Viscount Mining Corp. — Management Reports 2021

Apr 29, 2021

K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

K2 Gold Corporation (“K2 Gold” or “K2” or the “Company”) Management’s Discussion and Analysis

Containing information up to and including April 29, 2021.

The following Management’s Discussion and Analysis (“MD&A”) should be read in conjunction with the Company’s audited consolidated financial statements for the year ended December 31, 2020 and the audited consolidated financial statements for the year ended December 31, 2019 together with the notes thereto, which can be found along with other information of the Company on SEDAR at www.sedar.com. All financial information in this MD&A and all dollar amounts are in Canadian dollars unless otherwise noted.

FORWARD LOOKING STATEMENTS

This MD&A provides management’s analysis of K2 Gold’s historical financial and operating results and provides estimates of K2 Gold’s future financial and operating performance based on information currently available. Actual results will vary from estimates and the variances may be significant. Readers should be aware that historical results are not necessarily indicative of future performance.

Certain information set forth in this MD&A, including management’s assessments of the Company’s future plans and operations, contains forward-looking statements. By their nature, forward-looking statements are subject to numerous risks and uncertainties, some of which are beyond the Company’s control, including the impact of general economic conditions, industry conditions, volatility of commodity prices, currency fluctuations, imprecision of resource and reserve estimates, environmental risks, competition from other industry participants, the lack of availability of qualified personnel or management, stock market volatility and ability to access sufficient capital from internal and external sources. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be inaccurate and, as such, undue reliance should not be placed on forward-looking statements. The Company’s actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do so, what benefits the Company will derive therefrom. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law.

OVERVIEW

K2 Gold Corporation is a junior mineral exploration company focused on building a portfolio of gold exploration projects in North America with particular emphasis in California on the Mojave property. In addition to the Mojave (“Mojave”) property, the Company is conducting exploration at the Wels Property (“Wels”) located approximately 185 km south of Dawson City, Yukon.The Company has assembled an experienced management team and board of directors with a track record of discovery success. The Company is actively pursuing other gold exploration projects in North America.

The Company is a reporting issuer in British Columbia, Alberta, and Ontario. The Company trades on the TSX Venture Exchange under the symbol KTO.

Mojave Property is the Company’s flagship project. The Mojave Project is located 230km northwest of Las Vegas and 100km west of the Nevada California border. It covers an area of approximately 5,780 hectares of land under the jurisdiction of the Bureau of Land Management (BLM).

For further details on the Mineral Properties, see Highlights and Recent Developments and Mineral Properties sections below for exploration program update for the year ended December 31, 2020.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

HIGHLIGHTS AND RECENT DEVELOPMENTS

For more details on the following highlights, please refer to news releases available on SEDAR: www.sedar.com.

On November 30, 2020 the Company announced initial drill results from its 3200m drill program. Three RC drillholes from the Dragonfly target, on the Mojave property were released. Highlights include:

• DF20-001 – 51.8 meters of 1.2 g/t gold from surface, including 18.3 meters of 3.1 g/t gold

• DF20-002 – 86.9 meters of 4.0 g/t gold from surface, including 45.7 meters of 6.7 g/t gold

• DF20-003 – 62.5 meters of 1.4 g/t gold from 3.1 meters, including 18.3 meters for 3.2 g/t gold

On December 30, 2020, the Company closed a bought deal private placement for gross proceeds of $7,000,000. The Company issued a total of 12,500,000 common shares at a price of $0.56 per share. Each unit consisted of one common share of the Company and one half of one common share purchase warrant. Each warrant is exercisable at price of $0.75 for 24 months. The common share purchase warrants are subject to acceleration at the Company’s discretion in the event its common shares trade on the Exchange on a volume weighted average price (“VWAP”) basis of $1.00 or more for a period of 20 consecutive trading days.

On January 25, 2021 the Company announced additional drill results from the Dragonfly target on the Mojave property. Highlights included hole DF20-004, from site DF-1, which returned 30.5m of 7.2 g/t gold from surface; including 15.2m of 11.1 g/t gold.

On February 4, 2021 the Company announced the remainder of drilling results on the Mojave project. The result consisted of 9 holes from two sites, NM-1 and NM02, on the Newmont Zone and highlights include:

• NM20-011 – 41.15m of 1.64 g/t gold from 44.20m depth; including 16.76m of 2.03 g/t gold

• NM20-016 – 22.86m of 1.00 g/t gold from 42.67m depth; including 10.67m of 2.01 g/t gold

On March 23, 2021 the Company announced its wholly owned subsidiary, Mojave Precious Metals Inc. (“MPM”), has received a positive decision letter from the United States Department of the Interior, Bureau of Land Management (“BLM”) at its 100% owned Mojave Project located in Inyo County, California. The BLM decision on the update to the Plan of Operations (“PO”) is an important milestone in the process for expanded Phase II exploration drilling at key zones where Phase I drilling yielded significant gold intercepts. Although this BLM decision does not constitute authorization for MPM to start its Phase II exploration drilling plans, the BLM decision allows for commencement of the formal initiation of the National Environmental Policy Act (“NEPA”) environmental review process. At a time specified by the BLM, MPM will update its reclamation cost estimate and post reclamation financial assurance for the additional exploration work.

On April 1, 2021 the Company announced the results of 482 rock grab and chip samples from multiple targets on the Mojave property. Highlights include:

• Upland: Reconnaissance sampling outline two new target areas of gold and pathfinder element anomalies.

