Surge Copper Corp. - Management Reports 2021

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Management Discussion and Analysis For the year ended March 31, 2021

This Management’s Discussion and Analysis (“MD&A”) for Surge Copper Corp. (the “Company”) has been prepared by management dated July 23, 2021 and provides information on the Company’s operations for the year ended March 31, 2021 and to the date of this report. This discussion and analysis should be read in conjunction with the Audited Consolidated Financial Statements for the Year Ended March 31, 2021 and the Audited Consolidated Financial Statements for the year ended March 31, 2020.

Forward-Looking Information

This MD&A contains certain forward-looking statements and information relating to the Company that is based on the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company or its management, are intended to identify forward-looking statements. This MD&A contains forward-looking statements relating to, among other things, regulatory compliance, the sufficiency of current working capital, and the estimated cost and availability of funding for the continued exploration of the Company’s properties. Such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertainties, and assumptions. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Aside from factors identified in the interim MD&A, additional, important factors, if any, are identified here.

Covid-19

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

Overall Performance

Business of the Company

The Company is engaged in the exploration and development of mineral properties hosting copper, gold, silver, and molybdenum resources located in central British Columbia. The Company continues to evaluate acquisition of additional mineral interests in Canada.

Mineral Properties

Ootsa Property, British Columbia

As at March 31, 2021, the Company owned a 100% interest in the Ootsa Property, located in central British Columbia, comprised of 136 mineral claims totalling 87,002.5 hectares. All of the Ootsa claims have had sufficient exploration work completed to remain valid until December 10, 2025.

Beyond claims acquired by staking, material transactions and royalty obligations in respect to this property are:

14 claims totalling 574.6 hectares, known as the Ox claims, are subject to a 2% Net Smelter Returns (“NSR”) royalty. The purchase agreement with the vendor, Silver Standard Resources Inc., (“Silver”) entitles the Company to purchase 50% of the 2% NSR from Silver at any time by the payment to Silver of $500,000. The Company may purchase the remaining 1% NSR at any time by payment to Silver of an additional $1,000,000. There is an associated Area of Interest with these claims, defined as the area lying within a distance of one kilometre from the external boundaries of the claims.
There are five claims totalling 3,450.4 hectares, known as the Seel claims, which are subject to a 1% NSR. The Company is entitled at any time to purchase 50% of this 1% NSR for $1,000,000. There is an associated Area of Interest with these claims, defined as the area lying within a distance of one kilometre from the external boundaries of the claims.
Two additional claims known as the Swing claims (the “Captain Mine”) totalling 383.4 hectares, purchased in March 2014, are subject to a 2% NSR. The purchase agreement with the vendor entitles the Company to purchase 50% of the 2% NSR from the vendor at any time by the payment to the vendor of $500,000 or the Company may purchase the entire 2% NSR at any time by payment to the vendor of $1,000,000.
The Troitsa Peak claim totalling 211.3 hectares and purchased in December 2014 is subject to a 1% NSR, half of which can be bought back at any time by the Company for $500,000.
On August 5, 2016, the Company acquired one claim for total consideration of $3,000, adding a total of 76.7 hectares.
On April 7, 2021, the Company acquired one claim for total consideration of 500,000 shares of the Company subject to a 2.5% NSR of which 60% (1.5% NSR) can be bought back by the Company for $1,500,000.
On April 7, 2021, the Company acquired two claims for total consideration of 350,000 shares of the Company subject to a 2% NSR of which 50% can be bought back by the Company for $1,500,000 and the remaining 50% can be bought back for and additional $2,000,000.

Summary of Exploration Activities:

The Company presently owns 87,002.5 hectares comprised of 136 claims in its Ootsa Property which contains the East Seel, West Seel, and Ox deposits. The property is located immediately adjacent to the Huckleberry Mine owned by Imperial Metals which produced copper, molybdenum, silver, and gold, from similar style deposits from 1997 to 2016.

From 2004 to present, the Company has conducted extensive exploration on the Ootsa Property. The Company has drilled 150,903 metres of core in 401 holes, conducted metallurgical testing, completed numerous ground based geophysical surveys plus an airborne geophysical survey, and collected and assembled a database containing 10,323 soil samples. NI 43-101 compliant resources containing porphyry style Cu-Au-Mo-Ag mineralization have been delineated at the Ox, East Seel, and West Seel deposits, and numerous exploration targets have been identified.

