Solution Financial Inc. — Interim / Quarterly Report 2021

Jun 29, 2021

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CARDERO RESOURCE CORP. Form 51-102F1 Management’s Discussion and Analysis For the period ended April 30, 2021

INTRODUCTION

This Management Discussion and Analysis (“MD&A”) for Cardero Resource Corp. (“Cardero” or the “Company”) for the period ended April 30, 2021 has been prepared by management, in accordance with the requirements of National Instrument 51-102, as of June 29, 2021, and compares its financial results for the six months ended April 30, 2021 to the six months ended April 30, 2020. This MD&A provides a detailed analysis of the business of Cardero and should be read in conjunction with the Company’s unaudited Interim Financial Statements for the six months ended April 30, 2021 and the accompanying notes, and the audited consolidated financial statements and the accompanying notes for the years ended October 31, 2020 and 2019. The Company’s reporting currency is the Canadian dollar and all amounts in this MD&A are expressed in Canadian dollars unless otherwise noted. The Company reports its financial position, results of operations and cash-flows in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.

Forward-Looking Statements

This MD&A contains forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian and US securities legislation. These statements relate to future events or the future activities or performance of the Company. All statements, other than statements of historical fact, are forward-looking statements. Information concerning mineral resource/reserve estimates and the economic analysis thereof contained in preliminary economic analyses or prefeasibility studies also may be deemed to be forward-looking statements in that they reflect a prediction of the mineralization that would be encountered, and the results of mining that mineralization if a mineral deposit were developed and mined. Forward-looking statements are typically identified by words such as: believe, expect, anticipate, intend, estimate, postulate, plans and similar expressions, or which by their nature refer to future events. These forward-looking statements include, but are not limited to, statements concerning:

• the timing of decisions regarding the timing and costs of exploration programs with respect to, and the issuance of the necessary permits and authorizations required for, the Company’s ongoing exploration programs on its properties;

• the Company’s estimates of the quality and quantity of the resources and reserves at its mineral properties;

• the timing and cost of any proposed future work with respect to the Zonia Copper Project (“Zonia”), including with respect to the preparation of future technical studies in respect thereof;

• general business and economic conditions; and

• the Company’s ability to meet its financial obligations as they come due, and to be able to raise the necessary funds to continue operations.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Although the Company believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Inherent in forward looking statements are risks and uncertainties beyond the Company’s ability to predict or control, including, but not limited to, risks related to the Company’s ability to raise the necessary capital to be able to continue in business and to implement its business strategies, to identify one or more economic deposits on its properties, variations in the nature, quality and quantity of any mineral deposits that may be located, variations in the market price of any mineral products the Company may produce or plan to produce, the Company’s ability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, and other risks identified herein under “Risk Factors”. The Company cautions investors that any forward-looking statements by the Company are not guarantees of future performance, and that actual results are likely to differ, and may differ materially, from those expressed or implied by forward looking statements contained in this MD&A. Such statements are based on several assumptions which may prove incorrect, including, but not limited to, assumptions about:

• the Company’s future cash requirements, and the ability of the Company to raise the funding necessary to carry out its planned activities and to meet its anticipated general and administrative expenses for the year ending October 31, 2021;

• the level and volatility of the price of commodities, and copper in particular;

• general business and economic conditions;

• the timing of the receipt of regulatory and governmental approvals, permits and authorizations necessary to implement and carry on the Company’s proposed work programs, particularly at Zonia;

• conditions in the financial markets generally;

• the Company’s ability to attract and retain key staff;

• the accuracy of the Company’s resource/reserve estimates when completed (including with respect to size and grade) and the geological, operational and price assumptions on which these are based;

• the ongoing relations of the Company with its underlying optionors/lessors, any joint venture and/or contractual partners, the applicable regulatory agencies, and indigenous groups; and

• that the metallurgy and recovery characteristics of samples from certain of the Company’s mineral properties are reflective of the deposit.

These forward-looking statements are made as of the date hereof and the Company does not intend and does not assume any obligation, to update these forward-looking statements, except as required by applicable law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

Caution Regarding Adjacent or Similar Mineral Properties

This MD&A may contain information with respect to adjacent or similar mineral properties in respect of which the Company has no interest or rights to explore or mine. Readers are cautioned that the Company has no interest in or right to acquire any interest in any such properties, and that mineral deposit on adjacent or similar properties are not indicative of mineral deposits on the Company’s properties.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Caution Regarding Reference to Resources and Reserves

National Instrument 43-101 Standards of Disclosure of Mineral Projects (“NI 43-101”) is a rule developed by the Canadian Securities Administrators which establishes standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all reserve and resource estimates contained in or incorporated by reference in this MD&A have been prepared in accordance with NI 43-101.

Caution Regarding Historical Results

Historical results of operations and trends that may be inferred from the discussion and analysis in this MD&A may not necessarily indicate future results from operations. In particular, the current state of the global securities markets may cause significant reductions in the price of the Company’s securities and render it difficult or impossible for the Company to raise the funds necessary to continue operations. See “Risk Factors - Share Price Volatility”.

All of the Company's public disclosure filings, including its most recent management information circular, material change reports, press releases and other information, may be accessed via www.sedar.com and readers are urged to review these materials, including the technical reports filed with respect to the Company’s mineral properties.

DATE

This MD&A reflects information available as at June 29, 2021.

RESULTS OF OPERATIONS

Background

Cardero is a junior resource mineral exploration and development company. Its assets consist of interests in mineral properties, investments and cash. The Company funds its operations primarily through the sale of its equity securities, its investments and interests in its mineral properties and, more recently, debt. The mineral exploration business is very high risk (See “Risk Factors”).

Novel Coronavirus (COVID-19)

As at the date of this report, the Company’s operations have not been materially affected by COVID-19. The Company has no full-time staff and is currently being managed by the chief executive officer and chief financial officer, who work a portion of their time from home. Exploration programmes are conducted with the assistance of consultants and contractors.

The out-break of the COVID-19 pandemic has introduced significant uncertainty in the capital markets. The financing prospects of the Company may be negatively affected should the pandemic persist for an extended period of time. Any fieldwork on the Company’s projects will only be undertaken once it is considered safe to do so. While the future impact of this outbreak is difficult to predict, the Company will continue to monitor and assess the associated risks to the Company’s operations and remains prepared to respond appropriately.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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EXPLORATION ACTIVITIES

Cardero is a resource company focussed on the development of the Zonia copper-oxide deposit in Arizona, USA. The Zonia deposit is an advanced stage near-surface copper-oxide resource on which scoping, feasibility and permitting activities are planned over the coming 3 to 4 years.

The Company also retains certain participation rights with respect to the assets of Cardero Coal Limited, which was sold in 2015 as part of a comprehensive restructuring of the Company discussed below:

	Total E&E Costs Capitalized During the Year Ended October 31, 2019	Total E&E Costs Capitalized During the Year Ended October 31, 2020	Proposed Fiscal 2021 Expenditures (1)
Zonia Copper Project Arizona USA	$215,838	$244,309	$250,800

Note: 1. This amount represents the estimated exploration expenditures for the entire fiscal year ending October 31, 2021 and does not include property acquisition costs. Estimated expenditures are contingent upon the Company raising the necessary financing to carry out its planned work, as it does not currently have the required funds to carry out the planned work.

Material Mineral Properties

Zonia, Arizona, USA

Pursuant to an option agreement dated August 27, 2015, and as amended most recently on October 3, 2018, between the Company and Redstone Resources Corporation (“Redstone”), the Company completed the acquisition of the 100% interest in the Zonia Copper Project (“Zonia” or “the Project”) effective February 21, 2019 by paying aggregate US $1,981,350 cash payment obligation (amended from US $2,225,000), and 22,679,099 common shares issuance obligation (amended from 16,500,000 common shares).

The Zonia Property consists of 261 patented (96) and unpatented (185) mineral claims and 566.85 acres of surface rights acquired from the State of Arizona; comprising 4,279.55 acres total. These claims include lode mining claims and millsite claims and are in the Walnut Grove Mining District. Each mineral claim has a survey description and each patented claim was surveyed by a registered surveyor.