• Newmont: Extended strike extent of the Newmont zone over 230m to northeast. The current strike extent of the target now stands at 950m and is open on trend.

• Broken Hill: Confirmation of mineralization at surface over 320m trend, open in all directions.

• Gold Valley: Reconnaissance sampling outline consistent anomalous Au mineralization with similar alteration and structural controls as the Dragonfly, 750m to the SE.

In addition, the Company announced the launch of a 2021 exploration program on Mojave including geologic mapping, rock grab/chip sampling, soil sampling, invoice leach sampling, and a heliborner VTEM survey.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

MINERAL PROPERTIES

Mojave Gold Project

On July 12, 2019, K2 signed an option agreement to acquire a 100% interest in the Mojave Gold Project (“Mojave Project”).

The Mojave Project is located 230km northwest of Las Vegas and 100km west of the Nevada-California border. It covers an area of approximately 5,780 hectares of land under the jurisdiction of the Bureau of Land Management (BLM). Exxon Mobil Corp. (formerly Mobil Exploration & Producing U.S.) first discovered mineralization in the district in 1984. Since the mid 1980’s, Mojave has been worked by several senior, mid-tier and junior companies including BHP, Newmont and more recently SSR. Each subsequent company that has explored the property since discovery has endorsed the geological model and improved the overall potential by finding further distinct locations of gold bearing rocks at surface over a 7km by 5km area. Newmont, BHP and Asamara Minerals have drilled the project, and each program was successful in discovering mineralization from different locations several kilometers apart. Approximately 150 historic drill holes were drilled covering an area of 7km by 5km and testing 8 targets (Dragonfly, Remi, Newmont, South, Flores, Soda Ridge, Soda Canyon, and Stega)..

The Company acquired the project in 2019 and completed database compilation and surficial work on the project including geologic mapping, soil and rock sampling, ground magnetics, LiDAR, and a World View 3 remote sensing survey. In the fall of 2020, the Company completed an initial drill program on Mojave focused on the Dragonfly and Newmont targets. A total of 2,540m was drill over 17 holes from four drill sites. The program intercepted broad zones of alteration and gold mineralization on both targets with highlights including:

• DF20-001 – 51.8 meters of 1.2 g/t gold from surface, including 18.3 meters of 3.1 g/t gold

• DF20-002 – 86.9 meters of 4.0 g/t gold from surface, including 45.7 meters of 6.7 g/t gold

• DF20-003 – 62.5 meters of 1.4 g/t gold from 3.1 meters, including 18.3 meters for 3.2 g/t gold

• DF20-004 - 30.5m of 7.2 g/t gold from surface; including 15.2m of 11.1 g/t gold.  NM20-011 – 41.15m of 1.64 g/t gold from 44.20m depth; including 16.76m of 2.03 g/t gold  NM20-016 – 22.86m of 1.00 g/t gold from 42.67m depth; including 10.67m of 2.01 g/t gold

The Mojave Project is predominantly a near-surface, sediment-hostedoxide gold system with characteristics of both Carlin and epithermal type systems. In addition, the western side of the project also hosts potential for epithermal Au-Ag-base metal, polymetallic skarn, and Cu-Au-Mo mineralization. To date 14 distinct target areas are recognized on the property.

To earn 100% of the Mojave project, the Company must make staged cash and share payments as listed below:

		Cash option		Common shares
		payments		issuance
July 12 2019 (Effective date)	US$	112,500	paid	480,000	issued
6-months from the effective date		112,500	paid
12-months from the effective date		125,000	paid	480,000	issued
18-months from the effective date		125,000	paid
24-months from the effective date		150,000		480,000
30-months from the effective date		150,000
36-months from the effective date		175,000		480,000
42-months from the effective date		175,000
48-months from the effective date		275,000		480,000
Total	US$	1,400,000		2,400,000

In addition, following the exercise of its option, K2 has agreed to make an annual pre-production payment of US$275,000 per year until the achievement of commercial production and to grant a 3% net smelter returns royalty with respect to all mineral produced from the Mojave Project, subject to a minimum annual royalty payment following

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

commercial production of US$300,000. The royalty will be subject to certain buy-down rights in K2’s favour. K2 may terminate the Agreement at any time during the option period.

Wels Property

The Wels property is located in the southwestern Yukon, approximately 50km east of Beaver Creek, YT, and consists of 350 contiguous quartz claims covering 7200 hecatres. The Wels was identified by regional geochemical surveys in 2002 and initially staked in 2011. The project was subsequently optioned to Gorilla Minerals in 2011 and this led to the discovery of mineralization within a granitic stock at the Saddle Zone with results including grabs up to 149 g/t Au and trench samples of 8.8 g/t Au over 45m. Subsequent drilling on the Saddle by Gorilla include results of 3.53 g/t Au over 19.5m. The Company acquired the project from Gorilla in 2016 and conducted additional drilling on Saddle returning highlights of 2.37 g/t Au over 28.5m and 10.38 g/t Au over 6m. To date, the Saddle has 1674m of drilling over 15 holes and has been defined over 135m along strike and to 150m depth; and is open in both directions along strike and at depth.

