining operation where in the late 1800’s, historic miners hand excavated an extensive series of anastomosing caverns, producing silver bars at an associated smelter operation. The project was un-explored since the historic miners ceased their operations. Initial phases of rock chip sampling by the Company returned widespread silver mineralization between 5 and 1,070 g/t Ag over a large area within the historic mines.

In July 2022, the Company signed an exclusivity agreement with Minera San Julian, S.A. de C.V. (“Minera San Julian”), a wholly owned subsidiary of Fresnillo plc, whereby Minera San Julian has the exclusive right for nine months to negotiate with the Company the terms of an option to earn a 70% interest in the Plata Verde Project. See “Exclusivity Agreement with Fresnillo” below for a description of the agreement terms.

Geological Model and Silver Mineralization

At Plata Verde, the Company’s geological team completed several months of detailed underground mapping and sampling of the historic Mina Real and Mina Mojonera. Three distinct mineralization styles have been defined within the basaltic andesite volcanic host rock:

1. Multiple large scale volcanic breccia zones up to 75 metre diameter and sampled on multiple mine levels. The breccias are cemented by massive to crustiform banded barite calcite with silver chlorides, sulphosalt minerals and native silver.

2. Fracture fill and stockwork silver mineralization occurs as massive to crustiform banded barite calcite with silver chlorides, sulphosalt minerals and native silver.

3. Disseminated style mineralization with fine silver sulphosalts disseminated within the volcanic host with little to no brecciation, veining or fracture fill.

All three mineralization styles host significant silver grades, although the highest grades are related to intense brecciation and fracturing. Geological maps and sampling data are available at http://www.radiusgold.com/s/plata-verde.asp.

In total, 255 2 x 2 metre panel samples were collected from the historic Mina Real and Mina Mojonera. Each mine covers a shallow dipping anastomosing sequence of mining areas on at least 3 levels with Mina Real covering approximately 200 x 200 metres and Mina Mojonera 150 x 150 metres. Results reported between 2 and 815 g/t Ag and averaging 185 g/t Ag. Samples were collected to represent all rock types and mineralization styles.

Summary of underground rock chip sampling. Majority are 2 x 2 m rock panel samples:

		Average all rocks	Breccia samples	Average breccia
Historic Mine	Rock chip samples
		(Silver g/t)	(number)	(Silver g/t)
Mojonera Real	133 122	168 143	57 17	262 244
Total	255	156	74	258

The sampling completed within the historic mines shows that the mineralization is open to expansion in all directions.

In 2021, the Company completed geophysical programs at Plata Verde, consisting of 7.5 line kilometre magnetic survey and 4.5 line kilometre IP/Resistivity survey conducted by consultants, Geofisica TMC. The program was designed to locate potential feeder systems below the historic silver mines and successfully identified compelling drill targets below the known mines. All relevant data and sections from the geophysical surveys are available on the Company’s website.

Regional Geology and Stream Sediments

In general, the silver mineralization is covered by the overlying rhyolitic volcanics and is only exposed within the historic mines and at surface in a few areas along the length of a small creek. The Company conducted a geological mapping and stream sediment sampling program within the district which indicates that a north south orientated regional structural zone likely

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controls development of the mineralization at Plata Verde. Stream sediment sampling at Plata Verde clearly identifies the creek where the historic mines are exposed. There are also strong silver stream sediment anomalies (several times higher than background) that indicate potential for further mineralization 300 metres to the east and 1,000 metres south of the known mines.

Discussion and Exploration Targets

The Company has defined two priority targets:

• 1) Extensions and repetitions of the shallow dipping large scale silver rich breccias, stockworks and disseminated silver mineralization exposed within the historic mines.

• 2) Sub-vertical feeder zones below the historic silver mines.

The barite/silver chloride mineralization appears to be a late-stage low temperature mineralizing event with the source and feeder systems an attractive exploration target. Barite and silver chloride are often part of the upper levels or supergene zone around large silver deposits. The solubility of barite and silver chlorides is low, and hence the source zone is likely to be close by. Extensions of the known mineralization below the ignimbrite cover to the north, east and west are open. Potential feeder structures have been defined by the geophysics.

The Company has completed an environmental study in support of drill permits which have been granted.

Metallurgical Tests

In late January 2023, the Company announced preliminary results from initial metallurgical testing conducted by Minera San Julian on samples from Plata Verde. Bulk samples (approximately 100 kg) were collected from the Mina Mojonera and Mina Real underground workings and sent to Fresnillo plc’s Technical Services Group, Mineral Processing Department, in Torreon, Mexico for initial investigation into metallurgical characterization and recoveries of metals (silver lead and copper) by cyanide leaching and flotation. Highlights of the results are:

• Work index for grinding (Wi) averaged 8.67 kWh/t, classifying the samples as “soft” for ball milling.

• Cyanide leach test work reported average recoveries of 93% for silver.

• Flotation studies generate Pb/Cu concentrates with a high grade of silver and good values of lead and copper with recovery of around 85% for silver, 52% for lead and 64% for copper.

• Combining flotation + tailings cyanidation results in average overall silver recovery of 97%.

• Future work should consider separation of Pb and Cu concentrates to generate commercial concentrates.

Exclusivity Agreement with Fresnillo

In July 2022, the Company signed an exclusivity agreement with Fresnillo plc’s subsidiary, Minera San Julian, whereby Fresnillo was granted the exclusive right for nine months to negotiate with the Company the terms of an option to earn a 70% interest in the Plata Verde Project. Fresnillo is the world’s leading silver producer and Mexico’s largest gold producer and holds one of the largest precious metals reserves in Mexico.

In April 2023, the exclusivity period was extended to July 7, 2023, and then further extended to January 7, 2024. Pursuant to the extensions, Minera San Julian has paid interim funding to the Company of US$171,000, and Minera San Julian made significant advances at Plata Verde, completing :

• Upgrading and rehabilitation of road access in preparation for drill access.

• • Initial metallurgical test work which demonstrated exceptional cyanide leach recoveries averaging 93% for silver and in combination with flotation achieving 97% silver recovery.

• Geological mapping and rock chip sampling of the property with 470 samples collected.

• Negotiations with landowners for drill access.

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In March 2024, the Company and Minera San Julian signed an option agreement which replaces the exclusivity agreement and provides of an initial investment by Minera San Julian of US$250,000 to mobilize drilling and field teams, and a second investment of US$250,000 to be made when drilling commences. The option agreement terms include:

• Minera San Julian would spend over a four year period a minimum cumulative amount of US$ 4,762,000 million on exploration activities at the Plata Verde Project.

• Minera San Julian would make option payments to Geonorte totaling US$2,825,000, which includes US$825,000 to cover underlying property agreements.

