Stroud Resources Ltd.

FORM 51-102FI

MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

November 28, 2022

MANAGEMENT’S DISCUSSION AND ANALYSIS (“MD&A”) FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2022

The following discussion of the results of operations of Stroud Resources Ltd. (“the Company” or "Stroud"), dated 28 November 2022, for the nine months ended 30 September 2022, should be read in conjunction with the Company’s consolidated financial statements for the nine months ended 30 September 2022 and for the year ended 31 December 2021.

All amounts are presented in Canadian dollars, unless otherwise noted. Additional information relating to the Company is available on SEDAR at www.sedar.com .

1. Overview

Stroud Resources Ltd. (the “Company” or “Stroud”) is a junior resource company involved in the acquisition, exploration, and development of mineral properties. The Company is listed on the TSX Venture Exchange as a Tier 2 company and trades under the stock symbol "SDR". Stroud is exploring properties hosting silver and gold mineralization in Jalisco, Mexico; and has interests in natural gas producing wells in Alberta, Canada.

Management's strategy for building Stroud and maximizing shareholder value is to acquire and explore properties with the potential to host significant economic deposits within prolific mining districts in Mexico, with the objective of enhancing the value of these properties either by direct exploration or through joint ventures with third parties.

The Company was incorporated on 18 March 1983 and is in the exploration and development stage. The Company is in the process of exploring its mineral properties and has not yet determined whether these properties contain ore reserves that are economically recoverable. The recoverability of these expenditures is dependent upon the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financings to complete the development thereof, and the future profitable production therefrom or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis. Future quarterly results, in terms of both corporate and exploration expenditures, may be constrained by difficult market conditions and lack of financing available to junior mining companies.

Mining Industry

The exploration for and development of mineral deposits involves significant risk, which even a combination of careful evaluation, experience and knowledge may not eliminate. While the discovery of a mineral deposit may result in substantial rewards, few properties that are explored are ultimately developed into producing mines. Major expenses may be required to locate and establish mineral reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. It is impossible to ensure that the exploration programs planned by the Company will result in a profitable commercial mining operation. Whether a mineral deposit will be commercially viable depends on several factors, some of which are: the particular attributes of the deposit, such as size; grade and proximity to infrastructure; metal prices; and government regulations, including regulations relating to prices; taxes; royalties; land tenure; land use; permitting; 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 investment.

Forward-Looking Statements

This management’s discussion and analysis may contain statements that are “Forward-looking Statements”. These include statements about the Company’s expectations, beliefs, plans, objectives and assumptions about future events or performance. These statements are often, but not always, made using words or phrases such as “will likely result”, “are expected to”, “will continue”, “anticipate”, “believes”, “estimate”, “intend”, “plan”, “would”, and “outlook” or statements to the effect that actions, events or results “will”, “may”, “should” or “would” be taken, occur or be achieved. Statements and estimates concerning mineral resources may also be deemed to be forward-looking statements in that they involve estimates, based on certain assumptions, regarding the mineralization that would be encountered, if and when, a mineral deposit was to be developed and mined. Forward-looking statements are not historical facts and are subject to several risks and uncertainties beyond the Company’s control. Accordingly, the Company’s actual results could differ materially from those suggested by these forward-looking statements for various reasons discussed throughout this analysis. Forward-looking statements are made based on the beliefs, opinions and estimates of the Company’s management on the date the statements are made, and the Company does not undertake any obligation to update forward-looking statements if the circumstances or management’s beliefs, opinions or estimates should change. Readers should not place undue reliance on forward-looking statements.

COVID-19

The Company’s operations have been significantly adversely affected by the effects of a widespread global outbreak of a contagious disease, including the recent outbreak of respiratory illness caused by COVID-19. The Company’s drilling permits were delayed about 5 months with delays associated with shutdowns related to Covid-19. The Company cannot accurately predict the impact COVID-19 will have on future operations and the ability of others to meet their obligations with the Company, including uncertainties relating to the ultimate geographic spread of the virus, the severity of the disease, the duration of the outbreak, and the length of travel and quarantine restrictions imposed by governments of affected countries. In addition, a significant outbreak of contagious diseases in the human population could result in a widespread health crisis that could adversely affect the economies and financial markets of many countries resulting in an economic downturn that could further affect the Company’s operations and ability to finance its operations.