The style of alteration, mineralization, and granitic host rock at Saddle led previous operators to interpret the mineralization as an intrusion-related gold system (IRGD). However, more recent work by the company has identified mineralization extending into surrounding metavolvanic, metasedimetary, and gabbroic rocks on the property forming a series of WNW trending zones including:

Pekoe Trend: Gabbro host, rock samples up to 4.1 g/t Au, & 2.15 g/t Au over 8m in trenching.

Saddle Trend: Intrusive host, rock samples up to 149 g/t Au, defined by drilling over 135m strike length and to 150m depth. Open along strike and at depth. Potential for subparallel zones of mineralization.

Chai Trends: Gabbro, intrusive, & metasedimentary host, rock samples up to 28.2 g/t Au, and 1.15 g/t Au over 15m in trenching.

All zones are associated with quartz veining, brecciation, quartz-sericite alteration, and anomalous As-Sb along WNW trending structural zones.

The Company signed a definitive option agreement with Go Metals Corp. (“Go Metals”) on August 11, 2016, subsequently amended October 21, 2016 option, to acquire a 90% joint venture interest (subject an existing 3% net smelter return) in certain mineral property interests located in the Yukon Territory, known as the “Wels Property”. According to the agreement, to earn its interest, the Company made cash payments aggregating $350,000 staged over 24 months and issued 3 million common shares staged over a 30-month period as follows:

		Cash option		Common shares
		payments		issuance
Within 5 days after date of October 16, 2016	$	50,000	(paid)	500,000	(issued)
On or before September 30, 2016		100,000	(paid)	-
On or before February 11, 2017		-		500,000	(issued)
On or before August 11, 2017		100,000	(paid)	500,000	(issued)
On or before February 11, 2018		-		500,000	(issued)
On or before August 11, 2018		50,000	(paid)	500,000	(issued)
On or before November 11, 2018		50,000	(paid)	-
On or before February 11, 2019		-		500,000	(issued)
Total	$	350,000		3,000,000	*

• Upon completion of the payments and share issuances, the Company and Go Metals will proceed under the terms of a joint venture agreement (the “Joint Venture”). Under the Joint Venture, the Company will fund the project fully through completion of a preliminary economic assessment, following which project expenditures will be funded on a 90/10 proportionate basis between the Company and Go Metals, respectively, with the Company acting as project

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

manager and holding voting control of the Joint Venture project committee. If, at any time, either party’s Joint Venture interest is diluted to less than 1.0% that diluted party’s interest will be cancelled, and the Joint Venture will terminate.

The Wels property is subject to 3% net smelter return (“NSR”) governed by a 2011 agreement between Go Metals and two arm’s length holders. The royalty agreement provides that 2% of the 3% NSR may be purchased from the royalty holders for cash payment of $1,500,000. Pursuant to the Option Agreement, the Company will pay the $20,000 annual advance royalty due under the 2011 agreement.

Ladue Property

In April 2017, the Company staked and filed 208 claims in the eastern Moosehorn Range area of Central West Yukon. The claim area totals 4,350 Ha in 208 quartz claims and are referred to as Ladue Property. McArthur Property

In May 2018 the Company announced that it had completed staking of 123 State of Alaska mining claims known as the McArthur Property (“McArthur”) located in east-central Alaska, USA, 30 km northeast of Northway, Alaska and 130 km southwest of Dawson City, Yukon. The project is located on the Alaska-Yukon border, proximal to K2’s Ladue Property and covers approximately 7400 ha.

In September 2020, the McArthur claims were not renewed and allowed to lapse due to minimal exploration potential based on previous reconnaissance sampling. Therefore during the year ended December 31, 2020 the Company wrote the property down to a value of $Nil.

GDR Property

In December 2018, the Company entered into an earn in agreement with Cazador Resources Ltd., Michael Cathro and North Track Exploration, (the “Vendor Syndicate”) to acquire up to a 100% interest in the GDR property located in the Yukon Territory.

To earn 100% of the GDR property, the Company must make staged cash and share payments as listed below:

		Cash option		Common shares
		payments		issuance
Upon signing of agreement (December 15, 2018)	$	6,000	(paid)	90,000	(issued)
1stanniversary of agreement (December 31, 2019)		12,000	(paid)	180,000	(issued)
2ndanniversary of agreement (December 31, 2020)		24,000		360,000
3rdanniversary of agreement (December 31, 2021)		48,000		570,000
Total	$	90,000		1,200,000

On November 25, 2019, the Company announced 2019 exploration results on the GDR property in the Yukon. A total of 85 grid soil samples and 19 trench and rock chip samples were collected from the MR claim block. Highlights include expansion of the Ag-Pb-Zn target 800m east through soil sampling with values ranging from trace up to 2% Pb, 1.2% Zn, and 7.6 g/t Ag. Highlights of the trench and rock chip sampling included T19-1 located from the South Zone on the MR block. T19-1 is located 16 metres east of historic trench T19 and returned 3m of 1.39 % Pb and 1.44 % Zn, and 2.5 g/t Ag within an oxidised phyllite.

The Company chose to terminate the GDR Property Option on December 29, 2020. The Company paid the three vendors $9,000 in total to cover claims costs. The Company also granted the three vendors 50,000 shares each for a total of 150,000 shares at a price of $0.71 with a fair value of $106,500. The GDR property was written down to zero as at December 31, 2020.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

RESULTS OF OPERATIONS

For the three months ended December 31, 2020

During the three months ended December 31, 2020, the Company’s net loss was $666,790 (2019 - $598,500). The main contributors were:

• Personnel fees of $140,171 (2019 - $72,555) which includes management, accounting and corporate compliance fees.