• Minera San Julian would have the right to earn a 70% interest in the Plata Verde Project.

• If the option is exercised, a new company (NewCo) would be set up to own the Plata Verde Project, Newco would be owned 70% by Minera San Julian and 30% by Geonorte.

• Any additional funding required by NewCo would be provided by Minera San Julian and Geonorte in proportion to their respective ownership interests in NewCo.

• Should either party’s interest fall below 10% interest in NewCo that interest would convert to a 2% NSR.

• Each party will have the right of first refusal to acquire the other party’s shares in NewCo if the other party receives a firm offer for its interest in NewCo that the other party would propose to accept.

Quality Assurance and Quality Control

Reported assays are rock chip and channels samples taken by Company geologists and trained sampling teams. Sample intervals are generally 2 metre chip channels or 2x2 metre panels producing samples of between 2 to 9 kilograms. Reported samples were delivered to SGN Laboratories in Paral, Chihuahua. The samples were crushed and pulverized. Two 100 gram splits were taken. The Company’s geologists removed and stored the excess and a 100 gram split at the Company’s offices. SGN performed initial Ag and Au analysis. The second split was subsequently sent to the ALS Geochemistry laboratory facilities in Chihuahua, Mexico and was analyzed for Ag and multi-elements using method code ME-ICP61 following a four-acid digestion. Overlimits are analyzed using an appropriate method. All assays reported above 30 g/t Ag have been analyzed by ALS Geochemistry. The Company routinely inserts multi-element geochemical standards and blanks into the sample stream to monitor laboratories’ performance. Quality control samples submitted were returned within acceptable limits. Comparisons between sample splits demonstrate acceptable accuracy and precision.

Mexico - Tropico Project

In March 2023, the Company announced the discovery of a new gold mineralized “hot spring type” sinter and breccia pipe target within the Fresnillo district, Zacatecas, Mexico, and the entering into of an option agreement with local property owners to acquire the Project.

The Tropico Project is located 30 kilometres northwest of Fresnillo city, Zacatecas, Mexico. The Fresnillo mining district is one of the world’s greatest epithermal systems and hosts the world’s oldest continuously operating mines producing silver, gold, copper, lead, and zinc for approximately five centuries, since 1554.

In late 2023, the Company completed a maiden 1,300 metre diamond drill program in eight drill holes at Tropico. Drilling defined a large gold mineralized breccia body that starts at surface and to date defined 250 metres down dip. Gold grades were starting to increase with depth from holes 1, 2, 3, 4, and 6 but unfortunately the latest gold assay results from the deepest hole 8 are weak. The drilling encountered wide zones of classic low sulphidation epithermal alteration, high level chalcedonic silica, banded stockwork and massive quartz veining, and breccias with gold mineralization, but not significant high grade mineralization.

Given the unexpected flat dip of the target breccia to the east and the significantly lower gold assays in hole 8, pursuing the breccia body down dip is not justified. The Company’s geological team interprets the breccia body to be part of a larger diatreme and/or explosive volcanic breccia system. Targeting the source of the epithermal gold mineralization will require further evaluation and likely an agreement with Geological Survey of Mexico (GSM), which controls ground surrounding the Tropico property.

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In early 2024, management of the Company decided that no further work is warranted at Tropico and accordingly, the Company relinquished its option on the property.

Mexico – Maricela Project

In March 2021, the Company optioned the Maricela group of mineral concessions covering 155 hectares in the State of Sonora, Mexico. The project is within a prolifically mineralized Arizona – Sonora porphyry belt, one of the most important centres of copper mineralization world-wide. Spatially and genetically related to this giant porphyry trend are numerous epithermal gold and silver deposits.

The Maricela property shows no evidence of previous drilling or systematic exploration. The property has a number of small open pits and shafts where limited high-grade material was mined in the 1950’s and 1960’s and shipped to a processing plant in Cananea. Prior to the Company acquiring an interest in the Project, the most recent work conducted was a small sampling program (24 samples) conducted by the Mexican Geological Survey in 2000.

In 2021, the Company completed rock sampling programs. While these programs identified both high-grade gold-silver vein targets and wide (up to 25 metres) stockwork and breccia zones, management of the Company has decided that no further work is warranted at Maricela. Accordingly, the Company has relinquished its option on the property.

Mexico – Rambler Project

In January 2019, the Company staked the 10,379 hectare Rambler Project located in the Sierra Madre Mountains of the State of Chihuahua, Mexico, approximately 20 kilometres northwest of the Company’s Amalia Project. The project area is previously unexplored with only minor historic artisanal-scale pitting of surface outcrops known. The Company’s geologists discovered the project during regional prospecting surveys. Epithermal silver/gold (plus significant copper, zinc and lead) mineralization has been sampled by the Company in several veins, vein breccias and disseminated zones over a 9 kilometre north-west trend. The property will be further evaluated once the license application has been granted.

Guatemala Properties

In May 2020, the Company signed an agreement whereby it has granted to Volcanic the exclusive option (the “Option”) to acquire a 60% interest in the Company’s Holly and Banderas gold-silver properties in Guatemala. Volcanic may exercise the Option by spending US$7.0 million on exploration of the properties within 48 months from the date drilling permits are granted. First year requirements of incurring at least US$1.0 million on exploration, including carrying out a minimum 3,000 metres of drilling, have been completed by Volcanic. Volcanic also made a cash payment to the Company of $100,000.

In September 2023, the Option was modified to include the Motagua Norte project in substitution for the Banderas project. The original earn-in requirement to spend US$7.0 million in exploration of the properties remains unchanged. Under the modified option agreement, Volcanic has an exclusive option to earn a 60% interest in the Company’s Holly and Motagua Norte properties by spending US$7.0 million on exploration of the properties, of which US$1,764,778 is required to be spent on Motagua Norte. Expenditures made by Volcanic on exploration of the Banderas property are credited towards the US$7.0 million expenditure requirement. Upon exercise of the Option, the Company will enter into a standard 40/60 joint venture with Volcanic in order to further develop the properties.

Recent exploration activities conducted by Volcanic on the Holly and Motagua Norte Properties are summarized below.

Holly Project

In 2021, Volcanic conducted a diamond core drilling program at the Holly Project to explore a series of high-grade northweststriking veins cross-cutting a segment of the regional east-west trending Jocotan structure: La Peña, El Pino and Alpha veins. A total of 32 drill holes for 5,259 metres of drill core were completed, with the following highlights:

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• Drilling successfully tested three distinct vein sets cutting the Jocotan fault zone.

• High-grade gold and silver intercepts confirmed and extended the La Peña vein system to at least 200 metres below surface.

• Exploratory drilling on the El Pino and Alpha veins confirmed mineralization.

