US Copper Corp — Interim / Quarterly Report 2022

Nov 30, 2022

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MANAGEMENT’S DISCUSSION AND ANALYSIS – QUARTERLY HIGHLIGHTS September 30, 2022

INTRODUCTION

The following Management Discussion & Analysis – Quarterly Highlights (“Quarterly Highlights”) of US Copper Corp. ( formerly Crown Mining Corp. ) (the “Company” or "US Copper") has been prepared to provide material updates to the business operations, liquidity and capital resources of the Corporation since its last management discussion & analysis, being the Management Discussion & Analysis (“Annual MD&A”) for the fiscal year ended December 31, 2021. This Quarterly Highlights does not provide a general update to the Annual MD&A, or reflect any non-material events since the date of the Annual MD&A.

This Quarterly Highlights has been prepared in compliance with the requirements of section 2.2.1 of Form 51-102F1, in accordance with National Instrument 51- 102 – Continuous Disclosure Obligations. This discussion should be read in conjunction with Annual MD&A, the audited consolidated financial statements of the Company for the years ended December 31, 2021 and 2021 and the unaudited condensed interim consolidated financial statements for the three and nine month periods ended September 30, 2022 and 2021, together with the notes thereto. Results are reported in Canadian dollars, unless otherwise noted. In the opinion of management, all adjustments (which consist only of normal recurring adjustments) considered necessary for a fair presentation have been included. The results for the three and nine month periods ended September 30, 2022 are not necessarily indicative of the results that may be expected for any future period. Information contained herein is presented as at November 29, 2022 unless otherwise indicated.

The unaudited condensed interim consolidated financial statements for the three and nine month periods ended September 30, 2022 and 2021, have been prepared using accounting policies consistent with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board and interpretations of the IFRS Interpretations Committee. The unaudited condensed interim financial statements have been prepared in accordance with International Standard 34, Interim Financial Reporting.

External auditors, appointed by the shareholders, have not audited or reviewed the unaudited condensed interim consolidated financial statements for the three and nine month periods ended September 30, 2022 and 2021 and did not perform the tests deemed necessary to enable them to express an opinion on these unaudited condensed interim consolidated financial statements.

For the purposes of preparing this Quarterly Highlights, management, in conjunction with the Board of Directors, considers the materiality of information. Information is considered material if: (i) such information results in, or would reasonably be expected to result in, a significant change in the market price or value of US Copper’s common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider it important in making an investment decision; or (iii) it would significantly alter the total mix of information available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with reference to all relevant circumstances, including potential market sensitivity.

ADDITIONAL INFORMATION

Additional information is accessible at the Company’s website www.uscoppercorp.com or through the Company’s public filings at www.sedar.com.

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CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

This Quarterly Highlights includes "forward-looking statements", within the meaning of applicable securities legislation, which are based on the opinions and estimates of management and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "budget", "plan", "continue", "estimate", "expect", "forecast", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar words suggesting future outcomes or statements regarding an outlook. In the event that the Company is able to acquire a suitable mining property, such risks and uncertainties include, but are not limited to, risks associated with the mining industry (including operational risks in exploration development and production; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve estimates; the uncertainty of estimates and projections in relation to production, costs and expenses; the uncertainty surrounding the ability of the Company to obtain all permits, consents or authorizations required for its operations and activities; and health safety and environmental risks), the risk of commodity price and foreign exchange rate fluctuations, the ability of US Copper to fund the capital and operating expenses necessary to achieve the business objectives of US Copper, the uncertainty associated with commercial negotiations and negotiating with foreign governments and risks associated with international business activities, as well as those risks described in public disclosure documents filed by the Company. Due to the risks, uncertainties and assumptions inherent in forwardlooking statements, prospective investors in securities of the Company should not place undue reliance on these forward-looking statements.

Readers are cautioned that the foregoing lists of risks, uncertainties and other factors are not exhaustive. The forward-looking statements contained in this Quarterly Highlights are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements or in any other documents filed with Canadian securities regulatory authorities, whether as a result of new information, future events or otherwise, except in accordance with applicable securities laws. The forwardlooking statements are expressly qualified by this cautionary statement.