• Advertising, marketing and promotion fees of $221,553 (2019 - $13,935), which includes marketing and promotional fees.

• Professional fees of $23,242 (2019 - $17,255), which includes legal and audit fees.

• Corporate listing and filing fees of $42,356 (2019 – $31,025), which includes listing and filing fees.

• Share-based compensation of $Nil (2019 - $437,162), which includes options granted to management, directors and consultants of the Company.

For the year ended December 31, 2020

During the year ended December 31, 2020, the Company’s net loss was $1,796,508 (2019 - $1,031,919). The main contributors were:

• Personnel fees of $374,501 (2019 - $253,580) which includes management, accounting and corporate compliance fees.

• Travel and conferences of $43,080 (2019 - $64,519) which includes conference fees and various travel expenses.

• Advertising, marketing and promotion fees of $503,246 (2019 - $56,158), which includes marketing and promotional fees.

• Office and administration fees of $57,882 (2019 - $41,992), which includes insurance and administration expenses.

• Share-based compensation $351,808 (2019 – $467,787), which includes options granted to management, directors and consultants of the Company.

SELECTED ANNUAL INFORMATION

The following table summarizes selected financial data for the three recent fiscal years, ended December 31, 2020, 2019 and 2018, and should be read in conjunction with such financial statements, prepared in accordance with International Financial Reporting Standards (“IFRS”) and the related notes thereon:

	As at and year ended December 31, 2020	As at and year ended December 31, 2019	As at and year ended December 31, 2018
Revenue	Nil	Nil	Nil
Loss for the year	$ (1,796,508)	$ (1,031,919)	$ (1,005,957)
Comprehensive loss for the year	$ (1,784,200)	$ (1,023,529)	$ (1,001,542)
Loss percommonshare, basic and diluted	$ (0.04)	$ (0.03)	$ (0.05)

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

Weighted Average number of common shares outstanding	47,179,476	31,974,284	21,469,229
Working capital	$ 7,270,453	$ 2,709,982	$ 392,610
Total assets	$ 15,423,936	$ 7,106,457	$ 3,150,434

SUMMARY OF QUARTERLY RESULTS

Quarterly results fluctuate depending on the timing of the granting and vesting of stock options and the incurrence of project evaluation expenses and write-off of exploration and evaluation assets.

The following table summarizes selected financial data reported by the Company for the quarter ended December 31, 2020 and the previous seven quarters.

	Dec 31, 2020	Sept 30, 2020	June 30, 2020	March 31, 2020	Dec 31, 2019	Sept 30, 2019	June 30, 2019	Mar 31, 2019
Current assets	$ 7,588,163	$ 3,304,322	$ 1,712,623	$ 2,011,806	$ 2,981,205	$ 3,524,890	$ 519,542	$ 273,711
Exploration and evaluation assets	$ 7,772,113	$ 6,408,859	$ 5,168,502	$ 4,786,621	$ 4,125,252	$ 3,698,091	$ 2,898,912	$ 2,890,725
Total assets	$ 15,423,936	$ 9,713,181	$ 6,881,125	$ 6,798,427	$ 7,106,457	$ 7,222,981	$ 3,418,454	$ 3,164,436
Current liabilities	$ 317,712	$ 588,516	$ 118,017	$ 177,210	$ 271,223	$ 269,965	$ 39,920	$ 59,222
Share capital	$ 26,487,173	$ 21,736,055	$ 18,388,480	$ 18,063,244	$ 18,063,244	$ 18,024,546	$ 14,905,579	$ 14,393,579
Net Income (loss)	$ (666,790)	$ (751,033)	$ (215,003)	$ (163,682)	$ (598,500)	$ (143,442)	$ (147,588)	$ (142,389)
Comprehensive Income (loss)	$ (0.038)	$ (0.015)	$ (215,003)	$ (163,682)	$ (593,642)	$ (130,638)	$ (157,302)	$ (141,947)
Basic Income (loss) per share	$ (0.038)	$ (0.015)	$ (0.005)	$ (0.004)	$ (0.014)	$ (0.004)	$ (0.01)	$ (0.01)
Weighted avg. shares	51,374,177	48,996,895	44,234,129	44,046,634	43,866,634	34,476,105	25,026,323	24,241,403

LIQUIDITY AND CAPITAL RESOURCES

At present, the Company’s operations do not generate cash inflows and its financial success is dependent on management’s ability to discover economically viable mineral deposits. The mineral exploration process can take many years and is subject to factors that are beyond the Company’s control. See “Risks and Uncertainties”.

In order to finance the Company’s future exploration programs and to cover administrative and overhead expenses, the Company intends to raise money through the sale of equity instruments and may consider the optioning of its mineral property interests. Many factors influence the Company’s ability to raise funds, including the health of the resource market, the climate for mineral exploration investment, and the experience and caliber of its management. Actual funding requirements may vary from those planned due to a number of factors, including the progress of exploration activities. Management believes it will be able to raise equity capital as required in the long term, but recognizes there will be risks involved that may be beyond their control.

Working Capital

As at December 31, 2020, the Company had positive working capital of $7,270,453 (December 31, 2019 - $2,709,982).

