Trident Resources Corp. — Management Reports 2021

Apr 30, 2021

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EROS RESOURCES CORP.

(an exploration stage enterprise)

Management Discussion and Analysis

Years ended December 31, 2020 and 2019

EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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INTRODUCTION

This MD&A has been prepared by management as at April 29, 2021 and was reviewed and approved by the Board of Directors on that date. The following discussion of performance, financial condition and future prospects should be read in conjunction with the audited consolidated financial statements of Eros Resources Corp. (“Eros”, or the “Company”) and the related notes thereto for the years ended December 31, 2020 and 2019, prepared in accordance with International Financial Reporting Standards (“IFRS”). The information provided herein supplements but does not form part of the financial statements. This discussion covers the year ended December 31, 2020 and the subsequent period up to the date of issue of this MD&A. All monetary amounts are in Canadian dollars unless otherwise specified.

Additional information including financial statements and more detail on specific mineral properties and oil and gas projects discussed in this MD&A can be found on the Company’s website www.erosresources.com and on the Company’s page at www.sedar.com.

This MD&A contains Forward-Looking Information. Please read the Cautionary Statements on page 3 carefully.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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FORWARD-LOOKING STATEMENTS AND INFORMATION

Certain information included in this MD&A contains forward-looking statements or forward-looking information within the meaning of applicable Canadian securities laws, including, without limitation, in respect of the Company’s priorities, plans and strategies and the Company’s anticipated financial and operating performance and prospects. All statements and information, other than statements of historical fact, included in or incorporated by reference into this MD&A are forward-looking statements and forwardlooking information, including, without limitation, statements regarding activities, events or developments that we expect or anticipate may occur in the future. Such forward-looking statements and information can be identified by the use of forward-looking words such as "will", "expect", "intend", "plan", "estimate", "anticipate", "believe" or "continue" or similar words and expressions or the negative thereof. There can be no assurance that the plans, intentions or expectations upon which such forward-looking statements and information are based will occur or, even if they do occur, will result in the performance, events or results expected. This information speaks only as of the date of this MD&A. In particular, this MD&A contains forward-looking information pertaining to the following:

• potential receipt of regulatory approvals, permits and licenses and treatment under governmental regulatory regimes;

• the estimates of the Company’s mineral resources or oil and gas reserves;

• expectations of market prices and costs of production, reclamation, operation and otherwise; and

• • exploration, development and expansion plans, objectives and results.

We caution readers of this MD&A not to place undue reliance on forward-looking statements and information contained herein, which are not a guarantee of performance, events, outcomes or results and are subject to a number of risks, uncertainties and other factors that could cause actual performance, events, outcomes or results to differ materially from those expressed or implied by such forward-looking statements and information. These factors include: changes in priorities, plans, strategies and prospects; general economic, industry, business and market conditions; changes in law; the ability to implement business plans and strategies, and to pursue business opportunities; potential legal and regulatory claims, proceedings and investigations; disruptions or changes in the credit or securities markets; inflationary pressures; and various other events, conditions or circumstances that could disrupt Eros’ priorities, plans, strategies and prospects.

Shareholders are cautioned that all forward-looking statements and information involve risks and uncertainties, including those risks and uncertainties set out above and as detailed in Eros's continuous disclosure and other filings with applicable Canadian securities regulatory authorities, copies of which are available on SEDAR at www.sedar.com. The Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements and information that may be made to reflect events or circumstances after the above-stated date or to reflect the occurrence of unanticipated event, except as otherwise required by applicable legislations.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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THE COMPANY

The Company’s principal business activities include the acquisition, exploration and development of mineral and oil and gas resource properties in North America. The Company’s corporate office is located at Suite 420, 789 West Pender Street, Vancouver, British Columbia. Eros is a Tier 1 company on the TSXV Exchange.

Eros has as its prime business objective the identification, acquisition and exploration of advanced projects with a North American focus. A secondary focus of the Company is to make strategic investments with a global focus and a diverse commodity base. The Board and management’s expertise in the resource sector supports the selection of these strategic investments.