Drill Programs

From the years 2021 and 2022, Stroud Resources performed two drilling campaigns. The Phase 1 diamond drilling program for 2021 began on 15 April 2021 (drill hole SD21-46) and was completed by 19 December 2021 (drill hole SD-21-58) with the plan to drill 3,000 metres in 12 drill holes distributed in 13 drill pads (drill setups) located across the Property.

In its Phase 1 diamond drilling program of 2021, the Company completed 7,707.75 metres with HQ and NQ size core, in 21 completed diamond drill holes and 383.15 metres in 5 abandoned holes with lengths varying from 55.5 m to 552 metres. This campaign aimed to verify and confirm the geological and mineral resource modelling of the Property. Interpretations from geological modelling of Santo Domingo had identified additional mineralized zones running parallel to the previously announced Mineral Resource Estimate (Table 10-2).

Table 10-2 . Summary of 2021 Phase 1 diamond drilling on the Santo Domingo Silver Project, Mexico.

Drill Hole	East (mE)	North (mN)	Elev (m)	Depth (m)	Collar Az	Collar Dip	Started (mm/dd/yyyy)	Completed (mm/dd/yyyy)	Target
SD-21-46	606383.073	2334194.03	1150.576	308.5	230	-50	4/15/2021	4/23/2021	Guadalupe
SD-21-47	606383.073	2334194.03	1150.576	350	230	-65	4/24/2021	5/2/2021	Guadalupe
SD-21-48	606383.073	2334194.03	1150.576	375	230	-80	5/4/2021	5/15/2021	Guadalupe
SD-21-53	606496.373	2334188.22	1143.327	384	230	-55	5/18/2021	5/31/2021	Guadalupe
SD-21-54	606496.373	2334188.22	1143.327	324	230	-65	6/1/2021	6/8/2021	Guadalupe
SD-21-56	606496.373	2334188.22	1143.327	292.5	230	-85	6/9/2021	6/15/2021	Guadalupe
SD-21-80	606070.172	2334155.96	1159.487	534	230	-50	6/18/2021	7/8/2021	Zopilote
*SD-21-68	606505.877	2334473.86	1025.024	55.5	230	-50	6/26/2021	6/30/2021	Guadalupe
SD-21- 68A	606505.877	2334473.86	1025.024	405	230	-55	7/4/2021	7/28/2021	Guadalupe
SD-21-81	606070.172	2334155.96	1159.487	540	230	-70	7/10/2021	7/27/2021	Zopilote
SD-21-82	606070.172	2334155.96	1159.487	537	50	-65	7/29/2021	8/15/2021	Zopilote
SD-21-69	606523.85	2334431.34	1044.534	187.95	230	-50	8/5/2021	8/20/2021	Guadalupe
*SD-21-83	606121.646	2334009.35	1152	100.95	230	-50	8/18/2021	8/23/2021	Zopilote
*SD-21-70	606523.85	2334431.34	1044.534	69	230	-50	8/22/2021	8/26/2021	Guadalupe
SD-21-84	606327.135	2334143.84	1165.917	552	230	-55	8/25/2021	9/12/2021	Zopilote
SD-21-71	606618.463	2334416.3	991.201	296.5	230	-50	9/2/2021	10/2/2021	La Raya
*SD-21-72	606441.384	2334206.86	1146	99	230	-65	9/16/2021	9/20/2021	Guadalupe
SD-21-73	606498.41	2334181.92	1143.641	423	50	-65	9/21/2021	10/4/2021	La Raya FW
SD-21-74	606441.384	2334206.86	1146	403	50	-65	10/5/2021	10/17/2021	La Raya FW
SD-21-75	606785.157	2334205.8	984.536	330	285	-50	10/12/2021	11/1/2021	La Raya
SD-21-49	606386.229	2334189.21	1151.256	333	50	-65	10/18/2021	11/3/2021	La Raya FW
SD-21-50	606785.157	2334205.8	984.536	237	298	-52	11/4/2021	11/16/2021	La Raya
*SD-21-51	606438.243	2334460.73	1036.036	58.7	222	-40	11/8/2021	11/19/2021	Guadalupe
SD-21-52	606785.157	2334205.8	984.536	225	279	-64	11/17/2021	12/4/2021	La Raya
SD-21-57	606438.243	2334460.73	1036.036	317.3	230	-72	11/20/2021	12/6/2021	Guadalupe
SD-21-58	606209.138	2334152.99	1128.458	353	240	-40	12/8/2021	12/19/2021	Zopilote