Cash and cash equivalents

Cash and cash equivalents increased by $4,523,686 during the year ended December 31, 2020, from $2,880,811 at December 31, 2019 to $7,404,497 at December 31, 2020.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

Cash used in operating activities

Net cash used in operating activities during the year ended December 31, 2020 was $1,245,638 (2019 - $553,282). Cash was mostly spent on personnel fees, advertising, marketing and promotion, corporate listing and filing fees, and office and administration.

Cash used in investing activities

Total cash used in investing activities during the year ended December 31, 2020 was $3,728,743 (2019 - $787,501). The investing activities were for exploration and evaluation expenditures.

Cash generated by financing activities

Total cash generated by financing activities during the year ended December 31, 2020 was $9,498,067 (2019 - $3,879,970) due to the sale of marketable securities and warrant and option exercises.

FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS

Overview

The Company has exposure to credit risk, liquidity risk and market risk from its use of financial instruments.

The following presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies and processes for measuring and managing risk, and the Company’s management of capital.

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framework.

Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and GST recoverable. Cash is held with a major Canadian financial institution, a US bank, and GST recoverable are from Government entities. Management is of the view that all amounts are fully collectible.

Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations and commitments as they become due. The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account cash flows from operations and the Company’s holdings of cash and cash equivalents. All of the Company’s financial liabilities have contractual maturities of less than 30 days and are subject to normal trade terms. Management believes that the Company has sufficient funds to meet its obligations as they become due or will be able to obtain financing as required to meet its obligations and commitments. For more details, please refer to Note 1 of the Company’s financial statements for the year ended December 31, 2020.

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

Investments in equity instruments which are classified as fair value through other comprehensive income and are measured at fair value, are listed on public stock exchanges, including TSX-V and OTC-QB. All equity instruments were sold during 2020.

Foreign currency risk

In the normal course of business, the Company enters into transactions for the purchase of supplies and services and acquisition of mineral properties, denominated in a currency other than the functional currency of the Company. As a result, the Company is subject to foreign exchange risk from fluctuations in foreign exchange rates, however the Management estimates the risk to be insignificant. The Company has not entered into any derivative or other financial instruments to mitigate this foreign exchange risk. The Company does not have any significant currency risks associated with its financial instruments at December 31, 2020.

FINANCIAL INSTRUMENTS

Financial assets are classified at initial recognition as either: measured at amortized cost, Fair value through profit or loss (“FVTPL”), or fair value through other comprehensive income (“FVTOCI”). The classification depends on the Company’s business model for managing the financial assets and the contractual cash flow characteristics. For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI.

Fair value through profit or loss (“FVTPL”) – Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in the income statement. Realized and unrealized gains and losses arising from changes in the fair value of the financial asset held at FVTPL are included in the income statement in the period in which they arise. Derivatives are also categorized as FVTPL unless they are designated as hedges.

Fair value through other comprehensive income (“FVTOCI”) – Investments in equity instruments at FVTOCI are initially recognized at fair value plus transaction costs. Subsequently, they are measured at fair value, with gains and losses arising from changes in fair value recognized in other comprehensive income. There is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment.

Financial assets at amortized cost – A financial asset is measured at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset’s contractual cash flows are comprised solely of payments of principal and interest. They are classified as current assets or non-current assets based on their maturity date and are initially recognized at fair value and subsequently carried at amortized cost less any impairment.

Derivatives embedded in contracts where the host is a financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is assessed for classification.

Financial liabilities are measured at amortized cost, unless they are required to be measured at FVTPL or the Company has opted to measure at FVTPL.

Under IFRS 9, the Company classifies its financial instruments as follows:

Cash and cash equivalents	Amortized cost
Accounts receivable	Amortized cost
Investments	Fair value through profit or loss
Marketable securities	Fair value through other comprehensive income
Accounts payable, Accrued liabilities	Amortized cost

NEW AND REVISED STANDARDS AND INTERPRETATIONS

The accounting policies in preparation of these consolidated financial statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2020.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

On January 1, 2020, the Company adopted IAS 1 – Presentation of Financial Statements (“IAS 1”) and IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors (“IAS 8”). Those standards refine the definition of materiality and clarify its characteristics. The revised definition focuses on the idea that information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements. The amendments clarify that materiality will depend on the nature or magnitude of information, or both. An entity will need to assess whether the information, either individually or in combination with other information, is material in the context of the financial statements. The amendments are effective for annual reporting periods beginning on or after January 1, 2020 and must be applied prospectively. The adoption of the above did not have a material impact on the Company’s financial results.

CRITICAL ACCOUNTING ESTIMATES

Our significant accounting policies are presented in Note 3 of the audited financial statements for the year ended December 31, 2020. Note 3 provides that the preparation of the Company’s financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the financial statements and reported amounts of expenses during the reporting period. Actual outcomes could differ from these estimates. These financial statements include estimates that, by their nature, are uncertain. The impacts of such estimates are pervasive throughout the financial statements and may require accounting adjustments based on future occurrences. Revisions to accounting estimates are recognized in the period in which the estimate is revised and future periods if the revision affects both current and future periods. These estimates are based on historical experience, current and future economic conditions and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Information about significant areas of estimation uncertainty in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements are noted below.

