Reyna Silver Corp. — Management Reports 2021

Apr 30, 2021

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REYNA SILVER CORP.

(An Exploration Stage Company)

Management Discussion and Analysis For the Year Ended December 31, 2020

Dated: April 30, 2021

PO Box 49130 2900 – 595 Burrard Street Vancouver, British Columbia, Canada V7X 1J5

INTRODUCTION

This is Management’s Discussion and Analysis (“MD&A”) for Reyna Silver Corp. (“Reyna Silver” or the “Company”) and has been prepared based on information known to management as of April 30, 2021.

The MD&A is intended to complement and supplement the Company’s consolidated financial statements, but it does not form part of those consolidated financial statements. The MD&A should be read in conjunction with the audited consolidated financial statements and the related notes for the years ended December 31, 2020 and 2019 which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). All dollar figures included in those financial statements and/or this MD&A are quoted in Canadian dollars unless otherwise specified.

FORWARD LOOKING STATEMENTS

Certain sections of this MD&A provide, or may appear to provide, a forward-looking orientation with respect to the Company’s activities and its future results. Consequently, certain statements contained in this MD&A constitute expressed or implied forward-looking statements. Terms including, but not limited to, “anticipate”, “estimate”, “believe” and “expect” may identify forward-looking statements. Forwardlooking statements, while they are based on the current knowledge and assumptions of the Company’s management, are subject to risks and uncertainties that could cause or contribute to the actual results being materially different than those expressed or implied. Readers are cautioned not to place undue reliance on any forward-looking statement that may be in this MD&A.

Forward looking statements that have been made in this MD&A include:

• Plans for exploration of the Company’s exploration and evaluation assets;

• Impairment of long-lived assets;

• The progress, potential and uncertainties of the Company’s exploration and evaluation assets in Mexico, USA (Nevada) and Canada (Quebec);

• References to future commodity prices;

• Budgets or estimates with respect to future activities;

• Estimates of how long the Company expects its working capital to last;

• Expectations regarding the ability to raise capital and to continue its exploration and development plans on its properties; and

• Management expectations of future activities and results.

ADDITIONAL INFORMATION

Financial statements, MD&A’s and additional information relevant to the Company and the Company’s activities can be found on SEDAR at www.sedar.com and/or on the Company’s website at www.reynasilver.com.

SUMMARY AND OUTLOOK

Reyna is a growth-oriented junior exploration and development company. The Company focuses on exploring for high-grade, district-scale silver deposits in Mexico and USA.

The environment for junior resource companies has been challenging for many months and it is anticipated that recovery of the sector may take many more months. We evaluate our projects on a regular basis using criteria that include political environment, relative cost of exploration, seasonality and type of mineral. As a result of our review, we may from time to time add or drop specific Mineral Properties.

On June 4, 2020, the Company completed the public listing via a reverse takeover transaction with Century Metals Inc. (the “Transaction” or “RTO”) by issuing 5,348,279 common shares.

As part of the Transaction, the Company also completed private placements by raising an aggregate of $6,597,606, resulting in the issuance of 32,988,030 units at $0.20, with each unit consisting of one common share and one-half of one share purchase warrant (for a total of 16,494,013 warrants) exercisable at $0.45 for 24 months expiring on June 3, 2022.

The Company paid an aggregate finders' fees consisting of (i) 428,961 common shares; (ii) 1,790,118 finders' warrants or advisor options (each entitling the holder to acquire one common share at $0.45 for 24 months expiring on June 3, 2022); (iii) 905,000 advisor options (each entitling the holder to acquire one common share at $0.20 for 24 months expiring on June 3, 2022); (iv) 7,000 finder’s warrants (each entitling the holder to acquire one unit at $0.20 for 24 months expiring on June 3, 2022);and (v) 114,450 compensation options (each entitling the holder to acquire one unit at $0.20 for 24 months expiring on June 3, 2022).

The Company issued 14,556,706 common shares to MAG Silver Corp. ("MAG Silver") in exchange for the preferred shares held by it in Reyna (equating to 19.9% of the outstanding common shares of the Company on closing of the Transaction).

The publicly listed company’s name has been changed to "Reyna Silver Corp." while Reyna concurrently changed its name to "Reyna Silver Mining Inc.".

On August 19, 2020, the Company completed a non-brokered private placement by issuing 11,300,000 units (“Unit”) at a price of $0.62 per Unit for gross proceeds of $7,006,000. Each Unit consists of one common share and one-half common share purchase warrant. Each warrant entitles the holder to purchase one additional common share for a 24-month period at a price of $0.90, expiring on August 19, 2022.

In connection with the private placement, the Company paid a total of $419,326 cash finder’s fee and issued 734,204 finder’s warrants, each of which is exercisable into one Unit at a price of $0.62 for a period of 24 months, expiring on August 19, 2022.

During the year ended December 31, 2020, the Company issued common shares pursuant to the exercise of 672,475 advisor options, 633,750 finder’s warrants and 3,796,242 warrants for cash proceeds of $2,224,872.

Subsequent to December 31, 2020, the Company issued 1,779,881 common shares pursuant to the exercised warrants, finder’s warrants and advisor options for cash proceeds of $758,071.

The gross proceeds of the financings are used for the Company’s working capital, general corporate expenses and to undertake further early stage exploration in certain Mexico and Nevada properties.

For the 2021 fiscal year, the Company continues to monitor its cash very closely and focuses on key objectives to improve shareholder value.