Note: coordinates are in WGS 1984/UTM Zone 13N; *Abandoned hole.

The Phase 2 diamond drilling program in 2022 started in mid-February 2022 and finished in June 2022, with the plan to drill 3,500 metres, targeting the newly discovered Zopilote Vein (previously “New Vein”), the Guadalupe Vein and the La Raya Vein, on which there is a current National Instrument 43-101 (“NI 43-101”) Mineral Resource Estimate (McBride, 2017).

In its Phase 2 diamond drilling program conducted in 2022, the Company completed 1,708.15 metres with HQ and NQ size core, in 5 completed diamond drill holes and 136.6 metres and 1 abandoned hole with lengths varying from 128 m to 503 metres (Table 10-3; Figure 10-1).

Table 10-3 . Summary of 2022 Phase 2 diamond drilling on the Santo Domingo Silver Project, Mexico.

Drill Hole	East (mE)	North (mN)	Elev (m)	Depth (m)	Collar Az	Collar Dip	Started (mm/dd/yyyy)	Completed (mm/dd/yyyy)	Target
SD-22-59	606070.172	2334155.96	1159.487	327	216	-37	2/16/2022	2/26/2022	Zopilote
SD-22-60	606209.138	2334152.99	1128.458	128	269	-51	3/7/2022	3/16/2022	Zopilote
SD-22-61	606209.138	2334152.99	1128.458	503	251	-48	3/25/2022	4/13/2022	Zopilote
SD-22-62	606209.138	2334152.99	1128.458	336	248	-38	4/28/2022	5/11/2022	Zopilote
*SD-22-63	606613	2334461	990	136.6	189	-62	5/12/2022	5/26/2022	La Raya
SD-22-64	605984	2334156	1163	414.15	23	-83	6/4/2022	6/29/2022	Zopilote

Note: coordinates are in WGS 1984/UTM Zone 13N; *Abandoned hole.

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Figure 10-1 . Location of drill hole collars and traces from the Phase 1 and Phase 2 drilling program, overlain on the satellite photo of the property concession, Santo Domingo Project (source: Stroud Resources, 2021).

To date, the Santo Domingo Silver Project has approximately 85 drill holes totalling about 18,184 metres.

Operations

The Company incurred a net loss of $1,212,643 [2021 – $2,035,836] and a net comprehensive loss of $1,212,643 [2021 – $2,035,836] for the nine months ended September 30, 2022. Oil and gas revenues increased by 67.2% in the first three quarters of 2022 from that of 2021, to $50,191 [2021 – $30,017], reflecting improved prices and natural gas production. Oil and gas operating expenses increased by 31.97% in the nine months ended 30 September 2022 from the same period of 2021 to $22,043 [2021 – $16,703]. The Company incurred exploration related costs of $1,066,531 [2021 – $1,804,998] during the nine months ended 30 September 2022. Administrative expenses were $175,147 compared to $178,712 in 2021. The Company earned interest income of $887 [2021 – $9,560] during the nine months ended 30 September 2022.

The Company had negative working capital of $151,919 at 30 September 2022 compared to positive working capital of $1,060,724 at 31 December 2021. The Company’s future performance will be dependent upon its ability to raise additional funds.