KEY SOURCES OF ESTIMATION UNCERTAINTY

Exploration and evaluation assets

Exploration and evaluation costs are initially capitalized as intangible exploration assets with the intent to establish commercially viable reserves. The Company is required to make estimates and judgments about the future events and circumstances regarding whether the carrying amount of intangible exploration assets exceeds its recoverable amount. Recoverability is dependent on various factors, including the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development, and upon future profitable production or proceeds from the disposition of the exploration and evaluation assets themselves. Additionally, there are numerous geological, economic, environmental and regulatory factors and uncertainties that could impact management’s assessment as to the overall viability of its properties or the ability to generate future cash flows necessary to cover or exceed the carrying value of the Company’s exploration and evaluation assets.

Deferred tax assets and liabilities

The measurement of a deferred tax provision is subject to uncertainty associated with the timing of future events and changes in legislation, tax rates and interpretations by tax authorities. The estimation of taxes includes evaluating the recoverability of deferred tax assets based on an assessment of the Company’s ability to utilize the underlying future tax deductions against future taxable income prior to expiry of those deductions. Management assesses whether it is probable that some or all of the deferred income tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income, which in turn is dependent upon the successful discovery, extraction, development and commercialization of mineral reserves. To the extent that management’s assessment of the Company’s ability to utilize future tax deductions changes, the

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

Company would be required to recognize more or fewer deferred tax assets, and future tax provisions or recoveries could be affected.

Share-based payments

The Company measures share-based payments expense by reference to the fair value of the stock options at the date at which they are granted. Estimating fair value for granted stock options requires determining the most appropriate valuation model which is dependent on the terms and conditions of the grant. This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of the option, volatility, dividend yield, and rate of forfeitures.

Capital stock

Common shares are classified as shareholders’ equity. Incremental costs directly attributable to the issue of common shares and stock options are recognized as a deduction from equity. Common shares issued for consideration other than cash, are valued based on their market value at the date the shares are issued.

The Company has adopted a relative fair value method with respect to the measurement of shares and warrants issued as private placement units. The proceeds from the issue of units is allocated between common shares and common share purchase warrants on a prorated basis using relative fair values of common shares and warrants. The fair value of common share purchase warrants is determined using the Black- Scholes option pricing model. Any fair value attributed to the warrants is recorded as reserves.

RISKS AND UNCERTAINTIES

Exploration Stage Company

K2 Gold is engaged in the business of acquiring and exploring mineral properties with the desire of locating and developing economic deposits of minerals. Development of any future properties will only follow upon obtaining satisfactory exploration results. There can be no assurance that K2 Gold’s existing or future exploration programs will result in the discovery of commercially viable mineral deposits. Further, there can be no assurance that even if an economic deposit of minerals is located, it can be commercially mined.

Mineral Exploration and Development

The exploration and development of minerals is highly speculative in nature and involves a high degree of financial and other risks over a significant period of time which even a combination of careful evaluation, experience and knowledge may not eliminate. While discovery of a mineral deposit or ore body may result in significant rewards, few properties which are explored are ultimately developed into producing mines. Substantial expenses are required to establish ore reserves by drilling, sampling and other techniques and to design and construct mining and processing facilities. Whether a mineral deposit will be commercially viable depends on a number of factors, including the particular attributes of the deposit (i.e. size, grade, access and proximity to infrastructure), financing costs, the cyclical nature of commodity prices and government regulations (including those relating to prices, taxes, currency controls, royalties, land tenure, land use, importing and exporting of minerals, and environmental protection). The effect of these factors or a combination thereof cannot be accurately predicted but could have an adverse impact on K2 Gold.

No Operating History and Financial Resources

K2 Gold has not achieved profitable operations and has no operating revenues and is unlikely to generate any in the foreseeable future. The Company has sufficient financing to cover its projected funding requirements for the ensuing year. Additional funds will be required for K2 Gold to acquire and explore new mineral interests. K2 Gold has limited financial resources and there is no assurance that sufficient additional funding will be available to fulfill its future obligations or for further exploration and development, on acceptable terms or at all. Failure to obtain

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

additional funding on a timely basis could result in delay or indefinite postponement of further exploration and development and could cause K2 Gold to forfeit its interests in some or all of its properties or to reduce or terminate its operations.

Government Regulation

The current or future operations of K2 Gold, including exploration and development activities and the commencement and continuation of commercial production, require licenses, permits or other approvals from various foreign federal, provincial and local governmental authorities and such operations are or will be governed by laws and regulations relating to prospecting, development, mining, production, exports, taxes, labour standards, occupational health and safety, waste disposal, toxic substances, land use, water use, environmental protection, land claims of indigenous people and other matters. There can be no assurance, however, that K2 Gold will obtain on reasonable terms, or at all, the permits and approvals, and the renewals thereof, which it may require for the conduct of its current or future operations or that compliance with applicable laws, regulations, permits and approvals will not have an adverse effect on any mining project which K2 Gold may undertake. Possible future environmental and mineral tax legislation, regulations and actions could cause additional expense, capital expenditures, restrictions and delays to K2 Gold’s planned exploration and operations, the extent of which cannot be predicted.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment, or remedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violations of applicable laws or regulations.

Competition

The mineral exploration and mining business is competitive in all of its phases. K2 Gold will compete with numerous other companies and individuals, including competitors with greater financial, technical and other resources, in the search for and the acquisition of attractive mineral properties. K2 Gold’s ability to acquire properties in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable prospects for mineral exploration or development. There is no assurance that K2 Gold will be able to compete successfully with others in acquiring such prospects.