Additional Mineral Property information, including 2020 activity, can be found in Section 3 and more detailed Mineral Property information can be found on the Company’s website at www.reynasilver.com.

Management’s overall expectations for the Company are positive, due in part to the following factors:

• The Company focuses its portfolio of properties with potential for high-grade, district-scale silver deposits;

• The Company’s exploration team has an exceptional track record of discoveries; and

• The Company is well funded.

TABLE OF CONTENTS

1. Background ............................................................................................................................................. 5
2. Overview .................................................................................................................................................. 5
2(a) Company Mission and Focus ...................................................................................................... 5
2(b) Qualified Person .......................................................................................................................... 5
2(c) Description of Metal Markets ..................................................................................................... 5
2(d) Use of the terms “Mineral Resources” and “Mineral Reserves” ............................................ 5
3. Mineral Properties ................................................................................................................................... 5
3(a) Mexico .......................................................................................................................................... 6
i. Guigui Property ...................................................................................................................... 6
ii. Batopilas Property ................................................................................................................. 6
iii. La Chinche Property ........................................................................................................... 10
iv. La Reyna Property .............................................................................................................. 10
v. Matilde Property ................................................................................................................... 11
vi. El Durazno Property ............................................................................................................ 11
3(b) USA ............................................................................................................................................. 11
i. Medicine Springs Property (Nevada) ............................................................................... 11
3(c) Canada ........................................................................................................................................ 11
i. Trudeau Gold Property (Quebec) ..................................................................................... 11
4. Risks and Uncertainties ...................................................................................................................... 13
5. Impairment of Long-lived Assets ....................................................................................................... 14
6. Material Financial and Operations Information ................................................................................ 14
6(a) Selected Annual Financial Information ................................................................................... 14
6(b) Summary of Quarterly Results ................................................................................................ 15
6(c) Review of Operations and Financial Results ........................................................................... 15
6(d) Liquidity and Capital Resources .............................................................................................. 16
6(e) Disclosure of Outstanding Share Data ..................................................................................... 17
6(f) Commitment ............................................................................................................................... 18
6(g) Off-Balance Sheet Arrangements ............................................................................................. 18
6(h) Transactions with Related Parties ........................................................................................... 18
6(i) Financial Instruments ................................................................................................................ 20
6(j) Management of Capital Risk ..................................................................................................... 20
7. Events after the Reporting Period ....................................................................................................... 21
8. Policies and Controls ........................................................................................................................... 21
8(a) Significant Accounting Judgments and Estimates .................................................................. 21
9. Internal Control Over Financial Reporting ......................................................................................... 22
10. Information on the Officers and Board of Directors ........................................................................ 22

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1. Background

Reyna Silver was incorporated in British Columbia, Canada, on August 24, 2017 under the Business Corporations Act of British Columbia . The Company changed its name from “Trudeau Gold Inc.” to “Century Metals Inc.” on April 30, 2018 and began trading on TSX Venture Exchange (the “Exchange”) on June 17, 2019.

Reyna Silver Mining Inc. (“Reyna”) was incorporated under the Business Corporations Act (British Columbia) on June 19, 2018.

On June 3, 2020, the Company completed the acquisition of Reyna pursuant to an amalgamation agreement dated March 20, 2020. This acquisition constituted a reverse takeover (“RTO”). Upon completion of the RTO, the Company changed its name from Century Metals Inc. to Reyna Silver Corp. and began trading on the Exchange under the symbol “RSLV”. Historical information on the formation of the Company can be found on the Company’s website www.reynasilver.com or on SEDAR at www.sedar.com.

2. Overview

2(a) Company Mission and Focus

With an exceptional exploration team, the Company focuses its exploration work in a portfolio of properties with potential for high-grade, district-scale silver deposits.

2(b) Qualified Person

Dr. Peter Megaw, Ph.D., C.P.G., is the Company's Qualified Person, reviewing the technical aspects of exploration projects described herein and is responsible for the design and conduct of the exploration programs and the verification and quality assurance of analytical results. Dr. Megaw is not independent as he and/or companies with which he is affiliated hold Net Smelter Royalties on the Guigui and Batopilas Projects that predate Reyna Silver acquiring them.

2(c) Description of Metal Markets

Silver prices have remained above their long term averages, albeit with high levels of volatility.

2(d) Use of the terms “Mineral Resources” and “Mineral Reserves”

Any reference in this MD&A to Mineral Resources does not mean Mineral Reserve.

A Mineral Reserve is the economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a Preliminary Feasibility Study. This Study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified. A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.

Mineral Resources are sub-divided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories. An Indicated Mineral Resource has a higher level of confidence than an Inferred Mineral Resource but has a lower level of confidence than a Measured Mineral Resource.

3. Mineral Properties

The Company has properties in Mexico and also has an option to acquire 80% of the Medicine Springs property in Nevada, USA while holding a 100% interest in the Trudeau gold property in Quebec, Canada.

ADAMERA MINERALS CORP. Management’s Discussion & Analysis

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3(a) Mexico

i. Guigui Property

The Company acquired 100% interest of the Guigui Property pursuant to the Asset Purchase and Sale Agreement (the “Agreement”) with MAG Silver Corp. (“MAG Silver”) on June 29, 2018. The Guigui Property, consisting of 7 concessions (4,553.7034 hectares) is located in Chihuahua Mexico. The Guigui property is subject to a 2.5% net smelter royalty (“NSR”) payable to the underlying owner with a right of first refusal.