The Project is an advanced discovery-stage property, amenable to low-cost recovery techniques including open pit mining and SX/EW processing. Zonia is in Yavapai County, Arizona, 130 kilometers to the northwest of Phoenix and is easily accessible with a network of roads to the project site.

Zonia was discovered in the 1880’s with the first single stack smelter built in 1900. From 1900 to present Zonia has been explored for copper by several operators. Most recently, the property was explored by Copper Mesa Mining Corporation (“Copper Mesa”) from 2008 to 2009, Redstone from 2009 to 2015, and currently Cardero from 2015. The property has been drill tested with almost 700 drill holes (60,000 meters). This high-density drilling covers 30% of the property and defines the historical resources and reduces technical risk on the deposit. Mineralization is open to the southwest and northeast, providing considerable opportunity to grow the resource.

The deposit has undergone deep oxidation from surface and metallurgical studies demonstrate that it is amenable to heap-leaching and SX-EW to produce cathode copper, with an expected recovery of 73% overall based on extensive metallurgical testing.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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In November 2017 Cardero released an amended technical report for the current resource estimate for Zonia, which corrected several minor deficiencies in the original 2015 technical report. For the 2017 Mineral Resource Estimate, Tetra Tech (“Tt”) completed an independent mineral resource and reserve estimate of the contained copper in the Zonia deposit.

In April 2018, Cardero released a Preliminary Economic Assessment (“PEA”) on Zonia, which gives Cardero the assurance to advance the project through feasibility. Details of the report and the report itself are available for download at the company’s website www.cardero.com.

As part of the PEA, the author of the report Global Resource Engineering (GRE) used the 2017 Tetra Tech block model to generate new pit shells at metal prices from $0.50/lb to $5.00/lb Cu, in $0.25/lb increments. The following table shows the estimated classified mineral resources within the $2.00/lb pit at various copper cutoffs.

GRE 2018 Pit-Constrained Mineral Resources at Various

Copper Cutoffs

Classification	Tons (millions)	Cu Grade (%)	Cu Pounds (millions)
	0.12% Cutoff
Measured	15.5	0.415	125.4
Indicated	65.1	0.297	378.3
Measured + Indicated	80.5	0.319	503.7
Inferred	26.4	0.265	153.3
	0.16% Cutoff
Measured	15.0	0.418	124.7
Indicated	58.2	0.309	362.0
Measured + Indicated	73.2	0.331	486.7
Inferred	22.2	0.279	143.1
	0.20% Cutoff
Measured	14.3	0.419	124.5
Indicated	48.3	0.310	361.1
Measured + Indicated	62.5	0.332	485.6
Inferred	17.0	0.284	138.6
	0.22% Cutoff
Measured	13.7	0.430	121.3
Indicated	42.0	0.329	321.4
Measured + Indicated	55.7	0.351	442.6
Inferred	14.4	0.304	117.0

Notes:

(1) Resources are stated within a floating cone optimized shell using the following parameters: Mining (ore and waste) $1.8/ton, processing $2.89/ton plus $0.12/lb copper SX/EW, General and Administrative $0.80/ton, oxide recovery 73%, transition recovery 70%, and Cu price $2.00/lb

(2) Columns may not total due to rounding

(3) Inferred Mineral Resources: It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resources will be converted into Mineral Reserves. Inferred resources are that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration .

Zonia would employ open pit mining with a conventional copper acid heap leach system. Good copper extractions were achieved from the majority of the metallurgical samples at Zonia. The overall copper extraction based on the total copper assay (%TCu) for the deposit is estimated to be between 71% and 75%.

The project has many positive attributes that justify study advancement:

• Politically stable jurisdiction and regional familiarity with mining and associated community economic benefits;

• Scoping-level analysis historically completed for many aspects of the project;

• Plan to optimize an initial plan of operations restricted to private land, with positive implications for permitting time;

• Oxide mineral resources exposed at the surface, with a low waste to mineralized material ratio;

• The potential for discovery of additional oxide and sulfide resources;

• All resources as currently defined in the PEA are on private land;

• Excellent infrastructure including mine road and upgradeable power transmission line and right of way to mine site;

• Hydrogeological work indicates that a suitable groundwater supply exists on site; and

• Potentially amenable to truck and shovel mining, heap leaching and SX-EW to produce cathode copper.

Historical drill samples at Zonia were only analyzed for copper, as almost all holes terminate within the upper oxidized zone. Only the last two drill programmes were deep enough to intersect primary sulphides, with several drill holes extending below the copper-oxide resource and intersect underlying copper-sulphide mineralization. Cardero tested the idea that the underlying sulphide mineralization had potential to host significant gold grades by assaying reject pulp samples across a range of copper grades.

Eleven samples with copper sulphides were taken from drill holes extending below the currently defined resource. While the higher-grade copper samples returned significant gold values, with average gold:copper ratios of 0.45, the more typical, lower-grade copper samples also had proportionately low gold grades. Subsequently, samples from the oxide zone were assayed for gold, to test for possible supergene gold enrichment, but the gold grades were not significant. If future deep drilling encounters higher primary copper grades, there should be significant accompanying gold grades.

Silver Queen, Arizona USA

In September 2016, Cardero completed staking a total of 57 claims, the Silver Queen block, covering 424.5 hectares (1049 acres) along the southeast edge of the Zonia property.

The Silver Queen claims were staked based on examination of historical reports and data that led to the delineation of a prospective area, covering favourable geology and geophysical anomalies that did not

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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appear to have been drill tested. However, subsequent geophysics and project-wide (Zonia and Silver Queen blocks) rock geochemical sampling have shown there is low probability of porphyry copper mineralization in the area. The Silver Queen claims were therefore reduced to 47 claims, covering 324 hectares (801 acres), in August 2018.

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Map of the reduced Silver Queen claim block, relative to the Zonia property.

Exploration Potential

Rock geochemical sampling in early 2018 on a 150-metre spaced grid over most of both the Zonia and Silver Queen claim blocks generated a new porphyry copper target based on coincident anomalous copper, molybdenum and manganese. The 2500 by 1000 metre anomaly, the “Northeast Porphyry Target”, occurs

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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two kilometres northeast of the drill-defined Zonia copper oxide deposit, and shares characteristics of its geochemical footprint. No further sampling was carried out in the latter part of 2018.

Coincident areas of elevated molybdenum (Mo) and copper (Cu) values with depressed manganese (Mn) values is a classic geochemical signature of porphyry copper mineralization (see maps below). Copper values are also anomalous, but copper is not as reliable as the other metals due to its solubility in the weathering profile. The overlapping anomalies suggest a porphyry copper target on the order of 2500 by 1000 metres in surface extent. The same quartz-monzonite porphyry that hosts the Zonia copper oxide resource (see NR17-08) underlies the anomaly. The anomaly marks a break in the northeast trend of the mineralization, with a narrow southern “tail” that opens northward to a broader northeast trend. The anomaly is truncated at the north end by younger, post-mineral cover rocks (Gila conglomerate, alluvium, and Tertiary basalt). The east margin of the anomaly contains some narrow high-grade copper bearing structures in the historical Copper Crown mine workings, with associated intense epidote alteration.

Sampling Procedures and Quality Assurance and Quality Control

The work programme at Zonia was designed by John Drobe P.Geo., the Company’s Chief Geologist, with the field work conducted by Discovery Consultants, of Vernon, B.C. Due to a lack of consistent soil cover over the project, composite rock samples were collected by shovel from 10 to 25 cm depth over a roughly one-metre square area at each station, and the locations marked with flagging and aluminum tags hung from the nearest vegetation. Samples were placed in woven Sentry brand 7 by 12.5 inch Olefin sample bags, which were sealed, transported and dropped off directly at ALS Minerals laboratories in Tucson, Arizona by Discovery personnel. The samples were dried at high temperature (method DRY-21), crushed, ‐ pulverized (methods CRU-31, SPL-21, PUL-31), and then analysed by ICP AES for 35 elements (method ME-ICP41) with gold determined by 30g fire assay and atomic absorption finish (method Au-AA23).

This sampling did not include a comprehensive QA/QC programme; however, ALS Minerals is an ISO 9002 registered laboratory and inserted blanks, standards and duplicates following their QA/QC protocol. These additional samples returned satisfactory values.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Gridded and thematic molybdenum (Mo) rock values, with the Whittle pit outline that defines the current resource estimate at Zonia. All claims shown are owned or under option by Cardero.