Ootsa Property Drill Hole Highlights

Drill Hole	Deposit	From (m)	To (m)	Width (m)*	Cu %	Au g/t	Mo%	Ag g/t	Cu Eq%**
S06-42	East Seel	22	160	138	0.84	0.06	-	22.11	1.13
S11-81	East Seel	38.5	176	137.5	0.39	0.34	-	-	0.69
S13-148	East Seel	31.7	178	146.3	0.51	0.59	-	2.33	1.05
S13-148	East Seel	31.7	76	44.3	0.94	1.12	-	3.46	1.96
S13-151	East Seel	32.9	193	160.1	0.33	0.38	-	2.01	0.68
S13-157	East Seel	31.7	218	186.3	0.37	0.41	-	1.82	0.75
S13-177	East Seel	26.8	213	186.2	0.39	0.53	-	1.86	0.87
S13-178	East Seel	26.5	170	143.5	0.46	0.55	-	2.43	0.97
S13-183	East Seel	38	134	96	0.58	0.62	-	2.75	1.15
S13-183	East Seel	76	100	24	1.11	1.22	-	4.98	2.23
S20-218	East Seel	34.5	210.6	175.1	0.35	0.4	-	1.7	0.72
S11-100	West Seel	170	736.7	566.7	0.25	0.173	0.028	3.4	0.53
S12-101	West Seel	262	1079	817	0.2	0.21	0.026	2.24	0.49
S12-101	West Seel	308	829.8	521.8	0.23	0.3	0.032	2.63	0.63
S12-118	West Seel	350	887	537	0.27	0.19	0.055	2.69	0.65
S12-118	West Seel	356	660	304	0.33	0.24	0.065	3.41	0.79
S14-208	West Seel	283	591	308	0.28	0.26	0.046	3.5	0.70
S14-208	West Seel	431	591	160	0.38	0.41	0.056	4.29	0.97
S14-210	West Seel	199	867	668	0.28	0.17	0.033	3.34	0.57
S14-210	West Seel	361	533	172	0.39	0.29	0.062	4.99	0.90
S20-219	West Seel	15	1028	1013	0.2	0.13	0.025	2.9	0.43
Ox13-46	Ox	5.1	167	161.9	0.36	0.06	0.028	1.85	0.53
Ox13-62	Ox	5.8	86	80.2	0.43	0.07	0.035	1.73	0.63
Ox13-80	Ox	18.3	246	227.7	0.34	0.05	0.032	1.73	0.51
Ox13-108	Ox	10.5	120	109.5	0.33	0.06	0.038	1.57	0.53
Ox13-110	Ox	5.4	108.7	103.3	0.44	0.06	0.04	1.89	0.65
Ox13-114	Ox	4.9	130.2	125.3	0.38	0.07	0.015	1.9	0.51
Ox13-120	Ox	118	150.9	32.9	0.4	0.08	0.012	2.3	0.53

*Width refers to drill hole intercepts, true widths have not been determined.

**Cu Eq. (copper equivalent) has been used to express the combined value of copper, molybdenum, gold and silver as a percentage of copper, and is provided for illustrative purposes only. No allowances have been made for recovery losses that may occur should mining eventually result. Calculations use metal prices of US $3.00/lb copper, $1,800/oz gold, $22 silver, and $10/lb molybdenum using the formula Cu Eq.% = Cu% + (Au g/t x 0.875) + (Ag g/t x 0.0107) + (Mo% x 3.33).

2016 Preliminary Economic Assessment

In February 2016, the Company announced the results of a resource update and independent Preliminary Economic Assessment (PEA) for the Ootsa Project which was conducted by P&E Mining Consultants Inc. with input from KnightPiesold Consulting and ERM Consultants Canada Ltd. Details of the resource update and PEA can be found in the Company’s news release dated February 9[th] , 2016, and a technical report documenting the study is available on SEDAR and on our website at www.surgecopper.com. The resource update and PEA were done in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. The updated mineral resource estimate was prepared by Brian Ray, P.Geo. and Eugene Puritch, P.Eng., both Independent Qualified Persons as defined by National Instrument 43-101 and has an effective date of January 1, 2016. The Preliminary Economic Assessment has been prepared under the supervision of

Eugene Puritch, P.Eng, an Independent Qualified Person as defined by National Instrument 43-101, and has an effective date of January 1, 2016.

The conceptual study demonstrates the potential to develop the Ootsa Project by means of contract mining and toll milling at low initial capital cost, low risk, and with rapid project payback and favorable economics. The conceptual operating plan for the Ootsa Project is based on the sequential open pit development of the East Seel, Ox, and West Seel deposits with crushed mill feed transported from Ootsa to the adjacent Huckleberry mill by means of an overland conveyor system employing a series of floating conveyor units to cross the intervening reservoir. A total of 65 million tonnes of mill feed grading 0.37% copper equivalent (0.25% Cu, 0.13 g/t Au, 0.016% Mo, 2.3 g/t Ag) is proposed in the study with a stripping ratio of 1.46:1. Using base case metal prices (US$) of $3/lb Cu, $1,260/oz Au, $10.30/lb Mo, and $17/oz Ag the study shows an after tax net present value discounted at 5% of C$186 million and an after-tax internal rate of return of 81%. The project has an initial capital cost of C$64 million, a mine life of 12 years, and a 1-year payback period.