2. New accounting standards and interpretations

The Corporation adopted the following accounting standards during the year:

IAS 1 – Presentation of Financial Statements

On 23 January 2020, the IASB issued an amendment to IAS 1 Presentation of Financial Statements providing a more general approach to the classification of liabilities. The amendment clarifies that the classification of liabilities as current or non-current depends on the rights existing at the end of the reporting period as opposed to the expectations of exercising the right for settlement of the liability. The amendments further clarify that settlement refers to the transfer of cash, equity instruments, other assets, or services to the counterparty. The amendments are effective for annual periods beginning on or after 1 January 2023 (for the Corporation’s annual period ended 31 December 2024) and are to be applied retrospectively, with early adoption permitted. The Corporation is currently assessing the financial impact of the amendments and expects to apply the amendments at the effective date.

IAS 16 – Property, Plant and Equipment

On 14 May 2020, the IASB issued an amendment to IAS 16 Property, Plant and Equipment to prohibit deducting from the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management. The proceeds from selling such items, and the cost of producing those items are to be recognized in profit and loss. The amendments are

effective for annual periods beginning on or after 1 January 2022 (for the Corporation’s annual period ended 31 December 2023) with early adoption permitted. The amendment is to be applied retrospectively only to items of property, plant and equipment that are brought to the location and condition necessary for them to be capable of operating in the manner intended by management on or after the earliest period presented in the financial statements in the year in which the amendments are first applied. The Corporation is currently assessing the financial impact of the amendment and expects to apply the amendment at the effective date.

IFRS 9 – Financial Instruments

On 14 May 2020, the IASB issued an amendment to IFRS 9 Financial Instruments clarifying which fees to include in the test in assessing whether to derecognize a financial liability. Only those fees paid or received between the borrower and the lender, including fees paid or received by either the entity or the lender on the other’s behalf are included. The amendment is effective for annual periods beginning on or after 1 January 2022 (for the Corporation’s annual period ended 31 December 2023) with early adoption permitted. The Corporation is currently assessing the financial impact of the amendment and expects to apply the amendment at the effective date.

3. Mineral Properties and Deferred Costs and Oil and Gas Interests

Santo Domingo Silver-Gold Project

Stroud holds its interest in its Santo Domingo property through its wholly owned subsidiary, Compañia Minera San Diego y La Espanola S.A. de C.V. ("Compañia Minera"), which holds prospecting and exploration permits for the property. Compañia Minera holds rights to the Santo Domingo II and Nombre de Dios mining concessions, located approximately 80 km northwest of Guadalajara, the capital city of the State of Jalisco, Mexico. The concessions occur in the Hostotipaquillo Mining District, which includes several established silver-gold epithermal mineral occurrences, including the well- known Monte del Favor, La Cabrera and Cinco Mines.

The Mexican Mining Law was amended by a Congress Decree dated 22 February 2005, published at the Office Daily of the Federation on 28 April 2005. Under this amendment, exploitation mining concessions are now valid for 50 years and all existing exploration and mining concessions were automatically converted into exploitation mining concessions from 1 January 2006. Compañia Minera has leased surface rights from Ejido of Santo Domingo de Guzman to cover the mining concessions and the surrounding area.

On 20 November 2017, the Company issued an updated NI 43-101 Technical Report and Mineral Resource Estimate on the Santo Domingo Silver Property (the “Report”). The Report is available online at SEDAR and on the Company’s website.

Highlights from the Report include:

Measured and Indicated mineral resources increased to 25.74M silver equivalent ounces from 15.05M.
Inferred mineral resources increased to 13.39M silver equivalent ounces from 10.68M.
La Rayas vein indicates a mineralized zone, 35 metres wide by 300 metres deep and over 700 metres along strike.
Guadalupe vein is typically 15 to 30 metres wide.
Five additional veins have been identified for future exploration, deeper into the hillside.