On November 24, 2020, the Company announced that it received drill permits from the Mexican Government for the Guigui Project in the state of Chihuahua, Mexico. The Guigui Project is located in the heart of the Santa Eulalia Mining District, home to Mexico’s largest Carbonate Replacement Deposit (CRD). The Company’s technical team spent 6 months preparing for the initial 10,000 metre drill program and received drilling permits in November 2020.

On December 9, 2020, the Company announced that drilling has started at Guigui. Targeting is based on a combination of geology, geochemistry, geophysics and hyperspectral satellite imagery analysis, with the initial holes targeting coincident anomalies in all of these. Reyna has drill permits covering much more of the Guigui project area than will be drilled under the 10,000 metre Phase I drilling budget; giving flexibility to follow results and room to expand without additional permitting. The map below shows the location of the first drill holes as well as the other permitted drill pads. The initial drilling program will consist of approximately 10,000 metres at an estimated cost of $1,800,000.

Figure 1. Historical and planned drilling at Guigui, including initial high priority targets. The red circle highlights the drilling zone for December 2020.

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ii. Batopilas Property

REYNA SILVER CORP. Management’s Discussion & Analysis

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The Company acquired 100% interest of the Batopilas Property pursuant to the Agreement with MAG Silver on June 29, 2018. The Batopilas Property, consisting of 10 concessions (1,169.7313 hectares) is located in Chihuahua Mexico.

MAG Silver retains certain participation rights to maintain MAG Silver’s percentage ownership interest in the Company. This right to participate shall survive until the earlier of (a) the date of which MAG Silver owns less than 10% of the Company’s common shares; and (b) the date that is two years following the date of conversion of MAG Silver’s preferred shares to common shares.

The Batopilas property is subject to a 4.5% NSR payable to the underlying owner with a right of first refusal.

On February 4, 2021, the Company announced high-grade silver and gold results from its late 2020 surface and trench sampling program, focused on the projection of the Pastrana-Roncesvalles-Cobriza vein zone into the northern and northeastern part of the Batopilas Project.

Highlights

• 258 trench, rock chip and soil samples were collected between October and December 2020 based on ASTER satellite image analysis and structural mapping in the previously underexplored north and northeastern parts of the district.

• Two new veins were found: One is a typical Batopilas-style native silver vein, the other is the first significant gold-rich vein encountered on the project to date.

• Notable high grade samples ranged from 305 to 42,302 g/t silver and 1.03 to 21.4 g/t gold.

• District-scale high-resolution Worldview III satellite hyperspectral imagery received subsequent to the sampling program shows distinctive alteration mineralogy coincides with the new and longknown structures with additional anomalies currently undergoing review and sampling.

• These results have been combined with historic data to define targets for drilling later in the year. Permits for this program are in progress.

REYNA SILVER CORP. Management’s Discussion & Analysis

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Table 1. Silver and Gold Highlights from Q4, 2020 Batopilas Sampling Program The full list of assays with location maps, detailed assays, and field photographs may be found on the website www.reynasilver.com.

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REYNA SILVER CORP. Management’s Discussion & Analysis

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Figure 1. Map of the Batopilas Property with the identified vein traces; Circled area represents the zone of the 2020 Exploration program at the project.

Figure 2. Geological Map of the Batopilas Project area and the sampling locations of the 2020 Exploration Program at Batopilas.

On-going work

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REYNA SILVER CORP. Management’s Discussion & Analysis

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iii. La Chinche Property

The Company entered into two agreements to acquire an 80% interest in the La Chinche Property.

On July 1, 2020, the Company entered into a mineral property option agreement with United Minerals Pty Limited and Minerales Unidos La Chinche S.A. de C.V. (“United Minerals”) to acquire 50% interest in the La Chinche property in exchange for 500,000 common shares and 11,500,000 warrants as follows:

Date/Period	Shares	Warrants
Upon receipt of the Exchange approval	250,000 (issued)	1,000,000 warrants exercisable for a period of 12 months at $0.74(issued)
January 1, 2021	None	3,000,000 warrants exercisable for a period of 12 months at $0.75 (issued subsequent toDecember31,2020)
July 1, 2021	None	3,500,000 warrants exercisable for a period of 12 months at $1.00
January 1, 2022	None	4,000,000 warrants exercisable for a period of 12 months at $1.25
July 1, 2022	250,000	None

On July 1, 2020, the Company entered into a mineral property option agreement with the underlying concession owner (the “Sellers”) to acquire an additional 30% interest in the La Chinche property by incurring the following:

• (i) Making a cash payment of US$42,000 on signing the agreement (paid);

• (ii) Undertaking a minimum of US$900,000 in work on the property within 24 months;

• (iii) Following the above work program, preparing a NI 43-101 technical report summarizing any mineral resources on the property (the “Report”); and

• (iv) Based on the mineral resources set out in the Report, paying an additional amount to the Sellers, calculated as a minimum of US$1,000,000 (for up to 1,500,000 tonnes of resource based on 12% Zn equivalent cut-off) plus an additional US$250,000 for every 500,000 tonnes of resource at comparable grade contained within the property over and above 1,500,000 tonnes.

iv. La Reyna Property

On September 29, 2020, the Company entered into a mineral property option agreement with the underlying concession owner (the “Sellers”) to acquire a 100% interest in the La Reyna property by incurring the following:

• (i) US$30,000 - on signing (paid);

• (ii) US$45,000 - six months from signing (paid subsequent to December 31, 2020); (iii) US$75,000 - 12 months from signing;

• (iv) US$75,000 - 18 months from signing;

• (v) US$120,000 - 24 months from signing;

• (vi) US$120,000 - 30 months from signing;

• (vii) US$150,000 - 36 months from signing;

• (viii) US$685,000 - 48 months from signing.