The table below shows how the Ootsa Project value varies with changing metal prices and exchange rate.

Metal Price – Exchange Rate Sensitivity

Metal Price
Cu	US $/lb	2.25	2.50	2.75	3.00	3.25	3.50
Au	US $/oz	1,140	1,180	1,220	1,260	1,300	1,340
Ag	US $/oz	14.75	15.50	16.25	17.00	17.75	18.50
Mo	US$/lb	6.70	7.90	9.10	10.30	11.50	12.70
Forex	US$:C$	0.73	0.75	0.78	0.80	0.83	0.85

NPV @ 5% (after tax)	C$M	21	86	141	186	232	274
IRR (after tax)	%	31	54	69	81	92	103
Payback	yrs	1.6	1.2	1.1	1.0	0.9	0.8

Direct cash costs including all on-site costs of production are US$1.33/lb Cu and all-in sustaining cash costs, including all costs of production plus sustaining capital are US$2.09/lb Cu.

PEA disclaimers:

The stated 65 million tonnes of mill feed consists of 61 million tonnes of the Measured portion of the mineral resource at grades of 0.25% Cu, 0.13 g/t Au, 0.016% Mo, and 2.3 g/t Ag, plus 4 million tonnes of the Indicated portion of the mineral resource at grades of 0.24% Cu, 0.07 g/t Au, 0.015% Mo, and 2.3 g/t Ag.

NPV includes by-product credits for gold, molybdenum, and silver. A discount rate of 5% was applied to generate NPV based on the lower risk of the development relative to that of similar projects. A contingency factor of 30% was included in the initial capital cost estimate.

The PEA is based on the open pit development of the Ootsa Property by a contract miner, toll milling of Ootsa mill feed at the adjacent Huckleberry Mill at the end of current operations and use of the existing Huckleberry site facilities on a fee-basis. There are currently no agreements in place to conduct toll milling of Ootsa mill feed at the Huckleberry facilities, nor is there any guarantee that the required agreements can be established on commercially acceptable terms to support the proposed development plan.

The projected mining method, potential production profile and other Ootsa Project economics referred to in this Management Discussion and Analysis are summarized from a PEA, which is filed on SEDAR, and are conceptual in nature and additional technical studies will need to be completed in order to fully assess the Ootsa Project’s viability. The PEA should not be considered a Pre-feasibility or Feasibility Study, as the economic and technical viability of the project have not been demonstrated to that level. There is no certainty that a potential mining operation will be realized or that a production decision will be made. A mine production decision that is made prior to completing a Feasibility Study carries potential risks, specifically, mine design and mining schedules, metallurgical flow sheets and process plant designs may require additional detailed work and economic analysis and internal studies to ensure satisfactory operational conditions and decisions regarding future targeted production. Capital cost estimates above are preliminary in nature and will require a more detailed assessment in subsequent economic studies. Further, the advancement of the Ootsa Project is subject to requisite consents, permits and approvals, regulatory or otherwise for the Ootsa Project and there is no guarantee that Surge Copper would be successful in obtaining any or all of them.

The technical content in this MD&A has been reviewed and verified by Dr. Shane Ebert, a qualified person, as defined by National Instrument 43-101. Dr. Ebert is also a director and President and VP Exploration of the Company.

2018 Exploration

During July and August 2018, the Company completed 2,137 metres of drilling in 7 holes, completed geological mapping, and collected 167 soil samples. Hole S18-211, the first hole of the program, was a 50 metre step out on the north side of the East Seel deposit and was drilled back toward the deposit at an azimuth of 135 degrees and a dip of -50 degrees and ended within the known deposit. The hole encountered mineralization at the start of bedrock at 7.8 metres depth and mineralization was continuous to the end of the hole at 209.8 metres depth. Results from the hole include 138 metres grading 0.31% copper and 0.37 g/t gold from 44 to 182 metres depth. A new zone of high-grade copper was discovered to the east of the East Seel deposit and was intersected in hole S18-214 and included 22 meters grading 1.5% copper equivalent from 91 to 113 metres depth within a larger zone containing 0.7% copper equivalent over 48 metres from 89 to 137 metres depth. A large extensional fault was identified during 2018 drilling and shows potential to host high grade gold mineralization. Hole S18-17 returned 9.4 g/t Au over 2 metres at 130 metres depth.

2020 and 2021 Exploration

During June and July 2020, the Company commissioned a high resolution and deep penetrating 3D Induced Polarization survey over the entire Seel trend which hosts 2 separate copper-gold porphyry style deposits as well as numerous untested exploration targets. The objectives of the geophysical survey were to help target higher grade copper-gold zones associated with potassic alteration, look for the fault offset portion of the high-grade East Seel deposit, image the roots of the systems, and better constrain and define late faulting which bounds the known mineralized zones. Final survey results were received in September 2020.