UPDATE ON COVID-19

As the global pandemic related to the Coronavirus disease 2019 (“ COVID-19 ”) continues, US Copper has implemented a plan to protect the health and safety of its stakeholders. The Company has implemented alternative working arrangements for all consultants to work from home and placed physical activities on its mineral properties on care and maintenance.

The Company’s operational activities are particularly affected due to the inability of staff to travel because of the non-essential travel restrictions. Furthermore, suppliers of services to the Company are also similarly affected and this may lead to delays in the provision of data and services to the Company’s operational efforts.

The Company will continue to monitor the COVID-19 related situation and will only fully resume regular activities when there are clear indications that its consultants are able to return to work in a safe environment and in accordance with the advice and requirements provided by all the regulatory authorities from a local to national level.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 2 of 8 Three and nine month periods ended September 30, 2022

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CORPORATE OVERVIEW AND OUTLOOK

The shares of the Company are listed on the TSX Venture Exchange and trade under the symbol USCU. US Copper is a Canadian-based junior mining and exploration company incorporated under the Canada Business Corporations Act which currently owns a 100% interest in an advanced mining exploration property in California, USA as well as holding a portfolio of exploration stage projects in Ontario, Canada and Nevada, USA.

In 2020, the Company designed two drill programs at both the Superior and Engels deposits of the Moonlight-Superior property to define higher grade starter pits that will improve the economics of our recent Moonlight Preliminary Economic Assessment (PEA). In 2020 and 2021, the Company raised funds to complete the drill program as outlined in its August 11, 2020 press release. Seven holes were drilled in the summer of 2021 and the results from all 7 holes met or exceeded expectations including:

1. Verifying 50-year-old historic drill results.

2. Quantifying silver and gold credits, Copper-equivalent grade increased by approximately 11% (8.2% – 14.4%).

3. Supporting the presence of higher-grade ore within the Superior deposit that can potentially be used to feed the Moonlight plant during early the production years to improve Project economics.

The results from all 7 holes are being reviewed by an independent engineering firm to determine:

1. A new resource calculation including silver and gold credits.

2. The economic impact of including Superior in our Moonlight mine plan.

Table 1: Summary of drill hole data

DH#	From (ft)	To (Ft)	Interval (ft)	Cu %	Ag opt	Au opt	CuEquiv	Comments
S21-7	594.6	785.0	190.4	0.51	0.121	0.0006	0.556	Hit stope @ 1060’
S21-6 and	190.0	318.0	128.0	0.490	0.106	0.0005	0.530
	413.0	496.0	83.0	0.43	0.152	0.0009	0.492
S21-5	103.0	178.0	75.0	0.367	0.126	0.0007	0.417
S21-4	462.0	556.7	94.7	0.537	0.141	0.0008	0.593
S21-3	349.9	398.6	48.7	0.478	0.137	0.0008	0.533	Hit stope
S21-2	328.0	402.9	74.9	0.435	0.118	0.0005	0.478	Twin of S29
S21-1	118.0	287.4	169.4	0.514	0.128	0.0006	0.562	Twin of S47

CuEq = Cu% + ((Au opt31.1035/10,000) Au$/lb/Cu$/lb)) + ((Ag opt31.1035/10,000) *Ag$/lb/Cu$/lb))

The Company hopes to resume the drill campaign and complete the remaining drill holes as originally planned in 2023.

The Company plans to continue to focus all its exploration and development activities on its MoonlightSuperior property in California and if conditions are favourable, seek to raise additional funds through a private or public offering of securities as required.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 3 of 8 Three and nine month periods ended September 30, 2022

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The Company’s prospects are tied to the global demand for Copper and the availability of financing to fund ongoing operations. The current price of Copper had been increasing since March of 2020 and reached highs of around US$4.50/lb. The price of copper has recently seen declines, but is still currently trading around US$3.60/lb, well above the price used in the Company’s 2018 PEA of US$3.15/lb.

OBJECTIVES AND MILESTONES

The objectives of the Company is to advance the Moonlight-Superior property in California to the production stage.

COMPANY HIGHLIGHTS

• On October 18, 2021 and November 15, 2021, the Company announced the results of the completed 7 holes of its 2021 drill program.

