Riley Gold Corp. — Management Reports 2021

Nov 25, 2021

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MANAGEMENT DISCUSSION AND ANALYSIS FOR THE PERIOD ENDED SEPTEMBER 30, 2021

TABLE OF CONTENTS

Background .................................................................................................................................................................... 2 Description of Business .................................................................................................................................................. 2 Highlights ....................................................................................................................................................................... 2 Results of Operations for the Three Months Ended September 30, 2021 ...................................................................... 3 Results of Operations for the Nine Months Ended September 30, 2021 ........................................................................ 3 Liquidity, Cash Flows and Capital Resources ................................................................................................................ 3 Annual Financial Information .......................................................................................................................................... 4 Quarterly Financial Information ...................................................................................................................................... 4 Evaluation and Exploration Assets: ................................................................................................................................ 5 Related Party Disclosures .............................................................................................................................................. 8 Off-Balance Sheet Arrangements .................................................................................................................................. 8 Commitments ................................................................................................................................................................. 8 Conflicts of Interest ........................................................................................................................................................ 8 Outstanding Share Data ................................................................................................................................................. 8 Industry Trends .............................................................................................................................................................. 9 COVID-19 .................................................................................................................................................................... 10 Critical Accounting Estimates ....................................................................................................................................... 10 Risks and Uncertainties ............................................................................................................................................... 10 Corporate Governance ................................................................................................................................................. 12 Cautionary Statement .................................................................................................................................................. 12 Other Information ......................................................................................................................................................... 13

Background

Riley Gold Corp. (the “Company” or “Riley”) provides this Management Discussion and Analysis (“MD&A”) of financial position and results of operations as of November 24, 2021. This MD&A should be read in conjunction with the unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2021 and the notes thereto, as well as the audited consolidated financial statements for the year ended December 31, 2020 and 2019, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). Except as otherwise disclosed, all dollar figures included therein and in the following MD&A are quoted in Canadian dollars. The Company has prepared this MD&A following the requirements of National Instrument 51-102, Continuous Disclosure Obligations.

Description of Business

Riley was incorporated under the Business Corporations Act (British Columbia) on June 3, 2011. On September 29, 2020, the Company changed its name from Riley Resources Corp. to Riley Gold Corp. The Company’s office is located at Suite 2390 - 1055 West Hastings Street, Vancouver, British Columbia, V6E 2E9. The Company’s common shares on the TSX Venture Exchange (“TSXV”, or the “Exchange”) under the trading symbol RLYG and on the OTCQB Venture Market (“OTCQB”) under the symbol RLYGF.

The Company is a precious metals exploration company engaged in the acquisition and exploration of mineral properties located in the state of Nevada, USA. To date, no mineral development projects have been completed and no commercial development or production has commenced. Based on the information available to date, the Company has not yet determined whether its mineral property contains economically recoverable reserves. The recoverability of the amounts shown for exploration and evaluation costs is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to successfully complete their exploration and development programs and ultimately upon future profitable production.

Highlights

• On October 20, 2021, the Company announced that it has identified two newly discovered prospective zones at its Tokop Gold Property. Soil geochemistry and mapping programs are underway on both newly discovered prospective areas.

• On August 23, 2021, the Company completed an oversubscribed non-brokered private placement of up to 6,500,000 units at $0.40 per unit for total gross proceeds of $2,600,000.

• On June 28, 2021, the Company announced initial high-grade gold drill results and a new surface rock sample that returned 71.73 grams per tonne from its Tokop Gold Property.

• On May 19, 2021, the Company announced that it has significantly increased its land holdings near and adjacent to the Pipeline West/Clipper Property, located 80 kilometers southwest of Elko, Nevada. This strategic acquisition includes two claim blocks totaling approximately 3.25 square kilometers (1.26 square miles) between the already well-positioned Pipeline West/Clipper Property and the Nevada Gold Mines joint venture (operated by Barrick and Newmont) boundary, just west of the Gold Acres and Pipeline deposits within the Cortez complex portion of the Battle Mountain-Eureka Trend.

