TOUBANI RESOURCES LIMITED — Interim / Quarterly Report 2023

May 9, 2023

TOUBANI RESOURCES INC. MANAGEMENT’S DISCUSSION AND ANALYSIS FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

Date: May 9, 2023

BACKGROUND

This Management’s Discussion and Analysis (“MD&A”) has been prepared based on information available to Toubani Resources Inc. (formerly African Gold Group, Inc.) (“we”, “our”, “us”, “Toubani” or the “Company”) as of May 9, 2023 unless otherwise noted. The MD&A provides a detailed analysis of the Company’s operations and compares its financial results with those of the previous periods and should be read in conjunction the condensed interim consolidated financial statements for the three months ended March 31, 2023 and the annual consolidated financial statements for the years ended December 31, 2022 and 2021. The condensed interim consolidated financial statements and related notes of Toubani have been prepared in accordance with International Financial Reporting Standards (“IFRS”) and do not reflect the adjustments that would be necessary should the Company be unable to continue as a going concern and therefore be required to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying financial statements.

Please refer to the notes of the December 31, 2022 annual consolidated financial statements for disclosure of the Company’s significant accounting policies. Unless otherwise noted, all references to currency in this MD&A refer to United States dollars. References to CAD$ refer to the Canadian dollar and AUD$ refer to the Australian dollar.

Additional information, including our press releases, has been filed electronically through the System for Electronic Document Analysis and Retrieval (“SEDAR”) and is available online under the Company’s profile at www.sedar.com. Additional information relating to the Company can be found on the Toubani website at www.toubaniresources.com.

Mr. Kerry Griffin, MAIG, Bsc Geol, Dip Eng Geol, is a Qualified Person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this MD&A.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

Except for statements of historical fact relating to Toubani, certain information contained herein constitutes forward-looking information under Canadian securities legislation. Forward-looking information includes, without limitation, statements with respect to: possible events, the future price of gold, the estimation of mineral reserves and mineral resources, the realization of mineral reserve and mineral resource estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of projects and new deposits, success of exploration, development and mining activities, permitting timelines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage. The words “anticipates”, ‘‘plans’’, ‘‘expects’’, “indicative”, “intend”, ‘‘scheduled’’, “timeline”, ‘‘estimates’’, ‘‘forecasts”, “guidance”, “opportunity”, “outlook”, “potential”, “projected”, “schedule”, “seek”, “strategy”, “study” (including, without limitation, as may be qualified by “feasibility” and “pre-feasibility”), “targets”, “models”, or ‘‘believes’’, or variations of or similar such words

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and phrases or statements that certain actions, events or results ‘‘may’’, ‘‘could’’, ‘‘would’’, or ‘‘should’’, ‘‘might’’, or ‘‘will be taken’’, ‘‘occur’’ or ‘‘be achieved’’ and similar expressions identify forward-looking information. Forward-looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable by Toubani and its external professional advisors as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.

Forward-looking information is provided for the purpose of providing information about management’s expectations and plans relating to the future. All of the forward-looking statements made in this MD&A are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada including, but not limited to, the cautionary statements made in the ‘‘Risk Factors’’ section of this MD&A. These factors are not intended to represent a complete list of the factors that could affect Toubani. Economic analyses (including mineral reserve and mineral resource estimates) in technical reports are based on commodity prices, costs, sales, revenue and other assumptions and projections that can change significantly over short periods of time. As a result, economic information in a technical report can quickly become outdated. Toubani disclaims any intention or obligation to update or revise any forward-looking information or to explain any material difference between subsequent events and such forward-looking information, except to the extent required by applicable law and regulations.

OVERVIEW

Toubani is a Canadian exploration and development company with a focus on developing a gold platform in West Africa. The Company is focused on the further exploration and development of the Kobada Gold Project (“Kobada”) in southern Mali.