Drilling at Holly focused on extending the high-grade La Peña vein to depth and along strike with a goal of establishing a significant high-grade mineral resource and improving understanding of the controls on high-grade mineralization. The La Peña vein remains open in all directions. Several holes also cut high-grade gold in the Amber vein and Pino target at a shallow depth. The Amber vein, Pino veins, Alpha vein, and the untested Jocotan splay targets all have significant potential and will be tested in future drill programs.

Figure 1: Holly Project: La Peña target long section with assay results table.

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On June 9, 2022, the Company and joint venture partner, Volcanic, announced a maiden Inferred Mineral Resource Estimate for the Holly property. The mineral resource estimate is reported in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards (2014) incorporated by reference in National Instrument 43-101 - Standards of Disclosure for Mineral Projects.

Highlights

• A maiden inferred mineral resource has been estimated for the first target, La Peña vein at the Holly project, Guatemala.

• The high-grade La Peña vein remains open to expansion along strike and importantly at depth, where exceptionally high-grade results have been returned.

• Multiple other drill targets remain un-tested at Holly with potential for new discoveries.

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Table 1: Holly, Peña Vein Resource Estimate (Effective date 7[th] June, 2022)

Category	Cut-off grade AuEq (2) (g/t)	Tonnes above cutoff (millions)	Gold (g/t)	Silver (g/t)	Gold (oz)	Silver (oz)	Gold Equivalent(2) (g/t)	Gold Equivalent(2) (oz)
Inferred	3.00	1.32	6.46	256	272,110	10,913,360	9.57	406,316

Notes:

1. Resources estimated using a 3.0 g/t Gold equivalent cut-off grade and a top cap grade of 100 g/t Gold and 2,000 g/t Silver and presented on a 100%-basis

2. Gold Equivalent Au(eq) values based on Au US$1800 and Ag US$22 using formula (Au g/t + (Ag g/t*0.01222))

3. Mineral Resources which are not Mineral Reserves have not demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, marketing, or other relevant issues. The mineral resources in this report were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on mineral resources and reserves, definitions, and guidelines prepared by the CIM standing committee on reserve definitions and adopted by the CIM council. Notwithstanding, to meet the requirement that the reported Mineral Resources show “reasonable prospects for eventual economic extraction”.

4. The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource. It is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.

5. Contained metal and tonnes figures in totals may differ due to rounding.

The Mineral Resource Estimate is underpinned by data from 21 diamond drillholes totalling 3,707 metres of drilling. Drill spacing ranges between 20 and 100 metres. All sample data was composited to a 2D dataset (linear grade and true thickness values) prior to analysis and estimation. The sample database and the topographic survey were reviewed and validated by Bruce Smith, Ludving Monroy and Shawn Rastad prior to being supplied to John Arthur, an independent UK based Resource Consultant. Geological domain modelling was completed by Bruce Smith and Dr John Arthur. Mineral Resource domain modelling, grade interpolation, Mineral Resource classification and reporting of the Mineral Resource statement, was performed by Dr John Arthur. Dr Arthur, Mr Smith, Mr Monroy and Mr Rastad are “qualified persons” within the meaning of National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). Block modelling was carried out using cell dimensions of 32mE by 32mN by 8 mRL and was coded to reflect the surface topography and mineralised zones. Density values were globally assigned into two zones, an upper zone between 50 to 100 metres from surface had an average density of 2.33t/m³ and below this an average density of 2.52t/m³ was applied. The Mineral Resource Estimate has been classified based on data density, data quality, confidence in the geological interpretation and confidence in the robustness of the grade interpolation.

The technical report for the Mineral Resource Estimate was filed on July 27, 2022 and is available on SEDAR+ at www.sedarplus.ca.

Technical studies and permitting

The Company considers that the demonstrated high-grade and good access to a nearby mine development project means that the Holly Project has a good chance of being developed. Further drilling will determine whether Holly will support a standalone mill, or if the ore should be processed elsewhere. Based on this positive outlook the Volcanic/Radius team is in the process of applying to upgrade the Holly exploration license to an exploitation license.

The initial technical studies to support the application, including a civil engineering design for an underground mine to exploit the principal La Peña vein, were submitted to and reviewed by the competent authorities. The application has advanced to the second stage and the Company is now responding to requests for additional information. The study envisages using transverse and longitudinal longhole stoping with cemented cavity fill on eleven levels, 30 metres apart, to a depth of 300 metres below surface with access via a spiral decline. Processing would be off-site. The mine design is an early-stage concept for permitting

• 12 -

purposes and does not meet the requirements of a preliminary economic assessment. The Holly deposit is currently at an inferred level of confidence and open in all directions and further drilling is required to improve the level of confidence in the mineral resource estimation as well as define the full lateral and depth extent of any future mining operation. This study is the principal requirement to support the current application to upgrade the Holly project licence from an exploration to exploitation licence.

Current Work Program and Way Forward

Volcanic continues to collect the environmental, hydrogeological, and social baseline data that will be required for future economic assessments and feasibility studies.

The gold and silver discovery made at Holly is significant. It is a high-grade vein deposit that could be mined from underground, causing very little surface disruption. With a paved highway adjacent to the deposit, it will not require a processing plant, but is well situated to truck the high-grade ore to a nearby mill. Bluestone Resources’ (TSX-V: BSR) Cerro Blanco feasibility stage gold and silver project is within trucking distance. The approval of an amendment to the Cerro Blanco environmental permit to allow surface mining announced by Bluestone Resources on January 18, 2024 is a positive step forward, although the path to production remains unclear whilst Bluestone works through a strategic review (see Bluestone Resources Inc. announcements on July 6, 2023 and January 18, 2024). Volcanic continues to closely monitor the situation and intends to resume drilling at Holly as soon as there is a clear path to production at the Cerro Blanco gold project.

Motagua Norte Project

Volcanic conducted widespread exploration of the Company’s large regional land position under the option agreement signed in May 2020 and identified Motagua Norte as an area with significant promise. Volcanic has successfully completed all the legal, environmental and community studies required to support four exploration licence applications comprising the Motagua Norte area and in September 2023 the first exploration licence, Cirilo 1, was granted. The Cirilo 1 exploration licence covers an area of 13.5 square kilometre (4.5 x 3 km) and includes the highly prospective Mila gold discovery.In December 2023, the Company announced the signing of long term access agreements with property owners on the Cirilo I licence. The other three applications cover an additional 72.68 square kilometres of the Motagua Norte orogenic gold corridor. Volcanic is continuing to work with the permitting authorities towards granting the remaining three licences.