• On April 15, 2021, the Company announced that its common shares have been made eligible for book-entry and depository services of the Depository Trust Company, to facilitate electronic clearing and settlement of transfers of its common shares in the United States.

• On April 8, 2021, the Company announced additional high-grade gold and silver samples from the systematic sampling and exploration program at its Tokop Gold Property.

• On March 31, 2021, the Company announced the formation of a technical advisory committee (the "Technical Advisory Committee”) to provide objective advice and to consult with the Company on their respective areas of technical experience relative to its Nevada-based exploration projects. In conjunction with the formation of the Technical Advisory Committee, the Company appointed Mr. Dean T. (“Ted”) Wilton as its first member.

• On March 8, 2021, the Company announced the appointment of Richard DeLong, P.Geo of Reno, Nevada to the Board of Directors.

• On March 2, 2021, the Company announced that it qualified for trading on the OTCQB in the United States operated by the OTC Markets Group Inc. trading under the symbol “RLYGF”.

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• On February 18, 2021, the Company announced that it significantly increased the land position of its Tokop Gold Property by 400% to over 21 square kilometers.

Results of Operations for the Three Months Ended September 30, 2021

For the three-month period ended September 30, 2021, the Company recorded a net loss of $262,988 versus a net loss of $40,582 incurred during the three-month period ended September 30, 2020. The increase in net loss during the period ended September 30, 2021 is due primarily from the following: an increase in consulting fees of $135,954; an increase in share-based payments of $35,528; and an increase in investor relations expenses of $20,844. The increase in consulting fees is due to additional consultants engaged to facilitate the increase in operating activity during period ended September 30, 2021. The increase in share-based payments is due to the grant of 250,000 share purchase options and the related vesting during the period ended September 30, 2021, whereas no share purchase options were granted during the period ended September 30, 2020. The increase in investor relations expense is due to the engagement of Mars Investor Relations Inc.

Results of Operations for the Nine Months Ended September 30, 2021

For the nine-month period ended September 30, 2021, the Company recorded a net loss of $796,467 versus a net loss of $85,018 incurred during the nine-month period ended September 30, 2020. The increase in net loss during the period ended September 30, 2021 is due primarily from the following: an increase in consulting fees of $449,780; an increase in share-based payments of $128,473; an increase in professional fees of $32,046; an increase in investor relations expenses of $20,844; and an increase in transfer agent and filing fees of $42,570. The increase in consulting fees is due to additional consultants engaged to facilitate the increase in operating activity during period ended September 30, 2021. The increase in share-based payments is due to the grant of 400,000 share purchase options and the related vesting during the period ended September 30, 2021, whereas no share purchase options were granted during the period ended September 30, 2020. The increase in professional fees is due to an increase in legal and audit fees, which is a result of increased transactions and activity (including Riley’s listing on the OTCQB Venture Market). The increase in investor relations expense is due to the engagement of Mars Investor Relations Inc. The increase in transfer agent and filing fees is due to overall increased activity and facilitating a listing on the OTCQB Venture Market.

Liquidity, Cash Flows and Capital Resources

Liquidity, Cash Flows and Capital Resources
	Nine Months Ended	Nine Months Ended
	September 30,	September 30,
	2021	2020
Sources and Uses of Cash
Cash used in operations prior to changes in
working capital	$ (664,751)	$ (81,775)
Changes in non-cash working capital	(30,352)	8,080
Cash used in operating activities	(695,103)	(73,695)
Cash used in investing activities	(2,351,499)	(52,345)
Cash provided by financing activities	2,500,991	-
Effect of foreign exchange	38,561	(117)
Changeincash	$ (507,050)	$ (126,157)

Operating Activities

For the period ended September 30, 2021, cash used in operating activities, prior to changes in non-cash working capital, was $664,751 compared to $81,775 used during the period ended September 30, 2020. The increase in cash used is due primarily to the variances as outlined under the “ Results of Operations for the Nine Months Ended September 30, 2021” section. For the period ended September 30, 2021, non-cash working capital increased by $30,352, as compared to a decrease of $8,080 for the period ended September 30, 2020. The increase in non-cash working capital is primarily the result of an increase in prepaid expenses of $39,400 and an increase in receivables of $18,801. These increases in non-cash working capital were partially offset an increase in accounts payable of $27,849. For the period ended September 30, 2021, cash used by operating activities was $695,103 compared to a use of $73,695 for the period ended September 30, 2020.