HIGHLIGHTS AND SUBSEQUENT EVENTS

On January 9, 2023, Mr. Phil Russo joined the Company as Chief Executive Officer (“CEO”) and Executive Director. As part of the appointment of Mr. Russo, current CEO and Executive Director, Danny Callow will transition to Executive Chairman until mid-2023 before moving to Non-Executive Chairman. Current NonExecutive Chairman, Jan-Erik Back, will move to a Non-Executive Director role. They will join current NonExecutive Directors Mr. Tim Kestell and Mr. Douglas Jendry.

On January 11, 2023, the Company announced the appointments of Bill Oliver and Kerry Griffin to its technical management team. Both have extensive experience in bringing orogenic gold deposits similar to Kobada and will be instrumental in driving the exploration and resource development strategy as the Company initiates a concerted effort to unlock the significant geological potential at the Kobada Project

On March 8, 2023, the Company provided the first set of results from the ongoing drilling program at its Kobada Gold Project in southern Mali.

On April 11, 2023 Toubani continued to increase the overall strike extent at Kobada with results from Kobada North and Gosso targets.

On April 19, 2023, the Company announced that it has applied to the TSX Venture Exchange (“TSX-V”) to voluntarily delist the common shares of the Company. Toubani Resources believes that the Company’s shares and overall liquidity will benefit from a centralized focus on the Australian Stock Exchange (“ASX”) following its listing in November 2022. The Company anticipates its shares being delisted as of the close of business on May 11, 2023.

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DRILLING HIGHLIGHTS

On March 7, 2023, the Company announced:

● Drilling has extended mineralization by almost 1km to the north and south of the Kobada Main Deposit

● Kobada Main Deposit currently hosts a Mineral Resource1 of 3.1 million ounces of gold over a strike length of 4.5km

• Mineralization remains open north and south of the Kobada Main Deposit

● Excellent first results from the Kobada North 1 target area with 9m at 1.32g/t and 14m at 1.02g/t

● Further assay results at Kobada North 2 testing along an additional 1.7km of strike are pending

● Drilling continues on site with the focus now moving to step out holes at the Gosso target, where previous drilling has already intersected mineralization

On April 10, 2023, the Company announced:

• Drilling at Kobada North has confirmed continuity and further extended mineralization north of the Kobada Main Deposit with mineralization now intersected over 2km from previous drilling, and remains open

• Shallow, oxide mineralization intersected in drilling at the Gosso target with results of 1m at 5.78g/t, 2m at 1.44g/t, 1m at 3.16g/t, 3m at 1.34g/t, 3m at 1.17g/t, and 2m at 1.15g/t

• Mineralization at Gosso remains open to the north and south with Toubani’s drilling increasing the strike of known mineralization to over 2km

• All targets tested in the current program to date have intersected mineralization

• RC drilling continues on site with drilling recently completed at the Kobada Est target, where high grade auger results were received in late 2022

• Drilling now in progress at Kobada West, a previously undrilled structure parallel to the Kobada Main Shear with results anticipated shortly

● Following the success of this current campaign, Toubani has increased its drilling program by 3,000m to a total of 13,750m

On April 25, 2023, the Company announced:

• Kobada East discovery made in 2022 by auger sampling has been confirmed by maiden RC drilling program – a significant milestone

• Drilling has identified shallow, oxide mineralization below the auger anomaly over a strike length of 400 metres

• Kobada East Shear extends for over 18km on Toubani’s tenure

• Significant intersections include:

• 6m at 0.85g/t incl. 2m at 1.70g/t (KE22_P013)

• 1m at 3.58g/t (KE22_P007)

• o 1m at 3.35g/t (KE22_P008)

• Results are typical of the mineralization style seen across Kobada with the intersections mirroring those observed at the Kobada Main deposit in its initial drill phases

• Mineralization remains open along strike to the north and south as well as at depth

• Four of five planned high-value exploration targets tested so far have now intersected new areas of mineralization and extended strike outside the current Mineral Resource

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Forward Work Program

Forward Exploration Work Program

At Kobada East, future drilling will be carried out on a regular spacing within the Kobada East anomaly with the aim of defining and extending the delineated mineralisation.