Environmental Risks and Hazards

All phases of K2 Gold’s operations will be subject to environmental regulation in the jurisdictions in which it intends to operate. These regulations mandate, among other things, the maintenance of air and water quality standards and land reclamation, provide for restrictions and prohibitions on spills, releases or emissions of various substances produced in association with certain mining industry activities and operations. They also set forth limitations on the generation, transportation, storage and disposal of hazardous waste. A breach of such regulation may result in the imposition of fines and penalties. In addition, certain types of mining operations require the submission and approval of environmental impact assessments. Environmental legislation is evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers, directors and employees. The cost of compliance with changes in governmental regulations has a potential to reduce the viability or profitability of operations. Environmental hazards may exist on the properties in which K2 Gold holds interests or on properties that will be acquired which are unknown to K2 Gold at present and which have been caused by previous or existing owners or operators of the properties.

Commodity Prices

The price of K2 Gold’s securities, its financial results and exploration, development and mining activities may in the future be significantly adversely affected by declines in the price of gold and base metals. Gold and base metals

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

prices fluctuate widely and are affected by numerous factors beyond K2 Gold’s control such as the sale or purchase of precious or base metals by various dealers, central banks and financial institutions, interest rates, exchange rates, inflation or deflation, currency exchange fluctuation, global and regional supply and demand; production and consumption patterns, speculative activities, increased production due to improved mining and production methods, government regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals, environmental protection and international political and economic trends, conditions and events. The price of gold and base metals has fluctuated widely in recent years, and future serious price declines could cause continued development of K2 Gold’s properties to be impracticable.

Further, reserve calculations and life-of-mine plans using significantly lower gold or base minerals prices could result in material write-downs of K2 Gold’s investment in mining properties and increased amortization, reclamation and closure charges.

In addition to adversely affecting reserve estimates and its financial condition, declining commodity prices can impact operations by requiring a reassessment of the feasibility of a particular project. Such a reassessment may be the result of a management decision or may be required under financing arrangements related to a particular project. Even if the project is ultimately determined to be economically viable, the need to conduct such a reassessment may cause substantial delays or may interrupt operations until the reassessment can be completed.

Price Volatility and Lack of Active Market

In recent years, the securities markets in Canada and elsewhere have experienced a high level of price and volume volatility, and the market prices of securities of many public companies have experienced significant fluctuations in price which have not necessarily been related to the operating performance, underlying asset values or prospects of such companies. It may be anticipated that any quoted market for K2 Gold’s securities will be subject to such market trends and that the value of such securities may be affected accordingly.

Key Executives

K2 Gold will be dependent on the services of key executives and a small number of highly skilled and experienced consultants and personnel, whose contributions to the immediate future operations of K2 Gold are likely to be of importance. Locating mineral deposits depends on a number of factors, not the least of which is the technical skill of the exploration personnel involved. Due to the relatively small size of K2 Gold, the loss of these persons or K2 Gold’s inability to attract and retain additional highly skilled employees or consultants may adversely affect its business and future operations. K2 Gold does not currently carry any key man life insurance on any of its executives. The directors and certain officers of K2 Gold will devote part of their time to the affairs of K2 Gold.

Potential Conflicts of Interest

Certain directors and officers of the Company are, and may continue to be, involved in the mining and mineral exploration industry through their direct and indirect participation in corporations, partnerships or joint ventures which are potential competitors of the Company. Situations may arise in connection with potential acquisitions in investments where the other interests of these directors and officers may conflict with the interests of the Company. Directors and officers of the Company with conflicts of interest will be subject to and will follow the procedures set out in applicable corporate and securities legislation, regulation, rules and policies.

Dividends

K2 Gold has no earnings or dividend record and is unlikely to pay any dividends in the foreseeable future as it intends to employ available funds for mineral exploration and development. Any future determination to pay dividends will be at the discretion of the Board of Directors of K2 Gold and will depend on K2 Gold’s financial condition, results of operations, capital requirements and such other factors as the Board of Directors of K2 Gold deem relevant.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

Nature of the Securities

The purchase of the Company’s securities involves a high degree of risk and should be undertaken only by investors whose financial resources are sufficient to enable them to assume such risks. The Company’s securities should not be purchased by persons who cannot afford the possibility of the loss of their entire investment. Furthermore, an investment in the Company’s securities should not constitute a major portion of an investor’s portfolio.

PROPOSED TRANSACTIONS

There are no proposed transactions that should be disclosed.

ADDITIONAL DISCLOSURE FOR VENTURE ISSUERS WITHOUT SIGNIFICANT REVENUE

Additional disclosure concerning the Company’s general and administrative expenses is provided in the Company’s statement of loss and comprehensive loss contained in its consolidated financial statements for the year ended December 31, 2020, which are available on SEDAR: www.sedar.com.

OUTSTANDING SHARE DATA

On May 25, 2015, the Company consolidated the Company’s issued and outstanding common shares, stock options and warrants at a ratio of one new share for ten old shares. On March 2, 2016, the Company consolidated the Company’s issued and outstanding common shares, stock options and warrants at ratio of one new share for four old shares. Unless otherwise indicated, all references to share capital, stock options and share purchase warrants presented in these financial statements and notes thereto are on a post-consolidation basis. The Company undertook this consolidation of its capital to facilitate future financings.

As at December 31, 2020, the Company had $26,487,173 in share capital representing 64,218,634 common shares outstanding.