• On August 23, 2021, the Company optioned the Warren Whiteside property to Li3 Lithium Corp. ( formerly Western Troy Capital Resources Inc.) (“ Li3 ”) for consideration of 2,500,000 common shares in the capital of Li3 and certain required exploration expenditures.

• On May 19, 2021, the Company completed a private placement of 10,000,000 units at a price of $0.20 per unit for gross proceeds of $2,000,000.

• On March 29, 2021, the shareholders approved the name change to US Copper Corp., which was completed effective April 5, 2021. In addition, effective April 8, 2021, the Company began trading under the name US Copper with a new ticker symbol “USCU”.

• On February 8, 2021, the Company completed a private placement of 5,000,000 units at a price of $0.10 per unit for gross proceeds of $500,000.

OVERALL PERFORMANCE

The Company does not currently have a producing property. Recovery of the cost of mining assets is subject to the discovery of economically recoverable reserves, the ability to obtain the financing required to pursue the exploration and development of its properties, and profitable future production or the proceeds from the sale of its properties. The Company must periodically obtain new funds in order to pursue its activities. While it has always succeeded in doing so to date, it is not possible to predict whether financing efforts will be successful and management cannot provide assurance that it will be able to obtain the required financing.

The net loss and comprehensive loss for the nine month period ended September 30, 2022 was $556,764 ($0.00 per share) as compared to $2,081,935 ($0.02 per share) for the nine month period ended September 30, 2021. The Company’s operations are consistent with the prior year period, except for the following:

Decrease in exploration and evaluation expenditures to $215,921 compared to $1,297,941 in 2021 as a result of the drill program in Q2 and Q3 of 2021 on the Moonlight-Superior property. The current year expenditures also include a reduction in exploration expenses of $120,000 due to the option payment received in shares relate to the Warren Whiteside property disposition.

Decrease in investors relations, promotion and travel costs to $228,318 compared to $443,742 in the same period in 2021. Such additional activities in 2021 included holding the Company’s AGM, changing it’s name and rebranding the Company’s presentation, website and promotional material for the new name and listing on the OTC Markets Group’s OTCQB Marketplace.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 4 of 8 Three and nine month periods ended September 30, 2022

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The Company incurred share based payments during the nine month period ended September 30, 2022 of $15,000 compared to $140,000 for the same period in 2021. The difference in the current period is due to lower options granted of 400,000 (2021 – 1,450,000) in the prior period. Share based payments expenses are recorded based on the valuation of options using the Black-Scholes model. The expense varies based on the number of options issued and/or vested in the period and the underlying assumptions used in the model.

MINERAL EXPLORATION PROPERTIES

None of the Company’s properties are at or near production. As at November 29, 2022, the Company had the following mineral properties under exploration:

Moonlight-Superior

Effective June 28, 2013, the Company purchased a 100% interest in the Superior Project, subject to an underlying production royalty, which included 132 unpatented mining claims and a lease on 36 patented claims in Plumas County, California for $50,000. The conditions of the lease include an annual lease payment of US$20,000 per year and an annual work obligation of US$25,000. The Company has a right to purchase the leased patented claims, and if purchased, the leased patented claims will be subject to an annual royalty payment schedule.

During the year ended December 31, 2015, the Company restaked the area in a more efficient way resulting in title to 47 unpatented claims. During the year ended December 31, 2016, the Company staked 57 additional claims. In addition, during the year ended December 31, 2018, the Company staked an additional 6 claims adjacent to the Superior Mine and an additional 35 new federal mining claims adjacent to the Engels Mine.

On February 26, 2016, the Company entered into an agreement with Canyon Copper Corp (“Canyon”) to acquire a 100% interest in the Moonlight Property (the “Agreement”), subject to an underlying production royalty. Under the terms of the Agreement US Copper acquired a 100% interest in the Moonlight Property for consideration of $375,000 and 2,750,000 common shares of the Company as follows:

• Cash Payments: $5,000 due on signing (paid), $20,000 due on or before June 1, 2016 (paid); and $350,000 (Paid in February 2018) due on or before March 4, 2019.