AC drilling will also be carried out to identify potential extensions to mineralisation along strike along the Kobada East shear, of which some 18km lies within Toubani’s licenses, to ensure a comprehensive test below the auger sampling.

In the current program, drilling has now been completed at Kobada West, a previously undrilled structure parallel to Kobada Main which hosts substantial artisanal workings. Results are anticipated shortly. Drilling has moved to targets identified by recently completed drilling at Kobada North and “Kobada Junction” which lies at the interpreted junction between the Kobada and Foroko shears. Significant artisanal workings are evident yet little to no previous drill testing has occurred with the program at these prospects well advanced.

SUMMARY OF QUARTERLY RESULTS

Selected unaudited consolidated financial information for each of the last eight quarters:

Quarter Ended	Revenue	Total assets**	(Loss) for the Period**	(Loss) per Share ,*
	$	$	$	$
March 31,2023	Nil	2,606,871	(2,504,024)	(0.02)
December 31,2022	Nil	4,043,341	(1,202,805)	(0.01)
September 30,2022	Nil	1,527,461	(713,135)	(0.01)
June 30,2022	Nil	2,358,198	(1,003,795)	(0.01)
March 31,2022	Nil	3,262,502	(648,726)	(0.00)
December 31,2021	Nil	3,883,251	(772,967)	(0.00)
September 30,2021	Nil	971,999	(848,920)	(0.01)
June 30,2021	Nil	1,777,752	(917,989)	(0.02)

• (Loss) earnings per share data is basic and diluted.

** During the year ended December 31, 2021, the Company changed its accounting policy from capitalization of exploration and evaluation costs to expensing these costs. The quarterly information above has been restated to reflect the results of this change in accounting policy. See Note 3 of the consolidated financial statements for the year ended December 31, 2021 and 2020 for further details.

The Company’s level of activity and expenditures during a specific quarter are influenced by the availability of working capital, the availability of additional external financing, the time required to gather, analyze and report on geological data related to mineral properties, the results of the Company’s prior exploration activities on its properties and the amount of expenditure required to advance its projects .

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SELECTED FINANCIAL INFORMATION

The following information has been extracted from the Company’s consolidated financial statements:

	For the three months	ended
	March 31,
	2023	2022
Operations
Revenue	-	-
Net loss	(2,504,024)	(648,726)
Loss per share	(0.02)	(0.00)
Balance Sheet
Total assets	2,606,871	971,999
Working capital*	1,509,223	25,191
Cash dividends declared	NIL	NIL

*Working capital is defined as current assets minus current liabilities. Working capital is a Non-IFRS figure without a standard meaning. Please see “Non-IFRS Measures” below for a reconciliation.

RESULTS OF OPERATIONS

Revenues

The exploration properties acquired by the Company are still in the exploration and evaluation stage. Until a property is placed into production, it is not anticipated that TRE will have any material revenue.

Expenses

Expenses
	2023 2022 For the three months ended March 31,
Expenses Administrative and general Consulting and personnel costs Exploration and evaluation expenditures Amortization Foreign exchange (gain) loss Share based payments	277,248 98,635 316,667 216,868 1,045,584 312,332 4,327 4,752 (11,722) 5,361 871,926 14,517
	2,504,030 652,465

Consulting and personnel costs – The increase in consulting and personnel cost during the three months ended March 31, 2023 compared to the same period in the prior year was due to the termination of consulting services and changes to the senior management team, that resulted in termination payments of CAD$90,000 (US$66,543) during the three months ended March 31, 2022.