In October 2020, drilling commenced at Ootsa with 2 drills and with the exception of a two month break during April and May 2021, that drilling program is ongoing as of July 2021. focused on defining the large West Seel deposit and testing several near-deposit exploration targets. To early July 2021, 41 holes and 26,700 metres of drilling have been completed. Assay results for most of this drilling has been released including . hole S20-219 drilled at the West Seel deposit and which returned 1,028 metres grading 0.20% copper, 0.13 g/t gold, 0.025% molybdenum, and 2.9 g/t silver from 15 to 1,028 metres depth. Hole S20-219 represents the longest mineralized interval drilled on the Ootsa Property to date.

Berg Property, British Columbia

On December 15, 2020, the Company entered into a definitive option agreement to acquire a 70% interest in the Berg Property from Thompson Creek Metals Company Inc., a wholly owned subsidiary of Centerra Gold Inc. Under the terms of the agreement, Surge must issue C$5 million in common shares of Surge and spend C$8 million on exploration, over a period of up to five years as outlined in the table below. As at December 31, 2020, the Company has issued 6,825,939 common shares valued at C$4 million dollars, as outlined in the agreement. The Berg Property is 34,798 hectares in size and is contiguous with the Ootsa Property and combined the Ootsa and Berg Properties give Surge Copper control of 50km of strike length in a very prospective porphyry belt. The Berg Property contains the Berg Deposit, a large, advanced stage porphyry copper-molybdenum-silver deposit located 28km northwest of Surge’s Seel Deposits.

Date for Completion	Value of Common Shares to be issued	Minimum Exploration Expenditures to be Incurred
Within 5 days of the Approval Date	$4,000,000 (6,825,939 common shares issued)	$Nil
On or before the first anniversary of the Effective Date(1)	$200,000	$Nil
On or before the second anniversary of the Effective Date(1)	$200,000	$2,000,000(2)
On or before the third anniversary of the Effective Date(1)	$200,000	$2,000,000
On or before the fourth anniversary of the	$200,000	$2,000,000

Effective Date(1)
On or before the fifth anniversary of the Effective Date(1)	$200,000	$2,000,000
Total	$5,000,000	$8,000,000
(1) “Effective Date” means the date of the agreement, December 15, 2020. (2) $1,000,000 ofthe expenditures are afirmcommitment.

A total of 53,754 metres over 215 holes have been completed on the Berg Deposit by prior operators including Kennecott, Placer Dome, Terrane Metals, and Thompson Creek Metals. Drilling in most areas of the Berg Deposit remains wide-spaced and mineralization is open to depth and outward from the Berg Stock. The deposit has been shown to have excellent vertical continuity with significant mineralization intersected greater than 550m below surface.

Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights	Berg Property Histortic Drill Hole Highlights
Drill Hole	From (m)	To (m)	Width (m)*	Cu %	Mo %	Ag g/t	Cu Eq %**
BRG11-215	54	404.2	350.2	0.41	0.031	8.3	0.60
including	54	134.4	80.4	0.56	0.036	13.9	0.83
BRG11-219	6	69	63	0.56	0.07	60.5	1.44
BRG11-221	15	350.2	332.2	0.46	0.039	5.6	0.65
including	15	132	114	0.58	0.025	5.4	0.72
BRG11-223	27	178.3	151.3	0.5	0.017	4.8	0.61
BRG11-228	33	294.6	261.6	0.35	0.035	5.3	0.52
BRG-11-229	15.5	325.4	309.9	0.46	0.016	4.6	0.56
including	15.5	191.5	176	0.63	0.02	4.8	0.75

*Width refers to drill hole intercepts, true widths have not been determined.

**Cu Eq. (copper equivalent) has been used to express the combined value of copper, molybdenum, and silver as a percentage of copper, and is provided for illustrative purposes only. No allowances have been made for recovery losses that may occur should mining eventually result. Calculations use metal prices of US $3.00/lb copper, $22 silver, and $10/lb molybdenum using the formula Cu Eq.% = Cu% + (Ag g/t x 0.0107) + (Mo% x 3.33).

On March 17, 2021 the Company announced an updated resource estimate for the Berg Deposit containing a total Measured and Indicated resources of 610.0 million tonnes grading 0.38% copper equivalent as summarized in the table below.

Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.