BELL MOUNTAIN, EASTGATE PROPERTIES and ORO CRUZ PROPERTIES

In August 2016, the Department of the Navy of the United States Department of Defense (the “Navy”) issued a notice in the Federal Register to prepare an environmental impact statement (“EIS”) regarding a proposed expansion of the Fallon Range Training Complex, including a proposed withdrawal and reservation for military use of public lands. The Company’s Bell Mountain Project consists of unpatented mining claims that are located on federal lands within the proposed expansion area. For a period of two years the Company was restricted from conducting any new project advancement that required surface disturbance. This withdrawal notice has expired.

On August 31, 2018, the Bureau of Land Management (“BLM”) of the Department of the Interior issued a Public Land Order in the Federal Register creating an additional four-year withdrawal of public lands to allow the Navy time to complete their EIS under the National Environmental Policy Act (“NEPA”). Owing to on-going negotiations between the Company and the Navy/BLM, the Bell Mountain mining claims were specifically exempted from the new four-year withdrawal. Furthermore, the Navy is proposing a Special Land Management Area (“SLMA”) which would allow for continued mineral exploration and development at the Bell Mountain project. While not assured, the SLMA is the preferred “Alternative 3” in the Navy’s present expansion proposal. The Company is actively working with the Navy and BLM to move the project forward.

The Company controls 100% ownership of the Bell Mountain gold-silver property. Advancement of the property towards production is no longer restricted by the BLM/Navy moratorium since the claims were specifically exempted from withdrawal in August 2018. A conceptual Plan of Operations has been submitted to the BLM and permitting and engineering work are in progress. An environmental Assessment (“EA”) under NEPA is also in progress. Stantec Consulting Services Inc. of Reno, Nevada is handling the permitting work. Welsh Hagen Associates of Reno, Nevada is handling the engineering work and also the Water Pollution Control Permit. The Company is working with the Navy and NV Energy in an effort to acquire access to grid electrical power from an existing Navy powerline that runs directly to the Bell Mountain property. Geotechnical work at the proposed leach pad site is underway and condemnation drilling is planned. The Company is targeting 2020 for possible completion of the NEPA documents.

An advance royalty payment of $20,000 is due annually on June 15 until such time as there is production from the property. Due to the Navy’s moratorium on exploration activities, the advance royalty has been deferred for the years ending December 31, 2017, 2018 and 2019. The royalty payments recommenced in 2020 and the past and current payments were paid in full.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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The Eastgate gold-silver property is situated in the Walker Lane, approximately 14.5 air miles (23.5 km) east-northeast from the Company’s Bell Mountain property. The nearest town is Fallon, Nevada, about 63 road miles (101 km) to the west. Pursuant to an agreement with Kermode Resources Ltd. (“Kermode”), Eros purchased a 45% interest in the Eastgate property for a total of US$650,000. In the year, Eros entered into an agreement to sell the Eastgate property to Southern Empire Resources Corp.

The Oro Cruz property is situated in Imperial County in Southern California. The property was acquired in 2019 from Lincoln Mining Corp. In the year, Eros entered into an agreement to sell the Oro Cruz property to Southern Empire Resources Corp.

BRITISH COLUMBIA PROJECTS

Golden Triangle

In 2016, the Company purchased a 5% minor investment interest in certain properties in the Golden Triangle area of northwest BC, near the past producing Snip mine. The purchase of these rights included a minor share position in SnipGold Corp. These SnipGold Corp. shares were sold for more than the cost of the total acquisition. As there is no planned activity on the property, the value was impaired to $nil in 2020.

SASKATCHEWAN PROJECTS

Denison Joint Venture

Hatchet Lake and Murphy Lake - Eros holds 29.85% in the Hatchet Lake joint venture located in the shallow, eastern portion of the Athabasca basin of Saskatchewan. The target is unconformity-type uranium deposits similar to the nearby McLean Lake mine. Denison Mines Corp. (“Denison”) is the operator of the joint ventures. Eros believes in the potential of the area and intends to defend its interest in the properties.

The Hatchet Lake property is located just 17 km north of the McClean Lake uranium mill owned by OranoDenison-OURD. Access to the property is by winter road or aircraft.