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In January and February 2018, HydroGEOPHYSICS, Inc. (HGI), of Tucson, Arizona completed 28 line kilometres of Induced Polarization (“IP”) and Electrical Resistivity (“ER”) on the Zonia project. Coincident IP and ER data were collected to characterize the extent of chargeable sulfides under the area of drilldefined mineralization, and then apply this information to outline other possible subsurface mineralization on the property. The IP method was selected to take advantage of the charge-storage capability of the sulfides that are known to underlie the copper oxide resources. ER measurements were recorded coincident with the IP measurements during this survey, as the ER data provides valuable context for the IP data and information on subsurface structure. The data were collected at 200m (n=1) dipole spacing to a maximum of n=6 spacing between measurements.

Depth slices at the 1000, 1100, 1200, and 1300-meter elevations show an increase in chargeability with depth, matching observations in the drill holes of sulphides underlying the copper oxide mineralization in this area. The IP response increases in magnitude in the depth slice from the 1,100-meter elevation, with the highest values towards the southwest end of the survey area. The chargeable body is clearly observed trending across the survey area in a NE-SW direction, with highest magnitude IP responses noted in the southwest and the response dropping off toward the northeast. The top of sulphides (or base of oxidation) is known from the drilling to dip down to the northeast, and this is well reflected in the IP data.

The area of overlapping chargeability and copper-molybdenum anomalies extends about 600 metres from the current Whittle pit defined resources. Half of this area has been sparsely drilled by holes targeting copper-gold structures, with the southeast half (up-dip from the chargeability) untested. This area will be tested during the future feasibility study in-fill drill programme.

The Northeast geochemical anomaly was only covered at its margins by widely spaced lines, which did not detect sulphides (i.e. a chargeability anomaly) down to depths of 300 metres. This suggests the area is deeply weathered and a good copper oxide porphyry target.

Northeast Anomaly Drill Plan

Cardero filed for drill permits with the Bureau of Land Management (BLM) and the State of Arizona in preparation of a 5000 metre drill programme testing the Northeast Anomaly, on the Company's Zonia Copper Oxide property ("Zonia"), located in Yavapai County, Arizona USA Cardero plans to drill a total of 5000 metres over the anomaly. The area is covered by both federal BLM and ASTL and requires separate permit applications to the state and federal agencies. Permit applications were filed to the ASTL in March and to the BLM in April.

The permit for the BLM land portion was received in late 2018; before drilling commences, a reclamation bond for US$152,000 needs to be paid. The Arizona state land permit is pending approval of the Geologic Field Operations Plan (GFOP 41-120020), which requires completing a Cultural Resource Survey and Native Plant Survey for the area. Westland Resources of Tucson, Arizona will be conducting the surveys as soon as Cardero has the funds available.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Plan of chargeability at 1000m elevation, a slice of the interpolated 3D model.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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Permitting on Zonia

With the completion of the Zonia option agreement, the company was required to file a Notice of Intent (NOI) with the Arizona Department of Environmental Quality (ADEQ) the NOI was to allow The Company to acquire a Multi-Sector General Permit (MSGP) for stormwater discharge at the site. This required an application to ADEQ by way of a Stormwater Pollution Prevention Plan (SWPPP) which was completed and submitted and resulted in the issuance of a MSGP. The permit was granted May 15, 2020 it is effective January 1, 2020 and will expire December 31, 2024.

Transfer of Claims and Property

Following the issuance of the MSGP the company proceeded to transfer patented and un-patented claims along with surface land ownership from Redstone to The Company. That transfer has been completed and all claims and surface land is now in the name of the Company’s wholly owned subsidiary Cardero Copper (USA) Ltd.

Lardeau Property, British Columbia

The Company had entered into a property option agreement to acquire a 100% interest in the Lardeau property. To exercise the option the Company would have issue 1,400,000 common shares of the Company. The property was subject to a 2% NSR and the Company had the right to purchase 50% of the royalty for $1,000,000 after the Company had exercised its right to acquire the property. Pursuant to the Option Agreement between Wealth Minerals Ltd. (“Wealth”) and the Company dated October 17, 2017 the parties agreed to end the option early.

The anniversary of the closing of the agreement is January 2, 2020 and as compensation for the early termination of the Option Agreement, Wealth has agreed to grant the Company a 2.5% Net Smelter Royalty (NSR) and to waive the provision that the Lardeau property be in good standing for a minimum of three months following termination. As a result, the Company wrote off cumulative costs incurred to date on the Lardeau property of $233,481 as an impairment loss, determined in accordance with Level 3 of the fair value hierarchy. The Company will maintain a 2.5% NSR.

Qualified Person

John Drobe P.Geo., Cardero's Chief Geologist and a qualified person as defined by National Instrument 43101, has reviewed the scientific information that forms the basis for this news release, and has approved the disclosure herein. Mr. Drobe is not independent of the Company as he is an officer and a shareholder.

RISK FACTORS

The Company is in the business of acquiring, exploring and, if warranted, developing and exploiting natural resource properties. Due to the nature of the Company’s proposed business and the present stage of exploration of its mineral properties, the following risk factors, among others, will apply:

Lack of Operating Funds : In the recent past, the Company has experiencing significant difficulty in raising additional capital to continue its operations. Although the Company continues to pursue potential funding opportunities, there can be no assurance that it will be successful in doing so. If the Company is not successful in raising funds it may be forced to further curtail or cease operations at Zonia.

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Resource Exploration and Development is Generally a Speculative Business : Resource exploration and development is a speculative business and involves a high degree of risk, including, among other things, unprofitable efforts resulting both from the failure to discover mineral deposits and from finding mineral deposits which, though present, are insufficient in size and grade at the then prevailing market conditions to return a profit from production. The marketability of natural resources which may be acquired or discovered by the Company will be affected by numerous factors beyond the control of the Company. These factors include market fluctuations, the proximity and capacity of natural resource markets, government regulations, including regulations relating to prices, taxes, royalties, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in the Company not receiving an adequate return on invested capital.

There are no known reserves on any of the Company’s properties. The majority of exploration projects do not result in the discovery of commercially mineable deposits of ore. Substantial expenditures are required to establish ore reserves through drilling and metallurgical and other testing techniques, determine metal content and metallurgical recovery processes to extract metal from the ore, and construct, renovate or expand mining and processing facilities. No assurance can be given that any level of recovery of ore reserves will be realized or that any identified mineral deposit, even it is established to contain an estimated resource, will ever qualify as a commercial mineable ore body which can be legally and economically exploited. Mineral resources are not mineral reserves and there is no assurance that any mineral resources will ultimately be reclassified as proven or probable reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Fluctuation of Commodity Prices : Even if commercial quantities of mineral deposits are discovered by the Company, there is no guarantee that a profitable market will exist for the sale of the minerals produced. The Company’s long-term viability and profitability depend, in large part, upon the market price of minerals which have experienced significant movement over short periods of time, and are affected by numerous factors beyond the control of the Company, including international economic and political trends, expectations of inflation, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. The recent price fluctuations in the price of commodities for which the Company is presently exploring is an example of a situation over which the Company has no control and may materially adversely affect the Company in a manner that it may not be able to compensate for. The supply of and demand for minerals are affected by various factors, including political events, economic conditions and production costs in major producing regions. There can be no assurance that the price of any minerals produced from the Company’s properties will be such that any such deposits can be mined at a profit.

General Economic Conditions: The recent unprecedented events in global financial markets have had a profound impact on the global economy. Many industries, including the gold and base metal mining industry, are impacted by these market conditions. Some of the key impacts of the current financial market turmoil include contraction in credit markets resulting in a widening of credit risk, devaluations and high volatility in global equity, commodity, foreign exchange and precious metal markets, and a lack of market liquidity. A continued or worsened slowdown in the financial markets or other economic conditions, including but not limited to, consumer spending, employment rates, business conditions, inflation, fuel and energy costs, consumer debt levels, lack of available credit, the state of the financial markets, interest rates, and tax rates may adversely affect the Company’s growth and profitability. Specifically:

• A global credit/liquidity crisis could impact the cost and availability of financing and the Company’s overall liquidity;

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• the volatility of commodity prices may impact the Company’s future revenues, profits and cash flow;

• volatile energy prices, commodity and consumables prices and currency exchange rates impact potential production costs; and

• the devaluation and volatility of global stock markets impacts the valuation of the Common Shares, which may impact the Company’s ability to raise funds through the issuance of Common Shares.