The Report confirms Measured and Indicated, and Inferred Mineral Resources as set out in the following table:

Classification	Tonnes	Goldg/t	Silverg/t	Silver Eq. g/t	Ounces Gold	Ounces Silver	Ounces Ag Eq.
Measured	3,148,834	0.51	107.40	144.21	51,370	10,136,145	13,952,515
Indicated	2,932,967	0.43	94.07	124.93	40,242	8,874,620	11,785,663
Measured and Indicated	6,081,801	0.47	100.97	134.91	91,612	19,010,765	25,738,178

Inferred	3,482,160	0.39		119.56	43,228	10,083,932	13,387,222

Cut-off grade was 45 grams per tonne silver equivalent over a three-metre true width and a gold-silver ratio of 72:1 Continuity of mineralization was established by drilling on 50 metre centres and using a specific gravity of 2.65.

The Company initiated its latest drilling program on the Property in April 2021 and has identified a new mineralized vein system referred to as the Zopilote Vein System.

An additional amount of USD $1,160,00 (approximately CAD $1,156,000) is to be paid in quarterly installments to a prior owner, if and when revenue is generated from minerals extracted by Compañia Minera, commencing three months after the start of commercial production. Each quarterly installment will be equal to 0.5% of the net smelter return, defined as revenue actually received by Compañia Minera from the sale of smelter minerals.

In order to maintain the Company’s mineral concessions and titles in good standing, the Company is required to maintain a prescribed minimum of annual exploration expenditure and pay fees semi-annually to the Secretaria de Economia in Mexico. Failure to make the annual concession payments or incur the minimum annual exploration expenditures, to the satisfaction of the Mexican authorities, or a determination that the expenditures incurred are not qualifying expenditures, may result in the cancellation or forfeiture of the mineral concessions. Management believes that all payments made are appropriate and current.

In November 2017, the Company signed an agreement with the owners of the surface rights on the Santo Domingo property to give access to the property until 2023 and provide potential for renewal of the access rights. Concession payments of approximately $8,600 were paid in November 2022.

Hislop Gold Project

The Company holds a net smelter return royalty (“NSR”) of 0.5% on properties located in Hislop Township, Ontario. The property owner of the Hislop Project may purchase the royalty for $1,000,000.

Leckie Gold Project

The Company holds a 1% NSR on the Leckie Project. Temagami Gold Inc. (“Temagami”), the property owner of the Leckie Project, can purchase the NSR for $500,000 for each 0.5% of the royalty. The Company holds 750,000 common shares of Temagami. As at 30 September 2022, Temagami is a privately held corporation and a market price for its shares could not be established. The Company attributed a value of $nil to the shares of Temagami which it holds.

Oil and Gas Interests

The Company generates cash flow through a 3.75% interest in six natural gas wells in central Alberta. The properties are operated by I3 Energy Inc. The Company's proportionate share of the revenue from these properties, net of operating expenses, is received from the operator on a monthly basis.

4. Results of Operations

The Company incurred a net loss of $1,212,643 [2021 – $2,035,836] and a net comprehensive loss of $1,212,643 [2021 – $2,035,836] for the nine months ended 30 September 2022. Oil and gas revenues increased by 67.2% in the first three quarters of 2022 from that of 2021, to $50,191 [2021 – $30,017], reflecting improved prices and natural gas production. Oil and gas operating expenses increased by 31.97% in the nine months ended 30 September 2022 from the same period of 2021 to $22,043 [2021 – $16,703]. The Company incurred exploration related costs of $1,066,531 [2021 – $1,804,998] during the nine months ended 30 September 2022. Administrative expenses were $175,147 compared to $178,712 in 2021. The Company earned interest income of $887 [2021 – $9,560] during the nine months ended 30 September 2022.

5. Liquidity and Capital Resources

The Company had negative working capital of $151,919 at 30 September 2022 compared to positive working capital of $1,060,724 at 31 December 2021, see item 14, SUBSEQUENT EVENTS.