The Hatchet Lake property is considered prospective for uranium as well as base and precious metals. Historic drill holes have reported U, Ni, Co, Cu, Au and Ag enrichment. The proposed ground geophysical program will cover areas prospective for the above metals. Historic holes on the property have reported:

4.9% Ni, 6.1% Co over 5 metres 5.9% Cu over 2 metres 21.5 g/t Au over 1 metre 19.6 g/t Ag, 3.3% Pb, 0.27% Zn over 9.6 metres

The proposed program for 2020 includes reviewing historic core, especially sulphide intersections for additional base or precious metal enrichment.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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On November 15, 2019, the Company entered into a purchase agreement with Denison, whereby Denison acquired the Company’s interest in the Murphy Lake joint venture agreement for 32,262 common shares of Denison. The shares were valued at $20,970 and a gain of $18,765 was recorded during the year ended December 31, 2019. During the year ended December 31, 2019, the Company along with Denison decided to reduce the Murphy Lake property by three claims due to management’s assessment of prospectively for future exploration work.

Oil and gas interests

Flaxcombe Heavy oil field

The Company has invested in heavy oil production in the Flaxcombe Field in the Kindersley area of Saskatchewan by funding the drilling of three wells by Westcore, a related party in which the Company also holds a significant equity position. Eros receives 90% of revenue from the wells until pay back of expenditure is received. Eros also has a right of first refusal to participate in drilling further wells with Westcore. The wells were drilled, completed and brought online in 2017.

In early 2018, the Company agreed to lease 415 hectares of land near its Flaxcombe wells from a third party, for a 2-year period with an option to extend the lease for an additional 2 years. The Company also acquired 2-d and 3-d seismic data for the region and had it analysed in order to help identify potential drilling targets. These activities helped decrease the Company’s future tax liability.

The heavy oil market in Canada has suffered from poor economics since 2018, principally due to ongoing delays in the development of pipeline capacity to tide water on the west coast of Canada. The impact of this has severely limited takeaway capacity in the heavy oil regions of western Canada, which has had direct downward pressure on the realized price that Eros and Westcore receive for the heavy oil it produces.

As a result of this downward pressure, the wells drilled in 2017 were no longer economic to produce in the fall of 2018, and Westcore made the decision to take the wells offline. Eros has recorded an impairment loss to bring the carrying value of the properties to nil at December 31, 2018. The Company also impaired the value of the additional lease and seismic data acquired in 2018 to nil as at December 31, 2018.

Both Eros and Westcore believe the wells will return to profitability and production will be re-initiated. The timing of this remains uncertain.

OVERALL PERFORMANCE and OUTLOOK

In the year ended December 31, 2020, the Company continued to make progress on both of its primary business objectives. Development works continued at Bell Mountain, as the Company drives toward the completion of permitting. Timing of completion remains somewhat uncertain, but the Company is targeting fiscal 2021 for receipt of the final permit.

Within the trading portfolio, the Company continued having success in exiting positions and re-deploying that capital into Bell Mountain. While this strategy may continue in the short-term, it remains the

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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intention of the Company to build on its existing portfolio and trade it actively. Success in the trading activities depends to a great degree on the relative health in the junior resource market, a market which began to reverse years of decline in 2020. The Company generated a realized gain on trading activities of $153,528 in the year ended December 31, 2020 (2019 – loss of $505,275), but recorded unrealized gains of $9,239,256 (2019 – gains of $3,279,123).

The Company’s focus remains on mineral exploration and development with our lead project remaining the Bell Mountain project and is making continued strides towards permitting. Engineering and geotechnical work is ongoing at the Bell Mountain project. Funding this work has been accomplished through the successful trading of the Company’s equity portfolio.

Management believes that the strong rebound in 2020 will continue throughout 2021 driven by higher gold and copper prices, which in turn will lead to additional financing being completed in the space. This will allow the Company to continue capitalizing on its trading capabilities, generating additional development funds for Bell Mountain as well as for further investment within Canada, which will be focused principally on flow through share investing.