These factors could have a material adverse effect on the Company’s financial condition and results of operations.

Share Price Volatility: In recent years, worldwide securities markets, particularly those in the United States and Canada, have experienced a high level of price and volume volatility, and the market price of securities of many companies, particularly those considered exploration or development stage companies, have experienced unprecedented fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. Most significantly, the share prices of junior natural resource companies have experienced an unprecedented decline in value and there has been a significant decline in the number of buyers willing to purchase such securities. In addition, significantly higher redemptions by holders of mutual funds has forced many of such funds (including those holding the Company’s securities) to sell such securities at any price. As a consequence, despite the Company’s past success in securing significant equity financing, market forces may render it difficult or impossible for the Company to secure subscribers to purchase new share issues at a price which will not lead to severe dilution to existing shareholders, or at all. Therefore, there can be no assurance that significant fluctuations in the trading price of the Company’s common shares will not occur, or that such fluctuations will not materially adversely impact on the Company’s ability to raise equity funding without significant dilution to its existing shareholders, or at all.

Permits and Licenses : The operations of the Company will require licenses and permits from various governmental authorities. There can be no assurance that the Company will be able to obtain all necessary licenses and permits that may be required to carry out exploration, development and mining operations at its projects, on reasonable terms or at all. Delays in obtaining, or a failure to obtain, such licenses and permits, or a failure to comply with the terms of any such licenses and permits that the Company does obtain, could have a material adverse effect on the Company.

Title Matters : The acquisition of title to mineral properties can be a very detailed and time-consuming process. Title to, and the area of, mineral properties may be disputed. While the Company has diligently investigated title to all mineral properties in which it has an interest and, to the best of its knowledge, title to all such properties is in good standing or, where not yet granted, the application process appears to be proceeding normally in all the circumstances, this should not be construed as a guarantee of title or that any such applications for concessions will be granted. Title to mineral properties may be affected by undetected defects such as aboriginal or indigenous peoples’ land claims, or unregistered agreements or transfers. The Company has not obtained title opinions for its mineral properties. Not all the mineral properties in which the Company has an interest have been surveyed, and their actual extent and location may be in doubt.

No Assurance of Profitability : The Company has no history of production or earnings and due to the nature of its business there can be no assurance that the Company will be profitable. The Company has not paid dividends on its shares since incorporation and does not anticipate doing so in the foreseeable future. The Company’s properties are in the exploration stage and the Company has not defined or delineated any proven or probable reserves on any of its properties. None of the Company’s properties are currently under development. Continued exploration of its existing properties and the future development of any properties

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

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found to be economically feasible, will require significant funds. The only present source of funds available to the Company is through the sale of its equity securities, the sale or optioning of a portion of its interest in its mineral properties or debt financing, none of which may be available at any time. Even if the results of exploration are encouraging, the Company may not have sufficient funds to conduct the further exploration that may be necessary to determine whether a commercially mineable deposit exists. While the Company may generate additional working capital through further equity offerings, through the sale or possible syndication of its properties, or through short-term debt facilities, there is no assurance that any such funds will be available through any of such methods on favourable terms, or at all. At present, it is impossible to determine what amounts of additional funds, if any, may be required. Failure to raise such additional capital could put the continued viability of the Company at risk.

Uninsured or Uninsurable Risks : Exploration, development and mining operations involve various hazards, including environmental hazards, industrial accidents, metallurgical and other processing problems, unusual or unexpected rock formations, structural cave-ins or slides, flooding, fires, metal losses and periodic interruptions due to inclement or hazardous weather conditions. These risks could result in damage to or destruction of mineral properties, facilities or other property, personal injury, environmental damage, delays in operations, increased cost of operations, monetary losses and possible legal liability. The Company may not be able to obtain insurance to cover these risks at economically feasible premiums or at all. The Company may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks. The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration and production activities.

Government Regulation : Any exploration, development or mining operations carried on by the Company will be subject to government legislation, policies and controls relating to prospecting, development, production, environmental protection, mining taxes and labour standards. The Company cannot predict whether such legislation, policies or controls, as presently in effect, will remain so, and any changes therein (for example, significant new royalties or taxes), which are completely outside the control of the Company, may materially adversely affect the ability of the Company to continue its planned business within any such jurisdictions.

Foreign Countries and Political Risk : Mineral exploration and mining activities may be affected in varying degrees by political or economic instability, expropriation of property and changes in government regulations such as tax laws, business laws, environmental laws and mining laws. Any changes in regulations or shifts in political conditions are beyond the control of the Company and may materially adversely affect it business, or if significant enough, may make it impossible to continue to operate in certain countries. Operations may be affected in varying degrees by government regulations with respect to restrictions on production, price controls, foreign exchange restrictions, export controls, income taxes, expropriation, environmental legislation and mine safety.

Dependence Upon Others and Key Personnel : The success of the Company’s operations will depend upon numerous factors, many of which are beyond the Company’s control, including (i) the ability of the Company to enter strategic alliances through a combination of one or more joint ventures, mergers or acquisition transactions; and (ii) the ability to attract and retain additional key personnel in exploration, mine development, sales, marketing, technical support and finance. These and other factors will require the use of outside suppliers as well as the talents and efforts of the Company. There can be no assurance of success with any or these factors on which the Company’s operations will depend. The Company has relied and may continue to rely, upon consultants and others for operating expertise.

Exploration and Mining Risks : Fires, power outages, labour disruptions, flooding, explosions, cave-ins, landslides and the inability to obtain suitable or adequate machinery, equipment or labour are other risks

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 16

involved in the operation of mines and the conduct of exploration programs. Substantial expenditures are required to establish reserves through drilling, to develop metallurgical processes, to develop the mining and processing facilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or that funds required for development can be obtained on a timely basis. The economics of developing mineral properties is affected by many factors including the cost of operations, variations of the grade of ore mined, fluctuations in the price of gold or other minerals produced, costs of processing equipment and such other factors as government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals and environmental protection. In addition, the grade of mineralization ultimately mined may differ from that indicated by drilling results and such differences could be material. Short term factors, such as the need for orderly development of ore bodies or the processing of new or different grades, may have an adverse effect on mining operations and on the results of operations. There can be no assurance that minerals recovered in small scale laboratory tests will be duplicated in large scale tests under on-site conditions or in production scale operations. Material changes in geological resources, grades, stripping ratios or recovery rates may affect the economic viability of projects.

Currency Fluctuations : The Company presently maintains its accounts in Canadian dollars. Due to the nature of its operations in other countries, the Company can be subject to currency fluctuations. Such fluctuations are out of its control and may materially adversely affect the Company’s financial position and results. The Company does not engage in any hedging programs with respect to currencies.

Environmental Restrictions : The activities of the Company are subject to environmental regulations promulgated by government agencies on spills, releases or emissions into the air, discharges into water, management of waste, management of hazardous substances, protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by mining operations. Certain types of operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which means stricter standards, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments of proposed projects carry a heightened degree of responsibility for companies and directors, officers and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the profitability of operations.

Regulatory Requirements : The activities of the Company are subject to extensive regulations governing various matters, including environmental protection, management and use of toxic substances and explosives, management of natural resources, exploration, development of mines, production and postclosure reclamation, exports, price controls, taxation, regulations concerning business dealings with indigenous peoples, labour standards on occupational health and safety, including mine safety, and historic and cultural preservation. Failure to comply with applicable laws and regulations may result in civil or criminal fines or penalties, enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions, any of which could result in the Company incurring significant expenditures. The Company may also be required to compensate those suffering loss or damage because of a breach of such laws, regulations or permitting requirements. It is also possible that future laws and regulations, or more stringent enforcement of current laws and regulations by governmental authorities, could cause additional expense, capital expenditures, restrictions on or suspension of the Company’s operations and delays in the exploration and development of the Company’s properties.