• Common Share Issuances: 2,000,000 common shares on or before 5 days after TSXV approval, which was received on March 4, 2016 (issued with a fair market value of $140,000), 750,000 common shares on or before 5 days after 1[st] anniversary of TSXV approval if the final payment has not yet been paid (issued with a fair market value of $60,000).

In addition, the advanced royalty holders, being Lester Storey and Metamin Enterprises Inc., (the “Advanced Royalty Holders”) have approved the following: (i) elimination of the advanced royalty payments, (ii) an increase in each of the Advance Royalty Holder’s net smelter returns from 1.0% to 1.25%, in exchange for the issuance of 300,000 common shares of the Company to each of the Advance Royalty Holders (issued with a fair market value of $42,000).

During the year ended December 31, 2020, the Company elected to not renew 75 unpatented claims. During the year ended December 31, 2021, the Company re-staked 47 unpatented claims. As at September 30, 2022, the Company holds a total of 329 (December 31, 2021 – 329) unpatented claims and a lease on 36 patented claims.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 5 of 8 Three and nine month periods ended September 30, 2022

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On March 2, 2018, the Company announced the results of its PEA on the Moonlight Deposit, part of the Moonlight-Superior Project. A full copy of the PEA can be found on the Company’s profile on www.sedar.com. Highlights of the PEA Include (using a US$3.15 copper price):

• Pre-tax Net Present Value (NPV): US$ 237M at 8% discount rate.

• Pre-Tax Internal Rate of Return (IRR): 16.4%

• Pre-tax Payback Period: 4.8 years

• After-tax NPV of US$179M and after tax IRR of 14.6% for the base case

• Initial Capital Cost: US$513M, including a contingency provision in the amount of US$71M

• Plant Processing Rate: 60,000 tons per day (STPD)

• Average Copper Recovery: 86.0%

• Copper concentrate Production: Averaging 163,000 tons per year (STPY) with an average grade of 28%.

• Mine Life: 17 years, based on the existing Mineral Resource estimate

• Projected Direct Employment: 332 employees (163 process and G&A; 169 mining)

• Life of mine copper production of 1.5 billion pounds

The Company plans to continue to advance the development of the Moonlight-Superior project.

Timore

The Company owns a 100% interest in patented claims covering 1 property near Timmins, Ontario and 1 property near Red Lake, Ontario. The properties are subject to a 3% net smelter royalty (“NSR”), one half of which can be purchased for $1,000,000.

The Timore properties are gold prospects.

Black Warrior

On May 20, 2008, the Company acquired a 100% interest in 2 patented claims for US$25,000.

The Black Warrior properties are silver prospects.

Warren Whiteside

On January 29, 2008, the Company acquired a 100% interest in 14 patented mining claims in Whiteside Township in Ontario (the “Warren Properties”) by a payment of a deposit of $5,000 on December 18, 2007, the payment of $45,000 and the issuance of 500,000 pre-consolidation common shares of the Company valued at $100,000. The vendors retain a 1.5% NSR on the Warren Properties, of which the Company has the option to purchase half for $1,000,000.

On August 23, 2021, the Company optioned the Warren Whiteside property (the “ Property ”) to Li3 for consideration of 2,500,000 common shares in the capital of Li3 (“ Common Shares ”) and exploration expenditures, payable as follows (the “ Transaction ”):

• upon signing the Agreement and after all regulatory approvals, Li3 will issue 200,000 Li3 Shares (received - fair market value on the date of the agreement of $32,000);

• on or before February 1, 2022, Li3 will issue 800,000 Common Shares following the completion of not less than three diamond drilling holes of an aggregate of at least 450 feet on the Property and completing a technical report, prepared in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (received - fair market value on date received on May 6, 2022 of $120,000);

US Copper Corp. Interim MD&A – Quarterly Highlights Page 6 of 8 Three and nine month periods ended September 30, 2022

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• and on or before December 1, 2022, Li3 will issue 1,500,000 Common Shares.

In the event that Li3 does not complete any of the above compensation, the Property and all consideration received to date would remain with the Company.

This Transaction is considered a related party transaction for accounting purposes as the Company and Li3 share a common officer, who is also a director of both Companies as well as a second director in common. The common officer and directors recused themselves from voting on any approvals related to the Transaction.

The Warren Whiteside properties are copper-nickel prospects.