The Company’s oil investment in the Flaxcombe heavy oil field has been written to nil. Management does not anticipate a material change in the oil and gas industry in western Canada in the near term.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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EXPLORATION AND EVALUATION ASSETS

The exploration and evaluation asset spending to December 31, 2020 has been capitalized as follows:

	British Columbia		Saskatchewan	Nevada	California	Total
Commodity	Gold		Uranium	Gold-Silver	Gold-Silver
Balance at December 31,2018	$6,500		$4,601	$448,893	$-	$459,994
Additions
Land cost		-	-	-	-	-
Staking and maintenance		-	-	66,183	108,185	174,368
Geology/ geophysics		-	4,131	453,916	143,130	603,177
Field support		-	-	63,907	13,571	77,478
Environmental and socio-
economic		-	-	526,107	12,935	539,042
Total additions for the year:			4,131	1,110,113	279,821	1,394,065
Total disposals for the year:		-	(2,205)	-	-	(2,205)
Reversal of impairment		-	-	334,345	-	334,345
Transfer to asset held for sale
(Note 12)		-	-	(480,234)	(279,821)	(760,055)
Balance at December 31,2019	6,500		6,527	1,413,117	-	1,426,144
Additions
Land cost		-	-	81,726	-	81,726
Staking and maintenance		-	-	41,741	-	41,741
Geology/ geophysics		-	15,816	521,093	-	536,909
Field support		-	-	37,586	-	37,586
Environmental and socio-
economic		-	-	112,477	-	112,477
Total additions for the year:		-	15,816	794,623	-	810,439
Impairment duringtheyear:	(6,500)		-	-	-	(6,500)
Balance at December 31,2020	$	-	$22,343	$2,207,740	-	$2,230,083

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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RESULTS OF OPERATIONS

SELECTED ANNUAL INFORMATION

The following table sets forth selected annual information from the audited consolidated financial statements for the years ended December 31, 2020, 2019 and 2018:

Year ended		2020		2019		2018
Revenue	$	-	$	30,477	$	251,641
Net income (loss) for the year	$	11,178,843	$	2,788,549	$	(5,397,216)
Basic and diluted loss per share	$	0.17	$	0.06	$	(0.11)
Total assets	$	23,073,948	$	8,436,996	$	5,750,280
Non-current financial liability	$	3,387,696	$	2,842,993	$	3,243,069
Cash dividends paid	$	Nil	$	Nil	$	Nil

SUMMARY OF QUARTERLY RESULTS

The following table reports selected financial information of the Company for the past eight quarters commencing with the reported financial information for the most recent quarter.

Quarter ended		31-Dec-20			30-Sep-20		30-Jun-20		31-Mar-20
Increase (decrease) in
mineral property
acquisition and
exploration costs	$	134,753		$	314,032	$	142,074	$	213,080
Revenue(1)	$	-		$	-	$	(119)	$	-
Net income (loss)	$	(940,192)(1,2)		$	(2,539,911)(1,3)	$	13,120,414(1,4)	$	1,538,532(1,5)
Net income (loss)
per share	$	(0.01)		$	(0.00)	$	0.27	$	0.03
Quarter ended		31-Dec-19			30-Sep-19		30-Jun-19		31-Mar-19
Increase (decrease) in
mineral property
acquisition and
exploration costs	$	243,008	$		515,029	$	341,150	$	294,878
Revenue(1)	$	-	$		34	$	133	$	30,310
Net income (loss)	$	1,791,394(1,6)	$		(28,823)(1,7)	$	(1,188,365)(8)	$	2,214,343(9)
Net income (loss)
per share	$	0.03	$		(0.00)	$	(0.03)	$	0.05

(1) The Company had no material revenues from oil production as wells were offline throughout the quarter.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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• (2) Includes unrealized loss on marketable securities of $204,639

• (3) Includes unrealized loss on marketable securities of $3,111,531

• (4) Includes unrealized gain on marketable securities of $13,120,414

• (5) Includes unrealized loss on marketable securities of $224,044

• (6) Includes unrealized gain on marketable securities of $1,607,138

• (7) Includes unrealized gain on marketable securities of $281,191

• (8) Includes unrealized loss on marketable securities of $1,011,749

• (9) Includes unrealized gain on marketable securities of $2,402,543

Discussion of variation in quarterly results

Primary factors influencing the fluctuation in quarterly capitalized property acquisition and exploration costs include whether a new property was acquired, or whether an existing property was written down. Write downs, when they occur, and gains or losses on marketable securities – whether realized on sale, or unrealized, also significantly impact net income (loss) and comprehensive income (loss).