The La Reyna Property is subject to a 2.5% royalty of which the Company can pay US$500,000 for each 0.5%.

REYNA SILVER CORP. Management’s Discussion & Analysis

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v. Matilde Property

The Company acquired the Matilde property for $7,476 by staking in 2018. The Matilde property is located in Sonora Mexico and consists of 1,369 hectares.

vi. El Durazno Property

The Company acquired the El Durazno property for $9,601 by staking in 2019. The El Durazno property is located in Sonora Mexico and consists of 24,630 hectares.

3(b) USA

i. Medicine Springs Property (Nevada)

On September 24, 2020, the Company entered into a property option agreement with Northern Lights Resources Corp. (“Northern Lights”), subject to the completion of due diligence, to acquire an 80% interest in the Medicine Springs Property, located in Elko county, Nevada.

• (i) To acquire the 75% interest in the Medicine Springs Property, the Company must assume and satisfy certain of Northern Lights’ obligations under the underlying option agreement as to payment of US$875,000 of cash consideration and incurring of at least US$2,439,065 of Expenditures on the property (collectively the “Option Price”), on or before December 31, 2023 (provided that all cash payments and Expenditures required to be paid or undertaken in phases 1, 2 and 3 under the underlying option agreement are to so paid or undertaken by December 31, 2021).

• (ii) Northern Lights further grants to the Company the option to acquire an additional 5% interest in the property for US$1,000,000.

On November 4, 2020, the Company announced that the Company completed its due diligence and closed the option agreement. A finder's fee of $25,000 will be paid, plus 5% of any future cash payments, to the owner of the Medicine Spring claims.

NSR ranging from 0.5% to 2% is payable to the underlying owners of certain claims.

3(c) Canada

i. Trudeau Gold Property (Quebec)

The Company holds a 100% interest in the Trudeau Gold Property consisting of three non-contiguous claim groups surrounding Duparquet Lake in the province of Quebec, namely Fabie, Trudeau and Eastchester.

On March 8, 2021, the Company sold the Trudeau Gold property in Quebec to Beyond Minerals Ltd. (“Beyond Minerals”). Beyond Minerals is a non-reporting, Manitoba based company. The sale price received by the Company is 1,000,000 shares of Beyond Minerals and a 1.0% NSR.

REYNA SILVER CORP. Management’s Discussion & Analysis

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Exploration and evaluation assets Acquisition costs As of January 1, 2020 Addition during the year As of December 31, 2020 Mineral exploration expenses for the year ended December 31, 2020 Consulting and reporting Claim staking Mineral taxes Drilling Geology and exploration Geophysics Other property related expenses Cumulative mineral exploration expenses up to December 31, 2020 Consulting and reporting Claim staking Mineral taxes Drilling Geology and exploration Geophysics Other property related expenses	Mexico Canada USA Batopilas Guigui La Chinche La Reyna Others Trudeau Medicine Spring Total
	469,571 $ 1,828,017 $ - $ - $ 17,077 $ - $ - $ 2,314,665 $ 127,691 497,098 1,069,246 42,543 - 813,596 33,831 2,584,005
	597,262 $ 2,325,115 $ 1,069,246 $ 42,543 $ 17,077 $ 813,596 $ 33,831 $ 4,898,670 $
	6,390 $ 57,342 $ 499 $ - $ - $ 4,500 $ - $ 68,731 $ - - - - - - 46,282 46,282 34,216 154,893 3,648 7,479 - - 90,492 290,728 1,324 3,624 103 - - - - 5,051 166,777 472,236 12,071 8,232 - - 39,205 698,521 - 5,717 - - - - - 5,717 17,981 49,409 1,404 - - - 8,333 77,127
	226,688 $ 743,221 $ 17,725 $ 15,711 $ - $ 4,500 $ 184,312 $ 1,192,157 $
	6,390 $ 258,802 $ 499 $ - $ - $ 4,500 $ - $ 270,191 $ - - - - - - 46,282 46,282 79,606 329,818 3,648 7,479 - - 90,492 511,043 1,324 3,624 103 - - - - 5,051 166,777 493,493 12,071 8,232 - - 39,205 719,778 - 5,717 - - - - - 5,717 17,981 90,377 1,404 - - - 8,333 118,095
	272,078 $ 1,181,831 $ 17,725 $ 15,711 $ - $ 4,500 $ 184,312 $ 1,676,157 $

ADAMERA MINERALS CORP. Management’s Discussion & Analysis

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4. Risks and Uncertainties

The Company is engaged in the exploration for mineral deposits. These activities involve significant risks which even with careful evaluation, experience and knowledge may not, in some cases, be eliminated. The Company’s success depends on a number of factors, many of which are beyond its control. The primary risk factors affecting the Company include inherent risks in the mining industry, metal price fluctuations and operating in foreign countries and currencies.

Inherent risks within the mining industry

The commercial viability of any mineral deposit depends on many factors, not all of which are within the control of management. Some of the factors that will affect the financial viability of a given mineral deposit include its size, grade and proximity to infrastructure. Government regulation, taxes, royalties, land tenure and use, environmental protection and reclamation and closure obligations could also have a profound impact on the economic viability of a mineral deposit.