Investing Activities

For the period ended September 30, 2021, cash used in investing activities was $2,351,499, which reflects expenditures on the Company’s exploration and evaluation assets and amounts paid as deposits and bonds. For the period ended September 30, 2020, the total cash used for investing activities was $52,345, which is also related to expenditures on the Company’s exploration and evaluation assets.

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Financing Activities

For the period ended September 30, 2021, cash provided by financing activities was $2,500,991, which is the net proceeds from the completion of a private placement of 6,500,000 units at a price of $0.40. cash provided by financing activities for the period ended September 30, 2020 was $Nil.

Annual Financial Information

The financial statements have been prepared in accordance with IFRS for fiscal years 2020, 2019 and 2018, and are expressed in Canadian dollars.

	Year Ended	Year Ended	Year Ended
	December 31,	December 31,	December
	2020	2019	31,2018
	$	$	$
Operations:
Revenues	-	-	-
Net income (loss)	(387,663)	(122,253)	(88,417)
Net income (loss) per share – Basic	(0.03)	(0.01)	(0.01)
Netincome (loss) pershare– Diluted	(0.03)	(0.01)	(0.01)
	Year Ended	Year Ended	Year Ended
	December 31,	December 31,	December
	2020	2019	31, 2018
	$	$	$
Balance Sheet:
Working capital	2,455,050	167,025	293,612
Total current assets	2,502,530	182,076	313,607
Total liabilities	47,480	15,051	19,995

Quarterly Financial Information

The following selected financial information is derived from the condensed interim financial statements of the Company prepared in accordance with IFRS.

	September 30,	June 30,	March 31,	December	September	June 30,	March 31,	December
Quarter ended	2021	2021	2021	31, 2020	30, 2020	2020	2020	31, 2019
	$	$	$	$	$	$	$	$
Revenue	-	-	-	-	-	-	-	-
Net income (loss)	(262,988)	(258,982)	(274,497)	(302,645)	(40,582)	(20,007)	(24,429)	(33,133)
Basic Earnings per
share (loss)	(0.01)	(0.01)	(0.01)	(0.02)	(0.00)	(0.00)	(0.00)	(0.00)
Diluted Earnings
pershare (loss)	(0.01)	(0.01)	(0.01)	(0.02)	(0.00)	(0.00)	(0.00)	(0.00)

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Evaluation and Exploration Assets:

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Independence Trend
Getchell
Trend
Pipeline West/ Carlin
Trend
Clipper
Battle Mtn –
Eureka Trend
Walker Lane
Trend
Tokop
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Tokop Gold Property:

The 100% owned and controlled Tokop Gold Property is located in Esmeralda County (Tokop Mining District), approximately 80 km south of Tonopah and includes 21 square kilometres of unpatented mining claims and patented (fee) lands. The Company’s contractual obligations surrounding the Tokop Gold Property are as follows:

The Company entered into a purchase agreement (“PA”) on September 30, 2020 to acquire a 100% interest in certain leased patented mining claims, leased unpatented mining claims and owned unpatented mining claims located in Esmeralda County, Nevada. Under the PA, the Company must incur the following:

• Pay US$13,000 on execution of the letter of intent (paid);

• Pay US$15,000 on or before September 30, 2021 (paid);

• Grant a net smelter return (“NSR”) royalty of 0.5% on the Tokop Gold Property which the Company has an option to purchase at any time prior to commercial production for US$400,000;

• Pay minimum lease payments (over a ten-year term) as follows: o US$10,000 on or before January 1, 2021 (paid); o US$15,000 on or before January 1, 2022; o US$20,000 on or before January 1, 2023; o US$30,000 on or before January 1, 2024;

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o US$330,000 thereafter.