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Exploration and evaluation costs during the three months ended March 31, 2023 and 2022 are as follows:

Exploration and evaluation costsduring the three months ended M	arch	31, 2023 and 2022 are as follow	31, 2023 and 2022 are as follow	31, 2023 and 2022 are as follow
		Three months ended
	March 31, 2023		March 31, 2022
Kobada
Drilling and feasibility study	$	750,935	$	-
Project management/ engineering		8,315		123,331
Site development and maintenance		51,987		42,834
Camp		110,991		78,314
Assays and sampling		56,178		-
Vehicle rent and maintenance		14,755		10,590
Travel		5,448		-
Security		23,076		29,258
Permits		23,308		28,005
Total Kobada expenditures	$	1,044,993	$	312,332
Faraba
Permits		591		-
Total Faraba expenditures	$	591	$	-
Total expenditures	$	1,045,584	$	312,332

Foreign exchange / loss – The Canadian dollar, Australian dollar and Mali CFA continued to fluctuate in 2023. The US dollar strengthened during the quarter resulting in gains on US dollar cash balances during the three months ended March 31, 2023 offset by a weakening of the Australian dollar. During the three months ended March 31, 2022, the Mali CFA weakened causing unrealized foreign exchange losses. These foreign exchange gains and losses are reflected in the Statement of Operations and Comprehensive Loss.

Administrative and general expenses – TRE’s administrative and general expenses for the three months ended March 31, 2023 increased by $72,213 from the same period in the prior year.

		For the three	months ended
		March 31,
		2023	2022
Bank and interest charges	$	2,263	$	1,292
Insurance		9,199		4,920
Investor relations		12,938		30,946
Office and general		63,741		24,157
Professional fees		141,703		36,657
Travel		47,404		663
	$	277,248	$	98,635

Within the administrative and general expenses seen above, office and general expenses increased for the three months ended March 31, 2023, compared to the same period in the previous year due mainly to increased conference and trade show activity. Travel expenses also increased as a result of increased travel to the Company’s project in Mali and travel to conferences and trade shows. These activities increased from the prior year due to easing of Covid travel restrictions and the Company’s drilling program. Professional fees increased due to additional legal fees incurred for an M&A opportunity evaluation.

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LIQUIDITY AND CAPITAL RESOURCES

The Company had working capital of $1,509,223 on March 31, 2023 (December 31, 2022 – $3,132,116) and cash and cash equivalents of $2,270,120 (December 31, 2022 - $3,642,903). The Company closed private placements in the year ended December 31, 2022 and is using the proceeds on development of its Kobada gold project and administrative expenses. Specific cash flow fluctuations can be evidenced in the March 31, 2023 condensed interim consolidated financial statements in the Statement of Cash Flows.

At present, the Company has no producing properties and consequently no revenue generating assets or operations. The Company is dependent on the ability to access funds from certain shareholders or potential investors in order to ensure that it can continue to fund ongoing administrative expenses and explore, quantify, and develop any potential assets. Management is confident that it will be able to raise sufficient capital to further explore and develop its properties and projects in future periods when additional funding is required.

Mineral exploration is a speculative venture. There is no certainty that the money spent on exploration and development of mineral projects will result in any discoveries of commercial bodies of ore. The long-term profitability of the Company’s operations will in part be related to the success of its exploration programs, which may be affected by a number of factors that are beyond the control of the Company.

The mineral industry is intensely competitive in all its phases. The Company competes with many other mineral exploration companies who have greater financial resources and experience. The market price of precious metals and other minerals is volatile and cannot be controlled.

NON-IFRS MEASURES

The Company has referred to working capital throughout this document. Working capital is a Non-IFRS performance measure. In the gold mining industry, it is common Non-IFRS performance measure but does not have a standardized meaning. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, we and certain investors use this information to evaluate the Company’s performance and ability to generate cash, profits and meet financial commitments. This Non-IFRS measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. The following tables provide a reconciliation of working capital to the financial statements as of March 31, 2023 and December 31, 2022.

Current assets Cash and cash equivalents Receivables Prepaid expenses Current liabilities Accounts payable and accrued liabilities Working capital, current assets less current liabilities	March 31, 2023 December 31, 2022 2,270,120 $ 3,642,903 $ 24,441 14,555 18,041 87,287
	2,312,602 3,744,745 803,379 $ 612,629 $
	803,379 612,629 1,509,223 $ 3,132,116 $

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CAPITAL RISK MANAGEMENT

The Company includes equity, comprised of issued share capital, share-based payment reserve, warrants, accumulated other comprehensive income and deficit, in the definition of capital. The Company’s objective when managing capital is to maintain its ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders.