Mining activities also involve risks such as unexpected or unusual geological operating conditions, floods, fires, earthquakes, other natural or environmental occurrences and political and social instability. It is not always possible to obtain insurance against all such risks and the Company may decide not to insure against certain risks as a result of high premiums or for other reasons. The Company does not currently maintain insurance against political or environmental risks. Should any uninsured liabilities arise, they could result in increased costs, reductions in profitability, and a decline in the value of the Company’s securities.

There is no assurance at this time that the Company’s current mineral properties will be economically viable for development and production.

Prices for silver and other commodities

Metals prices are subject to volatile price fluctuations and have a direct impact on the commercial viability of the Company’s exploration properties. Price volatility results from a variety of factors, including global consumption and demand for metals, international economic and political trends, fluctuations in the US dollar and other currencies, interest rates, and inflation. The Company has not hedged any of its potential future silver or other metal sales. The Company closely monitors silver prices as well as other metal prices to determine the appropriate course of action to be taken by the Company.

Foreign currency risks

The Company uses the Canadian dollar as its measurement and reporting currency, and therefore fluctuations in exchange rates between the Canadian dollar and other currencies may affect the results of operations and financial position of the Company. The Company does not currently have any foreign currency or commercial risk hedges in place.

The Company raises the majority of its equity financings in Canadian dollars while foreign operations are predominately conducted in Mexican pesos and US dollars. Fluctuations in the exchange rates between the Canadian dollar, US dollar and Mexican pesos may impact the Company’s financial condition.

Risks Associated with Foreign Operations

The Company’s investments in foreign countries such as Mexico and USA carry certain risks associated with different political, business, social and economic environments. The Company is currently evaluating silver and other commodities in Mexico and USA, but will undertake new investments only when it is satisfied that the risks and uncertainties of operating in different cultural, economic and political environments are manageable and reasonable relative to the expected benefits.

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Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of certain claims as well as the potential for problems arising from the frequently ambiguous conveyance and regulatory characteristics of property rights in certain foreign countries. Access to mineral properties also involves certain inherent risks due to the change in local ranchers and land owners.

Future government, political, legal or regulatory changes in the foreign jurisdictions in which the Company currently operates or plans to operate could affect many aspects of the Company’s business, including title to properties and assets, environmental protection requirements, labor relations, taxation, currency convertibility, repatriation of profits or capital, the ability to import necessary materials or services, or the ability to export produced materials.

The exploration of mineral resources in Mexico and USA is subject to a comprehensive review, approval and permitting process that involves various federal, state and local agencies. There can be no assurance given that the required approvals and permits for a mining project, if technically and economically warranted, on the Company’s claims can be obtained in a timely or cost-effective manner. The Mexican or US government may enact a law requiring royalties on minerals produced from federal lands, including unpatented claims.

Competition

The Company competes with larger and better-financed companies for exploration personnel, contractors and equipment. Increased exploration activity has increased demand for equipment and services. There can be no assurance that the Company can obtain required equipment and services in a timely or costeffective manner.

Financing

All of the Company’s short- to medium-term operating and exploration cash flow have been derived from external financing. Should changes in equity-market conditions prevent the Company from obtaining additional external financing in the future, the Company will review its exploration-property holdings and programs to prioritize project expenditures based on funding availability.

5. Impairment of Long-lived Assets

The Company completed an impairment analysis as at December 31, 2020, which considered the indicators of impairment in accordance with IAS 36, “Impairment of Assets”. Management concluded that no further impairment charges were required because:

• there have been no significant changes in the legal factors or climate that affects the value of the properties;

• all property rights remain in good standing;

• there have been no significant changes in the projections for the properties;

• exploration results are generally positive; and

• the Company intends to continue its exploration and development plans on its properties.

6. Material Financial and Operations Information

6(a) Selected Annual Financial Information

The following selected annual financial information has been derived from the last three audited financial statements of the Company, which have been prepared in accordance with IFRS. All dollar amounts are expressed in Canadian dollars.

REYNA SILVER CORP. Management’s Discussion & Analysis

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	2020	2019	2018
Total revenues	- $	- $	- $
Expenses	5,676,345 $	510,380 $	185,585 $
Loss for theyear	5,661,976 $	510,380 $	185,585 $
Basic and diluted lossper share	0.09 $	0.04 $	0.02 $
Total assets	16,569,897 $	3,462,442 $	2,422,024 $
Total long-term financial liabilities	- $	- $	- $
Cash dividend declared -per share	N/A	N/A	N/A

6(b) Summary of Quarterly Results

The following is a summary of the Company’s financial results for the last eight quarters:

	Three months ended	Three months ended	Three months ended	Three months ended
	March 31,2019	June 30,2019	September 30,2019	December 31,2019
Total revenues	- $	- $	- $	- $
Loss before other items	50,860 $	67,614 $	163,507 $	228,399 $
Net loss	50,860 $	67,614 $	163,507 $	228,399 $
Lossper share	0.00 $	0.01 $	0.01 $	0.01 $
	Three months ended
	March 31,2020	June 30,2020	September 30,2020	December 31,2020
Total revenues	- $	- $	- $	- $
Loss before other items	584,537 $	962,327 $	858,816 $	3,270,665 $
Net loss	584,537 $	961,862 $	849,758 $	3,265,819 $
Lossper share	0.02 $	0.02 $	0.01 $	0.04 $

6(c) Review of Operations and Financial Results

For the three months ended December 31, 2020 compared with the three months ended December 31, 2019:

The Company’s exploration expenses amounted to $662,212 (2019 - $177,551), an increase of $484,661 as a result of the Company being more active in its exploration work on its properties in Mexico and USA, including Guigui, Batopilas, La Reyna and Medicine Spring properties.