The majority of the Company’s mineral interests acquired under the PA are subject to a 3.0% NSR.

The Company entered into a mining lease and option to purchase agreement (“MLOP Agreement”) on September 30, 2020, whereby the landowner will lease and grant the option to purchase its 100% interest in certain patented and unpatented mining claims (“Nevada Property”) located in Esmeralda County, Nevada, under the following conditions:

Minimum lease payments (over a fifteen-year term) as follows:

• US$25,000 any time after January 1, 2021 but prior to January 7, 2021 (paid);

• US$35,000 on or before the first anniversary of the execution date of the MLOP Agreement (paid);

• US$45,000 on or before the second anniversary of the execution date of the MLOP Agreement;

• US$55,000 on or before the third anniversary of the execution date of the MLOP Agreement;

• US$3,565,000 thereafter.

Work commitment expenditures:

• US$50,000 on or before the second anniversary of the execution date of the MLOP Agreement (completed);

• US$100,000 on or before the third anniversary of the execution date of the MLOP Agreement (completed);

• US$200,000 on or before the fourth anniversary of the execution date of the MLOP Agreement (completed);

• US$300,000 on or before the fifth anniversary of the execution date of the MLOP Agreement (completed).

The Company shall grant an NSR royalty of 4.0% on the Nevada Property which the Company has an option to purchase 2.0% of the 4.0% royalty at any time for US$4,000,000. The Company has the option to purchase the Nevada Property outright for US$4,000,000 prior to or on the tenth anniversary of the execution of the MLOP Agreement and for US$6,500.000 prior to or on the fifteenth anniversary of the execution of the MLOP Agreement.

The Company entered into an exploration and option agreement (“MGC Agreement”) on November 25, 2020, whereby the landowner has granted Riley the option to purchase a 100% interest in certain unpatented mining claims (“MGC Property”) located in Esmeralda County, Nevada, under the following conditions:

Minimum lease payments (over a twenty-year term) as follows:

• US$12,788 within two (2) weeks of the execution of the MGC Agreement (paid);

• US$10,000 on or before the first anniversary of the execution date of the MGC Agreement (paid);

• US$20,000 on or before the second anniversary of the execution date of the MGC Agreement;

• US$30,000 on or before the third anniversary of the execution date of the MGC Agreement;

• US$1,465,000 thereafter.

Work commitment expenditures:

• US$5,000 on or before the first anniversary of the execution date of the MGC Agreement (completed);

During the first 10 years of the 20-year term, the Company may exercise its option by making a lump sum payment of US$500,000. On completion of the option exercise, the Company shall grant an NSR royalty of 3.0% on the MGC Property.

In addition to the agreements above, the Company staked 160 unpatented mining claims.

Pipeline West/Clipper Gold Property

The 100% owned and controlled Pipeline West/Clipper Gold Property is located in Lander County (Cortez Mining District), approximately 80 km southwest of Elko and includes 24.7 square kilometres of unpatented mining claims and patented (fee) lands adjacent to properties controlled by the Nevada Gold Mines JV. The Company’s contractual obligations surrounding the Pipeline West/Clipper Gold Property are as follows:

The Company entered into an option agreement (“Option Agreement”) on September 30, 2020, whereby the landowners have granted Riley the option to purchase a 100% interest in certain patented and unpatented mining claims located in Lander County, Nevada, under the following conditions:

Minimum lease payments:

• US$57,146 within two (2) weeks of the execution of the Option Agreement (paid);

• US$20,000 on or before the first anniversary of the execution date of the Option Agreement (paid);

• US$20,000 on or before the second anniversary of the execution date of the Option Agreement;

• US$25,000 on or before the third anniversary of the execution date of the Option Agreement;

• US$930,000 thereafter.

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Work commitment expenditures:

• US$200,000 on or before the third anniversary of the execution date of the Option Agreement;

• US$200,000 on or before the fourth anniversary of the execution date of the Option Agreement;

• US$250,000 on or before the fifth anniversary of the execution date of the Option Agreement;

• US$2,000,000 thereafter.