Volcanic’s initial prospecting samples returned exceptional gold grades at Mila prospect, a surface concentration of bonanzagrade and visible gold in quartz veins and boulders spread over a 250 x 570 metre area (see news release Sept 1, 2022). Highgrade gold assays and visible gold occur in both quartz veins and in quartz stockwork zones. In order to determine whether the very high gold grades (many samples above 1 oz gold / tonne) were the result of selective sampling or are widespread across the target zones, several lines of continuous 2 metre chip sampling were collected within the quartz boulder field. Average grades of 42 g/t gold along a 34 metre line, and 54 g/t gold over a 24 metre line from two parallel lines 70 metres apart in the centre of the quartz boulder field confirmed the high grades.

Current drill program

Volcanic commenced a first-pass drilling program at the Mila prospect in February 2024 designed to establish the width, grade and geometry of gold mineralization. Volcanic anticipates drilling between 1,000 and 3,000 metres of diamond core in this first campaign.

The Company reported on March 4, 2024 that the first few exploratory drill holes had revealed that the broad area of quartz boulder float with abundant visible gold and bonanza grade assay results discovered by Volcanic geologists is the top of a thick package of colluvial scree, locally over 15 metres thick, composed of quartz and schists boulders that have likely moved downslope from a major geological structural that has been named the Veta Madre Fault Zone.

The Veta Madre Fault contains a wide quartz vein that has been known for some time, although where sampled, has returned relatively high silver and lead results but poor gold numbers. It is a massive vein, forming in places a vertical, cliff with flute marks and slickensides indicating near-vertical fault movement. Exposure of the Veta Madre fault is notably absent from the area immediately uphill from the Mila quartz float field, suggesting that the abundant gold mineralized quartz boulders are derived from this eroded segment of the Veta Madre fault vein and that this is the target to be tested. .

• 13 -

The Company reported on April 3, 2024 that two drill holes cutting across the broad Veta Madre fault zone were completed. Both holes have cut wide zones of quartz veining and quartz stockwork at the fault contact between serpentinite in the hanging wall to the north, and schistose rock in the footwall to the south. The wide stockwork zones with associated intense silicasericite alteration of the host rock appear to be best developed in the footwall schist, although stockwork veining has been recognized on both sides of the vein.

Hole MIDD-24-004 targeted the Veta Madre above the central part of the colluvial field, drilling through 98 metres of serpentinite before reaching the fault zone at a depth of approximately 120 metres below surface. The hole remained in veining and stockwork schists for 63 metres before entering unaltered schistose rocks at 161 metres. The hole was drilled at an inclination of minus-45 degrees; true width of the mineralized zone is yet to be confirmed as the dip of the fault, while thought to be steep, is as yet unknown.

Hole MIDD-24-005 was drilled 100 metres along strike to the west of MIDD-24-004, collared closer to the fault zone so that it intersected the fault at a slightly shallower depth of approximately 80 metres below surface. This hole passed through 73 metres of serpentinite before entering the targeted structure. A wide zone, some 39 metres of altered rock with strong stockwork quartz veining, was intersected before passing into unaltered schistose rock at 112 metres drill depth. This hole was also drilled at an inclination of minus-45 degrees, and again, true width of the zone is, at present, unknown.

The Mila discovery presents an unusual challenge for exploration but an exceptional opportunity. The abundance of goldmineralized quartz boulders covering the surface makes it difficult to map-out, measure and model the gold mineralized structures. Of approximately 420 rock chip samples collected at surface across the area over one hundred returned assays exceeding 10 g/t gold, including twenty-one of over 100 g/t gold and a maximum of 692 g/t gold. In addition to the obvious quartz vein mineralization, gold has also been observed hosted within sericite altered and micro-veined schist with samples returning assay results of up to 94 g/t gold, indicating potential for a wide mineralized structure with high-grade gold mineralization not just restricted to quartz veins but potentially extending a significant distance into the wall rock.

Assays are pending on drillholes MIDD-24-004 and 005. Drilling of the Veta Madre target is ongoing.

Additional gold vein discoveries

Beyond the Mila prospect ongoing prospecting and rock chip sampling has identified a number of additional mineralized veins within the Cirilo I licence area, including:

1. Two gold quartz veins have already been identified approximately 500 metres to the south of the Mila prospect with two high-grade rock chip samples of 9.34 g/t and 29.6 g/t gold some 280 metres apart.

2. Quartz veins grading up to 60.2 g/t gold have also been identified at a couple of locations further along the regional Motagua Norte trend between 800 and 1700 metres to the west of the Mila prospect.

Geology and Exploration potential

The Mila prospect is a new discovery with a sizeable footprint of abundant high-grade quartz at surface, pointing to a significant gold system. The abundance of high-grade quartz vein and quartz stockwork spread across a 250 x 570 metre area, the identification of multiple gold mineralized quartz veins at surface, and the demonstration that high-grade quartz is not confined to the quartz veins but also occurs in the wallrock, point to a broad, high-grade and extensive gold system. The mineralization is orogenic style, with mineralization at mesothermal depths within a major transform structure. These systems and structures typically support mineralization over significant vertical distances, and so there is potential for mineralization to continue to significant depths.

• 14 -

Royalty Interests

Guatemala – Tambor Project Royalty

The Company holds a royalty interest in the Tambor gold project in Guatemala which is owned by Kappes, Cassiday & Associates (“KCA”) The initial royalty payments due to the Company are to be based on the price of gold at the time and the number of ounces of gold produced, ranging from US$100 per ounce when the gold price is below $1,200 up to $250 per ounce when the gold price is $1,500 or greater, up to a maximum of US$10.0 million. After the US$10.0 million has been paid and cumulative gold production from the Tambor Project has exceeded 100,000 ounces, the cash payments will be based on the then price of gold and the number of ounces of gold produced, ranging from US$25 per ounce when the gold price is below $1,500 up to $50 per ounce when gold price is $1,500 or greater.

Commercial production commenced at the Tambor project in December 2014 and receipt of royalty payments by the Company commenced during the third quarter of 2015. To date, the Company has recognized net royalty income of $1,530,555 of which $746,375 has been received. In May 2016, KCA informed the Company that mining operations were suspended by the Supreme Court of Guatemala due to a lack of consultation by the Guatemalan Ministry of Mines with local indigenous people when the mine was permitted in 2011.

KCA initiated a Central America Free Trade Agreement Arbitration action against the Guatemalan government to overturn the suspension of operations and seek compensation from the Guatemalan authorities, from which the Company would benefit as well. The Arbitration hearing has been completed and a ruling is expected in early 2024. Until these proceedings are concluded, the Company is allowing KCA to defer payment of the remaining balance owing to the Company. Due to these circumstances, for accounting purposes, a provision was recorded against the KCA receivable in the 2016 fiscal year.