Limited Experience with Development-Stage Mining Operations : The Company has limited experience in placing resource properties into production, and its ability to do so will be dependent upon using the services

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 17

of appropriately experienced personnel or entering agreements with other major resource companies that can provide such expertise. There can be no assurance that the Company will have available to it the necessary expertise when and if it places its resource properties into production.

Estimates of Mineral Reserves and Resources and Production Risks : The mineral resource estimates presented in the Company’s filings with securities regulatory authorities, press releases and other public statements that may be made from time to time are based upon estimates made by Company personnel and independent geologists, and no assurance can be given that any particular level of recovery of minerals will in fact be realized or that an identified reserve or resource will ever qualify as a commercially mineable (or viable) deposit which can be legally and economically exploited. The estimating of mineral resources and mineral reserves is a subjective process and the accuracy of mineral resource and mineral reserve estimates is a function of the quantity and quality of available data, the accuracy of statistical computations, and the assumptions used, and judgments made in interpreting available engineering and geological information. There is significant uncertainty in any mineral resource or mineral reserve estimate and the actual deposits encountered and the economic viability of a deposit may differ materially from the Company’s estimates. Accordingly, there can be no assurance that:

• these estimates will be accurate;

• reserve, resource or other mineralization figures will be accurate; or

• this mineralization could be mined or processed profitably.

Because the Company has not commenced production at any of its properties, and has not defined or delineated any proven or probable reserves on any of its properties, mineralization estimates for the Company’s properties may require adjustments or downward revisions based upon further exploration or development work or actual production experience. In addition, the grade of mineralization ultimately mined may differ from that indicated by drilling results and such differences could be material. There can be no assurance that minerals recovered in small-scale tests will be duplicated in large-scale tests under onsite conditions or in production scale. Production can be affected by such factors as permitting regulations and requirements, weather, environmental factors, unforeseen technical difficulties, unusual or unexpected geological formations and work interruptions. Short term factors, such as the need for orderly development of deposits or the processing of new or different grades, may have a material adverse effect on mining operations and on the results of operations. There can be no assurance that minerals recovered in small scale laboratory tests will be duplicated in large scale tests under on-site conditions or in production scale operations. Material changes in reserves or resources, grades, stripping ratios or recovery rates may affect the economic viability of projects. The estimated resources described in the Company’s filings with securities regulatory authorities, press releases and other public statements that may be made from time to time should not be interpreted as assurances of mine life or of the profitability of future operations. Estimated mineral resources and mineral reserves may have to be re-estimated based on changes in applicable commodity prices, further exploration or development activity or actual production experience. This could materially and adversely affect estimates of the volume or grade of mineralization, estimated recovery rates or other important factors that influence mineral resource or mineral reserve estimates. Market price fluctuations for copper and other commodities, increased production costs or reduced recovery rates or other factors may render any reserves uneconomical or unprofitable to develop at a particular site or sites. A reduction in estimated reserves could require material write downs in investment in the affected mining property and increased amortization, reclamation and closure charges.

Mineral resources are not mineral reserves and there is no assurance that any mineral resources will ultimately be reclassified as proven or probable reserves. Mineral resources which are not mineral reserves do not have demonstrated economic viability.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 18

Mining Industry is Intensely Competitive : The Company’s business of the acquisition, exploration and development of mineral properties is intensely competitive. The Company may be at a competitive disadvantage in acquiring additional mining properties because it must compete with other individuals and companies, many of which have greater financial resources, operational experience and technical capabilities than the Company. The Company may also encounter increasing competition from other mining companies in efforts to hire experienced mining professionals. Competition for exploration resources at all levels is currently very intense, particularly affecting the availability of manpower, drill rigs and helicopters. Increased competition could adversely affect the Company’s ability to attract necessary capital funding or acquire suitable producing properties or prospects for mineral exploration in the future.

The Company may be a “passive foreign investment company” under the U.S. Internal Revenue Code, which may result in material adverse U.S. federal income tax consequences to investors in Common Shares that are U.S. taxpayers . Investors in Common Shares that are U.S. taxpayers should be aware that Cardero believes that it has been in one or more prior tax years, and may be in current and future tax years, a “passive foreign investment company” under Section 1297(a) of the U.S. Internal Revenue Code (a “PFIC”). However, no determination has been made regarding Cardero’s PFIC status for any tax year. Investors should consult their own tax advisor regarding the PFIC rules and other U.S. federal income tax consequences of the acquisition, ownership, and disposition of Common Shares.

SUMMARY OF QUARTERLY RESULTS

The table below sets out the quarterly results for the past eight quarters:

	January 31,	January 31,	October 31,	July 31,
	2021	2021	2020	2020
Total assets	7,088,800	7,053,772	7,125,140	7,126,420
Exploration and evaluation assets	6,846,042	6,830,880	6,788,703	6,713,179
Working capital (deficit)	(3,521,291)	(3,724,404)	(3,492,088)	(2,114,873)
Shareholders’ equity	2,974,606	2,773,350	2,822,516	2,976,015
Other income (loss)	14,636	(14,180)	(78,958)	(14,736)
Operating expenses	(154,713)	(64,513)	(207,844)	(92,810)
Impairment of exploration and evaluation assets	-	-	-	-
Net income (loss)	(140,077)	(78,693)	(271,715)	(107,546)
Basic and diluted lossper share	(0.00)	(0.00)	(0.00)	(0.00)
	April 30,	January 31,	October 31,	July 31,
	2020	2020	2019	2019
Total assets	7,223,357	7,224,268	6,756,262	7,008,287
Exploration and evaluation assets	6,694,494	6,583,462	6,544,394	6,713,065
Working capital (deficit)	(2,073,029)	(1,991,424)	(1,799,682)	(2,960,218)
Shareholders’ equity	3,082,101	3,341,243	1,237,934	1,501,552
Other income (loss)	(144,386)	(340,713)	(119,054)	27,785
Operating expenses	(113,296)	(113,298)	514,065	(234,770)
Impairment of exploration and evaluation assets	-	-	(270,981)	-
Net loss	(257,682)	(454,011)	124,030	(206,985)
Basic and diluted lossper share	(0.00)	(0.01)	(0.00)	(0.00)

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 19

The variation seen over such quarters is primarily dependent upon the success of the Company’s ongoing property evaluation program and the timing and results of the Company’s exploration activities on its then current properties, none of which are possible to predict with any accuracy. There are no general trends regarding the Company’s quarterly results, and the Company’s business of mineral exploration is not seasonal. Quarterly results can vary significantly depending on whether the Company has abandoned any properties or granted any stock options and these are the factors that account for material variations in the Company’s quarterly net losses, none of which are predictable. While the Company may seek, in the future, to sell some or all the interests in other of its exploration and evaluation assets, the timing and potential effect of any such sale is impossible to predict. The write-off of exploration and evaluation assets can have a material effect on quarterly results as and when they occur. Another factor which can cause a material variation in net loss on a quarterly basis is the grant of stock options due to the resulting share-based payment charges which can be significant when they arise. General operating costs other than the specific items noted above tend to be quite similar from period to period.

FINANCIAL RESULTS OF OPERATIONS

The following discussion addresses the operating results and financial condition of the Company for the three and six-month periods ended April 30, 2021, compared with the three and six-month periods ended April 30, 2020. The discussion explains the variations in key components of these numbers but, as with most junior mineral exploration companies, the results of operations are not the main factor in establishing the financial health of the Company. Of far greater significance are the mineral properties in which the Company has, or may earn, an interest, its working capital and how many shares it has outstanding. Quarterly results can vary significantly depending on whether the Company has abandoned any properties or granted any stock options.

Three Months ended April 30, 2021, compared to three months ended April 30, 2020

During the three-month period ended April 30, 2021, the Company incurred a loss of $140,077 (April 30, 2020 – $257,682).

The Company’s expenses were $154,713 (2020 - $113,296); a review of the significant components is as follows:

• Consulting fees of $10,500 (2020 - $15,000) decreased by $4,500 and consisted of fees paid to the CFO $9,000 (2020 - $13,500), and expenses from other consultants of $1,500 (2020 – $1,500).

• Depreciation of $5,059 (2020 - $4,940) remained fairly consistent and consisted of depreciation on property plant and equipment and leasehold improvements.

• Insurance of $11,931 (2020 - $5,946) increased by $5,985 during the period due to timing of payments, however, it is expected that the annual cost will only increase by approximately $4,500.