On completion of the option exercise, the Company shall grant an NSR royalty of 3.0% on certain unpatented mining claims and an NSR royalty of 1.5% on certain patented mining claims.

The Company entered into two separate mining lease agreements (“Lease Agreements”) on May 12, 2021, whereby the landowners have granted Riley the right to their 100% interest in certain unpatented mining claims located in Lander County, Nevada, under the following conditions:

Minimum lease payments:

• US$10,000 within five (5) days of the execution of the Lease Agreements (paid);

• US$25,000 on or before the first anniversary of the execution dates of the Lease Agreements;

• US$26,000 on or before the second anniversary of the execution dates of the Lease Agreements;

• US$27,000 on or before the third anniversary of the execution dates of the Lease Agreements;

• US$217,000 thereafter.

Work commitment expenditures:

• US$25,000 on or before the third anniversary of the execution dates of the Lease Agreements;

• US$50,000 on or before the fourth anniversary of the execution dates of the Lease Agreements;

• US$100,000 on or before the fifth anniversary of the execution dates of the Lease Agreements;

• US$1,000,000 thereafter.

On the commencement of commercial production, the minimum lease payments shall terminate and be replaced with a 4.0% gross smelter return royalty (“GSR”) which Riley has the right to buydown to a 2% GSR at varying amounts adjusted for inflation.

East Manhattan Wash Property:

On October 13, 2016, the Company entered into an exploration and option agreement (the “Agreement”) with MSM Resource L.L.C. (“MSM”), pursuant to which the Company has been granted an option to acquire MSM’s undivided interest in the East Manhattan Wash Property, located in Nye County, Nevada and is comprised of certain unpatented lode mining claims controlled by MSM.

Pursuant to the terms of the Agreement, in order to earn MSM’s interest in the East Manhattan Wash Property, the Company must pay to MSM option payments in the aggregate of C$57,500 as follows:

• C$5,000 cash upon execution of the agreement (paid).

• C$7,500 before the first anniversary date of TSXV final approval of filing QT, March 29, 2018 (the “Anniversary”) (paid).

• C$10,000 before the second Anniversary (paid).

• C$15,000 before the third Anniversary (complete – the Company paid MSM a one-time payment of C$5,000 in lieu of the third Anniversary payment); and

• C$20,000 before the fourth Anniversary (complete – the Company paid MSM a one-time payment of C$6,000 to extend, for one year, the option payment obligation due before the fourth Anniversary)

Work commitments in the aggregate of C$550,000 must be met as follows:

• C$50,000 before the first Anniversary (complete).

• C$50,000 before the second Anniversary (complete – the Company paid MSM a one-time payment of C$15,000 in lieu of the second Anniversary work commitment).

• C$100,000 before the third Anniversary (complete – the Company paid MSM a one-time payment of C$20,000 in lieu of the third Anniversary work commitment).

• C$150,000 before the fourth Anniversary; (complete – the Company paid MSM a one-time payment of C$6,000 to extend, for one year, the work commitment obligation due before the fourth Anniversary); and

• C$200,000 before the fifth Anniversary.

In addition, the Company must grant MSM a 3% NSR royalty on the East Manhattan Wash Property, and finally must pay MSM an additional lump sum payment of C$200,000 within five years from signing the Agreement.

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Related Party Disclosures

Related party transactions have been measured at the exchange amount of consideration agreed between the related parties. Related party transactions are listed below:

As at September 30, 2021, $25,118 (December 31, 2020 - $780) of accounts payable and accrued liabilities was payable to companies with officers in common.

As at September 30, 2021, $Nil (December 31, 2020 - $105) of accounts receivable was receivable from a company with a director and/or officer in common.

During the period ended September 30, 2021, $7,461 (September 30, 2020 - $287) was paid to a law firm in which a director is a partner. During the period ended September 30, 2021, the Company incurred rental fees and shared office expenses of $13,564 to companies with a director and/or officer in common (September 30, 2020 - $13,564). During the period ended September 30, 2021, the Company incurred consulting fees of $292,500 to companies with directors and officers in common (September 30, 2020 - $22,500).