	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.	Table 1. Mineral Resource Estimate for the Berg Deposit at 0.2% CuEq cut-off with Effective Date of March 9, 2021.
					Grade				Contained Metal
Material Type	Resource Category	Cut-Off (CuEq %)	Tonnes	Cu	Mo	Ag	CuEq	Cu	Mo	Ag	CuEq
			(Mt)	(%)	(%)	(g/t)	(%)	(Mlbs)	(Mlbs)	(Moz)	(Mlbs)

Supergene	Measured	0.2	86.9	0.41	0.03	2.46	0.50	789	52	6.9	960
	Indicated	0.2	88.5	0.29	0.02	2.67	0.37	572	43	7.6	724
	Measured & Indicated	0.2	175.4	0.35	0.02	2.57	0.44	1,362	95	14.5	1,685

		Inferred	0.2	7.2	0.23	0.01	4.26	0.29	37	2	1.0	47

Hypogene		Measured	0.2	120.3	0.28	0.04	3.42	0.41	752	97	13.2	1,098
		Indicated	0.2	314.1	0.22	0.03	3.10	0.34	1,537	226	31.3	2,343
		Measured & Indicated	0.2	434.3	0.24	0.03	3.19	0.36	2,289	323	44.6	3,441
		Inferred	0.2	20.8	0.22	0.02	3.57	0.30	101	8	2.4	138

Leachate		Measured	0.2	0.0	0.04	0.09	5.62	0.21	0	0	0.0	0
		Indicated	0.2	0.2	0.14	0.12	2.37	0.25	1	1	0.0	1
		Measured & Indicated	0.2	0.2	0.13	0.12	2.41	0.25	1	1	0.0	1
		Inferred	0.2	0.1	0.11	0.09	6.13	0.21	0	0	0.0	0

Total		Measured	0.2	207.2	0.34	0.03	3.0	0.45	1,541	149	20.1	2,058
		Indicated	0.2	402.8	0.24	0.03	3.0	0.35	2,110	270	39.0	3,069
		Measured & Indicated	0.2	610.0	0.27	0.03	3.0	0.38	3,651	419	59.1	5,126
		Inferred	0.2	28.1	0.22	0.02	3.8	0.30	138	11	3.4	185
	Notes: 1) Copper Equivalent (CuEq) calculated using metal prices of $3.10/lbs Cu, $10.00/lb Mo, and $20/oz Ag. Recoveries were applied to correspond with estimated individual metal recoveries based on limited metallurgical testwork for production of a copper and molybdenum concentrate: supergene zone (Cu = 73%, Mo = 61%, and Ag = 52%), hypogene zone (Cu = 81%, Mo = 71%, and Ag = 67%), leachate zone (Cu = 0%, Mo = 61%, and Ag = 52%). Smelter loss was not applied. 2) A cut-off value of 0.2% CuEq was used as the base case for reporting mineral resources that are subject to open pit potential. The resource block model has been constrained by a conceptual open pit shell, however, economic viability can only be assessed through the completion of engineering studies defining reserves including PFS and FS. The CIM Definition Standards (May 10, 2014) were followed for classification of Mineral Resources. It cannot be assumed that all or any part of Inferred Mineral Resources will be upgraded to Indicated or Measured as a result of continued exploration. 3) Dry bulk density has been estimated based on 2,996 in situ specific gravity measurements collected between 2007 and 2011. Values were applied by geology model domain (n = 18) representing the weathering profiles and major lithological units; values ranged from 2.38 t/m3to 2.74 t/m3. 4) There are no known legal, political, unnatural environmental, or other risks that could materially affect the potential development of the mineral resources. 5) All numbers are rounded. Overall numbers may not be exact due to rounding.

The Berg mineral resource estimate has been completed by Tetra Tech in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. The mineral resource estimate has been prepared by Cameron Norton, P.Geo., Independent Qualified Person as defined by National Instrument 43-101, and has an effective date of March 9, 2021. Mineral resources are not mineral reserves and by definition do not demonstrate economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves. A 'Measured Mineral Resource' is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit. An 'Indicated Mineral Resource' is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.

Surge Copper is planning to conduct additional drilling at Berg later in 2021 focused on expanding near surface high grade zones of copper mineralization that remain open.

Auro Claims, British Columbia

The Company owns a 2% net smelter return royalty on the Auro claim block, a 22,591 hectare claim block which forms part of the Blackwater property, which is owned by Artemis Gold Inc.

Financial Condition, Results of Operations and Cash Flows

The Company’s working capital as at March 31, 2021 was $3,705,447 (March 31, 2020 – deficiency of $26,823).

Selected Quarterly / Annual Information

Selected annual information for the three most recently completed fiscal years is as follows:

	Fiscalyear ended March 31(audited)	Fiscalyear ended March 31(audited)	Fiscalyear ended March 31(audited)
	2021	2020	2019
Revenues	$Nil	$Nil	$Nil
Income (Loss) for the year	($5,803,092)	($169,937)	($389,093)
Income (Loss) per share: Basic	($0.06)	($0.00)	($0.01)
Income (Loss) per share: Diluted	($0.04)	($0.00)	($0.00)
Total Assets	$33,906,167	$22,072,268	$22,140,538
Long Term Debt	$Nil	$Nil	$Nil
Mineral property cash expenditures	$4,358,729	$7,588	$577,371

Annual Results for the Year Ended March 31, 2021

Administrative expenditures for the year ended March 31, 2021 were $5,078,918 (2020 – $248,470). The increased administration expenditures reflect increased management fees incurred during the year of $275,736 (2020 - $103,272), increased investor relations expenses of $706,191 (2020 - $14,191), increased consulting fees of $205,495 (2020 - $Nil), increased share-based payments of $3,680,473 (2020 - $Nil), increased transfer agent fees of $65,734 (2020 - $19,767) and increased professional fees expense of $52,490 (2020 - $13,907).