Net loss for the three months ended December 31, 2020

A net loss of $940,192 (Q4 2019 – net income of $1,791,394) was recorded for the three months ended December 31, 2020 primarily due to the unrealized loss on marketable securities of $204,639 (2019 – unrealized gain of $1,607,138), a realized gain on sale of marketable securities of $59,319 (2019 – loss of $142,822).

Net income for the year ended December 31, 2020

Net income of $11,178,843 (2019 – net income of $2,788,549) was recorded for the year ended December 31, 2020, primarily due to the unrealized gains on marketable securities of $9,239,256 (2019 – gain of $3,279,123), realized gains on sale of marketable securities of $153,528 (2019 – loss of $505,275) and gain on sale of exploration and evaluation interests of $3,338,151 (2019 - $18,765). When compared with the year ended December 31, 2019, operating expenses increased by $110,192 driven by an increase in property research expenditures.

Cash flows for the year ended December 31, 2020

Cash used in operating activities was $513,068 for the year ended December 31, 2020, as compared with the $241,714 used in the year ended December 31, 2019.

Eros continued to trade actively in marketable securities in the year, with acquisitions of $2,087,760 (2019 $690,093). Eros offset these cash outflows by generating proceeds of $3,155,152 from the sale of marketable securities, compared to $1,867,144 during fiscal 2019. Additionally, Eros continued to heavily invest in the Bell Mountain project in Nevada, with exploration expenditures of $743,871 as compared to $1,363,122 in 2019.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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LIQUIDITY AND CAPITAL RESOURCES

At December 31, 2020, the Company had working capital[1] of $2,049,871 as compared to working capital of $2,411,908 at December 31, 2019, representing a decrease in working capital, and in liquidity, of $362,037.

The Company is budgeting administrative costs of approximately $250,000 for 2021. This amount excludes any purchases or sales of investments that may be made, based on market conditions.

A deferred income tax liability of approximately $3.25 million is a result of deferring income tax on the proceeds of the settlement with the Province of British Columbia relating to the government’s implementation of the ban on uranium mining in the province and unrealized gains on marketable securities. This liability can be eliminated by spending approximately $9 million on Canadian acquisitions and qualifying exploration expenditures within the next 3.5 years.

The Company’s ability to continue as a going concern is dependent on the ability of the Company to raise additional equity financing or the attainment of profitable operations. There are no assurances that the Company will be successful in achieving either one of these goals. Although the Company has been successful in raising funds to date, there can be no assurance that adequate or sufficient funding will be available in the future, or under terms acceptable to the company. The Company’s discretionary activities do have considerable scope for flexibility in terms of the amount and timing of expenditures, and expenditures have been adjusted accordingly.

RELATED PARTY TRANSACTIONS

Key management compensation

Key management personnel at the Company are the directors and officers of the Company. The remuneration of key management personnel during the years ended December 31, 2019 and 2018 was as follows:

ws:
	December 31,		December 31,
		2020		2019
Share-based compensation	$	18,907	$	37,815
Short-term benefits1	$	71,893	$	127,428

1Remuneration consists exclusively of salaries, bonuses, health benefits and consulting fees.

Other than the amounts disclosed above, there were no short-term employee benefits or share-based payments paid to key management personnel during the years ended December 31, 2020 and 2019.

An amount of $200,000 (2019 – $200,330) was payable to other related parties at December 31, 2020. Included in accounts receivable is an amount of $191,025 (2019 - $81,190) due from MAS Gold Corp.

1 Working capital is a non-GAAP measure and is defined as “current assets less current liabilities”

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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During the year ended December 31, 2020, the Company purchased:

• 7,100,000 units of MAS at a price of $0.07 per unit. Each unit consists of one common share and one-half of one common share purchase warrants. Each whole share purchase warrant is exercisable into one common share at an exercise price of $0.10 for a period of 24 months.

During the year ended December 31, 2019, the Company purchased:

• 2,857,143 units of MAS at a price of $0.07 per unit. Each unit consists of one common share and one share purchase warrants. Each whole share purchase warrant is exercisable into one common share at an exercise price of $0.10 for a period of 24 months.