The Company manages its capital structure and makes adjustments to it based on the funds available to the Company in order to support the acquisition, exploration, and development of mineral properties. 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 and consultants to sustain future development of the business.

The Company’s properties are in the exploration stage and, accordingly, the Company is dependent upon external financings to fund activities. In order to carry out planned engineering, test work, advancement, and development of the mining projects, and pay for administrative costs, the Company will spend working capital and expects to raise additional funds from time to time as required.

Management reviews its capital management approach on an ongoing basis and believes that this approach is reasonable given the relative size of the Company. There were no changes in the Company’s approach to capital management during the three months ended March 31, 2023. Neither TRE nor its subsidiaries are subject to externally imposed capital requirements, other than those of the TSX Venture Exchange (“TSXV”), which requires adequate working capital or financial resources of the greater of (i) $50,000 and (ii) an amount required in order to maintain operations and cover general and administrative expenses for a period of nine months.

COMMITENTS

Management Commitments

The Company is party to certain management contracts. As of March 31, 2023, these contracts require payments of approximately CAD$475,000 ($331,900) to be made upon the occurrence of a change of control to the officers and consultants of the Company. The Company is also committed to payments upon termination of approximately CAD$202,500 ($140,090) pursuant to the terms of these contracts as of March 31, 2023. As a triggering event has not taken place on March 31, 2023, these amounts have not been recorded in the condensed interim consolidated financial statements.

Environmental

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. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.

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MINERAL PROPERTY DESCRIPTION

KOBADA

The Kobada Gold Project is located in southern Mali, approximately 125 km in a straight-line southsouthwest of the capital city Bamako and is situated adjacent to the Niger River and the international border with Guinea. The Kobada Gold Project is based on one mining exploitation permit (Kobada) of 136 km2 and two exploration permits (Faraba and Kobada Est) of 77 km2 and 45 km2 , which are wholly owned by TRE Mali SARL, the local Malian company, a 100% owned subsidiary of Toubani. TRE has completed over 170,000 metres of diamond, reverse circulation, air core and auger drilling Gold mineralization is present in the laterite, saprolite, and quartz veins that comprise the project, and in the sulphidic hard rock underneath. There are also placer style deposits in the region.

Kobada is a predominantly free-dig operation, requires limited blasting, and processing of ore will be through a very simple and proven gravity plus CIL plant with recoveries over 95% in both oxides and sulphides. The inclusion of sulphides in this updated DFS, which are free milling and easy to process, opens significant future opportunities within the sulphide resource as well as continuing growth possibilities in the oxides. The capital and cost estimates of Kobada as compared to recent similarly completed projects in the region are competitive for a project of this size. The potential to produce significant free cash flows after tax and low capital expenditure highlights very attractive economics of our Kobada project.

An October 2021 DFS was completed for the project that outlined a robust project producing at circa 100,000oz per annum for 10 years in both oxide and fresh rocks ores. The Company is currently reviewing the outcomes of the study with a view of assessing various potential optimization scenarios that include a review of the mining schedule as well as a range of throughput options for the project.

The NI 43-101 compliant technical report was filed on www.sedar.com on October 18, 2021.

Health and Safety

The Company regards the health and safety of its employees and the communities in which it operates as its highest priority. The company has recorded zero lost time injuries during the quarter, despite increased activity on site. An ongoing comprehensive program of awareness and mitigation of risks continues to be prioritized by the on-site personnel.

USE OF FINANCIAL INSTRUMENTS, OFF BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

The Company has not entered into any specialized financial agreements to minimize its investment risk, currency risk or commodity risk. There are no off-balance sheet arrangements that are likely to have a material effect or future effect on the Company’s financial condition that have not been disclosed in the consolidated financial statements.

Additional disclosure concerning the Company’s contractual obligations is provided in Note 4 and Note 1 in the condensed interim consolidated financial statements for the three months ended March 31, 2023 and 2022, copies of which are filed on the SEDAR website at www.sedar.com.