Net cash flows used in operating activities for the year ended March 31, 2021 were $1,473,238 (2020 - $43,376). Cash expenditures on the Company’s Ootsa Project and Berg Property mineral interests were $4,358,729 (2020 - $7,588). Purchases of equipment and related camp assets totaled $12,500 (2020 - $Nil). BC mining exploration tax credits receivable were $1,076 (2020 - $Nil).

Annual Results for the Year Ended March 31, 2020

Administrative expenditures for the year ended March 31, 2020 were $248,470 (2019 – $394,125). The reduced administration expenditures reflect reduced management fees incurred during the year of $103,272 (2019 - $142,643), decreased investor relations expense of $14,191 (2019 - $92,358) and reduced professional fees expense of $13,907 (2019 - $22,656).

Net cash flows used in operating activities for the year ended March 31, 2020 were $43,376 (2019 - $440,252). Expenditures on the Company’s Ootsa Project mineral interests were $7,588 (2019 - $577,371). Purchases of equipment and related camp assets totaled $Nil (2019 - $Nil). BC mining exploration tax credits receivable were

$Nil (2019 - $154,522).

The following table provides selected financial information of the Company for each of the last eight quarters:

Basis of presentation	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS	IFRS
Quarter ended:	Mar 31-2021	Dec 31-2020	Sep 30-2020	Jun 30-2020	Mar 31-2020	Dec 31-2019	Sep 30-2019	Jun 30-2019
Income (Loss)	($5,428,117)	($247,958)	($61,418)	($65,599)	$16	($47,651)	($67,938)	($54,364)
Income (Loss) per share: basic	($0.06)	($0.00)	($0.00)	($0.00)	($0.00)	($0.00)	($0.00)	($0.00)
Weighted average of shares issued	130,735,133	106,794,591	64,203,423	60,796,346	59,268,544	59,458,659	59,458,659	58,685,056
Total Assets	$33,906,167	$34,610,986	$22,469,484	$22,433,215	$22,072,268	$22,209,076	$22,223,160	$22,272,863
Long-Term Liabilities	$Nil	$Nil	$Nil	$Nil	$Nil	$Nil	$Nil	$Nil

Results for the 4th Quarter Ended March 31, 2021

During the three months ended March 31, 2021 the Company’s administrative expenditures were $4,699,793 (2020 – $58,984) and included share based payments of $3,680,473 (2020 - $Nil), management costs of $138,224 (2020 - $25,609), professional fees of $6,011 (2020 – $3,000), travel and promotion costs of $Nil (2020 – $83) and investor relations of $629,271 (2020 - $3,000). All comparative amounts refer to the three months ended March 31, 2020.

Liquidity and Capital Resources

As an exploration stage company, the Company’s liquidity position decreases as mineral exploration and evaluation expenditures plus administrative expenses are incurred. To mitigate this liquidity risk, the Company budgets both exploration and administrative expenditures and closely monitors its liquidity position. The Company’s cash position as at March 31, 2021 was $3,274,777 (March 31, 2020 - $35,045).

On June 3, 2020, the Company completed a non-brokered private placement comprised of 4,508,500 units at a purchase price of $0.06 per unit for gross proceeds of $270,510. Each unit consisted of one common share and one common share purchase warrant. Each warrant entitles the holder to purchase an additional common share at a price of $0.09 at any time on or before June 3, 2023.

On July 6, 2020, the Company completed a non-brokered flow-through private placement comprised of 3,239,996 flow-through units at a purchase price of $0.09 per unit for gross proceeds of $291,600. Each flow-through unit consisted of one flow-through common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase an additional common share at a price of $0.12 at any time on or before July 6, 2023.

On October 9, 2020, the Company completed a non-brokered non-flow through private placement comprised of 3,846,154 non-flow through units at a purchase price of $0.13 per unit for gross proceeds of $500,000. Each unit consisted of one non-flow through common share and one common share purchase warrant. Each warrant entitles the holder to purchase an additional common share at a price of $0.17 at any time on or before October 9, 2023.