To continue its operations for the foreseeable future, the Company will require additional financing which, if not raised, would result in the curtailment of activities or the sale, option or joint venturing of assets, to the extent appropriate counterparties can be found. The Company's ability to continue to meet its obligations and carry out its planned exploration activities is uncertain and dependent upon its ability to obtain further funds. There can be no assurances that the Company will be able to raise sufficient financing or on terms acceptable to management. The outcome of these matters cannot be predicted at this time and, accordingly, these matters create a material uncertainty that may cast significant doubt on the Company's ability to continue as a going concern. If the going concern assumption is not appropriate, adjustments will be necessary to carrying amounts and classification of assets, liabilities and expenses in the consolidated financial statements. Such adjustments could be material.

6. Off-Balance Sheet Arrangements

As of the date of this filing, the Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future effect upon its results of operations or financial condition, including, and without limitation, such considerations as liquidity and capital resources.

7. Transactions with Related Parties

In accordance with IAS 24, key management personnel are those having authority and responsibility for planning, directing and controlling the activities of the Company directly or indirectly, including any directors (executive and nonexecutive) of the Company. The remuneration of directors and key management of the Company for the nine months ended 30 September 2022 and 2021 was as follows:

Administrative and professional fees Director fees	2022 2021
	$ 45,000 $ 56,250 45,000 33,750
	$90,000 $90,000

8. Proposed transactions

The Company has not entered into any significant transactions, nor is it currently reviewing any such transaction, which requires board approval, shareholder approval or regulatory approval.

9. Critical Accounting Estimates

The Company’s significant accounting policies are presented in Note 3 of the consolidated financial statements for the nine months ended 30 September 2022.

10. Financial Instruments

A discussion of the Company’s financial instruments can be found in Notes 3 and 4 of the consolidated financial statements for the nine months ended 30 September 2022.

11. Other MD&A Disclosure

The following table sets forth, for the quarter indicated, information relating to the Company’s revenue, net loss and loss per common share for the eight most recently completed fiscal quarters.

	Revenues	Net Income (Loss)	Basic Net Income (Loss) per Share	Diluted Net Income (Loss) per Share
31 December 2020 31 March 2021 30 June 2021 30 September 2021 31 December 2021 31 March 2022 30 June 2022	6,067 7,732 8,733 13,552 14,664 14,964 18,504	(100,120) (334,164) (638,474) (988,188) (1,489,350) (456,911) (565,600)	(0.002) (0.007) (0.013) (0.020) (0.002) (0.007) (0.013)	(0.002) (0.006) (0.013) (0.020) (0.002) (0.006) (0.013) (0.020)
30 September 2022	16,723	(193,132)	(0.020)

Additional information relating to the Company, including its annual and quarterly financial statements, is available on SEDAR at www.sedar.com, and on the Company’s website at www.stroudsilver.com.

12. Disclosure of Outstanding Share Data as at 28 November 2022

	Number or Principal Amount Outstanding	Maximum Number of Common Shares Issuable
Common Shares outstanding Warrants outstanding Stock Options outstanding	50,004,449 – 150,000	N/A – 150,000
Maximum common shares issuable 50,154,449

13. CONTINGENCIES

The Company’s exploration and evaluation activities are subject to laws and regulations governing the protection of the environment. These laws and regulations are continually changing and generally becoming more restrictive. The Company believes its activities are materially in compliance with all applicable laws and regulations.

Legal Matters

From time to time, the Company may be named as a party to claims or involved in proceedings, including legal, regulatory and tax related, in the ordinary course of its operations. While the outcome of any such matters may not be estimable at period end, the Company makes provisions, where possible, for the estimated outcome of such claims or proceedings. Should a loss result from the resolution of any claims or proceedings that differ from these estimates, the difference will be accounted for as a charge to net income (loss) in that period.

14. SUBSEQUENT EVENTS

In November 2022, the Company issued 1,518,750 common shares to settle debt of CAD$243,00 owing to a third party.

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Stroud Resources Ltd. Management Reports 2022

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