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RELATED PARTY TRANSACTIONS

Related party transactions are in the normal course of business and are recorded at the amount agreed to between the parties.

Included in accounts payable as at March 31, 2023 is CAD$61,923 ($45,757) (December 31, 2022 - CAD$283,174 ($209,077) owed to other key management personnel for consulting and directors fees and $nil (December 31, 2022 - CAD$9,309 ($6,873)) for expense reimbursement. The amounts owing are unsecured, non-interest bearing and due on demand.

During the three months ended March 31, 2023, the Company issued a total of 2,000,000 stock options to directors and officers of the Company (March 31, 2022 – nil) and granted 8,500,000 performance shares to the CEO of the Company. An expense of $809,538 in share-based payments was recorded in the three months ended March 31, 2023 (March 31, 2022 - $14,517) in relation to the amortization of the estimated fair value of options and performance shares expected to vest.

The remuneration of directors and key management of the Company was as follows:

	Three months ended	Three months ended	Three months ended	Three months ended
		March 31, 2023		March 31, 2022
Remuneration	$	204,634	$	249,432
Share-based payments		809,538		14,517
Short term employee benefits	$	1,014,172	$	263,949

RISK FACTORS

The Company is in an industry that is exposed to a number of risks and uncertainties, including:

Fair Value and Foreign Exchange Risk

The carrying amount of cash and cash equivalents, receivables, and accounts payable and accrued liabilities approximates their fair value because of the short-term maturities of these items. The Company has operations in Canada, Barbados, Australia and West Africa and as such, transactions are settled in local currencies or the United States Dollar. Given this scenario, TRE’s operating businesses and financial reporting results and cash flows are exposed to risks associated with foreign currency fluctuations.

Price Volatility

Any future earnings will be directly related to the price of precious and base metals. Such prices fluctuate over time and are affected by numerous factors beyond the control of the Company.

Political and Economic Risk

The Company’s operations in West Africa are affected by West Africa's unpredictable and potentially unstable political and economic environment. There is the risk that this situation could deteriorate further and adversely affect the Company’s operations.

Environmental

Operations, development, and exploration projects could potentially be affected by environmental laws and regulations of the country in which activities are undertaken. The environmental standards continue to change, and the global trend is to a longer, more complex process. Although the Company continuously reviews environmental matters and undertakes to comply with changes as expeditiously as possible, there is

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no assurance that existing or future environmental regulations will not materially adversely affect TRE’s financial conditions, liquidity, or results of operations.

Certain environmental issues, such as storm events, storage seepage, dust and noise emissions, while having been assessed and strategies based on best practices have been adopted, there can be no assurance an unforeseen event will occur which could have a material effect on the viability of the Company’s business and affairs.

Licenses and Permits, Laws and Regulations

The Company’s exploration activities require permits and approvals from various government authorities, and are subject to extensive federal, state and local laws and regulations governing prospecting, development, production, transportation, exports, taxes, labour standards, occupational health and safety, mine safety and other matters. Such laws and regulations are subject to change, can become more stringent and compliance can therefore become more time consuming and costly. In addition, the Company may be required to compensate those suffering loss or damage by reason of its activities. There can be no assurance that the Company will be able to maintain or obtain all necessary licenses, permits and approvals that may be required to explore and develop its properties, commence construction or to operate its mining facilities.

The costs and potential delays associated with obtaining or maintaining the necessary authorizations and licenses and complying with these authorizations, licenses and applicable laws and regulations could stop or materially delay or restrict the Company from proceeding with the exploration of its mineral properties. Any failure to comply with applicable laws, regulations, authorizations or licenses, even if inadvertent, could result in interruption or termination of exploration, development or mining operations or logistics operations, or material fines, penalties or other liabilities that could have a material adverse effect on the Company’s business, reputation, properties, results of operations, financial condition, prospects or community relations. Claims, lawsuits, and injunctions may be brought by parties looking to prevent the Company from advancing its projects. The Company can make no assurance that it will be able to maintain or obtain all of the required mineral licenses and authorizations on a timely basis, if at all.