On October 28, 2020, the Company completed a non-brokered flow-through private placement comprised of 40,000,000 flow-through units at a purchase price of $0.15 per unit for gross proceeds of $6,000,000. Each flowthrough unit consisted of one flow-through common share and one common share purchase warrant. Each warrant entitles the holder to purchase an additional non-flow through common share at a price of $0.17 at any time on or before October 28, 2023.

On June 9, 2021, the Company completed a bought deal private placement for total gross proceeds of $14,014,125, consisting of (i) 4,445,000 units (the “Units”) sold at a price of $0.45 per Unit; (ii) 11,325,000 flow-through units (the “FT units”) sold at a price of $0.53 per FT Unit; and (iii) 9,775,000 charity flow-through units (the “Charity FT Units”) sold at a price of $0.615. Each Unit consists of one common share of and one-half of one transferable common share purchase warrant (each whole such common share purchase warrant, a “Warrant”). Each FT Unit consists of one flow-through common share and one-half of one Warrant issued on a flow-through basis. Each Charity FT Unit consists of one charity flow-through common share and one-half of one Warrant issued on a flowthrough basis. Each Warrant shall be exercisable into one additional common share at a price of $0.60 at any time on or before June 9, 2023.

The Company has paid a cash commission of $737,989.23 and a fiscal advisory fee of $42,858.27. In addition, the Company issued 1,339,085 broker warrants and 81,317 fiscal advisory warrants (collectively, the “Compensation Warrants”) to the Underwriters. Each Compensation Warrant is exercisable into one additional common share for a period of twenty-four months at an exercise price of $0.45 per Warrant. All securities issued in connection with the Offering are subject to a hold period of four months and one day from closing of the Offering.

The Company intends, if possible, to raise further financing by way of equity issuances, applying for refundable tax credits or private loans in order to meet its exploration and working capital requirements as and when needed.

During the year ended March 31, 2021, 13,857,886 share purchase warrants, 450,000 agent warrants and 1,005,000 stock options were exercised for gross proceeds of $2,224,691.

As at July 23, 2021, 1,416,600 share purchase warrants and 190,000 incentive stock options have been exercised for gross proceeds of $267,822.

During the year ended March 31, 2020, there were no exercises of any stock options or any exercises of share purchase warrants.

Share Data

As at July 23, 2021 the Company had 161,193,734 common shares issued and outstanding, 13,118,000 options issued and outstanding, 59,555,283 share purchase warrants and 1,420,402 agent warrants issued and outstanding.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements and does not contemplate such arrangements in the foreseeable future. There are no contingent liabilities.

Related Party Transactions

The Company incurred the following transactions with companies controlled by directors of the Company:

		For the year ended March 31,	For the year ended March 31,
		2021	2020
Key management personnel compensation comprised	of:
Short term employee benefits:
Management fees – mineral property costs	$	29,730 $	4,000
Professional fees – administration		27,600	18,600
Management and administration		231,450	77,800
	$	288,780 $	100,400
Share-based payments		3,048,629	-
	$	3,337,409 $	100,400

The above transactions, occurring in the normal course of operations, are measured at the exchange amount which is the amount of consideration established and agreed to by the related parties.

FINANCIAL INSTRUMENTS, MANAGEMENT OF CAPITAL AND FINANCIAL RISK

All financial instruments are included on the Company’s balance sheet and measured at either fair value or amortized cost.

The Company’s financial assets consist of cash and cash equivalents and amounts receivable, which are designated as loans and receivables and measured at amortized cost.

The Company’s financial liabilities consist of accounts payable and accrued liabilities and due to related parties, which are designated as other financial liabilities and measured at amortized cost.

The carrying values of the Company’s financial instruments measured at amortized costs approximate their fair values due to their short-term nature.

The capital of the Company consists of shareholders’ equity - $31,961,022 (March 31, 2020 - $21,741,881).

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. There were no changes in the Company’s approach to capital management during the year.

The Company is not subject to any externally imposed capital requirements. The Company relies on capital markets to support continued growth.

Critical Accounting Estimates

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. Estimates and judgments are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions.

The effect of a change in an accounting estimate is recognized prospectively by including it in comprehensive income in the period of the change, if the change affects that period only, or in the period of the change and future periods, if the change affects both.

Information about critical judgments in applying accounting policies that have the most significant risk of causing material adjustment to the carrying amounts of assets and liabilities recognized in the financial statements within the next financial year are discussed below:

a) Exploration and Evaluation Expenditures

The application of the Company’s accounting policy for exploration and evaluation expenditure requires judgment in determining whether it is likely that future economic benefits will flow to the Company, which may be based on assumptions about future events or circumstances. Estimates and assumptions made may change if new information becomes available. If, after expenditure is capitalized, information becomes available suggesting that the recovery of expenditure is unlikely, the amount capitalized is written off in the profit or loss in the period the new information becomes available.

b) Title to Mineral Property Interests

Although the Company has taken steps to verify title to mineral properties in which it has an interest, these procedures do not guarantee the Company’s title. Such properties may be subject to prior agreements or transfers and title may be affected by undetected defects.

c) Income Taxes

In addition, the Company recognizes deferred tax assets relating to tax losses carried forward to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same entity against which the unused tax losses can be utilized.