• 833,333 units of MAS at a price of $0.12 per unit. Each unit consists of one common share and one-half share purchase warrants. Each whole share purchase warrant is exercisable into one common share at an exercise price of $0.15 for a period of 24 months.

MAS and Eros have a common director.

See also Note 6 in relation to three oil and gas wells drilled with Westcore. During the year ended December 31, 2019, the Company received $37,278 in oil revenue, paid $6,801 in royalties and paid $19,042 for direct costs relating to oil production. There were no transactions with Westcore during the year ended December 31, 2020. Westcore and Eros have a common director. During the year ended December 31, 2020, the Company wrote off $68,757 of amounts receivable from Westcore as management is unsure if the amount can be collected.

ASSETS HELD FOR SALE

On November 22, 2019, the Company signed an asset purchase agreement (“Asset Purchase Agreement”) with Southern Empire and Demerara Gold Corp., whereby Southern Empire will acquire the Company’s interest in the Eastgate property in Nevada and Oro Cruz property in California. The terms of the agreement are as follows:

• The Company agrees to sell, assign and transfer an undivided 45% beneficial interest in the Eastgate property to Southern Empire in consideration for 2,901,275 Southern Empire shares;

• The Company agrees to sell, assign and transfer its entire tight, title and interests in and to the Lincoln Option Agreement, including the exclusive right to acquire up to an undivided 37.5% beneficial interest in the Oro Cruz Property to Southern Empire in consideration for 8,545,000 Southern Empire shares; and

• The Company agrees to sell, assign and transfer the Bullfrog securities to Southern Empire in consideration for 2,856,665 Southern Empire shares.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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During the year ended December 31, 2019, management determined that the Eastgate property meets the definition of assets held for sale and not discontinued operations in accordance with IFRS 5 Noncurrent assets held for sale and discontinued operations (“IFRS 5”). In accordance with IFRS 5, on the reclassification to assets held for sale, the Company remeasured the Eastgate property to the lesser of the carrying amount and the fair value less costs of disposal. Consequently, the Eastgate property of $480,234, the Oro Cruz property of $279,821, and Bullfrog securities of $1,312,500 was classified as asset held for sale as at December 31, 2019. The transaction closed in March of 2020 and a gain on sale of $3,338,151 was recorded. The transaction reconciles as follows

of $3,338,151 was recorded. The transaction reconciles as follows
Fair value of Southern Empire shares received:	$4,791,485
Assets sold:
Fair value of Eastgateproperty	480,234
Fair value of Oro Cruzproperty,net recoveries of$146,024	133,797
Fair value of Bullfrogsecurities	839,303
Net Assets sold:	1,453,334
Gain on sale	3,338,151

OFF BALANCE SHEET ARRANGEMENTS

The Company has not entered into any off-balance sheet arrangements.

PROPOSED TRANSACTIONS

There are no proposed transactions.

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

Financial instruments that are measured subsequent to initial recognition at fair value are grouped in Levels 1 to 3 based on the degree to which the fair value is observable:

Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and Level 3 Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The marketable securities which consists of common shares are based on quoted prices and are therefore considered to be Level 1. The marketable securities which consist of warrants are based on inputs other than quoted prices and therefore considered to be Level 2. The Company’s risk exposures are summarized below:

Credit risk

Credit risk is the risk that the Company will incur an unexpected loss as a result of the counterparty to a financial asset failing to meet their contractual obligations. The Company's financial assets that are exposed to credit risk are cash, accounts receivable, and promissory notes receivable. The Company holds

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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cash with large financial institutions in accordance with the Company’s investment policy. Management considers credit risk on cash to be low, as the counterparties are highly rated Canadian banks. The Company is exposed to some credit risk on accounts receivable and promissory note receivable, apart from sales tax refunds receivable. The amounts owed in accounts receivable and promissory note receivable are from companies where there is a common director and/or officer with Eros.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company’s approach to managing liquidity risk is to provide reasonable assurance that it has sufficient capital to meet short-term financial obligations after taking into account its exploration obligations and cash on hand. All of the Company’s financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms with the expectation of lease liabilities. The Company’s lease liability matures based on the terms outlined in the lease agreement.