During the period ended September 30, 2021, the Company incurred share-based payments of $85,171 (September 30, 2020 - $3,182) to officers and directors of the Company.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Commitments

The Company has no commitments.

Conflicts of Interest

The Company’s directors and officers may serve as directors and/or officers, or may be associated with, other reporting companies, or have significant shareholdings in other public companies. To the extent that such other companies may participate in business or asset acquisitions, dispositions or ventures in which the Company may participate, the directors and officers of the Company may have a conflict of interest in negotiating and concluding terms respecting the transaction. If a conflict of interest arises, the Company will follow the provisions of the Business Corporations Act (British Columbia) (“Corporations Act”) dealing with conflict of interest. These provisions state that where a director has such a conflict, that director must, at a meeting of the Company’s directors, disclose his or her interest and refrain from voting on the matter unless otherwise permitted by the Corporations Act. In accordance with the laws of the Province of British Columbia, the directors and officers of the Company are required to act honestly, in good faith and in the best interests of the Company.

Outstanding Share Data

Outstanding Share Data
	Number of Shares Outstanding (Diluted)
Outstanding as at November 24, 2021 Shares reserved for issuance pursuant to share purchase options outstanding Shares reserved for issuance pursuant to share purchase warrants outstanding Shares outstanding - fully diluted	32,182,880 2,495,000 10,750,562
	45,428,442

As at the date of this MD&A, the Company had outstanding stock options enabling holders to acquire common shares of the Company as follows:

of the Company as follows:
		Price per
Number	Vested	share	Expiry date
705,000	705,000	$ 0.10	January 8, 2025
240,000	240,000	$0.145	September 20, 2028
1,150,000	537,500	$0.30	October 15, 2025
100,000	50,000	$0.28	March 5, 2026
50,000	25,000	$0.23	March 30, 2026
250,000	-	$0.40	September 1,2023
2,495,000	1,557,500

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As at the date of this MD&A, the Company had outstanding share purchase warrants enabling holders to acquire common shares of the Company as follows:

		Price per
Number	Vested	share	Expiry date
7,500,562	7,500,562	$ 0.40	October 15, 2022
3,250,000	3,250,000	$ 0.60	August 20, 2023
10,750,562	10,750,562

Industry Trends

Price of gold (1-year chart):

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Price of gold (5-year chart):

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Source : http://www.kitco.com/

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COVID-19

On March 11, 2020, the World Health Organization characterized the outbreak of a disease caused by a strain of the novel coronavirus (“COVID-19”) as a pandemic which has resulted in a series of public health and emergency measures that have been put in place to combat the spread of the virus. The duration and impact of COVID-19 is unknown at this time and it is not possible to reliably estimate the impact that the length and severity of these developments will have on the financial results and condition of the Company in future periods.

Critical Accounting Estimates

The preparation of financial statements in conformity with IFRS requires management to apply accounting policies and make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. There is full disclosure of the Company’s critical accounting policies and accounting estimates in note 3 of the audited consolidated financial statements for the year ended December 31, 2020.

Risks and Uncertainties

The Company is in the business of acquiring and exploring mineral properties. It is exposed to a number of risks and uncertainties that are common to other mineral exploration companies in the same business. The industry is capital intensive at all stages and is subject to variations in commodity prices, market sentiment, exchange rates for currency, inflation and other risks. The Company currently has no source of revenue other than interest on cash balances. The Company relies mainly on equity financing to fund exploration activities on its mineral properties.

The risks and uncertainties described in this section are not inclusive of all the risks and uncertainties to which the Company may be subject.

Early Stage – Need for Additional Funds

The Company has no history of profitable operations and its present business is at an early stage. As such, the Company is subject to many risks common to other companies in the same business, including under-capitalization, cash shortages and limitations with respect to personnel, financial and other resources, and the lack of revenues. There is no assurance that the Company will be successful in achieving a return on shareholders’ investment and the likelihood of success must be considered in light of its early stage of operations.

Exploration and Development

Mineral exploration and development is a speculative business, characterized by a number of significant risks including, among other things, unprofitable efforts resulting not only from the failure to discover mineral deposits, but also from finding mineral deposits that, though present, are of insufficient size and/or grade to return a profit from production.