However, utilization of the tax losses also depends on the ability of the taxable entity to satisfy certain tests at the time the losses are recouped.

The key estimates applied in the preparation of the consolidated financial statements that could result in a material adjustment to the carrying amounts of assets and liabilities are as follows:

d) British Columbia Mining Exploration Tax Credit (“BCMETC”) Claim

The completion of certain qualified exploration costs by the Company entitles it to refundable tax credits as part of an exploration incentive plan offered by the Province of British Columbia. In May 2019, the Company filed a BCMETC claim with the Canada Revenue Agency seeking $154,522 in qualified refundable tax credits for the year ended March 31, 2019. In January 2020, the entire amount was received. No amount has been accrued for fiscal 2020 or fiscal 2021.

New Standards, Interpretations and Amendments

The Company makes estimates and assumptions about the future that affect the reported amounts of assets and liabilities. These new standards, interpretations and amendments, which have not yet been applied are included in the Audited Consolidation Financial Statements for the year ended March 31, 2021.

Disclosure Controls and Procedures

In connection with National Instrument 52-109 (Certificate of Disclosure in Issuer’s Annual and Interim Filings) (“NI 52-109”) the Chief Executive Officer and Chief Financial Officer of the Company have filed a Venture Issuer Basic Certificate with respect to the financial information contained in the audited consolidated financial statements and this accompanying interim MD&A (together the “Interim Filings”).

In contrast to the full certificate under NI 52-109, the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. For further information the reader should refer to the Venture Issuer Basic Certificates filed by the Company with respect to the Annual and Interim Filings on SEDAR at www.sedar.com.

Disclosure for Venture Issuers without Significant Revenue

Consistent with other junior companies in the mineral exploration industry, the Company has no source of operating revenue. The Company’s Audited Consolidated Financial Statements for the Year ended March 31, 2021 provide a breakdown of the general and administrative expenses for the period under review and an analysis of the capitalized and expensed exploration and evaluation incurred on its mineral properties.

Risks and Uncertainties

Early Stage – Need for Additional Funds

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

The Company has no source of operating cash flow and no assurance that additional funding will be available to it for further exploration and development of its projects when required.

Although the Company has been successful in the past in obtaining financing though the sale of equity securities or joint ventures, there can be no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing will be favourable. Failure to obtain such additional financing could result in the delay or indefinite postponement of further exploration and development of its properties. Exploration and Evaluation

Exploration for minerals is a speculative venture involving substantial risk. There is no certainty that the expenditures made by the Company will result in discoveries of commercial mineral reserves.

Mining and development risk always accompany anticipated rewards, and uncertainties always exist where mineral properties are concerned. Uncertainties include the size, grade and recovery of a natural occurring mineral deposit. Although exploration and development efforts can outline a mineral deposit with a degree of certainty, ultimate grade and tonnages are never fully known until mining has been completed.

Metal and prices are also a significant factor in the development decision for a mineral property, as a mine may not be economically feasible in a period of depressed prices. Factors, beyond the control of the Company may affect the marketability of any minerals discovered. Pricing is affected by numerous factors such as international economic and political trends, global or regional consumption and demand patterns, and increased production by current producers.

Operating Hazards and Risks

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

Title Risks

Although the Company has exercised the usual due diligence with respect to determining title to properties in which it has a material interest, there is no guarantee that title to such properties will not be challenged or impugned.

Environmental Regulations, Permits and Licences

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

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actions, 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. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations and, in particular, environmental laws.

Amendments to current laws, regulations and permits governing operations and activities of mining companies, or more stringent implementation thereof, could have a material adverse impact of the Company and cause increases in capital expenditures or productions costs or reduction in levels of productions at producing properties or requirements abandonment or delays in development of new mining properties.

Competition and Agreements with Other Parties

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

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

Price Volatility of Public Stock

In recent years securities markets have experienced extremes in price and volume volatility. The market price of securities of many early stage companies, among others, have experienced fluctuations in price which may not necessarily be related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any market for the Company’s shares will be subject to market trends generally and the value of the Company’s shares on the TSX Venture Exchange may be affected by such volatility.

Economic Conditions

Unfavourable economic conditions may negatively impact the Company’s financial viability as a result of increased financing costs and limited access to capital markets.

Dependence on Management

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

Conflicts of Interest

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

Approval

The Audit Committee has reviewed and approved the disclosure included in this MD&A. A copy of the interim and annual and MD&A’s will be provided to anyone who requests it. Additional Information relating to the Company can be found at the Company’s website www.surgecopper.com or www.sedar.com .