Mexico - Tlacolula Property Royalty

In 2017, the Company completed the sale of its Tlacolula silver property, Mexico to Fortuna Silver Mines Inc. in consideration for 239,385 common shares of Fortuna, a cash payment of US$150,000, and a 2% NSR royalty on the property. Fortuna retains the right to purchase one-half of the royalty by paying the Company US$1.5 million.

Outlook

Management of the Company is enthusiastic about the current exploration programs at multiple targets. The Company plans to advance its JV funded partnership projects at Amalia, Plata Verde and Guatemala, and continue its strategy of conducting property evaluations and grassroots exploration on properties in various jurisdictions with the aim of delineating minable resources and delivering value to shareholders.

Qualified Person: Bruce A Smith, M.Sc., MAIG., a member of the Australian Institute of Geoscientists, is the Company’s Qualified Person as defined by National Instrument 43-101, and has approved the disclosure of the technical information in this MD&A.

• 15 -

Selected Annual Information

The following table sets forth selected annual financial information of the Company for, and as at, the end of each of the last three financial years ended December 31, 2023, 2022, and 2021:

	2023 ($)	2022 ($)	2021 ($)
Investment and other income	13,502	9,954	3,048
Exploration expenditures	1,572,144	732,140	690,258
Net income (loss) for the year Total Basic & fully diluted per share	(2,637,656) (0.03)	1,076,154 0.01	(892,648) (0.01)
Total assets	2,361,168	3,711,214	2,803,553
Total long-term liabilities	-	81,942	154,631
Cash dividends	-	-	-

Investment and other income were higher for the 2023 and 2022 fiscal years due to the periodic rise of interest rates throughout 2022 until mid-2023. The 2022 fiscal year resulted in a net income compared to net losses for the 2023 and 2021 fiscal years due to a $1,350,913 gain on reclassification as an equity investment. The gain relates to the Company’s holding of Rackla shares that were previously treated as an investment in associate with a carrying cost of $1 and their fair value being $1,350,914 at the time of reclassification. This reclassification is also why total assets were higher for the 2022 fiscal year. Long-term liabilities presented for the 2021 and 2022 fiscal years are related to a lease liability associated with an office lease, a right-touse asset, which expires at the end of 2024. The total lease liability as at December 31, 2023 was $81,942 and presented entirely as a short-term liability. The overall lease liability decreases each year as the remaining term of the office lease decreases.

Quarterly Information

The following table provides information for the eight fiscal quarters ended December 31, 2023:

Quarter ended	Dec. 31, 2023 ($)	Sep. 30, 2023 ($)	June 30, 2023 ($)	Mar. 31, 2023 ($)	Dec. 31, 2022 ($)	Sep. 30, 2022 ($)	June 30, 2022 ($)	Mar. 31, 2022 ($)
Investment and other income	2,363	2,276	3,550	5,313	4,674	3,433	1,348	499
Exploration expenditures	452,449	462,942	403,814	252,939	177,248	172,255	201,132	181,505
Net income (loss)	(939,300)	(533,636)	(791,913)	(372,807)	1,028,546	(231,529)	567,114	(287,977)
Basic and diluted income (loss) per share	(0.01)	(0.01)	(0.01)	(0.00)	0.01	(0.00)	0.00	(0.00)

The quarter ended December 31, 2022 resulted in a net income of $1,028,546 due to a gain of $1,350,913 from reclassifying the Company’s holdings of Rackla’s shares from an investment in associate to an equity investment. The quarter ended June 30, 2022 resulted in a net income position due to a gain of $859,523 from the Amalia Project option agreement with Pan American.

Results of Operations

Quarter ended December 31, 2023

The quarter ended December 31, 2023 had a net loss of $939,300 compared to a net income of $1,028,546 for the quarter ended December 31, 2022, a difference of $1,967,848. As noted above, the fourth quarter of 2022 recorded a net income due to the gain on reclassification of shares held in Rackla.

Exploration expenditures for the current quarter totaled $452,449 compared to $177,248 for the comparative quarter, an increase of $275,201. This increase was largely due to the acquisition of the Tropico Project in March 2023 and subsequent exploration activity, including a drill program that commenced during third quarter of 2023. The current quarter also included a write-off of mineral property acquisition costs of $309,223 relating to the Tropico and Maricela properties whereas there was no such charge for the comparative quarter.

• 16 -

General and administrative expenses for the current quarter were $161,859, compared to $185,846 for the comparative quarter, a decrease of $23,987. This decrease is primarily due to a share-based compensation expense of $23,750 in the comparative quarter compared to no such expense for the current quarter. Stock-based compensation expense for the comparative quarter relates to the value of shares issued as part of a compensation package for the Chief Executive Officer of the Company. Another notable cost decrease in the current quarter was $12,575 in travel and accommodation expenses as there was minimal travel activity during the current quarter compared to tradeshow travel during the comparative quarter. The most notable cost increases for the current quarter were in shareholder communications costs and legal and audit fees. Shareholder communications costs were higher due to more promotional services while Audit and legal fees were higher due to an increase in estimated audit fees for the current year.

Year ended December 31, 2023

The year ended December 31, 2023 had a net loss of $2,637,656 compared to a net income of $1,076,154 for the year ended December 31, 2022, a difference of $3,713,810. As with the quarterly comparison, the comparative year resulted in a net income position due to the gain of $1,350,913 on reclassification of Rackla shares. The comparative year also recorded a gain of $894,097 on mineral property option agreements and a foreign currency gain of $74,531 compared to a gain of $106,202 on mineral property option agreements and foreign currency loss of $28,409 in the current year.

Exploration expenditures, net of cost recoveries, for the current year totaled $1,572,144 compared to $732,140 for the comparative year, an increase of $840,004. As with the quarterly comparison, the current year included a write-off of mineral property acquisition costs of $309,223 whereas there was no such charge for the comparative year.

General and administrative expenses for the current year were $847,584, compared to $522,680 for the comparative year, an increase of $324,904. Both the current and comparative years recorded a share-based compensation expense but the expense for the current year totaled $308,631 compared to $46,875 for the comparative year. The current year share-based compensation expense relates to the fair value of stock options that were granted and became fully vested during that year whereas the expense for the comparative year relates to the fair value of shares issued pursuant to a compensation agreement. Other notable cost increases for the current year were $24,313 in shareholder communications, $18,603 in office and miscellaneous costs, and $11,457 in salaries and benefits. Shareholder communications and salaries and benefits costs were higher due to an increase in the use of shared personnel and promotional activities. Office costs were higher due in part to more information technology maintenance needs and increased office rent.