Excluding the share-based payment of $1,180,960 (2019 - $Nil) and foreign exchange of $321,496 (2019 - $20,342), the Company’s administrative expenses amounted to $1,105,997 (2019 – $30,506), an increase of $1,075,491 mainly due to: (a) consulting fees of $175,185 (2019 - $Nil); (b) management and director fees of $525,731 (2019 - $Nil) and (c) marketing and shareholders communication of $247,092 (2019 - $124) as the Company completed the RTO and was active in promoting its properties to its shareholders and potential investors.

During the three months ended December 31, 2020, the Company recorded a net loss of $3,265,819 (loss per share - $0.04) compared to a loss of $228,399 (loss per share - $0.01) for the three months ended December 31, 2019.

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For the year ended December 31, 2020 compared with the year ended December 31, 2019:

The Company’s exploration expenses amounted to $1,192,157 (2019 - $349,368), an increase of $842,789 as a result of the Company being more active in its exploration work on its properties in Mexico and USA, including Guigui, Batopilas, La Reyna and Medicine Spring properties.

Excluding the share-based payment of $1,228,305 (2019 - $Nil) and foreign exchange of $447,531 (2019 - $13,248), the Company’s administrative expenses amounted to $2,808,352 (2019 – $147,764), an increase of $2,660,588 mainly due to: (a) consulting fees of $765,719 (2019 - $59,800); (b) management and director fees of $777,981 (2019 - $Nil); (c) marketing and shareholders communication of $605,496 (2019 - $162); (d) legal of $390,955 (2019 - $17,071) and (e) accounting and audit of $127,942 (2019 - $24,885) as the Company completed the RTO and was active in promoting its properties to its shareholders and potential investors.

During the year ended December 31, 2020, the Company recorded a net loss of $5,661,976 (loss per share - $0.09) compared to a loss of $510,380 (loss per share - $0.04) for the year ended December 31, 2019.

6(d) Liquidity and Capital Resources

As at December 31, 2020, the Company had a working capital of $11,074,505 (December 31, 2019 – $855,989). With respect to working capital, $11,294,878 was held in cash and cash equivalents (December 31, 2019 –- $1,104,553). The increase in cash and cash equivalents was mainly due to (a) the net proceeds of $14,244,126 from the private placements that the Company did in conjunction with the RTO and in August 2020 as well as the exercised warrants, options and finder’s warrants and (b) $895,734 cash acquired from the RTO; while being offset by (c) operating expenses including exploration expenses totaling $4,027,519; (d) exploration and evaluation assets expenditures of $98,789; (e) due to related parties of $595,413; and (f) repayment of shareholders’ loans of $227,814.

The Company also received funding from the exercise of warrants, finders’ warrants and advisor options subsequent to December 31, 2020 (see “Summary and Outlook” section).

During the year ended December 31, 2020, the Company issued 166,668 common shares with a fair value of $16,667 to its consultants for geological consulting services and issued 284,760 shares at the price of $1.05 per share toward partial annual compensation to five directors and officers.

During the year ended December 31, 2020, 1,600,000 options were granted to its directors with an exercise price of $1.13 expiring on October 13, 2025.

Subsequent to December 31, 2020, the Company granted 502,400 options to its consultants with an exercise price of $1.03 expiring on January 12, 2026 and 130,000 options to its consultant with an exercise price of $1.00 expiring on March 30, 2024.

On April 30, 2021, the Company issued 699,666 common shares toward partial annual compensation to seven advisors and consultants of the Company. The share compensation was based on a 20-day volume weighted average price of $1.00 per share.

Management estimates that the current cash position and future cash flows from the exercise of warrants, finder’s warrants and options will be sufficient for the Company to carry out its anticipated exploration and operating plans through fiscal 2021.

There may be circumstances where, for sound business reasons, a reallocation of funds may be necessary in order for the Company to achieve its stated business objectives.

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In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and any related adverse public health developments, has adversely affected workforces, economies, and financial markets globally, potentially leading to an economic downturn. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or ability to raise funds.

6(e) Disclosure of Outstanding Share Data

Common Shares

Authorized: unlimited number of common shares without par value and an unlimited number of preferred shares issuable in series.

	Issued and Outstanding December 31, 2020 April30, 2020	Issued and Outstanding December 31, 2020 April30, 2020
Commonshares	90,086,537	92,566,084

Stock option transactions and the number of stock options, including the compensation options and advisor options, for the year ended December 31, 2020 are summarized as follows:

		Exercise	December 31,		Expired /	December 31,
Expiry date		price	2019 Granted	Exercised	Cancelled	2020
June 3, 2022	(i)	$ 0.20	- 905,000	(330,000)		- 575,000
June 3, 2022		$ 0.45	- 366,535	(276,850)		- 89,685
September 13, 2029	(ii)	$ 0.57	- 265,625	(65,625)		- 200,000
October 13, 2025		$ 1.13	- 1,600,000	-		- 1,600,000
Options outstanding			- 3,137,160	(672,475)		- 2,464,685
Options exercisable			- 3,137,160	-		- 2,464,685
Weighted average exercise		price	$ - $ 0.73	$ 0.34	$	- $ 0.84

Subsequent to December 31, 2020: (i) 200,000 options were exercised.

(ii) 12,500 options were exercised.