• • Investor relations of $639 (2020 - $309) remained fairly consistent and was reduced in part of the Company’s reduction in travel and associated costs during the Covid-19 pandemic.

• Office cost recoveries of $71,422 (2020 - $37,680) increased by $33,742, mainly due to a final adjustment on the expiration of the office lease.

• Professional fees of $17,087 (2020 - $23,416) decreased by $6,329 mainly due to and decrease in legal fees on the company’s Zonia property.

• Regulatory and transfer agent fees of $12,381 (2020 - $9,243) increased by $3,138 mainly due to an increase in transfer agent fees.

• Salaries and benefits of $25,694 (2020 - $16,568) increased by $9,126 due to for salaried employees due to the timing of payments and recoveries in the current period.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 20

• Travel of $Nil (2020 - $194) was reduced in part of the Company’s reduction in travel and associated costs during the Covid-19 pandemic.

The Company also incurred other income and expenses including:

• Interest income of $336 (2020 - $6,553) is mainly due from the Company’s investment in sublease and has reduced substantially as the net investment in sublease expired in March 2021.

• Interest expenses of $85,850 (2020 - $92,078) decreased by $6,228 mainly due to interest accretion on the office lease liability, where the lease has expired and a stronger Canadian Dollar affecting the USD loan interest by decreasing the expense due to the current exchange rate recording the interest.

• Foreign exchange gain of $100,150 (2020 loss – $58,861) is due to the stronger Canadian dollar on revaluation of USD based loans and accounts payable.

• Dividend expense of $Nil (2020 – $Nil) on the preferred shares. The dividends ceased during the year ended October 31, 2020 on conversion of the preferred shares to common shares.

Six Months ended April 30, 2021, compared to six months ended April 30, 2020

During the three-month period ended April 30, 2021, the Company incurred a loss of $249,770 (April 30, 2020 – $711,693).

The Company’s expenses were $250,226 (2020 - $226,594); a review of the significant components is as follows:

• Consulting fees of $21,000 (2020 - $24,001) decreased by $3,001 and consisted of fees paid to the CFO $18,000 (2020 - $27,500), and expenses from other consultants of $3,000 (2020 recovery – $2,999).

• Depreciation of $10,118 (2020 - $9,880) consisted of depreciation on property plant and equipment and leasehold improvements.

• Insurance of $23,779 (2020 - $12,236) increased by $11,543 during the period due to timing of payments, however, it is expected that the annual cost will only increase by approximately $4,500.

• • Investor relations of $639 (2020 - $4,364) decreased by $3,725 mainly due to a reduction in advertising and marketing as the Company continues its discussions with World Copper Ltd on a potential merger.

• Office cost recoveries of $75,356 (2020 - $44,181) increased by $31,175 mainly due to a final adjustment on the expiration of the office lease.

• Professional fees of $59,371 (2020 - $32,941) decreased by $4,570 mainly due to and decrease in legal fees on the company’s Zonia property and an small increase in Audit fees.

• Regulatory and transfer agent fees of $16,632 (2020 - $30,660) increased by $3,138 mainly due to an increase in filing fees and related costs on the Company’s private placements and conversion of Preferred shares to Common shares.

• Salaries and benefits of $43,331 (2020 - $66,495) decreased by $23,164 due to a reduction in the CEO’s salary and a reduction in recoveries allocations in the current period.

• Travel of $Nil (2020 - $1,836) was reduced in part of the Company’s reduction in travel and associated costs during the Covid-19 pandemic.

The Company also incurred other income and expenses including:

• Interest income of $4,265 (2020 - $11,544) is mainly due from the Company’s investment in sublease and has reduced substantially as the net investment in sublease expired in March 2021.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 21

• Interest expenses of $180,464 (2020 - $150,186) increased by $30,278 mainly due to interest on additional loans.

• Foreign exchange gain of $176,655 (2020 loss – $97,251) is due to the stronger Canadian dollar on revaluation of USD based loans and accounts payable.

• Dividend expense of $Nil (2020 – $249,206) on the preferred shares. The dividends ceased during the year ended October 31, 2020, on conversion of the preferred shares to common shares.

SELECTED ANNUAL INFORMATION

	October 31, 2020	October 31, 2019	October 31, 2018
Interest (expense)	$(345,214)	$(197,490)	$(22,955)
Income (Loss) for the year	$(1,090,954)	$(2,577,069)	$680,454
Income (Loss) per share	$(0.01)	$(0.03)	$0.01
Total assets	$7,125,140	$6,756,262	$7,573,443
Working capital deficit	$(3,492,088)	$(1,799,682)	$(1,642,170)

LIQUIDITY AND CAPITAL RESOURCES

The Company has no revenue generating operations from which it can internally generate funds. Over the past three fiscal years, the Company’s ongoing operations have been predominantly financed by a shortterm loan, a credit facility, the sale of its equity securities by way of private placements and the subsequent exercise of share purchase warrants and broker options issued regarding such private placements. However, the exercise of warrants/options is dependent primarily on the market price and overall market liquidity of the Company’s securities at or near the expiry date of such warrants/options (over which the Company has no control) and therefore there can be no guarantee that any existing warrants/options will be exercised. The Company has also successfully generated operating funds through the sale of certain of its resource related investments, some of which had significantly increased in value since their acquisition. However, such returns are subject to fluctuations in the market for the shares of the companies in which the Company has invested, and therefore there can be no assurance that the Company will continue to be able to generate significant additional funds through the liquidation of its investments. As illustrative of this, the current market conditions for junior resource equities have resulted in a significant decline in the market value, and hence the price at which the Company can sell, any of its remaining resource related investments, and the Company does not presently envision raising any further significant funds through the sale of such investments. In addition, the Company has already disposed of the bulk of its resource-related investments and therefore does not anticipate being able to generate material funds through further sales in the foreseeable future. The Company can raise funds through the sale of interests in its mineral properties, and negotiations in this regard are underway, although there can be no assurance that it will be successful in doing so.

During the period ended April 30, 2021:

The Company received $117,619 ($95,000 USD) in loans from E.L. II Properties Trust and $40,000 from Robert van Doorn, a Director of the Company.

The Company negotiated an extension to the maturity date of a previously extended US $294,655 promissory note (the “Loan”) with the lender, a company controlled by a majority shareholder and Director of the Company. The Loan was due on November 13, 2020 and was extended for another year and to November 13, 2021 bearing interest at 12% per annum. The Company planned to issue 9,819,809 bonus

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 22

warrants to the lender. The bonus warrants are exercisable into one common share of the Company at a price of $0.05 per share expiring November 13, 2021. This transaction is subject to TSXV approval and that approval was not given on the original submission. At the request of the TSXV the Company has resubmitted the transaction to the TSXV based on the Company issuing 6,452,945 bonus warrants at a price of $0.06 per share, the extension date and the expiry of the warrants remain the same.

As at April 30, 2021, the Company reported cash of $135,838 compared to cash of $26,393 at October 31, 2020. The change in cash and cash equivalents over the period is comprised of funds used by Operating Activities of $313,726 (2020 - $120,517), in Investing Activities used $93,322 (2020 - $158,800) in exploration and evaluation assets, $147,041 (2020 - $Nil) was provided by lease payments received from sub leases and Financing Activities provided $41,333 (2020 - $155,860) in proceeds on share issuances net of share issue costs, $300,000 (2020 - $Nil) in subscriptions received, $157,619 (2020 - $266,526) in related party loans, $20,000 (2020 - $40,000) in Covid-19 relief loans and used $149,500 (2020 - $179,443) in lease payments. As at April 30, 2021, the Company had a working capital deficit of $3,521,291 (October 31, 2020 - $3,492,088).

To move the Company’s projects forward and to continue as a going concern, the Company will be required to raise additional funds. The Company will raise funds in the 2020 fiscal year to advance its projects. It is the Company’s intention to specifically move the Zonia copper project forward in anticipation of a copper market recovery continuing through the next 3 to 5 years. The Company is investigating several potential sources of capital including but not limited to an equity placement, Joint Venture and potential royalty and/or streaming arrangement. Although the Company believes it will be able to raise capital, there can be no assurances that the Company’s future cash requirements, and the ability of the Company to raise the funding necessary to carry out its planned activities and to meet its anticipated general and administrative expenses for the fiscal year ending October 31, 2021 will be successful.