For both the current and comparative quarterly and yearly periods, the fees paid to Bruce Smith, a Director, President, and CEO of the Company, and to Simon Ridgway, a Director and Executive Chairman of the Company, were allocated partly to exploration expenditures and partly to management fees. Office and administration costs relate mostly to an administrative cost sharing agreement with Gold Group Management Inc. (“Gold Group”), a private company controlled by Mr. Ridgway which is reimbursed by the Company for certain shared rent and other corporate expenses paid by Gold Group on behalf of the Company. Salaries and benefits costs also relate primarily to Gold Group which provides administrative personnel, including the Company’s Chief Financial Officer and Corporate Secretary throughout the current and comparative quarterly and yearly periods and the addition of the Company’s Vice President of Corporate Development for the current fiscal year.

Mineral Properties Expenditures

A summary of the Company’s expenditures on its mineral properties during the year ended December 31, 2023 is as follows:

Mexico – A total of $1,513,115, excluding cost recoveries, was incurred on exploration, property investigation, and miscellaneous administrative costs, of which $817,404 was on the Tropico property, $240,985 was on the Plata Verde property, $141,934 was on the Amalia property, $39,479 was on the Maricela property, and $273,313 was on general exploration.

A total of $726,641, excluding cost recoveries, was incurred on option payments and recorded as mineral property acquisition costs, of which $271,822 was on the Tropico property, $395,460 on the Plata Verde property, and $59,359 on the Amalia property.

• 17 -

Cost recoveries relating to the Plata Verde property totaled $395,460 for the Company’s underlying option payments. Cost recoveries relating to funding from Pan American on the Amalia property totaled $59,359 for option payments and $30,367 for exploration costs.

Guatemala – A total of $52,396 was incurred on investigation of new opportunities and maintenance of the Company’s Guatemala properties.

Other – A total of $37,000 was incurred on property investigation costs in regions other than Mexico and Guatemala.

Further details regarding exploration expenditures for the years ended December 31, 2023 and 2022 are provided in the schedules at the end of this MD&A.

Liquidity and Capital Resources

The Company’s cash and cash equivalents were $0.91 million at December 31, 2023 compared to $1.42 million at December 31, 2022. As at December 31, 2023, working capital was $2.02 million compared to $3.25 million at December 31, 2022. Included in working capital is the fair value of the Company’s equity investments which as of December 31, 2023 was $1.01 million compared to $1.87 million as of December 31, 2022. During the year ended December 31, 2023, the Company raised gross proceeds of $1.95 million by way of equity financing to provide working capital for corporate and exploration operations.

The Company did not earn any royalty revenue from the Tambor Project during the current year as the operations at Tambor continue to be suspended.

The Company intends to use the proceeds from any equity financings, sales of its equity investments, option payments received, and royalty income payments received to fund its exploration programs, investment opportunities, and general working capital requirements. The Company expects its current capital resources to be sufficient to cover its corporate operating costs and carry out limited exploration programs for the next twelve months. Actual funding requirements may vary from those planned due to a number of factors, including future property option payments, potential property acquisitions and exploration activity. The Company will continue to seek to raise additional capital in the future and believes it will be able to do so, but recognizes the uncertainty attached thereto.

Commitment

The Company is party to an operating lease agreement for its office premises that expires on December 31, 2024. The Company shares its office space with other companies related by common directors and officers on a month-to-month basis, and the portion of the rent paid by these companies is netted against the Company’s rental expense. However, as there are no commitments from these companies, the amounts presented below are the gross commitments of the Company. The remaining commitment under the lease for the 2024 fiscal year is $133,869.

For the year ended December 31, 2023, the Company received a total of $96,775 (2022: $99,875) from those companies which share office space with the Company.

Financial Instruments and Risk Management

The Company is exposed to the following financial risks:

• Market Risk

• Credit Risk

• Liquidity Risk

In common with all other businesses, the Company is exposed to risks that arise from its use of financial instruments. This section describes the Company’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented throughout the accompanying consolidated financial statements.

• 18 -

General Objectives, Policies and Processes

The Board of Directors has overall responsibility for the determination of the Company’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Company’s finance function. The Board of Directors receive periodic reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets.

The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. Further details regarding these policies are set out below.

a) Market Risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices are comprised of three types of risk: foreign currency risk, interest rate risk, and equity price risk.

Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company is exposed to fluctuations in foreign currencies through its operations in foreign countries. The Company monitors this exposure but has no hedge positions. As at December 31, 2023, the Company is exposed to currency risk through the following financial assets and liabilities denominated in currencies other than the Canadian dollar:

	December 31, 2023 US Dollar Mexican Peso Guatemala Quetzal (CDN equivalent) (CDN equivalent) (CDN equivalent)	December 31, 2022
		US Dollar Mexican Peso Guatemala Quetzal (CDN equivalent) (CDN equivalent) (CDN equivalent)
Cash Receivables Currentliabilities	$ 49,619 $ 3,836 $ 11,142 - 183,569 - (5,677) - (4,209)	$ 735,977 $ 8,141 $ 11,146 14,681 51,634 - (15,867) - (1,376)
	$ 43,942 $ 187,405 $ 6,933	$ 734,791 $ 59,775 $ 9,770

Based on the above net exposures at December 31, 2023, a 10% depreciation or appreciation of the above currencies against the Canadian dollar would result in approximately a $23,800 (2022: $80,400) increase or decrease in profit or loss, respectively.

Commodity Price Risk

The Company’s royalty revenue is derived from a royalty interest that is based on the extraction and sale of gold. Factors beyond the control of the Company may affect the marketability of gold discovered. Gold prices have historically fluctuated widely. Consequently, the economic viability of the Company’s royalty interest cannot be accurately predicted and may be adversely affected by fluctuations in gold prices. The Company has not engaged in any hedging activities. The Company is not exposed to commodity price risk as the Company has not earned any royalty revenue during the years ended December 31, 2023 and 2022.

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company does not have any borrowings. Interest rate risk is limited to potential decreases on the interest rate offered on cash held with chartered Canadian financial institutions. The Company considers this risk to be limited as it holds no assets or liabilities subject to variable rates of interest.

• 19 -

Equity Price Risk

Equity price risk is the uncertainty associated with the valuation of assets arising from changes in equity markets. The Company’s equity investments consisting of common shares and derivative investments consisting of share purchase warrants are exposed to significant equity price risk due to the potentially volatile and speculative nature of the businesses in which the investments are held. The Company’s equity investments are monitored by the Board with decisions on sale or exercise taken by Management. A 10% decrease in fair value of the shares and warrants would result in an approximate $101,000 (2022: $187,000) decrease in comprehensive income and shareholders’ equity.

b) 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 credit risk is primarily attributable to its cash and cash equivalents, equity investments, and receivables. The Company limits exposure to credit risk by maintaining its cash and cash equivalents with large financial institutions. The Company does not have cash and cash equivalents or equity investments that are invested in asset based commercial paper. For advances and other receivables, the Company estimates, on a continuing basis, the probable losses and provides a provision for losses based on the estimated realizable value.

c) Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s approach to managing liquidity risk is to provide reasonable assurance that it will have sufficient funds to meet liabilities when due. The Company manages its liquidity risk by forecasting cash flows required by operations and anticipated investing and financing activities.