All of the mineral claims in which the Company has a right to acquire an interest are in the exploration stages only and are without a known body of commercial ore. Upon discovery of a mineralized occurrence, several stages of exploration and assessment are required before its economic viability can be determined. Development of the subject mineral properties would follow only if favorable results are determined at each stage of assessment. Few precious and base metal deposits are ultimately developed into producing mines.

Operating Hazards and Risks

Mining operations involve many risks which even a combination of experience, knowledge and careful evaluation may not be able to overcome. In the course of exploration, development and production of mineral properties, certain risks, and in particular unexpected or unusual geological operating conditions including rock bursts, cave-ins, fires, flooding and earthquakes, may occur. Operations in which the Company has a direct or indirect interest are subject to all the hazards and risks normally incidental to exploration, development and production of mineral deposits, any of which could result in damage to or destruction of mines and other producing facilities, damage to life and property, environmental damage and possible legal liability for any or all damage.

Although the Company maintains liability insurance in an amount which it considers adequate, the nature of these risks is such that liabilities could exceed policy limits, in which event the Company could incur significant costs that could have a materially adverse effect upon its financial conditions.

Foreign Currency Exchange

Foreign currency exchange rate risk is the risk that the fair value or future cash flows will fluctuate as a result of changes in foreign exchange rates. Although the Company is considered to be in the exploration stage and has not yet developed commercial mineral interests, the underlying market prices in Canada for minerals are impacted by changes in the

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exchange rate between Canadian and United States dollars. The Company has not entered into any arrangements to hedge its currency risk but does maintain cash balances within each currency.

Supplies and Infrastructure

The Company’s property interests are often located in remote, undeveloped areas and the availability of infrastructures such as surface access, skilled labor, fuel and power at an economic cost cannot be assured. These are integral requirements for exploration, production and development facilities on mineral properties. Power may need to be generated onsite.

Metal Prices

The mining industry, in general, is intensely competitive and there is no assurance that a profitable market will exist for the sale of metals produced, even if commercial quantities of precious and/or base metals are discovered. Factors beyond the control of the Company may affect the marketability of metals discovered. Pricing is affected by numerous factors beyond the Company’s control, such as international economic and political trends, global or regional consumption and demand patterns, increased production and smelter availability. There is no assurance that the price of metals recovered from any mineral deposit will be such that it can be mined at a profit.

Title Risks

Although the Company has exercised the usual due diligence with respect to determining title to properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned. The Company’s mineral property interests may be subject to prior unregistered agreements, transfers or native claims, and title may be affected by undetected defects.

Environmental Regulations, Permits and Licenses

The Company’s operations are subject to various laws and regulations governing the protection of the environment, exploration, development, production, taxes, labor standards, occupational health, waste disposal, safety and other matters. Environmental legislation in Nevada provide restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry operations, such as seepage from tailing disposal areas, which would result in environmental pollution. A breach of such legislation may result in the imposition of fines and penalties. In addition, certain types of operations require the submission and approval of environmental impact statements. Environmental legislation is evolving in a direction of stricter standards and enforcement, and higher fines and penalties for non-compliance. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and their directors, officers and employees. The cost of compliance with changes in governmental regulations has the potential to reduce the profitability of operations. The Company intends to fully comply with all environmental regulations.

The current operations of the Company require permits from various U.S. authorities and such operations are governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use, environmental, mine safety and other matters.

The Company believes that it is in compliance with all material laws and regulations which currently apply to its activities. However, there can be no assurance that all permits which the Company may require for its operations and exploration activities will be obtainable on reasonable terms, a timely basis or that such laws and regulations would not have an adverse effect on any mining project which the Company might undertake.

Competition and Agreements with Other Parties

The mining industry is intensely competitive in all its phases and the Company competes with other companies that have greater financial resources and technical capacity. Competition could adversely affect the Company’s ability to acquire suitable properties or prospects in the future.