The Company does not believe that the credit, liquidity or market risks with respect to cash held in banks has increased because of the current market conditions. However, to achieve greater security for the preservation of its capital, the Company has, of necessity, been required to accept lower rates of interest which has also lowered its potential interest income.

The Company’s contractual obligation consisted of an operating lease to March 31, 2021 which expired without renewal.

OFF BALANCE-SHEET ARRANGMENTS

The Company has no off-balance sheet arrangements.

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 23

RELATED PARTY TRANSACTIONS

During the six month period ended April 30, 2021, the Company entered the following transactions with related parties and paid or accrued the following amounts, excluding share-based payment charges in connection therewith:

		Purpose of		April 30,		April 30,
Name	Relationship	Transaction		2021		2020
Stuart Ross	CEO and President	Wages and Salaries	$	-	$	40,000
Marla Ritchie	Corporate Secretary of	Wages and Salaries	$	18,000	$	18,000
	the Company
Promaid Services Ltd	Company controlled by a	Consulting	$	-	$	27,000
	former CFO of the
	Company
Sead Hamzagic, Inc	Company controlled by	Consulting	$	18,000	$	-
	the CFO of the
	Company

Accounts receivable as at April 30, 2021 included $10,237 (October 31, 2020 - $7,345) owed from an officer and directors of the Company.

Accounts payable and accrued liabilities as at April 30, 2021 included $211,549 (October 31, 2020 - $288,124) owed to officers, Companies owned by officers and directors and directors of the Company.

Facility:

During the year ended October 31, 2019, the Company entered into a facility agreement with E.L. II Properties Trust, for an unsecured credit facility (the “Facility”) of US $630,000 to be advanced in five equal installments of US $126,000. The Company received all five installments of US $126,000. The Facility bears interest at 12% per annum, and repayment is due on the date which is two years following the date the Facility has been fully advanced to the Company. The repayment of the facility was due on February 22, 2021, and has been extended as a demand loan under the same interest terms.

Loan:

The Company negotiated an extension to the maturity date of a previously extended US $294,655 promissory note (the “Loan”) with the lender, a company controlled by a majority shareholder and Director of the Company. The Loan was due on November 13, 2020 and was extended for another year and to November 13, 2021 bearing interest at 12% per annum. The Company planned to issue 9,819,809 bonus warrants to the lender. The bonus warrants are exercisable into one common share of the Company at a price of $0.05 per share expiring November 13, 2021. This transaction is subject to TSXV approval, and that approval was not given on the original submission. At the request of the TSXV the Company has resubmitted the transaction to the TSXV based on the Company issuing 6,452,945 bonus warrants at a price of $0.06 per share, the extension date and the expiry of the warrants remain the same.

The Company received an additional $117,619 (US $95,000) during the period, and as at April 30, 2021 the Company has a total of $230,040 (US $180,000) in unsecured advances from E.L. II Properties Trust (the “Lender”) accruing interest at 12% per annum.

Directors loan:

During the year ended October 31, 2019, the Company secured loans in the aggregate amount of $150,000 with certain directors of the Company. The loans have a two-year term and bear interest at a rate of 12% per annum, compounded annually, payable on the maturity date. The Company issued 3,000,000 non-

Cardero Resource Corp. Form 51-102F1 Management Discussion & Analysis Period ended April 30, 2021

Page 24

transferable bonus warrants to the lenders. Each bonus warrant will entitle the holder to purchase one common share in the capital of the Company at an exercise price of $0.05 per share for a period of two years. During the period and additional $40,000 was advanced as a demand loan bear interest at a rate of 12% per annum. The repayment of the original loans were due on May 22, 2021 (subsequent to the period ended April 30, 2021), and have been extended as a demand loan under the same interest terms.

PROPOSED TRANSACTIONS

On April 20, 2021, the Company announced that it has entered a letter agreement with World Copper Ltd. (“WCU”) dated April 13, 2021 (the “Letter Agreement”) to combine the businesses of the two companies (the "Proposed Transaction"). Completion of the Proposed Transaction is subject to board approvals by both companies and shareholder approval for Cardero, and the satisfaction of certain other conditions discussed below.

Under the terms of the Proposed Transaction, WCU would acquire all of the outstanding common shares of Cardero in consideration of the issuance of common shares of WCU such that upon the completion of the Proposed Transaction, the number of WCU shares held by former shareholders of Cardero, on a nondiluted basis, will be 40% with the remaining 60% held by the existing shareholders of WCU.

Cardero’s principal asset is the 100%-owned Zonia copper oxide project ("Zonia") located in central Arizona. A preliminary economic assessment for the Zonia was completed by as prepared by Global Resource Engineering Ltd. ("GRE") of Denver, Colorado) in 2018. WCU’s principal assets are the Escalones and Cristal copper projects located in Chile.

Summary of the Transaction

It is anticipated that the Proposed Transaction will be completed by way of a plan of arrangement or such other structure to be determined in a manner that is mutually agreeable from a tax perspective to both Cardero and WCU shareholders, likely resulting in Cardero becoming a wholly-owned subsidiary of WCU at closing. Prior to the completion of the Proposed Transaction, Cardero will effect a voluntary delisting of its shares from the TSX Venture Exchange (“TSXV”).

As certain members of the Cardero board are also members of the board or management of WCU or control persons of WCU, Cardero has appointed a special committee to review the Proposed Transaction and make recommendations to the Cardero board. Cardero has also engaged a third party advisor to prepare a fairness opinion in relation to the Proposed Transaction.

Following completion of the Proposed Transaction, outstanding warrants to acquire common shares of Cardero will be exercisable to acquire common shares of WCU on the basis of the above common share exchange ratio. All outstanding and unexercised options of Cardero will be cancelled.

Under the terms of the Letter Agreement, Cardero will have the right to appoint two members to the board of the merged entity.

The Proposed Transaction is conditional upon a number of items, including without limitation, the approval of the board of directors of each party, the execution of a definitive agreement (the “Definitive Agreement”) reflecting the terms set out in the Letter Agreement, the approval of the Cardero shareholders, as more particularly described below, at a meeting to be held as soon as practicable following execution of the Definitive Agreement, Cardero having not more than $300,000 in outstanding accounts payable and accrued

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liabilities, excluding loans made by entities controlled by director Robert Kopple (the “Kopple Entities”), in addition to other customary closing conditions, including receipt of court and all regulatory and TSXV approvals.

In addition, in connection with the completion of the Proposed Transaction, WCU is to complete a financing of not less than $10 million for the merged entity (the “WCU Financing”), which financing is not to impact the ratios set forth above.

Finally, prior to the completion of the Proposed Transaction and following the voluntary delisting of Carder from the TSXV, Cardero and the Kopple Entities will enter into certain agreements for the extension of the maturity and restructuring of $2,329,163 in loans (the “CDU Loans”) and $1,019,836 (the “CDU Dividend”) dividends payable by Cardero to the Kopple Entities (the “Loan Restructuring”) which loans and dividends will be assumed by WCU upon completion of the Proposed Transaction.

More particularly the Loan Restructuring will comprise the following elements:

• (a) the maturity date of such portion of the CDU Loans as become due in 2021 (approximately $1,677,771) will be extended such that 50% of total amount will be extended by two years and the remaining 50% will be extended by three years. The portion of the CDU Loans maturing in 2022, being approximately $651,392, will not be extended;

• (b) 50% of the CDU Dividend will be payable in 2023 and the remainder in 2024 (to be concurrent with the extensions to the CDU Loans above);

• (c) The outstanding amounts under the CDU Loans and the CDU Dividend will accrue interest at 8% per annum, payable upon maturity, shall be unsecured and shall be repayable, in whole or in part at any time without penalty or bonus;

• (d) An aggregate of 19,869,809 share purchase warrants currently held by the Kopple Entities and issued in connection with the CDU Loans will be cancelled and 53,952,124 new warrants exercisable at a price of $0.05 per share until the earlier of 12 months following issuance or the completion of the WCU Financing.