Market risk

Market risk consists of interest rate risk, foreign currency risk and other price risk. Market risk to which the Company is exposed is as follows:

Interest rate risk

Interest rate risk consists of two components:

• (i) To the extent that payments made or received on the Company’s monetary assets and liabilities are affected by changes in the prevailing market interest rates, the Company is exposed to interest rate cash flow risk.

• (ii) To the extent that changes in prevailing market rates differ from the interest rate in the Company’s monetary assets and liabilities, the Company is exposed to interest rate price risk.

The Company is not exposed to significant interest rate risk.

Foreign currency risk

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. A significant change in the exchange rate between the Canadian dollar relative to the US dollar could have an effect on the Company’s future results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. As at December 31, 2020 and 2019, the Company is exposed to currency risk through the following financial assets denominated in a currency other than the Canadian dollar:

	December	31, 2020	December	31, 2019
	US $	CDN $	US $	CDN $
Cash	31,739	40,729	24,327	31,591
Accounts payable	(19,652)	(25,017)	(81,478)	(105,824)

Based on the above, assuming all other variables remain constant, a 10% strengthening of the Canadian dollar against the US dollar would have increased the Company’s comprehensive income/loss by $1,571 (2019 - $4,989). A weakening of the Canadian dollar would have had the opposite effect.

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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Other price risk

Other price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market prices, other than those arising from interest rate risk or foreign currency risk. The Company’s marketable securities are carried at market value, and are therefore directly affected by fluctuations in the market value of the underlying securities. Changes in market prices of securities in the portfolio have a material effect on net income (loss). A 20% increase in the market prices would have increased/decreased the Company’s net income/loss by $3,577,171 (2019 - $859,156).

RISKS AND UNCERTAINTY

Success in the mining exploration business is measured by a company’s ability to raise funds, secure properties of merit and, ideally, identify commercial deposits on one of its properties. The attainment of these objectives is influenced by many factors not necessarily within management’s control.

Risk factors include political risks and government interference, the establishment of undisputed title to mineral properties, environmental concerns and obtaining governmental permits and licenses when required.

The resource industry is intensely competitive in all of its phases, and the Company competes with many companies possessing far greater financial resources and technical facilities. Competition could adversely affect the Company’s ability to acquire, explore and develop properties in the future.

The ability to raise funds is in part dependent on the state of the junior resource stock market, which in turn is dependent on the economic climate, metal prices and perceptions as to market trends.

The investment in expenditures on exploration and evaluation assets comprises a significant portion of the Company’s assets. Realization of the Company’s investment in these assets is dependent upon the establishment of legal ownership, and either the attainment of successful production from the properties or from the proceeds of their disposal.

Mineral exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored ultimately develop into producing mines. There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore. The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values. These costs will be depleted over the useful lives of the properties upon commencement of commercial production or will be written off if the properties are abandoned and the claims are allowed to lapse.

CONFLICTS OF INTEREST

Some of the directors of the Company are also directors of other companies that are similarly engaged in the business of acquiring, exploring and developing natural resource properties. Such associations may give rise to conflicts of interest. In particular, one of the consequences will be

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EROS RESOURCES CORP. Management Discussion and Analysis December 31, 2020

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that corporate opportunities presented to a director of the Company may be offered to another company or companies with which the director is associated, and may not be presented or made available to the Company. The directors of the Company are required by law to act honestly and in good faith with a view to the best interests of the Company, to disclose any interest which they may have in any project or opportunity of the Company, and to abstain from voting on such matter. Conflicts of interest that arise will be subject to and governed by the Business Corporations Act (British Columbia), applicable securities law, and the procedures prescribed in the corporate governance guidelines published by the BCSC and TSX-V.

OTHER MANAGEMENT’S DISCUSSION AND ANALYSIS

Additional disclosure for venture issuers without significant revenue:

Capital Stock updated to April 29, 2021 : Authorized: Unlimited number of voting common shares Unlimited number of redeemable, retractable, convertible, preferred shares Issued: 97,893,741 common shares Options: 675,000 at $0.20 until August 16, 2021 400,000 at $0.165 until August 29, 2022 2,400,000 at $0.08 until July 30, 2024 3,475,000 Warrants: 24,223,444 at $0.15 until August 12, 2021 500,000 at $0.15 until August 13, 2022 24,723,444 Fully diluted: 126,092,185 common shares

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