LIQUIDITY

Operating Activities

Cash flow used by operating activities during the nine month period ended September 30, 2022 was $596,654 compared to cash flow used of $1,775,969 during the same period in 2021.

Financing Activities

During the nine month period ended September 30, 2022, cash flow provided in financing activities was $Nil (year ended December 31, 2021 – $3,241,991) as a result of Nil (year ended December 31, 2021 - 15,000,000) shares issued through private placements for net cash proceeds after share issuance costs of $Nil (year ended December 31, 2021 – $2,454,991), Nil (year ended December 31, 2021 – 1,325,000) shares issued on exercise of stock options for net cash proceeds of $Nil (year ended December 31, 2021 – $147,000) and Nil (year ended December 31, 2021 – 8,300,000) shares issued on exercise of warrants for net cash proceeds of $Nil (year ended December 31, 2021 – $680,000). These financings were completed to allow the Company to acquire and advance its mineral exploration projects.

Liquidity Outlook

US Copper had cash and cash equivalents of $1,935,126 available as at September 30, 2022, a decrease of $596,654 from the balance at December 31, 2021 of $2,531,780.

The current cash as at September 30, 2022, will be used to pay existing liabilities, continue exploration programs at US Copper's Moonlight-Superior property in California, including its drill program scheduled for Q2/Q3 2023, as well as for general working capital purposes and other property commitments. The Company will look to complete private placement financings or the sale of mineral property assets to help fund ongoing operations in 2022 and 2023, if necessary.

Notwithstanding success to date in acquiring equity financing on acceptable terms, there is no guarantee of obtaining future equity financings or on what terms any such equity capital may be available to the Company and, as such, alternative funding programs are also being pursued by the Company.

The Company must utilize its current cash reserves, funds obtained from the exercise of options and warrants, if any, and other financing transactions to maintain the Company’s capacity to meet working capital requirements, and ongoing discretionary and committed exploration programs, and to fund any further development activities. The Company anticipates that it will raise additional capital when and if the opportunity arises.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 7 of 8 Three and nine month periods ended September 30, 2022

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The Company believes that it will be able to raise funds in the short-term. Management will monitor the current market situation and make prudent business decisions as they are required.

RELATED PARTY DISCLOSURES

Certain corporate entities and consultants that are related to the Company’s officers and directors provide consulting and other services to US Copper. All transactions were conducted in the normal course of operations and are measured as follows:

	September 30,	December 31,	December 31,
As at,	2022		2021
Amount included in trade and other payables, due to directors and/or
officers	$ -	$	8,600
Amounts due to directors and officers are non-interest bearing and have no set terms of repayment.
Transactions during the nine month period ended September 30,	2022		2021
Balances:
Short-term benefits	$ 45,000	$	45,000
Total compensation paid to key management	$ 45,000	$	45,000

During the nine month period ended September 30, 2022, certain officers, directors or companies controlled by them participated in the Company’s private placements as described in Note 13 (a) and subscribed for Nil units (year ended December 31, 2021 - 800,000), for total gross proceeds to the Company of $Nil (year ended December 31, 2021 - $180,000).

PROPOSED TRANSACTIONS

None

CONTINGENCIES AND COMMITMENTS

Outside of annual lease and property tax payments on the Company’s mineral properties, there are no outstanding contingencies or commitments as of the date of this MD&A. See Note 16 to the unaudited condensed interim consolidated financial statements for the three and nine month periods ended September 30, 2022 and 2021 for more detailed disclosure regarding possible contingencies or commitments.

RISKS AND UNCERTAINTIES

An investment in the securities of the Company is highly speculative and involves numerous and significant risks. Such investment should be undertaken only by investors whose financial resources are sufficient to enable them to assume these risks and who have no need for immediate liquidity in their investment. Prospective investors should carefully consider the risk factors that have affected, and which in the future are reasonably expected to affect, the Company and its financial position. Please refer to the section entitled "Risk and Uncertainties" in the Company’s Annual MD&A for the fiscal year ended December 31, 2021, available on SEDAR at www.sedar.com.

US Copper Corp. Interim MD&A – Quarterly Highlights Page 8 of 8 Three and nine month periods ended September 30, 2022