Artisanal Miners

The Company’s mining concessions are held in remote areas of Mali where artisanal miners are present. As the Company further explores and advances mining projects towards production, the Government must evict or negotiate with artisanal miners operating on the Company’s mining concessions illegally. There is risk that such artisanal miners may oppose the Company’s operations and efforts to evict them from the Company’s mining concessions may result in violence, the destruction of the Company’s property, the physical occupation of the Company’s current mine or a disruption to the planned development and/or to mining and processing operations; all of which could have a material adverse effect on the Company .

Mineral Resource and Mineral Reserve Estimates May be Inaccurate

There are numerous uncertainties inherent in estimating mineral resources and mineral reserves, including many factors beyond the control of the Company. Such estimates are a subjective process, and the accuracy of any mineral resource or mineral reserve estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. These amounts are estimates only and the actual level of mineral recovery from such deposits may be different. Differences between management’s assumptions, including economic assumptions such as metal prices and market conditions, could have a material adverse effect on the Company’s financial position and results of operations.

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Title to Properties

The acquisition of title to resource properties is a very detailed and time-consuming process. There is no guarantee that such title will not be challenged or impaired. There may be challenges to the title of the properties in which the Company may have an interest, which, if successful, could result in the loss or reduction of the Company’s interest in the properties.

Going Concern

As is common with exploration companies, the Company's ability to continue its on-going and planned exploration activities and continue operations as a going concern, is dependent upon the recoverability of costs incurred to date on mineral properties, the existence of economically recoverable reserves, and the ability to obtain necessary equity financing from time to time.

Competition

The Company competes with many other mining companies that have substantially greater resources than the Company. Such competition may result in the Company being unable to acquire desired properties, recruit or retain qualified employees or acquire the capital necessary to fund its operations and develop its properties. The Company’s inability to compete with other mining companies for these resources would have a material adverse effect on the Company’s results of operation and business.

Dependence on Outside Parties

The Company has relied upon consultants, engineers, and others, and intends to rely on these parties for development, construction, and operating expertise. Substantial expenditures are required to establish mineral reserves through drilling, to carry out environmental and social impact assessments, to develop metallurgical processes to extract the metal from the ore. If such parties’ work is deficient or negligent or is not completed in a timely manner, it could have a material adverse effect on the Company.

Share Price Fluctuations

The market price of securities of many companies, particularly exploration stage companies, experience wide fluctuations in price that are not necessarily related to the operating performance, underlying asset values or prospects of such companies. There can be no assurance that fluctuations in the Company’s share price will not occur.

Conflicts of Interest

Certain of the Company’s directors and officers serve or may agree to serve as directors or officers of other companies and, to the extent that such other companies may participate in ventures in which the Company may participate, the directors of the Company may have a conflict of interest in negotiating and concluding terms respecting such participation.

Interest Rate Risk

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company does not have any borrowings. Interest rate risk is limited to potential decreases on the interest rate offered on cash and cash equivalents held with chartered Canadian financial institutions. Sensitivity to a plus or minus 1% change in the interest rates could impact any renewals or extensions of term deposits which would have no significant impact on the net loss due to the immateriality of the interest earned.

Liquidity Risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or

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risking damage to the Company’s reputation. The key to success in managing liquidity is the degree of certainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

On March 31, 2023, TRE had a cash balance of $2,270,120 and current liabilities of $803,379. As outlined in Note 2 of the condensed interim consolidated financial statements for the three months ended March 31, 2023 and 2022, the Company may be required to obtain additional financing for working capital and continued exploration and development of its properties.