Related Party Transactions

The Company had transactions during the years ended December 31, 2023 and 2022 with related parties who consisted of directors, officers and the following companies with common directors:

Related Party	Nature of Transactions
Mill Street Services Ltd. (“Mill Street”)	Management fees
Gold Group Management Inc. (“Gold Group”)	Shared general and administrative expenses
Volcanic	Investment and exploration support
Rackla	Investment and shared personnelexpenses

The Company incurred the following expenditures charged by non-key management officers and companies which have common directors with the Company during the years ended December 31, 2023 and 2022:

		Three	months ended			Year ended
			December 31,			December 31,
		2023	2022		2023	2022
General and administrative expenses:
Salaries and benefits	$	7,600	$ 3,600	$	24,627	$ 12,720
Exploration expenditures:
Salaries and benefits		4,506	4,492		17,859	17,224
	$	12,106	$ 8,092	$	42,486	$ 29,944

• 20 -

The Company reimburses Gold Group, a company controlled by Simon Ridgway, a Director of the Company, for shared administrative costs and other business-related expenses paid by Gold Group on behalf of the Company. During the years ended December 31, 2023 and 2022, the Company reimbursed Gold Group the following:

	Three	months ended		Year ended
		December 31,		December 31,
	2023	2022	2023	2022
General and administrative expenses:
Office and miscellaneous	$ 10,470	$ 11,089	$ 52,018	$ 37,743
Shareholder communications	15,536	3,768	26,851	14,238
Salaries and benefits	41,393	44,807	160,787	144,496
Transfer agent and regulatory fees	2,626	525	7,309	3,169
Travel and accommodation	1,505	3,154	24,714	11,514
	$ 71,530	$63,343	$ 271,679	$ 211,160
Exploration expenditures	$ -	$ 670	$ 4,062	$ 670

Gold Group salaries and benefits costs for the year ended December 31, 2023 include those for the Chief Financial Officer, Vice President Corporate Development, and Corporate Secretary (2022: includes those for the Chief Financial Officer and the Corporate Secretary).

During the year ended December 31, 2023, the Company charged $Nil (2022: $4,795) to Volcanic, a company which has a common director with the Company, for exploration costs incurred on behalf of Volcanic and relating to the option agreement between the two parties and Volcanic charged $38,830 (2022: $38,083) to the Company for shared exploration costs.

During the year ended December 31, 2023, the Company charged $Nil (2022: $27,832) to Rackla, a company which has three common directors with the Company, for shared exploration personnel costs.

Receivables include an amount of $Nil (2022: $7,007) owed from Rackla.

Prepaid expenses and deposits include an amount of $4,153 (2022: $5,850) paid to Gold Group for shared office and administrative services.

Long-term deposits include an amount of $60,000 (2022: $60,000) paid to Gold Group as a deposit on the shared office and administrative services agreement.

Accounts payable and accrued liabilities include $9,546 (2022: $17,927) payable to Gold Group for shared administrative costs, $7,792 (2022: $571) to Bruce Smith, the Chief Executive Officer of the Company, for management fees and expense reimbursement, and $9,594 (2022: $9,556) payable to Volcanic for shared exploration costs.

Key management compensation

Key management personnel are persons responsible for planning, directing and controlling the activities of an entity, and include certain directors and officers. Key management compensation comprises:

• 21 -

	Three	months ended		Year ended
		December 31,		December 31,
	2023	2022	2023	2022
Geological fees included in
exploration expenditures	$ 33,500	$ 39,000	$ 150,500	$ 156,000
Management fees	14,500	16,500	64,000	66,000
Salaries, benefits and fees*	17,950	10,726	70,889	32,610
Share-based payments –
fair value of stock options
granted and vested	-	-	99,891	-
Share-based payments – fair
value ofshares to beissued	-	23,750	-	46,875
	$65,950	$89,976	$385,280	$301,485

*Included in reimbursements to Gold Group

Key management compensation includes management and geological fees paid to Mill Street, a company controlled by Simon Ridgway, a Director of the Company.

During the year ended December 31, 2023, the Company issued 500,000 common shares with a value of $120,625 to the Chief Executive Officer of the Company pursuant to a shares for services agreement dated January 1, 2021.

Other Data

Additional information related to the Company is available for viewing at www.sedarplus.ca.

Share Position and Outstanding Warrants and Options

As at the date of this MD&A, the Company’s outstanding share position is 99,118,533 common shares and the following incentive stock options are outstanding:

Number of warrants		WARRANTS Exercise price Expiry date
11,376,425		$0.35 May28,2025
Number of options	STOCK OPTIONS Exercise price Expiry date
1,230,000 1,265,000 75,000 850,000 280,000 50,000 50,000 50,000 300,000 75,000 2,070,000 50,000 25,000	$0.15 October 18, 2026 $0.15 May 21, 2028 $0.15 November 4, 2028 $0.25 October 7, 2029 $0.15 March 15, 2030 $0.27 December 8, 2030 $0.34 February 10, 2031 $0.24 March 3, 2031 $0.34 October 25, 2031 $0.20 January 9, 2033 $0.18 June 6, 2033 $0.23 September 18, 2033 $0.15 March 26,2034
6,370,000

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Investment in Associate

Rackla

Rackla previously met the definition of an associate and was equity accounted for in the consolidated financial statements. During the 2022 fiscal year, Rackla no longer met the definition of an associate when its interest in Rackla was further diluted to a level significantly below 20% on December 22, 2022 when Rackla issued 12,615,000 common shares by way of private placements to different parties. Therefore, the Company’s investment in Rackla was reclassified as an equity investment. Upon discontinuing the use of the equity method, an investment, if a financial asset, is to be measured at fair value and the difference between the fair value and the carrying value of the investment recognized in profit or loss. The fair value of the investment in Rackla at the time of reclassification was $1,350,914 and its carrying cost was $1. As a result, a gain of $1,350,913 was recognized in the consolidated statement of income for the year ended December 31, 2022.

Accounting Policies and Basis of Presentation

The Company’s material accounting policies and future changes in accounting policies are presented in the audited consolidated financial statements for the year ended December 31, 2023.

Future Changes in Accounting Policies

The Company has reviewed upcoming policies and amendments and determined that none are expected to have an impact on the Company’s consolidated financial statements.