The Company may, in the future, be unable to meet its share of costs incurred under such agreements to which it is a party and it may have its interest in the properties subject to such agreements reduced as a result. Also, if other parties to such agreements do not meet their share of such costs, the Company may not be able to finance the expenditures required to complete recommended programs.

Economic Conditions

Unfavourable economic conditions may negatively impact the Company’s financial viability. Unfavourable economic conditions could also increase the Company’s financing costs, decrease net income or increase net loss, limit access to capital markets and negatively impact the availability of credit facilities to the Company.

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Properties held under option

The Company’s mineral exploration property is currently held under option. The Company has no ownership interest in this property until all required property expenditures and cash payments have been made. If the Company is unable to fulfill the requirements of the option agreement, it is likely that the Company would be considered in default of the agreement and the option agreement could terminate resulting in the complete loss of all expenditures and option payments made on the property to that date.

Dependence on Management

The Company is very dependent upon the personal efforts and commitment of its existing management. To the extent that management’s services would be unavailable for any reason, a disruption to the operations of the Company could result and other persons would be required to manage and operate the Company.

Corporate Governance

Management of the Company is responsible for the preparation and presentation of the annual financial statements and notes thereto, MD&A and other information contained in this MD&A. Additionally, it is management’s responsibility to ensure the Company complies with the laws and regulations applicable to its activities.

The Company’s management is held accountable to the board of directors (“Directors”), each member of which is elected annually by the shareholders of the Company. The Directors are responsible for reviewing and approving the audited annual financial statements and MD&A. Responsibility for the review and approval of the Company’s audited financial statements and MD&A is delegated by the Directors to the Audit Committee, which is comprised of 3 directors. Additionally, the Audit Committee pre-approves audit and non-audit services provided by the Company’s auditors.

The external auditors are appointed annually by the shareholders to conduct an annual audit of the financial statements in accordance with IFRS. The external auditors have complete access to the Audit Committee to discuss the audit, financial reporting and related matters resulting from the annual audit, as well as assist the members of the Audit Committee in discharging its corporate governance responsibilities.

Cautionary Statement

The Company’s condensed interim consolidated financial statements for the period ended September 30, 2021, and this accompanying MD&A contain statements that constitute “forward-looking statements” within the meaning of National Instrument 51-102, Continuous Disclosure Obligations of the Canadian Securities Administrators. Forwardlooking statements often, but not always, are identified by the use of words such as “seek”, “anticipate”, “believe”, “plan”, “estimate”, “expect”, “targeting” and “intend” and statements that an event or result “may”, “will”, “should”, “could”, or “might” occur or be achieved and other similar expressions. Forward-looking statements in this MD&A include statements regarding the Company’s future exploration plans and expenditures, the satisfaction of rights and performance of obligations under agreements to which the Company is a part, the ability of the Company to hire and retain employees and consultants and estimated administrative assessment and other expenses. The forward-looking statements that are contained in this MD&A involve a number of risks and uncertainties. As a consequence, actual results might differ materially from results forecast or suggested in these forward-looking statements. Some of these risks and uncertainties are identified under the heading “RISKS AND UNCERTAINTIES” in this MD&A. Additional information regarding these factors and other important factors that could cause results to differ materially may be referred to as part of particular forward-looking statements. The forward-looking statements are qualified in their entirety by reference to the important factors discussed under the heading “RISKS AND UNCERTAINTIES” and to those that may be discussed as part of particular forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause the actual results to differ include market prices, exploration success, continued availability of capital and financing, inability to obtain required regulatory approvals and general market conditions. These statements are based on a number of assumptions, including assumptions regarding general market conditions, the timing and receipt of regulatory approvals, the ability of the Company and other relevant parties to satisfy regulatory requirements, the availability of financing for proposed transactions and programs on reasonable terms and the ability of third-party service providers to deliver services in a timely manner. Forward-looking statements contained herein are made as of the date of this MD&A 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. 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, readers should not place undue reliance on forward-looking statements.

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Approved by the audit committee on:

Other Information

Additional information relating to the Company is available for viewing on SEDAR at www.sedar.com.

November 17, 2021

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