The continuity of warrants for the year ended December 31, 2020 is as follows: Exir date Exercise rice December 31, 2019 Issued Exercised Exired December 31, 2020	The continuity of warrants for the year ended December 31, 2020 is as follows: Exir date Exercise rice December 31, 2019 Issued Exercised Exired December 31, 2020
	December 31, 2020
Exir date Exercise rice December 31, 2019 Issued Exercised Exired
py p p August 17, 2021 (a) $ 0.74 - 1,000,000 - - 1,000,000 June 3, 2022 (i) $ 0.45 - 16,554,738 (3,721,242) - 12,833,496 August 19, 2022 (ii) $ 0.90 - 5,650,000 (75,000) - 5,575,000 Warrants outstanding - 23,204,738 (3,796,242) - 19,408,496 $ - $ 0.57 $ 0.46 $ - $ 0.59 Weighted average exercise price

• (a) These warrants were granted pursuant to the mineral property option agreement.

Subsequent to December 31, 2020:

• (i) 1,497,743 warrants were exercised.

(ii) 12,500 warrants were exercised.

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The continuity of finder’s warrants for the year ended December 31, 2020 is as follows:

		Exercise	December 31,	December 31,				December 31,	December 31,
Expiry date		price		2019 Issued	Exercised	Expired			2020
June 3, 2022	(a)	$ 0.20		- 114,450	(114,450)		-		-
June 3, 2022	(a)	$ 0.20		- 7,000	(7,000)		-		-
June 3, 2022	(i)	$ 0.45		- 1,423,583	(512,300)		-		911,283
August 19, 2022	(b)	$ 0.62		- 734,204	-		-		734,204
Finders warrants outstanding				- 2,279,237	(633,750)		-		1,645,487
Weighted average	exercise	price	$	- $ 0.49	$ 0.40	$	-	$	0.53

(a) Each compensation warrant is exercised into one common share and one-half of a warrant, where each full warrant is then exercisable into one common share at $0.45 for a period of 2 years.

(b) Each compensation warrant is exercised into one common share and one-half of a warrant, where each full warrant is then exercisable into one common share at $0.62 for a period of 2 years.

Subsequent to December 31, 2020: (i) 57,138 finder’s warrants were exercised.

The remaining outstanding stock options finder’s warrants and warrants, if all exercised, would increase the Company’s cash by $16,614,616. However, if the strike prices of the options, finder’s warrants and warrants are greater than the fair market price, this may influence whether options, finder’s warrants and warrants that expire in the near future will be exercised.

As at the date of this MD&A, there were 92,566,084 common shares issued and outstanding and 118,304,373 common shares outstanding on a diluted basis.

6(f) Commitment

The Company is committed to issue a total of 2,502,666 common shares to its directors, officers and consultants over the next 24 months for consulting and geological consulting services.

6(g) Off-Balance Sheet Arrangements

None.

6(h) Transactions with Related Parties

The aggregate value of transactions and outstanding balances relating to key management personnel and entities over which they have control or significant influence were as follows:

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For the year ended December 31, 2020

Forthe yearendedDecember31,2020	Forthe yearendedDecember31,2020	Forthe yearendedDecember31,2020	Forthe yearendedDecember31,2020	Forthe yearendedDecember31,2020
	Cash payments	Shares issued(8)	Share-based payments	Total
Jorge Ramiro Monroy(1) Chief Executive Officer, Director	313,000 $	100,000 $	295,240 $	708,240 $
Alex Tsang(2) Former Chief Financial Officer	2,000 $	- $	8,355 $	10,355 $
Sandy Chim(3) Former director	- $	- $	8,355 $	8,355 $
Peter Jones(4) Director	12,500 $	32,999 $	229,785 $	275,284 $
Michael Wood(5) Chief Financial Officer, Director	136,000 $	100,000 $	295,240 $	531,240 $
Alex Langer(6) Director	85,000 $	32,999 $	184,525 $	302,524 $
Evaristo Trevino(7) Director	3,750 $	32,999 $	184,525 $	221,274 $
TOTAL:	552,250 $	298,998 $	1,206,025 $	2,057,273 $

• (1) Jorge Ramiro Monroy is paid as the Chief Executive Officer through payments to Emerging Capital Markets (see table below).

• (2) Alex Tsang became the Chief Financial Officer of the Company effective June 3, 2020 and resigned effective July 6, 2020.

• (3) Sandy Chim became the director of the Company effective June 3, 2020 and resigned effective September 21, 2020.

• (4) Peter Jones became the director of the Company effective June 3, 2020.

• (5) Michael Wood became the director of the Company effective June 3, 2020 and the Chief Financial Officer effective July 6, 2020. He is paid as the Chief Financial Officer through payments to Reyna Silver Hong Kong Limited (see table below).

• (6) Alex Langer’s director fee is paid to his company Andros Capital Corp. (see table below).

• (7) Evaristo Trevino became the director the Company effective September 21, 2020.

• (8) 284,760 shares were issued for services provided at a fair value of $1.05 per share for a total of $298,998.

• (9) 166,000 shares were issued for services provided at a fair value of $0.10 per share for a total of $16,600.

Related party transactions and balances:

			For the	For the			As at		As at
			years ended December		31	December 31,		December 31,
Amounts in due to relatedparties:	Services for:		2020		2019		2020		2019
Emerging Capital Markets(1)	Management fee	$	313,000	$	-	$	-	$	-
Reyna Silver Hong Kong Limited(2)	Management fee		136,000		-		-		-
	Management
	fee and		85,000		-		-		-
Andros Capital Corp.(3)	consultingfee
Total		$	534,000	$	-	$	-	$	-

(1) Jorge Ramiro Monroy is the managing director of this private company.