K2 Gold’s authorized capital is unlimited common shares without par value. As at April 29, 2021, the following common shares and share purchase warrants were outstanding:

	# of Shares	Exercise Price	Expiry Date
Issued and Outstanding Common Shares	64,368,634
Share Purchase Warrants*	6,250,000	$ 0.75	December 30, 2022
Share Purchase Options	935,000	$ 0.30	May 1, 2022
	50,000	$ 0.36	June 12, 2022
	150,000	$ 0.22	June 3, 2024
	2,200,000	$ 0.27	October 30, 2024
	200,000	$ 0.23	February 20, 2025
	150,000	$ 0.42	July 2, 2025
	450,000	$ 0.71	September 28, 2025
Broker Compensation Options	728,565	$ 0.56	December 30, 2022
Fully Diluted at April 29, 2021	75,482,199

• On July 23[rd] , 2020 the Company announced that it was accelerating the expiry date of the warrants issued by the Company in the August 27, 2019 private placement. Under the terms of the form of warrant, the Company is permitted to accelerate the expiry date if the common shares of the Company have traded on a stock exchange at a volume weighted average price of $0.50 or higher for a period of 10 consecutive trading days. The acceleration event occurred as of July 23, 2020. Accordingly the Company chose to accelerate the expiry date of the warrants to August 22, 2020. Holders of the warrants had until 4.00pm (Vancouver time) on August 22, 2020 to exercise the warrants in accordance with their terms. Warrants not exercised by such time and date, expired.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

OFF BALANCE SHEET ARRANGEMENTS

The Company does not utilize off balance sheet arrangements.

TRANSACTIONS WITH RELATED PARTIES

Key management compensation

Key management consist of the Company’s directors and officers. In addition to management and consulting fees paid to these individuals, or companies controlled by these individuals, the Company provides non-cash benefits. Total key management compensation are as follows:

Related Party	Nature of Relationship
Lundy Management Ltd.	Company, controlled by CEO
GSBC Financial Management Inc.	Company, controlled by CFO
FT Management Ltd.	Company related to CFO
1108341 BC Ltd.	Company, controlled by the former VP of Exploration

			Year ended		Year ended
			December 31,		December 31,
Payee	**Nature of the transaction **		2020		2019
CEO	Management fees	$	200,000	$	150,000
CFO	Management fees		12,000		10,000
Company related to CFO*	Consulting fees		61,200		62,000
VP of Exploration	Management and consulting fees		8,100		10,000
	Exploration and evaluation		171,900		15,000
VP of Exploration (former)	Management and consulting fees		-		14,850
	Exploration and evaluation		-		23,840
Director (Carolyn Loder)	Consulting fees		7,506		-
	Exploration and evaluation		38,317		-
CEO	Share-based compensation		-		87,493
Company related to CFO	Share-based compensation		-		38,886
VP Exploration	Share-based compensation		-		97,214
VP Exploration (former)	Share-based compensation		-		19,443
Director (John Robins)	Share-based compensation		-		97,214
Director (Fred Leigh)	Share-based compensation		-		48,608
Director (Carolyn Loder)	Share-based compensation		235,566		-
Director (Craig Roberts)	Share-based compensation		-		48,608
Total		$	734,589	$	723,156

(*) Related to accounting and compliance services.

Related party transactions and balances not disclosed elsewhere in the Company’s consolidated financial statements are as follows:

			Year ended		Year ended
			December 31,		December 31,
Payee	**Nature of the transaction **		2020		2019
Company related to CFO	Reimburse office rent	$	28,257	$	25,980
Company related to CFO	Reimburse marketing & design costs		23,405		12,000
Total		$	51,662	$	37,980

The balance payable to related parties at December 31, 2020 was $1,050 (December 31, 2019 - $4,002). These payables are generally unsecured, non-interest bearing and are expected to be repaid under normal trade terms.

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K2 GOLD CORPORATION MANAGEMENT’S DISCUSSION & ANALYSIS For the year ended December 31, 2020

The amounts charged to the Company for the services provided have been determined by negotiation among the parties and, in certain cases, are covered by signed agreements. These transactions were in the normal course of operations and were measured at the exchange value, which represented the amount of consideration established and agreed to by the related parties.

RECENT DEVELOPMENTS AND OUTLOOK

The Company expects to obtain financing in the future primarily through further equity financing, as well as through joint venturing and/or the optioning of the Company’s properties to qualified mineral exploration companies. There can be no assurance that the Company will succeed in obtaining additional financing, now or in the future. Failure to raise additional financing on a timely basis could cause the Company to suspend its operations.

The Company's business objectives are to secure financing, fund its general and administrative expenses for the ensuing year, to search for a new property, and fund its working capital requirements.

APPROVAL

The Board of Directors of K2 Gold has approved the disclosure contained in this MD&A. A copy of this MD&A will be provided to anyone upon request.

ADDITIONAL INFORMATION

Additional Information relating to K2 Gold is on SEDAR at www.sedar.com or by contacting:

K2 Gold Corporation Suite 1020 - 800 West Pender Street Vancouver, BC CANADA V6C 2V6 Tel: (604) 331-5090 Fax: (604) 682-4809 www.k2gold.com Email: info@k2gold.com

/s/ “Stephen Swatton” Stephen Swatton

President and Chief Executive Officer

/s/ “Robert Scott” Robert Scott Chief Financial Officer

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