Credit Risk

Credit risk is the risk of financial loss to the Company if a customer or a counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk in its cash and cash equivalents and receivables. The maximum credit risk represented by the Company’s financial assets is represented by their carrying amounts. Concentration of credit risk exists with respect to the Company’s cash and cash equivalents as substantially the entire amount is held at a single major Canadian financial institution. Credit risk on cash and cash equivalents is minimized by depositing with only reputable financial institutions. Management has reviewed the receivable balances and determined that the balances are collectible as they are mainly Harmonized Sales Tax (HST) rebates from the Government of Canada; accordingly, there have been no allowance for doubtful accounts recorded.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management is often required to make judgments, assumptions and estimates in the application of generally accepted accounting principles that have a significant impact on the financial results of TRE. A comprehensive discussion of TRE’s significant accounting policies is contained in Note 3 to the annual consolidated financial statements.

As is common with exploration companies, the Company's ability to continue its on-going and planned exploration activities and continue operations as a going concern, is dependent upon the recoverability of costs incurred to date on mineral properties, the existence of economically recoverable reserves, and the ability to obtain necessary equity financing from time to time. Should the Company be unable to continue as a going concern, amounts realized from disposal of its assets (primarily its mining properties) on a liquidation basis may be significantly less than their carrying amounts.

Management continues to pursue various alternatives, including private placements, to raise capital. It is not possible to determine with certainty the success or adequacy of this or other initiatives.

The following is a discussion of the accounting estimates that are critical in determining TRE’s financial results.

Impairment

Assets, including property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts.

In the determination of carrying values and impairment charges, management looks at the higher of recoverable amount or fair value less costs to sell. These determinations and their individual assumptions require that management make a decision based on the best available information at each reporting period.

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Disclosure Controls and Procedures and Internal Controls over Financial Reporting

There were no significant changes to the Company’s internal control over its financial reporting for the three months ended March 31, 2023, which have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

As of March 31, 2023, the Company evaluated its disclosure controls and procedures and internal control over financial reporting. These evaluations were carried out under the supervision of the Company’s chief executive officer and chief financial officer. Based on these evaluations, the chief executive officer and chief financial officer concluded that the design and operation of these internal controls and procedures and internal control over financial reporting was effective.

Recent Accounting Pronouncements

The International Accounting Standards Board ("IASB") or the International Financial Reporting Interpretations Committees ("IFRIC") have issued a number of new or revised standards or interpretations that have been adopted by the Company.

New accounting standards

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods on or after January 1, 2023 or later periods. Many are not applicable or do not have a significant impact to the Company and have been excluded.

IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in January 2020 to provide a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date. The amendments clarify that the classification of liabilities as current or noncurrent is based solely on a company’s right to defer settlement at the reporting date. The right needs to be unconditional and must have substance. The amendments also clarify that the transfer of a company’s own equity instruments is regarded as settlement of a liability, unless it results from the exercise of a conversion option meeting the definition of an equity instrument. The adoption of the amendments to IAS 1 on January 1, 2023 did not have a material impact on the Company’s condensed interim consolidated financial statements.

IAS 1 – In February 2021, the IASB issued ‘Disclosure of Accounting Policies’ with amendments that are intended to help preparers in deciding which accounting policies to disclose in their financial statements. The adoption of the amendments to IAS 1 on January 1, 2023 did not have a material impact on the Company’s condensed interim consolidated financial statements.

IAS 8 – In February 2021, the IASB issued ‘Definition of Accounting Estimates’ to help entities distinguish between accounting policies and accounting estimates. The adoption of IAS 8 on January 1, 2023 did not have a material impact on the Company’s condensed interim consolidated financial statements.

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DISCLOSURE OF OUTSTANDING SHARE DATA

The following is for disclosure of information relating to the outstanding securities of the Company as at the date of this MD&A:

• 102,198,999 common shares issued and outstanding

• 9,437,087 warrants and broker options outstanding, 2,972,383 of which have exercise prices in Australian dollars. If all the warrants were exercised 9,437,087 common shares would be issued for gross proceeds of CAD$4,848,528 and AUD$832,267.

• 7,492,210 stock options outstanding, 3,000,000 of which have exercise prices in Australian dollars. If all the options were exercised, 7,492,210 common shares would be issued for gross proceeds of CDN$2,913,026 and AUD$1,200,000.

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