(2) Michael Wood and Jorge Ramiro Monroy are the sole directors of this private company.

• (3) Alex Langer is the owner of this private company.

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6(i) Financial Instruments

The Company’s financial instruments consist of cash and cash equivalents, receivables (excluding sales tax), trade and other payables and shareholders’ loans that approximate their carrying values.

Credit Risk

Credit risk is the risk that one party to a financial instrument will fail to fulfil an obligation causing the other party to incur a financial loss. The Company is exposed to credit risks arising from its cash holdings and receivables. The Company manages credit risk by placing cash with major Canadian and Mexican financial institutions. Management believes that credit risk related to these amounts is low.

Liquidity Risk

Liquidity risk is the risk that the Company will not have sufficient funds to meet its financial obligations when they are due. To manage liquidity risk, the Company reviews additional sources of capital to continue its operations and discharge its commitments as they become due.

Historically, the Company’s sole source of funding has been the issuance of equity securities for cash and cash equivalents, primarily through private placements. The Company access to financing is always uncertain. There can be no assurance of continued access to significant equity funding. Liquidity risk is assessed as high.

Interest Rate Risk

Interest rate risk is the risk that any investment income or investment value will change due to a change in the level of interest rates. The Company’s exposure to interest rate risk is minimal.

Foreign Exchange Risk

The Company’s property interests in Mexico and USA make it subject to foreign currency fluctuations and inflationary pressures which may adversely affect the Company’s financial position, results of operations and cash flows. The Company is affected by changes in exchange rates between the Canadian dollar and the Mexican pesos as well as between the Canadian dollar and the US dollar. The Company does not invest in foreign currency contracts to mitigate the risks. The Company has net monetary liabilities of approximately 24,088,000 Mexican pesos. A 1% change in the absolute rate of exchange in Mexican pesos and US dollars would affect its net loss by approximately $12,200.

Commodity Risk

Commodity risk is the risk on financial performance due to fluctuations in the prices of commodities. The Company’s ability to raise capital to fund exploration or development activities is subject to risks associated with fluctuations in the market price of commodities for which it is exploring. The Company closely monitors commodity prices to determine the appropriate course of action to be taken.

Management of industry risk

The Company is engaged primarily in the mineral exploration field and manages related industry risk issues directly. The Company is potentially at risk for environmental reclamation and fluctuations in commodity based market prices associated with resource property interests. Management is of the opinion that the Company addresses environmental risk and compliance in accordance with industry standards and specific project environmental requirements.

6(j) Management of Capital Risk

The Company manages its cash and cash equivalents, common shares, warrants, finder’s warrants and share purchase options as capital. The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

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The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets or adjust the amount of cash and cash equivalents held.

In order to maximize ongoing operating efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its short-term excess cash in highly liquid short-term interestbearing investments with maturities of 90 days or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations.

The Company expects its current capital resources will be sufficient to carry out its exploration or operations in the near term.

7. Events after the Reporting Period

None other than disclosed already in other sections.

8. Policies and Controls

8(a) Significant Accounting Judgments and Estimates

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

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

Critical judgments

The following are critical judgments that management has made in the process of applying accounting policies and that have the most significant effect on the amounts recognized in the consolidated financial statements:

• The analysis of the functional currency for each entity of the Company. In concluding that the Canadian dollar is the functional currency of the parent, management considered both the funds from financing activities and the currency in which goods and services are paid. The functional currency of its subsidiaries in Mexico is the Mexican peso and the functional currency of its subsidiary in USA is the US dollar. The Company chooses to report in Canadian dollar as the presentation currency;

• The assessment of indications of impairment of each mineral property and related determination of the net realized value and write-down of those properties where applicable;

• The determination of the value of the common shares issued pursuant to the acquisition of the exploration and evaluation assets; and

• The determination that the Company will continue as a going concern for the next year.

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9. Internal Control Over Financial Reporting

Changes in Internal Control over Financial Reporting (“ICFR”)

In connection with National Instrument 52-109, Certification of Disclosure in Issuer’s Annual and Interim Filings (“NI 52-109”) adopted in December 2008 by each of the securities commissions across Canada, the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”) of the Company will file a Venture Issuer Basic Certificate with respect to financial information contained in the unaudited interim financial statements and the audited annual financial statements and respective accompanying Management’s Discussion and Analysis. The Venture Issue Basic Certification does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI52-109.

Disclosure Controls and Procedures

The Company’s CEO and CFO are responsible for establishing and maintaining the Company’s disclosure controls and procedures. Management, including the CEO and CFO, have evaluated the procedures of the Company and have concluded that they provide reasonable assurance that material information is gathered and reported to senior management in a manner appropriate to ensure that material information required to be disclosed in reports filed or submitted by the Company is recorded, processed, summarized and reported within the appropriate time periods.

While management believes that the Company’s disclosure controls and procedures provide reasonable assurance, they do not expect that the controls and procedures can prevent all errors, mistakes, or fraud. A control system, no matter how well conceived or operated, can only provide reasonable, not absolute, assurance that the objectives of the control system are met.

10. Information on the Officers and Board of Directors

Directors:

Peter Jones, Chairman Jorge Ramiro Monroy Michael Wood Alexander Langer Evaristo Trevino Berlanga

Audit Committee members:

Evaristo Trevino Berlanga, Peter Jones and Alexander Langer

Management:

Jorge Ramiro Monroy – Chief Executive Officer Michael Wood – Chief Financial Officer Ariel G. Navarro Herrera, MSc. – Vice President of Exploration

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