Risks and Uncertainties

Royalty revenue

The Company cannot predict future revenues from or operating results of mining activity. Management expects any future royalty revenues from the Tambor Project to fluctuate depending on the level of future production and the price of gold. The owner of the Tambor Project is not obligated to re-start or continue production from the Tambor Project and the Company will not be entitled to any compensation if this mining operation does not meet its forecasted gold production targets or if the mine operations are discontinued on a temporary or permanent basis. Risks that could negatively affect a mine’s operations include, but are not limited to economics, lack of financial capital, floods, fire, mechanical malfunctions, social unrest, expropriation, environmental regulations, and legal and/or political changes. The Tambor Project is currently subject to a suspension of operations imposed by the Supreme Court of Guatemala.

Competition

The Company faces competition from other capital providers, all of which compete with it for investment opportunities. These competitors may limit the Company’s opportunities to acquire interests in investments that are attractive to the Company. The Company may be required to invest otherwise than in accordance with its Investment Policy and strategy in order to meet its investment objectives. If the Company is required to invest other than in accordance with its Investment Policy and strategy, its ability to achieve its desired rates of return on its investments may be adversely affected.

Inability to dispose of illiquid securities

There is a possibility that the Company will be unable to dispose of illiquid securities held in its portfolio and if the Company is unable to dispose of some or all of its investments at the appropriate time, a positive return on such investment may not be realized.

Due diligence

The due diligence process undertaken by the Company in connection with investments that it makes or wishes to make may not reveal all relevant facts in connection with an investment. Before making investments, the Company will conduct due

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diligence investigations that it deems reasonable and appropriate based on the facts and circumstances applicable to each investment. The due diligence investigations that are carried out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful.

Mineral property exploration and mining

The business of mineral deposit exploration and extraction involves a high degree of risk. Few properties that are explored ultimately become producing mines. At present, none of the Company’s properties has a known commercial ore deposit. 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 and leases are in good standing; and obtaining permits for drilling and other exploration activities.

If the Company does not satisfactorily complete its contribution requirements to any joint ventures it may be a party to, the Company’s interest in a joint venture can be diluted to a point where all interest in the joint venture is forfeited.

Joint venture funding

The Company’s strategy includes seeking partners through joint ventures to fund exploration and project development. The main risk of this strategy is that funding partners may not be able to raise sufficient capital in order to satisfy exploration and other expenditure terms in a particular joint venture agreement. As a result, exploration and development of one or more of the Company’s property interests may be delayed depending on whether the Company can find another partner or has enough capital resources to fund the exploration and development on its own.

Commodity price

The Company is exposed to commodity price risk. Declines in the market price of gold, silver, base metals and other minerals may adversely affect the Company’s ability to raise capital or attract joint venture partners in order to fund its ongoing operations. Commodity price declines could also reduce the amount the Company would receive on the disposition of one of its mineral properties to a third party. The Company’s past royalty revenue was derived from a royalty interest that is based on the extraction and sale of gold. Factors beyond the control of the Company may affect the marketability of precious and base metals discovered or extracted. Metal prices have historically fluctuated widely. Consequently, the economic viability of the Company’s property and royalty interests cannot be accurately predicted and may be adversely affected by fluctuations in metal prices.

Financing and share price fluctuation

The Company had a limited source of operating cash flow in the form of royalty revenue from the Tambor property; however, that property is currently subject to suspension of operations. There is no assurance that additional funding from this or other sources will be available to the Company when needed for further exploration and development of its projects. Further exploration and development of one or more 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 or the value of the Company’s equity and derivative investments and corresponding effect on the Company’s financial position.

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Political, regulatory and currency

Some of the Company’s mineral property interests are located in emerging nations. Properties in emerging nations may be subject to a higher level of risk compared to developed countries. Operations, the status of mineral property rights, title to the properties and the recoverability of amounts shown for mineral properties in emerging nations can be affected by changing economic, regulatory and political situations. The Company’s equity financings are sourced in Canadian dollars but for the most part it incurs its exploration and property maintenance expenditures in US dollars, Guatemalan quetzals, and Mexican pesos. At this time there are no currency hedges in place. Therefore, a weakening of the Canadian dollar against the US dollar, Guatemalan quetzal, or Mexican peso could have an adverse impact on the amount of exploration conducted.

Insurance

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, earthquakes, and pandemics. 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.

Environmental and social

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. Social risks are fairly significant in some of the Company’s areas of operations. Violence, kidnapping, theft and other criminal activities could disrupt supply chains and discourage qualified individuals from being involved with the Company's operations.

Mineral Properties Expenditure Detail (see following page)

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Mineral Properties Expenditure Detail

CONSOLIDATED SCHEDULE OF EXPLORATION EXPENDITURES

For the year ended December 31, 2023

	Guatemala Mexico Other General Mineral General Mineral General Exploration Properties Exploration Properties Exploration Total
Administration Drilling Environmental Geochemistry Geological services Legal and accounting Licenses, rights and taxes Salaries and wages Travel and accommodation	$ 967 $ 8,707 $ 17,299 $ 11,127 $ - $ 38,100 - - - 345,714 - 345,714 - - - 60,926 - 60,926 - - 20,344 28,296 2,693 51,333 1,490 13,405 82,845 272,577 34,307 404,624 - 454 17,705 153,264 - 171,423 - 2,109 69,046 63,123 - 134,278 2,515 22,632 36,934 100,619 - 162,700 - 117 29,140 204,156 - 233,413
Expenditures recovered	4,972 47,424 273,313 1,239,802 37,000 1,602,511 - - - (30,367) - (30,367)
	$ 4,972 $ 47,424 $ 273,313 $ 1,209,435 $ 37,000 $ 1,572,144

CONSOLIDATED SCHEDULE OF EXPLORATION EXPENDITURES

For the year ended December 31, 2022

	Guatemala Mexico Other General Mineral General Mineral General Exploration Properties Exploration Properties Exploration Total
Exploration administration Geochemistry Geological services Legal and accounting Licenses, rights and taxes Salaries and wages Travel and accommodation	$ 1,015 $ 5,438 $ 5,699 $ 932 $ - $ 13,084 - - 72,963 - 8,592 81,555 10,127 37,812 136,350 88,372 70,205 342,866 1,655 - 21,625 30,701 - 53,981 - - 367 151,122 - 151,489 - 24,253 43,502 61,327 12,767 141,849 - 1,166 73,427 30,212 14,019 118,824
Expenditures recovered	12,797 68,669 353,933 362,666 105,583 903,648 - - - (171,508) - (171,508)
	$ 12,797 $ 68,669 $ 353,933 $ 191,158 $ 105,583 $ 732,140