As the Kopple Entities are owned and controlled by Robert Koppel, who is a director and a control person of Cardero, the Loan Restructuring is a ‘related party transaction’ as such term is defined in Multilateral Instrument 61-101 Protection of Minority Securityholders in Special Transactions (“MI 61-101”) and will require the approval of a majority of the minority shareholders, excluding the votes of the Kopple Entities. Cardero anticipates relying on an exemption to the formal valuation requirement as set forth in Section 5.5(b) of MI 61-101, as Cardero is not listed in the TSX, NYSE, NASDAQ or any stock exchange outside of Canada.

The Loan Restructuring is distinct from the loan extensions announced by Cardero on December 11, 2020. Those loans were extended to November 13, 2021 as announced, but Cardero has not proceeded with the issuance of any of the bonus warrants then announced.

The Proposed Transaction requires the favourable vote of 66 2/3% of the votes cast by Cardero shareholders, as well as a majority of the minority shareholders, excluding the votes of the Kopple Entities in accordance with MI 61-101 as the Proposed Transaction will constitute a ‘business combination’ as such term is defined in MI 61-101 as a result of the ‘collateral benefit’ to be received by the Kopple Entities relating to the Loan Extension. The voluntary delisting of Cardero will also require the approval of a majority of the minority shareholders in accordance with the policies of the TSXV.

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Full details of the Proposed Transaction will be included in the Definitive Agreement and Cardero’s information circular to be filed with the regulatory authorities and provided to Cardero shareholders. Cardero anticipates utilizing notice and access in connection with the distribution of the meeting materials and intends to set a meeting date for the Proposed Transaction in mid to late June, 2021 subject to the execution of the Definitive Agreement.

Subject to the execution of the Definitive Agreement and satisfaction of all closing conditions, the Proposed Transaction is expected to be completed in Q3 2021. There can be no assurances that any transaction relating to the Proposed Transaction or otherwise will result, or as to the final definitive terms thereof.

Transaction Benefits

Cardero believes that the Proposed Transaction will result in numerous benefits to the shareholders of the Company, including:

• Exposure to a more diversified copper exploration portfolio in the Americas;

• Combined entity will likely increase shareholder liquidity, trading and capital markets exposure;

• Anticipated cost savings from consolidating operations; and

• Commitment to $10 million financing into WCU by the time of closing the Proposed Transaction

Amending Agreement with World Copper Ltd.

Cardero Resource Corp. has entered an amending agreement dated June 4, 2021, to the letter agreement dated April 13, 2021, entered into with World Copper Ltd. intending to merge the businesses of the two companies (see press release dated April 20, 2021).

As previously announced, under the terms of the proposed transaction, World Copper would acquire all of the outstanding common shares of Cardero in consideration of the issuance of common shares of World Copper such that upon the completion of the proposed transaction, the number of World Copper shares held by former shareholders of Cardero, on a non-diluted basis, will be 40 per cent, with the remaining 60 per cent held by the existing shareholders of World Copper.

The amending agreement extends the date by which the parties are to enter into a definitive agreement, reflecting the terms of the proposed transaction to June 30, 2021. In addition, the amending agreement no longer requires Cardero to effect a voluntary delisting of its shares from the TSX Venture Exchange in advance of the proposed transaction.

The amending agreement also confirms Cardero's issuances of new bonus warrants and extension of the maturity and restructuring of $2,329,163 in loans to entities controlled by director Robert Kopple, which loans will be assumed by World Copper upon completion of the proposed transaction (see press release dated May 31, 2021).

In addition, the amending agreement contemplates that upon closing of the proposed transaction, World Copper will grant to Mr. Kopple or a Kopple entity the option to acquire a 1-per-cent net smelter return royalty on the Zonia copper oxide project. The royalty option will be exercisable by the holder thereof at a price of approximately $1.41-million and may be repurchased by World Copper.

Pursuant to the letter agreement, World Copper is to complete a financing of not less than $10-million for the merged entity, which financing is not to impact the ratios in the proposed transaction. The amending

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agreement contemplates that the aggregate proceeds of the World Copper financing shall be an amount by which, when combined with the proceeds of the royalty option, shall be at least $10-million.

The proposed transaction requires the favourable vote of 66-2/3rds per cent of the votes cast by Cardero shareholders as well as a majority of the minority shareholders, excluding the votes of the Kopple entities, in accordance with MI 61-101 as the proposed transaction will constitute a business combination as such term is defined in MI 61-101 as a result of the collateral benefit to be received by the Kopple entities relating to the loan restructuring and the contemplated royalty option to be granted by World Copper.

Full details of the proposed transaction will be included in the definitive agreement and Cardero's information circular to be filed with the regulatory authorities and provided to Cardero shareholders. Cardero anticipates utilizing notice and access in connection with the distribution of the meeting materials and intends to set a meeting date for the proposed transaction in early September, 2021, subject to the execution of the definitive agreement.

Subject to the execution of the definitive agreement and satisfaction of all closing conditions, the proposed transaction is expected to be completed in 2021. There can be no assurances that any transaction relating to the proposed transaction or otherwise will result or as to the final definitive terms thereof.

Additional Information

Additional information about Cardero Resource Corp. and World Copper Ltd. is available by visiting Cardero’s website at www.cardero.com or WCU’s website at www.worldcopperltd.com or under their profiles on SEDAR at www.sedar.com.

General, there are no other proposed transactions where the Board of Directors or senior management believes that confirmation of the decision by the Board is probable or with which the Board and senior management have decided to proceed other than the proposed transaction with World Copper Ltd as noted above in “Proposed Transactions”.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements requires management to use judgment in applying its accounting policies and estimates and assumptions about the future. Estimates and other judgments are continuously evaluated and are based on management’s experience and other factors, including expectations about future events that are believed to be reasonable under the circumstances. There were no changes to the Company’s most significant accounting judgments and estimates during the period.

CHANGES IN ACCOUNTING POLICIES

The impact of the adoption of new accounting standards and amendments are disclosed in the Company’s consolidated financial statements for the period ended April 30, 2021. None of the new standards or amendments had a significant impact on the consolidated financial statements of the Company.

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FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

The Company’s amounts due from related parties, and its accounts payable and accrued liabilities at April 30, 2021 were normal course business items.

The Company manages its capital structure, and adjusts it, based on the funds available to the Company to support future business opportunities. The Company defines its capital as shareholders’ equity and debt. The Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future development of the business.

The Company currently has no source of revenues; as such, the Company is dependent upon external financings or related party loans and line of credit to fund activities. To carry future projects and pay for administrative costs, the Company will spend its existing working capital and raise additional funds as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. There were no changes in the Company’s approach to capital management during the period ended April 30, 2021. The Company is not subject to xternally imposed capital requirements.

IFRS 13 Fair Value Measurement establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value hierarchy requires the use of observable market inputs whenever such input exists. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value.

DISCLOSURE OF OUTSTANDING SHARE DATA

• (a) As of the date of this MDA, the Company has 142,206,712 issued and outstanding common shares. The authorized share capital is an unlimited number of common shares without par value.

• (b) As at the date of this MDA, the Company has 2,600,000 incentive stock options outstanding.

• (c) As at the date of this MDA, the Company has 24,184,033 share purchase warrants.

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DISCLOSURE OF MANAGEMENT COMPENSATION

In accordance with the requirements of Section 19.5 of TSXV Policy 3.1, the Company provides the following disclosure with respect to the compensation of its directors and officers during the period:

1. During the period ended April 30, 2021, the Company did not enter any standard compensation arrangements made directly or indirectly with any directors or officers of the Company, for their services as directors or officers, or in any other capacity, with the Company or any of its subsidiaries except as disclosed under “Related Parties Transactions”.

2. During the period ended April 30, 2021, officers of the Company were paid (or accrued) for their services as officers of the Company as noted above under “Related Parties Transactions”.

3. During the period ended April 30, 2021, the Company did not enter any arrangement relating to severance payments to be paid to directors and officers of the Company and its subsidiaries.

ADDITIONAL SOURCES OF INFORMATION

Additional disclosures pertaining to the Company, including its most recent, financial statements, management information circular, material change reports, press releases and other information, are available on the SEDAR website at www.sedar.com or on the Company’s website at www.cardero.com. Readers are urged to review these materials, including the technical reports filed with respect to the Company's mineral properties.